This is the major milestone for the region. The Convention gives the Caspian Sea special legal status, clarifying the maritime boundaries of each surrounding country.

It states that the development of seabed reserves will be regulated by separate deals between Caspian nations, in line with international law.

It also allows each party to lay pipelines offshore with consent only from the neighboring states affected, rather than from all Caspian Sea nations.

The agreement effectively acknowledges existing situation with cross-border oil and gas fields.

It’s been quite a long time since Russia, Kazakhstan and Azerbaijan agreed on the development of natural resources of the Northern Caspian.

It allowed LUKOIL to start the development of the Caspian Sea bed’s Russian sector, setting the ground for ten field discoveries in the region with the combined recoverable reserves of 1 billion tons of oil equivalent.

In particular, Y. Korchagin field was discovered in 2000 and became the first field put on stream by LUKOIL in the Caspian. The field started producing in 2010.

V. Filanovsky field, discovered by LUKOIL in 2005, is the largest oil field in the Russian sector of the Caspian Sea, with initial recoverable reserves of 129 million tons of oil and 30 billion cubic meters of gas. Commercial production at the field started on October 31, 2016.

On the contrary, a number of South Caspian fields and exploration blocks has yet to be divided between Azerbaijan, Iran and Turkmenistan.

Another disputed issue is the Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan to Europe.

With Convention signed, this project is becoming mostly commercial, depending on such issues as infrastructure constrains or European demand for natural gas.