PUTIN’S BAKU VISIT TO CONFIRM RUSSIA’S CAUCASUS INTENTIONS Russian President Vladimir Putin’s just-concluded visit to Azerbaijan confirms that Russia intends to act aggressively to regain its position as the dominant power in the Transcaucasus. However, unlike the Soviet era, it appears that economic interests, rather than political priorities, are currently driving Kremlin policy. The collapse of the Soviet Union, coupled with the discovery of vast oil and gas reserves in the Caspian Basin, turned the region into an arena of intense international competition. During the past decade, Azerbaijan and Georgia in particular moved to strengthen ties with Western governments to counterbalance Russian influence. As a result, Western business interests are now poised to capture a substantial share of the Caspian Basin oil and gas bounty. Since assuming Russia’s presidency just over a year ago, Putin has moved consistently to restore Moscow’s lost status and to reduce the West’s profile in the region. In recent months, Russia has employed a variety of economic and political measures to enhance its role as the power broker in the Transcaucasus. [For additional information see Eurasia Insight archives]. In a speech to the Azerbaijani parliament January 10, Putin said that his Baku visit was an important step "towards a new phase" in relations with Azerbaijan, and the Transcaucasus in general. The Russian president went on to make it clear that economics served as the cornerstone of the new order. "First of all, in line with the new phase of relations, we should have a higher level of economic ties," Putin said. "Russia is ready to have close cooperation in all aspects of the fuel and energy sectors. We are ready to be involved in the development of deposits, the extraction of hydrocarbons… and the use of our [Russian] pipelines." Consistent with Putin’s stated aim, the Russian oil giant LukOil signed a deal with the Azerbaijani state oil concern, SOCAR, to develop the Hovsani-Six onshore oilfield, which has estimated reserves of up to 20 million metric tons. In addition, SOCAR agreed to export 1.7 million tons of oil to Russia via the Baku-Novorossisk pipeline. In a related development, Putin signed a joint statement with Azerbaijani leader Heidar Aliyev on the status of the Caspian Sea that called for the convocation of a regional conference of all five regional states – Azerbaijan, Kazakhstan, Iran, Russia and Turkmenistan. "A consensus solution [on the sea’s legal status] should be sought gradually," the statement said. In the meantime, the statement added, the Caspian seabed should be divided into national sectors, while all five states shared the water’s resources equally. Resolution of the Caspian’s legal status is seen as the key in further development of the sea’s natural resources. Some Azerbaijani observers say Putin was only partially successful in promoting the goal of expanding Russia’s economic influence. They suggested that the LukOil-SOCAR deal was more symbolic than substantive. In addition, the joint statement on the Caspian Sea appeared to represent a significant modification of Russia’s stance on the division of natural resources. In the past, Russian officials had pressed for joint control over all Caspian resources, both in its waters and under its seabed. Now, Russia appears open to the division of the Caspian seabed into national sectors. Putin also suffered what could be considered a setback in the geostrategic sphere by failing to come away from his two-day visit with a firm agreement on the Gabala Radar Station. Moscow has sought a continued Russian presence at the facility. Meanwhile, Azerbaijani Foreign Minister Vilayat Guliyev told journalists in Baku that the two countries had not narrowed differences on the base’s future status. During the visit, Putin and Aliyev only agreed to establish a joint commission to continue discussions about the radar base. Aliyev in recent months has been willing to explore a rapprochement with Russia, in part because of annoyance with Western criticism over Azerbaijan’s human rights record [For additional information see Eurasia Insight]. Also, the elderly Aliyev appears to be maneuvering to transfer power to his son, Ilham. Some experts have speculated that Russia might act as a guarantor of a smooth dynastic succession in Azerbaijan. But the outcome of the Putin summit suggests that Aliyev remains wary of Moscow, and wants to keep his strategic options open, one observer said. The summit, at least in its public aspects, may have fallen short of Russian expectations, but Putin signaled that the Kremlin will not abandon its strategic goals in the Transcaucasus anytime soon. Putin’s comments on the search for a settlement to Nagorno-Karabakh conflict underscore that Russia remains intent on using whatever political influence it has to advance its agenda. "Russia is prepared to act as an intermediary and guarantor or any [peace] agreements that may be signed," Putin said. Recent history, including the Russian role in the Abkhazia conflict in neighboring Georgia, indicates that Russia’s record as a good-faith broker is mixed. Thus, Russia’s offer to act as a Karabakh mediator, especially given Russia’s close strategic relationship to Armenia, could been seen in Baku either as an incentive or as a threat to increase cooperation with Moscow. Whatever the case, Azerbaijan is unlikely to realize its full oil and gas profit potential until Karabakh’s status is resolved. And Russia has made it clear that it will have a major voice in any settlement. The collapse of the Soviet Union, coupled with the discovery of vast oil and gas reserves in the Caspian Basin, turned the region into an arena of intense international competition. During the past decade, Azerbaijan and Georgia in particular moved to strengthen ties with Western governments to counterbalance Russian influence. As a result, Western business interests are now poised to capture a substantial share of the Caspian Basin oil and gas bounty. Since assuming Russia’s presidency just over a year ago, Putin has moved consistently to restore Moscow’s lost status and to reduce the West’s profile in the region. In recent months, Russia has employed a variety of economic and political measures to enhance its role as the power broker in the Transcaucasus. [For additional information see Eurasia Insight archives]. In a speech to the Azerbaijani parliament January 10, Putin said that his Baku visit was an important step "towards a new phase" in relations with Azerbaijan, and the Transcaucasus in general. The Russian president went on to make it clear that economics served as the cornerstone of the new order. "First of all, in line with the new phase of relations, we should have a higher level of economic ties," Putin said. "Russia is ready to have close cooperation in all aspects of the fuel and energy sectors. We are ready to be involved in the development of deposits, the extraction of hydrocarbons… and the use of our [Russian] pipelines." Consistent with Putin’s stated aim, the Russian oil giant LukOil signed a deal with the Azerbaijani state oil concern, SOCAR, to develop the Hovsani-Six onshore oilfield, which has estimated reserves of up to 20 million metric tons. In addition, SOCAR agreed to export 1.7 million tons of oil to Russia via the Baku-Novorossisk pipeline. In a related development, Putin signed a joint statement with Azerbaijani leader Heidar Aliyev on the status of the Caspian Sea that called for the convocation of a regional conference of all five regional states – Azerbaijan, Kazakhstan, Iran, Russia and Turkmenistan. "A consensus solution [on the sea’s legal status] should be sought gradually," the statement said. In the meantime, the statement added, the Caspian seabed should be divided into national sectors, while all five states shared the water’s resources equally. Resolution of the Caspian’s legal status is seen as the key in further development of the sea’s natural resources. Some Azerbaijani observers say Putin was only partially successful in promoting the goal of expanding Russia’s economic influence. They suggested that the LukOil-SOCAR deal was more symbolic than substantive. In addition, the joint statement on the Caspian Sea appeared to represent a significant modification of Russia’s stance on the division of natural resources. In the past, Russian officials had pressed for joint control over all Caspian resources, both in its waters and under its seabed. Now, Russia appears open to the division of the Caspian seabed into national sectors. Putin also suffered what could be considered a setback in the geostrategic sphere by failing to come away from his two-day visit with a firm agreement on the Gabala Radar Station. Moscow has sought a continued Russian presence at the facility. Meanwhile, Azerbaijani Foreign Minister Vilayat Guliyev told journalists in Baku that the two countries had not narrowed differences on the base’s future status. During the visit, Putin and Aliyev only agreed to establish a joint commission to continue discussions about the radar base. Aliyev in recent months has been willing to explore a rapprochement with Russia, in part because of annoyance with Western criticism over Azerbaijan’s human rights record [For additional information see Eurasia Insight]. Also, the elderly Aliyev appears to be maneuvering to transfer power to his son, Ilham. Some experts have speculated that Russia might act as a guarantor of a smooth dynastic succession in Azerbaijan. But the outcome of the Putin summit suggests that Aliyev remains wary of Moscow, and wants to keep his strategic options open, one observer said. The summit, at least in its public aspects, may have fallen short of Russian expectations, but Putin signaled that the Kremlin will not abandon its strategic goals in the Transcaucasus anytime soon. Putin’s comments on the search for a settlement to Nagorno-Karabakh conflict underscore that Russia remains intent on using whatever political influence it has to advance its agenda. "Russia is prepared to act as an intermediary and guarantor or any [peace] agreements that may be signed," Putin said. Recent history, including the Russian role in the Abkhazia conflict in neighboring Georgia, indicates that Russia’s record as a good-faith broker is mixed. Thus, Russia’s offer to act as a Karabakh mediator, especially given Russia’s close strategic relationship to Armenia, could been seen in Baku either as an incentive or as a threat to increase cooperation with Moscow. Whatever the case, Azerbaijan is unlikely to realize its full oil and gas profit potential until Karabakh’s status is resolved. And Russia has made it clear that it will have a major voice in any settlement. Posted January 11, 2001 © Eurasianet The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues. The views expressed in this publication do not necessarily represent the position of the Open Society Institute and are the sole responsibility of the author or authors.
1/11/01
Print this article 
Email this article
http://www.eurasianet.org 
Sunday, 16 November 2008
EURASIA INSIGHT
Posts
