ENERGY POLITICS

CASPIAN REGION ENERGY POLITICS ‘Except Russia’

Ece DINCASLAN

One significant geopolitical and geo-economic consequence of the collapse of the Soviet

Union was the rise of an intense political and commercial competition for control of the

spacious energy resources of the Caspian Region. Both international players, states and oil

companies, became involved in a serious competition in the fields of oil, gas and pipelines. In

order to understand the complexity of Caspian Bonanza firstly, control of production of the oil

and gas, and secondly, control of the pipelines that will transfer the hydrocarbons the world

markets should be examined.

However, there is an emerging question: Can the Caspian Sea be our savior in the energy

deal? or Is it worth for the compelling missions? Thus, The Caspian Sea is an newly emerged

region of potentially big oil resources. The situation of this region could relief problems that

would result from a cutoff of oil imported to the U.S. and European Union thereby giving

them especially U.S search in its oil imports while it tries to create a less oil dependent nation.

The Caspian Politics changed especially since the breakup of the Soviet Union. Azerbaijan,

Kazakhstan, and Turkmenistan are no longer part of the Russian Federation and have now

opened up their fossil fuel expectations to foreign investors. Despite this, geopolitics,

pipelines, oil dependence from other countries and the lack of desire to look for alternative

means are the arising questions.

In the assessment of geopolitics and pipelines; five border countries in the Caspian Sea and

their own agendas regarding the politics in the region - Turkmenistan, Kazakhstan, Iran,

Azerbaijan ‘which are evaluated and examined in this paper’ and Russia- especially when it

comes to the pipelines are formed the main pillars. Moreover, there are players include in the

politics of Caspian Region except the Five Caspian Sea Neighbors; United States, China,

Turkey, other Regional Neighbors like Pakistan, Afghanistan, and India and the Oil

Companies.

It’s not just only the United States who is seeking more and more oil to meet its needs.

What’s more, other countries, especially Asian countries, are going to have additional oil

needs in the coming decades. China and India with their large populations and related rising

energy hungers are going to exceed the U.S.’ demands for oil in the coming years. Benefits

coming from the Caspian Sea, provides a safety net while other energy alternatives are being

researched and developed and the U.S. would be less dependent on the Middle East and the

fragile political structures that control that region’s oil. There are only estimates as to the

reserves; no one really knows how much oil exists (Can the region stand in the 2nd rank after

Middle East or not?, Are the reserves sufficient or abundant enough?) Also the political

instability exists in the region. Hence, pipeline security is questionable and getting the oil out

has become a political issue. China and the United States have their own agendas as to who

should get the oil and where the pipelines should go.

Pipelines are a big deal in the Caspian Region. Because, “In landlocked central Asia there is

no point in pumping oil and gas if you cannot get it to market. All the pipelines in the area

run over Russian soil and, until now, the Kremlin has been playing hardball limiting the

access to pipelines and charging usurious tariffs.”1

The behaviors of other players, such as The U.S., China, and the Oil Companies should be

estimated. The United States is trying to create ties with some of the former Soviet countries

in order to contain Russian dominance in the region. Moreover, the U.S. presence in the

region due to September 11, has facilitated some of the pressure to follow Russia’s lead by

some of the Caspian states and U.S. presence has been seen by some to provide an excuse to

side with it. Unfortunately, the U.S. policies against Iran have locked U.S. companies from

that market. An Iranian pipeline would only harm the companies even more, investments are

relatively low. Besides, If we look at the China’s perspective; It will increasingly be searching

for oil. Thus, the Asia-Pacific region as a whole is dependent on Middle East oil and more

than 90% of the region’s oil comes from the Middle East. Finally, the Oil Companies have

expressed interest in investing in the region. They are expected to invest the billions of dollars

to create and maintain the needed pipelines. However, divergence of the politics and

unintended consequences has added difficulties to the investment possibilities in the regions.

For example; U.S. oil companies are prohibited from investing with Iran but other companies

are not and political instability in the region makes companies hesitant to invest. What’s

more, the fear of Middle East, like problems compound the region’s image as unstable.

1 Ben Aris, Falling Out With the Neighbors; How tension and rivalry between the five central Asian states are holding back

further economic progress

Pipeline Security is also an important point which is a complex issue in the present and

future. The issue, who will protect the pipelines and who will pay for the security is an

unclear framework.

In the legal sense, the status of the Caspian Sea is the most prominent thing. Caspian Sea is

Lake or a Sea? If it is a sea then the three mile limit of the territorial water should be applied,

so granting of access permits to foreign vessels and boundary disputes are an issue between

many of the countries in the region. Thus, what can be done in order to cope with these rising

problems? Regional discussions and treaties are the best means of solving the boundary

disputes. Also, contracts between oil companies and the countries’ need to address issues of

infrastructure, pipeline security and pipeline transportation can be done in order to solve the

problems. They need to be guaranteed by regulations and laws. In the fact, the United States

needs to eliminate the barriers it has imposed on U.S. oil companies in order to prevent

investment in Iranian oil may lighten the problematic weight of the region.

To sum up, the Caspian Sea is filled with possibilities but two big problems stand in its way

to becoming the savior to US dependence on Middle East’ oil. To achieving this, pipelines

need to be built and politics affect everything in the region and at this time prevent a

productive solution to the pipeline problem. The former U.S. Assistant Secretary of State

Marc Grossman was quoted as underlying, “Bringing Caspian energy online could be one of

the most significant developments of this decade.” Besides, the U.S. and China seem to the

key outside players in that they have the money to invest in pipelines and the desire to have

the oil. If the oil flows West then China’s dependence which is far greater than the U.S.’s, on

the Middle East would remain the same and If the oil flows East then there would be more oil

for the U.S. but the dependence on that region has at the least remained the same and at the

worst grown.

The facts and important figures, which indicated the above, the case of Turkmenistan

viewed in this paper. The geopolitics of natural gas in Turkmenistan, in the Caspian Region,

is rapidly gaining importance while indicating historical case studies and advanced economic

modeling to examine the interaction between economic and political factors in the

development of natural gas. Increasingly, natural gas is the fuel of choice for consumers

seeking its relatively low environmental impact, especially for electric power generation,

surpassing coal as the world’s number two energy source and potentially overtaking oil’s

share in many large industrialized economies. Hence, the topic is really important since

world’s gas consumption is expected to be doubled over the next three decades. Moreover,

this paper will analyze the reasons why Turkmenistan is facing with a number of difficulties

to sell its gas to the international market. As a result, the case of Turkmenistan shaped around

the relative roles played by geopolitical factors, the economics of transportation and sale of

gas, and how these are affected by the routes.

Today, Turkmenistan is important to world energy markets because it contains the world's

fourth largest reserves of natural gas within a singular national boundary, with estimates of

the country's total gas resource is 265 tcf or %4.2 However, five years after independence

from the Soviet Union, Turkmenistan's economic and political situation remains constrained.

Economic reform has made almost no headway, with the state continuing to dominate and

interfere nearly all sectors. Foreign investment in the country remains minimal. Meanwhile,

hopes for riches from natural gas exports have not been realized, and the country remains

dependent on Russia for almost of its trade. In the case of inflation; there is the highest rate, in

the former Soviet Union (FSU), while Turkmenistan's currency sank in value. The sudden

death of Turkmenistan’s political leader Saparmurat Niyazov, in December 2006, who had

ruled the country as its Soviet Community Party, first elected president, that closed the

chapter in Turkmenistan’s long history and opened the possibility of change in the most

isolated and unreformed former Soviet republic. Gurbanguly Berdymukhammedov, Deputy

Prime Minister since 2001, was quickly named acting president and easily won a February

2007 presidential election severely criticized by foreign observers as neither free nor fair. The

new president has already announced several moderate policies, but he has also called for

continuity in domestic and foreign policy and a gradualist approach to change. He has also

reassured Russia, Turkmenistan’s most important economic partner, that existing contracts to

supply natural gas will be honored, decreasing fears of a disruption in energy supplies to

Russia and Europe. In order to provide a legal regime that, Turkmen government would

attract foreign investment (FDI) in its oil and gas sector, in both the development and

expanded exploitation of fields, and the transportation sector. Though the government

promulgated many laws, it provided no real protection for investments.

2 The World FactBook 1 Jan 2009 est. (after Russia, Iran and Qatar), and International Energy Outlook 2010.

Throughout the Soviet period, Turkmenistan's economy was based on exploitation of its

natural gas, oil, and cotton. Its resources seemed more limited, and the challenges more

daunting, than in other Caspian countries. Eighty percent of Turkmenistan is desert, and as

primarily a raw material supplier for the former Soviet Union (FSU), the country was the least

developed of all of the new states. Today, the government is focusing its attention of

expanding its export markets for its natural resources and increasing the value of its exports.

The government has placed a priority on investment in light industry, transportation and

communication networks, and processing facilities. In addition, the government has invested

heavily in infrastructure improvements designed to attract foreign businesses to invest in

Turkmenistan. The government has now turned its attention to reforming its economy and

legal system to support these priorities.

Turkmenistan is not only a gas producer but also the fourth largest producer of oil ‘197.700

bbl/day’, in the former Soviet Union after Russia, Kazakhstan and Azerbaijan.3 While home

to vast reserves of oil and gas, Turkmenistan’s export of these reserves to foreign markets has

been complicated by the geopolitics of pipeline construction. To tap its export potential,

Turkmenistan has focused on development of the energy industry. At the same time other

sectors of the economy have lagged. Growing poverty, declining living standards, the

expansion of organized crime and narcotics trafficking, and ethnic and tribal divisions are all

potential sources of instability. The Niyazov government has responded to these problems

with a variety of reform measures, but inconsistent policies, arbitrary regulations, and the

absence of legal mechanisms for the enforcement of contracts have discouraged foreign

investment and slowed economic growth. In this atmosphere, expected energy revenues could

lead to turmoil and conflict, rather than providing broad benefits to the population.

Turkmenistan has about 2.1 trillion cubic meters in reserves, amounting to 1.2 percent of the

world’s reserves, and making it the state with the 13th largest natural gas reserves. With large

reserves and a small population–just under 5 million–Turkmenistan’s citizens and enterprises

require only a fraction of the state’s natural gas. In 2002, for example, Turkmengas and

Turkmenneft, the only relevant players in the state, produced 71 billion cubic meters of gas;

of those total, Turkmen citizens and industries used only 15 billion cubic meters, or 21

percent, leaving nearly 80 percent for export.4

3 The World FactBook 2009 est.4 Sergei Rudnitsky, “Turkmenistan’s E&P Projects Achieve Good Pace,” World Oil Magazine 224, 1; Burren Energy, “Operations: Turkmenistan,” <www.burren.co.uk/turkmenistan.htm> (March 2006).

Niyazov has failed to develop alternative export routes for Turkmen gas. Russian firms such

as Gazprom control the pipeline network and force Turkmenistan to sell its gas to customers

in Russia and the Commonwealth of Independent States (CIS) at well below international

market value. With their domestic and regional markets satisfied at relatively low cost,

Russian firms then sell Russian gas to lucrative markets in Europe.5 Ukraine is the second

largest importer of Turkmen gas; it pays for half of its gas through construction work in

Turkmenistan and is obligated to pay for the other half of its gas in cash. In addition, the

accumulated gas debts of the former Soviet Republics, gas contraction in demand and, the

difficulties in the transition routes of Russia's gas and higher wages results in Turkmenistan to

rely on existing pipelines.

Mysteriously, in April 2009, gas pipeline explosion occurred which cut Turkmenistan's

natural gas exports to Gazprom. The government blamed Russia for the explosion, which

Gazprom denied; However, Gazprom afterwards sought a price reduction from Turkmenistan

and did not resume importing gas until January 2010, when it began accepting significantly

less gas at a reduced price exported from Turkmenistan. This event, which resulted in a large

income loss for Turkmenistan, worsened relations with Russia.

Under these conditions, Turkmenistan must find the most politically viable and

economically feasible route for exporting its natural gas to global markets. Its choices are

wide ranging and have their both costs and benefits. The government of Turkmenistan is

looking for foreign investment to explore and develop its gas industry and export routes to

hard-currency markets. Resource areas have been made available for joint-venture projects

and production sharing arrangements but the legal regime remains incomplete. For all the

idiosyncrasies of its ruler, Turkmenistan was and still is eager to attract foreign investment in

its oil and gas sectors.6 Beside this, President Berdymukhammedov has forsaken at least some

of his predecessor’s inward focus, in favor of a “multi-vector” natural resource strategy means

based on its own politico-diplomatic capabilities and economic power also completing with it

by ‘political interference, financial leverage, blackmailing, and strategic communications’,

which is underlining the multiple hydrocarbon export routes, and the various gas importers

each have a route in mind.

5 Martha Brill Olcott, Central Asia’s Second Chance (Washington, D.C.: Carnegie Endowment for International Peace, 2005), 38, 100. 6 Turkmenistan has 2.86 tcm of proven gas reserves and 1.4 billion barrels of proven oil reserves. EIA. International Energy Outlook, April 2004.

Two new routes offered the potential for good return on capital invested, with little need for

technological innovation. The first would take Turkmen gas across Iran and then on through

Turkey to markets in Europe. The second would send Turkmen gas through Afghanistan to

markets in Pakistan and India (the TAPI and IPI pipelines). A third possibility, which offered

long-term potential as new technology came on line, was to send Turkmen gas across Central

Asia to the ports of eastern China and then possibly on to Japan (the Central Asia-China

pipeline). There was also strong U.S. government support for Turkmen gas to be shipped via a

Baku-Tbilisi-Erzurum pipeline across the Caspian Sea (South Caucasus Pipeline or Shah-

Deniz Pipeline), parallel to the Baku-Tbilisi-Ceyhan oil pipeline. The Trans-Caspian Gas and

Nabucco Pipeline are the other options.

120-mile Korpeje-Kordkuy pipeline would take Turkmen gas across from Korpeje field

north of Okarem in western Turkmenistan to Kordkuy in Iran and then through Turkey to

markets in Europe. The 1996 agreement between the two countries provides for 8 tcf of gas

within the next 22 years. Iran financed 90% of construction costs, which was later paid back

by gas deliveries. Although, the plans are quite big, some imports were stopped due to

“quality issues,” but were probably related to decreased demand in Turkey. On the other hand,

At the beginning of 2002, a second pipeline was opened between the two countries with the

goal of expanding Turkmenistan’s exports to 20 bcm/y.

Plans for the Trans-Caspian Gas Pipeline (a proposed gas pipeline through the Caspian Sea,

Azerbaijan and Georgia to Europe), which has been in various stages of discussion and

negotiation since 1999, have also turn out no concrete results. It was aimed to bypass Russia

and deliver Turkmen gas to Europe are unlikely to materialize before the end of this decade,

considering the various challenges such as high costs and technical difficulties. This is the

case despite the European Union’s (EU) and US State Department’s concerted efforts to

convince the Turkmenistan government that a pipeline across the Caspian Sea, which would

exclude both Russia and Iran, is the best route for natural gas export to the west. Following

the death of President Niyazov, the EU and United States redoubled efforts to secure energy

deals with Turkmenistan. The United States has sponsored training assembles in

Turkmenistan through the US Trade and Development Agency. Assembles focused on the

issues necessary to manage oil and gas licensing and negotiation production sharing

agreements. Besides Nabucco and Trans- Caspian Pipelines are interlinked, in order to

construct Nabucco, Trans- Caspian Pipeline need to be finished first. The under-sea pipeline

from Turkmenistan could link up with the Europe’s ‘great pipe hope’ Nabucco, to aid its own

diversification from Russian energy dependency. However, Russia and Iran opposed the

Trans Caspian Gas Pipeline so that Nabucco for the same reason; building the pipeline would

divert Turkmenistan from using their pipelines systems, thus the dependence will be

decreased. The US opposition to IPI is revealed the Russian antagonism toward Nabucco.

According to the Russian Natural Resources Ministry, any gas or oil pipelines across the

floor of the Caspian Sea would be environmentally unacceptable Russian Deputy Prime

Minister Igor Sechin: ‘depressed regional demand, over-supply, as well as asserting the EU-

backed Nabucco simply has no future’. On the other hand, Turkey favored this pipeline just as

much as any other pipeline that could be built sooner and could start transmission of gas to its

market. This opposition, as well as a host of other factors, could well put the project on

standby.

According to some accounts, the project could be killed by current plans on the part of

Gazprom and the Italian company ENI to pursue the Blue Stream Pipeline Project to construct

a 400 km gas pipeline, with an annual capacity of 16 billion cubic meters, from Russia’s

Black Sea coast under the Black Sea to the Turkish port of Samsun, and then on to Ankara,

Turkey.7 It will increase Turkey’s dependence on Russian gas from 66% to around 80%. The

sea link is technically difficult, but both parts have forcible financial interests in the project

and are positioned to capture an important part of the Turkish market. The route is shorter and

the source gas is intensely low-cost. The project is finished and gas flow started in February

2003 although Turkey does not seem to be able to take the agreed volumes in the short run as

the country has contracted for more gas than the domestic demand, which has fallen even

further behind the contracted volumes due to the economic crisis in Turkey since 2001.

Natural gas supplies from Shah Deniz field in Azerbaijan are quite promising as well. In

2001, Turkey signed an agreement with Azerbaijan to import 3.1 tcf of gas over 15 years. The

natural gas supply will be done through Baku-Erzurum pipeline which will be laid alongside

the main oil export pipeline of Baku-Tbilisi-Ceyhan. British Petroleum company became the

technical operator of the Baku-Tbilisi-Erzurum gas project and it is also in charge of building

the Baku-Ceyhan oil pipeline.

7 For some of the public debates, see “Rival Gas Suppliers Race for Turkish Market,” Caspian Investor Newsletter, February 1999; “Black Sea Gas Pipe Start Seen in Autumn,” Reuters, March 24, 1999

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline continues to be discussed,

although no significant progress has been made to date. Negotiations that were to have taken

place in October 2008 no significant results, as Turkmenistan failed to provide gas

certification, which was requested by Pakistan and India.8 Instability in Afghanistan continues

to be a major stumbling block to the realization of the project. The proposed pipeline would

cross 1,680 kilometers and cost an estimated $7.6 billion.9 The Asian Development Bank is

reportedly considering a comprehensive review of the feasibility study conducted for the

project.10 Also there is an option of the $7.5 billion, 1,700-mile Peace Pipeline (IPI) project

which is approximately cost as the same, would bring gas from the South Pars Gas Fields

through Baluchistan (in western Pakistan) into India. However, this project faced with strong

opposition of US. The reason is that, US wanted to isolate Iran form the world community.

What’s more, US intended to diminish Russia’s weight in Central Asia and Afghanistan’s

importance must be taken in to consideration. Because, Afghanistan is a strategic piece of real

state “energy bridge” in the geopolitical struggle for power and dominance in the region.

Thus, the 2006 U.S.-India nuclear agreement puts pressure upon India to cooperate with

American foreign policy purposes, and damaging the Iranian economy through oil imports.

On December 2010, Representatives from Turkmenistan, Afghanistan, Pakistan and India

signed the Turkmenistan- Afghanistan-Pakistan-India (TAPI) Natural Gas Pipeline

Framework Agreement between the Government, as well as a government agreement on

measures to implement the gas pipeline project. According to the Turkmenistan

Governments’ estimates, after the pipeline is built up, Turkmenistan will transport about 33

billion cubic meters of natural gas. The whole project would cost 4 billion U.S. dollars.

In May 2008, The EU and Turkmenistan signed an agreement on energy cooperation, which

Europe hopes will reduce its dependence on Russia.11 Another significant aspect of the

Turkmen gas, that European Union is tired of relying on Russia; it is again looking for

alternatives. According to the International Energy Agency (IEA), 80 percent of primary

energy supplies in Turkmenistan are dependent on natural gas, and only 55 percent of the

power generated in the country goes to various industrial usages.12 The EU is aware of the

8Khalid Mustafa, “TAPI Gas Project Hits Snags,” October 31, 2008, The News, http://the news.com.pk/print1.asp?id=144078, accessed November 20, 2008.9“Turkmenistan’s Pipeline Prospects: China, Russia, India, or Europe?” August 11, http://www.bicusa.org/en/Article.3870.aspx2008, accessed November 20, 2008.10Khalid Mustafa, “TAPI Gas Project Hits Snags,” October 31, 2008, The News, http://the news.com.pk/print1.asp?id=144078, accessed November 20, 2008.11 http://www.iht.com/articles/ap/2008/05/27/business/AS-FIN-Turkmenistan-EU-Energy.php, accessed November 19, 2008.12 EIU Turkmenistan Country Profile, 2003 and IMF Staff Country Report, no. 99/140, December 1999.

situation that Turkmenistan has the potential to rival Russia’s influence and power in natural

gas and provide an alternative for the EU. It has made clear that human rights concerns take a

back seat to energy questions with its refusal to sanction Turkmenistan for its human rights

violations in spite of calls from international human rights activists to use its leverage to push

for improvements in this sphere.13

China has made more progress in securing a greater presence in Turkmenistan’s Energy

market than the Europeans or Americans. A new gas pipeline is under construction—the only

new pipeline to break ground—with plans for the first natural gas to flow to China in 2009

and an estimated annual capacity of thirty billion cubic meters.14 The pipeline is estimated to

cost $30 billion and will traverse 1,818 kilometers to export natural gas from Turkmenistan

through Uzbekistan and Kazakhstan, delivering it to Xinjiang, China, where it will connect to

the West-to-East natural gas pipeline to Shanghai. According to the Bank Information Center,

“The China National Petroleum Corporation (CPNC) is requesting a $2.5 billion loan from

the China Development Bank to fund construction for the segment in Uzbekistan.”15

The struggle for control over pipelines is as much about geopolitics as it is about energy.

Steve Levine, author of The Oil and the Glory, The Pursuit of Empire and Fortune on the

Caspian Sea, stated in an interview with Radio Free Europe/Radio Liberty in September

2008, “the United States fears that Gazprom’s growing hold (on those supplies) is translating

into political power and influence in the European theater, and the United States seeks to

assert its own leverage into the equation.”16

However, this paper argues, even in the absence of these geopolitical factors,

Turkmenistan's new pipeline projects may still have had difficulty moving forward, given the

number of political and economic risks associated with doing business in Turkmenistan as

well as in the transit countries. Moreover, the country faces several difficulties and constraints

such as project financing, limited technical capabilities in development of gas fields, and a

lack of adequate gas infrastructure. These factors are expected to limit the gas export

availability from Turkmenistan in the next 5 to 10 years. This is especially the case for new

gas buyers, such as Europe, who will have less of a chance to receive Turkmen gas in this

13See Human Rights Watch’s specific recommendations regarding the Energy Trade Agreement at: http://www.hrw.org/en/news/2008/07/06/human-rights-watch-concerns-andrecommendations- Turkmenistan accessed November 20, 2008.14 http://www.iht.com/articles/ap/2008/05/27/business/AS-FIN-Turkmenistan-EU-Energy.php, accessed November 19, 2008.15 Ibid16 Lindsey Alexander, “Seeking a Way forward on Trans-Caspian Pipeline,” Radio Free Europe/Radio Liberty, September 2, 2008, http://www.rferl.org/articleprintview/1195765.html, accessed November 20, 2008.

decade. Lack of accountability, in the sense of Turkmenistan’s authoritarian regime

particularly able to rely on resource rents, which burden risks, both economically and

politically. Also there is an arising question which implies that, pipelines reveal significant

risks to the environment and local communities; the challenges in both South Caucasus and

Baku-Tbilisi-Ceyhan (BTC) pipelines. The big doubt on the natural gas commitments based

on these pipeline plans may unravel if Turkmenistan’s gas reserves prove less than expected;

Turkmenistan would have to double its exports.

Azerbaijan has huge significance of the world energy market. The proven and potential

resources in that sector of the Caspian Sea are inevitable to diversify, secure, and stabilize

world energy supplies. However, the land-locked energy resources in the Caspian field over

challenges to the transport of oil and gas resources, especially to the European energy

markets. Recently, long-distance transnational pipelines have grown rising central in efforts to

guarantee energy security, in huge part so they obtain an alternative to a number of vulnerable

maritime chokepoints. As a result, a broadened understanding of energy security is imperative

not only to understand the new challenges of Azerbaijan’s foreign policy but also to cope with

any potential instability or geopolitical rivalries in the Caspian region. This issue emphasizes

Azerbaijan’s foreign policy using the oil-led development process and the country’s relations

with multinational oil companies as a framework for analysis and focus on challenges for

energy security in the Caspian. The certain war between Russia and Georgia and the ongoing

Karabakh discrepancy between Azerbaijan and Armenia not only updated deliberateness of

geopolitical competition, but also further multiplied the nodes of vulnerability along the

energy configuration and cross-border pipelines in the world energy market. Eventhough

there was no certain attack on, or threat to, the oil and gas pipelines bypassing Russia through

the Caucasus region and reaching the Mediterranean in Turkey (the Baku-Tbilisi-Ceyhan

pipeline), Russia openly imply itself as a regional power by not allowing any changes in the

status quo of the region or any individual attempts to find a solution “frozen conflicts” in the

Caucasus.

Azerbaijan which had the oldest oil fields in the world was one of the most significant

mineral resource bases of the USSR during the early Soviet era. Moreover, they resumed a

near monopoly in manufacturing oil and gas equipment within the USSR, and remained a

significant refining centre for Siberian oil. With the collapsed of the Soviet Union,

Azerbaijan’s economic lifelines with the rest of the USSR were severed. Political problems

and economic conditions were escalated by ethnic unrest among the Armenian population in

the Nagorno-Karabakh zone, causing in a three year war.

Azerbaijan encountered bad position when its largest trading partner Russia, closed all rail

and road borders among the two countries in September 1994, citing the conflict in Chechnya.

Since 1995, several factors have contributed to a gradual return to political and economic

stability. Haidar Aliyev, has consolidated his position sincerely, an armistice in Nagorno-

Kharabak has been adhered to since 1994; and foreign oil and gas companies have confirmed

huge offshore reserves under the section of the Caspian Sea request by Azerbaijan. Azerbaijan

foreign policy especially focuses on two aims: attracting foreign investment in the oil sector

from a wide cycle of countries, and guaranteeing a variety of oil export routes in order to get

out becoming dependent upon any one transit country.

ORGANISATION OF THE OIL AND GAS SECTOR

At the beginning of 1998, there was no arrangement body for energy issues; the President’s

office made policies and energy sub-sectors were managed by the state-owned companies.

The State Oil Corporation of the Republic of Azerbaijan (Socar) was established in 1992 by

combining the onshore upstream execution of Azneft and the offshore activities of

KhezerDenizNeft, inheritor organizations to the former Soviet Ministry of Oil and Gas

managing in Azerbaijan. Oil and gas produced in Azerbaijan and negotiates contracts with

foreign enterpriser in this field. Azerigaz is responsible for the transportation, storage and

sales of natural gas while Socar concerned about production and processing. It was found in

1992 with the strengthening of the national gas transmission firm and the natural gas

distribution sector of the State Fuel Committee. The government declared in 1997 that it

intended to set up a ministry to regulate energy policy, though by the beginning of 1998, such

a ministry had not been created. The functions of the new ministry are to contain improving

energy policy, preparing legislation, setting tariffs, and guaranteeing the state’s energy

security.

However, it is not clear how much of a role such a ministry would have in the oil and gas

sector. Even though the divergence of Socar’s policy making and licensing role from its

commercial functions has been negotiable, the new ministry might focus on the internal

provision of electricity and gas. Moreover, most significant policy decisions affecting the oil

and gas sector will might continue to be occurred by the President’s office.

OIL RESERVES AND PRODUCTION

Oil reserves: According to Socar, Azerbaijan’s oil reserves are nearly total some 17.5 billion

barrels, while most outside prediction place obtainable oil reserves at 3 - 11 billion barrels. It

is thought that over 90% of Azerbaijan’s total oil reserves are offshore. Extensive

investigation is to precede not only deep but also shoal side of the Caspian Sea offshore

Azerbaijan, mostly near the Apsheron Peninsula. Onshore investigation during the next few

years is to focus on the central and western parts of the country. Similarly, the situation in

most OECD countries, the State keeps down monopoly title to the subsoil, containing

offshore, and the latent resources within it. Oil production: Oil production fell from 12.5 Mt

in 1990, to 9.02 Mt in 1997, owning to continuing depletion of existing areas, poor furthering

because of lack of funds, and limits managed by backward technology. One of the first oil

was perforated in Azerbaijan’s Apsheron peninsula in 1848. At beginning of the 20th century,

Azerbaijan considered nearly one half of world raw oil production. Output peaked at around

23 Mt in 1940, when Azerbaijan accounted for some 70% of total USSR crude oil

production.17

Distribution of oil products: Azerbaijan has more than 670 petrol stations in operation yet,

over one-third of which have been privatized. All stations were already run by the State Fuels

Committee (Goskomtoplivo), which was defeated in 1994. Lukoil has construct three filling

stations in Baku and project to build three others in recent times, containing two outside the

capital.

Rail and road are produced movements within Azerbaijan but there are no significant

product pipelines.

The northern route

The northern route, which established in December 1997, consists mainly of upgraded

basically sections of pipeline from Baku to Novorossiysk via Grozny (in Chechnya) and

Tikhoretsk. The section within Azerbaijan was actually used to import Russian oil for

processing in Azeri refineries and had to be reciprocated. The cultivate and substitution of the

17 Caspian oil gas , Page: 157

1,411-km section within Russia was the responsibility of Russia’s Transneft, which also

financed the work. Transneft is to send a transit fee of US$15.67 per tone.18

The western route

The 920-km western route from Baku to the Georgian Black Sea port of Supsa is scheduled

for completion by early 1999. Similar to the northern route, it combines both existing

stretches of pipeline with new sections. AIOC, which is financing the western route, has

allocated US$315 million for the project, of which US$60 million will be used to build a

terminal and storage facilities for 240 kt of oil in Supsa. The Supsa terminal will have an

annual capacity of 10 Mt, with the possibility to upgrade eventually to 50 - 70 Mt. A tanker

loading platform is to be built 2.5 km offshore. Five pumping stations are also to be

constructed along the route.19

Ceyhan route

In July 1997 the AIOC declared that it had restricted the routes for the basic oil pipeline to

three routes: the two used for early oil and a third route to the Turkish Mediterranean port of

Ceyhan. Costs for a basic oil pipeline to Ceyhan are approximately between US$2.5 - 3.4

billion, depending on the route and the use of appearing facilities, involving pipelines and the

terminal at

Ceyhan. bypassing the environmentally vulnerable Turkish Straits is one of the main gain of

a pipeline to Ceyhan .Turkey, Azerbaijan and the United States had received strong approval

for that routes but its cost competitiveness against other routes may related to the offering of

significant fiscal and other trigger by the Turkey.

Oil Strategy of Azerbaijan

Although no formal government institution adopted formal document in Azerbaijan, two

basic principles emphasizing the Azerbaijani foreign attitude regarding the oil issue. They

were inclusion and participation or the initiation of alternative regional co-operative

arrangements.

18 Caspian oil gas, Page: 163 19 Caspian oil gas, Page: 164

The first strategy is overcome all the regional powers in the Caspian oil business to intensify

the recognition of the Azeri national sector in the Caspian. That principle was applied mainly

with respect to the states in the region, which held a negative behavior towards the oil activity

in the Caspian which is Russia and Iran. The second principle focus on managing and

institutionalizing the relations of Azerbaijan with the friendly states in order to have a security

balance against the mentioned two states, such as the foundation of a regional alliance, called

GUUAM (Georgia Ukraine, Uzbekistan, Azerbaijan and Moldova), and previous activation of

the Georgia-Ukraine-Azerbaijan trio within the CIS and the Georgia-Turkey-Azerbaijan trio

in the Caucasus.

The inclusion policy had a certain success to get out the tenseness of bring into Russia and

Iran, the Russian public-private company LukOil was contained in the “Contract of the

Century” with a serious 10% share of participation. Oil projects in the Caspian also involved

the Russian oil firms Transneft and Rosneft Azeri.

In spite of the initial refusal, the Iranians confirmed it later on. Later, the Iranian company

called Oil Industries’ Engineering & Construction (OIEC) is attending in Shahdeniz project.

The OIEC attended in two oil and gas projects in Azerbaijan. All foreign companies attending

in Azeri oil projects as signing a standard contract which involves the following statement in

its preamble: ‘ownership of all petroleum existing in its natural state in underground or

subsurface strata in the

Azerbaijan Republic, including the portion of the Caspian within its jurisdiction, is vested in

the Azerbaijan Republic. After having their public-private companies sign such a treaty with

the government of Azerbaijan, it would be quite difficult for Russia and Iran to maintain a

legal argument that they never recognized the Azeri sector in the Caspian Sea.20

However, despite of the fact that participation of the Russian and the Iranian oil companies

into the oil projects in Azerbaijan, it could not ensure for the full security of the oil business in

Azerbaijan. Also, two states have shown an extraordinary sense to alter their attitude on the

status of the Caspian and other topics relevant the security of oil business in the Caspian.

20 Azerbaijan’s Foreign Policy and Challenges for Energy Security: Pinar Ipek, Page: 233

The role of oil in Azerbaijan’s Western-Oriented Foreign Policy

Security threats in the early years of Azerbaijan’s independence were critical obstacle the

route of the country’s foreign policy, which has been largely driven by the economic and

political preferences toward Azerbaijan’s initiative relations with multinational oil companies

and make profit an oil-led development process. Azerbaijan’s economy encountered several

crises after end of the central economic system of the prior Soviet Union. Foreign direct

investment in the oil and gas sectors was certain rising the country’s economic recovery. With

collapsing Soviet system, Azerbaijan’s economy was interested in extraction and production

of raw materials. The experience of Azerbaijan was different from those of other previous

Soviet republics owning to its geographic location and cultural content. Turkish Muslim

population lives Azerbaijan, also they located between powerful neighbors Iran and Russia.

As a result, some regional conflicts, which occurred after Azerbaijan gain its independency,

emphasized the significance of economic revival for its national security. That is why;

Azerbaijan had to secure its political independence and economic development among

disorder geopolitics that reflected the conflicting interests of variety side, while ending its oil

and gas projects, especially for pipeline routes. These parts included multinational oil

companies, Azerbaijan’s neighbors (including Iran, Russia, and Georgia), and Turkey and the

United States.

GAS RESERVES AND PRODUCTION

At the beginning of 1990s, natural gas accounted for nearly 60% of Azerbaijan’s primary

energy supply. This phase decreased in the mid 1990's, basically because of reducing in the

amount of gas imported from Azerbaijan’s suppliers due to non-payment problems. In spite of

the fact that, gas continues to play a dominant role in the Azeri economy. According to Socar,

Azerbaijan’s proven gas reserves are about 800 Bcm, while most outside sources place them

between 300 - 800 Bcm. US Government report estimates recoverable gas reserves at around

300 Bcm, with another 1,000 Bcm classified as possible. The three offshore fields being

developed by the AIOC consortium alone are estimated to contain 70.8 Bcm of natural gas,

while the Nakhichevan and Kyapaz fields may contain an additional 280 Bcm.21

21 Report to Congress on Caspian Region Energy Development, 1997, Page: 166

Onshore reserves appear almost discharge. Also, the main gas producer is Socar. Most of

Azerbaijan's gas production is connected with offshore oil production. The extensive base for

offshore natural gas is relatively well developed for the basic producing regions and is

expected to be expanded as certain offshore oil fields are brought on-stream by the AIOC and

other consortiums. According to most contracts signed with international investors, associated

gas belongs to Socar, though the responsibility to improve and gather it seems as different

kinds by project.

Gas production in Azerbaijan reached a high of 14 Bcm in the mid-1980s, though declined

to 6.4 Bcm by 1994, at which time only 0.2 Bcm came from onshore fields. Production

increased slightly to 6.6 Bcm in 1995, due to the one-off effect of a project to capture gas

previously vented at the Guneshli and Neft Dashlari offshore fields.

The declining trend continued again in 1996 when total production decreased to 6.3 Bcm in

1996 and 5.7 Bcm in 1997. Azerbaijan’s largest single domestic source of gas in 1998 was the

offshore Bakhar field, which produces large amounts of gas condensate. In 1991 Bakhar

accounted for 51% of Azerbaijan’s gas production.22

However, since the mid-1980s, production at Bakhar and most other large fields has

decreased. Guneshli production has only remained relatively constant. Five new wells being

drilled at the Bakhar, Bulla-Deniz and Apsheron fields could reportedly raise gas production

by 2 Bcm per year and should be on-line in 1998. Revision of the Bakhar eras and the shallow

portion of the Guneshli reportedly could supply another 6 Bcm per year, doubling current

production. Since most gas produced in Azerbaijan is associated, declines in shoal gas

production have mirrored falls in oil output. Gas production is only likely to rise significantly

when some of the huge offshore oil and gas projects being developed with international

consortia begin to come on stream. Azerigaz forecasts production to reach 18 Bcm in 2010,

while the IEA scenarios call for 15 - 24 Bcm.

22 Caspian oil gas, The definition of production apparently includes gas flared and vented, while delivery includes only gas

delivered to the transmission/distribution system, whether processed or not, Page: 168

GAS PROCESSING, TRANSMISSION AND DISTRIBUTION

Socar is accountable for gas processing. Azerbaijan’s main gas processing facility is the

Karadag plant, most of which was built in 1961. Its six gas processing trains and one intensify

train have a organize capacity for processing 6.5 Bcm per year of gas and 675 kt of

condensate.

Main capacity in 1997 was about 4.5 Bcm. Karadag obtains gas from two main pipelines.

The Guneshli line brings gas from offshore fields east of Baku, while the Narimov-Bulla

Deniz line transports gas from onshore and offshore parts south of Baku. Although Karadag is

in poor situation, a more serious problem is probably the lack of region compression and

pipelines to transport offshore gas to the processing amenity. Many pipelines lead squarely

into the transmission system, intensification depreciation problems for the network and end-

use equipment. Also, with increasing the amount of gas available for distribution, the 1994

project to recover gas from the Guneshli and Neft Dashlary offshore fields increased the

amount of gas sent for processing from 2.9 Bcm in 1993 to some 4.3 Bcm in 1995. Azerbaijan

reportedly processed 5 Bcm per year in both 1996 and 1997, although some sources suggest

considerably lower amounts. The World Bank has financed a suitability study to replace the

Karadag plant.

Gas Transmission and distribution

State-owned Azerigaz is in charge for transportation, transit, storage and diffusion of natural

gas. The company was established in 1992 with the coalition of the national gas transmission

company and the natural gas distribution offshoot of the State Fuel Committee. Azerigaz’s

charter forbids it to engage in gas-extraction, which remains the prerogative of Socar. As part

of conditions relating to a World Bank loan for the rehabilitation of the country's gas industry,

a Presidential prescript of May 1997 corporative Azerigaz and relayed its shares to the State

Property Committee to be sold at a later date.

Iran has an important position according to international energy security and its large oil and

natural gas resources in the world economy.

Oil has importance that country’s determination of the last hundred years of history. Also,

the modernization and industrialization was always based on oil. Almost all of the operated

oil effects from Huzistan region and the strip between the Zagros Mountains and the Arabian

Gulf coast. Oil deposits in interior areas are relatively weak or difficult to operate but they are

rich in natural gas.

Before the Iran – Iraq War, oil production was up to 300 million tons a year, in the war

period it was decreased 50 – 60 million tons, today in 2010 is still below 200 million tons.

The country's most important industrial sector depends on oil, petro-chemical industry.

Besides the refineries, oil and gas pipelines are important for processing and transmitting of

oil. In addition, the possibility of many infrastructure including rail and road was developed

by oil revenues in 1970s.

Iran is the second country of the world in terms of its natural gas reserves, and third for the

oil reserves. In 2005, it was spent $ 4 billion for Iranian oil import because of insufficient

domestic use and trafficking. In 2005, oil industry has reached an average of 4 million barrels

of production per day. In case, it was produced about 6 million barrels per day in 1974. In the

early 2000s industry infrastructure was weakened because of technological insufficient.

In 2004, a large portion of Iranian natural gas reserves were unopened condition. Iran’s

energy capacity has increased to 33.000 megawatts with the addition of new hydroelectric

stations and conventional coal and oil powered stations’ lines connecting. 75% of this amount

is natural gas, 18% of it oil and 7% is based on hydroelectric energy. In 2004, Iran opened its

first wind energy and geothermal power plants. The first thermal solar power plant opened in

2009.

Growth of population and heavy industrialization has caused electricity demand to increase

by 8% per year. The government plans to build nuclear power plants, including hydroelectric

power stations and making the new gas-fired power plants to reach 53.000 megawatt capacity

by 2010.

Iran, one of the OPEC’s founding members, holds the world’s third – largest proven oil

reserves and the world’s second – largest natural gas reserves. (Iran Energy Data 2010)

Iran produced 4.2 million barrels of oil per day (bbl/d) of total liquids in 2008.

Approximately 3.9 million bbl/d of it was crude oil. This rate equals nearly 5 percent of

global production. Also, production capacity of crude oil in 2009 was same.

Development plan of the Iran’s energy sector’s key part is ongoing production and

exploration of the South Pars natural gas field in the Persian Gulf.

Oil

“Iran has an estimated 137.6 billion barrels of proven oil reserves, or roughly 10 percent

of the world’s total reserves. Iran has 40 producing fields – 27 onshore and 13 offshore, with

the majority of crude oil reserves located in the southwestern Khuzestan region near the Iraqi

border. In 2008, Iran exported about 2.4 million bbl./d of oil, making it the fourth largest

exporter in the world.” (Iran Energy Data 2010) Oil production capacity of Iran is planning to

increase to 5.1 million bbl./d by 2015 due to five year development plan which submitted to

the Majles in 2010.

Iran has the largest oil tanker fleet in the Middle East. The National Iranian Tanker

Company holds twenty nine ships. (Iran Energy Data 2010)

The state - owned National Iranian Oil Company (NIOC) is responsible for oil and natural

gas production and exploration. NISOC – National Iranian South Oil Company accounts for

80 percent of oil production covering the provinces of Khuzestan, Bushehr, Fars, and

Kohkiluyed and BoyerAhamd. (Iran Energy Data 2010)

In 1978, over 5 million bbl./d oil was produced in Iran. But after the 1979 revolution

production levels have increased because of sanctions, limited investment and over rate of

national decline. Due to this decline in mature oil fields of Iran, crude oil production is lost

nearly 400.000 – 700.000 bbl./d annually. Oil fields of Iran need structural upgrades

(including) oil recovery efforts such as natural gas injection.

The Azadegan field contains 26 billion barrels of proven crude oil reserves. (Iran Energy

Data, 2010) But because of field’s geologic complexity (extraction) is difficult. Production

from the southern part of the field has been nearly 20.000 bbl./d since 2008. In 2009, 35.000

bbl/d was produced and is expected to reach 45.000 bbl./d in 2010. In January 2009, China

National Petroleum Corporation signed a buyback contract with NIOC to develop northern

Azadegan in two phases. Phase one, expected to be completed in 48 months, will add

approximately 30.000 bbl/d of production. Phase two is expected to take 42 months to

complete upon phase one’s completion, and will add 75.000 bbl./d, bringing Azadegan’s total

production to 150.000 bbl./d. (Iran Energy Data 2010)

The largest gas – reinjection project of the world began on Iran’s Agha – Jari oil field in

2009. It is planned to be injected 3.6 billion cubic feet (Bfc) of gas into Agha – Jari. But due

to technical obstacles 3 Bfc was injected. When the full injection amount is realized, in

operation for 70 years, Agha – Jari production is planned to increase from 140.000 bbl./d to

200.000 bbl/d. The gas is supplied by Iran’s South Pars phases 6, 7, and 8 via the IGAT-5

Pipeline. (Iran Energy Data 2010)

In 2008, the oil consumption of Iran was 1.7 million bbl/d. Iran’s refinery capacity is limited

for the production of light fuels. So, it imports most of its gasoline supply. Domestic oil

demand of Iran is mostly for diesel and gasoline. In accordance with the FACTS Global

Energy, in 2008 diesel consumption was 570.000 bbl/d and 90 percent of it was produced

domestically. The Iranian government sponsors the refined oil products’ price. But in January

2010 Iran’s Guardian Council approved measures with the aim of eliminating energy

subsidies by 2015.

In 2008, Iran exported 2.6 million bbl/d and its net oil export revenues were $73 billion.

Half of the government revenues is provided from oil exports.

Kharg Island, the site of the vast majority of Iran’s exports, has a crude storage capacity of

20.2 million barrels of oil and a loading capacity of 5 million bbl/d, followed by Lavan Island

with capacity to store 5 million barrels and loading capacity 200.000 bbl/d. “Besides, Kish

Island, Abadan, Bandar Mahshar, and Neka are important terminals provide imports from

Caspian Region. Also, The Straits of Hormuz on the southeastern of Iran, is an important

route for oil exports from Iran and other Persian Gulf countries.” (Iran Energy Data 2010)

In 2009, total refinery capacity of Iran was approximately 1.5 million bbl./d. Iran refineries

are not enough for domestic demand. But Iran is planning to rise its refining capacity to 3

million bbl./d down to 2013 by expansions at existing refineries. This provides no need for

imports by 2013. Besides, Iran has discussed joint ventures in Asia, China, Indonesia,

Malaysia, and Singapore to expand refining capacity. (Iran Energy Data 2010)

Gasoline

In 2007 and 2008, Iran gasoline consumption was 400.000 bbl./d. In reference to FACTS

Global Energy, government aims domestic gasoline refinery projects to make Iran a gasoline

exporter. 2% demand growth in 2010 will remain to 3% by 2015. Iran imported nearly

130.000 bbl./d in 2009.

Domestic oil network of Iran is extensive including five pipelines and many international

pipeline projects under consideration. Iran has invested in its import capacity at the Caspian

port on behalf of providing crude swaps with Turkmenistan and Kazakhstan and to overcome

increased product shipments from Russia and Azerbaijan. In the case of crude swaps, the oil

from the Caspian is consumed domestically in Iran, and an equivalent amount of oil is

produced for export through the Persian Gulf with a Swiss – trading arm of NIOC for a swap

fee. (Iran Energy Data 2010)

Natural Gas

In accordance to Oil and Gas Journal, Iran’s calculated proven natural gas reserves nearly

1.045 trillion cubic feet (Tfc) in January 2010. According to this calculation Iran is second

after Russia. Most of natural gas reserves of Iran are attended in non – associated fields. So,

these reserves - approximately 62% are not developed. South and North Pars, Kish, and

Kangan – Nar are the main natural gas fields.

In the year of 2008, Iran produced 4.1 Tcf natural gas but consumed about 4.2 Tcf. The

majority was provided by imports from Turkmenistan.

Natural gas consumption is expected to grow around seven percent annually for the next

decade. Last twenty years both production and consumption of Iran have increased quickly.

Even though a great extent South Pars project’s expansion and production in the future, in

reference to FACTS Global Energy, Iran’s natural gas exports will be less because of the high

domestic demand.

The European Union has an energy supply security about Iranian oil and gas. Because

importing these products is necessary for the EU. So, it must provide a plan for the security of

supply at rational prices. This could only happen with the competition of different producers

in the European market. Iran is the greater supplier for the EU in the future.

Iran’s natural gas infrastructure, transportation, and distribution are provided by The

National Iranian Gas Company (NIGC). Certain international oil companies such as Repsol,

Shell, and Total have divested from natural gas sector of Iran by reason of poor investment

climate. As a response, Iran was interested in eastern firms including state – owned Indian Oil

Corporation, China Petroleum and Chemical Corporation, and Russia’s Gazprom. These firms

have an important role in natural gas upstream development of Iran. Under Iran’s buy – back

scheme, foreign firms hand over operations of fields to the National Iranian Oil Company

(NIOC), and after development they receive payment from natural gas production to cover

their investment. National Iranian Oil Company (NISOC), a subsidiary of NIOC, is

responsible for much of the southern natural gas production. (Iran Energy Data 2010)

Iran imports natural gas from Turkmenistan. Supply is not regular depending upon dissents

on pricing. In 2008, Iran was imported 0.8 Bcf per day (Bcf/d) natural gas from

Turkmenistan. Besides, this two country signed an agreement in 2009 to rise natural gas

imports up to 1.2 Bcf/d. Plus in 2010 a new pipeline is finishing.

“The most significant energy development project in Iran is the offshore South Pars field

(called the North Field in Qatar), which is estimated to have 450 Tcf of naural gas reserves, or

around forty seven percent of Iran’s total natural gas reserves.” (Iran Energy Data 2010)

Liquefied Natural Gas (LNG)

Upstream development of LNG is provided from Pars Oil and Gas Company (PAGC). And,

several companies such as National Iranian Gas Export Company (NIGEC) are responsible

from the downstream development. Iran requires international partners developing its LNG

potential.

Developments in the Iranian Gas Trunkline (IGAT) pipeline series, all fed by South Pars

development phases, are important to Iran’s natural gas transport. (Iran Energy Data 2010) It

is planning for 2011, between Assaluyeh and Iranshahr IGAT – 7 will transport more than 3

Bcf/d of gas.

The Nabucco pipeline project is important for the EU, the Middle East and Iran to make

stronger energy ties between them. The Nabucco pipeline will transport natural gas from

Caspian region, Iran, Iraq and Egypt via Turkey, Bulgaria, Romania and Hungary to Austria.

(Eva Patricia,2009) This project will decrease the EU dependency on Russian gas. Within the

frame of Nabucco project it is planning to build a 2050 miles pipeline and it has 3 Bcf/d

transportation capacity.

The 745 mile Iran-Turkey pipeline, completed in 2001, can transport up to 1.4 Bcf/d of

natural gas. (Iran Energy Data,2010)

The 87-mile long Iran-Armenia pipeline will transport 86 Mcf/d to Armenia in exchange for

3.3 billion kilowatt hours of electricity.

The Iran – Pakistan – India gas pipeline participation was made in 2006. This is not a quick

but a win – win project for these countries. It is 1724 miles and has 5.4 Bcf/d capacity.

The option included Iranian companies to own and operate the pipeline and deliver gas to

India at India–Pakistan border or a consortium of Iranian, Indian, and Pakistan and

international companies to own and operate the pipeline. Under the third option, it proposed

that India and Pakistan buy gas in Iran and transport through a pipeline owned by global

companies. (Verma 2007)

Electricity

Iran generated nearly 190 billion kilowalthours (Bkwh) and consumed 153 Bkwh in 2007.

The generation sources are conventional thermal electric power and hydroelectric power and

Iran has no nuclear electric power generation as from 2010.

Iran has focused on meeting higher demand mainly through expanding combined-cycle and

hydroelectric power. However, a severe drought during late 2007 and early 2008 adversely

affected Iran's hydroelectric production, leaving water reservoirs emptied during the summer

peak demand season, resulting in a drop of nearly 70 percent in hydroelectricity power

generation. This has brought into question Iran’s ability to fulfill its domestic power

obligations, let alone its export obligations. Consequently, as of late 2007 some 85 water

dams were under construction. (Iran Energy Data 2010)

Iran exports its electricity from Armenia, Pakistan, Turkey, Afghanistan and Iraq.

Energy Consumption

In households and commerce sectors, energy consumption of Iran is very high.

Transportation sector is lower but it has a main importance in Iran’s present and future energy

policy.

Energy consumption in Iran is heavily subsidized. Fuel required for the transportation

sector, gas and electricity for household's and commerce as well as for industry and

agriculture, in other words, the country’s entire energy consumption, is subsidized from top to

bottom. (Massarrat, 2004)

Energy Policy of Iran

Iran must follow the policy which is combined two phases. “Firstly, meeting the rising

demand for energy in every sector of consumption by raising the primary energy supply

whilst maintaining the lowest prices possible, and, secondly, upholding the country’s oil

exporting capacity at a certain level. The diversification of fossil based primary energy supply

and stepping up of natural gas production follow exactly these objectives.” (Massarrat 2004)

For the future generations Iran must apply these energy policies. As a first, using natural gas

in every sector instead of oil will give precedence to the transportation sector. Secondly,

amending and adjusting the subsidization policies are reforming the energy pricing structure.

There must be a changing from price subsidies to purposeful subsidies. Thirdly, the

configurations to provide oil, natural gas, and electricity must be renewed with competition. It

requires close relationships with the private sector. Fourth policy is founding new engineering

capacities for educational and research institutes. The fifth, Iran must take precautions for

applying modern technologies to energy usage. Also these will increase the energy efficiency.

China, India, and the EU are the significant economic partners for Iran. Iran supplies natural

gas for China and India. The EU can provide foreign direct investment and technology and

knowledge transfer; and China’s national oil and gas companies have signed several import

deals and will explore Iranian oil and gas fields to secure its growing oil and gas import

dependency. (Rakel 2009) In the past, China and Iran has not any conflicts or war. This is

useful for their cooperation.

With the economic liberalization policies’ execution in China in 1976, energy sources

demand of China has been rising. One form of cooperation between the China and the Iran is

the Shanghai Cooperation Organization (SCO), which has developed into an important global

political, economic, and security organisation. (Rakel 2009) It was established on 14 June

2001. Owing to SCO, Iran could expand its international political and economical facilities.

Plus, the country will develop in the technology, trade, investment, and infrastructure areas.

Also, US’s sanctions on Iran lose its influence by the Iran – SCO cooperation.

In 2006, Iran provided 11% of its oil imports.

Even though the prospects of the EU, China and Iran cooperation, there could be some

obstacles of it. Firstly, US can have the hostile attitude in economic and political relations. US

is afraid of shifts of mutual relations between from Iran – US to Iran – China or Iran – EU.

The second negative side is Iranian trade and investment ways or climates are insecure for the

governments and companies in Iran. The last obstacle is the nuclear subject. Today Iran is a

potential nuclear weapon state. This scares its neighbors including Iraq, Saudi Arabia, Egypt,

Syria and Turkey.

As a conclusion, assessing the reserves and resources in the hands of Iran, it needs

sustainable energy policy. Iran should determine its energy structure’s speed and direction.

After the break-up of the Soviet Union in December 1991, the evolving process of

Kazakhstan as Azerbaijan, and Turkmenistan regarding legal status of Caspian region have

been shaped by three significant development. These are; three countries of Caspian region

that are Kazakhstan, Turkmenistan and Azerbaijan are believed to have more oil and gas

reserves in coastal region than the other countries; Russia and Iran because of that reason

private companies prefer these part of region in order to invest and get advantages. Second,

these countries possesses available capacity on hydrocarbon resources which is considered

necessarily to the economic survival of these newly independent states because the countries

have no more alternative for development on national economy. Thirdly, especially

Kazakhstan and Azerbaijan want to divide Caspian Sea. The reason of that desire; they are

encouraged by foreign investors in order to establish national energy sector.

Oil Reserves of Kazakhstan

Kazakhstan is near the North of Caspian region and known as main oil field in that region.

Kazakhstan has the largest recoverable crude oil reserves of Caspian region which also

possesses important oil and natural gas reserves. Because of that, Kazakhstan has significant

role in international energy market. Kazakhstan’s barrel number of oil reserves increases

annually. For example, Kazakhstan earlier assessment in the 1990s estimated reserves at

approximately 16 billion barrels, this proportion rise in 2004 Kazakhstan oil production grew

by about 15 percent every year, between 1999 and 2004.Kazakhistan oil production started to

increase especially in 2004 with foreign investments. The oil of Kazakhstan is exported with

pipeline through Russia and other neighboring countries

Kazakhstan hopes that most of its exports will come from the growing current fields of

Black Sea accordance with Russia, Persian Gulf via with Iran, and also with some additional

traffic from northward to Russia via pipeline and rail. Kazakhstan aim to develop

infrastructures of these pipelines in the purpose of gaining access to hard-currency markets.

Moreover, major oil reserves of this country are located in western part of Kazakhstan that are

Tengiz, Karachaganak, Aktobe, Mangistau, and Uzen, also the 5 largest onshore oil fields.

What’s more, estimated capacity of sector in Kazakhstan is at least 14 billion barrels. In

addition to this Kazakhstan is significant exporter country with its oil capacity which

pipelines to Mediterranean, China and rail to Batumi and Georgia. The current export

pipelines of Kazakhstan are Caspian Pipeline Consortium (CPC), Atyrau-Samara Pipeline

Kazakhstan-China Pipeline, Baku-Tbilisi-Ceyhan (BTC).

Caspian Pipeline Consortium (CPC)

CPC is unique to the region, that means it is a shipper owned pipeline which is from Tengiz

field to the Novorossiysk and two marine terminal on Russia's Black Sea coast. What’s more,

it is financed and constructed on behalf of a group of share holders who have or expect to

have oil to transport. This is a radical difference from the existing regional pipeline systems.’

The Caspian Pipeline Consortium (CPC) oil pipeline was commissioned in 2001 In late 2008,

CPC members agreed on a plan to expand capacity on the pipeline to 1.34 million bbl/d by

2013, but a delay in the final investment decision to the fourth quarter of 2010 due to

technical complications moved the completion date to mid-2014’23

Kazakhstan – China Pipeline

Kazakhstan-China pipeline is running from Atyrau port in northwestern Kazakhstan to

Alashankou in China's northwest Xinjiang region. Also span of this pipeline is 1,384 miles.

Kazakhstan has the Caspian Sea’s largest recoverable oil reserves. On the other hand , China

has to fill the gap between oil production and consumption. As a result of this, China wants to

secure importer countries an done of these countries is Kazakhstan. China is not only

interested in oil resources of Kazakhstan but also hyrocarbon resources. . Thus, in May 2004

the two nations signed a joint declaration of what was termed the ‘‘second section’’ of an oil

pipeline project. The aim of these countries is obvious. Kazakhstan intends to increase its oil

productionand ship it through multiple routes. Meanwhile,China needs to import large volume

of oil to maintain its impressive economic performance.’ The pipeline was built in segments,

the most recently completed segment, the 492-mile Kenkiyak-Kumkol (Phase 3) started

commercial operations on October 6, 2009, and connects the Kenkiyak-Atyrau pipeline

(Phase 1) to the Atasu-Alashankou pipeline (Phase 2), online since 2006.’24

Atyrau-Samara Pipeline

One of the significant pipelines of Kazakhstan is Atrayu- Samara pipeline. Reason of this

pipeline’s importance is route of it which provide opportunity in order to connect World

market via Black Sea

23 U.S. Energy Information Administration; Breif Country Analysis, Kazakhstan, November, 201024 Ibid

Before the completion of the CPC pipeline, Kazakhstan exported almost all of its oil through

this system.

Baku-Tbilisi-Ceyhan

Supply of this oil pipeline is Azeri-Chirag-Guneshli oil field of Azerbaijan. Also the routes

of this pipeline are from Baku to Ceyhan Turkey and passes through Tbilisi, Erzurum, Sarız.

However, Kazakhstan’s government announced that it would build a trans-Caspian oil

pipeline which is from the Kazakhstani port of Aktau to Baku. They had an agreement about

oil transportation with Azerbaijan because of the opposition to Russia and Iran. The BTC

Pipeline Company to supply up to 500,000 bbl/d of oil via the BTC pipeline. Oil supplies of

Kazakh were loaded into the BTC for re-export for the first time that is in October 2008.

However, disagreements are regarded in this region over the pipeline routes because there is

no major or specific rules on the agreement. What‘s more, states which are located in Caspian

region have not yet legal framework about their energy production or relationship between the

countries because of the lack of consensus, the private companies decided to not to wait for

that. Thus, a defacto regime is emerged and the companies started to develop all these

resource location. Because of that reasons economies of these countries in the region started

to develop. Most of this growth will come from three enormous fields of Kazakhstan: Tengiz,

Karachaganak, and Kashagan.

Tengiz is the second largest oil field in the World and currently largest field of Kazakhstan;

also, recoverable crude oil reserves estimated at approximately 6 to 9 billion barrels. Like

many other oil fields, the Tengiz also have large reserves of natural gas which is located

western Kazakhstan and discovered in 1979. What’s more, tengiz oil field is supported by

private sector in order to improve capacity.’ The Tengizchevroil (TCO) joint venture has

developed the Tengiz field since 1993. The major partners in Tengizchevroil are

ChevronTexaco with 50% ownership , ExxonMobil with 25% ownership, the Kazakhstani

government through KazMunaiGaz with 20% ownership and Russian LukArco with 5%

ownership. In January 2003, after negotiations with the government of Kazakhstan, the

Tengizchevroil consortium members initiated a $3 billion expansion project designed to boost

production to approximately 450,000 bbl/d by 2006. According to ChevronTexaco, pottential

of Tengiz should be different Tengiz could produce 700,000 bbl/d by the end of the decade.

There could be disagreement like that between companies about capacity od Tengiz oil field.

On the other hand, Karachaganak is one of the world's largest oil and gas condensate

reserves. It is located close to the Russian border. In addition, Kasgahan is another gas and

oil field of Kazakhstan which possess significant potential. Kashagan oil field has been

developing since 1997 which is also important for the future oil and gas output of Kazakhstan.

However, Kasgahan represents one of the most complicated oil field developments to date.

Because, state influence the each steps of development that means state-owned companies

started to involve the domestic energy sector and have important role with gas and oil

company; KazMunaiGaz. This field discovered step by step, first one was in 1999 which is

east part of Kasgahan

Chronology of Kasgahan

1993 Creation of the KazakhstanCaspiishelf (KCS) to carry out the seismic survey

of the Caspian with Eni, BG Group, BP/Statoil, Mobil, Shell, Total and a

Kazakh state company.

1997 KCS becomes the Offshore Kazakhstan International Operating Company

(OKIOC), governed by a Production Sharing Contract.

1998 KazakhstanCaspiiShelf, the state-owned company, sells its stake in OKIOC

to Phillips Petroleum (US) and Inpex (Japan) for $500 million.

2000 Discovery of Kashagan is officially announced in July.

2001 Eni becomes the operator and the project is re-named Agip Kazakhstan North

Caspian Operating Company (Agip KCO). BP and Statoil sell their stake in

the project with the remaining partners buying their share.

2003 BG Group (British Gas International) attempts to sell its stake to two Chinese

companies CNOOC and Sinopec. Other partners two Chinese companies

CNOOC and Sinopec. Other partners block the sale by exercising their pre-

emption privileges

2004 Legislation granting the government to claim pre-emptive purchase rights in

any energy project.

2005 KazMunaiGaz purchases 50% of BG shares (8,33%) while other IOC

participants share the rest.

2007 In August, the government of Kazakhstan at Kashagan for three months due

to environmental violations suspends work at In September, the Parliament

approves the law enabling government to alter or cancel contracts with

foreign oil companies if their actions threaten nations interests.

2008 On January 14 the consortium and the Kazakh authorities sign a

Memorandum of Understanding, which established that the Kashagan

partners will pay a $2.5-4.5 billion compensation to Kazakhstan for the

project’s continuous delays. At the same time, the stake of KazMunaiGaz in

the consortium is to be doubled to 16.8% for $1.78 billion.

Source: eia

Natural gas production of Kazakhstan has been remaining. However, domestic

consumption has also been increasing, although Kazakhstan consumed more natural gas than

produces especially in 2008. That means, the position of this country is shifting from being

natural gas importer to becoming a net expoter. Kazakhstan has two different natural gas

distribution network. One of them is in the West, another one is in the South. Because of the

lack of internal pipelines connectingnatural gas-producing areas of Kazakhstan, industrial

belt of this country has been effecting in a bad way between which are Almaty and Shymkent

this reason has prevented the development of the country's natural gas resources. Southern

Kazakhstan obtains much of its natural gas supplies from Uzbekistan via the Tashkent-

Shymkent-Bishkek-Almaty pipeline and the country exports gas from its northwestern region.

Moreover, gas pipeline transportation system is managed by KazTransGas. Moreover,

Kazakhstan is known as transit country for natural gas which exports from Uzbekistan and

Turkmenistan to Russia and China. However this portion changed in 2009 and import of

Kazakhstan started to be more higher than export.

Central Asia Center Pipeline (CAC)

The Central Asia Center (CAC) gas pipeline has two branches which is controlled by

Gazprom, meet in the southwestern Beyneu that is one of the Kazakh city then crossing into

Russia at Alexandrov Gay and feeding into the Russian pipeline system. The eastern branch,

originates in the southeastern gas fields of Turkmenistan, on the other hand, The western

branch, originates on the Caspian seacoast of Turkmenistan. Turkmen and Uzbek gas is

mostly delivered via the eastern branch, western branch have periodic problems because of

repairing of the pipeline which is supported by Intergas Central Asia which is the operator of

the Kazakh pipeline sections and has been increasing its annual investment

‘In December 2007, Russia, Kazakhstan and Turkmenistan announced signing an

agreement to renovate and expand the western branch of the CAC pipeline and to construct a

new Caspian gas pipeline paralleling the western branch with a capacity of 706 Bcf. Upon this

new pipeline’s completion, originally slated for 2012, the route would have a total capacity of

2.8 Tcf, up from around 2.1 Tcf currently. However, construction of the new pipeline was put

on hold in 2009 as Turkmenistan seeks to diversify its gas export options and Russia reduces

its Turkmen gas imports due to lower European demand.’25

Central Asia Gas Pipeline (CAGP)

Central Asia Gas Pipeline is known as Turkmenistan-China pipeline starts at Gedaim on

the border of Turkmenistan and Uzbekistan and across Kazakhstan east to the Chinese border.

This pipeline is invested for transportation from Turkmenistan to China.

CNPC, KMG and Uzbekneftegas are partners in this project.

Tashkent-Shymkent-Bishkek-Almaty Pipeline

Tashkent-Shymkent-Bishkek-Almaty Pipeline is a significant import and transit gas

pipeline. It provides gas supplies from Uzbekistan to main southern population centers of

Kazakhstan, this pipeline has a capacity of 160 Bcf.

Bukhara-Urals Pipeline

Bukhara-Urals Pipeline is a transit gas pipeline from Uzbekistan via Kazakhstan to Russia,

this pipeline has capacity of 706 Bcf

Besides, Kazakhstan requires neighbouring while exporting own natural gas the reasons

could explain with that sentences ; ‘Kazakhstan, is landlocked,it has to shiptheir oil and

natural gas by pipelines which cross multiple international boundaries.The issue of potential

routes through neighbouring countries became apriority for both regional and international

powers, as well as for oil companies. Pipeline construction provides the transit states with

several financial and political benefits, including access to oil or natural gas for their domestic

needs;foreign investment and jobs; substantial transit fees; and political leverage over the

25 http://www.intergas.kz/eng/index.php/ news

flow of oil and gas. Thus, the process of choosing and constructing pipeline routes is

complicated and requires delicate negotiations with many parties.’26

As regarding some articles about foreign policy making, the situation is understood that

Kazakhstan is also shape thier foreign policy according to economic interest.’ Foreign policy

making is influenced by numerous domestic and internationalfactors. In Kazakhstan, for

example, a wide range of determinants should be assessedin terms of their influence on

foreign policy. These include the nature of the regime in its post-Soviet state-building

process; questions of national identity; the influence of domestic groups, especially clans, on

government policy; Kazakhstan’s landlocked geography; the interests of neighbouring

powers; and the investment of multinational corporations (MNCs) in the rich oil and gas.

Above all however, it will be argued here, the questions of under what conditions and to what

extent Kazakhstan’s oil and gas resources are determinant in foreign policy making are crucial

to this study. The argument suggests that Kazakhstan has been following a multi-vector

foreign policy in strict relation to oil and gas contracts, given the determining influence of

geopolitics and the pragmatism of the Kazakh leadership in its foreign policy discourse’27

Following Kazakhstan’s dependence on Russia in the early years of its post-Soviet

independence, its geopolitical situation gradually changed so that the priority shifted

to a need to balance the interests of Russia, China, and the United States

When it became clear that Russia did not have sufficient financial clout and

technology to develop the huge oil resources in Kazakhstan, Nazarbayev turned to the

major Western oil companies. His main strategy was to diversify sources of funding to

safeguard economic stability during the state-building process and consolidation of his

power. He noted that

‘The investment potential of Kazakhstan is so large that it would require resources

which arenot available even to the highly developed countries. Thus, the requirement for a

diversified set of investors that represents dozens of countries from Europe and Asia in

addition to the US is an imperative in Kazakhstan’s policy.’

A senior government officer in the state oil company Kazakhoil explained the

26 CENTRAL ASIA AND ENERGY SECURITY,Gawdat BAHGAT , March 200627 The Role of Oil and Gas in Kazakhstan’s Foreign Policy: Looking East or West? , Pınar IPEK , January 2007

preferences of the Kazakhstan government as follows:

‘The government first wanted Tengiz and Karachaganak to be finalised. These fields

haveproven reserves. So, we could start production and exporting as early as possible. That

was a priority for the contracts. The Kazakh economy needed its oil and gas sector to be

developed... There were large companies from large Western countries. These countries

would not allow the change of the political situation in Kazakhstan. So it was good for the

Kazakh government. All companies from Russia and China were also invited in all tenders. In

1997 the CNOC (Chinese National Oil Company) for example won the tender for

Aktobe.Lukoil was in Kazakhstan before for Caspian Pipeline Consortium (CPC) and

Karachaganak oil field.’

In berief, petrol and gas have significant role on foreign policy of Kazakhstan which shape

their policy according to interest on petrol and gas.

On the other hand, great powers also have policy in central asia. In 1991, with the collapse

of the Soviet Union, a number of powers – China, the European Union, Iran, Turkey, and the

Untied States (U.S.) – made inroads into a newly opened Central Asia. For example,

‘Throughout the 1990s, Central Asian hydrocarbon reserves, concentrated mostly in

Kazakhstan and Turkmenistan, sparked a greatdeal of initial interest among the U.S. business

and policy making circles. As significant as these reserves may be, their impact on the global

energy stage was projected to be marginal at over three percent of the world’s oil reserves.’28

Moreover, Kazakhstan has problem on deutch disease and recently some journal article

prove that kind of problems.’ The Kazakh government can battle the Dutch disease by

stimulating non-energy business development and job creation, by simplifying registration for

new business and reducing corporate taxes and employment payments for these newly created

entities. As USAID and a number of NGOs repeatedly demonstrated around the world, micro-

lending to boost entrepreneurship is yet another way to decrease unemployment and

poverty.’29

28 ALTERNATIVES, Turkish Journal of International Relations, Fall 2009 – Ezeli Azarkan29 http://www.cacianalyst.org/?q=node/1007- Confronting Kazakhstan’s ‘Deutch Disease’

In conclusion, Kazakstan is significant country for international issues with their resources

and it obtain lots of foreign investments from great powers and the other countries.

REFERENCES

1. Alkin, Kerem & Atman, Sabit 2006, Küresel Petrol Stratejilerinin Jeopolitik Açıdan Dünya ve Türkiye Üzerindeki Etkileri, Yayın No: 2006-48, İstanbul.

2. ALTERNATIVES, Turkish Journal of International Relations, Fall 2009 – Ezeli Azarkan.

3. Aras, Bülent 2003, ‘Iranian Policy toward the Caspian Sea Basin’, EBSCO.

4. Askari, Hossein & Taghavi, Roshanak 2006, ‘Iran's Financial Stake in Caspian Oil’ British Journal of Middle Eastern Studies, Vol. 33, No. 1 (May, 2006), pp. 1-18, JSTOR.

5. ‘ASRIN ANLAŞMASI’ ve Azerbaycan ekonomisine etkisi: Osman Nuri Aras.

6. Azerbaijan and the European Union: new landmarks of strategic partnership in the Azerbaijan’s Foreign Policy and Challenges for Energy Security: Pinar Ipek.

7. Ben Aris, Falling Out With the Neighbors; How tension and rivalry between the five central Asian states are holding back further economic progress.

8. An assessment of the natural gas supply potential of the south energy corridor from the Caspian Region to the EU: Dimitrios Mavrakis, Fotios Thomaidis, Ioannis Ntroukas.

9. Bina, Cyrus 2009, ‘ Petroleum and Energy Policy in Iran’, Economic & Political Weekly, january 3, 2009.

10. “Black Sea Gas Pipe Start Seen in Autumn,” Reuters, March 24, 1999.

11. Caspian oil gas, Energy Charter Secretariat Marat Malataev, Temuri Japaridze, Khamidulah Shamsiev and Galina.

12. CENTRAL ASIA AND ENERGY SECURITY,Gawdat BAHGAT , March 2006.

13. “COMPETITION IN THE CASPIAN REGION AFTER SOVIET PERIOD”: Dr. Mustafa GÖKÇE.

14. EIA. International Energy Outlook, April 2004.

15. Geology, Oil and Gas Potential, Pipelines, and the Geopolitics of the Caspian Sea Region: PHILIP D. RABINOWITZ, MEHDI Z. YUSIFOV, JESSICA ARNOLDI, EYAL HAKIM.

16. Lindsey Alexander, “Seeking a Way forward on Trans-Caspian Pipeline,” Radio Free Europe/Radio Liberty, September 2, 2008.

17. Iran Energy Data, Statistics and Analysis - Oil, Gas, Electricity, Coal, 2010.

18. The Kashagan Field: A Test Case for Kazakhstan's Governance of Its Oil and Gas Sector Nadia Campaner Shamil Yenikeyeff October 2008.

19. The Role of Oil and Gas in Kazakhstan’s Foreign Policy: Looking East or West? , Pınar IPEK , January 2007.

20. Kazakhstan’s Economy since Independence: Does the Oil Boom Offer a Second Chance for Sustainable Development? RICHARD POMFRET – September 2005.

21. LeVine, Steve 2007, Oil and the Glory: The Pursuit of empire and fortune on the Caspian Sea, Random House, New York.

22. Mairet, Frederic – Christopher 2006, New Stakes in the Caucasus and Central Asia: Caspian Energy Resources and International Affairs, Bloomington, IN, Milton Keynes, UK.

23. Martha Brill Olcott, Central Asia’s Second Chance (Washington, D.C.: Carnegie Endowment for International Peace, 2005)

24. MERIP Reports 1984, ‘Oil and the Outcome of the Iran-Iraq War’, The Strange War in the Gulf, (Jul. - Sep., 1984), pp. 40-42, JSTOR

25. Massarrat, M. 2004, ‘Iran’s energy policy: Current dilemmas and perspective for a sustainable energy policy’, International Journal of Environmental Science & Technology, Vol. 1, No. 3, pp. 233-245, Autumn 2004

26. Noreng, Oystein 2004, Ham Güç: Petrol Politikalar ve Pazarı, Kesit Tanıtım, Ankara

27. Philip D., Rabinowitz & Mehdi Z., Yusifov & Jessica, Arnoldi & Eyal, Hakim 2004, ‘Geology, Oil and Gas Potential, Pipelines, and the Geopolitics of the Caspian Sea Region’, Ocean Development & International Law, 35:19–40, 2004

28. Perry, Jane & Carey, Clark 1974, ‘Iran and control of its oil resources’, Political Science Quarterly, Vol. 89, No. 1 (Mar., 1974), pp. 147-174, JSTOR

29. Perry, Jane & Carey, Clark & Carey, Andrew Galbraith 1960, ‘Oil and Economic Development in Iran’, Political Science Quarterly, Vol. 75, No. 1 (Mar., 1960), pp. 66-86, JSTOR

30. Pipeline diplomacy: the geopolitics of the caspian sea region: gawdat Bahgat

31. Rakel , Eva Patricia 2009, ‘The energy policy of Iran towards the EU and China’, The Newsletter, No.51, Summer 2009

32. “Rival Gas Suppliers Race for Turkish Market,” Caspian Investor Newsletter, February 1999

33. Sergei Rudnitsky, “Turkmenistan’s E&P Projects Achieve Good Pace,” World Oil Magazine 224, 1; Burren Energy, “Operations: Turkmenistan,” <www.burren.co.uk/turkmenistan.htm> (March 2006).

34. South Caucasus–Caspian: Elkhan Nuriyev

35. The World FactBook 1 Jan 2009 est.

36. THE CASPIAN SEA: RIVALRY AND COOPERATION: Mahmoud Ghafouri

37. U.S. Energy Information Administration; Breif Country Analysis, Kazakhstan, November, 2010

38. Verma, Shiv Kumar 2007, ‘Energy geopolitics and Iran–Pakistan–India gas pipeline’, Political Geography Division, Center for International Politics, Organization and Disarmament, School of International Studies, Jawaharlal Nehru University, New Delhi 110067, India, received 5 January 2006, accepted 17 November 2006, available online 17 January 2007

LINKS

1. http://www.hrw.org/en/news/2008/07/06/human-rights-watch-concerns- andrecommendations- Turkmenistan accessed November 20, 2008.

2. http://www.iht.com/articles/ap/2008/05/27/business/AS-FIN-Turkmenistan-EU-Energy.php, accessed November 19, 2008.

3. http://www.rferl.org/articleprintview/1195765.html , accessed November 20, 2008.4. http://www.intergas.kz/eng/index.php/ news5. http://www.cacianalyst.org/?q=node/1007- Confronting Kazakhstan’s ‘Deutch

Disease’6. www.aboutkazakstan.com 7. www.iea.com 8. www.eia.doe.com 9. http://www.kmgep.kz/ 10. http://www.btso.org.tr/databank/countryreport/11-kazakistan.pdf 11. http://www.eurasianet.org/departments/insight/articles/eav042602a.shtml