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    Central Asia
     Apr 17, 2008
Iran homes in on the Caspian
By Kaveh L Afrasiabi

This week, Tehran hosts the 22nd meeting of representatives from the five littoral states in the Caspian Sea region - Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan - working overtime to put together a new "convention for the legal regime of the Caspian Sea".

As a followup to last October's summit of leaders of the littoral states in Tehran, the two-day meeting is unlikely to reach any substantial agreement, although it is a good warmer for a related economic summit of Caspian states to be held in Russia this summer.

Already, Iran's point man on the Caspian Sea, Mehdi Safari, has criticized the lack of adequate preparation for this week's meeting, calling for more preparatory meetings to hammer out differences 

 
among the five countries on what is undoubtedly one of the most contentious issues in the region, that is, how to divide up the world's largest lake.

In his opening remarks, Iranian Foreign Minister Manouchehr Mottaki stated that the 1920 and 1941 Iran-Soviet Union accords, which identify the Caspian as an Iran-Soviet "common sea", still serve as the legal frame of reference, representing a slight hardening of Iran's position. This in light of the severe criticisms of Mottaki's Foreign Ministry by some members of parliament (Majlis) who have questioned Iran's diplomacy in the Caspian region.

Since the 1991 breakup of the Soviet Union and the rise of three new independent states around the Caspian Sea, who have for the most part carved out the sea among themselves, the issue of the legal regime of the Caspian has been thrown into turmoil by post-Soviet politics, this while many people in Iran continue to insist that Iran is entitled to 50% of the Caspian, pointing at the terms of the above-said accords.

However, Iranian officials have distanced themselves from such claims, and Mottaki himself has brought some popular anger on himself by stressing that Iran's share of Caspian has never been 50%, that this is illogical, since Iran's coastline is only some 17% of the entire Caspian coastline, and that neither of those accords or any other accord or official document endorses that position. What is more, Mottaki has explicitly stated that Iran's exploitation of the Caspian has never gone beyond 11.3% of the sea.

Concerning the latter, aside from fishing, Iran actually has not had an active energy policy in the Caspian Sea, partly because of the priority given to its oil and gas riches in the Persian Gulf, which are relatively easier to access than the ones in Iran's deep water section of the Caspian, and partly due to US sanctions inhibiting foreign companies from joint ventures with Iran.

But, with US and United Nations sanctions on Iran escalating the pressures on it, particularly in the Middle East and Persian Gulf, Iran is now seeking an outlet for trade and investment in the Caspian region, attracting potential partners with lucrative production-sharing agreements. Brazil's Petrobras is reportedly in the concluding stages of a deal to acquire liquefied natural gas from Iran in exchange for energy exploration operations in the Caspian Sea.

Simultaneously, Iran is looking to expand both its oil-swap agreements, for example with Kazakhstan, as well as its pipeline system that includes the Neka-Rey pipeline, which has a current capacity of 170,000 barrels per day.

Iran and Russia are also expanding their energy ties and Russia's giants, Gazprom and LUKoil, are involved in Iran's oil and gas projects and, most likely, will be further engaged in joint projects with Iran, despite the fact that the two countries are to some extent each other's competitors for alternative energy routes in the region.

For now, however, the cooperative side of Russia-Iran relations has taken the upper hand, in light of last October's summit in Tehran, which dealt with a host of other issues, such as regional security, and culminated in a joint communique that banned the presence of any foreign ships or military forces in the Caspian Sea.

With the issue of the North Atlantic Treaty Organization's (NATO's) eastward expansion on every one's mind, Russia and Iran have found a geostrategic common denominator in the Caspian that from Iran's point of view binds Moscow and Tehran to the extent that Moscow might be willing to accommodate Iran on the thorny issue of legal ownership, perhaps more than in the past.

The problem with that scenario, on the other hand, is that Russia, Azerbaijan and Kazakhstan have already divided the Caspian in their respective sectors and, as a result, Iran's best hoped for share right now is well below 20% (as called for by the foreign ministry).

Unable to ink any agreement that would be deemed a sellout by nationalistic Iranians, the Iranian government is thus torn between conflicting domestic and foreign priorities and, for now at least, has settled to duck the bullet by avoiding the so-called "percentage issue" via its insistence on the "common sea" or "condominium" approach to the ownership of Caspian waters, in contrast to the division of the sea's seabed resources.

One key advantage of the condominium approach is that it retains the contiguity of Russia and Iran, who lack a territorial border and yet have a maritime border in the Caspian. This is an important consideration, given Iran's formal bid to join the security pact known as the Shanghai Cooperation Organization (SCO, whose member states are Kazakhastan, China, Kyrgyzstan, Russia, Tajikistan and Uzbekistan). In case the SCO admits Iran, which presently enjoys observer status, then the organization's purview will cover a larger territory encompassing (a bigger parcel of) the Caspian region, indeed an important consideration in the current NATO-SCO calculations.

It is noteworthy that Iran is officially averse toward a new cold war and some former Iranian diplomats, such as Iran's ex-ambassador to Germany, have called for selective Iran-NATO cooperation. This, too, may be a reaction to Russia's stated new willingness to cooperate with NATO, for example as a conduit for NATO supplies going to Afghanistan, and demonstrates Iran's flexibility that aims to address the concerns of China and Russia, the two main pillars of the SCO, regarding Iran's membership. This would complicate the SCO's agenda if Iran was not in sync with the overall pattern of policies and orientation of the organization - that is still in the formative stage.

In conclusion, the irony of Iran stressing the validity of old agreements between it and the former Soviet Union is precisely that it is in effect a catalyst for new agreements and even arrangements that may not quite have the logic of a new cold war yet, by all indications, are not completely bereft of its flavor either.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) and co-author of "Negotiating Iran's Nuclear Populism", Brown Journal of World Affairs, Volume XII, Issue 2, Summer 2005, with Mustafa Kibaroglu. He also wrote "Keeping Iran's nuclear potential latent", Harvard International Review, and is author of Iran's Nuclear Program: Debating Facts Versus Fiction. He is a professor of international relations, Bentley College.

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