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

ConocoPhillips slashes 2015 capital budget

12/08/2014 ConocoPhillips has elected to reduce its 2015 capital budget to $13.5 billion, down 20% compared with this year’s budget. The news comes on the hee...

BLM issues final SEIS for Greater Mooses Tooth project in NPR-A

10/30/2014 The US Bureau of Land Management released its final supplemental environmental impact statement for the proposed Greater Mooses Tooth (GMT1) oil an...

Western gulf lease sale attracts $110 million in high bids

08/20/2014 Gulf of Mexico western planning area Lease Sale 238 drew 93 bids from 14 companies over 81 blocks covering 433,823 acres, totaling $109,951,644 in ...

ConocoPhillips, Enap sign deal to study unconventional oil, gas in Chile

08/06/2014 ConocoPhillips and Chile’s state oil company Empresa Nacional del Petroleo (Enap) have signed a technical agreement to jointly conduct geological, ...

Oando completes purchase of Nigeria assets from ConocoPhillips

07/30/2014 Oando Energy Resources (OER), a Calgary-based subsidiary of Oando PLC, has completed its acquisition of the Nigeria upstream business of ConocoPhil...

ConocoPhillips, Suncor join Shell in deepwater exploration off Nova Scotia

06/11/2014

ConocoPhillips and Suncor Energy Inc. are joining Shell Canada as partners in exploring the deepwater Shelburne basin off Nova Scotia.

ConocoPhillips raises estimates on Eagle Ford recoverable resources, production

04/11/2014 ConocoPhillips has increased its estimated resource base in the Eagle Ford play to 2.5 billion bbl of oil in place from 1.8 billion bbl, as well as...

ConocoPhillips reports higher 2013 earnings

02/10/2014 ConocoPhillips reported full-year earnings of $9.2 billion in 2013, an increase from the $8.4 billion totaled in 2012, which included $1.2 billion ...

ConocoPhillips reports higher 2013 earnings, expects higher production in 2014

01/31/2014 ConocoPhillips reported full-year earnings of $9.2 billion in 2013, an increase from the $8.4 billion totaled in 2012, which included $1.2 billion ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


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