68
The basis for bilateral cooperation in the energy field was laid down in the
Memorandum of Understanding on a Strategic Partnership between the Republic of
Azerbaijan and the European Union in the Field of Energy signed in 2006. The
MoU identified four priority areas of cooperation: harmonization of legislation,
enhancing the security of supply and transit systems, development of RES, and
increased EE and technical cooperation. Regular MoU meetings take stock of the
developments in energy relations between Azerbaijan and the EU (www.europa.
eu 2017).
Azerbaijan is in the process of initiating and realizing several energy projects
through its national oil company along with foreign partners in the form of international oil companies (IOCs). These projects target world markets in the case of oil,
and the regional, EU, and Turkish markets in the case of natural gas. This endeavor
perfectly aligns with EU interests, especially the objective of freeing up some
regional markets of the EU from reliance on a single major supplier, with the associated contractual and, for some countries, political pressure this entails due to the
lack of diversification in supply sources and transportation routes. However, a strategy of supply diversification conflicts with the energy and strategic interests of the
region’s most politically influential power, Russia, from the perspective of losing
not only market share (in Turkey and the EU), but also political influence on certain
countries (Author’s interview with Farhad Mammadov 2017).
The revenue from export activity can lead to greater economic prosperity and
stimulate further reforms in the democratization process, projects like Nabucco,
which in its present form, intends to use the Baku-Tbilisi route to move Azerbaijan’s
gas through Georgia to the Turkish national gas network, then to Bulgaria, Romania,
Hungary, and the Austrian gas trading center, may be important pillars of infrastructure for reducing poverty and maintaining peace and stability in the Caspian states.
Specifically, Turkey may be one of the centers for diversifying and supplying linear
gas from the Caspian Sea and the Middle East (such as Iraq and Iran) to the European
Union as well as exporting LNG (from Ceyhan to the Mediterranean) these areas
originate from the same source (Ipek 2009:238–239).
However, there is a significant disparity in energy policies of the EU member
states, which impedes the formation of a common foreign and security policy of the
European Union. Therefore, the emerging challenges for the foreign policy of
Azerbaijan and the fragile stability in the Caspian region should be through the
cooperation of power policies around energy security, the common foreign energy
policy of the European Union, and the role of the major American and British oil
companies in the Caspian region (Ipek 2009:238–239)
Turkmenistan
With huge natural gas reserves, Turkmenistan displays an interest in playing a significant role in the security of world energy. The country’s plan is to boost its natural
gas production to 250 bcm by the year 2030. Saparmyrat Nyýazow, the first President
3 International Context of the New Era and the Caspian Sea Region
The basis for bilateral cooperation in the energy field was laid down in the
Memorandum of Understanding on a Strategic Partnership between the Republic of
Azerbaijan and the European Union in the Field of Energy signed in 2006. The
MoU identified four priority areas of cooperation: harmonization of legislation,
enhancing the security of supply and transit systems, development of RES, and
increased EE and technical cooperation. Regular MoU meetings take stock of the
developments in energy relations between Azerbaijan and the EU (www.europa.
eu 2017).
Azerbaijan is in the process of initiating and realizing several energy projects
through its national oil company along with foreign partners in the form of international oil companies (IOCs). These projects target world markets in the case of oil,
and the regional, EU, and Turkish markets in the case of natural gas. This endeavor
perfectly aligns with EU interests, especially the objective of freeing up some
regional markets of the EU from reliance on a single major supplier, with the associated contractual and, for some countries, political pressure this entails due to the
lack of diversification in supply sources and transportation routes. However, a strategy of supply diversification conflicts with the energy and strategic interests of the
region’s most politically influential power, Russia, from the perspective of losing
not only market share (in Turkey and the EU), but also political influence on certain
countries (Author’s interview with Farhad Mammadov 2017).
The revenue from export activity can lead to greater economic prosperity and
stimulate further reforms in the democratization process, projects like Nabucco,
which in its present form, intends to use the Baku-Tbilisi route to move Azerbaijan’s
gas through Georgia to the Turkish national gas network, then to Bulgaria, Romania,
Hungary, and the Austrian gas trading center, may be important pillars of infrastructure for reducing poverty and maintaining peace and stability in the Caspian states.
Specifically, Turkey may be one of the centers for diversifying and supplying linear
gas from the Caspian Sea and the Middle East (such as Iraq and Iran) to the European
Union as well as exporting LNG (from Ceyhan to the Mediterranean) these areas
originate from the same source (Ipek 2009:238–239).
However, there is a significant disparity in energy policies of the EU member
states, which impedes the formation of a common foreign and security policy of the
European Union. Therefore, the emerging challenges for the foreign policy of
Azerbaijan and the fragile stability in the Caspian region should be through the
cooperation of power policies around energy security, the common foreign energy
policy of the European Union, and the role of the major American and British oil
companies in the Caspian region (Ipek 2009:238–239)
Turkmenistan
With huge natural gas reserves, Turkmenistan displays an interest in playing a significant role in the security of world energy. The country’s plan is to boost its natural
gas production to 250 bcm by the year 2030. Saparmyrat Nyýazow, the first President
3 International Context of the New Era and the Caspian Sea Region