Why Europe should change its approach to Azerbaijan by Rem Korteweg
The EU has relied on oil and gas from Azerbaijan to reduce its dependence on Russian energy supplies since the beginning of the 21st century. Because of Baku’s strategic importance, the EU has not assertively promoted good governance in Azerbaijan through its European Neighbourhood Policy. However, developments in gas exploration and production are changing the EU’s relationship with the Azerbaijanis. This could pave the way for a more coherent EU policy that balances energy security with a greater emphasis on democratic reform. Nestled between Iran and Russia, energyabundant Azerbaijan is prime geostrategic real estate. Since it gained independence from the Soviet Union in 1991, it has been concerned that its neighbours will interfere in its domestic affairs. In the early 1990s, Azerbaijan fought a war with Armenia, in which Russia sided with the Armenians. During the war, Baku lost control of Nagorno-Karabakh, a contested area that covers one-eighth of its territory. The conflict is still unresolved and the area occupied. In this rough neighbourhood, Azerbaijan needs allies. Energy is central to these friendships. Georgia and especially Turkey are regional partners. But by tying the country with pipelines to Europe’s energy market and attracting US and European investment, Baku has also been developing allies in the West to safeguard its independence. With its oil production having peaked in 2010, Azerbaijan wants to deepen its energy relationship with Europe by developing an
off-shore natural gas field called Shah Deniz II. In 2013, the state oil company of Azerbaijan (SOCAR), along with its partners including BP, will decide which pipeline will deliver Shah Deniz-gas to Europe, Nabucco-West or the Trans-Adriatic pipeline (TAP). The decision will complete the so-called Southern Gas Corridor which has been a key element in the EU’s energy diversification strategy and could deliver roughly 10 per cent of Europe’s gas imports by 2020. The government in Baku is also promoting a European secular image. Last year Azerbaijan signed a major deal with Microsoft, in a drive to become a regional IT hub in an otherwise internet-unfriendly region. Geopolitically, the country supports America’s ‘new silk road’ vision for Central Asia, and Baku has troops in Afghanistan supporting NATO. But in spite of the flourishing energy relationship and converging geopolitical interests, there