OTC: Caspian Sea region to become major non-OPEC oil supplier by 2025

By Paula Dittrick
Senior Staff Writer

HOUSTON, May 6 -- The Caspian Sea region is positioned to become a major contributor of non-OPEC oil supply growth in coming years although the region still has some obstacles to overcome, panelists said Monday at the Offshore Technology Conference.

A US Energy Information Administration spokesman said the Caspian region currently produces 1.5 million b/d of total liquids. Proved reserves under the Caspian Sea and in the surrounding coastal areas, excluding Russia and Iran, range from 17-33 billion bbl depending upon the source.

W. Calvin Kilgore, director of EIA's office of energy markets and end use, said his office predicts that Caspian production will reach 3.4-4 million b/d of total liquids by 2015.

EIA recently forecast that the Organization of Petroleum Exporting Countries will produce nearly 56 million b/d by 2025, compared with current production of 27 million b/d.

Meanwhile, Russia's oil production is expected to start falling off after 2015, while the Caspian Sea region is expected to show major incremental increases during 2020-25 in both oil and natural gas, Kilgore said.

US energy policy
Candy Green, international energy officer for the US State Department, said US energy policy regarding the Caspian Sea region during the 1990s focused on transportation issues. Progress has been made on pipeline route issues, she said, adding, "That does not mean that all the problems have gone away."

Regional challenges still include the need for respecting contracts, strengthening democracy, transparent management of oil and gas earnings, and the curtailment of corruption, Green said.

"We all win when transparency and free markets prevail," Green said, adding that development of the Caspian Sea region's reserves and infrastructure hinges upon financing. The region needs $10-12 billion in 3-5 years for oil field services alone, she said.

Regarding Russia, Green said the US government sees "merit in involving the private sector in Russian pipeline development." Russia is expected to issue a report regarding its pipeline development later this month, she noted.

"Russia will need to allow competition in gas transportation," Green said. "We continue to see room for improvement in the investment climate."

Overall, billions upon billions of dollars worth of investments are needed to tap into Russia and the Caspian Sea region's energy potential, said Amy Jaffe, senior energy advisor to the James A. Baker III Institute for Public Policy of Rice University.

"Companies that want to go to capital markets will have to exhibit transparency . . . . It's the need for capital that will drive the end of corruption," Jaffe predicted.

Corporate policy
Thomas Knudson, ConocoPhillips senior vice-president of government affairs and communications, said the world needs the Caspian's resources, and in turn, the Caspian region needs more private investment.

In the past 3-4 years, public oil and gas companies have shifted their primary focus from building production volumes to trying to ensure predictable earnings and quality returns for shareholders, Knudson said.

Oil and gas companies are looking to create legacy assets while seeking stable, predictable, and transparent fiscal and tax regimes. This is true regardless of whether the project is in the Caspian Sea, the North Sea, or the Gulf of Mexico, he said.

In its quest for legacy assets, ConocoPhillips also looks for market-driven development prospects having secure, dependable transportation options, he said. ConocoPhillips will not develop giant fields unless it also sees viable markets and a means of reaching those customers, he said.

ConocoPhillips has a stake in giant Kashagan oil field in the Caspian Sea. Kashagan is expected to begin producing in 3-4 years (OGJ, Mar. 17, 2003, p. 42).

Contact Paula Dittrick at paulad@ogjonline.com

Related Articles

EIA: US oil output fell 50,000 b/d in May

07/07/2015 Total US crude oil production dropped 50,000 b/d in May compared with April and is expected to continue falling through early 2016 before growth re...

BLM approves ROW for Elko gas pipeline expansion project

07/07/2015 The US Bureau of Land Management’s Tuscarora, Nev., field office signed a decision record approving a right-of-way for Paiute Pipeline Co.’s (PPC) ...

Obama urged by IPAA president to lift ban on US crude exports

07/07/2015 Commending the administration for its actions allowing some condensate to be exported as a petroleum product, Independent Petroleum Association of ...

Cidade de Itaguai FPSO anchors in Lula field

07/07/2015 Petroleo Brasileiro SA (Petrobras) reported that the Cidade de Itaguai floating production, storage, and offloading vessel has arrived at the Irace...

AER shuts in 16 Murphy Oil sites in Peace River region for noncompliance

07/07/2015 Alberta Energy Regulator said it has shut in or partially shut in 16 sites operated by Murphy Oil Co. Ltd. in the Peace River region. The sites wer...

MARKET WATCH: NYMEX, Brent oil prices take dive on world oil oversupply concerns

07/07/2015 US light, sweet crude oil prices plummeted more than $4/bbl on the New York market July 6, marking a 5-month low, while Brent crude oil prices on t...

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Production ramps up from Sunrise oil sands project

07/06/2015 Husky Energy Inc., Calgary, reported that 25 well pairs are now on production at its Sunrise oil sands project in northeastern Alberta. Steaming is...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST



On Demand

Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected