Caspian, Russian "foreign policy offensive"; interesting developments The Future of the Moscow-Baku Relationship Vladimir Putin’s trip to Baku on 14 August drew significant media attention. The first visit by the Russian leader in seven years was bound to be significant, and even though Putin left without any major deals being signed, the trip has certainly helped to normalise relations between Baku and Moscow. Perhaps most significantly, the tone and results of the trip suggest that Russia is increasingly getting used to dealing with Azerbaijan as an equal rather than as a former satellite. Putin’s choice of companions gives some indication of the priorities on his one-day visit. He was accompanied by the presidents of Russia’s biggest oil companies Rosneft and Lukoil, and sailing into Baku’s port were two warships from Russia’s Caspian Flotilla. Energy and security were the order of the day. On the energy front, Rosneft President Igor Sechin signed a deal with Azerbaijan’s state energy company SOCAR, pledging “full-fledged energy cooperation” in both upstream (exploration and production) and downstream (marketing and infrastructure). Opinion on the significance of the deal has been mixed, with Reuters noting that it named no specific project on which the two sides will collaborate. After a preparatory visit by Sechin in July, it had been reported that Rosneft was planning to take a stake in Azerbaijan’s giant Absheron gasfield. That would have been a significant development: Russia’s presence in Azerbaijan’s oil and gas industry is extremely limited compared to Western companies, reflecting Baku’s wider geopolitical priorities. For Rosneft to take a stake in one of the most important new generation of Azerbaijani gasfields would have been a significant symbol of a much closer partnership. The lack of specifics in the Rosneft-SOCAR deal suggests that things are not as easy as Sechin might have hoped. Reportedly SOCAR is driving a hard bargain in its negotiations, as it has done on other issues recently. This is in stark contrast to some other post-Soviet states, such as Armenia and Kyrgyzstan, where Russian energy companies can dictate terms with ease by relying on Moscow’s broader political clout. So although Azerbaijan may now be willing to accept a greater Russian role in its oil and gas industry, Russia will have to work hard for it: the power relationship between them is very different to what it was ten or fifteen years ago. The other focus of Putin’s visit was politics and security, and here again there few concrete results. In remarks to the press, the Russian president gave just one line to Azerbaijan’s most pressing security concern, the Nagorno-Karabakh conflict. Putin insisted that Russia was “actively facilitating the conflict’s accelerated settlement, which is only possible through political means”, an unremarkable statement. There was no public indication that Putin is prepared to lean on Armenia to make compromises, which Azerbaijan has been publicly requesting for some time. Putin has never shown much interest in the conflict, an impression which this trip will reinforce. Putin said that the two leaders spent a great deal of time discussing “security, border delimitation, [and] conserving biological diversity” in the Caspian, where there are a number of problems to be solved – “naturally taking into account the interests of all littoral states”. Moscow and Baku have a generally good relationship in the Caspian, although they remain divided on the permissibility of a Trans-Caspian Pipeline from Turkmenistan. Russia claims that the project requires consent from all five littoral states, while Azerbaijan insists that it’s a matter only for the participating states. Both sides are somewhat concerned by the recent increase in Iranian naval power in the Caspian – Russia because it risks eroding the military superiority of its Caspian Flotilla, and Azerbaijan because of its maritime border dispute with Iran. Although some saw the arrival of the Russian warships as a demonstration of power directed at Azerbaijan, it may have been a demonstration of support in the face of Iran’s growing naval forces and, coming shortly after Iranian warships visited the Caspian Flotilla’s home port of Astrakhan, as a way to reassure Baku. President Aliyev praised the high value of the arms trade between the two, which he said is worth $4 billion (although this appears to be a figure for recent years only). This seems likely to be one of the strongest aspects of their relationship in the coming years, although Azerbaijan is careful to avoid dependence on Russian equipment by purchases from Turkey and Israel. Arms sales allow Russia to pursue its objective of maintaining a degree of parity between Azerbaijan and Armenia, to which it also supplies military equipment; but it also allows Baku to maintain its relations with Moscow on an equal, businesslike footing. This appears to be the evolving model for Azerbaijan-Russia relations as they become warmer after several years of frostiness. Certain challenges will remain – particularly on Nagorno-Karabakh and Caspian projects – but the relationship is set to become increasingly pragmatic as Russia realises that it must treat Azerbaijan as an equal partner and not as an imperial subject. caspianresearch/2013/08/20/the-future-of-the-moscow-baku-relationship/
Posted on: Sun, 22 Sep 2013 15:14:30 +0000
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