Razorback, Good Morning,
More news from the Caspian, story is below. Look for two things to happen out of this evolving story:
Rapprochment with Iran, the installation of a moderate government there, and increasing alienation between Iraq and the US, a la Libya (look at the result there - Mohammar, the slave to fashion, is now a palace eunuch). This will almost certainly result in the construction of a pipeline through Iran to a warm weather port, bypassing the Bosporus Straits bottleneck.
Second, as gas reserves come on line, there will be an export market established through Iran. In the bigger picture, there will be an increasing shift to the use of Gas to Liquids technology, which will supplant the currently favored LNG projects. Liquids are simply too easy to transport, folks, and you can pump them off anywhere. With LNG, it must be chilled, liquified, transported under pressure, then re-gassified at the other end, at the contracted re-gassification sales point. These are typically 20-30 year contracts requiring billions in up-front investments.
Unfortunately, this will probably come to fruition with such players as Agip (ENI) or Total, or other second world conglomerates with strong government ties and relaxed corporate morals. Those guys really know how to grease the wheels.
As for PKD, well....they sure have a lot of debt, and they really screwed up by selling their domestic (US) land rigs. Drilling activity always increases the fastest when you're close to the market. I'm tempted, but this tickle has a ways to go before it's an itch.
Regards to all,
Aggie
slb.com
Oil & Gas News: Archived Story
Watershed Time for Caspian Oil and Gas
By Michael Steen
ALMATY, April 26 (Reuters) - Prospects for a long-awaited oil and gas boom which could bale out the struggling former Soviet economies of the Caspian basin hinge on key developments over the next two years, industry experts said on Wednesday. Although rich in reserves, Central Asian countries surrounding the Caspian Sea have been hampered in exporting hydrocarbons independently to hungry markets in the West by a landlocked geography and Russian-dominated history.
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But results due from fresh explorations, new pipelines, and the tantalising possibility of a thaw in U.S.-Iranian relations could shift the impoverished economies of Central Asia and the Caucasus into a higher gear - or leave them floundering.
"The jury is still out. But the signs are the Caspian will develop into a large oil and gas basin," Nick Zana, the Eurasia managing director of Chevron Overseas Petroleum Inc, told an investor conference in the Kazakh commercial capital Almaty.
"I think this year and next will be watershed years," Zana said at the meeting, organised by the World Economic Forum.
A consortium of foreign oil firms, OKIOC, is due to report by mid-2000 on drilling at Kashagan off the Kazakh coast. Initial estimates put reserves at four billion tonnes, making it the world's biggest exploration at present.
FINDING THE MARKET
A large oil strike there could make Kazakhstan, sandwiched between Russia and China, a global player on the oil market, providing it can get the crude to buyers.
After a decade of slippage, traditionally dominant Russia is seeking to regain its economic grip over Central Asia while the United States has lobbied hard for pipelines which could feed oil and gas out of the region avoiding Russia and Iran.
How these questions are resolved affects even countries in the region without large reserves as they stand to profit if they can divert pipelines through their territory.
Julia Nanay, director of the Washington-based Petroleum Finance Company consultancy, said geography and politics were especially important for the region's gas supplies.
"Look at where the Caspian is located. Russia is to the north and Iran to the south. If you understand these two countries have 50 percent of world gas assets, you realise the Caspian is in a difficult position," she said.
Turkmenistan, in particular, has seen its export position complicated after a U.S.-backed plan to build a trans-Caspian gas pipeline was thrown into question by large gas finds in Azerbaijan, which would have to cooperate on the project to feed gas to Turkey.
But Nany said the odds stacked against the region finding a route to export its gas could be set to change, because Russian gas monopoly Gazprom - the world's largest gas company - may soon have to look for new supplies.
"Gazprom gets 75 percent of its gas from two fields in western Siberia which are basically declining fields," she said, adding that a need to service debts was an added incentive for the Russian giant to seek partnerships abroad.
IRANIAN FACTOR
A southern route out of Central Asia could also be within reach if Iran, classed a "rogue state" by Washington, finds its way back onto the world stage. The United States recently edged towards detente by easing import bans on some Iranian goods.
"I think there will be progress (on Iranian relations) this year or early next year," Nanay said. "Russia understands this is round the corner, which is why President-elect (Vladimir) Putin is looking to restore oil and gas links."
Iran has already built a gas pipeline from Turkmenistan to the north of its country, although volumes are still tiny compared with the potential.
In oil terms, Russia has stolen a march over the United States as the Caspian Pipeline Consortium has completed a large section of a 1,500-km (940-mile) line from western Kazakhstan to the Russian port of Novorossiisk, giving access to the open sea.
The CPC line is due to start pumping next year, adding to some analysts' scepticism that a U.S.-backed plan to build an oil pipeline from Azerbaijan's Baku to the Turkish port of Ceyhan, via Georgia, will find enough customers.
Zana said it was too early to rule out Baku-Ceyhan, but said: "You can't wish a pipeline to happen. A political pipeline has to be paid for by politicians, if there's enough oil the decision will be based on economics." |
