KAZAKHSTAN SEEKS TO STEP UP CRUDE OIL EXPORT CAPABILITIES

The Commonwealth of Independent States' Kazakhstan republic is driving to achieve international export capability for its crude oil production. Latest official figures showed Kazakhstan producing 532,000 b/d, or a little more than 5% of the C.I.S. total of 10.292 million b/d (OGJ, Mar. 2, p. 22). As part of its oil export campaign, Kazakhstan agreed with Oman to a joint venture pipeline to ship oil from Kazakh fields, including supergiant Tengiz, earmarked for further development by a

June 22, 1992

3 min read

The Commonwealth of Independent States' Kazakhstan republic is driving to achieve international export capability for its crude oil production.

Latest official figures showed Kazakhstan producing 532,000 b/d, or a little more than 5% of the C.I.S. total of 10.292 million b/d (OGJ, Mar. 2, p. 22).

As part of its oil export campaign, Kazakhstan agreed with Oman to a joint venture pipeline to ship oil from Kazakh fields, including supergiant Tengiz, earmarked for further development by a Chevron Corp. joint venture (OGJ, May 18, p. 35).

In addition, Kazakh leaders were scheduled to conduct 3 days of talks last week with Turkish officials covering construction of a crude oil pipeline to the Mediterranean Sea through Turkey.

KAZAKH-OMANI PLANS

The 50-50 Kazakh-Omani combine plans to design, finance, lay, and operate a pipeline system that will transport crude oil from Tengiz and other sites in western Kazakhstan to present and future deepwater export terminals.

Possible shipments to export sites could be to the southeast to the Persian Gulf, southwest to the Mediterranean Sea, or west to the Black Sea. Final selection will depend in part on political and economic factors, including market value of the oil at each terminal.

Oman said the project will take about 3 years to complete. The pipeline is to reach its 1.5 million b/d capacity within 12 years of start-up.

Estimated construction costs range from $700 million to $1.6 billion, depending on the route selected and the extent to which present facilities can be used.

Oman is to provide or arrange financing as required by Kazakhstan. Credit support will be provided by Kazakhstan, which will contribute petroleum resources to the venture.

Oil sale revenues will be used as partial repayment of debt incurred to finance the system.

Oman will provide technical, design, operating, and marketing assistance to the venture through OOC Ltd., owned by Oman's Ministry of Petroleum and Minerals. OOC is the vehicle for investments in oil ventures outside Oman.

The pipeline could serve other parties outside of Kazakhstan and provide crude oil to refining or other processing plants along the route or at the terminal site.

Preliminary evaluations have identified eight possible routes. Final selection also will depend on detailed engineering studies and negotiations with right-of-way owners.

The states the pipeline may cross include Russia, Azerbaijan, Georgia, Turkmenistan, Iran, and Turkey.

The present equal split of ownership in the venture may change as other members are admitted.

KAZAKH-TURKISH TALKS

Separately, Beijing's Xinhua News Agency quoted Turkey's semiofficial Anatolia News Agency as saving the talks between Kazakh and Turkish officials were to focus on pipeline costs and technical details.

Anatolia said under an agreement by the two governments last April, Kazakh crude oil is to reach the Mediterranean ports of Yumurtalik or Dortyol through a pipeline crossing Azerbaijan.

The system also would transport Azeri oil "when necessary."

No further details were available.