Energy Resources and Foreign Policy of the small post-soviet states and its reflection on the regional stability of South Caucasus Region

 Energy Resources and Foreign Policy of the small post-soviet states and its reflection on the regional stability of South Caucasus Region

 

 By: Nika Chitadze. Ph.D. 

 

Director of the Center for International Studies. Tbilisi, Georgia 

 

Abstract 

 

The purpose of this research paper is to analyze the interconnection between energy resources, oil and gas in particular, and national security and foreign policies of the post-soviet small/weak states of South Caucasus. It is proposed that the formation of foreign policies of Armenia, Azerbaijan, and Georgia are related not only to great powers but also to the internal economic factors such as oil and gas reserves or respective export and/or transit capabilities of energy resources. 

 

This research argues that states with rich oil and gas reserves or export/transit possibilities (oil and gas factor) are more likely to get rid of the influence of the neighboring great power - Russia, and, thus, to distance themselves from the military alliances and economic/political international organizations created by Moscow. In contrast to this, the state with no oil or gas reserves and no export and/or transit capabilities stay closely aligned with Russia, which is significantly caused by the energy aspects. 

 

Keywords: South Caucasus, Oil, Gas, Energy Resources, Foreign Policy.

 

Introduction

 

The energy factor has come to world politics with the beginning of an industrial era. Before that people were fighting for territories (pastures and fields), or deposits and control over trade routes, and so on. The XX century has added to the fight for energy resources carried on using all available economic, diplomatic, and military ways. Aspiration for control over energy resources has turned into a major factor in world history.

 

After the collapse of USSR, the new geopolitical realities have been created in global politics and especially in the post-soviet space. Together with such a positive event as the disintegration of the last totalitarian empire - USSR, at the beginning of the 1990s of the 20th century, at the same time, several political and interethnic conflicts have been emerged in the post-soviet space, first of all in the Black Sea/Caspian Region.

 

By this, competition in the Black Sea/Caspian Region grounds on prospect estimations of the Caspian oil and gas scopes. And here it’s noteworthy that the states of the Black Sea/Caspian area evaluate noticeable growth of the scopes of Caspian gas production as a serious and promising factor of assurance of their energy security. Black Sea/Caspian states act in the role of energy “bridge” to deliver Caspian hydrocarbons to Europe. To our mind exactly the node Pre-Caspian – Black Sea region is turning into the frame of new international relations, which are in the stage of formation, reserving a possibility of turning the two regions into a separate geopolitical area.

 

The issue of the geopolitical configuration of forces in the Black Sea/Caspian Region is greatly connected with the trend of foreign powers influencing the processes, happening within its borders and out of their lines and with the establishment of new exporting pipelines by-passing Russia to minimize the Moscow`s place and role in the region.

 

The small states of the South Caucasus: Quantitative and Qualitative Indicators

 

According to the existing quantitative and qualitative indicators, Georgia, Armenia, and Azerbaijan are considered small countries. In particular, the population and area of ​​all three countries of the South Caucasus are small - about 3 million people live in Armenia and Georgia, and 9 million in Azerbaijan; The area of ​​Armenia is 29 thousand square meters. Km does not exceed, Georgia - 69 thousand, and Azerbaijan - 86 thousand (CIA, The World Factbook, 2016). The military strength of the South Caucasus countries (military infrastructure, military personnel, weapons, etc.) is insignificant compared to other large states, however, it should be noted that Azerbaijan's growing military budget ($ 1.6 billion) and upgraded military equipment are outdated by outdated Russian equipment in Armenia and It makes some difference compared to the small military budget of Georgia (the military budget of Armenia does not exceed 512 thousand US dollars, and the budget of Georgia - 380 thousand). The GDP per capita of the South Caucasus countries is also small: Armenia - $ 3,936.8; Azerbaijan - $ 4,131.6; Georgia - $ 4,078.3 (World Bank, 2017).

 

As for the qualitative indicators, the most important in this regard is the inability of the South Caucasus states to influence the international arena independently or to change the status quo. Neither Georgia, nor Armenia, nor Azerbaijan could independently change the status quo in the region; Moreover, these countries have not been able to secure their national interests since the 1990s, which is reflected primarily in unresolved internal conflicts: in the 21st century, the Karabakh issue remains an unresolved issue, despite the wishes of the parties involved; This is evidenced by the increasing number of military clashes in recent years (De Waal, 2017). And the self-proclaimed republics of South Ossetia and Abkhazia pose a threat to Georgia's territorial integrity and, consequently, to Georgia's Euro-Atlantic integration (Litra and Chkhikvadze, 2016).

It is easy to see that the conflicts in the South Caucasus are easy, likely, the conflicts in the South Caucasus are mainly in the interest of a third party, namely Russia. , 2009).

 

The distinguishing energy factor

 

In comparing Georgia, Armenia, and Azerbaijan, the paper considers, as already mentioned, the gas and oil factor - reserves, export, and/or transit opportunities - as a factor of some importance in the foreign policy of these countries.

 

Energy policy of Azerbaijan

 

Azerbaijan is one of the first countries, where the oil, and later gas industry was developed. Its history is connected to the fortunes of petroleum. The state is ready to become an important oil and gas producer once again.

 

Resources

 

According to the statistical information for the second decade of the XXI Century, Azerbaijan produces about 873,260 barrels (138,837 m3) of oil per day and 29 billion cubic meters of gas per year (SOCAR, 2014).

 

As a result of modern methods of exploration being employed, four new multi-reservoir fields were opened in the Caspian at a depth of 200 meters: Gunashli (1979), Chirag (1985), Azeri (1988), and Kapaz (1989). 

Only the Azeri-Chirag-Guneshli complex contains more than 16 billion barrels of oil in place (Offshore, Technology, 2017)

 

Natural gas production has become more important in recent years, especially in Baku, where some of the oil wells have been exhausted. Proven reserves as of the beginning of the 21-st century totaled 1.37 trillion cubic meters (Eurasianet, 2017). 

 

The State Oil Fund of Azerbaijan 

 

The State Oil Fund of Azerbaijan was founded at the decree of former president Heydar Aliyev on 29 December 1999 and started to operate in 2001 (ARDNF, 2017). It is a sovereign wealth fund where surplus revenues of the oil industry are saved. The main purposes of the Fund are to maintain macroeconomic stability and through decreasing dependence on oil and gas revenues and to foster the development of the non-oil sector, to put investments in the development of new technologies, to save revenues for future generations, and to release funds for those projects, which represent the national interests of the country. The approximate amount of the Fund's financial reserves are 34.7 billion dollars (Investopedia, 2017). Fund's assets may be used for strategically important infrastructure projects but not for government borrowing. The strict target asset allocation of the Fund decreases investment risks. Funds flow mainly from the State Oil Company of Azerbaijan. 

 

Energy policy of Armenia

 

Unlike Azerbaijan, Armenia does not have its energy resources. They are mainly imported from Russia. As a result, about 83% of the gas, having been imported to Armenia is Russian. Up to 2 billion cubic meters of Russian gas is supplied to Armenia annually through the North Caucasus-Transcaucasia (Mozdok-Tbilisi-Yerevan) main pipeline, which was put into operation in the 1970s.).

 

The natural gas market in Armenia is monopolized entirely by "Gazprom Armenia", a subsidiary of the Russian Gazprom, with a vertically integrated structure. Gazprom also owns the Armenian part of the Iran-Armenia pipeline (up to 140 km long; it has been operating since 2007; its planned maximum capacity is 2.3 billion cubic meters per year).

 

Due to some technical (and in reality political reasons), as a result, in the future, the export of Iranian gas via Armenia to the West will be technically complicated. As a result, Gazprom will not have a competitor in terms of European gas supply and Armenia will not have an alternative source of supply (Socor, 2007). With all this in mind, the amount of Iranian gas imported by Armenia is gradually declining every year. For example, in 2017, only 380 million cubic meters. of Iranian gas was imported (Neftegaz.ru, 2018).

 

Georgia - a country with oil and gas transit opportunities

 

Unlike neighboring Armenia, Georgia is not militarily dependent on neighboring Russia, especially since its northern neighbor was directly involved in the military conflicts against Georgia at the beginning of the 90th (in Abkhazia and former South Ossetian Autonomous District) and direct military aggression against Georgia in 2008. Georgia imports military equipment and weapons mainly from the West. It should also be noted that Georgia has the smallest military budget among its neighbors; The country mainly purchases defense weapons and equipment (combat vehicles, light or heavy weapons) and conducts joint military exercises with western partners, first of all, NATO member states.

 

Due to its special geographical location, Georgia is important for major powers, especially the United States and the European Union, in the context of existing and planned energy projects aimed at relieving European countries of their dependence on Russian gas and, to some extent, balancing Russian influence. These projects are often cited as a source of "alternative supplies" to Europe, which irritates Russia.  

 

Thus, from the end of the twentieth century till now, Georgia has been an energy corridor connecting Asia and Europe, largely as a result of its geographical location and political will. 

 

Many Economic analysts suggest that the corridor has more of a security than an economic function. After the collapse of the Soviet system, Georgia could have either stayed in Russia’s orbit as a satellite or taken a Western orientation and an independent stance. It chose the second option, not only leaving Russia’s sphere of influence but competing with it as east to the west energy supplier, while Russia claimed it had the sole right to fulfill this function. Of course, Moscow reacted to this and started taking all possible and impossible steps to damage Georgia’s image as a transit country.

 

The idea of the Europe - Caucasus - Asia transport corridor in Georgia was born in 1992. In 1993, in the City of Brussels, European Commission invited South and Central Asia’s eight country’s Ministerial Conference where was risen idea of ​​a trans-Caspian pipeline’s development that followed the adoption of a declaration, which was a base of the regional program – TRACECA. This was a preconditioning strategy to restore the so-called “Great Silk Road”.

 

Importance of existing pipelines on Georgia’s territory for the ensuring energy security

 

Due to the important geopolitical location between East and West and because of its foreign political orientation, Georgia was actively involved in the Caspian energy 

projects implementation process. In this case, this South Caucasian country can play a very important role as a transit state in providing Black Sea countries with oil and gas, which as it is known is transported and will be transported in the future from Azerbaijan and 

Central Asia. There are projects, which are already implemented and projects, which can be implemented. 

Among the projects, which have started functioning are the following:    

 

Baku-Supsa oil pipeline: 

 

Implementation of the project started on April 17, 1999, and by this pipeline is transported more than 5 million tones of oil per year. Through the Georgian port Supsa, part of the oil by tankers is exported to the Bulgarian port of Burgas, Ukrainian port Odesa and Romanian port Constanta In this case, a very important role can play oil refinery factory in Constanta, which can produce more than 35 million tones of oil products per year (Chitadze, 2016). 

 

Baku-Tbilisi-Ceyhan oil pipeline:

 

About the Baku-Tbilisi-Ceyhan pipeline, agreement about construction of this pipeline was sighed on 18 November 1999 in Istanbul. As it is known, the pipeline has already started its functioning since 2005. The capacity of this pipeline is about 50 million tonnes, but, if the pipeline receives an additional volume of oil from the Kazakh port Aktay, capacity will be increased to 80 million tonnes per year (Chitadze, 2016).

 

Baku-Tbilisi-Erzurum Gas Pipeline

 

South Caucasus Pipeline (also known as Baku–Tbilisi–Erzurum Pipeline, BTE pipeline, or Shah Deniz Pipeline) is a natural gas pipeline from the Shah Deniz gas field in the Azerbaijan sector of the Caspian Sea via the territory of Georgia to Turkey. It is constructed in parallel to the Baku–Tbilisi–Ceyhan pipeline.

 

On 21 May 2006, the commissioning gas was pumped into the pipeline from the Sangachal Terminal. First deliveries through the pipeline commenced on 30 September 2006. Deliveries of gas from Shah Deniz gas field started on 15 December 2006.

 

During the military aggression of Russia against Georgia in August 2008, the pipeline operator BP closed the pipeline for several days for safety reasons (NHST Media Group. 2008).

 

The 42-inch (1,070 mm) diameter gas pipeline runs in the same corridor as the Baku–Tbilisi–Ceyhan pipeline. It is 692 kilometers (430 mi) long, and, 442 kilometers (275 mi) is laid in Azerbaijan, and 248 kilometers (154 mi) in Georgia.

 

The initial capacity of the pipeline is 8.8 billion cubic meters (310 billion cubic feet) of gas per year, but some experts and government officials consider, that its capacity could be increased to 25 billion cubic meters (880 billion cubic feet) per year (Chitadze, 2015). 

 

From this project, Georgia as a transit state annually receives 5% of the whole volume of gas (about 0.5 billion cubic meters). At this stage, it is being considered the project Shah Deniz Stage 2, is a giant project, within of which the additional pipeline will be constructed and that will add a further 16 billion cubic meters per year of gas production to the approximately 9 billion cubic meters produced by Shah Deniz Stage 1. In the case of the second phase project implementation, it is expected, that Georgia will receive about 400-700 million US Dollars in investments (Chitadze, 2015).

 

Importance of the TANAP project

 

On June 12, 2018, the inauguration day of the starting the TANAP project was held. The Gas Southern corridor takes into consideration the widening of the Baku-Tbilisi-Erzurum gas pipeline construction to the new pipeline – Trans Anatolian Pipeline till the Greek-Turkish border.  

 

 

 In the framework of the new historic project, natural gas will be transported from Azerbaijan`s gas field “Shah Deniz” toward Georgia, Turkey, Greece, Bulgaria, Albania, and Italy. 

The length of the pipeline is 3500 Km. 

 

 

The cost of the southern corridor project is about 40 billion USD, from where $9,3 billion was spent to the Trans Anatolian Pipeline (TANAP), $6 billion – for Trans Adriatic Pipeline (TAP), and $23,8 billion for the second stage of exploration and exploitation activities of the “Shah Deniz” field. 

 

On the same day, during the inauguration day, the US Department of State spread the official declaration, that “The USA fully supports the “Southern Gas corridor”, it realizes the importance of this project toward the diversification of the energy supply of Europe.    

 

About the capacity of this gas pipeline, according to the experts, it would contain about 16 billion cubic meters of natural gas per year with the perspective of the gas volume increasing up to 23 billion cubic meters by 2023, 31 billion cubic meters by 2026, and at the final stage 60 billion cubic meters with the possibilities the transportation of the additional volume of gas supplies from Azerbaijan (in case of the number of compressor stations are increased) and in long-term perspectives if Trans-Caspian Gas Pipeline enters into exploitation from Turkmenistan (Chitadze, 2016) It is expected the pipeline to be connected with Trans Adriatic Pipeline.

 

Armenia – Main foreign policy and national security priorities 

 

From the military point of view, among the three South Caucasus Countries, Russia is mostly dependent on Armenia (especially, that country has no other military partners). 

 

Over the last decade, Moscow has been actively supplying arms to Armenia. Also noteworthy is the importance of the Russian military base 102 on the territory of Armenia, which completely covers the budget of Armenia. Armed weapons acquired from Russia are actively used in the clashes on the Armenia-Azerbaijan border.

 

It is noteworthy that the South Caucasus countries most closely cooperate with Russia in the format of regional international organizations. As early as the 1990s, after declaring independence, Armenia joined the Commonwealth of Independent States (CIS) (formed shortly after the collapse of the Soviet Union) by the initiative of the Russian government. The purpose of the official regional organization was to "prevent the disintegration of the cooperation mechanisms" of the post-Soviet countries (deepening the political, economic, social, and humanitarian dialogue between the member states);

 

One of the most important places in the Russian-Armenian military relations is the cooperation within the structure of the Central Committee of Collective Security Treaty Organization (CSTO). The CSTO is a military-political organization created by the initiative of Russia in the early 1990s. Founders of this organization were Armenia, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan; Later to this organization was joined by Azerbaijan, Georgia, and Belarus. However, in 1999 Azerbaijan, Georgia, and Uzbekistan left the organization. The organization aims to strengthen military cooperation between member states, which also includes providing military assistance in case of a threat.

 

On January 16, 2012, the Permanent Representation of the country to the mentioned regional organization was officially approved by the President of Armenia. In 2015, Armenia took over the five-year chairmanship of the CSTO (Asbarez, 2018).

 

Particular importance in Russian-Armenian relations is attached to the cooperation between the two countries in the field of energy, which is asymmetric and mainly serves the interests of Russia. As already mentioned, Armenia has neither oil nor gas. These resources are mainly imported from Russia. This energy dependence is often reflected in Moscow's years of accumulated debts. In exchange for energy debts, Armenia has had to hand over several strategically important economic facilities to Russia - gas and oil infrastructure, the country's largest cement plant, Razdan power plant, which supplies 40% of the country's electricity (Danielyan, 2003). Most importantly, however, due to its energy dependence on Russia, Armenia also had to change its foreign policy, most clearly in 2013, when the government refused to sign the Association Agreement with the European Union (Deep and Comprehensive Free Trade Agreement (DCFTA) in exchange for the Russian-initiated Customs Union (currently the Eurasian Economic Union), which has been operational since 2015. 

 

Russia, Kazakhstan, Kyrgyzstan, and Belarus become members of this organization before.

 

Armenia's pro-Russian choice was somewhat unexpected as cooperation between Europe and Armenia deepened in recent years. The Partnership and Cooperation Agreement (PCA) between Armenia and the European Union was signed in 1996; In addition, Armenia became a member of the European Union's Neighborhood Policy in 2004 and the Eastern Partnership in 2009 and has been actively negotiating an Association Agreement since 2010. It is noteworthy that during this period, several important reforms were implemented in Armenia with the assistance of the European Union, thanks to which the country has made significant progress in terms of democracy development. For example, according to the World Press Freedom Index, in 2014 Armenia was the leader of the region (World press freedom index, 2014).

 

Thus, despite the progress made with the help of the EU, Armenia eventually opted for membership in the pro-Russian Customs Union, even though the organization is likely to serve to limit the independence of post-Soviet countries and ultimately Russia's long-held aspirations to rebuild the former Soviet Union.

 

The pro-Russian foreign policy course of Armenia remained unchanged even after the change of government in the country in 2018. Moreover, there is an opinion that Pashinyan's victory was achieved with the help of the Russian government (Pinchuk and Osborn, 2018).

 

Armenia's foreign policy choice can be explained by the lack of energy resources in the country, and consequently, energy dependence on Russia. As is well known, Russia often uses energy resources to achieve foreign policy goals (Fiona, 2004; Rutland, 2008).

 

The same thing happened in the case of Armenia. after Armenia declared rapprochement with the EU as a foreign policy priority, the Russian side repeatedly warned the Armenian President that the country's pro-European course would jeopardize Russian-Armenian cooperation. Indeed, in the summer of 2013, a few months before the Eastern Partnership Vilnius Summit, Moscow raised the price of gas for its ally Armenia. As a result, gas for the Armenian population has risen in price by 18% and electricity by 26% (as one-third of Armenia's electricity is generated from fuel power plants); Under the new tariffs, Armenia had to pay $ 270 instead of $ 180 for Russian gas (Armenpress, 2013). All this would add to the already existing debts and pose a significant threat to the country's energy security, especially since there was no alternative source of supply. The Armenian part of the Armenian-Iranian pipeline was already sold to Armrosgaz by the Armenian government. Almost 80% of this company is owned by the Russian Gazprom (Socor, 2007). Therefore, the purchase of alternative Iranian gas would be completely controlled by Russia, or this project would never be implemented.

 

That is why the offer of the Iranian ambassador to Armenia, Mohammad Rice, to buy Iranian gas at a lower price did not receive a response from the Armenian side. The Armenian government realized that cooperation with Iran in the gas field would be impossible at any cost and under any conditions. In addition, Iran, as the main supplier of gas, would not be acceptable to the West if we take into account the international sanctions imposed on Tehran by the US and the EU. 

 

Given all the above, it is clear that one of the most important determinants of Armenia's pro-Russian choice was energy security, and in particular the problems in the gas sector. By rejecting the Association Agreement in 2013 and concluding a deal with Russia, Armenia has finally lost the ability to balance its foreign policy. However, it must be said that the country had no other choice. The rise in natural gas prices would have far more serious consequences, especially given the role of gas in the Armenian economy. Naturally, the "overflow" effect of the economic crisis would have on political stability, the social sphere, and so on. The Armenian government was well aware of this. In 2013, the Armenian Minister of Energy acknowledged that refusing to join the Customs Union / Eurasian Economic Union would pose a serious threat to the country, as it would not be able to repay its accumulated Russian natural gas debt of up to $ 300 million. A similar statement was made by the former President of the country; Serzh Sargsyan noted that his government could not allow the price of gas to almost double, which would lead to an increase in the price of electricity. So, the only solution was to choose a customs union (Ter-Matevosyan, Drnoian, Mkrtchyan, and Yepremyan, 2017). These statements once again underscore the fact that in the case of Armenia, gas has become one of the important factors determining the foreign policy course of the state.

 

The foreign policy of Georgia 

 

Georgia has become a member of US-initiated energy projects and continues its pro-Western policies, primarily in close cooperation with the European Union and the North Atlantic Treaty Organization (NATO). This cooperation dates back to the 1990s when the Partnership and Cooperation Agreement (PCA) with the EU was signed and since 2004 Georgia has been an official member of the European Neighborhood Policy. In addition, Georgia is a participant in several EU regional initiatives (Chitadze, 2011). It was within the framework of these initiatives that the Association Agreement (AA) between Georgia and the European Union was signed in 2013 as part of the Deep and Comprehensive Free Trade Agreement (DCFTA), and since 2017 Georgian citizens have been able to travel to the EU without a visa.

 

As early as the 2002 NATO Prague Summit, Georgia formally stated its desire to become a member of the North Atlantic Alliance, and at the 2008 Bucharest Summit, a formal response was made by NATO - the Alliance believes that Georgia will become a member of NATO (Chitadze, 2008).

 

The National Security Concept of Georgia (2011) emphasizes the importance of the transit role in terms of security and states that “Georgia attaches special importance to strengthening its transit function. To this end, it is ready to be even more actively involved in international energy, transport and communication projects. ”(Georgian National Security Concept, 2011).

 

It should be noted that the Euro-Atlantic course of Georgia's foreign policy is often linked to factors of the country's history, geography, and identity, which implies Georgia's "return to the European family". It was in this context that Georgia needed to get rid of Russian oil and gas.

 

Because if Russian Gazprom would remain the country's main supplier, Georgia would not be able to pursue an active pro-Western foreign policy and, like neighboring Armenia, could not sign the Association Agreement in 2013. Like Armenia, Georgia would come under pressure from its northern neighbor to become a member of Russian-made military alliances and regional international organizations under the Kremlin leadership.

 

Azerbaijan and the external world 

 

Azerbaijan has the strongest military capabilities among the countries of the South Caucasus. The country cooperates with several partner states, which excludes dependence on one of the powers of this country. Thanks to its rich energy resources, Baku has been able to improve its military strength; Thanks to revenues from the oil and gas sector, the country's annual military budget has reached almost $ 2 billion in recent years, equivalent to the total state budget of Armenia (SIPRI Fact Sheet, 2017). The Ministry of Defense Industry of Azerbaijan was established in 2005 with the main purpose of upgrading obsolete Soviet equipment. Some authors believe that the purpose of Azerbaijan's energy resources is to increase military power and, as a result, to solve the problem of Nagorno-Karabakh (Shahbazov, 2017). The main driving force of the country's economy is energy extraction, processing, and Export revenue (energy exports account for 95% of the country's total exports). Therefore, it is natural that the country's energy resources, including the gas industry, are entirely controlled by the state-owned company SOCAR; Under the current legislation, privatization of the energy sector is not allowed (EBRD, 2014). In addition, the document of the National Security Concept of Azerbaijan especially emphasizes the role of Azerbaijan as an energy-rich country in the context of strengthening energy security regionally and internationally; Any attack on the country's energy infrastructure (including pipelines) is considered a threat to national security (Azerbaijan National Security Concept, 2007). All this underscores the strategic importance of gas resources at the state level.

 

It should be noted that in the military sphere, Azerbaijan actively cooperates with Russia, Israel, the United States, the European Union, and Turkey. There were also reports of Turkey opening a military base on the territory of Nakhichevan a few years ago, although, according to the Azerbaijani government, the country will never host foreign military bases on its territory. In 2012, the only foreign base on the territory of Azerbaijan was closed - the Russian-run Gabala radar station, which operated since Soviet times. It should be noted that the Constitution of Azerbaijan itself excludes the existence of any foreign military base on the territory of the country; In addition, in 2011 the country became a member of the "Non-Aligned Movement" (an international organization that unites 120 countries), which opposes unification in any military bloc (Kucera, 2016).

 

Unlike neighboring Armenia, Azerbaijan's foreign policy course is arguably less influenced by external forces (except for the Karabakh issue). In addition to maximizing military force, Azerbaijan has also managed to get rid of its strong neighbor`s (Russia) expansionist policy - despite Moscow's efforts, Azerbaijan has not changed its foreign policy course and has not joined pro-Russian regional initiatives. Moreover, if Armenia became a loyal member of any Russian initiative, in 1999 Azerbaijan left the Russian-initiated Collective Security Treaty Organization; Despite active efforts by the Russian side in 2009, Baku again refused to join the organization; In 2011, Azerbaijan also did not sign the CIS Free Trade Agreement (TENGRINEWS, 2011); Later, it also avoided the Customs Union agreement. According to a Eurasian Development Bank survey, only 38% of the Azerbaijani population was in favor of joining the organization, as the majority saw Russia as an adversary rather than an ally (Nalbandov, 2016). In return, Azerbaijan became a member of the GUAM, an organization set up against Russia's expansionist policies in the region. Along with Azerbaijan, post-Soviet Georgia, Ukraine and Moldova also joined GUAM. Moreover, Azerbaijan has taken important steps in the international arena in terms of cooperation with Russia's main rival - the West; In this regard, Azerbaijan's military assistance in NATO operations in Kosovo and Afghanistan is important, and in 2009 Azerbaijan became one of the main members of the EU Eastern Partnership initiative.

 

It should be noted that despite the above steps, Azerbaijan has not expressed interest in deepening cooperation with either the EU or NATO (as well as pro-Russian organizations). Although Azerbaijan has become a member of the European Union's Eastern Partnership program, it has rejected the most important part of the initiative - the Association Agreement, including the Deep and Comprehensive Free Trade Agreement (DCFTA). It is also true that Azerbaijan has been linked to NATO through the Individual Partnership Action Plan (IPAP), but the government has repeatedly stated that, unlike neighboring Georgia, Baku's ultimate goal is not to join NATO.

 

In analyzing the more or less biased foreign policy course of Azerbaijan, some authors emphasize the importance of the country's special geographical location (Vera, 2012). However, it should be noted that Azerbaijan, Georgia, and Armenia are parts of the same strategically important South Caucasus region, so if we consider only the geographical location factor, it will be impossible to explain the completely different foreign policy courses of the South Caucasus countries.

 

In addition to the geographical factor, some authors explain the fact that Azerbaijan distances itself from regional alliances because of 

 

Armenia-Russia relations (Aslanli, 2010). However, it should be noted that even in the absence of the Armenian factor, Azerbaijan is unlikely to be an active member of organizations created by the leadership of the Greater Neighbor, since, as has already been seen, the post-Soviet states are largely dependent on Russia. Rich energy resources (95% of the country's budget) allow Azerbaijan to get rid of its dependence on Russia.

 

Given all the above, it can be said that in the foreign policy context, Azerbaijan has the opportunity to maneuver relatively more; It can pursue an impartial and flexible foreign policy, i.e. not to join the international military, political, or economic international organizations created by a large neighboring power. Due to its rich energy resources, Azerbaijan does not need Russia's energy "protection", so there is no significant political leverage that Moscow successfully uses about other post-Soviet countries.

 

 

Conclusion

 

The main objective of the study was to determine the relationship between the foreign policy course of the post-Soviet small/weak states in the South Caucasus region and the energy resources, in particular, the oil and gas factor (reserves, exports, and/or transit). Therefore, the main question in the research was the following - what is the connection between the oil and gas factor (reserves, exports, and/or transit) and the foreign policy of small/weak post-Soviet countries in the South Caucasus?

 

This question can be answered as follows: The existence of the oil and gas factor (reserves, exports, and/or transit) allows the small/weak states of the South Caucasus, namely Azerbaijan, Georgia, to free themselves from the influence of great power - Russia and not join its military alliances. And a country that does not have rich oil and gas reserves and has no export and/or transit opportunities, in particular Armenia, together with many other post-soviet republics, which do not possess energy reserves is easily influenced by Russia and, consequently, by its military alliances and regional economic organizations. 

 

The answer is as follows: Azerbaijan has rich oil and gas resources and export opportunities, which in turn has a strategic purpose for the state. Energy resources are an important source of income for this country and also provide an increase in the defense budget. It also helps to increase the importance of Azerbaijan at the international level. Thanks to it, Azerbaijan has the opportunity to balance Russian influence and not aspire to membership in Moscow-led military alliances and regional international organizations. In the case of Georgia, to be free from the import of natural gas from Russia and playing a transit role in energy projects together with Azerbaijan and Turkey are of great foreign policy importance for the country's main goal - Euro-Atlantic integration. It is the "reasonable use of the East-West transit and transport corridor function" that should bring Georgia back into the "Common European Family" (Georgia's Foreign Policy Strategy 2019-2022). Armenia, which has neither rich gas reserves nor export or transit opportunities, is a close ally of Russia and, consequently, a member of its military alliances and regional international organizations. 

Given this attitude, Armenia is unable to free itself from Russian influence. 

 

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