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Author Topic:   Background data on topic of dispute between Iran and Azerbaijan
posted August 03, 2001 10:14     Click Here to See the Profile for Vatandoost   Click Here to Email Vatandoost     Edit/Delete Message   Reply w/Quote
BBC Monitoring Service
Aug 1, 2001

Text of report in English by Iranian news agency IRNA

Astara, Gilan Province, 1 August: Alborz oil field has turned into the main topic of dispute between Iran and Azerbaijan within framework of the Caspian sea legal regime.

The oil field occupies more than 1,400 square kilometres of lands in south central part of the Caspian sea. The field is known in Azerbaijan as Alov, meaning flame in the Azeri language.

Based on a map released by the I.H.S. Energy company of the US, Alborz oil field is nearly like a rectangular, whose short angles meet northeastern and southwestern parts of the region. It shortly meets the Iranian coasts and is 160 kms from Astara north of Iranian province of Gilan.

Baku lies about 170 kms from the field.

Depth of water in the field is 300 to 800 meters and it is believed that the oil reserves are the oil field is 2,500 to 6,500 meters in the Caspian Sea bed.

The debates on the Caspian Sea legal regime expect 20 per cent share for Iran in the northern part of the land-locked sea.

Iran's insistence on its 20 per cent share in the sea and Azerbaijan's claim that Iran's share is limited to the Astara- Hoseynali line represent a triangle inside which the Alborz oil field lies.

According to the internet publication of Azerbaijan, International, Azeri Oil Company singed for the first ever on July 21, 1998, a deal with British Petroleum (BP) and Norwegian State Oil company in London for expansion of the oil field as well as the east and Araz fields in the Caspian sea.

In the ceremony marking conclusion of the deal Azeri President Heydar Aliyev and British Prime Minister Tony Blair were present.

Based on the contract each of the British and Norwegian companies would have a 15 per cent share and Azerbaijan Oil Company will have 40 per cent share of the consortium, thus formed for development of the oil field. No decision was made on the fate of the remaining 30 per cent share.

Later, the Exxonmobil, Tapeo and Alberta Energy each gained 15, 10 and five per cent of the remaining share gradually. should have been drilled in the field.

Two European companies were to invest 75m dollars in each phase of the project.

Total amount of investment in the 25-year project was estimated to be about four billion dollars.

According to Azeri Asa Irada News Agency, a research project, recently launched, was to be completed by the year 2002 and after that measures be adopted to prepare a suitable drilling platform so as to drill the first oil well.

Meanwhile, IRNA said the first measure for expansion of Alborz oil field was adopted by Iran in September 1999 following conclusion of a contract between National Iranian Oil Company (NIOC) and an Iranian company of Iran Petro Development within framework of the policy for expansion of Alborz Oil Field.

Head of the Caspian Sea Research Institute Abbas Maleki had already accused the Republic of Azerbaijan of taking hasty actions in oil related issues which he blamed for the country's dispute with all its neighbours.

Maleki in an interview with IRNA touched on Azerbaijan's prospecting operation in the Caspian Sea since Monday and said that an oil consortium had resumed operation and this was why the British Petroleum (BP) sent the Azeri Geofizik-3 research vessel to the region.

He said an Iranian warship had ordered the vessel to leave Iranian territorial waters, warning it would use force if she did not heed to the warning. He called Iran's move as "logical and sound".

BP and Britain announced that they fully understand Iran's stance, said the official, adding that BP announced that it will suspend its activities in the Caspian Sea as long as Iran does not permits it to do so.

He said that Iran has, since last week, launched wide-scale diplomatic efforts to prevent the Azeri government from dispatching the consortium to the region.

He accused Azerbaijan of adopting a unilateral move in ceding Alborz oil field to an oil consortium in 1998. The filed has five billion barrels of oil and gas reserves.

Britain's biggest company signed a Production Sharing Agreement (PSA) with Azerbaijan to be granted exploration, development and production rights for what it described as the Alov-Araz-Sharg area of the Caspian in 1998.

Under the terms of the PSA, the consortium, which includes Statoil of Norway, the Azeri state oil company, SOCAR, and BP as the operator, three wells were supposed to be drilled this year with up to an additional five exploratory wells by 2004.

Based on recent dispatches, BP is currently assessing possibilities of continuing the work in the Araz-Alov-Sharg area and is currently consulting its partners to the contract valued at nine billion dollars.

BP is optimistic that a positive resolution of the problem would be reached, and that it believes the issue of the legal status of the Caspian Sea that will determine the share of littoral states in its resources should be solved at intergovernmental level.

Iran insists on equal share for each of the five Caspian countries, also including Russia, Kazakhstan, and Turkmenistan, thus bidding at least for 20 per cent of the oil-rich sea.

Azerbaijan claims, however, that the size of a country's share should depend on the length of its coastal line.

The five littoral states of the sea are scheduled to meet in the Turkmen capital Ashkhabad in October to decide on a legal regime for the waters.

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