Baku, August 22 (AZERTAC). The Caspian Research Institute has published an article entitled “The Future of the Moscow-Baku Relationship”.

The article says: “Vladimir Putin`s trip to Baku on 14 August drew significant media attention. The first visit by the Russian leader in seven years was bound to be significant, and even though Putin left without any major deals being signed, the trip has certainly helped to normalise relations between Baku and Moscow. Perhaps most significantly, the tone and results of the trip suggest that Russia is increasingly getting used to dealing with Azerbaijan as an equal rather than as a former satellite.

Putin`s choice of companions gives some indication of the priorities on his one-day visit. He was accompanied by the presidents of Russia`s biggest oil companies Rosneft and Lukoil, and sailing into Baku`s port were two warships from Russia`s Caspian Flotilla. Energy and security were the order of the day.

On the energy front, Rosneft President Igor Sechin signed a deal with Azerbaijan`s state energy company SOCAR, pledging “full-fledged energy cooperation” in both upstream (exploration and production) and downstream (marketing and infrastructure).

Opinion on the significance of the deal has been mixed, with Reuters noting that it named no specific project on which the two sides will collaborate. After a preparatory visit by Sechin in July, it had been reported that Rosneft was planning to take a stake in Azerbaijan`s giant Absheron gasfield.

That would have been a significant development: Russia`s presence in Azerbaijan`s oil and gas industry is extremely limited compared to Western companies, reflecting Baku`s wider geopolitical priorities. For Rosneft to take a stake in one of the most important new generation of Azerbaijani gasfields would have been a significant symbol of a much closer partnership.

So although Azerbaijan may now be willing to accept a greater Russian role in its oil and gas industry, Russia will have to work hard for it: the power relationship between them is very different to what it was ten or fifteen years ago.

Moscow and Baku have a generally good relationship in the Caspian, although they remain divided on the permissibility of a Trans-Caspian Pipeline from Turkmenistan. Russia claims that the project requires consent from all five littoral states, while Azerbaijan insists that it`s a matter only for the participating states.

Both sides are somewhat concerned by the recent increase in Iranian naval power in the Caspian - Russia because it risks eroding the military superiority of its Caspian Flotilla, and Azerbaijan because of its maritime border dispute with Iran. Although some saw the arrival of the Russian warships as a demonstration of power directed at Azerbaijan, it may have been a demonstration of support in the face of Iran`s growing naval forces and, coming shortly after Iranian warships visited the Caspian Flotilla`s home port of Astrakhan, as a way to reassure Baku.

President Aliyev praised the high value of the arms trade between the two, which he said is worth $4 billion. Arms sales allow Russia to pursue its objective of maintaining a degree of parity between Azerbaijan and Armenia, to which it also supplies military equipment; but it also allows Baku to maintain its relations with Moscow on an equal, businesslike footing.

This appears to be the evolving model for Azerbaijan-Russia relations as they become warmer after several years of frostiness. Certain challenges will remain - particularly on Nagorno-Karabakh and Caspian projects - but the relationship is set to become increasingly pragmatic as Russia realises that it must treat Azerbaijan as an equal partner and not as an imperial subject.”