Azerbaijan-Turkmenistan

=Overview=

Since gaining independence after the collapse of the Soviet Union, Azerbaijan and Turkmenistan have disagreed over maritime boundaries at three oil fields in the lucrative Caspian basin. As of August 2012, two of the three were part of Azerbaijan's energy sector and the third, Serdar-Kyapaz, remained disputed. A leaked diplomatic cable from 2009 reported Azerbaijani President Aliyev as saying that, despite Baku's diplomatic efforts, Turkmenistan 'largely remains a mystery', but that Azerbaijan is still willing to work together with Turkmenistan on commercial projects, including development of the Serdar-Kyapaz offshore field.

=Territorial Disputes in Caspian Sea=

Reported in August 2009, disagreements between Azerbaijan and Turkmenistan arose due to the development of the disputed Serdar-Kyapaz oil field, although the roots of the quarrel run deeper, according to one of SOCAR's vice presidents Elshad Nassirov. Azerbaijan and Turkmenistan met in July 2009 to negotiate delimitation of boundaries in the Caspian Sea. A move was made toward international arbitration but was ultimately described as a ‘drastic, ineffective and time-consuming path’ by Nassirov in a leaked diplomatic cable. Claims of ownership over the Azeri-Chirag-Guneshli (ACG) fields by Ashgabat would likely arise, and future pipeline developments would be at stake, if international arbitration was to come out on side with Turkmenistan. Nassirov noted that the delimitation line, as it stood in August 2009, was the same Soviet-drawn line used since 1949.

Ten days after the Turkmen President Berdymuhammedov insisted on international arbitration, he signalled that negotiations on Serdar-Kyapaz could continue. SOCAR offered concessions on revenue sharing, whereby Turkmenistan could take 80 percent of revenue. When negotiations stalled once again, Baku suspected Russian pressure on Ashgabat, according to the cables.

Relations deteriorated when in June 2012 the Azerbaijani Foreign Ministry issued an official protest against Turkmenistan, alleging that Turkmenistan had begun seismic activity on the disputed Kyapaz field, along the line dividing the Azerbaijani and Turkmen sectors of the Caspian, claiming that it represented a violation of its sovereign rights. In response, an official protest was made by the Foreign Ministry of Turkmenistan against ‘attempted alleged illegal actions by Azerbaijan’s border services against a vessel conducting research and development operations in the sector of the Caspian Sea beyond Azerbaijan’s jurisdiction’.

=Pipelines=

Trans-Caspian Pipeline
According to energy industry representatives in Baku, the continued disputes between Baku and Ashgabat would make potential financiers of a proposed Trans-Caspian pipeline uneasy about the prospect of investing in a volatile region.

According to an article in Eurasianet, the building of such a pipeline is viewed as anathema by Tehran and Moscow, and as of August 2012 they had proved effective in halting its progress. In June 2012 the EU made clear its position that it sees no obstacle, political or environmental, to the development of the pipeline.

"Main article: Trans-Caspian Pipeline (proposed)"

TransAsia Gas Pipeline
According to a leaked diplomatic cable, in response to the TransAsia gas pipeline (built from Turkmenistan to China), Baku reiterated its position in December 2009 of playing no role in the project, although there were discussions regarding Baku committing gas supplies eastwards instead of west, north or south. Despite press and blog comments to the contrary, SOCAR maintained that Azerbaijan would not make arrangements with Turkmenistan to transport its natural gas eastwards. The countries' ongoing dispute about delimitation of maritime boundaries in the Caspian Sea was said to be a factor explaining the lack of cooperation on the TransAsia pipeline.

=References=