Five states reach landmark agreement for Caspian Sea oil extraction

Iran, Russia and three ex-Soviet states have reached a breakthrough agreement over sovereign rights in the Caspian Sea, paving the way for major oil and gas extraction and pipeline projects.

The treaty marks the conclusion of more than two decades of disputes between Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan, who have argued whether the whether the Caspian is a sea or a lake.

This uncertainty surrounding the status of the Caspian has made the division of maritime boundaries in the world’s biggest enclosed body of water particularly difficult. But, speaking after the signing on Sunday, all five leaders praised it as historic event.

“Many years of thorough work have culminated today in the signing of the Convention on the Legal Status of the Caspian Sea,” said Kazakhstan’s President Nursultan Nazarbayev in the coastal city of Aktau.

However, the delimitation of the seabed will require additional agreements between the nations bordering the sea, said Iranian president Hassan Rouhani.

Until now, the territorial disputes have prevented the exploration of at least 20 billion barrels of oil and more than 240 trillion cubic feet of gas, according to estimations by the US Energy Information Administration in 2013.

The five states have already developed several offshore oil and gas reserves that are located near enough to the coast not to be disputed, such as Kazakhstan’s giant Kashagan field.