Senior thesis

The Caspian Sea as a Commons: Conflict and

Cooperation
By: Alex Mette

1
Previous page: image 1.0 “The Caspian Sea” from: Kitāb Gharāʾib al-funūn wa-mulaḥ al-ʿuyūn' (The Book of
Curiosities of the Sciences and Marvels of the Eyes) 11th Century Egyptian manuscript See Mirfendereski, 2001.
Table of Contents
Glossary pp. 3

Chapter 1: Introduction 4–5

• Abstract
• Purpose
• Thesis
• Methodology
• Overview

Chapter 2: Background 5 – 10
• Riparians
• International Actors
• Interstate Relations

Chapter 3: The Caspian 11 – 12

• History
• Constraints
• Location of Oil and Gas

Chapter 4: Theory 13 – 15
• Competition – Cooperation matrix
• Discussion
• Units of Analysis
• Benefits and Obstacles to Cooperation

Chapter 5: Caspian Resources 15 – 17

• Oil and Gas
• Navigation
• Fishing
• Security
•
Chapter 6: Pipelines 17 – 20
• Theory
• Asian Routes
• The Iranian 'Option'
• Washington and Moscow

Chapter 7: The Legal Regime 20 – 26

• Legal History
• Positions of the five States
• The Legal Regime Today
• Legal Issues in the Commons

Chapter 8: Conclusion 26 – 28
• The Future

2
 Glossary

Ambient – In this context ambient refers to the degree to which a resource is omnipresent. Air and security are
both ambient resources.

Commons – The commons is any space or resource that is used by multiple actors. An area can be privately
owned by several people, states, or organization and still be considered as a commons. The most important point
is that all the actors have access to the space.

Condominium – Condominium is used here in the legal sense and refers to the definition of rights so that all
actors have equal rights in any part of the commons. In other words, condominium is the total absence of
property rights. The practical effect of this is that one actor, such as Russia, can legally exploit resources in any
portion of the Caspian and the same goes for other states.

Delimitation/delineation – In contrast to condominium delimitation or delineation is the use of dividing lines to

specify where actors have rights to resources in the commons. This generally follows the practice of extending
national borders out into a sea, gulf, territory, etc. Delineation, rather than condominium, is the norm in
international law.

Fugitive – A fugitive resource is one that does not respect human boundaries or divisions such as air pollution or
fish.

Hydrocarbon resources – In terms of chemistry a hydrocarbon is a molecule that contains only hydrogen and
carbon. Such resources include petroleum, natural gas, methane, butane, etc. In this context it simply means oil
and natural gas.

Pentalateral – Literally five sided, in this context it means any action or agreement made by all five Caspian
states.

Regime – This can mean a social system, government, or period of time in which a particular form of
management prevails. In the case of the Caspian sea the regime refers to the body of practices and agreements
that govern the use of resources in the Caspian Sea.

Riparian – One who resides on the bank of a waterway; in this context the five Caspian States: Russia, Iran,
Kazakhstan, Turkmenistan, and Azerbaijan, who have sovereign rights over a portion of the Caspian Sea.

Rivalrous – Refers to a resource where use by one actor limits use by another. This is generally the case when
the resource is fixed in quantity such as a pool of water. Any water that one individual drinks is no longer
available to others. A renewable resource is only rivalrous for a fixed period of time.

Sui generis – Latin meaning “of its own kind.” Used in the context of the Caspian Sea it means that if the
Caspian Sea's status cannot be determined by international law then its status is sui generis and must be
determined by the actors based on its unique qualities.

Transboundary – A resource that is transboundary is similar to a fugitive resource; both traverse human
boundaries but a transboundary resource can be much more broadly defined than a fugitive resource because
they can be in a set location or in motion. Transboundary water resources for example are rivers and lakes that
either cross or form the borders of two or more states. Other resources such as fish or pollution are
transboundary resources in the same sense as fugitive ones.

3
 The Caspian Sea as a Commons: Conflict and Cooperation
Chapter 1. Introduction
Abstract
The Caspian Sea contains many resources each of which is unique in terms of how states perceive it
and how it is managed. This variability is due to traits of the resources themselves as well as history
and politics. This paper outlines a theory of resource cooperation and places it in the context of
historical and political events in the Caspian Sea region. The five states of that surround the Caspian
are examined alongside other key international actors and four resources: oil and gas, navigation,
fishing, and security are examined according to the theory.
Purpose
The goal of this paper is to understand how states compete and cooperate over resources and to weigh
the strength of the theory being explored. Ultimately, the theory can help to provide a way to predict
how states will view different resources and whether they will cooperate or compete over them.
The Caspian Sea is an excellent case-study due to the fact that the legal regime is simple
because it began largely with the breakup of the Soviet Union. The states that surround the Caspian are
diverse and have unique relationships with each other and world powers. Also there are many different
types of resources in the Caspian many of which are extremely valuable such as Sturgeon and Oil.
International attention on the region reflects the Caspian's strategic importance which extends beyond
oil and gas resources. Overall this region is very important and will increasingly become a
transportation and energy hub as Caspian states and western markets such as India, China, Pakistan,
and Indonesia continue to develop.
Thesis
Resources are subject to varying levels of conflict and cooperation. The extent to which actors (in this
case states) compete over resources can be predicted based on their placement within the conflict-
cooperation matrix. While states always act in their own interest there are some resources that require
cooperation in order that all actors maximize their benefits. Conversely, when individuals act in their
own interest without regard for aspects of communal property that require coordination the effect can
be the destruction of the environment or premature exhaustion of the resource. While this result harms
all parties in the long-run, often individuals seek to exploit a resource to the greatest extent possible.
This is due to the perception that the individual should try to gain as much as possible as quickly as
possible before others deplete the resource and to the rational view that money today is worth more
than money ten years from now.
Ultimately, cooperation is the preferred outcome for all actors because coordination allows for
the maximum yield in the long-run for renewable resources and allows for stability and clearly defined
rights more generally. In this sense, the question of cooperation becomes one of compromise. When a
state is unable to ensure the ideal outcome of negotiations it must compromise in order to secure rights
or benefits. States' willingness to make compromises over resources is a product of their bargaining
leverage as well as a preference for stability and clearly-defined rights. No state benefits if resources
sit in the ground untapped because of disagreement.
Methodology
The theory of resource cooperation is based off the notion of a public good. A Punnett Square is built
that includes values of public, private, good, and pool types of resources. A value of cooperation is
assigned to different resources based on their location in the square. Then resources of the Caspian are
categorized and examined according to this model and finally the ordering is compared to empirical
evidence. The importance of looking at these resources in their context in the world is paramount. The
theory itself is far too simple to explain how states will act regarding different resources but it does
provide a basis for comparing states' interactions. The difficulty though is to balance the complex

4
histories and relations of the five Caspian States, as well as international and non-state actors with a
theory of resource cooperation that can shed some light on whether some resources are more
contentious than others and why.
Overview
The paper will begin with the history of the region and the Caspian states in order to understand each
state's motives as well as the nature of their interactions with one another. Next, the Caspian Sea itself
will be discussed to help with understanding of the multifaceted nature of this area. The theory of
resource cooperation is presented in the next section followed by an examination of the Caspian Sea's
resources within this framework. Finally, I will look at pipelines as a counterexample to the theory, and
at the legal regime which serves as a medium through which negotiations occur.

1. Background 3. Theory: Cooperation 5. Pipelines

2. The Caspian Sea 4. Caspian Resources 6. Legal Regime

Chapter 2: Background

The Caspian Sea is the largest inland body of water and a remnant of the ocean that once covered Asia.
It lies to the east of the Black Sea and to the west of the Aral. Politically it is surrounded by Iran,
Russia, Kazakhstan, Turkmenistan, and Azerbaijan. Fig. 1.2 Political Map1
These 5 states surround a vast commons called the Caspian Sea,
within which are quantities of oil comparable to those of Africa,
Central and South America, or Asia and Oceania,2 as well as
numerous varieties of Sturgeon that produce high quality caviar
including the famed Beluga Sturgeon. Oil in the Caspian Sea
region has an extensive history, dating back to almost three
centuries3. Zoroaster is said to have traveled to Baku, capital of
Azerbaijan in around 1000 BC to witness the phenomenon.4 In the
early 19th Century the Nobels of Switzerland and the Rothschilds
of France invested in Baku's oil resources.5
Each state in the Caspian has a unique history and though
some share more than others each has high ambitions for the
Caspian region. It has repeatedly been termed a “Sea of peace of
friendship” and organizations such as the Caspian Economic
Community and the Caspian Environment Programme are signs of
a cooperative approach to the sea. Furthermore, the Caspian has great significance to each country in
different ways and has played a key role in the changing political scene following the breakup of the
USSR. For the three Former Soviet Republics (FSU) the Caspian is a way to achieve independence
from Moscow. What is most remarkable is the balancing of the US and Russian positions vis-a-vis the
Caspian region as their interests collide around the governments of oil and gas rich states. For Russia
and Iran there was the common enemy of the United States who backed the new governments and
supported private ownership of oil and gas resources. However, the way that Moscow and Tehran dealt
with the US presence shows how different their positions are.

1 www.payvand.com/news/07/nov/1156.html
2 Rabinowitz, 29.
3 Gokay, 3.
4 Ibid, 3.
5 Bahgat, 2007, 158.

5
Riparians
Any theory that seeks to explain behavior on a state-wide level must provide context so that the
strength of the theory can be weighed against other factors that could explain a state's actions. The five
Caspian states are unique as independent entities and in their relationships with each other and
international corporations and governments. To understand why the past two decades unfolded as they
did we must first examine the states themselves.

Azerbaijan
Azerbaijan had the most developed oil infrastructure of the 3 FSU (Former Soviet Union) republics and
sought to ensure that foreign companies would invest in their energy industry. The need for capital was
apparent as the USSR had neglected the area, not for lack of oil, but to focus on the Siberian provinces.
Furthermore, oil in the Caspian Sea is technology and capital intensive due to its great depth. Foreign
capital and expertise were essential in Azerbaijan's view to develop the economy and to ensure
independence from Moscow.
Conflict in Nagorno-Karabakh continues as Azerbaijan protests territory taken by Armenia
during the war that broke out in 1988. Following the end of Soviet control, war between Azerbaijan
and Armenia in the contested region worsened and the province would ultimately become autonomous.
Russia is accused of supporting Armenia during this conflict and even of attempting to overthrow
Heydar Aliev, President of Azerbaijan (1993-2003) in 1995. Others hold that Aliev himself
orchestrated the failed coup in order to eliminate opposition.6
Heydar Aliev built a centralized government that made him a virtual dictator. His son, and
current president Ilham Aliev, inherited a legacy of electoral manipulation, control of the media,
absence of competing political parties, and a state-owned oil company that has funded Azerbaijan's
military growth in recent years. Western support of the Aliev regime(s,) especially through investment
in the oil industry ensures that human rights and political and economic development are subservient to
the stability of the government.
Azerbaijan has an immense history with oil and focuses much of its attention on the Caspian
region. Conflict with Armenia drained economic resources and the support of the west was crucial to
secure foreign capital to develop oil and gas and to counterbalance the Kremlin's support of Armenia.
The government in Baku embraces western investment wholeheartedly with favorable laws and
contracts with state-run industries. Azerbaijan has aggressively defined itself as pro-west and used the
support of the US to influence outcomes in the Caspian.

Turkmenistan
Saparmurad Niyazov became head of the communist party of Turkmenistan in 1986 and ruled the
country for two decades. Like many in Turkmenistan, he was opposed to the dissolution of the Soviet
Union and supported the coup against Gorbachav in August 1991.7 Turkmenistan was one of the least
developed of the Soviet republics and its economy was heavily dependent on the Soviet Union.
Support for a referendum to remain part of the USSR was overwhelming in 1991. The government of
Turkmenistan reverted back to the Soviet-period central authority after independence was declared.
Democratic reforms were reversed and communist ideology was swapped for nationalism. Niyazov
himself created an extensive personality cult whose grandiosity overshadowed much of the politics of
the time. He changed his name to Turkmenbashi (head of all Turkmen) and cities, streets, and schools
were named after him.
After September 11th Turkmenistan gained considerable strategic significance as a base for US
forces operating in Afghanistan. Turkmenistan's oil and gas industry is composed of four, largely state-
6 Dekmeijan, 62.
7 Ibid, 68.

6
run companies. While gas reserves in Turkmenistan place it in a position to become one of the world's
top producers, development is limited by corruption and the opaqueness of the Turkmen government.
Dependence on Russia as a market limits Turkmenistan's ability to achieve consistent economic
growth.8

Kazakhstan
Kazakhstan is the largest FSU country and home to a population of 45% ethnic Kazakh. The large
number of Russian's in Kazakhstan led many to fear the possibility of a north-south divide. The
government is held together by the singular rule of Nursultan Nazerbayev. Like Niyazov, Nazerbayev
was a communist-era ruler who changed his title with the fall of the USSR. Since then, the Kazakh
president has prevented any political opposition and controlled the energy sector through the state-
owned oil company. Nazerbayev has been criticized internationally for his record of electoral fraud,
his rewriting of laws to allow him to serve as president for life, and for the high levels of corruption
among the political elite. Ethnic diversity and tribal affiliations in Kazakhstan led Nazerbayev to
institute a policy of Kazakhization that placed ethnic Kazakh in the government, promoted the Kazakh
language, and encouraged the return of ethnic Kazakh from Mongolia and China.
Kazakhstan is a vast country with significant hydrocarbon resources especially in the Caspian
region. They are an active party in negotiations and scientific exploration of the Caspian and
Nazarbayev skillfully balances the forces of ethnicity and competing international pressures to maintain
Kazakhstan's role as a peaceful nation with multiple allegiances. The main drawbacks of Kazakhstan's
position are extensive corruption and a lack of broad development, this approach is only amplified by
large quantities of oil and gas that ensure incoming foreign cash.

Iran
The defining historical event to change Iran in the last 50 years is the Islamic Revolution of 1979.
After the Pahlavi dynasty was overthrown, Iran's government became an Islamic theocracy dominated
by conservative religious clerics. Control of Iran's armed forces, power to select top judicial positions,
and the ability to veto presidential candidates are all given to the faqih. Politically, conservative
religious leaders in Iran have prevented significant reforms and control key industries. President
Khatami (1997-2005) sought to reform Iran's political system but was stifled by the conservative
opposition. Today, Mahmoud Ahmadinejad espouses a conservative view aimed at bringing Iran back
to a position of prestige in the international community.
Iran's economy faces many barriers to the development of oil and gas in the Caspian Sea. State-
run monopolies called the Bonyad-e Mostazafin dominate and stifle private sector growth. Corruption
and mismanagement coupled with a costly war in the 1990's, falling oil prices, and a US embargo have
all impacted Iran economically.9 The US seeks to further alienate Iran and to prevent their involvement
in deals over oil in the Caspian. Iran's ability to promote its views on the legal regime, pipeline routes,
and to enter contracts is checked by US influence in the region. Further, Iran's relationship with Russia
is seen to change based on the strategic interests of Moscow. Iran sought to improve diplomatic
relations with Azerbaijan after 1991, capitalizing on the dominant Shiite population and historical ties
to the country. This move angered Moscow who opposed the Azeri government's western leanings.
When the US successfully prevented Iran from entering the “contract of the century” in 1994 they
reverted to the “Russian” position of condemning such contracts as illegal.
Iran sees the Caspian as its historical and political domain and there is extreme pressure inside
Iran for a good outcome to the past two decades of political turmoil. Some in Iran say that they could
have negotiated for half of the Caspian and now the 20% they claim as Iranian is in question. The
pressure to gain ownership of oil and gas in Iran despite the conventions of division in international law
8 Ibid, 71.
9 Dekmeijan, 50.

7
has little space to move given the US presence in the Caspian and Washington's desire to isolate
Tehran.

Russia
Russia is the most powerful Caspian state and the most influential actor in the region. The overarching
Russian policy in the Caspian has evolved from a view towards maintaining economic dominance over,
and political alignment with, the FSU countries in Central Asia. The post-Soviet period for Russia was
defined by reform of the economy and the adoption of free market principles as well as the need to
balance the newly independent republics against the center polis. Ethnic conflict arose as new
republics gained independence from Moscow. Others, namely Chechnya and Tatarstan, rejected the
new provision of autonomous regions, republics, and districts that gave greater sovereignty to large
regions of the FSU. Russia faced the need to develop a new state structure that maintained the power
of the federation. Two wars in Chechnya, terrorist attacks on Russian soil by Islamic Radicals, and
conflicts in the Caucuses led to the rise of Vladimir Putin and the military intelligence paradigm that
dominates Russian politics today. Putin's hardline stance on Chechnya won him favor and he has
demonstrated his ability to make key reforms and alter his position as part of the policy of
“constructive engagement.”
Russia's energy sector is its largest hard currency earner with $22.8 billion in 1998.10 The energy
industry is dominated by large privatized monopolies especially Lukoil and Gazprom. Russia also
controls the vast majority of oil and gas pipelines in the region. In the past, all Caspian pipelines
passed through Russia, many terminating at the Black Sea port of Novoroiisk.

International actors

The United States

The US sees the Caspian Sea as a means of improving energy security. Interestingly, following the oil
embargo in 1973 Russia was increasingly viewed as a potential source of oil. Today the US supports
any move that will bypass Russia and Iran and limit Europe's dependence on Russian gas. In the
Caspian, Russia is the major opponent of the US' presence as well as a major partner. The US
supported Azerbaijan in its claim for oil off its coastline and EIA figures of oil and gas reserves in the
Caspian sought to promote development of the region.11 US ties with Kazakhstan and Turkmenistan
are especially crucial due to their strategic importance in the war in Afghanistan. The US seeks to
alienate Iran from any agreement over the Caspian and prevented Iran from participating in the “deal of
the century.” Furthermore, the US government refused to allow a pipeline through Iran that was
supported by US oil companies.12

Turkey
Turkey is connected with the Caspian Sea for two main reasons. One, Turkey seeks to improve its
position strategically by building relations with Central Asian countries many of whom speak Turkic
languages and share cultural traits with Turkey. Second, Turkey is geopolitically located to serve as an
energy bridge from Asia to Europe. Before the construction of the Baku-Tblisi-Ceyhan (BTC) pipeline
all of the pipelines leaving the Caspian Sea terminated in the Black Sea. Much of the oil and gas that
arrives in the Black Sea passes through the crowded Bosporus straits before entering the
Mediterranean. Today the BTC carries oil through Turkey directly to the Mediterranean port of
Ceyhan. Russian control over pipelines was demonstrated when supplies were cut off to the Ukraine
and many EU countries faced shortages. This Russian dominance coupled with Turkey's growing
10 Ibid, 47
11 Bahgat, 2003, 312.
12 Ibid, 315.

8
demand for natural gas has led to increasing attention on the NATO country.

Interstate Relations

Conflict over resources of the Caspian Sea centers around ownership of oil and gas. For the most part,
these disputes manifest in disagreements over the legal definition of the Caspian but are in essence
disputes over oil fields. Conversely, areas of cooperation are limited mainly to the environment,
navigation, security, and transportation. Caspian states' interactions regarding these resources are built
around complex political situations that define how states perceive each other and how they define
themselves but also by traits of the resources specifically.

Azerbaijan
Azerbaijan was instrumental in defining the Caspian legal regime in opposition to the Russian view.
Azerbaijan's desire to develop its oil resources coupled with Russian support of Armenia in the
Nagorno-Karabakh conflict meant that western support politically and financially was crucial to ensure
independence from Moscow and to finance the war in the west. The US strongly supported
Azerbaijan's view that the Caspian be managed on the basis of delimitation13 and this claim would have
carried very little weight if not for western interest in the region. Tension between Moscow and
Washington was apparently reignited over oil in Azerbaijan and the implications of “foreign”
companies developing oil in the Caspian Sea. Azerbaijan's alignment with the west had implications
for Iran as well, as Tehran's effort to forge bonds based on the common Shiite Islam religion and ethnic
Tajik in Azerbaijan gave way to the more practical strategic alliance with Moscow.14 Western backing
of Azerbaijan meant that Iran was unable to gain shareholder status in any deals with Azerbaijan and
prevented any future pipelines from passing through Iranian territory. For Russia, despite its greater
power in the region, their inability to control oil resources throughout the Caspian meant that a shift in
policy was necessary.

Kazakhstan
Kazakhstan maintains cooperative relations with Russia in terms of jointly-developed oil fields and in
the establishment of boundaries. Initially, Kazakhstan was vocal about the use of UNCLOS as a means
of defining the Caspian Sea. Russia responded with a letter to the UN that stressed the illegality of any
agreements over resources in the Caspian and the potential consequences in so doing.15 However,
Kazakhstan's position is one of cooperation with its neighbor. Unlike Azerbaijan who stressed the
importance of American political support in completing the BTC pipeline,16 Kazakhstan has sought to
maintain ties with Russia by exporting oil through Russian pipelines, developing fields jointly, and with
Russian development of Kazakh oil fields.

Russia
Despite acquiescence to US involvement in the Caspian, Russia remains the dominant military and
political power in the region. Following the breakup of the Soviet Union, many countries were faced
with the choice of a Russian security guarantee in exchange for economic dominance. Azerbaijan is the
only FSU republic on the Caspian to reject that military presence. Russia's role in conflict resolution in
Central Asia and the Caucuses is evidence of its power in the region and its determined stand to check
US influence.17 Russia has several means of influencing energy policies in the region including as an

13 Mehdiyoun, 184.
14 Gokay, 31.
15 UN doc. A/49/475
16 Bahgat, 2007, 166.
17 Bahgat, 2002, 315.

9
investor in projects, as a transit country, as a competitor, and as a market. Russia has strategic and
economic leverage in the Caspian and its political options are cheaper than those of the US.18
However, Russian policy has shifted from a primarily strategic focus to one driven by pragmatism and
constructive engagement.

Turkmenistan
In the case of Turkmenistan, Russia was able to ensure the bulk of Turkmenistan's gas sales would be to
Russia.19 Historically Turkmenistan has maintained cooperative relations with Russia and energy
agreements between Ashgabat and Moscow show Turkmenistan's willingness to make concessions to
appease Russian aggression. However, Turkmenistan has built a network of relationships that, if not
successful in countering Russian dominance in the region, do show Ashgabat's ability to balance their
relationships with Moscow, Tehran, and Washington. In recent years Turkmenistan shows an
increasing desire to diversify its export options away from Russian control. The north-south corridor is
an example of cooperation between Turkmenistan and its southern neighbor Iran who can provide the
nation with access to the Persian Gulf.

Iran
Iran has been cautious towards Moscow since 1991. Before that time, Tehran and Moscow were united
by strategic interests. In the aftermath of the Soviet Union, Iran sought to expand its strategic reach
while cautiously testing Moscow. An attempted alliance with Azerbaijan soon failed and Iran's desire,
above all else, not to provoke Moscow was apparent. Russian military superiority in the region means
Iran feels strongly about the benefits of preventing the militarization of the Caspian. Iran initially
found much comfort in its shared view with Moscow over the legal regime of the Caspian. When
Tehran found itself outside of agreement that included the US and Russia the reality of their
relationship with Moscow as strictly strategic, was clear.

The United States

Following the breakup of the Soviet Union the US position was one of caution. In the years after 1991
US interests were strictly economic and focused solely on oil.20 Moscow still controlled the situation
and the US and American companies deferred to the Russian government regarding oil and gas. BP
and Statoil negotiated with Moscow pre-1991 and even after 1991 companies such as ExxonMobil,
Ramco, and Turkish oil firms negotiated with the Russian government. However, as foreign firms
secured contracts with Azerbaijan and Kazakhstan Russian cooperation seemed inevitable, if not
reluctant.
As the US' cautious approach to Caspian politics yielded to the success of several ventures in
the region that included the participation of Russia, political and economic interests clashed over
conflict in Armenia. Just as western interest seemed to be congealing around Baku, the war with
Armenia became a public issue for Americans who witnessed US cooperation with a regime
responsible for denying Armenians energy supplies. Support for US policy is shaped overwhelmingly
by its desire to expand its oil and gas supplies and to limit Russian and Iranian influence in the region.
This frequently takes the form of supporting stable, pro-US governments in the FSU republics who are
corrupt and undemocratic.

18 Ibid, 316.
19 Bahgat, 2007, 161.
20 Gokay, 28.

10
 Chapter 3: The Caspian

The groundwork for a theory of interstate cooperation and conflict is the historical context and some
basic understanding of the character of the states. The Caspian Sea is surrounded by diverse nations
each with their own view of the future of the region. Furthermore, countries like the US and China also
have interests in the oil and gas resources in the Caspian. The Caspian region is strategically located
between East and West. As markets in the West grow, the Caspian will increasingly become host to a
convergence of interests. It is already apparent that states such as Kazakhstan and Turkmenistan are
engaged in a balancing act between different powers and as their options to the west expand more
actors and more interests are likely to enter the Caspian scene.

History
The Caspian Sea has seen many empires, from Darius to Nicolas and today, following the end of the
Soviet Union, has returned to a place of prominence in world politics. What Mirfendereski termed at
one point a “Russian Lake” is now surrounded by five countries.21 Over the last 200 years control of
the Caspian has swayed from Russian hands and we are witness to Russia's dynamism as well as its
continuity. The most important international treaties on the Caspian Sea of the 19th and 20th centuries
are the 1813 Treaty of Golestan that gave Russia the exclusive right to a navy on the Caspian22 the 1921
Friendship Treaty that granted Iran navigation rights and arose out of Russia's need to ensure the
exclusivity of rights to the Caspian preceding the First World War, and the 1940 Commerce and
Navigation Treaty that broadened Iran's rights to include freedom of commerce on the Caspian waters.23
When the FSU republics gained independence from the USSR in 1991, the number of states
surrounding the Caspian increased and more importantly allowed the new republics access to world
markets. From the perspective of the oil company, negotiations began before the fall of the Iron
Curtain as the “deal of the century” was now truly underway.
The battle to define the Caspian as either commonly owned or divided into state sectors was the
main impediment to cooperation around other issues. Scholars saw rivalries between Moscow and
Washington manifest in a discussion over whether the Caspian was in fact a “sea” and the situation was
deemed “the new great game” in reference to the international attention and strategic considerations the
region received. Over time the situation became more clear not just in the strategic sense but legally.
By 1994 there was no question whether the Caspian would be managed communally and issues
such as declining fish stocks, a seal die-off, oil pollution, sea-level rise, and desertification all led to the
creation of the Caspian Environment Programme and the signing of the first Caspian-wide agreement
that same year.24 In this way, different elements of what today make up the Caspian regime were
addressed separately during the last two decades. Navigation, fishing, oil and gas, and security as well
as any number of other issues present in the Caspian are subject to different types of management by
the actors as well as corresponding levels of cooperation and competition.

21 Mirfendereski, 2001.
22 Gokay, 56.
23 See Mirfendereski, 2001.
24 Lee, 41.

11
The Role of Constraints Fig. 1.3 Oil and Gas Resources in the Caspian25
Conditions, both historical and geological, led to the very
different positions of some of the Caspian states. In terms
of history, the most important elements of the Caspian
states' relations are Russia's legacy of domination of the
region, Iran's historical ambitions and inflexible position,
and the three FSU Republics who are building foreign
partnerships and developing independent economies. The
political and economic conditions of the Caspian states are
a product of their histories but the way they seek to go
forward means an interaction between what is given and
what varies. A theory is a guess at what breaches the
determinism of history and geography. The theory of
resource cooperation in the Caspian Sea is about how states
view different resources and how they cooperate over
them. In the Caspian there are fish, there are seas to
navigate, there is security, and there is oil. How the states
view these various components of the broader commons is
related to the resources themselves as well as their
positions politically and economically. Therefore, it is
necessary to understand how states view resources based
on givens such as history or geography as much as it is important to understand the resources
analytically.

Location of Oil and Gas Resources

A quick look at the location of oil and gas resources in the Caspian helps show how this given variable
led to certain states' legal positions in the early stages of the legal regime debate. As oil and gas are
only resource being examined in this paper that are fixed in location it is important to see how
geography and politics collide in this case.
Oil and gas resources are located throughout the Caspian Sea primarily in the southern and
eastern portions. Concentrations of oil are found on a rift that extends from Azerbaijan in the west to
Turkmenistan in the east. These fields are the most developed in the Caspian and the most contentious
among the three southern Caspian states. In the north oil and gas fields are located offshore of
Kazakhstan above the Garabogazkol and in the northwest portion of the Caspian. Most of these
resources lie offshore of Kazakhstan. This development, that Kazakhstan, Turkmenistan, and
Azerbaijan would inherit the bulk of hydrocarbon resources in the Caspian following the breakup of the
Soviet Union has led to the unique character of the post-Soviet history around the Caspian. Simply put,
the states with the most political power ended up with the least amount of resources. This led to two
opposing views about how to define the Caspian Sea and resulted in competition between Caspian
states and international powers over control of oil and gas.
The theory of resource cooperation is about analyzing how states manage resources based on
their unique traits as well as why some resources are more cooperative than others. To do so a theory
of cooperation will be explained and resources in the Caspian are framed within it. Understanding how
states compete over resources means analyzing the resources themselves as well as states' abilities to
influence desired outcomes.

25 Source: http://www.lib.utexas.edu/maps/middle_east_and_asia/caspian_sea_oil_gas-2001.jpg
12
 Chapter 4: Theory

The Tragedy of the Commons

The Tragedy of the Commons is a simple model of behavior first identified by a British mathematician
in the early 19th century. In England, pastures were shared by many shepherds who grazed their flocks
over any part of the land. He held that because people act in their own interest, each shepherd saw
himself benefiting from more sheep. “Each new sheep,” thought the shepherd, “means more wool,
more meat, and more money.” However, because every shepherd thinks this way, soon there are far too
many sheep and the pasture is overgrazed. Economically speaking, the problem is not that the
individuals are pursuing their “rational self-interest,” but that they fail to maximize their benefits in the
long-run because of poor coordination. How do you solve the tragedy of the commons? The most
frequent answer is to divide the land.

The Caspian Sea as a Commons

The commons can be anything: area in space or time, knowledge, rights and law but in economic terms
it is related to property (space and time,) and benefits. Coase discussed private and social costs and
found that it is possible to balance “costs of production” with private ownership.26 The basis of the
theory behind categorizing resources deals with the intersection of public and private ownership.
The Caspian Sea as a commons means separately analyzing each resource found in, under, on,
and above the waters of the Caspian and comparing it to a public good. In this way it is possible to
examine how specific resources are defined and competed/cooperated over.
The essential qualities of a public good are that they are unlimited in quantity and available to
all. These goods are the easiest to cooperate over because they are non-rivalrous in their use, meaning
that use by one does not limit or prevent use by another. Conversely a good that is private in ownership
and static in quantity is the most competed over of goods considered within this framework. The
nature of goods as common-pool, public good, etc. plays a key role in “determining the outcome of
mutual use of a common resource.”27

Competition – Cooperation Matrix

Competition over resources increases with the degree to which those resources are excludable and/or
rivalrous. The relationship is demonstrated by the following matrix and a discussion of the ordering of
cooperative vs. competitive resources follows.
Figure 1.1 competition and cooperation matrix
Competition and Cooperation Rivalrous Non-rivalrous
(X) (∞) xª ∞ª
Excludable Private pool Private good
xº (xº, xª) (∞ª, xº)
Non-excludable Public(common) pool Public(common) good
∞º (xª, ∞ º) (∞ª, ∞ º)
X is a limited quantity
∞ is infinite or renewable
xº (private) Excludable, means one can be excluded from use of a resource
∞º (public) Non-excludable means one cannot be excluded from use of a resource
xª (pool) Rivalrous, means use by one party limits use by another

26 “The Problem of Social Cost” RH Coase, 1960. Journal of Law and Economics. v.3. Oct.
27 Apesteguia, 2006.

13
∞ª: (good) Non-rivalrous, means use by one party does not limit use by another
(xº, xª) private pool means that use by the public is regulated by its owner(s) and use of that good
permanently limits its availability to others.
Ex. oil, gas, money, food, gold
(∞ª, xº) private good is one in which use by the public is regulated and where its use by one party
does not limit its availability to others.
Ex. electricity, communication, transportation
(xª, ∞ º) public or common pool means that a limited or rivalrous amount of a resource is open to all.
Ex. fish, a pool of water, trees, oxygen
(∞ª, ∞ º) public good is one in which use is open and unrestricable and use by one party does not
limit availability to others
Ex. peace, radio signals, knowledge

In order of prevalence of cooperation:

1. Public Good
2. Private Good
3. Common Pool
4. Private Pool
Discussion
A Punnett square does not tell us how to distinguish between the two middle values. The two extremes
are clear, a public good is the most cooperative while a private pool resource is the most competitive.
Pivate pool resources are rivalrous in terms of use and can be privately owned. Therefore, actors see
the best outcome as private ownership of the resource. Public goods so defined are completely absent
of competition; they are freely available to all regardless of how much one uses it.
Understanding the ordering of private goods and common pool resources requires some
discussion of the values on which those categories are based. A pool resource is a fixed quantity whose
value is determined by the actors based on a limited length of time. A gas field is understood to be
worth so many millions of dollars for the time it will take to extract and export them to market. A good
is either limitless or renewable so that it is limitless in the long-run. This means that cooperation is
essential for renewable resources such as fish and natural in resources that are limitless, such as air.
The crucial distinction in whether a resource is public or private depends primarily on whether
it is possible to exclude others from the use of the resource rather than who actually owns it. Colonel
Kamal Mahmudzadeh, illustrates this in the “Shenakht-e darya-ye mazandaran”28 who wrote of the
Astara-Hassanqoli line established between Iran and the USSR in May 1957 and how it is crossed by
“planks and driftwood, stray boats that have lost their mooring, and the precious caviar fish that come
to spawn in our rivers but end up in the net of Iranian fishermen.”29 It is possible to divide some
resources and to specify who owns them or which territory is theirs but there are many levels on which
different resources are present.

Units of Analysis
In the case of the Caspian Sea, the surface waters, the water itself, and the seabed represent distinct
units of analysis as their respective resources vary considerably. Oil and gas are present in the seabed
of the Caspian and are the most controversial. Fish, as well as pollution and rising sea levels represent
public goods and bads respectively all of which are present in the water. Finally, the surface and the air

28 “The Survey of the Caspian Sea” Colonel Kamal Mahmudzadeh, 1971. From Mirfendereski, p. 177.
29 Mirfendereski 2001.
14
above the sea represent a facet of the Caspian that acts as a commons in which navigation, trade, and
security are the resources.

Benefits and Obstacles to Cooperation

An agreement between the five Caspian States would encourage investment and promote greater usage
of the resources beneath the Caspian Sea.30 This notion of cooperation as a key component to
maximizing the benefits of all involved players is demonstrated in the literature regarding public goods
and common pool resources, especially in public goods games.31
The success, in theory, of the Caspian states in creating agreement around environmental issues,
navigation rights, fishing rights, and the exclusive use of the Caspian by the five littorals all reflect the
mutual interests of the involved parties and their willingness to create regimes for cooperation in the
use of Caspian resources and promoting peace in the area. The legal status of the Caspian and the
fundamental differences expressed by the designation of the Caspian as a 'sea' or a 'lake' continues, as
they have since the disintegration of the USSR, to hinder the formation of a comprehensive governing
body for the Caspian Sea and all of its elements.

Chapter 5: Caspian Resources

Oil and gas: “private-pool” resources

Oil and gas are considered private pool resources because they can be privately owned and use by one
actor limits use by another. This is because there is fixed amount of the oil in a given field and each
actor perceives that whenever another actor benefits from that oil there is less available for them to
benefit from. Cooperation is not likely in the case of private pool resources because the main concern
of actors is how to gain ownership over the resource so that they alone can benefit. It is important to
remember that just because a resource is fixed in quantity it does not necessarily have to be owned by
one state. In practice, states such as Russian and Kazakhstan jointly operate several oil fields and the
fact that it is possible for anyone to own the resource means that states can be clear about how much
each actor benefits. Private ownership should not be considered solely as to whether a resource can be
owned, as is so important in other public resources, but as to why states choose to limit ownership over
resources when it is possible.
To answer this we need go no further than Coase, his theorem states that when property rights
are defined and transactions costs are zero two or more actors can reach economic equilibrium
regardless of the the initial distribution of resources.32 This means that when states know who owns
what and can compensate each other for the difference both states maximize their benefits. However,
states' preference for unilateral ownership is evident in that the only fields in the Caspian that are
jointly managed are fields that lie on the median line between Russia and Kazakhstan. This means that
division is a possibility but not preferable to ownership by a single state. The reason that Kazakhstan
and Russia are able to jointly manage oilfields is the same reason that states generally prefer to own
those resources themselves: ownership means benefits and the desire to own resources is based on
whether that resource can be owned as well as whether there is an incentive to do so.

Navigation: “private good”

Navigation means access to the surface waters of the Caspian and refers to many activities such as
ocean commerce (primarily fishing and trade,) as well as security, scientific missions, personal sea-

30 Bahgat, 2002
31 Bischoff, 2005
32 Coase, 1960.

15
faring, etc. The first element of navigation in the theory is that it is private. This means that it is
possible to determine who is allowed to navigate the Caspian. The most fundamental legal agreements
in the Caspian specify that the five Caspian states, and only those states have the right to navigate the
Caspian. Further, we know that states have sovereignty over coastal waters and that governments issue
permits that allow navigation. While it is not always possible to enforce navigation rights on a small
scale navigation is subject to a management regime in which ownership is controllable.
Whether navigation is a good or a pool resource is a distinction that is made according to
degrees. In a relatively large area such as the Caspian one more boat navigating the sea's surface does
not mean one less for another actor. This is the element of rivalry that determines whether a resource is
a good or a pool. Even though there is a fixed amount of space for boats to occupy there is no reason to
try to discourage others doing the same because the two parties do not interfere with each other.

Fish: “public pool” resource

Fishing is the quintessential example of a common pool resource and has long had an important role in
the discourse surrounding public goods and its branches. The Caspian Sea is the only natural habitat of
the Sturgeon on which the export sector relies for harvesting and selling caviar.33 Sturgeon in the
Caspian Sea may be defined as a 'fugitive' or 'ambient' resource34 in that they ignore human boundaries
and are present throughout the Caspian Sea. Sturgeon are limited only to the boundaries of the Caspian
Sea itself and can move freely throughout its waters. Any delineation of the Caspian will not impact
the distribution of Sturgeon and therefore cooperation regarding this resource must take place on a
Caspian-wide level. The resource is managed communally by the Caspian States, employing
regulatory regimes made up of rights to use, areas of exclusive rights, quotas, enforcement agencies,
etc. in order to maximize benefits for all involved parties and prevent destruction of the environment.
In the case of any renewable resource the most important point to consider is the time-frame in
the use of the resource. The quantity of fish is only fixed for a given period of time. In the long-run
the fish will replenish themselves so that they are infinite. The Tragedy of the Commons illustrates
what happens when actors fail to limit their use to a sufficient degree as to allow the resource to
reproduce. Cooperation, in other words, means the difference between a fixed quantity and an infinite
quantity in the long-run.
The difficulty in limiting the catch of fish is due to the fact that fish are public resources. Any
regime that manages a renewable resource is composed of some means of limiting the catch along with
enforcement agencies. Public resources in the purest sense are those that cannot be restrictive in terms
of use like peace and security. A resource that needs to be managed as a renewable one requires a
concept of ownership and actors attempt to define rights to use and to enforce those rights regarding
these resources. This is evident in licensing and the use of quotas but enforcement becomes less a
possibility as the size of the resource and the degree to which it is ambient or omnipresent increases.
As overfishing, pollution, and damming rivers that sturgeon spawn in increase, catches are
decreasing and Caspian states recognize the need to cooperate to ensure the stability of the fish stock.
One of the main problems states face is illegal fishing which increases as legal fishing is limited by
governments. The ability to enforce regulations on fishing in the Caspian is limited by how widespread
of an area fishing takes place and the huge number of people who are able to fish.

33 Bahgat 2002.
34 Dellapenna 2007
16
Security: public good
Security is the most widely cited example of a pure public good35 because it illustrates the idea of a
resource that is available to all where one party benefiting does not limit another's ability to benefit at
the same time. Security, like most public goods, is an abstract idea rather than a resource in the
conventional sense. The only “resource” that it is a pure public good is air but peace and security,
when they are present, are like air in terms of this model; they are omnipresent and infinite. However,
when security is concretized it entails military, intelligence, and logistical agencies that are basically
state-centered and non-cooperative. When all states see security as the best possibility the only
question is: who owns the means of security? In the Caspian Sea Russia does, though Iran also has
significant naval power and Kazakhstan and Turkmenistan continue to develop their own navies.
Development of the Caspian states' naval capabilities is not necessarily a sign of lack of
cooperation rather states seek to develop their own capacity following the history of Russian
domination. The cooperative approach that the Caspian states have and the prevailing view that “peace
and friendship” are the desired outcomes means that security apparatuses can be coordinated to address
transboundary issues such as illegal poaching and to enforce laws about shipping and navigation.
Cooperation in terms of security in the broadest sense allows states to coordinate their forces to
maintain security and enforce legal agreement in other areas.

Conclusion: Caspian Resources

The four resources examined under the resource cooperation theory are oil and gas, navigation, fishing,
and security. While these goods are subject to an array of political considerations the underlying nature
of them determines how they will be managed by the involved parties. Oil and gas ownership is
private and actors compete to own these static resources. They are the main point of contention in
concluding comprehensive legal rulings in the Caspian. Rights to navigation are defined by general
principles of international law36 and states agree that all of the Caspian states have the right to free
navigation.37 In terms of fishing the Caspian states agree that issues of sustainability need to be
addressed by the government but the lack of clearly defined rights hinges on agreement about
delimitation of the sea.38 Security is the preference of all the Caspian states but opinions do differ on
the extent to which the Sea should become militarized and the fear of the preeminence of Russian naval
power.
The best way to see the theory being presented is to understand the basic context that states
operate in and to examine the resources in question from an analytic perspective. To understand the
resource cooperation theory it is necessary to see it at its most essential but also to see how on the other
end politics can be the most important determinant of how resources are managed. To see this we look
at oil and gas pipelines in the Caspian Sea region.

Chapter 6: Pipelines

Pipelines serve to highlight the ways in which political and economic imperatives can outweigh any
tendency towards cooperation that states may have. The theory itself is limited in that it can show how
resources are managed differently according to their nature but it cannot explain why negotiations take
the form they do, why some states benefit more than others, or when issues will be resolved. Pipelines
show how overarching ideas about economic benefit are shaped by the politics of the day and how
often resources are made private when it is possible to do so instead of being managed cooperatively.
35 Soderbaum, Fredrik. "Public Goods and the Public Good." UN Chronicle 3 (2005): 39+.
36 Caspian Environment Programme, Transboundary Diagnostic Analysis part 2, pp. 41. (CEP)
37 25 point declaration
38 CEP, pp. 42.

17
Theory
Pipelines are a key element of the value of oil and gas resources. They also traverse international
boundaries and create an upstream-downstream dynamic similar to that of rivers. Politics of rivers are
defined by the extent to which individual states have rights to the water. The relationship is made up of
two extremes: The Harmon Doctrine, or the doctrine of absolute territorial sovereignty which is often
employed by upstream riparians.39 holds that a state can do whatever it pleases to water within its own
political boundaries.40 The doctrine of absolute territorial integrity, usually cited by downstream
riparians41 says that states have a right to uninterrupted river discharge from the upstream state.42
The underlying theories of upstream-downstream relations are the same regarding pipelines. The
difference is in how the owners of pipelines, private or state-owned companies, view their property in
the context of interstate relations.

Concentration of interests: Oil and Gas Pipelines figure 1.4

Companies such as the BTC Pipeline Company

define the situation in legal terms as one in
which they exercise absolute sovereignty over
the pipeline in terms of ownership. In terms of
cooperation between “host states”
intergovernmental agreements (IGA's) are
made between the company and the
governments and establish the obligation of the
involved states on the basis of international
law.43 Land is purchased from locals and the
pipeline is monitored by private forces that
cooperate with state and local security forces.44
Community-Liaison Officers are responsible
for coordinating the operations of the pipeline
company with local populations and security
forces.45

The notion of the pipeline company as a third party with absolute sovereignty is important in
understanding how the cooperative element is absent in the case of pipelines versus rivers. In essence
the owners of a pipeline seek to limit its availability to those along its route. A river, though fixed in
location is freely available to all who live near it. In the case of a pipeline, ownership is controlled by a
third-party, non-state actor who exercises absolute sovereignty over the pipeline. A pipeline, even
insomuch as it is a worthless object other than for what it transports, is considered to be valuable for its
“value-adding” relationship with the resource. As such, ownership of pipelines is linked, in the case of
the BTC with the company who owns the oil. The incentive to control transportation of oil is high for

39 Wolf 1999
40 Beaumont 2000
41 Wolf 1999
42 Beaumont 2000
43 Joyner, 211.
44 Caspian Development Advisory Panel, March 2007. “BP Response to the Letter from the Panel to the Lord Browne of
Madingley”
45 Ibid.

18
governments and companies alike; however, a pipeline is not competitive by nature. It is the
relationship between owners of oil and owners of pipelines that is crucial in understanding their
dynamic as it relates to interstate cooperation.

Asian Routes
During the 20th Century, pipelines built in the Soviet Union were aimed at transporting oil and gas to
Russia, the Black Sea, and Eastern Europe. Russia sought to control transportation of oil and gas and
used its ability to cut supplies to Ukraine, and thereby much of Europe in 2006 and 2009. This led to
shortages in many EU countries and was an alarm to western powers over “energy security.”
The bulk of major proposed pipelines face political and engineering setbacks. One of the major issues
for oil supplying countries in the Caspian is that the entire pipeline network is geared towards western
markets. Proposed routes through Iran to the Persian Gulf and the world marketplace are blocked by
Washington and the Kazakhstan-Pakistan route suffers obvious setbacks in terms of security. The
pipeline from Kazakhstan to China will eventually be the longest in the world but the difficulties in
constructing it far outweigh questions about the safety of the pipeline after its built, as in Afghanistan.
Ultimately, says Bahgat, pipelines that “make economic sense” will be built.46 China's demand for oil
is expected to increase by more than 4 million b/d by 2020, making this relationship highly beneficial
for both countries.

The Iranian 'option'

Routes through Iran have clear advantages. Iran has a developed pipeline network and energy
infrastructure operating and pipelines could terminate at the Persian Gulf. Disagreement over whether
this move would strengthen cooperation between Tehran and Washington or concede power to the anti-
American government, are potentially overshadowed by the economic benefits both countries would
receive and continue to receive if agreement was maintained.
It is clear at this point the US does not wish to pursue any route that passes through Iran whose
best option at this point is to “swap” oil with Azerbaijan, Kazakhstan, and Turkmenistan for oil
produced in Iran and shipped from the Persian Gulf. This method bypasses US sanctions and allows
Iran to supply its North where the bulk of the population lives.
The fact that Iran represents so good an export option for the landlocked Caspian region and yet
has seen very limited development of inter-Caspian transportation networks shows how critical US
influence in the region is. Only in recent years the first stage of a railway line connecting Iran,
Turkmenistan, and Kazakhstan was completed. Pipelines through Iran are limited to the internal
network and sanctions by Washington have meant Tehran's only option is to swap oil with its
neighbors. This in itself is evidence of the importance of transportation as these swaps represent a form
of transportation for all the involved states. The need for transportation as a key element of the value
of oil and gas resources means that cooperative use of so-called “transportation resources” such as sea
and air routes, pipelines, swaps, and railways is present. However, competition between states over the
political leverage and financial incentives they perceive as connected with pipeline ownership gives
them an element of private ownership that is not present in navigation and transportation on the
Caspian Sea surface.

46 Bahgat 2002, 326.

19
Washington and Moscow: Rivalry over pipeline control
Four pipelines serve as examples of the rivalry between Washington and Moscow. The first two: the
BTC and the Trans-Caspian pipeline flow from Baku and Turkmenistan to Turkey. The US strongly
supported both of these pipelines seeing them as means of ensuring supplies of oil and gas that bypass
Russia and Iran. Russia favored the Blue Stream pipeline from Russian Black Sea ports to Northern
Turkey. Competition over the two gas pipelines between Moscow, Washington, and Ankara
highlighted the Turkish government's conflicting business and political interests.47 Finally, the Caspian
Pipeline Consortium (CPC) is an oil pipeline that connects Kazakhstan's Tengiz oil field with
Novorosiisk in the Black Sea. Tengizchevroil, a consortium of Chevron, ExxonMobil, and Kazakhstan
was initially opposed by Russia who saw their interest in maintaining control over Kazakh oil exports.
Putin and Moscow would alter their stance and later gain a majority share in the CPC with 24%.48

Conclusion: pipelines
Pipelines highlight the balance of competing state interests and trace the histories of areas through
which they pass. The BTC pipeline makes sweeping changes in direction to avoid conflict areas in
Azerbaijan and Turkey but the specific route the pipeline takes reflects more the political balance of the
day than the nature of the resource itself. Bahgat's statement reflects the fact that in the long-run states
all need these transportation networks and once a good arrives in international waterways it is available
to all. The essence of the pipeline is that its private nature is due to its strategic significance and
economic benefits in the short-term. Competition over pipelines as well as the exact route they take is
evidence of these benefits. However, if a pipeline is operating unimpeded it provides a resource similar
to any other transportation resource. It is private in terms of ownership but provides a good available
to a vast number of customers. In this way, the long-term economic benefits to the market mean that
short-term political rivalries are relatively insignificant.

Chapter 7: Legal Regime

Legal Regime
The legal regime of the Caspian Sea is central in the literature about all aspects of the Caspian.
Disputes over legal classifications reflect conflicts that surround this region but it is clear that the legal
regime arises based on political and economic interests over specific oil fields. States stress the
importance of deciding on a legal classification of the Caspian in order to coordinate exploitation of its
resources.49 In this sense, the legal regime is crucial, but only in that its conclusion represents
diplomatic agreement about specific resources in the Caspian. Unfortunately, disputes over oil and gas
resources on the sea-surface often interfere with coordination on different levels of the Caspian such as
for fishing and navigation zones. In general though there is a cooperative approach to three of the four
resources examined and states act in accordance with the principles of the cooperation theory.

Legal History
Russian and Iranian diplomatic relations on the Caspian began in 1729 with the Treaty of Rasht, the
first to deal with sovereignty in the Caspian.50 By the early 19th Century Russia had the exclusive right
to a navy in the Caspian following the treaties of Gulistan (1813) and Turkmenchai (1828). Both of
these treaties allowed for free commerce and navigation by the Russia and Persia.51 After the Russian
revolution in 1917 the Friendship Treaty was signed in 1921 between the USSR and Persia giving the

47 Bahgat, 2002, 325.

48 Ibid, 325.
49 25 Point Declaration,.Tehran, 2007.
50 Dekmejian, 20.
51 Ibid, 20.

20
latter the right again to maintain a navy on the Caspian.52 The 1940 Treaty of Commerce and
Navigation, like the 1921 agreement sought to explicitly state that only Russia and Persia had sovereign
rights to the Caspian.53
Speculation over whether the 1921 and 1940 treaties between Russia and Persia apply to the
successor states of the Soviet Union plays a significant role in Iran's position. The Vienna Convention
on Succession of States (1978) allows for Kazakhstan, Azerbaijan, and Turkmenistan to choose
whether to adhere to these treaties,54 Azerbaijan points to the Astara-Husseingholi line that divided the
two states, as evidence in support of its position of delimitation. All three FSU republics hold that the
1921 and 1940 treaties do not apply due to the absence of any mention by both treaty of oil or gas and
the practice of exploiting those resources unilaterally.
At the end of the Soviet period the Caspian Sea was scrutinized according to principles of
international law and was in a unique position to be defined by the Caspian states. There approaches
varied directly with the amount of oil and gas resources off of their coastlines. Russia and Iran favored
condominium while Azerbaijan, Kazakhstan, and Turkmenistan all advocated delineation of the sea.
The first question to be addressed was “is the Caspian a sea?”

Caspian “Sea”
The United Nations Convention on the Law of the Seas (UNCLOS) article 122 defines an enclosed or
semi-enclosed sea as a “gulf, basin, or sea surrounded by two or more states and connected to another
sea or the ocean by a narrow outlet or consisting entirely or primarily of the territorial seas and
exclusive economic zones (EEZ's) of two or more states.”55 Therefore, the question of whether to
define the Caspian as a sea in terms of UNCLOS rests mainly on whether it is connected with another
sea, or the ocean. Until the completion of the Volga-don canal system the Caspian had no outlet to sea.
In any case this network, as well as the Volga River itself, lies completely within Russian territory.
UNCLOS provides for the creation of an EEZ's in which states have sovereign rights over an
area of the seabed of 200 nautical miles (nm) extending from their land borders.56 While the Caspian
Sea's maximum breadth is much less than 400 nm, making the “high seas” nonexistent, the definition
of the Caspian as a Sea would call for the creation of sovereign zones based on political boundaries.
“Layers of sovereignty” extend from the coastline begin with a territorial sea up to 12 nm out, then the
contiguous zone which extends up to an additional 24 nm.57 The essence of UNCLOS in this case is
that is provides for territorial division of the Caspian seabed, initially a highly contentious point among
the Caspian states.

Caspian “Lake”
If the Caspian does not qualify as an enclosed sea according to the UNCLOS guidelines then there is no
applicable international legal agreement to define its use by border states. International water law
focuses on the high seas as well as international river-systems. In terms of precedence, there is only
one example of a body of water that is communally managed by the three states that border it: the Gulf
of Fonesca.58 Most international lakes, the Great Lakes in North America, Lake Victoria, and others are
defined by treaties between the boundary states and use the territory as a basis for division.59
Defining the Caspian as a lake can have numerous consequences legally, all of which are a
52 Ibid. 20.
53 Mirfendereski, 142.
54 “Vienna Convention on Succession of States in respect of Treaties” 1978.
http://untreaty.un.org/ilc/texts/instruments/english/conventions/3_2_1978.pdf
55 Dekmejian, 21.
56 Ibid, 22
57 Ibid, 22.
58 The Gulf of Fonesca is managed by El Salvador, Honduras, and Nicaragua. See Mehdiyoun, 188.
59 Dekmejian, 22.

21
matter to be decided by the border states. Precedence, as mentioned, is overwhelmingly for division
(based on coastlines) rather than communal use. If neither of these options is agreed to, the status of
the Caspian is sui generis. In most cases, international lakes are divided according to a median line
which allows for a greater level of sovereignty than the UNCLOS statutes.
In fact, discussions over the legal status of the Caspian touch on numerous issues between the
Caspian states not limited to “how it should be divided.” The bulk of disputes are over division of the
seabed whereas regimes to govern different elements of the Caspian proceed at their own pace. Here
the Caspian is many things: it is oil and gas in the seabed, it is fish and pollution in the water, and it is
navigation and transportation on the sea surface as well as in the air. Four distinct layers of the Caspian
are addressed by legal outcomes and resources specific to those layers play a key role in the nature of
those discussions.

Positions of the Five States

Russia and Iran initially held that the Caspian Sea was unique in that it was an enclosed body of water
(having no natural connections to the open seas,) and therefore could not be defined by UNCLOS.
They sought to define rights in the Caspian as communal: each state has equal rights throughout the
entire Caspian. Azerbaijan, Kazakhstan, and Turkmenistan all held that the Caspian should be divided
according to political borders by creating a different zones of sovereignty (UNCLOS) or a median line
(sui generis.)

Azerbaijan
The presence of oil infrastructure and western interests in Azerbaijan as a potential new energy source
led to support of Azerbaijan's legal position.60 This position is distinct from the UNCLOS definition
which creates an Exclusive Economic Zone (EEZ) based on the state's political borders as well as a
commons between that. Because of the size of the Caspian as well as the placement of oil and gas
fields in the “center” of the Caspian (an area that would fall under the category of the commons,)
Azerbaijan holds that the sea should be delimited into sovereign blocks by creating a median line that
runs parallel to the borders of the states.61 Disputes should be resolved as they arise. Any oilfield that
falls on this line will be negotiated individually while the overarching legal regime will be of
delimitation.

Kazakhstan
Kazakhstan supports the definition of the Caspian as a sea in terms of UNCLOS and believes that the
most important reason for this is that the Caspian is an enclosed sea. The only way that the Caspian is
connected to the open seas is through the Volga-Don Canal system in Russia. Kazakhstan supports the
use of UNCLOS because it argues that this system should be an international waterway. Furthermore,
Kazakhstan favors the creation of EEZs that border states and allow for exploitation of seabed
resources located within these zones.

Turkmenistan
Turkmenistan also favors the creation of sovereign rights over seabed resources and designated an
exclusive zone where it had rights in 1993.62 However, Turkmenistan has, like Kazakhstan, supported
cooperation and the creation of a legal regime in order to prevent unilateral claims over resources. This
contradiction reflects Turkmenistan's view that while some resources in the Caspian clearly belong to
it, others are in doubt and conflicts over those specific fields are best dealt-with through cooperative
use.
60 Gokay 65
61 Ibid, 66.
62 Ibid, 66.

22
“3 + 2”
Azerbaijan, Turkmenistan, and Kazakhstan's positions are essentially the same: delimitation of the
seabed into sovereign zones. The question is how to draw the lines based on the location of some
specific oil fields. This is evident today in disputes between Azerbaijan and Turkmenistan over oil
fields between the two states. Russia and Iran initially favored the opposite approach: communal
ownership and rights to all oil and gas resources regardless of their location in the Caspian. They
sought to define those resources as common-pool resources. They are available to all, but they are
limited. This would allow their greater political power, economic position, and industry expertise to
compensate for the lack of oil and gas that would be theirs if property rights were granted based on
political borders. Iran was most adamant about this point while Russia eventually signed two bilateral
treaties with Azerbaijan and Kazakhstan delimiting the Caspian as well as a trilateral treaty between the
three of them. Iran now holds that it has the non-negotiable right to 20% of the Caspian and has
prevented the development of oil and gas fields it considers as belonging to it.

The Legal Regime Today

To date no comprehensive legal regime exists regarding the Caspian Sea. The main points of
contention are over oil and gas fields in the southern Caspian.
Russia and Kazakhstan were the first two Caspian countries to divide their portion of the sea in
1998 followed by an agreement between Russia and Azerbaijan.63 These actions effectively divided
around 65% of the Caspian leading to a joint declaration of Iran and Turkmenistan opposing the
division. However, at this point the question was no longer whether to divide the Caspian but how it
would be done. This determination includes not only oil and gas resources on the seabed, the most
controversial by far but other elements of the Caspian as well. However, at this point the only
remaining sticking point is the seabed. There is agreement over the need to cooperatively manage the
environment of the Caspian and an agreement signed in 1994 in support of this.64 According to Dr.
Mehdi Safari, Iran's special envoy in Caspian Sea affairs, “regarding issues dealing with the
environment, fisheries, transportation, and shipping some cooperation is continuing among the
countries.”65 The Caspian states agree to their exclusive right to “navigation, fishing, and seafaring
under the national flags of the Caspian littoral states” on the basis of their “sovereign rights.”66 All of
the aforementioned aspects of the Caspian are public rather than private in terms of ownership and
more importantly: none of them are rivalrous.
Iran and Turkmenistan agreed to a division based on “strict accordance with the UN and
convention on maritime law and the norms and principles of international law” which gives the two
countries each a 20% share of the Caspian. Azerbaijan opposes this designation calling it “confused.”67
Indeed, the Iranian position is not clear, Safari states “[Iran] believes there are no binding methods
regarding this issue in international law” and that division of the seabed should be based above all on
the principle of “fairness.”68 This principle does not necessarily entail an equal share to each country a
point that adds to the uncertainty as to the basis of Iran's claim.
Despite cooperation between Iran and Turkmenistan the southern Caspian legal status remains
undetermined due to disputes of both countries with Azerbaijan. Turkmenistan and Azerbaijan failed to
come to agreement over three fields following 16 bilateral meetings and Turkmenistan has resolved to

63 Lee, 41.
64 Lee, 45.
65 “Iran's share of Caspian Sea is 20 per cent” - Official. BBC Monitoring. 2/3/2008
66 25 Point Declaration,.Tehran, 2007.
67 Lee, 44.
68 “Iran's share of Caspian Sea is 20 per cent” - Official. BBC Monitoring. 2/3/2008

23
accept a ruling from the International Court of Arbitration.69 Azerbaijan has been engaged in exploiting
the fields in question and the ongoing negotiations represent an obstacle to exploration and
development in the disputed area.
Iran and Azerbaijan's position is much less reconcilable. Iran's claim of 20% of the southern
Caspian encroaches on oil fields it considers its own. Iran continues to prevent development of fields
in this region making clear the fact that it would not see its interests compromised. Iran demonstrated
this resolve in 1996 when it sent military aircraft and naval forces to confront BP exploration vessels
working with Baku.70
Most important though is not Iran's willingness to play spoiler to any Caspian-wide agreement it
sees as excluding or infringing on its interests but its limited policy options. A meeting between
Russia, Kyrgyzstan, Turkmenistan, and Azerbaijan in 2009 was widely perceived as a deliberate
attempt by Moscow to alienate Iran. While Iran and Russia shared the position of condominium early
on, when Russia gained a share in the “deal of the century” in 1994 Iran's attempt to join the
consortium was blocked by Washington. Russia's ability to change its stance in order to maintain its
presence in oil deals in the Caspian reflects a shift in policy advocated by the oil industry and
implemented by Putin but also greater flexibility vis-à-vis the United States. Tehran on the other hand
has been forced to gain advantage where it can and to skirt US sanctions and opposition to Iranian
participation in energy projects. This has lead to Iran's rigid position where its strategic levers have
been reduced largely to transportation and oil swaps.
Therefore, in concluding a legal regime in the Caspian, a feat that Tehran said was 70% done as
of early November71 questions between Azerbaijan and Iran are the most contentious. It is clear that
cooperation is the preferred outcome for the two states and Iran's show of force in 1996 has since been
replaced by a “positive atmosphere” in negotiations.72 Unlike Russia, Iran's limited ability to
compromise has resulted in the extremity of its actions regarding the Caspian legal regime. For Russia,
when claims over oil and gas in Azerbaijan's or Turkmenistan's territorial waters failed in the face of
US support of the Azeri position, Russia was able to compromise, gaining a share in several primarily
western consortia. Iran, left without the ability to successfully compromise its position makes the
claim for 20% of the sea as its non-negotiable right. If it is not able to secure ownership over some
fields in the southern Caspian Iran's negotiations will have failed to counter US and Russian dominance
over the formation of the legal regime.

Legal Issues in the Commons

The difficulty in creating agreement among multiple states regarding communal property is evident in
that the majority (86%) of treaties dealing with water have been bilateral.73 This has indeed been the
case among the Caspian States who have so far signed only one pentalateral agreement. Rather Russia,
the dominant state power, began to promote a “phased solution” in which bilateral treaties are created
that should eventually lead to a comprehensive agreement.74
Furthermore, the idea that the Caspian Sea would be managed by a condominium of the five
states came to a decisive end in the late 90's when Russia signed two treaties dividing the Caspian.
Rivalry over oil and gas resources as well as their importance to the economies of Turkmenistan,

69 “Turkmenistan to take disputed oilfield to international court” BBC Monitoring. 7/25/2009.

70 Lee, 43.
71 Seventy per cent of convention on Caspian Sea legal status agreed on – Iran Deputy Foreign Minister. BBC
Monitoring. 11/8/2009.
72 Ibid.
73 Wolf, Aaron T. "Conflict and Cooperation Along International Waterways." Water Policy 1 (1998): 251-265.
74 Bahgat 2002
24
Azerbaijan, and Kazakhstan means that other legal issues are overshadowed while others hinge on
definition of territorial rights. For example, state practice of basing territorial boundaries on oil and gas
resources has stalled agreement over simpler issues like navigation and fishing.

Oil
The fact that the environment, fishing, transportation, and shipping represent such minor points relative
to the weight of seabed resources in creating a comprehensive legal regime is evidence of the greater
degree of cooperation inherent to these resources. Also important is that oil and gas are more
quantifiable resources in terms of value but it is clear that their value is linked with other more
cooperative factors such as transportation and the environment. This means that aspects of the value of
oil and gas such as transportation and environmental concerns regarding extraction that are cooperative
are seen as secondary to ownership of the actual resources. Because oil and gas as well as
transportation are private resources they are more competitive than environmental damages that result
from oil and gas extraction or agreement about rights to navigation and shipping. Benefits, or in the
case of pollution: damages, are most dispersed when ownership is public. Oil and gas, as well as
pipelines and other forms of transportation are private resources. Only in the case of oil and gas are
they also pool resources. For these reasons, the most competitive issue in the Caspian legal regime is
ownership of oil and gas resources.

Navigation
Transportation, as it is a good rather than a pool resource is much less competitive than oil and gas. In
terms of ownership, it is possible and desirable for the Caspian states to define rights to navigation as
limited to the five Caspian riparians. These agreements find their basis in the 1921 Treaty of
Friendship and the 1940 Commerce and Navigation Treaty signed between the Russia and Iran. The
North-South corridor, a railway network linking Kazakhstan and Turkmenistan with Iran is underway.
This development will ultimately connect Russia, Kazakhstan, and Turkmenistan with the Persian
Gulf75 an extremely valuable asset to those states.
Transportation has great value to all Caspian states and cooperation in this regard is essential to
commerce in the Caspian. Treaties in place as well as new developments in the transportation network
show how states benefit from shared use of transportation resources.

The Environment
The first agreement that all five Caspian states signed dealt with the environment.76 In 1994 the Treaty
on the Protection of the Marine Environment of the Caspian Sea was signed. This agreement addressed
issues such as pollution, fishing, sea-level rise, air quality, and desertification. From the standpoint of
the commons, environmental issues are the easiest to agree upon because a good environment benefits
everyone and is freely available to use without potential restriction. Conversely, issues of public bads
such as air and water pollution harm the public in a way that makes ownership and blame difficult to
assess. In terms of cooperation on a broad scale the environment is the least competitive because it is a
public good.

Conclusion: Legal Regime

Although the legal regime in the Caspian represents an ongoing discussion and perhaps the most
important issue to be addressed, it has largely been in place over the last 15 years. In fact, to a large
degree the legal definition of the sea was set at the beginning of any debate over the Caspian legal
status in that delimitation is the norm in situations such as this and states apparently consider resources
75 Press conference of Caspian leaders following the October 16, 2007 summit of the Caspian Sea littoral states. BBC
Monitoring.
76 Lee, 45.

25
off their coasts as exclusively belonging to them. Thus, while Iran and Russia advocated a
condominium approach to managing the hydrocarbon resources of the Caspian Sea in practice that was
never the case and the current disputes over the “legal definition of the Caspian” would more
accurately be described as states competing over specific oil fields. For example, a disputed field
between Azerbaijan and Turkmenistan manifested in legal terms in the question of whether or not the
median line should parallel the coast line. Azerbaijan's capital city, Baku lies on the Abseron peninsula
which juts out into the Caspian along with several islands. Whether these islands accounted for in
drawing the border ultimately decides ownership of oil fields.77
Therefore, questions about legal definitions and practices are frequently disputes over
ownership of specific oil and gas fields. Secondary or altogether unrelated issues are sometimes used
as part of a reason for or against a specific legal ruling. Russia held early on that the main reason that a
condominium approach was necessary was in order to protect the ecology of the Caspian.78 Ecology
was clearly not Russia's primary motivation but rather reflected Moscow's stance on the matter. Legal
disputes over ownership of Caspian oil and gas cannot be considered as meaningful in and of
themselves but rather as a major medium through which politics occurs.
Overall, the legal regime debate focuses almost exclusively on oil and gas resources due to
many factors including their high value, international competition, and the fact that these resources are
fixed in time and location. There are signs that even oil and gas resources in the Caspian are not as
rivalrous as many predicted in the mid 1990's, when Iran's position became more and more strangled.
Today it seems that all the states are interested in resolving the discussion finally and advancing
cooperation in broader forms including the environment, transportation networks, and an economic
community.

Chapter 8: Conclusion

Some elements of the Caspian Sea are more conducive to cooperative management than others. Oil
and gas resources are the most contentious for a variety of reasons including their high potential value
as well as their “static” nature. The degree to which states cooperate in their use of oil and gas
resources in the Caspian is dependent on numerous factors including, history, strategic alliances,
geography, and political and economic determinism. Cooperation in fields such the environment or
navigation remains uncontentious due to qualities inherent to them as resources. In terms of the more
rivalrous oil and gas resources, analysis entails the redefining of cooperation to encompass the notion
of compromise.
Pipelines represent a distinct units of analysis in terms of ownership in particular as well as in
how their route is determined largely by contemporary and projected political and economic conditions.
Therefore, there is a key distinction in how a pipeline is owned and operated and which route it takes.
Discussion of the legal regime of the Caspian Sea is dominated by questions over ownership of
oil and gas resources. That the discussion took the form of a question of territory shows the importance
of the location of these resources as static and ownership as private.

The Future
Russia's position, though only in recent years really being acknowledged, is dynamic. The leadership
of Vladimir Putin seems more potent than ever and his return to the presidency, or not, “its fine” says
Putin.79 Russia's success is a matter of balancing diversification and economic development, in which
Putin sees technology as key, with an increase in US presence in the region. Russia's leader seeks to
77 Haghayeghi, 35.
78 Gokay, 36.
79 Youtube video: “Putin lashes out at NATO war games.”

26
develop Russia's long-term economy through technological growth and economic diversification.
Washington is keen to build positive relations with Moscow but its unlikely that Russia will make
strategic concessions. Rather, Moscow will seek to involve itself in profitable deals for energy and to
strongly lobby for its preferred pipeline routes. This is a good index of some of the diversification to
be expected from Turkmenistan and Kazakhstan especially, whereas Azerbaijan has succeeded in
acquiring a major pipeline route. Putin is well aware of the need to diversify and the internal political
levers are in place. Russia's past dominance of oil and gas transportation is being eroded and growth of
the Russian economy is stalled by the global recession. When conditions improve, Russia's economy
will accelerate its diversification especially towards high-tech and non-extractive industries.

Iran's statement that 70% of the legal regime was completed as of November 9, 2009 is potentially a
very misleading one. Less than 70% of the Caspian legal regime has been completed since the late 90's
and if the disputed 30% represents in fact what is now the only open dispute then that 30% is really
100%. The ongoing dispute is between Iran and Azerbaijan over fields in the contested area of the
Caspian between the two nations. Iran's position on this territory has not changed since 1994 when it
flew military aircraft over BP exploration vessels. Its claim for 20% is said to be non-negotiable and so
Azerbaijan is expected by Tehran to submit to a line it has drawn based on “fairness.” Silly as it
sounds, it just might work. The question is: is it worth some oil and gas resources from Azerbaijan to
develop additional fields in the contested area opened up by agreement with Iran? If not, non-
development does not harm either state in the short-term and this is a very likely outcome. The least
likely possibility is that Iran accepts a ruling that favors Azerbaijan's position leaving itself with
negligible resources.

Agreements between Russia, Kazakhstan, Azerbaijan, and Turkmenistan (though not all four together)
mean that the bulk of the Caspian is effectively delimited. The major constraint at this point is
transportation, a view that bodes well for Iran. The conclusion of a comprehensive legal regime,
though dependent on a resolution of disputes primarily between Iran and Azerbaijan is likely at this
point due mainly to the fact that the costs of ongoing negotiations and non-use of resources by any
party mean that there are incentives on both sides to resolve legal issues.
While a “comprehensive” legal regime entails the definition of 100% of the Caspian Sea
territory, the bulk of non-energy issues are in fact what make up the Caspian Sea overall. These less
contentious issues will likely continue to see cooperation and separation from the territory issues of the
seabed. The fact that different regimes are emerging for different parts of the Caspian (bed, surface,
water, etc.) regarding different resources, shows that the uniqueness of these resources as well as
different levels of cooperation are recognized. It is likely that the bulk of non-oil legal issues be
resolved within five years. While territorial division of the Caspian on all levels does hinge to some
degree on ownership of the seabed, if disputes between Turkmenistan, Azerbaijan, and Iran are not
solved within five years they will continue for significantly longer. Because of uniqueness of different
Caspian resources states will manage them separately from oil and gas as disagreement in that area
continues.
In terms of transportation, creative solutions involving Iran are likely in the future to expand as
the railway is completed that will connect Russia and Iran along the Caspian's eastern side. Relations
with Washington will have a decisive role in the extent of the development of Iranian transport options
but Tehran has shown creativity in meeting the clear needs of its neighbors for transportation. Oil
swaps and non-pipeline transportation through Iran will continue so long as Washington blocks
pipelines. Shipping and railroads will continue to see cooperation in the Caspian due to their less
contentious nature but pipelines in all states are more politically charged.
The buildup of the navies of Caspian states is an important element of the Caspian that will
likely continue to be a peaceful sea. Increases in naval power will contribute to declines in smuggling
27
and illegal fishing and will likely see the formation of some inter-Caspian cooperation and information-
sharing in terms of policing. As the sea surface will probably be divided more or less in keeping with
the principles of UNCLOS, policing will take place in sovereign territory but will also be necessary on
a Caspian-wide level. Caspian policing will likely take the form of cooperation rather than the creation
of a third-party force due to asymmetries in capabilities between the states.
Overall the situation for the Caspian is optimistic. States are committed to cooperation amongst
themselves and despite varied positions strategically seem united in the belief that all interests are
served by peace in the Caspian. It is very unlikely that conflict occur between the Caspian states but
one factor can play a decisive role: American-Iranian relations. As pressure from Washington has
limited Tehran's options in the Caspian improved relations between the two states would allow Iran to
see greater participation and significant export plans coming to fruition. On the other hand, as relations
between the two deteriorate pressure on Moscow increases as well and Iran's options become fewer and
fewer.
The value of the theory of resource cooperation lies in the underlying tendencies states show in
managing different resources. Depending on whether a resource is public or private, a good or a pool,
cooperation and competition are inevitable when the question of how the resources will be used arises.
Exactly who will gain access to which resources can be predicted when the answer is easy, in the case
of transportation or fishing but oil and gas are fixed and states know that if they don't own the resource
they cannot benefit from it. It is clear when examining the history of the Caspian states that politics are
the most important part of which states get which resources when those resources are subject to private
ownership or are fixed in quantity.

Notes:
1. Rabinowitz, Philip D., Mehdi Z. Yusifov, Jessica Arnoldi, and Eyal Hakim. "Geology, Oil, and
Gas Potential, Pipelines, and the Geopolitics of the Caspian Sea Region." Ocean Development
and International Law 35 (2004): 19-40.
2. "Presidents of Caspian countries issue 25-point Declaration in Tehran." Lexisnexis. BBC, 16
Oct. 2007. Web. 31 Aug. 2009. <http://lexisnexis.com>.
3. Gokay, Bulent. The Politics of Caspian Oil. New York: Palgrave Macmillan, 2001.
4. Mirfendereski, Guive. Diplomatic history of the Caspian Sea treaties, diaries, and other stories.
New York: Palgrave, 2001.
5. Bahgat, Gawdat. "Prospects for Energy Cooperation in the Caspian Sea." Communist and Post
Communist Studies 40 (2007): 157-68.
6. Mehdiyoun, Kamyar. "Ownership of Oil and Gas Resources in the Caspian Sea." The American
Journal of International Law 94.1 (2000): 179-89.
7. Hagheyeghi, Mehrdad. "The Coming of Conflict to the Caspian Sea." Problems of Post-
Communism 50.3 (2003): 32-41.
8. Lee, Yusin. "Toward a New International Regime for the Caspian Sea." Problems of Post-
Communism 52.3 (2005): 37-48.
9. Dekmejian, R. Hrair, and Hovann H. Simonian. Troubled Waters The Geopolitics of the
Caspian Region. London: I. B. Tauris, 2003.
28
 10. Bahgat, Gawdat. "Pipeline Diplomacy: the geopolitcs of the Caspian Sea region." International
Studies Perspectives 3 (2002): 310-27.
11. Joyner, Christopher C., and Kelly Zack Walters. "The Caspian Conundrum: Reflections on the
interplay between law, the environment, and geopolitics." The International Journal of Marine
and Coastal Law 21.2 (2006): 173-216.
12. Russian Federation. "Position of the Russian Federation regarding the legal regime of the
Caspian Sea." Letter to UN General Assembly. Oct. 1994. United Nations. Vol. A/49/475.
13. Beaumont, Peter. "The 1997 UN Convention of the Law of Non-Navigational Uses of
International Watercourses: Its Strengths and Weaknesses From a Water Management
Perspective and the Need for New Workable Guidlines." Water Resources Development 16
(2000): 475-495.
14. Wolf, Aaron T. "Conflict and Cooperation Along International Waterways." Water Policy 1
(1998): 251-265.

Bibliography

Books

1. Gokay, Bulent. The Politics of Caspian Oil. New York: Palgrave Macmillan, 2001.
2. Oil and geopolitics in the Caspian Sea Region. Westport, Conn: Praeger, 1999.
3. Post-Soviet Central Asia. London; New York: Tauris Academic Studies in association with the
International Institute of Asian Studies, Leiden, Amsterdam, 1998.
4. Skagen, Ottar. Caspian gas. London: Royal Institute of International Affairs, Russia and Eurasia
Programme, Brookings Institution, 1997.
5. Dekmejian, R. Hrair, and Hovann H. Simonian. Troubled Waters The Geopolitics of the
Caspian Region. London: I. B. Tauris, 2003.
6. Mirfendereski, Guive. Diplomatic history of the Caspian Sea treaties, diaries, and other stories.
New York: Palgrave, 2001.

Journal Articles

1. Olcott, Martha Brill. "The Caspian's False Promise." Foreign Policy 111 (1998): 94-113.
2. Mehdiyoun, Kamyar. "Ownership of Oil and Gas Resources in the Caspian Sea." The American
Journal of International Law 94.1 (2000): 179-89.
3. Hagheyeghi, Mehrdad. "The Coming of Conflict to the Caspian Sea." Problems of Post-
Communism 50.3 (2003): 32-41.
4. Joyner, Christopher C., and Kelly Zack Walters. "The Caspian Conundrum: Reflections on the
interplay between law, the environment, and geopolitics." The International Journal of Marine
and Coastal Law 21.2 (2006): 173-216.
5. Ghafouri, Mahmoud. "The Caspian Sea: Rivalry and Cooperation." Middle East Policy XV.2
(2008): 81-96.
6. Lee, Yusin. "Toward a New International Regime for the Caspian Sea." Problems of Post-
Communism 52.3 (2005): 37-48.
7. Rabinowitz, Philip D., Mehdi Z. Yusifov, Jessica Arnoldi, and Eyal Hakim. "Geology, Oil, and
29
 Gas Potential, Pipelines, and the Geopolitics of the Caspian Sea Region." Ocean Development
and International Law 35 (2004): 19-40.
8. Bahgat, Gawdat. "Pipeline Diplomacy: the geopolitcs of the Caspian Sea region." International
Studies Perspectives 3 (2002): 310-27.
9. Carpenter, Harry B., and Walid Labadi. "Striking a balance: Intergovernmental and
hostgovernment agreements in the context of the Baku-Tbilsi-Ceyhan pipeline project." Law in
Transition Online.
10. Young, Oran R. "Political leadership and regime formation: On the development of institutions
in international society." International Organization Summer 45.3 (1991): 281-308.
11. Bahgat, Gawdat. "Splitting Water: the Geopolitics of Water Resources in the Caspian Sea."
SAIS Review 22 (2002): 273-291.
12. Falkenmark, M. Fresh waters as a factor in strategic policy and action. In: Westing, A.H. (Ed.)
Global resources and international conflict: environmental factors in strategic policy and action
(pp 85-113.) New York: Oxford University Press.
13. Wolf, Aaron T. "Conflict and Cooperation Along International Waterways." Water Policy 1
(1998): 251-265.
14. Appelgren, Bo, and Wulf Klohn. "Management of Transboundary Water Resources for Water
Security; Principles, Approaches and State Practice." Natural Resources Forum 21 (1997): 91-
100.
15. Uitto, Juha I., and Aaron T. Wolf. "Water Wars? Geographical Perspectives: Introduction." The
Geographical Journal 168 (2002): 289-292.
16. Milich, Lenard, and Robert G. Varady. "Openness, Sustainability, and Public Participation: New
Designs for Transboundary River Basin Institutions." Journal of Environment and Development
8 (1999): 258-306.
17. Giordano, Meredith A., and Aaron T. Wolf. "Incorporating Equity Into International Water
Agreements." Social Justice Research 14 (2002): 349-365.
18. Giordano, Meredith, Mark Giordano, and Aaron Wolf. "The Geography of Water Conflict and
Cooperation: Internal Pressures and International Manifestations." The Geographic Journal 168
(2002): 293-312.
19. Beaumont, Peter. "The 1997 UN Convention of the Law of Non-Navigational Uses of
International Watercourses: Its Strengths and Weaknesses From a Water Management
Perspective and the Need for New Workable Guidlines." Water Resources Development 16
(2000): 475-495.
20. Postel, Sandra. "Changing the Course of Transboundary Water Management." Natural
Resources Forum 21 (1997): 85-90.
21. Uitto, Juha I., and Alfred M. Duda. "Management of Transboundary Water Resources: Lessons
From International Cooperation and Conflict Prevention." The Geographic Journal 168 (2002):
365-378.
22. Falkenmark, Malin, and Jan Lundqvist. "Towards Water Security: Political Determination and
Human Adaptation Crucial." Natural Resources Forum 21 (1998): 37-51.
23. Langford, Malcolm. "The United Nations Concept of Water as a Human Right: a New Paradigm
for Old Problems?" Water Resources Development 21 (2005): 273-282.
24.
25. Haftendorn, Helga. "Water and International Conflict." Third World Quarterly 21 (2000): 51-68.
26. Rainne, Juha. "The Work of the International Law Commission on Shared Natural Resources:
the Pursuit of Competence and Relevance." Nordic Journal of International Law 75 (2006):
321-338.
27. Kliot, N, D Shmueli, and U Shamir. "Institutions for Management of Transboundary Water

30
 Resources: Their Nature, Characteristics and Shortcomings." Water Policy 3 (2001): 229-255.
28. Rowland, Marty. "A Framework for Resolving the Transboundary Water Allocation Conflict
Conundrum." Ground Water 43 (2005): 700-705.
29. Dellapenna, Joseph W. "Transboundary Water Sharing and the Need for Public Management."
Journal of Water Resource Planning and Mangement 135 (2007): 397-404.
30. Soderbaum, Fredrik. "Public Goods and the Public Good." UN Chronicle 3 (2005): 39+.
31. Bischoff, Ivo. "Institutional Choice Versus Communication in Social Dilemmas-an
Experimental Approach." Journal of Economic Behavior and Organization 62 (2007): 20-36.

News Articles

1. "Presidents of Caspian countries issue 25-point Declaration in Tehran." Lexisnexis. BBC, 16

Oct. 2007. Web. 31 Aug. 2009. <http://lexisnexis.com>.
2. "Iran's share of Caspian is 20 per cent - Official." Lexisnexis. BBC, 3 Feb. 2008. Web. 31 Aug.
2009. <http://lexisnexis.com>.
3. Eqbali, Aresu. "Caspian Leader Fail to Reach Agreement on Resources." Platts Oilgram News
17 Oct. 2007: 1+. LexisNexis. 16 Dec. 2007.
4. "Iran, Russia to hold join manoeuvre to fight Caspian oil pollution." BBC Monitoring Middle
East 6 May 2009.
5. "Azerbaijan ready to bvack Russian offer of moratorium on catch of sturgeon." BBC
Monitoring trans-Caucus Unit 1 Apr. 2008.
6. "Turkmenistan undecided to join Nabucco gas project - Iranian radio." BBC Monitoring Central
Asia Unit 8 May 2009.
7. Eqbali, Aresu. "Iran to begin Caspian Sea drilling in February 2009." Platts Oilgram News 14
Nov. 2008.
8. Aminzadeh, Mohsen. "Iran should have taken Caspian Sea rights seriously - commentary."
E'temad [Tehran] 15 Jan. 2008, From BBC Monitoring Middle East ed.
9. Maleki, Dr. Abbas. "Former Iranian official criticises Iranian diplomacy in Caspian Sea."
E'temad [Tehran] 18 Sept. 2009, From BBC Monitoring Middle East ed.
10. Eqbali, Areseu. "Caspian leaders fail to reach agreement on resources." Platts Oilgram News 17
Oct. 2007.
11. "Russia trying to sideline Iran from Caspian Sea - Azeri experts." BBC Monitoring trans-
Caucus Unit 12 Sept. 2009.
12. "Iran: Caspian Sea countries to hold conference on cooperation." BBC Monitoring Middle East
3 May 2009.
13. "Iran stresses validity of agreements inked by Iran, former Soviet Union." BBC Monitoring
Middle East 15 Apr. 2008.
14. "Russia, Kazakhstan, Azerbaijan agree on development of Caspian shelf." BBC Monitoring
former Soviet Union 15 Apr. 2009.
15. "Iran's share of Caspian Sea is 20 per cent - Official." BBC Monitoring Middle East 3 Feb.
2008.
16. “Iran, Russia to stage first naval exercise in Caspian Sea on 29 July.” BBC Monitoring Middle
East 18 July 2009.
“Kazakhstan sets up Caspian coast guard department.” BBC Monitoring Central Asia Unit 6
April 2009.

31
Other Sources

1. Cedeno, Victor R. Protests by the Russian Federation against Azerbaijan. Publication no. 8.
CN.4 ed. Vol. A. UN, 2005. Print. Ser. 557.
2. BTC Resettlement Action Plan Turkey.
3. Caspian Development Advisory Panel. Publication. British Petroleum, 2007.
4. "Caspian Sea Region: Regional Conflicts." Energy Information Administration, July 2002. Web.
1 Oct. 2009. <http://eia.doe.gov>.
5. Caspian Sea Region: Natural Gas Export Options. EIA, 2002.
6. Russian Federation. "Position of the Russian Federation regarding the legal regime of the
Caspian Sea." Letter to UN General Assembly. Oct. 1994. United Nations. Vol. A/49/475.
7. Transboundary Diagnostic Analysis for the Caspian Sea. Publication. The Caspian
Environmental Programme, Sept. 2002. Web. 1 Oct. 2009.
<http://www.caspianenvironment.com>.

32