Kazakhstan’s Oil with American Fragrance - ChevronTexaco Selects Azerbaijan

Kazakhstan’s Oil with American Fragrance - ChevronTexaco Selects Azerbaijan

Azerbaijan, Baku, 13 October / Trend corr. S.Aliyev/ A new stage of energy policy pursued by Azerbaijan towards Caspian Sea and Black Sea countries will commence in the second half of October.

Transportation of Kazakhstan's oil produced from the Tengiz field by the Tengizchevroil company will be launched via the Baku-Tbilisi-Ceyhan (BTC) pipeline in October, said ВР Azerbaijan, operator of the BTC.

ChevronTexaco (operator of Tengiz) will transport oil from the onshore field via railway to the Kazakhstan's Aktau port and onwards via tankers to Baku. From Baku port the oil will be supplied to the BP-operated Sangachal terminal containing the entrance to the BTC and will be transported via railway to the Georgian Black Sea ports.

According to an informed source close to the talks with ChevronTexaco, tariff for ChevronTaxaco to pump oil through BTC will total $4 per barrel, which is an economically attractive index. ChevronTexaco purchased the business of Unocal and became the owner of 8.9% stocks of the BTC.

Presently, ChevronTexaco transports its oil through the Caspian Pipeline Consortium (CPC) pipelines to the Novorossiysk port. In 2007, Tengizchevroil LLC produced 13.9mln tons of oil, with 12.8mln tons pumped through CPC export pipe and exported to Novorossiysk. A consumption of oil was transported via railway to Odessa.

According to forecasts, the company intends to improve oil production 1.5 or 2 times this year, which requires new transportation routes. Azerbaijan is the route. Besides transportation of oil via BTC, ChevronTexaco intends to transport oil via railway through Azerbaijan to the Georgian Black Sea Batumi and Kulevi ports.

Thus, sceptics' statements that transportation of Kazakhstan's oil through BTC via Azerbaijan is completely unattractive are groundless. Furthermore, transportation of Chevron oil through this route will be only the first stage. Stocks of four BTC stockholders, who are part of Kashagan field of Kazakhstan, are also guaranteed.

Four BTC stockholders (ENI, INPEX, ConocoPhillips и Total) are working in Kazakh Kashagan field and hold 15% of shares in BTC. It means that the companies will transport about 150,000 barrels of oil a day (planned capacity of pipeline totals to 1mln barrels of oil a day). In January, an agreement was signed on creation of Caucasus Oil Transport System (COTS) through which oil will be pumped to BTC. The cost of the project is estimated at $3bln. COTS will consist of terminals in the Kazakh shore of the Caspian, pipe till the port of Kurik and tanker fleet.

Shareholders of Kashagan and Tengiz projects, who signed memorandum on creation of COTS, will invest in the construction of transport system.

Oil and gas fields Tengiz and Korolevskoye in Atirau province in west of Kazakhstan has been developed by Tengizchevroil, largest oil extracting company, since 1994. It accounts for almost a quarter of oil output of Kazakhstan. Tengizchevroil includes American ChevronTexaco Overseas (50%), ExxonMobil Kazakhstan Ventures Inc. (25%), KazMunayGaz, national oil and gas company of Kazakhstan (20%) and Russian-American JV LUKArco) ( 5%).

Tengiz oil field was opened in 1979. According to estimations, mineable oil reserves of the field total to 1.125bln tons with explored reserves totalling 3.133bln tons.

The total length of BТС is 1.768km, including the 443km section running via Azerbaijan, the 249km section via Georgia and the 1.076km via Turkey. Construction of the pipeline was commenced in April 2003 and it was filled with oil on 18 May 2005.

A total of $4bln has been spent for the construction of BTC not including fill-up of pipeline, financial expenses and payment of the bank rates. The credit allocated for the project totalled $2.6bln.

BTC Company Shareholders includes: BP (30.1%); AzBTC (25%); Chevron (8.90%); Statoil Hydro (8.71%); ТРАО (6.53%); Eni (5%); Total (5%); Itochu (3.40%); Inpex (2.50%); ConocoPhillips (2.50%) and Amerada Hess (2.36%).

The correspondent can be contacted at [email protected]

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