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Abigail Hofman:

Champagne was plentiful but canapés were scarce

Bank deleveraging has barely started

Bank deleveraging has barely started

Banks lending money to governments to help fund bank bailouts looks horribly circular

January 2003

Oil fuels Caspian carve-up





Caspian states keen on oil
Keen to exploit the massive oil deposits found in its segment of the Caspian Sea, Kazakhstan is pushing for an end to the decade-long dispute over how to draw borders between the five countries that share its coastline.

The Soviet Union signed the only existing border agreement with Iran in the 1940s but the treaty didn't mention how sub-sea resources should be shared or divided up. Then almost overnight in 1991 three new countries - Azerbaijan, Kazakhstan and Turkmenistan - were created on the shores of the Caspian.

When offshore oil was discovered the bickering began. However, following Russian president Vladimir Putin's election in March 2000 and a US resolve to diversify its oil supplies after the terrorist attacks last September, a new climate of cooperation has emerged between the five littoral states.

In April last year the presidents of the five states met in the Turkmen capital of Ashkhabad to try to thrash out a deal.

Most of the oil deposits are thought to be in the north of the sea, in the Azerbaijani, Russian and Kazakh sectors. Iran and Turkmenistan have therefore constantly blocked any final settlement. Frustrated with their southern neighbours, Azerbaijan, Russia and Kazakhstan have been pushing ahead with de facto agreements that will allow exploration and production to proceed.

A month after the summit, Russia and Kazakhstan went a step further and signed a protocol to divide their part of the Caspian seabed. The Majilis, the Kazakhstan parliament, ratified the agreement in October. The protocol established the "geographical coordinates of the modified meridian line demarcating the seabed of the northern part of the Caspian between Russian and Kazakhstan."

In other words, the two parties drew a line down the middle of the stretch of sea between them.

By the end of the year, Azerbaijan, Russia and Kazakhstan went on to declare that they held a "common position" on setting sea borders between them.

Heydar Aliev, the president of Azerbaijan, visited Moscow in September and signed a Azerbaijan-Russia agreement on "division of adjacent sectors in Caspian Sea" that sets de facto mutual marine borders.

Iran is strongly opposed to these agreements and refuses to recognize their legitimacy. Last July Iranian fighter aircraft strafed an Azerbaijani exploration ship in the southern Caspian.

There is, though, little that either Iran or Turkmenistan can do to prevent their northern neighbours from pushing ahead. The five heads of state are due to meet in Tehran later this year to try to come to a more permanent agreement.






The Fitch approach is good. They are now a serious player, and best for covered bonds

So says a German Pfandbrief specialist. Well, as Fitch is maintaining triple-A ratings, while Moody’s makes severe downgrades, he would say that wouldn’t he?

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