ENERGY-AZERBAIJAN: Iran Surprises Russia Over Azeri Oil Deal

MOSCOW, Nov 17 (IPS) - Against Russian government expectations and strategic interests Iran has joined Azerbaijan and a powerful western oil consortium in agreeing to develop the huge Caspian Sea oil shelf near the Azeri capital Baku.

Azeri parliamentarians voted unanimously in favour of the Iranian participation on Tuesday after nearly six weeks of debate on the issue, said the Itar-Tass news agency here.

The agreement on Azerbiajan's 'Deal of the Century' was signed during a recent visit to Baku, Azerbaijan, on Nov. 11 by Iranian government officials, headed by Gholam Reza Aga-Zaden, the Iranian oil minister and managing director of the country's national oil company.

One highly placed Russian diplomat said Wednesday he was extremely surprised at the development and told the news agency 'Interfax' that he thought it was a newspaper hoax at first.

"There has been a great deal of negative reaction in Moscow to the Iranian participation in the deal," said Elmar Guseinov in the Russian newspaper 'Izvestia'. He said this was to be to be expected since the Russian government reacted violently to the original agreement signed between Azerbaijan and the Western oil consortium on Sep. 20.

The Iranian proposition is to take the oil through Northern Iran, the Azeri autonomous region of Nakhichevan and across south eastern Turkey. It would eventually connect with the Ceyhan Terminal in the Mediterranean.

The Russian foreign affairs ministry has strongly protested against it and referred Azerbaijan to Soviet-Iranian treaties of 1921 and 1940 which laid down responsibilities and restrictions on any development of the Caspian Sea oil fields at Baku.

The long-standing treaties stipulated that the Caspian Sea could not be subject to any development without the consent of all countries bordering the Caspian Sea.

"It is clear that by signing this agreement the Iranians have publicly denounced these treaties and intend to ignore them completely," concludes Guseinov.

A spokesman for the Russian state oil company 'Lukoil' also told the Itar-Tass news agency that his company plans to become involved in the consortium but will steer well away from the political aspects of the deal.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service