Caspian oil and gas: the facts at the end of the year 2000

Caspian stocks of energy resources are not, and most probably will not be, of any great significance on the world scale. Nevertheless it is the Caspian region which will have the opportunity to become an oil exporter which will reduce the dependence of the European countries on Arabian oil, and which will guarantee Russia the quantities of gas which are indispensable both for meeting its internal demands and for maintaining its current level of export. For Azerbaijan, Kazakhstan and Turkmenistan, the confirmation of the existence of successive oil strata is not only an opportunity to increase income, but also an additional bargaining chip in the game for the future of the whole region. The stake in this game is the opportunity to limit the economic, and by extension the political influences of Russia in the region.

A significant event of last year was the announcement of the initial results of tests from the Kashagan deposit in Kazakhstan. In a declaration made at end of July 2000, the international Offshore Kazakhstan Operating Company consortium (OKIOC), which had been conducting research in Kazakhstan's part of the Caspian Sea shelf, confirmed the discovery of considerable amounts of oil. Although it was only stated that the research's initial results were promising, and that measurement of the size of the deposit would only be possible after conducting further tests, the information given by the OKIOC caused a sudden rise in interest in the region. Together with the confirmation of the existence of large oil deposits, the chances began to grow that plans for new transport routes could be implemented, also including the Baku-Ceyhan project which had hitherto been viewed as rather unrealistic, but which could compete with Russian routes. The sudden growth of Russia's fear of losing its monopoly position in the transport field, and the rise in demand for energy resources in Russia itself, led during the last year to Moscow's determination to maintain control over the transit of Caspian raw materials. However, despite a range of actions taken by Moscow, the question of the region's future has not yet been finally decided.