Caspian states meet but no deal on sea's status

TEHRAN (Reuters) - The leaders of Caspian Sea states pledged on Tuesday to overcome differences on dividing the sea with its huge hydrocarbon reserves and valuable caviar stocks but failed to agree on boundaries or a final share.

Russian President Vladimir Putin, attending the summit in Tehran after shrugging off a report about a plot to kill him, said a comprehensive deal could be reached soon. The host, Iran's Mahmoud Ahmadinejad, said the meeting was a milestone.

The one-day summit -- also attended by presidents of Kazakhstan, Azerbaijan and Turkmenistan -- did not agree on a new pact among the five littoral states to replace agreements on the sea's status dating from the era of the Soviet Union.

The final declaration, signed by all five states, said setting up a legal regime for the sea was "the most important duty" but did not give a timetable for achieving this.

At stake are estimated oil reserves of as much as 49 billion barrels -- equal to about half that of an OPEC member such as Kuwait -- and reservoirs with 230 trillion cubic feet of gas. The Caspian is also the world's main source of caviar.

Azerbaijan and Kazakhstan in particular have been quick to extract hydrocarbons, even without a final deal. They have signed bilateral accords with Russia. Iran opposes such deals.

LEGAL STATUS

Without a comprehensive pact on sharing resources or clear demarcation of boundaries, tensions can grow.

Iran sent a gunboat and military aircraft in 2001 to ward two Azeri vessels off an oilfield claimed by both Baku and Tehran. Ownership of several big oilfields is hotly contested.

"The legal status is very important -- fishing, shipping, military activities and the protection of the environment -- and I think this comprehensive agreement can be reached very soon," Putin told the four other leaders in Tehran.

He called for a "logical balance", ensuring that the environment was not harmed when oil and gas were extracted.

Putin said construction work in the sea should be agreed by five states, apparently a reference to a Western-backed energy pipeline that would bypass Russia and which Moscow opposes in favor of one on its territory.

Russia has argued for dividing the seabed between the five states but keeping the waters in common use. Some experts say this is so it has more room to maneuver its Caspian navy of a 100 or so ships, far larger than any other coastal state.

Iran wants all resources shared equally among five states, even though its coast accounts for less than 14 percent.

Ahmadinejad hailed the agreement signed at the summit as "big achievement". The five states agreed to steps towards setting up a body that would strengthen economic ties among coastal states, an initiative proposed by Iran.

The next summit will hosted by Azerbaijan in October 2008.