Wednesday, May 17, 2000

Caspian oil find 'largest in 20 years'

Washington: A consortium of Western oil companies has found a vast petroleum reserve in the Caspian Sea off the coast of Kazakhstan that may well be the largest oil discovery anywhere in the world in the past 20 years, according to United States officials and industry sources.

While efforts to map the confines of the vast field have just begun after nine months of drilling, initial estimates of its size range from 8 billion to more than 50 billion barrels of oil.

If the 800-square-kilometre deposit, called the Kashagan field, proves to be anywhere near the higher estimate, it could surpass the size of the North Sea fields. The last oil find of comparable size was in 1979, also in Kazakhstan, when it was part of the Soviet Union. That field, located onshore at Tengiz, is now being exploited by an international consortium led by the US oil company Chevron Corp.

The Prime Minister of Kazakhstan, Mr Qasymzhomart Toqaev, announced last Tuesday that the consortium had found "big deposits of oil" but refused to speculate about the size.

The discovery should lead to accelerated competition between the US and Russia for control over pipelines being built, or planned, to transport growing volumes of Caspian oil to markets in Europe.

The US Government has been promoting the construction of a $A4.16 billion, 1,600-kilometre pipeline running from Baku, the capital of Azerbaijan on the western side of the Caspian, through Georgia to the Turkish port of Ceyhan on the Mediterranean coast. US officials want to prevent any Caspian pipelines from running south through Iran and would also like to stop Russia dominating all the export routes.

But the proposed Baku-to-Ceyhan pipeline, capable of carrying a million barrels a day, needs more Caspian oil to make it commercially viable. US officials are hoping that Kazakhstan will solve this problem by exporting more of its crude to Azerbaijan across the Caspian in barges, or under it through a pipeline.

The Washington Post

http://www.smh.com.au/news/0005/17/world/world3.html

-- Martin Thompson (mthom1927@aol.com), May 16, 2000