Caspian Agreement

2. The conditions and procedures applicable to the passage of warships, submarines and other underwater vessels into territorial waters are established on the basis of agreements between the flag state and the coastal state or, failing that, the legislation of the coastal state. Another key factor is that the borders of the seabed still need to be negotiated (although they are now subject to bilateral, not multilateral, agreements as is currently the case). The agreement is expected to ease regional tensions and accelerate the development of lucrative oil and gas projects. The Caspian Sea is an extremely important inland water mass, not only in terms of its strategic position as a link between energy-rich Central Asia and Eastern Europe, but also in terms of the energy resources it believes it contains. According to various estimates, it holds 50 billion barrels of oil and nearly 9 trillion cubic meters of gas in proven or probable reserves. With current market prices, energy resources are worth thousands of billions of dollars. It is also home to disruptive fish – a source of delicacy caviar. While several bilateral agreements between the Soviet Union and Iran regulated the use of the water mass, the disintegration of the Soviet Union in 1991 added three new countries to the coasts of caspian, Kazakhstan, Azerbaijan and Turkmenistan, which claimed their share of the pie. This meant that the agreement on the use of the Caspian Sea had to be renegotiated in order to allay their fears and rights. Differences of opinion on their legal status have also prevented the construction of a gas pipeline by the Caspian Sea between Turkmenistan and Azerbaijan. This would have allowed Turkmen gases to bypass Russia on the way to Europe. But Dubnow said an agreement on seabed sharing “will take, in my opinion, years, not months.” Some felt that under international law there was no obstacle to the construction of this Trans-Caspian Pipeline (TCP) – even in the absence of an agreement on the legal status of the Caspian State, which was approved by the five states – as long as Turkmenistan and Azerbaijan, through which the pipeline would pass, had accepted the agreement.

“This agreement is extremely beneficial for Russia. It makes Moscow a de facto naval power in the Caspian Sea by granting Russian warships the right to operate freely throughout the waterway,” said Russian expert Dubnov. An 18-page draft agreement, briefly published in June on the website of Russian Prime Minister Dmitry Medvedev and collected by RFE/RL, lists 24 articles, including territorial waters, maritime borders, navigation rules, fishing rights, environmental issues and, most importantly, the use of marine resources.

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