Turkmenistan has named an ambassador to neighboring Azerbaijan seven years after recalling its envoy during a dispute over rival claims to Caspian Sea hydrocarbon resources, the state newspaper Neutral Turkmenistan reported Friday.
Improving relations between the two energy-rich nations offers a glimmer of hope to a proposal to build a gas pipeline circumventing Russia that has been strongly backed by the European Union and the U.S.
Turkmenistan has sought to mend ties with Azerbaijan since the death in December 2006 of Turkmenistan's eccentric former leader Saparmurat Niyazov.
Earlier this month, the countries sealed an agreement to settle an outstanding debt for Turkmen gas supplies. Under the deal, Azerbaijan will pay $44.8 million for gas supplied in the early 1990s.
Turkmenistan's former consul general in Turkey, Annamammed Mamedov, has been named as ambassador to Azerbaijan, the newspaper reported.
Turkmenistan closed its embassy in Azerbaijan's capital, Baku, in June 2001 after a disagreement over the ownership of oil fields situated in a border area of the Caspian Sea. Turkmenistan and Azerbaijan have long shorelines on opposite sides of the inland sea.
Bilateral ties have been boosted by shared interest in developing a trans-Caspian pipeline.
Turkmen President Gurbanguli Berdymukhamedov has said repeatedly in recent months that his government is prepared to discuss plans for the pipeline.
Last month, Azerbaijani state-owned oil company SOCAR announced it awarded U.S. firm KBR Inc. (KBR) a contract to conduct a feasibility study for an oil and gas pipeline crossing the Caspian.
Territorial disagreements over energy resources remain, however.