Energy geo-economics are affecting the range of Azerbaijan geopolitical choices, conditioned also by the “geographical pivot of history” famously identified over 100 years ago by Sir Halford Mackinder, in his Heartland Theory of geopolitics, as being the to the east and north of the Caspian Sea. Much of that territory corresponds to modern-day Uzbekistan, whose importance was rediscovered in the wake of the disintegration of the multinational Soviet state. The term could now equally apply to Azerbaijan’s role in the South Caucasus, and not only because it provides the most secure and efficient transit of Caspian Sea energy resources westward to Europe and beyond.

Azerbaijan geopolitical choices and Russia’s war on Georgia

Yet Russia’s war on Georgia last year together with the European Union’s continuing failure to provide guarantees and funding necessary to catalyze the construction of the Nabucco gas pipeline, has had the effect of compelling the politicians in Baku to rethink their country’s strategic orientation.

Partly in consequence, the State Oil Company of the Azerbaijani Republic (SOCAR) two months ago signed with Russia’s Gazprom a Memorandum of Understanding (MoU) for supplying gas to Russia at market prices. The MoU only sets the opening of negotiations over the conditions of delivery and price. Yet this announcement, beyond the EU’s dilatory behavior over the Nabucco project, is in the end about Nagorno-Karabakh—a region that is de jure part of the Republic of Azerbaijan and which unilaterally declared itself an independent republic in 1991—just as oil shipments through Chechnya/Dagestan to Novorossiisk were 15 years ago.

Indeed, Baku just this week announced further that it will double the shipments of oil to Novorossiisk from about 25,000 barrels per day (bpd) to 50,000.
The pipeline’s capacity is twice the latter figure, or 100,000 bpd, which is equivalent to the volume transited through the Baku-Supsa pipeline in the late 1990s before the opening of the Baku-Tbilisi-Ceyhan (BTC) pipeline. This oil will come from old deposits already developed during the Soviet period and not from any of the newly excavated fields, such as Azeri-Chirag-Guneshli (ACG).

Azerbaijan geopolitical choices and the Armenian question

Azerbaijan’s rapprochement with Russia is also partly a response to moves between Turkey and Armenia, a shift partly but not entirely due to the replacement of the former “Turanian” leadership (which sought to assist and extend ties with Azerbaijan and the Turkic states of Central Asia) by Turkish Prime Minister Recep Tayyip Erdogan’s “Islamist” party (AKP), which seeks to increase Ankara’s profile within the Muslim world more specifically. Ankara’s geopolitical orientation is therefore more concentrated on what during the Cold War was called the Soviet “southern tier” stretching from Afghanistan through Iran and the Mashreq, the Arabian Peninsula, and the Maghreb in North Africa.

Partly in belated response, European Union leaders on March 20 finally approved 5 billion euros (US$6.7 billion) for investments in energy infrastructure projects (and also telecommunications), including 200 million euros for Nabucco-related activities. German Chancellor Angela Merkel had initially refused to support EU funding for Nabucco at all, under the pretext that private capital should be sufficient. In the end, the 5 billion euros was announced in the form of an economic stimulus package, much of which had already been planned anyway: a little over a third would go for gas interconnections and a little under a quarter for electricity interconnectors, under the “supergrid” initiative approved last year.

One of the stumbling blocks in the implementation of the Nabucco project has been Turkey’s insistence on a netback arrangement whereby it pays 15% less than the European price for the gas in recognition of lower transportation costs for consumption within Turkey itself as opposed to transmission through to Europe. This demand has been unacceptable to the EU, which has sought further to impose the EU’s rules and regulations on Turkey (the acquis communautaire, which would also have to go through Turkey’s parliament, the Grand National Assembly) as a further condition for constructing the Nabucco pipeline.

European influences on Azerbaijan geopolitical choices

Germany, however, vetoes re-opening the suspended chapters of ongoing negotiations for Turkey’s accession to the EU in return for such an acceptance by Turkey of the acquis communautaire. This veto is an expression of the interest of the German political and industrial-economic elite in promoting the North Stream (under the Baltic Sea) and South Stream (under the Black Sea) pipeline projects with Russia, to the exclusion of Nabucco, which despite disclaimers on many sides is a competing project.

From Baku’s perspective, this constraint is added onto the Azerbaijani political elite’s inevitable interpretation of Western speechifying over South Ossetia in light of the long-standing failure to resolve the Karabakh conflict. To be sure, the failure of the West to offer tangible assistance to the government of Georgian President Mikheil Saakashvili only confirmed the extinction of Azerbaijan’s hope for eventual membership of the North Atlantic Treaty Organization. That hope had already been imperiled by NATO’s failure earlier in 2008 to offer Georgia and Ukraine a Membership Action Plan (MAP).

Merkel, whose geopolitical vision for Europe has incorporated historically established notions of entente and even concert between Deutschland und Russland, had strongly opposed including these countries in a MAP.

Azerbaijan geopolitical choices: The oncoming period is crucial

The lesson has not been lost on Azerbaijan, which has nevertheless over the past 20 years demonstrated its capacity to be a reliable energy partner for the West.

Indeed, Azerbaijan is nothing less than the manifestation of the idea of “multiple energy pipelines” and the advantages of such a perspective, which was a few years ago adopted by Kazakhstan under the rubric of its “multi-vector strategy” and most recently by Turkmenistan, which seeks to exit from the Russian monopsony to which Turkmenistan’s deceased president Saparmurat Niyazov had condemned it.

Time is running out for the Western powers to redeem the promise that they have themselves created, to their own advantage, in Baku’s strategic orientation, which holds implications not only for the South Caucasus but for the extended Caspian Sea region as a whole.

[A version of this article was first published in Asia Times Online, 8 May 2009.]