Caspian Sea energy and big powers

The newly independent states of Azerbaijan, Turkmenistan, and Kazakhstan are located in Central Asia and Caucasus and enjoy rich oil and gas reserves.

After implosion of the former Soviet Union, efforts made by the said countries to promote their international standing, has paved the way for extraction of oil and gas resources of the Caspian Sea. Although the legal regime of the Caspian Sea has not been defined yet and negotiations among concerned states are going on, existence of remarkable energy sources in the region has turned it into a major field of rivalry among major regional and international powers during the past years
Construction of oil and gas transit routes is the most important challenge faced by the said countries in promoting their status in the region as well as in global energy markets. Regional and international players are trying to find a more suitable position in the future by determining the most suitable energy transit route.

Between May 12 and May 15, Gurbanguly Berdimuhammedov, Vladimir Putin, and Nursultan Nazarbayev, presidents of Turkmenistan, Russia, and Kazakhstan have signed early agreements on construction of new pipeline to transfer Turkmenistan’s gas to Russia and Uzbekistan. They stressed the roles played by their respective countries in the world’s energy market during a press interview in Turkmenbashi port city in Turkmenistan. Total gas transfer through the joint pipeline will amount to 10 billion cu. m. per year and it is projected that the final contract for construction of the pipeline will be signed before July. Putin noted that construction of the pipeline will boost cooperation between Russia and the Commonwealth of Independent States. He added that according to the existing timetable, construction of a border pipeline for transfer of gas will start in the first half of 2008 and after completion in 2012; its capacity for gas transfer can be increased up to 12 billion cu. m. per year.

The pipeline, which is currently taking Turkmenistan’s gas to Europe through Russia and Kazakhstan, is capable of transferring 5 billion cu. m. gas per day. The question is what would be the impact of the new pipeline on the region and international relations among countries and which country’s standing in international energy markets will be bolstered by it. To answer this question, first we must have an overall look at regional resources and its status in supplying world energy. Major routes for transferring regional energy to global markets constitute the second issue. The consequences of choosing any of the said routes, especially, signing of a new contract for construction of a new gas pipeline by Russia, Turkmenistan, and Kazakhstan is another major topic to be discussed here. In conclusion, proposals will be offered on suitable policies to be adopted by the Islamic Republic of Iran. There are various assessments about the exact amount of oil and gas reserves of the Caspian Sea. Some experts draw an analogy with the North Sea while others exaggerate and liken it to the Persian Gulf. The latter claim, however, cannot be held up by authentic figures.

Total proven oil reserves of the Caspian Sea stand between 203 billion and 235 billion barrels of which 132 billion barrels belongs to Kazakhstan, which accounts for the highest amount of oil reserves. Kazakhstan is followed by Turkmenistan, the Republic of Azerbaijan, Iran, Russia and Uzbekistan, which respectively account for 7.39 billion, 39 billion, 15 billion, 3.7 billion, and 59.2 billion barrels of the Caspian oil reserves.

Figures produced on gas reserves of the Caspian Sea are also different.

Tehran Times