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82. Caspian Energy (event summary)
- Author:
- Nurlan Kapparov
- Publication Date:
- 09-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- As a part of its Director's Lunch Series, the Belfer Center invited Nurlan Kapparov, former president of the National Oil Company of the Republic of Kazakhstan (KazakhOil) and former Kazak vice-minister of energy and mineral resources, to give a talk entitled "Caspian Energy." Mr. Kapparov previously represented state interests in TengizChevrOil (a Kazakh-American joint venture) and the Offshore Kazakhstan International Oil Consortium (OKIOC). He was the chairman of the board of directors of National Atomic Company KazAtomProm, as well as the head of Kazakhstan's delegation on delimitation of the Caspian Sea with the Russian Federation. Instead of dealing with the Caspian energy situation as a whole, Mr. Kapparov's talk focused primarily on the oil resources of Kazakhstan. Prior to starting his presentation, Kapparov took the time to stress that Kazakhstan was the first ex-Soviet state to promise practical support for the United States' war on terrorism, offering the country's "strategically vital aerodromes and bases for a potential strike on Afghanistan." Kapparov echoed the words of Kazakh president Nursultan Nazarbayev and said that "Kazakhstan is ready to support an action against terrorism with all the means it has at its disposal." Beginning with basic background information on Kazakhstan and the Caspian Sea, Kapparov provided projected extraction figures (both in barrels per day and billions of dollars per year) and potential transportation routes for Kazakh oil. Using the most recent data gathered for Kazakhstan's five major offshore fields (Kashagan, Aktote, Kairan, Kashagan SW, and Kalamkas A), Kapparov indicated that if these fields will be developed with primary depletion recoverable reserves would be approximately 24 billion barrels of oil. If Kazakhstan is able to successfully re-inject gas into the fields — a process that yields more oil — the country's potential recoverable reserves could climb as high as 42 billion barrels from the fields that are included in the OKIOC consortium alone. Kapparov noted that by the year 2020, this oil could bring up to $35 billion per year in income to OKIOC. The total potential oil income could increase Kazakhstan's budget to more than twenty times its current level. Kapparov also showed on the map that Kazakhstan has many other petroleum structures in its sector of the Caspian Sea. He emphasized that Kazakhstan has not yet started the licensing round on other blocks that might have the same reserves as OKIOC. Kapparov acknowledged that the shallow waters that predominate the Kazakh portion of the Caspian Sea place certain constraints on the oil extraction process. The first constraint involves environmental factors, as shallow-water extraction is more complicated than deep-water extraction. Kapparov stressed Kazakhstan's concern for the environment, describing the Caspian as "a unique ecosystem which is the habitat for hundreds of kinds of plants and animals." The second constraint has to do the weather — the Caspian freezes over for four months a year, preventing work during that time. Kapparov subsequently tried to place the importance of Caspian petroleum resources within the overall international context. He described Caspian oil as geopolitically significant, based on the assumption that more active oil production in the region would help to lessen the importance of Persian Gulf producers. This trend would enable countries such as the United States to diversify their sources of oil, providing security in an otherwise unstable field. Kapparov noted that the region's most persistent problem remains the legal status of the Caspian Sea itself. Since the countries surrounding the Caspian have not agreed on each country's jurisdiction over the seabed and its oil and gas reserves, there is still strong regional tension. Iran's recent actions against Azerbaijani-based BP ships working in the southern Caspian are only the most recent examples of this tension. Kapparov articulated the hope that the United States, which is already exerting a strong mediating influence in the region, would play a role in resolving this issue. Kapparov supports demarcation of the Caspian between Iran and former Soviet countries according to the old agreements that were signed between Iran and the USSR. Kapparov is also hoping that Kazakhstan, Russia, Azerbaijan, and Turkmenistan will work together to solve this problem among themselves as soon as possible. Kapparov then talked about the challenges involved in bringing Caspian oil to market. He described the transportation of hydrocarbons as "difficult, geopolitically sensitive, and expensive," which has led to some degree of intrigue regarding the current and proposed routes for transporting oil from the Caspian Sea. From Kazakhstan's perspective, the current pipeline capacity is sufficient, since it is only exporting 2 million barrels of oil a day. However, the country will eventually be exporting up to 7 million barrels a day. Consequently, a strategy of pursuing multiple transportation solutions makes not only sound commercial and strategic sense (since reliance on a single production route or a small group of options leaves a producer such as Kazakhstan open to too many potential constraints). It is, in fact, necessitated by the sheer quantity of the country's remaining reserves. As Kapparov candidly noted, "In Kazakhstan we say 'happiness is multiple pipelines.'" In his conclusion, Kapparov reemphasized the importance of the Caspian region to the world's energy market. Acknowledging that Kazakhstan's fate does depend on the actions of the United States and the other G7 countries, he underscored the fact that Kazakhstan is committed to "developing and implementing domestic policies to continue both our economic growth and the social welfare of our population." During the subsequent question and answer session, Michael Lelyveld of RFE/RL asked why the government of Kazakhstan insisted upon maintaining a monopoly system over the routing of oil. Kapparov replied that this system reduced paperwork, facilitated the transport of oil, and actually increased the overall amount of oil being shipped. Professor Francis Bator of the Kennedy School asked what percentage of the Kazakh national budget is derived solely from oil. Kapparov estimated the current figure to be 40 percent of the budget, but also noted that by 2020 — when oil production should be at full capacity — this number could be as high as 80 to 90 percent if other industries are not developed more extensively. However, Kapparov underscored that Kazakhstan does not want to depend solely on the oil industry. In response to a question about Kazakhstan's plan for dealing with the excess funds derived from its vast petroleum resources, Kapparov said that the country had established a separate oil fund according to the "Norway model" — whereby excess money would be placed in this fund so as not to interfere with the national economy.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia, Europe, and Asia
83. Internal and External Dimensions of the Ethnic Conflict in the Caucasus (transcript)
- Author:
- Kazim Azimov
- Publication Date:
- 06-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Melissa Carr: Many of you have met Kazim Azimov. He has been here since the end of April. He is in the United States on a program called the Junior Faculty Development Program, which brings faculty members from universities in countries of the former Soviet Union and Eastern Europe to the United States to train, study, develop curriculum materials, and teach. We at Harvard are fortunate that part way through Kazim's year at the University of Hawaii, we were able to arrange for him to come join us here, in part because the University of Hawaii went on strike.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia, United States, Europe, and Asia
84. Judicial Reform and Human Rights in Russia
- Author:
- Danielle Lussier
- Publication Date:
- 06-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Sergei Pashin discussed Russia's judicial system, past and current debates on judicial reform, and his thoughts on the likelihood of the Putin government implementing a significant judicial reform. Dr. Pashin began by telling about the history and results of the 1991 - 1995 judicial reform in Russia. As the main achievements of this period Pashin identified ratification of the European Convention on Human Rights and acknowledgement of the jurisdiction of the European Court located in Strasbourg, adoption of a number of bills expanding and strengthening citizen s' civil and criminal procedure rights and of the law on jury trials, abolition of capital punishment for non - violent crimes, adoption of a law on judges' status in which real guarantees of independence of judges were declared, establishment of the first Constitutional Court in Russian history, establishment of a system of arbitration courts, etc.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia, Europe, and Asia
85. Putin's Plans for Russia: How Realistic Are They? (Event Summary)
- Author:
- Emil Pain
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Implications of Putin's policies remain vague. While analysts and politicians note alarming trends in politics, the economy and human rights, it is difficult to identify details and determine the feasibility of Putin's long-term strategy. Dr. Emil Pain, the Galina Starovoitova Fellow on Human Rights and Conflict Resolution at the Kennan Institute/Woodrow Wilson Center and a former advisor to President Yeltsin, was invited to present his views on policies of the Putin administration.
- Topic:
- Conflict Resolution, Security, Democratization, Energy Policy, and Human Rights
- Political Geography:
- Russia, Europe, and Asia
86. Putin's First Year: How Good, How Bad? (Event Summary)
- Author:
- Vladimir Boxer, Timothy Colton, Sarah Mendelson, and John Reppert
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Timothy Colton began his remarks with a discussion of the 1999 parliamentary elections and 2000 presidential elections in Russia. He suggested two alternative views of the elections: they can be seen as part of a succession process or as truly democratic elections. Professor Colton claimed that although President Yeltsin named Vladimir Putin his "successor" in the fall of 1999, the formal transfer of power still included a competitive election in 2000. The parliamentary elections, he argued, were highly contested and the outcome was not pre-ordained.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia and Europe
87. Fishing in Troubled Waters: Putin's Caspian Policy (Event Summary)
- Author:
- Doug Blum and Carol Saivetz
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Carol Saivetz and Doug Blum spoke about Russia's policies toward the Caspian under President Putin at the Belfer Center for Science and International Affairs on May 2, 2001 in an event sponsored by the Caspian Studies Program. Carol Saivetz, Research Associate at the Davis Center for Russian Studies at Harvard and Executive Director of the American Association for the Advancement of Slavic Studies, noted a trend toward more coherence in Russia's foreign policy, although she said it is occurring despite a split within the foreign policy establishment. Doug Blum, who spoke second, focused on the bilateral relationships between Russia and other Caspian Basin countries, and on those countries' responses to Russian policy, singling out Kazakhstan's relations with Russia as the most cooperative. Melissa Carr, Caspian Studies Program Director, chaired the event. Carol Saivetz opened by arguing that President Putin has being working to correct the foreign policy "freelancing" rampant in the late Yeltsin years, bringing more coherence to Russian foreign policy in general. However, at the same time, she said, the Putin Administration seems to be split into two different camps. Moscow analysts, when describing this trend to Saivetz, used the terms "integrationists" and "isolationists." The "integrationists" are those interested in reforming the Russian economy and linking it to the outside world (through WTO membership, for example) and who welcome globalization. The "isolationists" are in Saivetz's opinion the "derzhavniks," those who long for Russia's superpower status and for increasing Russia's power in the CIS. Putin has decided, Saivetz argued, that the Caspian is one of Russia's vital interests and therefore a region to concentrate on. Shortly after he was elected President, a Security Council meeting took place in which the two items on the agenda were the new military doctrine and Caspian issues. After this meeting, Putin declared that Russia must be "competitive" in the region and to this end he created a new department for Caspian policy, appointing Viktor Kalyuzhny as Caspian envoy. The Russian President also talked about the need to balance state interests with the interests of the oil companies. Following that statement (and probably with Kremlin backing), Yukos, LUKoil and Gazprom joined in a new consortium called the Caspian Oil Company to start developing reserves in the Russian sector. Next Saivetz discussed Putin's January trip to Azerbaijan and the agreements that emerged from his meetings with Aliyev. There was compromise on the division of the Caspian Sea, and in parallel the signing of an oil deal between LUKoil and SOCAR during the visit. On the other hand, at that time Russia was still trying to block the Baku-Tbilisi-Ceyhan pipeline (since then they have withdrawn overt opposition but continued to waver), and could not find agreement with Azerbaijan about Nagorno-Karabagh. Saivetz also briefly discussed Khatami's trip to Moscow, which ended up being about arms deals and not the Caspian, precisely because of the lack of agreement on a legal regime. The final resolution of the Caspian demarcation remains one of the key issues in the region, she noted. Saivetz made several broader conclusions: 1) Putin has made the Caspian a priority; 2) Putin's policy blends economic and geopolitical calculations; he has shifted the emphasis in foreign policy from macro ties (state-to-state relations) to a combination of macro and micro (i.e. trade and economic) ties. 3) There is a notable militarization of Russian pressures on other littoral states, particularly Azerbaijan and Georgia; many analysts explain Russia's intention to keep the waters of the Caspian common as a way to ensure Moscow the right to project its naval power. 4) Increased attention to the Caspian reflects a larger Russian policy towards what Russians have called the "Near Abroad," and particularly the Caucasus (Chechnya, Georgia, Armenia). Returning to the idea of integrationists and isolationists, Saivetz remarked that there is a debate in the U.S. about which of these two tendencies is driving Russian policy. It seems that Putin has not made a choice: the Russian government is pressuring Georgia and Azerbaijan at the same time as Viktor Kalyuzhny has backed off from opposing BTC. It seems that Russia's ideal model for pipeline development is reflected in the CPC: outside investment went into a pipeline that traverses Russian territory (where Russia gets transit fees). This pipeline reflects a policy that is simultaneously both integrationist (bringing in Western investment) and isolationist (forcing North-South routes). Doug Blum began by registering his agreement with Saivetz's presentation. He structured his talk by focusing on Russia's bilateral relationships with Caspian littoral states one by one, in "declining order of [Russia's] success": Kazakhstan, Azerbaijan, Iran, Turkmenistan, and Georgia. He pointed out that Russia's place is extremely important in all the significant issue areas that concern the Caspian countries. "This is not simply a matter of Russia being effectively able to exert leverage on these countries," he remarked, "there are shared and overlapping interests." Russia is an important transit route for Central Asian goods, and these countries also share an interest in combating terror, drugs, crime, and "Islamic fundamentalism." Russia has the logistical and military resources to help in these areas, and is unparalleled by all other countries in the region. Russia's successes in Kazakhstan include the achievement of increased energy transit through Russian territory with the Caspian Pipeline Consortium line and also with added volumes from on the Aktau-Samara route. Also, Russia and Kazakhstan have concluded formal accords on trade and the possible implementation of a Eurasian Economic Union. In security, there is cooperation on an air defense system. Also, Russia has retained access to the Baikonur Space Facility. In sum, Russia has succeeded in fulfilling its goals in Kazakhstan, but this is largely due to overlapping interests. On the other hand, Kazakhstan is and has for the past decade been interested in balancing its orientation between Russia, China, and the West. This balancing act has resulted in strains with Russia, for example over the possible Kazakh commitment to BTC. Kazakhstan also disagrees with Russia about the ownership of some offshore oil islands, and about Russia's naval presence in the Caspian Sea. Azerbaijan, according to Blum, presents a "much more complex picture of balancing and bandwagoning," being limited to some extent by Nagorno-Karabagh and, relatedly, the U.S. Section 907 of the Freedom Support Act, which limits direct government assistance from the U.S. to Azerbaijan. He noted that Azerbaijan of necessity has been searching for a modus vivendi with Russia, a pursuit that has been made easier given the new Russian flexibility towards Azerbaijan under Putin. Azerbaijan and Russia have started to form agreements on trade and investment, and also humanitarian relief and treatment of migrants. The two countries are cooperating on combating terrorism, organized crime, and drug smuggling. Also, Azerbaijan is increasing imports of Russian gas as a trade-off for exporting more oil through Novorossiisk. Total trade between Azerbaijan and Russia remains low, however. Azerbaijan is trying to attract Western investment and balance against Russia through membership in groups such as GUUAM. Blum emphasized that both Azerbaijan and Kazakhstan are attempting to accommodate to geopolitical reality. In addition, he pointed out that both countries are "very sensitive and very angry about repeated Western, and especially American, criticisms of human rights and the lack of political progress"; and this motivates compromise with Russia. Iran's relationship with Russia involves both conflict and cooperation. There is disagreement over Russia's naval presence in the Caspian and about the ownership of the Sea. On the other hand, there is significant military cooperation. Turkmenistan's relationship with Russia is "quite strained," according to Blum, especially over the Caspian legal regime, where Turkmenistan has sided with Iran. Turkmenistan has, however, negotiated a favorable deal for gas transit through the ITERA system. However, on the whole Turkmenistan remains "a very isolated and extraordinary backwards, removed country." Blum termed Georgia's relationship with Russia "extremely strained." Russian policymakers see it in zero-sum terms, especially over energy transit issues (what goes through Georgia is a Russian loss) and over the pending loss of military bases in the region. Georgia has shown some willingness to form a working relationship with Russia, but still the Shevardnadze regime is understandably very reluctant (given how the Russian security apparatus relates to him, as a wishful target for assassination). Blum closed by reiterating that the cornerstone of current Russian policy is international integration. Russia is pushing a north-south route that would bring trade from Iran and India up through Russia's Caspian port of Astrakhan then up the Volga. The Caspian States also want to enter into the international economy, with the help of multiple trading routes, north south and also the east west.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia, China, Europe, and Asia
88. Fishing in Troubled Waters: Putin's Caspian Policy (Transcript)
- Author:
- Doug Blum and Carol Saivetz
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- Melissa Carr: On behalf of the Caspian Studies Program at the Belfer Center for Science and International Affairs at the Kennedy School, let me welcome all of you today to our seminar. Lest anyone be misled by the title, Doug and Carol are going to speak today about more than fishing — in fact they may not even speak about sturgeon or caviar at all, although those are important considerations in thinking about the Caspian Sea.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia, Europe, and Asia
89. U.S. Policy on Caspian Energy Development and Exports: Mini-Case and Paradigm
- Author:
- Graham T. Allison and Emily Van Buskirk
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- The date is July 1, 2001. Real world history and trends occurred as they did through March 19, 2001 — except for the hypothetical departures specified in the case below. Events after March 19 that are not specified in this case are assumed to be straight - line projections of events as they stand on March 19. Assume, for example, that sporadic violence continues in the Middle East at the current level of intensity; Britain and the U.S. are nearing the end of their review of UN sanctions against Iraq, and will soon make recommendations on refocusing the sanctions to make them “smarter”; as expected, Mohammad Khatami was reelected as President of Iran on June 8 with a mandate for continued reform; the price of oil is $25/barrel; events in Chechnya and Ukraine, and negotiations over Nagorno - Karabagh will continue as before.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Britain, Russia, United States, Iraq, Ukraine, Middle East, Asia, and United Nations
90. Stability and Peace in the Caucasus: The Case of Nagorno-Karabagh: Keynote Address
- Author:
- Brenda Shaffer
- Publication Date:
- 05-2001
- Content Type:
- Working Paper
- Institution:
- Belfer Center for Science and International Affairs, Harvard University
- Abstract:
- "We have gathered together in this very picturesque village setting, esteemed negotiators both from the past and the present, honorable diplomats and officials, professional facilitators and researchers on both conflict resolution and the Caucasus from many places, including Germany, Azerbaijan, Armenia, Russia, U.S., France, Iran and Turkey. Many of the primary diplomats responsible for the recent breakthroughs in the negotiations on Nagorno-Karabagh are currently present in this room, or on their way. They have been fulfilling their mission passionately and selflessly.
- Topic:
- Conflict Resolution, Security, Democratization, and Energy Policy
- Political Geography:
- Russia, America, Europe, and Asia