Russian PM pushes support for Caspian oil pipeline

Ulhas Joglekar ulhasj at
Tue Dec 7 11:31:51 MST 1999

Monday, December 6, 1999

Russian PM pushes support for Caspian oil pipeline

Moscow, Dec 5: Russian prime minister Vladimir Putin said last week an oil
pipeline being built from Kazakhstan to the Black Sea Port of Novorossiisk
was of crucial economic and geopolitical importance to Russia.
His comments were reported in a statement issued by the Caspian Pipeline
Consortium, which is building the 1580 kilometre (990 mile) pipeline, after
a meeting between Putin and CPC's largest shareholder companies to discuss
the progress of construction.
Putin was reported as saying the Russian government would give every support
to the project, adding that it had "exceptional significance for Russia both
from an economic and from a geopolitical point of view."
The pipeline will be the first to deliver oil from the Caspian basin to a
Port from which it can be shipped to international markets.
The first stretch of the line was laid on November 17, and the first phase
of construction, when capacity will be 560,000 barrels per day, is due for
completion in October 2001.
Russia supportspipelines from the Caspian basin running across Russian
territory to international markets, and is bitterly opposed to a route from
Baku in Azerbaijan to Ceyhan in Turkey, which is being heavily promoted by
the United States.
This explains Putin's desire to give maximum support to the CPC line, which
will come onstream years ahead of Baku-Ceyhan if that is ever built, and
could boost Russia's credentials as a reliable transit option for Caspian
oil. Russia suggested using the CPC to transport some Azeri oil, as a
pipeline it is building to bypass rebellious Chechnya would intersect the
CPC route, Vladimir Fedotov, CPC chairman, told a news briefing following
the meeting with Putin.
But members of the consortium were reluctant to discuss the prospects of
using it to carry Azeri oil. "I think there is potential, though CPC was not
built for this purpose," Richard Matzke, president of Chevron Overseas
Petroleum Inc., a unit of Chevron Corp, told reporters.
Vagit Alekperov, head of Russia's largest oilcompany Lukoillkoh, said that
for the foreseeable future two pipelines running through Russia and Georgia
would be sufficient to handle all crude oil produced by Azerbaijan."We
believe that for the coming 10 or 15 years two pipelines -- Baku-Supsa and
Baku-Novorossiisk -- are enough to carry all oil extracted on Azeri
territory," he said.
CPC unites Russia (24.0 percent), Kazakhstan (19 percent), Oman (7 percent),
Chevron (15 percent), Lukarco, a joint venture between Lukoil and Arco (12.5
percent), Rosneft Shell Caspian Ventures (7.5 percent), Mobil Caspian
Pipeline Company (7.5 percent), Agip International (2 percent), BG Overseas
Holding Ltd (2 percent), Kazakhstan Pipeline Ventures LLC (1.75 percent),
and Oryx Caspian Pipeline LLC (1.75 percent).

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