VERDI'S MUSIC "PLAYED" IN BAKU

In mid-November, Baku was once again the focus of attention on the world's news wires. An energy summit was held in Baku on 14 November, picking up the baton from Krakow, Vilnius and Kiev. However, unlike the previous energy summits, Baku brought together a record number of heads of state and government. And this was no accident.

Following the Georgian-Russian clash, which led to a serious crisis in relations between the USA and the EU on the one hand and Russia on the other, many experts predicted serious problems for the implementation of energy projects passing through our country. Indeed, trade and transit operations through Georgian territory were suspended and Azerbaijan was forced to divert flows of export oil to Russia, while Azerbaijan's own investments found themselves in a "high risk zone". Georgia's actions and Moscow's military response undermined trust in regional projects and played into the hands of opponents of the very idea of diversifying sources of raw materials and their delivery to the world market.

Some even thought that the situation favoured the Southern Stream route over the Nabucco project (so named after Giuseppe Verdi's opera) and that Azerbaijan had ended up in "energy isolation".

But today this scepticism is being replaced with rather more optimism and higher expectations. Baku has made a considerable contribution to this mood because, during August-November, a difficult period for the foreign and domestic policy of Azerbaijan, it consistently pursued a policy of respect for, and constructive dialogue with, the leading regional and international players - Russia, the USA, the EU, Turkey and Kazakhstan. In fact, immediately before the summit - in early November -Kazakhstan began transporting its oil through the Baku-Tbilisi-Ceyhan pipeline under an agreement between the BTC pipeline company and Tengiz Chevroil. It is expected that, by the end of the year, up to 300 tonnes of Kazakh oil will have been transported by this route. With exploitation of the Kashagan oil deposit underway, the volume of oil transited by BTC from the eastern coast of the Caspian will reach 15-20 million by 2013.

An important feature of this stage was that Baku supplemented its active energy diplomacy with strenuous efforts towards a settlement of the Nagornyy Karabakh conflict. As a result, Azerbaijan, Armenia and Russia signed a declaration in Mayendorf Castle (Moscow Region) on 2 November; this was the first document signed by leaders of the conflicting sides since 1994. Many so-called "experts" have already put this declaration down as "marking time" and "an empty document containing nothing new". But in our view, this document should be assessed more soberly and in a wider regional context. Such an assessment allows us to conclude that it may prove to be a vital starting point for successful development of the whole settlement process.

However, this is not the only reason that the declaration is so important. Its significance at this specific point in the development of the regional situation is that it was a crucial move to ease tensions in the region. The two sides confirmed in the declaration that "they will help improve the situation in the South Caucasus and ensure an atmosphere of stability and security in the region on the basis of the principles and norms of international law and the decisions and documents adopted in this regard, and this will create favourable conditions for economic development and comprehensive cooperation in the region." For most Western leaders and investors, these obligations undertaken by an influential "player" like Russia - improving the situation in the region, ensuring an atmosphere of stability and security and creating favourable conditions for economic development and comprehensive cooperation - were an important indication of increased stability in the explosive South Caucasus.

In this context, the success of the Baku energy summit was to be expected, as it brought together an impressive team of Presidents and Prime Ministers. Our neighbours and partners believed in the region, its power and ability to implement projects based on the principle of diversification - a principle that is in the interests of energy security both for the whole European region and for its individual member states.