Old Dominion University ODU Digital Commons Graduate Program in International Studies Theses & Graduate Program in International Studies Dissertations Summer 2007 Geopolitical Rivalry in the Caspian-Caucasus Region and the Dilemma of Interstate Cooperation Nurettin Altundeger Old Dominion University Follow this and additional works at: https://digitalcommons.odu.edu/gpis_etds Part of the International Law Commons, and the International Relations Commons Recommended Citation Altundeger, Nurettin. "Geopolitical Rivalry in the Caspian-Caucasus Region and the Dilemma of Interstate Cooperation" (2007). Doctor of Philosophy (PhD), dissertation, International Studies, Old Dominion University, DOI: 10.25777/cr9e-hz14 https://digitalcommons.odu.edu/gpis_etds/33 This Dissertation is brought to you for free and open access by the Graduate Program in International Studies at ODU Digital Commons. It has been accepted for inclusion in Graduate Program in International Studies Theses & Dissertations by an authorized administrator of ODU Digital Commons. For more information, please contact [email protected]. GEOPOLITICAL RIVALRY IN THE CASPIAN-CAUCASUS REGION AND THE DILEMMA OF INTERSTATE COOPERATION by Nurettin Altundeger B.A. May 1997, Bilkent University M.A. August 1999, Fatih University A Dissertation Submitted to the Faculty of Old Dominion University in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY INTERNATIONAL STUDIES OLD DOMINION UNIVERSITY August 2007 Approved by: Steve A. Yetiv (Director) Austin Jersild tlv ember) Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ABSTRACT GEOPOLITICAL RIVALRY IN THE CASPIAN-CAUCASUS REGION AND THE DILEMMA OF INTERSTATE COOPERATION Nurettin Altundeger Old Dominion University, 2007 Director: Dr. Steve A. Yetiv This dissertation develops a unique way of analyzing the interstate relationship in the Caspian region over the development of Caspian oil resources. Based on three different independent variables, this dissertation seeks to understand the main reasons behind the absence of interstate cooperation in the Caspian Sea region. Among the variety of factors that might have affected the nature of interstate relationships and cooperation in the region, national interest considerations among the littoral states and external powers involved in the affairs of the Caspian Sea region proved to be the most important factor(s) that explain the lack of cooperation in developing the Caspian oil industry. While competition for influence and resources impeded the establishment of an environment conducive to interstate cooperation, the rise of military conflicts and widespread wars also contributed to the deterioration of the international environment for the development of the Caspian oil industry. The lack of effective international institutions and the failure of the Caspian states to come up with a regime or a system of governance that would normalize interstate relationships in the region further reduced chances for a smoothly functioning oil industry in the region. Although the advances made—after more than a decade—in the development of oil industry and transportation systems stands as a success, the current level of Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. development hardly satisfies the littoral states and those of external powers as well as oil companies. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ACKNOWLEDGEMENTS This project would not have been possible without the support of many people. Many thanks to my adviser, Steve A. Yetiv, who read my manuscripts many times and patiently helped me to complete my dissertation. Thanks also to my committee members, Donald Zeigler and Austin Jersild for their understanding and for their guidance and support. I would like to thank the Graduate Programs in International Studies at Old Dominion University for providing an assistantship to start and continue my work as a doctoral student, and also offer my gratitude to Regina Karp, GPIS director. Thanks to my wife Makbule for her continuous support throughout my years in the program and especially for her help in typing of the manuscripts. Finally, I would like to remember my parents Huseyin and Havva Altundeger for their spiritual support from thousands of miles away in Turkey. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. iv TABLE OF CONTENTS Chapter Page I. INTRODUCTION: COOPERATION AND CONFLICT IN THE CAUCASUS ....................................................................................................... 1 EXPLORING WHY COOPERATION HAS FAILED ................... 5 COOPERATION IN THEORY...................................................... 12 IMPORTANCE OF THE REGION ............................................... 14 METHODOLOGY .............................................................................20 II. HISTORY OF OIL DEVELOPMENT IN THE CASPIAN BASIN ....... 28 RUSSIAN CONTROL OF THE REGION .....................................30 THE FIRST OIL BOOM ...................................................................31 DEVELOPMENT OF CASPIAN O IL ............................................ 39 CASPIAN OIL: RESERVES AND ESTIMATES.........................41 COST OF ENERGY DEVELOPMENT IN THE CASPIAN SEA ......................................................................... 44 III. GEOPOLITICAL RIVALRY AND COMPETITION OVER RESOURCES: THE LEGAL STATUS OF THE CASPIAN SEA ......... 47 DELIMITATION VS CONDOMINIUM .......................................49 HISTORICAL BACKGROUND OF THE LEGAL DISPUTE ..51 IN SEARCH OF A NEW REGIME IN THE CASPIAN SEA ... 55 AZERBAIJAN AND THE CASPIAN SEA ...................................57 BY WAY OF IRAN: IRAN’S QUESTION FOR DOMINATION IN THE CASPIAN SEA .......................................63 RUSSIA AND THE CASPIAN SEA: FROM CONFRONTATION TO COOPERATION....................................73 KAZAKHSTAN AND THE CASPIAN SEA ................................ 77 TURKMENISTAN AND THE CASPIAN SEA ............................79 CONCLUSIONS ................................................................................ 81 IV. THE PIPELINE DILEMMA IN THE CASPIAN SEA: DREAM OR REALITY? .......................................................................................................84 EARLY OIL DEVELOPMENT AND PIPELINES ......................88 MAIN PIPELINE PROJECTS AND PROPOSALS ..................... 90 EXISTING PIPELINES .................................................................... 91 PROPOSED PIPELINES ..................................................................94 INTERSTATE COOPERATION IN THE CASPIAN SEA: THE EARLY OIL D EBA TE.............................................................95 MAIN EXPORT PIPELINES (MEP) AND COOPERATION . 103 TURKEY AND THE BAKU-CEYHAN PIPELINE................ 106 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. V THE ROLE OF THE UNITED STATES IN THE PIPELINE DILEMMA.................................................................. 114 RUSSIAN RESISTANCE TO BTC AND NEGOTIATIONS OVER MEP ..................................................................................... 117 OIL COMPANIES AND IRAN ................................................... 123 BTC: A DREAM COMING TRUE ............................................. 126 CONCLUSIONS ............................................................................ 127 V. CONFLICTS IN THE CAUCASUS AND CASPIAN OIL DEVELOPMENT........................................................................................ 133 OIL DEVELOPMENT AND CONFLICT IN THE CASPIAN REGION: AZERBAIJAN, ARMENIA & NAGORNO-KARABAKH ........................................................... 136 NAGRNO-KARABAKH CONFLICT AND PEACE PROCESS: A DIFFICULT ROAD AHEAD ............................. 145 THE CHECHEN CONFLICT...................................................... 152 ETHNIC CONFLICTS IN GEORGIA AND THE STABILITY IN CAUCASUS ...................................................... 158 MILITARY CONFLICTS IN THE CAUCASUS AND THE CASPIAN OIL DEVELOPMENT .......................... 165 PEACE PROCESS IN CAUCASIA AND INTERNATIONAL INSTITUTIONS ........................................ 166 CONCLUSIONS: INSTABILITY AND OIL DEVELOPMENT........................................................................... 175 VI. THE ROLE OF INSTITUTIONS IN THE CASPIAN SEA REGION . 180 INTERNATIONAL INSTITUTIONS IN THE CASPIAN CONTEXT .................................................................. 182 COMMONWEALTH OF INDEPENDENT STATES (CIS) AND REGIONAL COOPERATION.......................................... 186 GUAM AND THE REGIONAL COOPERATION IN THE CASPIAN SEA ................................................................................. 201 OSCE AND THE CASPIAN REGION ........................................205 OSCE MINSK GROUP AND MEMBERS ................................. 207 INTERNATIONAL REGIMES AND OIL DEVELOPMENT IN THE CASPIAN SEA ................................ 209 CASPIAN OIL AND REGIME FORMATION...........................213 CONCLUSIONS ..............................................................................216 VII. CONCLUSIONS ...........................................................................................218 IMPORTANCE OF CASPIAN OIL IN TODAY’S WORLD .. 219 BIBLIOGRAPHY