CASPIAN SEA RESOURCES REMAIN AN ITEM OF CONTENTION BETWEEN

S E C R E T SECTION 01 OF 02 IRAN RPO DUBAI 000021

SIPDIS

SIPDIS

E.O. 12958: DECL: 4/24/2018
TAGS: ECON EFIS EMIN ENGR EPET IR
SUBJECT: CASPIAN SEA RESOURCES REMAIN AN ITEM OF CONTENTION BETWEEN
IRAN, RUSSIA AND CENTRAL ASIA

CLASSIFIED BY: Ramin Asgard, Acting Director, Iran Regional
Presence Office, Department of State.
REASON: 1.4 (d)

1.(S) Summary: Since the break-up of the Soviet Union,
"equitable" distribution of Caspian Sea resources has been an
item of contention between the five littoral states:
Kazakhstan, Turkmenistan, Iran, Russia and Azerbaijan.
According to press articles, the Caspian is said to contain some
12% of the world's oil reserves, as well as huge deposits of
natural gas. Iran hosted the 22nd meeting of the special
working group which is tasked with producing the convention for
the legal regime of the Caspian Sea, April 15-16. (Note: the
first meeting was held in 1991. Endnote) The five states were
unable to come to a consensus in this latest round of meetings.
IRPoffs have been told by several contacts that if the US
government would like to send a "positive" signal to Iran, it
could publicly back the split of the sea into five "equal"
portions. End Summary.

2.(SBU) Tehran hosted the 22nd meeting of the Caspian Sea
special working group, tasked with establishing a "legal regime"
for the sea that is acceptable to all parties, April 15-16. In
past treaties signed between Iran and the Soviet Union in the
1920s and 1940s, the two parties designated the Caspian as a
lake; agreeing to divide the body of water into two parts and
commonly share resources - which at the time was mostly fishing.
(Note: If a body of water is labeled a "sea" then
international treaties come into play, obligating access permits
to foreign vessels - whereas if a body of water is designated a
"lake," there are no such obligations. Endnote) Kazakhstan,
Turkmenistan and Azerbaijan, do not recognize the earlier
treaties between Iran and the Soviet Union, and the five states
have been attempting to "equitably" resolve issues pertaining to
energy resources, fishing rights and security since 1991.

3.(SBU) According to press articles, the Caspian is said to
contain some 12% of the world's oil reserves, as well as huge
deposits of natural gas. Furthermore, security and military
rights are a topic of much concern. In October of 2007, the
five States agreed not to let foreign militaries use Caspian
waters as a launching point for any potential attacks. Iranian
Commander Seyyed Mahmood Mousavi called for the prevention of
any "alien" presence in the Caspian Sea April 18, saying that
the littoral states do not want the Caspian to "become like the
Persian Gulf." (Note. The article did not specify if Mousavi
is an IRGC or Armed Forces commander. Endnote) To date, the
five parties have only been able to agree on quotas for sturgeon
fishing and have signed the Caspian Environment Protection
Convention.

Options for division

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4.(SBU) After failing to convince the other four members to stay
with the original 50/50 split - forcing Kazakhstan,
Turkmenistan, Azerbaijan and Russia to share half of the Caspian
resources, Iran "compromised" pushing for an "equal" 1/5
division of the Caspian among the five countries. Kazakhstan,
Turkmenistan, and Azerbaijan have consistently insisted that
each state should be awarded a proportionate share of the
Caspian based on its coastline. Under this scheme, Iran would
only be eligible for roughly 11%-13% of the Caspian. Russia
initially suggested a more complex equation of dividing the
seabed (and the mineral resources that go along with it) along a
sectoral line and sharing the surface (a.k.a. the fishing
rights) commonly - with each state receiving an exclusive zone
and sharing the center. According to press reports, Russia now
favors the same plan as the former Soviet States -- dividing the
Caspian in accordance with coastline boundaries.

5.(SBU) The former Soviet States have signed a host of bilateral
treaties amongst themselves, and with Russia --demarcating
borders and apportioning resources; none of which are recognized
by Iran. Iran is insistent that a single, multilateral
agreement between all five parties be signed. In a newsletter to
clients April 20, an Iranian consultant and political/economic
analyst claimed that Foreign Minister Mottaki has hinted at the
possibility of Iran accepting a break-up that would give it
rights over some 11% of the sea. However, continued the
analyst, many Iranian MPs want at least a five-way break-up and,
at most, some revision of the 1940s treaty with the USSR which
stipulated the sea's resources were "common" between the two
countries. On January 20, according to press reports, several
MPs complained that the government was not "doing enough" on the
Caspian issue.

6.(S) Comment: Given the natural resources and security
concerns, it is unlikely that the five littoral states will
reach a resolution on the Caspian issue in the near future.
IRPoffs have been told by several Iranian contacts that if the
USG "is ever looking to send a positive signal to Iran," it
could publicly support "equitable" distribution of the Caspian -
granting each state 20% of the Sea, which is more than
reasonable in the minds of many Iranians. An equal distribution
of Caspian resources would still represent an overall 30% loss
for Iran as compared to the original treaties signed with the
Soviet Union.
ASGARD