Publication: Monitor Volume: 4 Issue: 15

In talks with Russian president Boris Yeltsin in Moscow yesterday, Kazakh president Nursultan Nazarbaev reportedly raised two major oil-related issues. Nazarbaev asked, first, that the Russian director-general of the Caspian Pipeline Consortium, Vladimir Stanev, be replaced by an American representative. The CPC plans to lay an oil export pipeline of up to 60 million tons in annual throughput capacity — one of the world’s largest — from Kazakhstan to Russia’s Black Sea port Novorossiisk. Originally formed in 1992, the consortium has undergone successive changes and currently includes some of the leading U.S. oil companies, which are supposed to arrange financing. Kazakhstan and its Western partners are seeking to address remaining concerns about the project, including the reliability of Russia as a transit country. Moscow meanwhile, has complained that the U.S. companies have practically suspended the financing.

Nazarbaev’s second concern involves Moscow’s attempts to claim title to mineral deposits in other countries’ sectors of the Caspian Sea. He told a briefing yesterday that "the whole problem stems from the fact that the big oil was found on Kazakhstan’s, Azerbaijan’s, and Turkmenistan’s continental shelf, not on Russia’s. Had the big oil been found on the Russian shelf, then Russia would have taken a completely different stand" — i.e., would have advocated sectoral division, not common ownership as it currently does. Last month the Russian government held a tender — for Russian companies only — for rights to the undersea oilfield "Severny." Kazakhstan regards the site as at least partly its own under the sectoral division principle.

Nazarbaev warned against turning the Caspian into an "apple of discord" and "another Balkans." The latter is a byword for the dangerous international rivalry that occurred in the first half of this century. He urged Russia "to demonstrate objectivity and pragmatism for the sake of relations in the CIS and international stability." Only sectoral division of the seabed, in conformity with international law, can ensure stability and development in the region, he said. (Russian agencies, Rossiiskaya gazeta, January 22)

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