AZERBAIJANI FOREIGN MINISTER COMMENTS ON ENERGY,

C O N F I D E N T I A L SECTION 01 OF 02 BAKU 001710

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/01/2026
TAGS: PREL PBTS PGOV UNGA EAID ENRG AM UAM IR AJ
SUBJECT: AZERBAIJANI FOREIGN MINISTER COMMENTS ON ENERGY,
NAGORNO-KARABAKH, REGIONAL SECURITY ISSUES WITH VISITING
CONGRESSIONAL STAFF DELEGATION

REF: A. BAKU 01681


B. BAKU 01582

Classified By: AMBASSADOR ANNE E. DERSE FOR REASONS 1.4 (B,D)


1. (C) SUMMARY: During a late October 2006 meeting, Foreign
Minister Mammadyarov reiterated that Azerbaijan seeks a
step-by-step solution to the Nagorno-Karabakh conflict and
wants Armenia to share in the economic integration and
prosperity of the south Caucasus. Mammadyarov characterized
Russia's current policy toward Georgia as "shock therapy" and
said Azerbaijan's own gas negotiations with Russia were
continuing. Commenting on his vision for Azerbaijan's
future, Mammadyarov said Azerbaijan will be a drastically
different country in 2010. The BTC pipeline represents an
"overcoming of Azerbaijan's Vietnam syndrome." Mammadyarov
also affirmed Azerbaijan's commitment to promoting tolerant
Islam and sought high-level USG representation for a planned
April 2007 OIC conference on religious tolerance (ref A).
END SUMMARY.


2. (C) Azerbaijani Minister of Foreign Affairs Eldar
Mammadyarov met with Ambassador Derse, six congressional
staffers and five members of a visiting German Marshall Fund
delegation in late October. Mammadyarov said that he was not
optimistic about the current state of negotiations vis-a-vis
Nagorno-Karabakh and said that Azerbaijan was proceeding with
a cautious, deliberate approach. Mammadyarov said that a
step-by-step approach was what Azerbaijan was looking for,
which would start with the withdrawal of Armenian troops,
demining, reconstruction and return of Azerbaijan's
internally displaced population.


3. (C) Mammadyarov said that the South Caucasus should move
forward, working together, and that Azerbaijan in both word
and deed has shared its economic benefits with Georgia. He
said that Azerbaijan also wanted Armenia to be a part of this
economic integration, adding that Armenia "should not be less
developed that the others." In regard to a plebiscite in NK,
Mammadyarov said that Azerbaijani was not opposed to this in
principle but that it would be a question of whom would be
allowed to vote and at which point the vote would take place.
Mammadyarov said that Armenia needed to decide how it wanted
to see itself in the future and over the next 30 years, and
noted that Armenia has already lost out on a great deal of
regional economic integration and energy projects.

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GEORGIA, RUSSIA AND GAS
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4. (C) Mammadyarov said that he spoke with the Georgian
Foreign Minister approximately once a week by telephone and
that Azerbaijani President Ilham Aliyev spoke with Georgian
President Mikhail Sakaashviili also about once a week.
Mammadyarov said that he had recently told a visiting Russian
official that what Russia was doing now with Georgia was
"unacceptable" and that this is not how Russia should be
dealing with small countries. He compared Russia's response
to Georgia as "shock therapy." Mammadyarov also said that he
believed that Russia's response was not what the Russian
public was demanding, but that it involved something "more
personal" from Russia toward Georgia.


5. (C) Mammadyarov said that last year Azerbaijan had
purchased approximately 4.5 billion cubic meters of gas from
Russia. While negotiations are still ongoing, Mammadyarov
said Azerbaijan hoped to purchase 1.5-2 billion cubic meters.
Mammadyarov also mentioned that Russia would be charge USD
230 per thousand meters to Georgia and Azerbaijan, a price
even greater than the one Germany was being charged.


6. In regard to Kazakhstan, Mammadyarov said that Kazakhstan
wanted to increase its yearly output from 25 million tons to
37 million tons of oil. Kazakhstan was interested in
transiting about 500,000 million barrels/day through
Azerbaijan and that Azerbaijan had the capacity to have
between 1.5-1.76 million barrels per day transit through
Azerbaijan. Mammadyarov also said that Kazakhstan has
indicated that it wanted to transit about 10 million tons of
oil through Azerbaijan via rail. With regard to possible
trans-Caspian gas initiatives, Mammadyarov said that

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Azerbaijan previously had a 60 billion cubic meter agreement
with Turkmenistan on the table. While the deal had fallen
through, Mammadyarov said it could be put back on the table
at some point in the future.

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RELATIONS WITH IRAN
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7. (C) Mammadyarov characterized Azerbaijan's relations with
Iran as diverse. Azerbaijan is cognizant of the fact it
shares a long land border with Iran, and that Azerbaijan
proper and Nakhchivan are connected overland via Iran.
Furthermore Mammadyarov said that approximately 40 percent of
Iranians were ethnic Azeri. On the political site however,
Mammadyarov said that Azerbaijani and Iranian views diverged.
He noted that many Iranians come to Azerbaijan on the
weekends to relax and "feel free".

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INTO THE FUTURE
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8. (C) Touching on a number of topics, Mammadyarov said that
Azerbaijan would be a drastically different country in 2010
than it was in 2006. He described the opening of the
Baku-Tbilisi-Ceyhan pipeline as the "overcoming of the
Vietnam Syndrome" for Azerbaijan. He reminded the group that
the Minsk Group "still needed the consent of Azerbaijan"
before a settlement could be reached. Finally Mammadyarov
said that Azerbaijan was a moderate Muslim state and that as
the chair of the Organization for Islamic Conference, wants
to promote the face of Moderate Islam. To this end
Azerbaijan plans to host an OIC conference on the "Role of
the Media" in April 2007. Mammadyarov requested the
Ambassador's help in securing a high-profile U.S. person,
such as a former President or Secretary of State to make a
keynote address at the conference (see reftel).
DERSE