Turkmenistan, Azerbaijan row over Caspian fields

ASHGABAT, Turkmenistan - The president of Turkmenistan says the country will take a dispute with Azerbaijan over Caspian oil and gas fields to the International Court of Arbitration, a move that could thwart Western hopes of tapping the region's vast reserves.

Ties between the two former Soviet republics have improved in the past two years over their shared interest in developing a trans-Caspian gas pipeline, but the threat of legal action by Turkmenistan is likely to increase tensions.

Turkmenistan and Azerbaijan last week began talks aimed at agreeing on ownership of subsea energy resources, but the negotiations collapsed in acrimony.

Speaking at government meeting Friday, Turkmen President Gurbanguli Berdymukhamedov slammed Azerbaijan for its "intransigence."

"For a long time, mainly because of Azerbaijan's stance, the issue of settling seabed borders, dividing natural resources and defining the boundary line between the two countries has not been resolved," Berdymukhamedov said in televised comments.

Berdymukhamedov said that areas under dispute were clearly allocated to Turkmenistan under boundaries dating back to the Soviet Union.

The feasibility of the Nabucco pipeline, which Western countries hope will connect eastern Turkey with the lucrative European market — rests heavily on its ability to tap into the Caspian region's vast energy resources.

A subsea pipeline under the Caspian linking Turkmenistan and Azerbaijan, which stand on its opposite shores, would be a massive boost to Nabucco but faces stiff opposition from Russia, which wants a monopoly on the supply of Central Asian gas to Europe.

An international legal dispute between the two countries may cause irreparable damage to the project's prospects, however.

Berdymukhamedov instructed Foreign Minister Rashid Meredov to examine the legality of Azerbaijan's claims to disputed offshore fields. He said the case would be taken to the international body and "we will accept any decision on this questions made by the International Court of Arbitration."

Azerbaijan has begun unilateral development of disputed oil and gas fields, and is seeking rights to other deposits in the Caspian, Berdymukhamedov said.

He also said lawyers should investigate whether foreign oil companies operating in the areas in question are breaking international law.

Turkmenistan is the largest gas producer in the former Soviet Union after Russia, which has had a lock on most of the reclusive desert nation's gas exports since the Soviet collapse in 1991. The EU and U.S. have been pressing for better access and for the construction of Nabucco, at an estimated cost of almost $8 billion.

Berdymukhamedov has carefully opened up to courtship by the West — as well as by China — since he came to power after the death of longtime autocratic leader Saparmurat Niyazov in December 2006. While continuing to supply gas to Russia, he has expressed increasing interest in diversifying exports.

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