Turkmens Say No Retreat On Caspian Oil Field Row

ALMATY–Kazakhstan (Reuter)–Turkmen President Saparmurat Niyazov told a Russian minister Monday that his country would not give in in the row over ownership of oil fields in the Caspian Sea–a source close to the Turkmen government said.

Earlier this month–Azerbaijan’s state oil company SOCAR signed a $1 billion preliminary agreement with the Russian state oil company Rosneft and the largest oil company in Russia–LUKoil–to develop the Kyapaz field.

It is estimated to hold more than 50 million metric tons. Turkmen’stan–which shares the Caspian coastline with Russia–Azerbaijan–Kazakhstan and Iran–refers to Kyapaz as the Serdar field. It lies in the far south of the Caspian–between Azerbaijan and Turkmen’stan.

Russian Deputy Prime Minister Valery Serov and Niyazov met in the Turkmen capital Ashgabat to discuss the topical issue.

"President Niyazov…expressed the hope that the Russian president would abolish the illegal agreement–because otherwise a new source of tension would appear on the Caspian," the source told Reuters in the Kazakh capital Almaty from Ashgabat.

"Russia is a great country–so let it take the first step," said the source–quoting Niyazov’s words.

He said the Turkmen leader would meet Russian President Boris Yeltsin next month.

On July 5–Turkmen’stan’s foreign ministry issued a "strong protest" over the Kyapaz deal. On July 26 the government sent Azerbaijan a message on the "inadmissibility of undertaking any practical work" on the Kyapaz and the nearby Chirag oil fields.

Ashgabat Monday appeared determined to maintain its uncompromising stance.

"This directive–to make no compromise over the Kyapaz field–was issued by President Niyazov–who earlier made it known to Azeri President Gaidar Aliyev and the Russian government," the source said.

He quoted Serov as calling the Kyapaz deal a "misunderstanding" and saying that Yeltsin could resolve the issue but gave no further detail.

Much of the debate over the Caspian Sea hinges on whether it is designated a sea or lake. International boundaries would be drawn differently in each case.

Moscow has argued that the Caspian is a salt lake whose oil resources should be developed jointly by the five littoral states. Others have said that it should be viewed as a sea–and each of the five must have a separate share of the riches.

With tens of million of metric tons of oil–the economies of five countries and the interests of multinational oil companies at stake–the diplomatic wrangling is intense.

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