The head of the company running Kazakhstan's giant Tengiz oil field said on Friday he hopes to rely on a pipeline through Russia as output nearly doubles in the next two years -- spurning advances to use a pipeline from the Caucasus to Turkey that has been heavily backed by the US.
Alexander Cornelius, general director of Tengizchevroil, also cautioned in an interview with The Associated Press that the Kazakh government must realize the risks businessmen have taken by pouring billions of dollars into this former Soviet republic -- and that attempts to renegotiate past contracts to keep more oil profits at home could scare away future investors.
"You're in a competitive landscape -- if you want to be a world oil power, you need to behave like a world oil power,'' Cornelius said is his standard refrain to Kazakh officials.
Tengizchevroil -- 50 percent owned by ChevronTexaco, along with ExxonMobil, KazMunaiGas and LukArco -- halted a US$4.5 billion expansion project in late 2002 after a dispute with the government over funding.
The resulting three-month interruption means the nearly doubling of production at Tengiz -- from 13 million tonnes a year to 25 million tonnes -- has been delayed by eight months to a year and won't happen before the third quarter of 2006, Cornelius said.
The Tengiz field in desolate western Kazakhstan is key to this country's hopes to become a major oil exporter, and also the Caspian Sea's aspirations to be a major oil-producing region competing with the Middle East.
Kazakhstan is the Caspian's richest country in energy wealth, and has attracted the most foreign investment from all corners of the world of all the former Soviet republics.
Right now, 96 percent of Tengiz oil is shipped through the Caspian Pipeline Consortium, or CPC, Cornelius said, which runs to Russia's Black Sea port of Novorossisk. CPC operators are expanding capacity as Tengiz also seeks to increase output.
"We're hopeful they can get it done in time to coincide with our production," Cornelius said from his office at Tengizchevroil headquarters in Atyrau, Kazakhstan's oil capital. "If not, we have contingency plans, but they're not quite as economic."
The backers of a pipeline from Baku, Azerbaijan through Tbilisi, Georgia to the Turkish port of Ceyhan -- strongly supported by Washington so Central Asia's resources can avoid Russia -- have sought to woo Kazakh oil as hopes for finding oil in Azerbaijan's sector of the Caspian have fizzled.
Cornelius said companies are exploring transporting oil by rail to a new terminal at the Kazakh port of Aktau to ship oil across the Caspian to Baku, and then through the Baku-Ceyhan pipeline. Still, he said, "all of that is early work, and will depend on CPC."
Kazakhstan's oil hopes are also resting on the Kashagan field off the coast from Atyrau under the Caspian Sea bed that could dwarf Tengiz. Cornelius acknowledged that when Kashagan comes online, "even an expanded CPC won't be able to take it all."
Other options are also enticing for Kazakhstan's energy. Energy-hungry China lies to the east -- and the Kazakh government has backed plans for a 3,200km pipeline from across the vast Kazakh steppes to western China. Cornelius said Tengizchevroil was viewing such plans "with interest."
Much closer lies Iran, and Kazakh officials have also expressed interest in a pipeline through Turkmenistan to Iran as another alternative to Russian pipelines. However, current US trade restrictions on Iran mean the American companies involved in Tengiz can't do business there.
If the political situation changes, however, Tengizchevroil would be interested in Iran as a market for its oil.
"There's no doubt, if that were a possible political outlet then there's good business sense in having oil go that way," Cornelius said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort