BOFIT Viikkokatsaus / BOFIT Weekly 2019/41

The five littoral states of the Caspian Sea (Russia, Kazakhstan, Turkmenistan, Iran and Azerbaijan) negotiated for two decades on territorial demarcation and sharing of the natural resources of the Caspian Sea. In August 2018, the heads of the littoral states signed a convention on these issues. The Russian parliament ratified the convention by law on September 19 and Russian president signed the law into effect on October 1. Iran is the only state yet to ratify the convention.

The convention establishes that territorial waters extend to 15 miles from shore and fishing rights to 25 miles. The area in the middle of the sea is to be divided into sectors. These are to be determined with agreements among neighbouring countries. Russia, Kazakhstan and Azerbaijan have already earlier agreed on sector boundaries in the northern part of the Caspian. Azerbaijan, Iran and Turkmenistan still continue negotiations on the division of the southern end. These countries have asserted overlapping claims on a number of hydrocarbon deposits.

In addition to exploiting natural resources, the convention gives each state the right to construct gas pipelines running along the seabed in their own sector. While this has raised hopes for the proposed Trans-Caspian gas pipeline running from Turkmenistan to Azerbaijan, the matter is still far from settled. Both Russia and Iran oppose the plan and may still contest the pipeline on environmental grounds.