WASHINGTON, DC, July 28 -- The US has made substantial progress in its efforts to help Central Asian nations bring their oil and gas resources to markets, a US Department of State official told a US House subcommittee on July 25.
"Much remains to be done, however, and continued robust US engagement is required to push forward the next phase of energy development and provide the political space for the countries of the region to pursue their national self-interests," said Steven R. Mann, principal deputy assistant secretary of state for South and Central Asian affairs.
US policy to promote oil and gas development in countries around the Caspian Sea emphasizes the use of best commercial standards and financial transparency, he said in written testimony submitted to the House International Relations Committee's Middle East and Central Asia subcommittee.
Completion of the Caspian Pipeline Consortium's oil pipeline from Kazakhstan to Novorossiysk on the Black Sea in Russia and inauguration of the oil pipeline from Baku, Azerbaijan, to Ceyhan on Turkey's Mediterranean Coast reflect the policy's success, Mann said.
Construction of the South Caucasus Pipeline initially will bring Azerbaijani gas to Europe, with the possibility that gas from Turkmenistan and Kazakhstan may cross the Caspian Sea and also use the system, he added.
The US is encouraging countries in the region and the European Union to move forward quickly on the project, according to another witness, Lana Ekimoff, director of Russian and Eurasian Affairs in US Department of Energy's policy and international affairs office.
"An important step in this process is to encourage more surveys of gas reserves in the offshore regions of the Caspian in Azerbaijan to reassure potential investors and consumers that there are sufficient reserves to justify investment in pipeline infrastructure," Ekimoff said in her written testimony.
Mann said, "Our pipeline policy—a policy of antimonopoly—is changing the landscape of Eurasia in an important and welcome way."
With the completion of the first phase of the East-West Energy Corridor, Mann said the region must now press on with the second phase of supporting new energy routes out of Central Asia."
Azerbaijan and Kazakhstan officials signed an agreement on June 16 to facilitate Kazakshstani oil's access to the Baku-to-Ceyhan pipeline, Mann said. This will give Kazakhstan additional capacity to export large volumes of crude to markets when the Kashagan field comes on stream in 2009-10.
Mann said countries bordering the Caspian Sea are increasingly significant oil and gas suppliers. Kazakhstan and Turkmenistan hold the largest reserves, but the extent of Turkmenistan's reserves remains unclear and the country remains dependent on Russia's pipeline system to bring its gas to market, he said.
Northern Caspian countries have reached delineation agreements, but Iran and Turkmenistan have not joined them because, among other reasons, of Iranian insistence on its claim to one fifth of the Caspian, Mann said.
"Lack of agreement has impeded exploration and development of hydrocarbon resources in disputed waters, and there remains the potential for conflict in the southern Caspian where promising offshore deposits of oil and gas remain to be developed," he said.
Other witnesses indicated that Russia, China, Iran, and other countries oppose US energy initiatives in the area around the Caspian Sea.
Contact Nick Snow at [email protected].