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.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS