Security threats in the Caspian context
The Caspian context proves to be a particularly challenging case due to its unique features. World-class upstream activities are located offshore and new projects are underway, but maritime borders are still being disputed. The most important assetys are located in the Azerbaijani offshore: Azeri-Chirag- Guneshli (ACG) is one of the most important oil fields in the world, with hydrocarbon reserves exceeding 5 billion barrels. The investments in the projects during the past twenty years led to the creation of an impressive system of infrastructures, above and below the surface.
Total investments exceed 30 billion dollars, while other 6 billion dollars expected to be invested in the coming years. ACG represents the core of the Azerbaijan oil production and the most important foreing investment in the country. With its daily production of 650.000 bbl/d, it accounts for more than 80% of the Azerbaijani oil exports. Overall, ACG revenues for the Azerbaijani state amount to approximately 15 billion dollars per year, i.e. nearly 20% of the Azerbaijani GDP. As a consequence, among Caspian littoral states, Azerbaijan shows the highest level of reliance on the viability of its offshore infrastructures.
From the security perspective, the most sensitive part is the complex of offshore platforms located 120 km off the coast of Azerbaijan: Chirag, East Azeri, Central Azeri, West Azeri (two platforms), Deepwater Guneshli (two platforms), West Chirag. Those infrastructures represent a core asset for the Azerbaijani energy industry.
Another important infrastructure (and potential target) is also located in the Azerbaijani offshore: the Shah Deniz complex, 70 km south-east of Baku. This natural gas field represents the core of the Azerbaijani production, with nearly 9 billion cubic metres (Bcm) of annual output. Currently, the offshore surface infrastructures include one platform, with a total investment of 6 billion dollars. However, by the end of this decade two more platforms will be installed for the second stage of the project, after an investment of 28 billion dollars. With its huge proven reserves (nearly trillion cubic meters), Shah Den- iz will be a key-asset for the Azerbaijani energy sectore.
A third potential target for security threat is the artificial island built at the Kashagan field, 80 Km south-west of Atyrau, in the Kazakh offshore. The complex is the most expensive energy project in the world, with current cumulated costs exceeding 100 billion dollars. Its proven reserves are approximately 9 billion barrels and its production is expected to begin shortly, becoming a strategic element of the Kazakh exports.
The infrastructures in the offshore of the other Caspian littoral states are instead less relevant. In the Russian sector, the most important asset is Yuri Korchagin field, holding reserves for several hundred million barrels. The complex is made up of two platforms and it is located 180 km south of Astrakhan. Several minor fields are also located in the area off the coast of Norther Caucasus.
In the Turkmen sector of the Caspian, the most important asset is the Cheleken block, located 40 km east of Hazar. Three platforms are located in the area, exploiting reserves for several hundred million barrels. In the Iranian sector, instead, currently there are no major infrastructures which could represent a significant target for a military or terrorist attack.
Theoretically the single most serious security threat in the seas is related to possible claims made by state actors to the same area or field. Though currently the possibility of military confrontation in the Caspian is negligible, over the past decade there has been a certain number of minor incidents involving exploration vessels and patrolling boats and aircrafts in the Caspian Sea. For example, during the summer 2001 Iranian forces threatened an Azerbaijani oil exploration ship operating in the Araz-Alov-Sharg oil field, in the Azerbaijani offshore, and forced it to leave the area. Currently cooperative relations in the region are largely prevailing, but the risk of unintentional escalation exists.
The second most relevant source of threat in the Caspian context is posed by terrorist activities. In particular, transnational non-state actors could target producer facilities in order to disrupt energy exports from Azerbaijan and Kazakhstan. These two countries have a strongly secularized state with significant trade relationships with Western countries. Therefore, they might represent potential targets for terrorist attacks carried out by religious extremists, either autonomously or with the backing of foreign countries.
All in all, this threat is less relevant when compared with interstate conflict. Indeed, with the exception of the Russian regions in the Northern
Caucasus, the Caspian area is not a traditional hotspot for international terrorism, and given the current situation there are no signs of a different evolution in the short-term. However, terrorist activities cannot be ruled out, especially considering a structural vulnerability related to the Caspian: its nature of enclosed sea with a complex equilibrium would intensify the visibility and the effects of any terrorist attack involving major oil spills.
Besides interstate conflict and terrorism, other threats are instead absolutely marginal in the Caspian context. In theory, local protesters could pose a threat to energy infrastructures, since purely local issues may arise at any moment and a small-scale organisation could be created and could operate quite quickly. However, there is no significant threat at present, especially because the existing offshore infrastructures are generally located far from populated areas, while oil rents have allowed a significant increase in public spending which has placated social tensions. Similarly, crime cannot be considered a significant threat, since the littoral states have full control of coastal territories, hampering large-scale criminal activities which could endanger energy infrastructures.
-  See Chapter 1.
-  EIA, Azerbaijan, 28 September update, 2013.
-  See BP, ACG 2013 full year results, February 2014; SOCAR, online database, (last access 16 Februray2014).
-  SOFAZ (The State Oil Fund of Azerbaijan), Annual Report 2012.
-  CNN Money, 10 most expensive energy projects in the world, 27 August 2012.
-  EIA, Kazakhstan, 28 October update, 2013. Another important project is the perspective exploitation of theKazakh offshore field of Kurmangazy, which is estimated to hold reserves for 5 billion barrels.
-  EIA, Russia, 26 November update, 2013.
-  EIA, Turkmenistan, 25 January update, 2012.
-  “Iran Is Accused of Threatening Research Vessel in Caspian Sea”, The New York Times, 25 July 2001.
-  See Chapter 4.