KISS: Caspian Convention opens door to investment climates’ progress

10 August, 2018, 14:11 5499
KISS: Caspian Convention opens door to investment climates’ progress

On the eve of the Caspian Summit, Deputy Director of the Kazakhstan Institute for Strategic Studies under the President of the Republic of Kazakhstan, Sanat Kushkumbayev, told about the expectations of the event, the problems and prospects of the Caspian region.

A convention on the status of the Caspian Sea is expected to be signed at a forthcoming summit. Do you think the Convention is capable of addressing the global problems of the Caspian region?

I do not suppose that the adoption of the convention will solve all the issues existing in the Caspian region at one time. It is important to note that signing the convention is a very important step towards positive dynamics. The adoption of the convention creates a legal platform for solving the problems existing in the Caspian region. First of all, it is a multilateral document while signing of which all five Caspian countries take on corresponding obligations. The second item is the convention can become a kind of "Constitution" of this region, allowing it to develop bilateral and multilateral documents related to oil and gas production on the shelf, laying transport pipelines and gas pipelines, shipping, fisheries, environmental protection, flora, and fauna on its basis. Over the years, many issues were resolved on the basis of national jurisdiction and bilateral agreements. At present, the solution of issues on a multilateral basis is required. The adoption of the convention increases the negotiating chances and prospects for laying pipelines.

The convention can contribute to organizing the export of Turkmen gas to Europe. As you know, this was opposed by Russia and Iran. So, Russia hardly needs a competitor in the face of Turkmenistan, which could potentially crash gas prices and take market share from Gazprom. Do you think it is possible to reach a consensus on this issue?

Russia and Iran should understand that the strategic delaying of the convention’s adoption is counterproductive. This issue has been debating for over two decades.  In fact,  Baku 3rd  Caspian Summit created perspectives for reaching consensus and adopting a balanced version of the convention. Russia has shown its constructive position in the adoption of this convention. So, the bilateral agreement, which delineates the bottom of the northern part of the Caspian Sea between Kazakhstan and Russia, was signed back in 1998. Even then, Russia showed that it was ready to go to a sectoral demarcation of the bottom. At the same time, it is highly likely that when signing the convention, both Iran and Russia will retain the mechanisms through which control over the construction of facilities will be carried out taking into account environmental risks and standards, but in general, this document is consensual.

-Azerbaijan has an ambitious goal to become a huge gas supplier to Europe. The same time Turkmenistan is going to lay a pipeline on the seabed and pump gas over its territory which will compete with the Azerbaijani. What is Azerbaijani readiness is to face these intentions?

- In my opinion, Azerbaijan will be interested in turning out into a key point at gas exporting way if such is realized.

To date, it is not known exactly how much gas Turkmenistan has. There are agreements, protocols, and memoranda on the export of Turkmen gas in different directions: the northern direction along Russia's lines, three gas pipelines along the China line, the well-known Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, as well as two gas pipelines to Iran. The question arises: does Turkmenistan have sufficient gas volumes? This is one aspect.

If the reserves of the Turkmenistan gas are enough and the gas pipeline to the West is expected to be laid in the future this will not in the least reduce the export potential of Azerbaijan, since it is a question of the European and Turkish markets capable of consuming large volumes of energy resources.

As European countries are inserted in a diversification of sources of consumer energy then Turkmenistan and Azerbaijan are considered as strategic partners for gas export.  

In this regard, the problem is in insufficient gas resources of Turkmenistan and Azerbaijan in Caspi to create effective pool capable for justifying the profitability of the gas pipeline to Europe.  Filling out of the gas pipeline without Iran is quite difficult. By the way, the current situation where Iran undergoing sanctions face exclusion from such transactions, is a sort of challenge as well.

- What is your opinion on the part of the agreement concerning the military presence and demilitarization of the Caspian? What are the positions of the five countries on the exclusion of the military presence of countries that do not have access to the Caspian?

- All the sides of the summit agree that the activity of other non-Caspian countries should be limited. This is a very important legal point that will allow creating clear rules of the game in solving issues in the Caspian.

- Would the signing of the convention lead to the implementation of President Nursultan Nazarbayev's plans for the construction of the Eurasia water channel, which expects to join the Caspian and the Black Sea?

- The signing will provide for a legal basis to realize a lot of transport projects including Eurasia water channel’s construction. The Eurasia water channel implies the expansion and deepening of Volga-Donskoy channel. Kazakhstan is interested in using these channels regardless of economic and geopolitical conjuncture.

- What are your expectations from the Aktau Caspian summit? What is the profit for Kazakhstan from the expected results of the forum?

- This is a very important event for regional and international politics, I suppose. During the post-Soviet period, questions, discussions, discussions, and disputes over the status of the Caspian Sea were held for more than a quarter of a century. The countries of the Caspian region had different, often diametrically opposed positions. Now that we are close to resolving this problem, it is necessary to put a point and move on.

The draft convention is close to the position, which was originally declared by Kazakhstan. Moreover, the state does not lose anything, but rather win: the legal base for our economic activity in the Caspian region will expand, which will lead to an increase in investment attractiveness. With the adoption of the convention, there is a prospect of open opportunities for improving the investment climate throughout the Caspian region.

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