Caspian sea and central Asian oil producers can become major international suppliers of crude, but the region is unlikely to reach its full potential until it achieves full economic and political independence from Russia, says the London-based Centre for Global Energy Studies.
In a study published in its latest Global Oil Report, the centre says that the former Soviet republics of Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan – with ‘proven-plus-probable’ oil reserves of 68,000 million barrels – expect a combined output of 3 million barrels a day (b/d) by the end of the decade, rising to 4.8 million b/d by 2010.
However, the region faces ‘two major hurdles on the road to becoming a major oil province’.
The first obstacle involves ‘ownership of the oil’, since Russia is demanding joint ownership of all the Caspian sea’s oil and gas resources. This ‘could invalidate any deals agreed between Western consortia and individual littoral states’. In addition, Russia has ‘claimed a right to be involved in the development of all oil reserves discovered during the Soviet era’.
The second obstacle involves transport, given Russia’s control of export routes and reluctance to give foreign oil precedence over its own production in its pipeline network. ‘Proposed export routes that avoid Russian
territory face obstacles which appear insurmountable in the short term,’ says the report, entitled ‘The Caspian region – the world’s next big oil province?’
The centre is run by Ahmad Zaki Yamani, former petroleum and mineral resources minister of Saudi Arabia.