AZERBAIJANI FONMIN AND DEPUTY SECRETARY NEGROPONTE

C O N F I D E N T I A L BAKU 000946

SIPDIS

FOR EUR/CARC

E.O. 12958: DECL: 10/08/2018
TAGS: PREL PGOV ENRG AJ
SUBJECT: AZERBAIJANI FONMIN AND DEPUTY SECRETARY NEGROPONTE
REVIEW BILATERAL ISSUES

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


1. (C) Summary: Azerbaiijani Foreign Minister Elmar
Mammadyarov affirmed the importance of deepening bilateral
cooperation, especially in the context of Vice President
Cheney's recent trip and Azerbaijan's "vulnerable"
geopolitical position in the aftermath of Russia's invasion
of Georgia. Mammadyarov said there is a "window of
opportunity" in resolving the Nagorno-Karabakh conflict,
though Russia's intentions remain unclear. Commenting on
Azerbaijani-Turkish negotiations over a gas-transit
agreement, Mammadyarov said Ankara's insistence that it be
allowed to buy large volumes of Azerbaijan's Shah Deniz Phase
II gas exports was "like a Gazprom offer." End Summary.


2. (C) Foreign Minister Mammadyarov affirmed the importance
of deepening bilateral cooperation, especially in the context
of Vice President Cheney's recent trip and Azerbaijan's
"vulnerable" geopolitical position in the aftermath of
Russia's invasion of Georgia. Mammadyarov suggested the two
sides further examine this issue "substantively" after the
Azerbaijani presidential election. The Deputy Secretary said
his visit is a follow-up to Vice President Cheney's trip,
with the intent to reaffirm the long-term U.S. commitment to
expanding relations with Azerbaijan, particularly in the
security sphere.

Nagorno-Karabakh
--------------


3. (C) Noting his recent discussion with Secretary Rice at
UNGA on resolving the Nagorno-Karabakh (NK) conflict,
Mammadyarov said there is "a window of opportunity,"
especially as Armenian President Sargsian knows "he needs to
make a move." Mammadyarov said the "easier part" is
encouraging flexibility from Yerevan, while winning Moscow
over is more difficult. Mammadyarov reiterated the GOAJ's
position to build on the basis of the Basic Principles as the
way to move forward on resolving NK. He also highlighted
Baku's willingness to lure Armenia through "investment
opportunities," not excluding possible energy cooperation.
The Azerbaijani and Armenian Presidents will meet in Moscow,
and Mammadyarov recommended the Minsk Group Co-Chairs come to
the region after Azerbaijan's presidential election. In the
context of resolving NK, Mammadyarov described Turkey's
Caucasus Stability and Cooperation Platform as "broad" and
potentially helpful in balancing Russia's regional influence.


4. (C) In response to Negroponte's question of how the U.S.
can help to the resolve the conflict peacefully, Mammadyarov
quipped that the U.S. should not vote against the GOAJ's UNGA
resolutions on NK. (Note: this was a reference to the Minsk
Group partners' decision in the spring to oppose Azerbaijan's
UNGA resolution on NK -- a decision that created much
consternation afterwards in Baku. End Note) Returning to a
more serious line, Mammadyarov said the conflict should be
resolved by the OSCE,s Minsk Group, with Bryza and his
fellow French and Russian Co-Chairs helping to negotiate
agreement on the Basic Principles. The core of the solution
should include: a fixed timetable for withdrawal of Armenian
troops from the 7 territories around NK; reopening of
Armenia,s lines of communication; restored business ties and
investment between Azerbaijanis and Armenians in the
territories; and potential energy connections. Mammadyarov
added that if Armenia agreed to withdraw its troops, the
utility of force would decrease, echoing President Aliyev,s
suggestion to DAS Bryza 10 days earlier that Azerbaijan was
considering a possible non-use-of-force pledge.

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


5. (C) Commenting on Azerbaijani-Turkish negotiations over
a gas-transit agreement, Mammadyarov said Ankara's insistence
that it buy large volumes of Azerbaijan's future Shah Deniz
Phase II natural gas exports was "like a Gazprom offer."
Mammadyarov affirmed the need to continue working with
Ankara, while noting the Turks "are stubborn." In response
to Negroponte's direct question of whether the Foreign
Minister conducts negotiations with Ankara, Mammadyarov
vaguely said "we" conduct the talks. (Note: At this point,
the primary negotiations are commercial, between Turkey's

Botas on the one side and Azerbaijan's SOCAR and the Shah
Deniz Consortium on the other. End Note)


6. (C) Mammadyarov observed that the Turkmen had submitted a
"very interesting" UNGA proposal dedicated to pipeline
security. The GOAJ sought to include language in the
proposal supporting the sovereignty of states.
Mammadyarov commented as an aside that Azerbaijan's
negotiations with Gazprom on gas sales had "failed" as the
Russians' idea of what constitutes market price ("they have
their own formula") differed from that of the Azerbaijanis.


7. (C) Mammadyarov gave brief updates on the timing of
several upcoming energy conferences. President Aliyev
"probably" will go the January Budapest conference. The GOAJ
also is aware of a ministerial-level conference on the
horizon in Brussels. President Aliyev will host an energy
summit in mid-November (to follow up previous meetings in
Krakow, Vilnius, and Kyiv),which will focus primarily on oil
and deepening cooperation with Ukraine, Poland, and the
Baltic countries. The GOAJ is not confirming its
participation in the preceding events until the Presidential
election has been held and a new government has been
confirmed. (NOTE: According to Azerbaijani law, the results
of the election need to be certified by the Central Election
Commission and the Constitutional Court, then the ministers
will resign and President Aliyev will appoint a new
government. The election is October 15. Expectations are
that the inauguration will be at the end of the month. End
Note)

Coalition Contributions
--------------


8. (C) Mammadyarov said the GOAJ understands the need to
redeploy Azerbaijani troops from Iraq, while questioning
whether the Iraqis are ready to provide for their own
security. On Afghanistan, Mammadyarov observed that the
Azerbaijani Parliament has approved a doubling of Azerbaijani
peacekeepers deployed to Afghanistan to 90, alongside several
proposed Azerbaijani civilian and business contributions in
northern Afghanistan. The Deputy Secretary shared Secretary
Rice's vision of reinforcing a north-south corridor among
India, Pakistan, Afghanistan, and the Central Asian states to
weaken these states' reliance on Russia.

New Embassy Compound
--------------


9. (C) Concerning the new Embassy compound, Mammadyarov
acknowledged the GOAJ's need to clarify when and how the U.S.
can take possession of the new property in a timely manner.

Comment
--------------


10. (C) Mammadyarov appeared tired, as he had just arrived
in Baku from UNGA. Mammadyarov's reference to the U.S. vote
against Azerbaijan's failed UNGA resolution was a partial
jest and partial reflection of genuine frustration. The GOAJ
certainly is enthusiastic about several recent senior level
U.S. visitors. Mammadyarov's remark suggests, however, the
GOAJ's broader, lingering questions about the U.S.
willingness to support Azerbaijan in concrete terms,
especially regarding security cooperation and Baku's position
on NK, remain. While aggravated by our adherence to the
Basic Principles (and resistance to Baku,s attempt to
distort those principles through its UNGA resolution),the
Foreign Minister, like President Aliyev, sees an opportunity
in coming weeks to make progress or reach agreement on a
framework to resolve the Nagorno-Karabakh conflict as defined
by the Basic Principles. The GOAJ will not likely make
progress on an agenda for the November 11-14 energy summit
until after the October 15 election; an agenda for this
summit must be well thought out and expanded beyond
discussion of Ukraine's Odessa-Brody pipeline in order for
the summit to be a success.


11. (SBU) DepSec staff has cleared this cable.
DERSE