Kazaks Losing Mediterranean Oil Race
Kazaks Losing Mediterranean Oil Race
Kazakstan may lose out on a chance to gain access to an oil pipeline to the Mediterranean, leaving Russia with a virtual monopoly over the export route, say energy experts surveyed by NBCA.
Leaders of Russia, Greece and Bulgaria gathered in Athens in early September to announce plans to begin construction of a pipeline which will extend over 300 kilometres from the Black Sea port of Burgas, in Bulgaria to Greece’s Aegean port of Alexandropoulis. With a planned throughput of 35 million tons a year, the Burgas-Alexandropoulis pipeline has been in the works since 1994, but disagreements between the participants have delayed construction.
Record high oil prices have recently given new life to the project.
Kazakstan has in the past expressed an interest in the pipeline, but a series of miscalculations in its energy policy may have dimmed its attractiveness as a partner to Burgas-Alexandropoulis stakeholders, according to energy expert Yaroslav Razumov.
First of all, while announcing plans to almost double its oil exports by 2015, Kazakstan has postponed the start of commercial exploitation of the major Kashagan fields. At the same time, it has made pledges to collaborate with several other pipeline projects.
All this has made international oil experts doubt Kazakstan’s ability to deliver on its promises, and this may weaken its position vis-a-vis Russia when it comes to getting oil to the Mediterranean.
Energy specialists are more upbeat about the possibility that the United States oil firm Chevron might join the Burgas-Alexandropoulis pipeline project. Chevron has expressed an interest in taking part, provided that the Caspian Pipeline Consortium, CPC, in which it has a 15 per cent stake, doubles the capacity of its pipeline from Kazakstan to the Russian port of Novorossiysk to 67 million tons per year. Some of this extra oil could then be taken by tanker across the Black Sea to Burgas.
Such an increase in the CPC pipeline’s throughput has so far been opposed by Russia’s Transneft, one of its major competitors. But NBCentralAsia analysts predict that Moscow – which has a 24 per cent stake in CPC - may back Chevron’s demand, as a way of ensuring the oil is directed to the Burgas-Alexandropoulis pipeline.
In so doing, Russia would prevent Chevron-produced Kazak oil going into the rival Baku-Tbilisi-Ceyhan, BTC, pipeline, which is backed by the United States. This hypothesis looks even stronger in light of recent statements from the Kazak government indicating that it is prepared to export some oil via the BTC route.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
Leaders of Russia, Greece and Bulgaria gathered in Athens in early September to announce plans to begin construction of a pipeline which will extend over 300 kilometres from the Black Sea port of Burgas, in Bulgaria to Greece’s Aegean port of Alexandropoulis. With a planned throughput of 35 million tons a year, the Burgas-Alexandropoulis pipeline has been in the works since 1994, but disagreements between the participants have delayed construction.
Record high oil prices have recently given new life to the project.
Kazakstan has in the past expressed an interest in the pipeline, but a series of miscalculations in its energy policy may have dimmed its attractiveness as a partner to Burgas-Alexandropoulis stakeholders, according to energy expert Yaroslav Razumov.
First of all, while announcing plans to almost double its oil exports by 2015, Kazakstan has postponed the start of commercial exploitation of the major Kashagan fields. At the same time, it has made pledges to collaborate with several other pipeline projects.
All this has made international oil experts doubt Kazakstan’s ability to deliver on its promises, and this may weaken its position vis-a-vis Russia when it comes to getting oil to the Mediterranean.
Energy specialists are more upbeat about the possibility that the United States oil firm Chevron might join the Burgas-Alexandropoulis pipeline project. Chevron has expressed an interest in taking part, provided that the Caspian Pipeline Consortium, CPC, in which it has a 15 per cent stake, doubles the capacity of its pipeline from Kazakstan to the Russian port of Novorossiysk to 67 million tons per year. Some of this extra oil could then be taken by tanker across the Black Sea to Burgas.
Such an increase in the CPC pipeline’s throughput has so far been opposed by Russia’s Transneft, one of its major competitors. But NBCentralAsia analysts predict that Moscow – which has a 24 per cent stake in CPC - may back Chevron’s demand, as a way of ensuring the oil is directed to the Burgas-Alexandropoulis pipeline.
In so doing, Russia would prevent Chevron-produced Kazak oil going into the rival Baku-Tbilisi-Ceyhan, BTC, pipeline, which is backed by the United States. This hypothesis looks even stronger in light of recent statements from the Kazak government indicating that it is prepared to export some oil via the BTC route.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
