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Iran, Azerbaijan face off as Caspian oil row turns nasty

DAWN, Wednesday 25 July 2001; 03 Jamadi-ul-Awwal 1422

BAKU, July 24: Iran and its neighbour Azerbaijan were in a high-stakes standoff on Tuesday as both sides refused to back down after an Iranian warship threatened an Azeri oil research vessel in disputed waters.

The incident marked a new low point in the fractious relations between the two countries and cast a shadow over the multi-billion-dollar development of the Caspian Sea's oil reserves with the participation of Western companies. Azerbaijan's Foreign Minister Vilayat Guliyev insisted that his country would not give in to Iran's claims on its sector of the oil-rich Caspian. We will not get into a war but we will stand up for our rights, Guliyev said.

Iran's ambassador to Azerbaijan, Akhad Gazai, repeated Tehran's claims that the research vessel, chartered by oil multinational BP Amoco, was trespassing in an area which belongs to Iran. Western oil companies, which have committed billions of dollars to developing the Caspian, made it clear they wanted no part in any international dispute and appealed to the two countries to resolve the issue.

BP Amoco said it was suspending operations in the disputed Alov-Sharg-Araz field, and Nick Browne, Britain's ambassador in Tehran, said British companies had no intention of resuming work in the areas under dispute.

The geological survey vessel Geophysic-3 was approached late on Monday by an Iranian warship in Azeri waters about 150 kilometres south of Azerbaijan's capital, Baku. After a standoff during which the Iranian ship trained its guns on the Azeri vessel and put them on readiness to fire, the Geophysic-3 turned around and returned to port in Baku, Azeri officials said.

In Baku, the government issued an official protest, saying Tehran had violated international norms. By late Tuesday, Azerbaijan had still not received any reply to its protest, Guliyev said. But the foreign minister added: Whatever Iran's reaction, I can say in advance that Azerbaijan will not step back from its position.

International law and global practice is on our side, the foreign minister said in an interview. We can prove to Iran and to other countries with Caspian shorelines that we acted justly. However, Guliyev said he still hoped that the 10-year-old dispute over how to carve up the Caspian among the five states which border it could be resolved at a summit planned for this autumn.

DIVISION: Iran wants to divide the inland sea into five equal parts, but Russia and Azerbaijan say it should be split in line with national boundaries, which would give Iran a smaller slice. Gazai, Iran's ambassador to Azerbaijan, said Tehran had earlier warned that no work should be carried out in the disputed zones until an agreement has been reached on the division of the Caspian.

Azerbaijan is a fraternal Muslim nation, Gazai told a press conference in Baku. There can be temporary misunderstandings between such countries but that misunderstanding should not affect relations. Underlining the two neighbours' difficult ties, about 50 protesters from a group which wants the Azeri-populated north of Iran to be ceded to Azerbaijan, picketed the Iranian embassy on Tuesday.

Azeri President Heydar Aliyev is scheduled to make an official visit to Tehran next month. Gazai would not be drawn on whether the visit would go ahead in the light of Monday's incident, but Guliyev said he saw no reason to cancel it.

The row with Iran comes at a time when development of the Caspian's oil resources is just starting to take off, with output set to grow and a major new pipeline from the Caspian to the Turkish Mediterranean in development.

The disputed Alov-Sharg-Araz field is being developed by a consortium including the Azeri state oil company SOCAR, BP Amoco, Exxon Mobil - the world's biggest oil company - and Norway's Statoil, among others. Investment totalling nine billion dollars has been earmarked for the field over the next 25 years, though exploratory drilling has not yet begun. -AFP