17 May 2012
The Caspian's Naval Arms Race
A rise in the naval buildup of powers on the Caspian Sea highlights the deepening of unresolved regional tensions.
By John CK Daly for ISN Security Watch
Why has Russia built a new stealth equipped artillery ship, the Mahachkala, as Kazakhstan prepares to launch the Kazakhstan missile boat, its first domestically built warship, from its Zenit shipyard in Uralsk?
Because both nations are concerned about the security of their burgeoning Caspian energy assets, with Iran, Azerbaijan and Turkmenistan also developing Caspian flotillas. While the global media focuses on rising US-Chinese naval tensions in the western Pacific, in isolated Central Asia a maritime arms race has been triggered by the resources of the Caspian, a cultural and political fault line where Christian Europe intersects the Muslim world. The sea, previously peacefully divided between the USSR and Iran, now has new players.
The 143,244 square-mile Caspian is the world’s largest enclosed body of water and is an endorheic sea: rivers only flow into it, with no egress to the open ocean.
What assets are the five nations scrambling to protect? Reserves, offshore production fields, undersea pipelines and tankers. In 2009 the US Energy Information Administration estimated that the Caspian could contain up to 250 billion barrels of recoverable oil along with an additional 200 billion barrels of potential reserves and 9.2 trillion cubic meters of recoverable natural gas.
Before 1991 the Soviet Union and Iran divided the inland sea amongst themselves. Under the 1921 Soviet-Iranian Treaty of Friendship, each had an "exclusive fishing rights in its coastal waters up to a limit of 10 nautical miles," while the 1940 Soviet-Iranian treaty which supplemented the agreement further declared that the "parties hold the Caspian to belong to Iran and to the Soviet Union." Needless to say, both treaties became invalid with the breakup of the USSR.
Ripples of discontent
Since the December 1991 implosion of the USSR, three new nations arose in the Caspian region and contested the bilateral arrangements: Azerbaijan, Turkmenistan and Kazakhstan. ever since, the five nations have wrangled about how equitably to divide the Caspian’s waters and seabed, but little has been achieved. Adding to the confusion, the 1982 UN Convention on the Law of the Sea (UNCLOS) did not definitively declare whether the international law of the sea or the law of inland lakes applied to the Caspian, labeling it instead as “a special inner sea.”
Amidst the ongoing disagreements, the Russian Federation, Azerbaijan, Turkmenistan, Kazakhstan and even Iran have tentatively moved to develop their offshore reserves in sectors that they believe would be indisputably within their future assignations under an eventual five-state agreement. A final definitive agreement has been stymied however because Iran and the Russian Federation hold diametrically opposed positions about how to develop a Caspian consensus beyond the now moribund 1921 and 1940 treaties.
Iran steadfastly maintains that all Caspian littoral nations should receive an equitable 20 percent of the sea’s waters and seabed, while the Russian Federation has consistently maintained that the five Caspian countries should apportion the assets based on the length of their coastlines.
Under Moscow’s formula, Azerbaijan, with 259 miles of coastline, would receive 15.2 percent of the Caspian’s waters and seabed, Iran with 319 miles of coast - 18.7 percent. Kazakhstan, with 526 miles of coastline, would receive the largest share, 30.8 percent, leaving Russia with its 315 miles of shore 18.5 percent of the Caspian. Turkmenistan’s 285 miles of coast would see it receive a 16.8 percent share.
Azerbaijan and Kazakhstan have always supported Russia’s stance, while Turkmenistan under its mercurial President Sapamurat Niyazov until his death in December 2006 wavered between Moscow and Tehran. Niyazov’s successor, Gurbangeldy Berdymukhammeov, has cautiously moved towards supporting the Russian formulation.
The murkiness of the Caspian’s maritime frontiers has produced more than rhetorical clashes, most notably in July 2001, when Iran sent military aircraft and a warship to intimidate two Azerbaijani survey vessels contracted by BP into leaving the Alov-Araz-Sharg field, a site that Azerbaijan claimed was well within its national sector, which Iran disputed.
On 16 November 2011 in Astrakhan Lukoil president Vagit Alekperov told journalists that his company will spend over $16 billion over the next decade to develop the country's Caspian offshore Korchagin and Filanovskii oil and natural gas fields stating, "Five hundred billion rubles ($16 billion) will be invested in development. This huge amount will provide an opportunity for sustainable development in the region." A month later, at the southern end of the Caspian, Iran announced a massive new oil and natural gas find at its Sardar Jangal field, which officials estimated contains up to 1.4 trillion cubic meters of natural gas reserves and could produce up to 880,000 barrels per day (bpd) of crude oil when developed. Azerbaijan, Kazakhstan and Turkmenistan are all increasing their offshore investments as well, which in turn leads to the perceived need for increased naval forces to protect them.
Russia controls the sole maritime entrance to the Caspian, the 37-mile Volga-Don Canal, built during the Stalinist era. The channel provides a link between the Volga - which empties into the Caspian - via the Don River; the Don disgorges into the Sea of Azov, a northeast corollary of the Black Sea which in turn provides Caspian littoral access via the Turkish Straits to the Mediterranean.
As the Volga-Don Canal qualifies as Russian “internal waters,” Moscow controls the movement of any and all naval units from the “world ocean” that might attempt to enter the Caspian from the Black Sea. The Volga-Don Canal can only handle ships of up to 5,000 tons and in some places is less than 12 feet deep; it is the least known of the world’s strategic waterways.
In 2003 Moscow permitted Azerbaijan to bring in several foreign-built small warships, but given the current state of US-Russian relations, it is unlikely that Azerbaijan, Kazakhstan, Iran or Turkmenistan would be now be able to import warships.
The state of Caspian navies
The Azeri Navy (Azərbaycan Hərbi Dəniz Qüvvələri), founded in July 1992 from the remains of the USSR’s Red Banner Caspian Flotilla elements based in Baku, currently numbers roughly 2,500 personnel and 39 warships.
As for Kazakhstan, whose Қазақ әскери-теңіз флоты naval forces were established in 2003, its navy now has 3,000 personnel and 14 inshore patrol craft, and since 1997 has received 10 ships from the United States and Germany. Kazakh Navy Commander Rear Admiral Zh. S. Zhanzakov noted during an interview on 7 May, “First of all, we do not aim to create a very large naval force. They should be small in number, but mobile and well equipped with modern weapons and military equipment. Over the past three years the budget of the Navy almost every year has increased threefold.” Zhanzakov added, “This fall, we plan a joint exercise with Russia’s Caspian Flotilla. … In addition to the Caspian states, we are cooperating with the United States Navy. Each year 3-4 naval personal train on the ships of the U.S. Navy’s 5th Fleet in the Persian Gulf. The navy is also organizing various training exercises with the Turkish Navy and other countries’ maritime forces.”
The Turkmen Navy (Türkmenistanyň Harby-deňiz Güýçleri) is a relative latecomer to the Caspian arms buildup, with in 2011 only 2,000 personnel and 10 light cutter vessels. Last 9 October on Turkmenistan Navy Day, President Berdymukhammedov told his audience, "Our country, as well as any nation that has access to the sea, requires ships to patrol its maritime borders, maintaining their security and to counter such negative phenomena and the challenges of today such as terrorism, organized crime, poaching and drug trafficking."
Last September the Russian Federation and Kazakhstan held the bilateral “Tsentr 2011” joint strategic exercise dealing with threats to their oil production. Kazakh Defense Minister Adilbek Dzhaksybekov oversaw the operation, which involved army, navy and aerial military units. Russian Central Military District deputy chief of staff Major-General Sergei Chuvakin observed, "In the preparation for the exercise we planned in advance that we would be fighting a hypothetical state," which “had perpetrated aggression, attempting to smash our troops and capture the Caspian part of territory known for its oilfields,” according to a report in the 28 September edition of Krasnaia Zvezda, the official paper of the Russian Federation’s Ministry of Defense.
So, why the military buildup in an isolated region? Last month Baku State University’s international law department chairman and expert on Caspian issues, Professor Rustam Mammadov, summed the situation up during an interview by observing, “The Caspian states do not have enough trust in each other.” Given the rising level of offshore assets, all five countries are seeking to overawe their neighbors and naval forces are uniquely flexible for “flying the flag” and intimidating opponents.
But this still leaves the final legal status of Caspian’s waters and seabed unresolved, and with billions of barrels of oil at stake, now might be a good time to talk as well as hold more joint naval exercises. If a shooting war does develop, the only certainties are that other interested navies beyond the Caspian will only be able to watch from afar and that if numbers prove decisive, Russia will win.
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Dr John CK Daly is a non-resident scholar at the Central Asia-Caucasus Institute, Paul H Nitze School of Advanced International Studies of the Johns Hopkins University in Washington DC. He is also the chief analyst for Oilprice.com.
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