Iran, Azerbaijan In Tense Caspian Standoff, Cables Show

Iran's movement of an oil rig toward Azerbaijan's territorial waters in the Caspian Sea in 2009 caused Baku to fret about its lack of military capacity to handle such a threat, and to seek advice from U.S. officials on what to do, recently released Wikileaks cables show.

The cables make for some fascinating reading, and seem to provide some real insight into the strategic thinking of both the Azerbaijani and U.S. governments about the threat of conflict in the Caspian. They make it clear that Azerbaijan is afraid of both Iran and Russian threats against its gas and oil infrastructure in the Caspian, and that U.S. embassy officials are eager to prevent any such conflict because of the economic disruption that it would cause.

The crisis, which seems not to have been previously reported, began in November 2009, when Iran moved its new Alborz-Iran rig into waters that were disputed between Azerbaijan and Iran. The U.S. shared some (unspecified) intelligence information to Ali Asadov, senior energy advisor to President Heydar Aliyev to which Asadov responded:

"This situation is challenging, your information shows this. This tension will escalate." Asadov did not outline specific responses the Azerbaijani government planned to undertake. Rather, like many of our GOAJ interlocutors, Asadov appears to be gathering information and weighing Azerbaijani options, in light of superior Iranian naval strength."

Asadov's assessment of the situation is worth quoting at length:

Asadov stated that the Iranian incursion "was not only about Iran, but about our northern neighbor (Russia)." He told us that Russia was increasing military pressure in the Caspian Sea, placing obstacles in the path of a possible Trans-Caspian Pipeline, and preventing Azerbaijan's energy cooperation with Turkmenistan. He described Russia's goal as preventing the transport of Azerbaijani and Central Asian gas to world markets. He noted that of all of the countries in the region, only Azerbaijan's energy resources were now exported to world Markets without transiting Russia. Russia, he declared, blocked Kazakhstan and Turkmenistan. He also described Russia as eager to thwart thawing relations between Azerbaijan and Turkmenistan...

Asadov outlined his core concern: Iran and Russia are taking advantage of the current poor state of Azerbaijani-Turkish relations and stalled gas transit discussions to kill the prospects for transit of Azerbaijani and Turkmen gas to international markets. Asadov underscored, "I believe this moment was chosen with a purpose," and indicated that Iran was taking advantage of the current "coldness in relations between us and Turkey..."

Asadov explained that the GOAJ would respond within its capabilities, but lacked the ability to mount a significant military response. "You know our military capacity on our borders. We do not have enough capacity. We need military assistance." He further highlighted that, "With even the smallest conflict in the region, all energy activity in the Caspian Sea will be stopped." Asadov indicated that it was not in Azerbaijan's interests to escalate the confrontation unnecessarily, stating "you carry a gun so that others will think twice..."

The strategic picture that Asadov painted was grim: the strategic encirclement of Azerbaijani and Central Asian energy resources by Russia and Iran, assisted, wittingly or unwittingly, by Turkey. According to Asadov's assessment, Turkey's gas transit dispute with Azerbaijan, hitherto a commercial issue, has morphed into a broader strategic and security issue, for Azerbaijan, the EU and U.S. With Azerbaijan now effectively hemmed in by Turkey on westward transit of its gas, Asadov also believes that Iran and Russia are now poised to squelch prospects of Turkmen gas coming west for the foreseeable future. The Embassy agrees that escalation of military tensions in the southern Caspian could serve as a disincentive for further western energy firm interest in a Trans-Caspian pipeline.

Another cable describes a meeting with a vice president of the state oil company SOCAR, in which the official "underscored Azerbaijan's inability to take on Iran militarily, stating that "we are not the U.S., Iran or Russia, sometimes we prefer to close our eyes," because possible courses of action appear difficult or unpalatable."

Then, the official asked for advice on what to do:

VP Nassirov asked for the best advice of the USG, U.S. Navy and Coast Guard on how the GOAJ and SOCAR should address this situation. Naval Attache stressed that there were many mechanisms within the maritime field to allow peaceful resolution. We agreed to seek additional guidance for SOCAR and the GOAJ on handling this situation. Naval Attache Verich further laid out some immediate suggestions to minimize the possibility of an incident at sea, while preserving Azerbaijan's territorial claims:

--The Azerbaijan Coast Guard should exercise peaceful presence. Mere presence in the area preserved Azerbaijan's territorial claim.

--The Coast Guard should communicate with any vessels it believed were violating Azerbaijan's sovereignty, and log these communications. Naval Attache explained that there were established methods via international organizations, such as the International Maritime Organization, (IMO), to thereafter raise a complaint.

--To prevent an incident at sea, the Coast Guard ship captain in the vicinity of the Alborz should receive clear and controlled instructions from Azerbaijan's political leadership regarding his mission and permissible courses of action.

Another cable said that the episode presented an opportunity to increase security cooperation with Azerbaijan.

The recent move of the Iranian Alborz rig into potentially disputed waters in the Caspian offers a timely opportunity to gain traction on Caspian maritime cooperation with the GOAJ. The Azerbaijani Navy, Coast Guard, and Azerbaijans state oil company, SOCAR, all appear eager to accelerate potential maritime cooperation. They recognize their current maritime domain awareness (MDA) capabilities are weak, covering only about 30 percent of the maritime sector claimed by Azerbaijan. From the USG perspective, most immediately concerning is that the GOAJ lacks shore-based visibility on half of the ACG oil fields, the country's largest, which feed 1 million-plus barrels per day of crude oil into the Baku-Tblisi-Ceyhan (BTC) pipeline flowing to western markets. Embassy Baku recommends that we move swiftly now to capitalize on current Azerbaijani concerns about the Alborz rig to jointly develop additional Azerbaijani MDA capabilities....

Azerbaijan's poor MDA risks unwitting confrontation with Iran, Russia, or other regional actors, as Azerbaijan must physically deploy vessels to potentially disputed waters to ascertain even basic information regarding developments in the maritime sector. Lack of MDA also leaves both the ACG fields and Shah Deniz vulnerable to attack by nations in the region, terrorists, or other non-state actors. Azerbaijan understands that both Russia and Iran regularly violate their claimed sector, but can do very little about it...

The GOAJ remains deeply concerned with potential underwater sabotage of its energy facilities. Naval Attache notes that the USSR developed and fostered significant underwater sabotage capabilities at a special operations center in Baku. Soviet capabilities were actively matched by Iranian efforts, in a type of low-intensity conflict which persisted for many years. There is evidence to suggest that both Russia and Iran maintain these capabilities. Therefore, DAO's best assessment is that the GOAJ's deep concern about underwater sabotage of its energy facilities is not misplaced...

Appropriate MDA would provide better maritime visibility to Azerbaijan, and assist the GOAJ to:

-- better understand and assess Caspian security developments, including those in potentially disputed waters,

-- help to avoid potential unwitting confrontations with neighbors such as Iran, Russia, and Turkmenistan;

-- provide better warning of threats from non-state actors, and

-- learn about and potentially forestall threats to existing Azerbaijani energy infrastructure.

Post also would note that security flare-ups significantly contribute to delays in the commercial development of energy infrastructure. For example, after the 2001 military confrontation between Azerbaijan and Iran at the disputed Alov field, BP and Statoil withdrew from exploration efforts. Eight years later, the Alov field is no closer to development.

The last cable referring to the incident, from February 2010, suggests that it had ended in a sort of stalemate:

Iran's recent provocative positioning of the Alborz mobile oil rig into disputed Caspian waters (despite promises not to) is of concern to the GOAJ, but they have not publicized their concern. The GOAJ appears willing to tolerate the situation, so long as the Iranian rig is not moved further north.

Iran, Azerbaijan In Tense Caspian Standoff, Cables Show

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