Implications on Energy Resources Development and Transport

Since 1991, the five states bordering the Caspian Sea have failed to find a common ground over the issue of the division of the sea bottom and the delimitation of surface waters. The problem is that there is no clear answer to the question about which concept should be applied to define the legal status and legal regime of the Caspian. There are great difficulties in resolving this issue since even international laws have failed to provide an adequate framework. The existing treaties relate only to navigation and fishing rights, not to demarcation of the coastlines or seabed mining. The unresolved disputes arising from inadequate legal regime, overlapping claims of ownership and a preference for unilateral or bilateral approaches are the stumbling blocks for the development of the Caspian Sea’s hydrocarbon resources and their transportation to the West’s markets. The positions of the parties remain divergent, it appears that a comprehensive and acceptable solution concerning the legal status and regime of the Caspian can only be achieved through negotiations in order to reach a unanimous agreement among the five littoral states. However the signature of such a five-way treaty may seem unlikely in the short term, there is still hope. Geopolitics will continue to play an important role in resolving this issue and its timing.