Abstract

Caspian Sea has become a major focus of oil activity since the break up of the Soviet Union. There are four sedimentary basins in the region; each containing proved hydrocarbon reserves. Five independent states (Russia, Kazakhstan, Azerbaijan, Turkmenistan and Iran) are sharing its reserves. The primary challenges of the area include: high cost of the oil and gas transportation; territorial disputes; complicated seismic and geological conditions and sensitive ecology. Early activity in the region was disappointing, however, several recent oil and gas discoveries including potentially the largest offshore oil field in the world (Kashagan in the Kazakhstan sector) could probably give Caspian a boost. This paper will review the major geological features and prospect types as well as technical and economic developments. The Caspian offshore has been mainly restricted to the multinational oil companies; however, recent improves could provide avenues for smaller companies and consortiums to participate. Activity in the area has resulted in new 3-D and transition zone seismic data, multi-client seismic surveys and equipment and services on a shared cost basis. Summary of D&S reserves and economic cases modeling is provided. A company that can balance risk and target size, forecast the possible development strategy and be aware of the local politics should take another look at the Caspian.

Introduction

The Caspian region used to be already one of the first and main sources of oil 100 years ago and could become again a very important oil-producing center in XXI century with its own infrastructure, marketing and E&P strategy (Fig. 1). Caspian landlocked sea-lake has the area of 373,000 sq km; reaches its maximum depth of 980 m in the south; the shallow northern part averages only 5 m. Petroleum resources of the region could exceed 225 bln. bbls of oil and ∼800 tcf of gas(1) from its current roven 37 bln. bbls and 290 tcf, with the increase mostly expected from the Caspian offshore in Kazakhstan, Azerbaijan, Russia and Turkmenistan (Table 1).

Currently Caspian region contains several largest in the world (at least, outside North America and North Sea) oil and gas projects, owned and operated by the Western oil companies on the Production Sharing or similar terms (like Chevron's Tengiz, Agip-BG' Karachaganak, BP' Azeri-Shirag-Gyuneshli, Kazakhstan Offshore Consortium' Kashagan and several smaller ones).

Even non-finalized legal status of the Caspian offshore sectors does not prevent many companies from signing and progressing with their E&P contracts. About 30 companies from 18 countries are now involved in the Caspian offshore exploration and production.

New opportunities are opening for transportation, trade, supply, marketing and oil service. New CPC pipeline connects 10 bln. bbls onshore Tengiz field with terminals in the Black Sea, providing direct access to the world market, rather than relying on the Russian oil transportation system. First tankers loaded with original Tengiz crude (traded at premium to Brent) are expected in October 2001. Another large oil pipeline from Azerbaijan to Georgia' Black Sea coast was put in operations in 1999.

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