BakuSUN,
25, May 2008

Azerbaijan President Ilham Aliyev declared that "all issues have been resolved" with Turkmenistan following his talks in Baku with Turkmen president Gurbanguly Berdymukhammedov on May 19.

Aliyev and Berdymukhammedov declared a "new stage" has been reached in relations that could enrich both countries as they seek - with prodding from the United States and European Union - to find ways to ship their Caspian energy resources to Western markets.

Both presidents used words like "brotherly nation" and "common interest" often in their comments to the media. Berdymukhammedov, in the first visit to Azerbaijan by a Turkmen president since 1996, praised his hosts and also announced that Ashgabat would writhe off $44 million in debt owed it by Baku.

But when it came to the major question - the construction of a pipeline to carry Turkmen gas across the Caspian to Azerbaijan and on to Europe, bypassing Russia - the presidents were optimistic but noncommittal.

Berdymukhammedov, who has steered Ashgabat along a more pragmatic course since taking over last year following the death of his predecessor, Saparmurat Niyazov, said the two countries are uniquely positioned to play a key role in energy exports.

"The advantageous geopolitical location of Turkmenistan and Azerbaijan, located at the intersection of Europe and Asia, offers the opportunity to use this fortunate location for the good of neighboring countries - and also for other countries in the West and in the East", he said.

The two neighbors, who both possess large oil and natural-gas reserves. Lie on opposite sides of the Caspian Sea. As the distance between their shores is the shortest route across the sea, the world's largest inland body of water, it has long made sense that any Caspian energy export route would exploit this advantage. But the previous leaders of the two countries so disliked one another that they could not even talk.

Aliyev - whose father, his predecessor, died in 2003 - said all that has now changed. He added that a trans-Caspian route was the main topic of his talks with Berdymukhammedov, but avoided giving any specific details.

Hope for a Caspian solution

The Azerbaijani president said they "discussed question connected to transport problems and we planned concrete ways to solve those problems still confronting our countries and which will facilitate the creation of a powerful transportation network in our region."

Still, there was no sign of any resolution of one of the main points of contention between the two countries: the three disputed hydrocarbon fields that lie directly between them in the Caspian that both countries claim. Representatives of both nations discussed that issue and noted progress. But they failed to give any specifics, such as whether they were close to agreeing on jointly developing the fields.

Berdymukhammedov stressed that the legal status of the Caspian - whether it is a sea or lake - must be decided soon. The question is vital to determining how the Caspian's resources can be divided among all littoral states, including Russia, Iran, and Kazakhstan.

But Aliyev added that if his country and Turkmenistan could resolve their differences over the disputed fields, then that could also lead to a final decision on the Caspian's status. If the Caspian is deemed a sea, then all five littoral states would have territorial sectors extending from their shorelines that they could develop as they wish. If the Caspian is declared to be a lake, then all five states should jointly develop its resources and share the profits. Two Caspian summits have failed to resolve the issue. Another summit is planned for this year.

However, the two presidents' remarks and the atmosphere in Baku provided plenty of hope for those who, like the United States and the EU, are encouraging both countries to throw their weight behind a trans-Caspian pipeline project.

The presidents announced, as a symbol of their new warm ties that a conference on the "Oil and Gas of Turkmenistan and Azerbaijan" would be held in September. And in keeping with the flurry of diplomacy in the region this year, there will be more bilateral meetings before then. The EU and the United States, eager lo see a trans-Caspian pipeline, can be expected to encourage this new warmth in relations.

For now, the Western powers can take comfort in what Aliyev hailed as a "qualitatively new stage" in relations with Ashgabat.