Identifier
Created
Classification
Origin
08BAKU90
2008-02-01 12:16:00
CONFIDENTIAL
Embassy Baku
Cable title:  

AZERBAIJANI FOREIGN MINISTER DISCUSSES ENERGY AND

Tags:  PREL PGOV PBTS ENRG PHUM AMGT ABLD AJ IR 
pdf how-to read a cable
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TO RUEHC/SECSTATE WASHDC PRIORITY 4689
INFO RUCNIRA/IRAN COLLECTIVE PRIORITY
RUEHAH/AMEMBASSY ASHGABAT PRIORITY 0503
RUEHTA/AMEMBASSY ASTANA PRIORITY 0023
RUEHMO/AMEMBASSY MOSCOW PRIORITY 0724
RUEHBS/USEU BRUSSELS PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 BAKU 000090 

SIPDIS

SIPDIS

FOR EUR/CARC

E.O. 12958: DECL: 01/30/2018
TAGS: PREL PGOV PBTS ENRG PHUM AMGT ABLD AJ IR
SUBJECT: AZERBAIJANI FOREIGN MINISTER DISCUSSES ENERGY AND
ALBORZ ISSUES

REF: STATE 08752

Classified By: Ambassador Anne E. Derse for reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 04 BAKU 000090

SIPDIS

SIPDIS

FOR EUR/CARC

E.O. 12958: DECL: 01/30/2018
TAGS: PREL PGOV PBTS ENRG PHUM AMGT ABLD AJ IR
SUBJECT: AZERBAIJANI FOREIGN MINISTER DISCUSSES ENERGY AND
ALBORZ ISSUES

REF: STATE 08752

Classified By: Ambassador Anne E. Derse for reasons 1.4 (b) and (d).


1. (C) Summary: Azerbaijani Foreign Minister appeared
unaware that Iran may soon move the Alborz oil rig, while
noting that Azerbaijan would respond through diplomatic and
legal means if Iran moves the rig into disputed waters.
Mammadyarov raised the need for an EU energy summit in
Brussels, concluding with a declaration on diversification,
to provide Turkmen President Berdimukhamedov and Kazakh
President Nazarbayev with political cover vis-a-vis Moscow.
To move ahead on Trans Caspian options, Mammadyarov did not
rule out an IEA conference in Baku or an EU Ministerial on
Nabucco, but said a higher level summit hosted by "the EU" in
the person of EU Commission President Barroso was necessary
to add substance to these lower-level forums. On a Turkish
transit agreement, Mammadyarov said experts from both sides
have crafted some options on Turkey's 15 percent netback
position, but the issue is political and the respective heads
of state needed to resolve it. Mammadyarov said SOCAR is
waiting to conclude this gas transit agreement with Turkey
before moving to conclude commercial agreements regarding
Nabucco and TGI. Mammadyarov also addressed human rights
issues, pledging to look into the ongoing tax investigation
of Chap Evi and suggesting that Russia was saying the U.S. is
prompting the Council of Europe to focus on political
prisoners in Azerbaijan. End Summary.

In the Dark about Alborz
--------------


2. (C) The Ambassador reviewed reftel points on an
anticipated Iranian movement of the Alborz oil rig.
Mammadyarov expressed thanks for the information, but
appeared to be new to him. He said he "needed to check" on
this issue with the State Border Service. If Tehran moves

the Alborz into disputed waters, Mammadyarov said, Baku would
rely on "strong diplomatic pressure" and a legal effort in
international courts to show that Tehran was violating
international law. Mammadyarov said that Azerbaijan could
reach out to the International Court of Justice in the Hague
and would win, and added that Iran would not want to be seen
to be in violation of international law on this matter.
Mammadyarov characterized a potential Iranian decision to
move into the disputed section of the Caspian as "stupid and
suicidal" and violating a gentlemen's agreement, while
observing that he had been expecting an Iranian response to
Azerbaijan's trial of the 15 Mahdi Army members. (NOTE: In
December, the Baku Court of Grave Crimes sentenced Said
Dadashbayli and fourteen other individuals on charges of
plotting a coup with the support of the IRGC. The GOAJ
publicized the issue provoking a sharp public and diplomatic
exchange with Tehran.) He agreed to follow up once he was
better informed.

Energy Update
--------------


3. (C) The Ambassador requested Mammadyarov's feedback on an
IEA request to hold a Baku-based conference and the separate
idea of an EU Ministerial on Nabucco in Brussels, possibly
chaired by EU Commissioner Piebalgs. Mammadyarov instead
proposed an EU energy summit in Brussels -- not lower-level
conferences in Baku -- as key to give Turkmen President
Berdimukhamedov and Kazakh President Nazarbayev the political
cover they seek vis-a-vis Moscow to explore Trans Caspian
options. Mammadyarov said Piebalgs was "a nice guy," but not
at the right level because "a commissioner cannot take on
Putin." Mammadyarov suggested EU Commission President
Barroso would be a better option and that President Aliyev
would attend if Barroso hosted a summit in Brussels.


4. (C) Mammadyarov said an EU Summit -- similar to the Heads
of State meeting that launched the BTC -- resulting in a
declaration signed by all attendees - including Russia - on
the importance of diversification should be the next step in
moving the ball forward on Trans Caspian energy plans. Such
a declaration would provide the political cover Turkmenistan
and Kazakhstan,in particular, need to pursue Trans Caspian
options. Mammadyarov indicated that while other lower-level
conferences could be held, this type of high-level summit was

BAKU 00000090 002 OF 004


a necessary first step. Mammadyarov said that while some in
Brussels floated the idea of a summit in Baku, Brussels is a
better location in ensuring senior EU participation and
alleviating Berdimukhamedov's jitters vis-a-vis Moscow. He
commented that Khazakh President Nazarbayev is ready to
engage more actively on Trans Caspian options now as he is
frustrated with Russian pressure on Samar. Mammadyarov
suggested that key European states attend, with invitations
extended to Azerbaijan, Georgia, Russia, Kazakhstan,
Turkmenistan, and Uzbekistan. Mammadyarov criticized EU
states for only paying lip service to diversification, saying
that U.S. assistance would be necessary in encouraging the EU
to host and participate in such a summit. Mammadyarov
underscored the importance of high level USG representation
at such a summit, noting that if Vice President Cheney
attended, this would ensure participation by Caspian and
other heads of state.


5. (C) Referring to the highly successful discussions in
Ashgabat between Azerbaijan and Turkmenistan (septels),
Mammadyarov emphasized that "the time is right now" for the
U.S. to be more engaged in discussing Caspian gas transit
issues with Turkmenistan. Mammadyarov said Berdimukhamedov
is likely to go to Brussels soon and that if Berdimukhamedov
goes, the U.S. should interpret this as a green light to be
intensify its efforts to encourage Ashgabat to send gas
across the Caspian. In an aside, Mammadyarov said the future
Turkmen Ambassador to Azerbaijan is not impressive, noting
that in this part of the world, the most important
qualification is good relations with the head of state.


6. (C) Concerning gas transit negotiations with Turkey,
Mammadyarov said with frustration that, "I cannot tell you
much new." Although the Turkish 15 percent netback position
is "a little melted," with SOCAR and Ankara trying to come up
with some options, the issue is still at an impasse.
Mammadyarov said this issue needed to be solved at the "very
top" by the presidents, although technical experts should be
proposing options.


7. (C) Mammadyarov said SOCAR was seeking to resolve gas
transit negotiations with Turkey before seeking to sign
supply contracts with Nabucco and TGI, since a transit
agreement was an essential prerequisite to define the terms
for any commercial contracts. Mammadyarov mentioned that
SOCAR plans on opening an office in Vienna in February to
work with OMV. (Comment: OMV recently opened an office in
Baku. End Comment). Mammadyarov downplayed the likelihood
of South Stream coming to fruition. He noted Azerbaijan's
interest in supplying gas to Europe is political, focused on
enhancing Azerbaijan's independence for the long term.
Mammadyarov said President Aliyev's interest in meeting
Europe's gas demand is primarily focused on benefiting the
next generation of Azerbaijanis.


8. (C) The Ambassador said transit talks and commercial
negotiations concerning Nabucco and TGI are important for
assuring Europe that Azerbaijani is serious about exporting
gas to European markets. The Ambassador assured Mammadyarov
that the U.S. will keep pressing Turkey and TGI partners to
reach a fair gas transit deal, while giving Azerbaijan
negotiating time and space to negotiate an acceptable
agreement. Mammadyarov noted pointedly that while he was
"not sure where the 15 percent net back idea had come from,
it was a bad idea and had to be fixed. In response to the
Ambassador's question on the Edison proposal for a four-way
intergovernmental agreement among
Azerbaijan-Turkey-Greece-Italy to help solve the 15 percent
problem, Mammadyarov said he was not familiar with the idea,
but he would check with SOCAR.


9. (C) Mammadyarov said President Aliyev will travel to
Budapest in mid-February and to Poland at the end of
February. Asked if Azerbaijan supplying gas was on the
agenda for these trips, Mammadyarov said President Aliyev
will "talk seriously" about Nabucco while in Budapest.
Mammadyarov urged the USG to send a senior U.S.
representative to the May 23 Kyiv energy summit. The
Ambassador said the U.S. is still waiting on the appointment
of a special energy envoy, although Ambassador Steven Mann's
new position is allowing him to focus on Eurasian energy
developments. Mammadyarov said he would welcome a visit by

BAKU 00000090 003 OF 004


U/S Reuben Jeffery to discuss the desirability of a potential
EU energy summit. He asked when the next round of bilateral
Energy Cooperation talks in Baku could be held, suggesting
the visit of U/S Jeffrey would be a good opportunity.


10. (C) The Ambassador asked for Mammadyarov's help in
getting answers to the U.S. questions regarding Azerbaijan's
critical energy infrastructure protection plans. Mammadyarov
said he sent the questions out to various ministries and "to
keep checking" with Deputy Foreign Minister Araz Azimov.

TEP
---


11. (C) The Ambassador said a potential U.S. Train and Equip
Program (TEP) offer to Azerbaijan needed to be linked to an
Azerbaijani commitment to deploy a battalion to Afghanistan.
Mammadyarov confirmed President Aliyev's interest in the TEP,
saying some items in the U.S. TEP paper needed to be
negotiated and asking for another discussion.

Political Reform Issues
--------------


12. (C) The Ambassador raised the ongoing tax investigation
of the independent Chap Evi (Publishing House),noting that
she hoped the investigation was routine and not
politically-motivated. Mammadyarov said he would talk to
Presidential Administration Chief of Staff Ramiz Mehdiyev
about the case, while noting that even Heydar Babayev's
relatives' businesses have been investigated for tax purposes.


13. (C) Mammadyarov said Parliamentary MP and head of the
Azerbaijani delegation to PACE Samad Seyidov, who recently
returned from the CoE Parliamentary Assembly's January
session in Strasbourg, informed him of rumors that the U.S.
was trying to raise the political prisoner issue at the
Council of Europe (CoE),suggesting that this could be
Russian effort to sour U.S.-Azerbaijani relations.
Mammadyarov said he is engaged on this issue and he has
encouraged Seyidov to meet with NGOs and to understand why
NGOs believe some individuals are political prisoners.
Mammadyarov said everyone knows PACE Monitoring Group head
Andreas Gross is "fully in Russia's pocket." Mammadyarov
said the political prisoner issue is "not helpful" and the
CoE "cannot dictate to us what to do," but that he was
engaged in trying to encourage the GOAJ to address the matter
seriously.


14. (C) Mammadyarov said the MFA has prepared a response to
Dan Fried's letter to Mammadyarov, and Azerbaijani Ambassador
Yashar Aliyev will soon contact the Department to deliver it.

NEC
---


15. (SBU) Noting that the January 11 deadline to sign a
lease on the NEC had passed, the Ambassador asked for
Mammadyarov's help in securing a meeting with Deputy Foreign
Minister Khalafov and the MFA's Legal Department to finalize
the lease language. She noted that further delays would
jeopardize funding for construction to start this fiscal
year. Mammadyarov said that Khalafov had been in Moscow for
border delimitation talks but was due back in Baku at the end
of this week. He promised to help push for a meeting. (We
have since scheduled a meeting for February 4 with lawyers at
the Presidential Apparat and will report developments after
that meeting.)

COMMENT
--------------


16. (C) Mammadyarov was deeply appreciative for the Alborz
information and our effort to share it. Although he did not
appear aware of the move, he had clearly been expecting an
Iranian response to the dipnote over the Mahdi Army arrests.
He was as enthusiastic as other Azerbaijani interlocutors at
the new state in Azerbaijan-Turkmenistan relations after the
successful January 17 bilateral commission, and eager to use
the opening to forge ahead on Caspian gas issues. He was
convinced that a high level energy summit focused on energy
diversification is needed to send a sharp signal of U.S.,

BAKU 00000090 004 OF 004


European and Caspian interest in the Trans Caspian project.
His willingness to look into the CAP EUI tax investigation
and the political prisoner issue are welcome evidence that he
feels newly empowered, as he previously noted (reftel) by the
President to engage on democracy/political reform issues.
DERSE