29-04-02 Russia and Kazakhstan have agreed to develop jointly three oilfields in the Caspian Sea, in the latest effort to resolve territorial issues in the resource-rich region. Victor Khristenko, a Russian deputy prime minister, said that the two countries would sign an agreement by this summer to cover development of the Kurmengaz, Tsentralnoye and Khvalynskoye fields, reinforcing a previous accord reached in 1998.
His statement follows the collapse of talks, at which the heads of the two countries and others that border the Caspian -- Azerbaijan, Turkmenistan and Iran -- met for the first time to discuss the division of the sea but failed to agree on even a joint declaration or to hold a concluding press conference.

President Vladimir Putin of Russia went straight from Ashgabat, the Turkmen capital, where the summit was held, to the Russia port city of Astrakhan, where he held talks with LUKoil, Russia's largest and partly state-owned producer, which is exploring in the Caspian. He also visited the Caspian naval fleet and promised it additional resources, stressing Russia's continuing military presence in the region.
Some interpreted the absence of agreement in Ashgabat as the result of Iran's continued insistence on a stake of one fifth of the Caspian, down from the 50-50 division that it shared in the past with the Soviet Union. Others argue that its stake should be proportional to its share of the coastline, representing about 14 %. However, Russian negotiators suggested afterwards that the main problem was the reluctance of Azeri negotiators to compromise, in spite of initial indications to the contrary, because of their disagreement with Turkmenistan on a common sea border.

Failure to agree a common approach by the five countries will slow development of the sea's rich mineral resources, notably in the south of the Caspian. BP suspended exploration in its Alov offshore concession, located in waters disputed by Iran and Azerbaijan, after warnings from Iranian gunboats last year.
ExxonMobil has not yet begun exploration in the Serdar field located in the centre of the Caspian. The US company signed an agreement with Turkmenistan in 1998 but has frozen its activities since the Azeri government, which also claims the field and calls it Kyapaz, issued a protest. However, Russia has reached a bilateral understanding with Azerbaijan as well as Kazakhstan, and large projects currently under development are unlikely to be affected. Kashagan in Kazakhstan's sector is being tested to determine its dimensions and officials hope to begin production by 2005.

In the south, BP-led Azerbaijan International Operating Company (AIOC) is forging ahead with plans to develop three offshore fields, Azeri, Chirag and Guneshli, in spite of the fact that two of these are also claimed by Turkmenistan.