Publication: Monitor Volume: 7 Issue: 143

On July 23, an Iranian military plane and warship forced two Azerbaijani vessels to withdraw from a major offshore oilfield being developed by a Western consortium. The vessels, contracted by consortium operator British Petroleum (BP), were carrying out surveys preparatory to drilling at the Alov-Araz-Sharg field, situated well within the limits of what Azerbaijan considers its national sector, implicitly accepted as such by the Western partners under the production-sharing agreements governing this and other offshore oilfields.

The incident took place more than 100 kilometers north of the former Soviet-Iranian maritime border, since 1991 generally deemed to be the Azerbaijani-Iranian border, contested by Iran only. After the Iranian plane buzzed the two research vessels, the Iranian warship demanded that the vessels withdraw some eight kilometers to the north of the area Iran claims. A BP representative on board Geophysic-3 attempted to parley with the warship, but the Iranian captain claimed that no one on his side could speak English. The warship demonstratively put its guns on stand-by to fire and aimed them on Geophysic-3. Meanwhile, in Baku, the government authorities and the BP office decided to yield in order to protect the lives of their personnel. The two vessels, instructed by radio to withdraw, returned to Baku.

Azerbaijan’s air defense and other military structures monitored some phases of the incident, but lacked both the capability and the political authorization to respond. Both the government and BP put top priority on avoiding any confrontation.

The incident underscored both Azerbaijan’s restraint and its military helplessness, inside what is generally deemed its own waters. More broadly, it underscored the potential vulnerability of international oilfield development projects in the face of a new type of rogue action by Iran. While military interference with oilfield operations would not be tolerated in an open sea, Iran apparently reckons that it can act with impunity in a closed sea like the Caspian, also counting on sympathetic understanding from Russia.

In a public diplomatic note, the Azerbaijani government protested the threat of military force by Iran and reaffirmed Azerbaijan’s long-standing title to the area in which the incident took place. Both the government and officials of Azerbaijan’s State Oil Company of Azerbaijan point out that Azerbaijan has been conducting exploratory work in that area for the past fifty years, on behalf of the Soviet government before 1991 and in partnership with international companies since then.

The maritime border between the former Soviet Union and Iran was the Astara-Hassan Guli line, running from the southernmost point of Azerbaijan to the southernmost point of Turkmenistan. The Astara-Hassan Guli line became an international border under the 1921 and 1940 Soviet-Iranian treaties, which Iran itself now insists on regarding as valid, pending the conclusion of a successor treaty by the five riparian countries. The same treaties also ban Iran from maintaining warships in its portion of the Caspian Sea. From 1991 on, that former Soviet border became the international border between Azerbaijan and Iran and between Turkmenistan and Iran.

Russia and the new independent states disagree in a number of cases over how to draw maritime borders in the Caspian Sea. Such differences exist between Turkmenistan and Azerbaijan and between Russia and Kazakhstan. Those situations involve portions of the sea where no international borders had existed prior to 1991. The Azerbaijan-Iran and Turkmenistan-Iran situations are of an entirely different nature, however. There, as everywhere in the successor states, the former Soviet borders became the successor states’ international borders, generally recognized as such in international law and practice.

If Iran now claims a large part of Azerbaijan’s sector, it can on the same grounds claim a part of Turkmenistan’s sector, which also stretches to the Astara-Hassan Guli line. Azerbaijan’s protest note seemed to allude to that distinct possibility by stating that Iran’s claim on Azerbaijan adversely affects other Caspian countries as well. To a lesser extent, it can also affect Russia and Kazakhstan inasmuch as Iran demands an equal division of the Caspian Sea among the five riparian states into 20-percent shares.

Iran prefaced and accompanied its military move with a series of political warnings that shed some light on its goals. On July 21, Iran’s Foreign Affairs Ministry summoned Azerbaijan’s charge d’affairs to hand him a strongly worded protest against Baku’s and the BP-led consortium’s plan to develop the “Alborz” offshore oilfield, apparently referring to Alov-Araz-Sharg. The note warned that Iran deems the production-sharing contract–which was signed in 1998–invalid, and would also deem “illegal” any “foreign” operations in what Iran considers its sector. On July 22, Iran’s Oil Ministry not only reiterated the Foreign Affairs Ministry’s warning, but threatened as well to refuse to do business with any companies that seek to operate in what Tehran regards as its Caspian sector.

Iran’s Foreign Affairs Ministry and the head of the Supreme National Security Council, Hojatolislam Hassan Rowhani, each summoned the British ambassador and reiterated both warnings. The ambassador, Nick Browne, publicly announced that British companies including BP would desist from conducting operations in any Caspian sections disputed by Iran and Azerbaijan. In Baku, BP announced that the international consortium is suspending operations at the disputed oilfield. On July 25, Iran’s Foreign Affairs Ministry issued a follow-up note expressing “great astonishment over the propaganda campaign” and the “hue and cry” in Baku over the July 23 incident. It advised Azerbaijan to “accept the advice just given to it by Iran.”

The mentioned “advice” evidently referred to the military action, not to Rowhani’s visit to Baku just forty-eight hours before the incident. There is no indication that Rowhani had warned Baku of any Iranian military move. The visit, however, did evidence differences between the two countries on major international and bilateral issues. In essence, Iran does not countenance Azerbaijan’s Western orientation. Tehran’s apparent grab for Azerbaijan’s Western-developed oilfields seeks not only economic gains, but also carries the significance of a political retaliation (Roundup based on Azerbaijani, Iranian and Western news agencies, July 22-25).