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Gold/Mining/Energy : Steppe Gold (SPE:V) -- Ignore unavailable to you. Want to Upgrade?

To: John Stokes who wrote (657)	2/19/1998 12:46:00 PM
From: John Menzies	Respond to of 1248

The most significant portion of the future Kazak economy is the oil sector - the reserves are truely immense. The S&P reports pertains almost exclusively to that sector. The transport routes which tehy speak of relate to oil and gas pipelines and the international negotiation currnelty underway to determine the routes which are most acceptable. This oil is needed in North Americ and Europe. The most obvious rutes are through Russia and down through Iran to the gulf and laos east through china. The chinese have committed to the development of a US9.5 billion dollar oil field development and pipeline from the caspian sea through to the chinese distribution network in wetsern china. The gulf route is opposed by the USA for the usual reasons - political instability. The russian route passes cles to a couple of trouble spots in southern Russian federation. An alternative is across the caspian through to turkey. The reason for the difficulty - the gulf situation is clear - is that the host country to the pipelines gets a charges per unit trasmitted- this can amount to a very substantial revenue. All of this will be resolved - the demand for the product and the producer countries desire for the income so vital to their economies will result in resolution. Tengiz - which is the field which has been developmed by Chevron-Mobil etc is currently producing about 185,000 barrels of oild per day and is now by far the largets producer in the country - maybe the region. Interesting comment made by one of their senior people the other day was that the inevstement climate in the country and their rationale for investing has not changed since they first became involved a couple of years ago !!.