Foreign Policy Watch- India-Central Asia

Caspian Sea breakthrough treaty set to boost oil, pipeline plansIOCRPriority 1


Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests.

From UPSC perspective, the following things are important:

Prelims level: Caspian Sea Bordering States

Mains level: Changing dynamics of Caspian neighbouring states


Consensus over Caspian Sea

  1. Five Caspian Sea states (Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan) reached a breakthrough agreement on sovereign rights to the sea.
  2. This paved the way for new oil and gas extraction and pipelines after more than two decades of disputes.
  3. The treaty ends a spat over whether the Caspian is a sea or a lake, granting it special legal status and clarifying the maritime boundaries of each surrounding country.
  4. The five members have tried to define the Caspian Sea’s legal status since the collapse of the Soviet Union, in order to divide up the waters and its natural resources for new drilling and pipelines.
  5. It also allows each to lay pipelines offshore with consent only from the neighbouring states affected, rather than from all Caspian Sea nations.

Huge energy reserves

  1. The territorial disputes have prevented the exploration of at least 20 billion barrels of oil and more than 240 trillion cubic feet of gas, the US Energy Information Administration estimated in 2013.
  2. The new agreement states that the development of seabed reserves will be regulated by separate deals between Caspian nations, in line with international law.
  3. This essentially cements the current situation, since countries such as Kazakhstan and Russia already have bilateral accords on joint projects

Connecting to Europe

  1. The five Caspian Sea nations already develop offshore oil and gas reserves that are located near enough to the coast not to be disputed.
  2. Projects in the northernmost waters Kazakhstan’s giant Kashagan field and Russia’s Filanovsky and Korchagin deposits are seen as sources of future oil-output growth for the countries.
  3. The treaty will also remove a legal barrier to building a trans-Caspian gas pipeline from Turkmenistan to Europe.
  4. While the European Union and Azerbaijan have supported the long-planned pipeline project, which could ease Russia’s grip on the EU’s gas market, the Kremlin has opposed it, citing environmental concerns and legalities.

Outstanding Issues

  1. Iran shares smallest boundary with Caspian Sea hence is the least gainer.
  2. It highlighted the issue of the distribution rights of seabed oil and gas deposits over the undiscovered fields.

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