Created: 4/25/1998

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{Economic [Intelligence Weekly



Caspian Sea Demarcation Remains Obstacle to Cross-Caspian Pipelines

Caspian littoral states are moving towardectoral division of the Caspian seabed but remain divided over how to treat water resources, including fisheries, environmental management, and navigation rights, according to local press reports. Russia and Kazakhstan plan to sign an agreement this month to divide the seabed resources into national sectors based along an equidistant median line and jointly manage water resources and navigation.

Azerbaijan and Turkmenistanull division of the Caspian Sea into national sectorsedian line, but they disagree over the method for drawing their common maritime boundary.

and in some diplomatic

to call for joint

ownership of the sea,!-

Even if boundary issues could be resolvedand Iran would challenge proposalspipelines on environmentalofficials have

Caspian pipelines are environmentally nnsouTsd and could threaten the sturgeon population.

Moscow's insistence on joint management of water resources suggests it would argue lhal it has veto power over any cross-Caspian pipeline.

dispute between Baku and Ashgabat revolves around the ownership of three fields in the centralof which are under development by the Azerbaijan International Operatingneither side appears willing to cornpromise sufficiently to move negotiations forward. Turkmen President Niyazov hasross-Caspian pipeline cannot go forward until the dispute is resolved.

Iran, should itectoral division of Use sea, couldarger share of the seaedian line approach than what it is allocated on current Azerbaijani and Turkmen maps, lis proposal for equal division of tbe sea would give it an even greater shareJ



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