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  June 28, 2002 atimes.com  

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Central Asia/Russia





NEWSLINE: OIL AND GAS

Kazakh, Greek presidents discuss oil-export pipeline
Kazakh President Nursultan Nazarbaev met with his visiting Greek counterpart Konstantinos Stephanopoulos in Almaty on Wednesday to discuss the potential for expanding trade and economic ties between the two countries. The two presidents paid particular attention to the possibility of Kazakhstan joining the Russian-Bulgarian-Greek consortium formed to build an oil-export pipeline from the Black Sea port of Burgas in Bulgaria to the Greek port of Alexandropoulis. That pipeline will have an annual throughput capacity of 35 million to 45 million tons. Nazarbaev said his country will need additional export-pipeline capacity in the near future, but would join that consortium only as an equal member, and only if the tariffs for using that pipeline proved "competitive". (Jun 28)

Russian oil exports to rise
Russian oil exports in the third quarter of this year will rise by 2 million tons per day in comparison with the previous quarter, Deputy Prime Minister Viktor Khristenko announced. Meanwhile, LUKoil head Vagit Alekperov predicted that world oil prices will drop by the end of the year and will stabilize around US$20-$21 per barrel. (Jun 27)

LUKoil defies protests, plans Baltic project
The Russian petroleum company LUKoil says it will begin oil production on the Baltic Sea shelf next year despite protests by local environmentalists. LUKoil head Vagit Alekperov told a news conference in Moscow that the oil reserves in this area have been estimated at 24 million tons and that his company has already began construction of an offshore platform in the Baltic. Oil exploration in the Baltic Sea was interrupted in 1985 under pressure from Lithuanian ecologists, whose republic lies close to the production area. Now Lithuanian environmentalists have called on the European Bank for Reconstruction and Development to stop providing loans to LUKoil until the company halts the project. (Jun 27)

Russian intelligence veterans attempt Caspian swim
Seven veterans of Russia's Foreign Intelligence Service who formerly served as navy divers began on Monday an attempt to swim across the Caspian Sea in order to draw attention to Russia's role in the resource-rich region. The group is headed by Igor Morozov, now a senator in the Federation Council. Morozov told journalists that the seven would swim 234 kilometers from Daghestan to the city of Shevchenko, Kazakhstan. The journey is expected to take 10 days. (Jun 25)

Yukos tests US oil market
Russia's Yukos oil company will begin exporting oil to the United States on a trial basis early next month, company chief Mikhail Khodorkovskii told journalists on Tuesday. Khodorkovskii said a tanker was already en route carrying 200,000 tons of oil. He declined to name the buyer, saying that the deal has not yet been sealed. He added that the US market will be difficult to crack, but Yukos believes that by using supertankers, it will be able sufficiently to reduce transportation costs to make its products competitive. (Jun 20)

Azerbaijani-Iranian differences on Caspian unresolved
Talks in Baku from June 11-13 between Azerbaijani government officials and Iran's special envoy for Caspian issues, Mehdi Safari, failed to yield any progress toward overcoming the differences between the two countries' views on the legal status of the Caspian Sea and how its resources should be divided among the five littoral states. It is unclear whether a planned meeting between Safari and Azerbaijani President Heidar Aliev took place. Former Azerbaijani foreign minister Tofik Zulfugarov was quoted on Friday by the opposition paper Yeni Musavat as saying that Iran realizes that its demand for a 20 percent share of the Caspian is unrealistic and utopian, and may be bargaining to receive a share that is a little larger than its current 14 percent, but less than 20 percent. (Jun 19)

Turkmenistan invites Russia to join pipeline project
Turkmen President Saparmurat Niyazov has invited Russian companies to participate in the construction of the planned gas export pipeline from Turkmenistan via Afghanistan to Pakistan. Niyazov reportedly made the offer during a telephone conversation with Russian President Vladimir Putin on Friday. (Jun 18)

Canadian deal on Kazakh pipeline falls through
A bid by Canada's Hurricane Hydrocarbons to acquire a stake in the Caspian Pipeline Consortium pipeline from Aktau to Novorossiisk has been thwarted because other CPC shareholders did not endorse that deal by the deadline for doing so. The US$100 million deal would have given Hurricane a 49.9 percent stake in Kazakhstan Pipeline Ventures, which owns a 75 percent stake in the CPC, and would have enabled Hurricane to export 64,000 barrels per day. The Kazakh state oil company, KazakhOil, approved the deal last August, but that approval was rescinded after KazakhOil was subsumed into a newly formed company, KazMunaiGaz, in March. (Jun 17)

TotalFinaElf joins Azerbeijani pipeline consortium
France's TotalFinaElf has signed an agreement with the Owner Group for the Baku-Tbilisi-Ceyhan oil-export pipeline to acquire a 5 percent stake in the BP-led consortium to build that pipeline. The decision left a 7.5 percent stake still available, which is to be divided between BP (the project operator), Norway's Statoil, and Turkey's TPAO, if no other company expresses an interest in acquiring it before the end of this month. (Jun 14)

Russia, Germany, Ukraine sign energy accord ...
Russian President Vladimir Putin, German Chancellor Gerhard Schroeder, and Ukrainian President Leonid Kuchma signed on Monday a trilateral accord on cooperation in developing and exploiting the pipeline infrastructure used to transport oil and natural gas from Russia through Ukraine to Western Europe. Speaking to journalists after the signing ceremony, Putin said that Germany's participation in the consortium will enable it to attract quickly the estimated US$2.5 billion needed to reconstruct Ukraine's pipeline network. The addition of Germany to the new Russian-Ukrainian pipeline consortium may mean the end - for the present at least - of proposals to construct a new pipeline through Poland and Belarus that would have bypassed Ukraine. The reconstruction of existing pipelines is estimated to be only about half as expensive as building a new route. (Jun 12)

... as Moscow plays Ukraine card in Kaliningrad dispute
The Russian government is not concealing the fact that its switch away from routing energy supplies through Poland is connected with the hard line taken by Warsaw and the European Union on the Kaliningrad issue, said an official in President Vladimir Putin's administration. If Warsaw continues to rebuff Moscow's proposals for a visa-free transit corridor between Kaliningrad oblast and the rest of Russia, the official said, Poland stands to lose this lucrative pipeline, as well as several billion dollars' worth of related development projects. The pipeline issue is political, not economic, and by dealing with Ukrainian President Leonid Kuchma, Moscow is sending a clear signal to Warsaw that it expects a concession on Kaliningrad, the BBC's Russian Service commented on Monday. (Jun 12)

Russia, Ukraine push ahead on energy cooperation
Russian President Vladimir Putin and his Ukrainian counterpart Leonid Kuchma signed a joint statement in St Petersburg on Sunday ordering their respective governments immediately to prepare a bilateral agreement on strategic cooperation in the natural-gas sphere. The statement outlined the proposed agreement, calling for the creation of a consortium that would manage and develop Ukraine's gas-transport system. Russian Deputy Prime Minister Viktor Khristenko said the agreement "will enhance the reliability of Russian gas deliveries to Europe in the long term". (Jun 11)

Azerbaijani-Russian Caspian pact postponed
Azerbaijani President Heidar Aliev and his Russian counterpart Vladimir Putin did not, as originally planned, sign an agreement on the division of their countries' respective sectors of the Caspian Sea during the former's visit to St Petersburg on the weekend. Spokesmen for the two countries had said in April after a meeting between Aliev and Putin on the sidelines of the abortive Caspian summit in Ashgabat that such an agreement would be signed this month. Aliev said on Saturday that several points of the agreement had not yet been finalized, but that "there are no disagreements on matters of principle". The deputy head of Putin's staff, Sergei Prikhodko, similarly said that the uncoordinated points "are not political" and predicted that the agreement will be ready for signing "soon". Russian Deputy Prime Minister Khristenko said the agreement "is being coordinated" and that "there are certain technical questions in the wording". (Jun 11)

Turkmenistan sets up working group for trans-Afghan pipeline
Turkmen President Saparmurat Niyazov announced on Saturday that the heads of state of Afghanistan and Pakistan have agreed to his proposal to set up a joint government working group to oversee construction of the planned pipeline to export Turkmen natural gas via Afghanistan to Pakistan. He gave the planned construction time for the 1,460-kilometer pipeline as two and a half years, saying it could be completed by the end of 2005. No offers have yet been forthcoming from investors willing to finance the estimated US$2 billion project, although Niyazov said the World Bank and several major Asian banks have expressed interest. (Jun 11)

Ukraine, Turkmenistan agree on gas debts
Agreement has been reached on a schedule for repayment of Ukraine's US$46 million debt to Turkmenistan for supplies of natural gas received in 2002, Neftegaz Ukrainy president Yurii Boyko said in Kyiv. A protocol has also been signed on the repayment schedule for an outstanding $65 million debt for Turkmen gas supplied in 1999. (Jun 11)

ExxonMobil to pull out of Azerbaijani consortium
ExxonMobil plans next year to pull out of an agreement with Azerbaijan's state oil company Socar to develop the Oguz offshore Caspian oilfield jointly. That US$2 billion agreement was signed in 1997. A test well drilled last year failed to yield commercially viable quantities of oil or gas, but a Socar official said in February that Exxon should drill a second well. (Jun 7)

Moscow approves volume of Kazakh oil exports
The Russian government has approved a draft bilateral agreement stipulating the amount of oil Kazakhstan will export via Russia over the next 15 years. Under that agreement, Kazakhstan will export annually no less than 15 million tons of oil via the Atyrau-Samara pipeline and no less than 2.5 million tons via the Makhachkala-Tikhoretsk pipeline. Last July, Kazakhstan's oil-export agency said it planned to export 13 million tons and 1.2 million tons, respectively, by those two routes by the end of 2001. Kazakhstan plans to increase oil extraction by 300 percent over the next 15 years but has not yet made a firm commitment to any proposed additional export-pipeline route. (Jun 7)

European development bank to co-finance pipeline
The European Bank for Reconstruction and Development has announced that it will provide US$300 million, or just over 10 percent of the estimated total costs, toward construction of the Baku-Tbilisi-Ceyhan oil pipeline. Thomas Moser, who heads the bank's Baku office, said the EBRD will provide half that sum in cash and half in bank syndicate deposits. Negotiations with potential lenders are proceeding without problems and the bank should raise the funds by the end of this year, Moser added. The British Petroleum-led consortium created to implement the project plans to hold the official ceremony marking the beginning of construction on June 19, Turkish Energy Minister Zeki Cakan said this week. It is hoped that the pipeline will be completed in 2005. (Jun 6)

Space-age technology reveals mineral, oil deposits
After more than 20 years of research, scientists have developed a unique technology for remote sensing of Earth's mineral reserves from outer space, says the Moscow-based Terrestrial Geoinformational Analysis Research Center. The technology consists of a complex series of algorithms used to interpret data from satellite photographs and enables scientists to locate mineral and fossil-fuel deposits with greater accuracy and at less cost than conventional methods. Institute director Valerii Tutykhin says the technique was used in March to locate water sources in the desert of Mauritania and, in April, it located reserves of gold ore in South Korea. (Jun 3)

Afghanistan, Pakistan, Turkmenistan sign pipeline agreement
Meeting in Islamabad on Thursday, the leaders of Afghanistan, Pakistan, and Turkmenistan - Hamid Karzai, General Pervez Musharraf, and Saparmurat Niyazov - signed a memorandum of understanding to proceed with the feasibility study for construction and financing of a gas pipeline from Dovletabad in Turkmenistan via Afghanistan to Pakistan. The cost of the 1,460-kilometer pipeline is estimated at between US$2 billion and $3.5 billion. Preliminary talks in 1995-98 between the Turkmen government and two successive Western oil companies on building such a pipeline collapsed in 1998 after the Taliban took control of most of Afghanistan. (Jun 3)

Russia defends 'natural advantage' on energy prices
Russian Economic Development and Trade Minister German Gref says that in its trade relations with the European Union, Russia will never accept an EU requirement to bring domestic energy prices to world levels. "For many energy sources - such as gas, coal, and electricity - there are no [accepted] international prices at all," Gref noted. Natural gas will always be more expensive in Europe than in Russia because of transportation costs, Gref remarked. Former finance minister Aleksandr Livshits, currently deputy head of Russian Aluminum, said that "energy in Russia will always be cheaper regardless of who regulates prices by virtue of advantages provided by nature". (May 31)

Russia, EU split on energy tariffs
Energy issues are a main topic of the ninth Russia-EU summit that opened in Moscow on Wednesday, said European Commission President Romano Prodi. The European Union believes that Russian domestic fuel prices should be increased and that domestic fuel subsidies are hampering Russia's effort to develop a full-fledged market economy, Prodi said. Lifting energy subsidies is necessary to gain EU consent to Russia's rapid accession to the World Trade Organization. However, Igor Yurgens, the deputy head of the Russian Union of Industrialists and Entrepreneurs, said: "We do not even want to discuss bringing domestic tariffs for electricity and gas to international levels." Deputy Economic Development and Trade Minister Maksim Medvedkov added that Russia will not eliminate the price differences because the government considers them not a subsidy but a "natural advantage" vis-a-vis competitors. (May 30)

LUKoil makes big move into Cyprus oil and gas
Vagit Alekperov, president of the Russian petrochemical giant LUKoil, said in Moscow on Tuesday that his company has won a government tender to develop a network of gasoline stations in Cyprus and now controls more than 25 percent of the island's oil market. Alekperov also said LUKoil plans further expansion in the Cyprus oil market, including in the areas of oil storage and transportation. Finally, he reported that his company already owns 23 percent of the Greek state oil firm Hellenic Petroleum and has major shares of the oil markets in Eastern Europe, especially in Poland and Bulgaria. LUKoil also owns 1,500 gas stations in the United States. (May 30)

Azerbaijan seeks to allay gas-export fears
Ilham Aliev, a senior vice president of Azerbaijan's state oil company SOCAR, has rejected as groundless concerns expressed at a recent news conference in Baku by a senior BP executive that Turkey may renege on an agreement signed in March 2001 to purchase 89.2 billion cubic meters of natural gas from Azerbaijan's offshore Shah Deniz field between 2004 and 2018. Gas-sector analysts say Turkey has committed itself to buy far more natural gas than it actually needs. Aliev said that even if Turkey declines to purchase gas from Shah Deniz, Azerbaijan could switch to buying gas from the BP-led consortium exploiting Shah Deniz rather than continue buying natural gas from Russia. He said other countries too would be interested in buying gas from Shah Deniz in the light of the ongoing decline in natural-gas extraction in Russia. (May 30)

Moscow backs EU efforts to build up energy reserves
Russia will increase its volume of oil exports as of July 1, ending the curbs it imposed at the beginning of the year to help the Organization of Petroleum Exporting Countries bolster world petroleum prices, said Deputy Prime Minister Viktor Khristenko. Khristenko said the government will decide on June 20 exactly by how much exports will be increased. Meanwhile, Energy Minister Igor Yusufov met in Moscow on Tuesday with European Union Energy and Transport Commissioner Loyla de Palacio and pledged Russia's support for EU efforts to build up oil and gas reserves. De Palacio said the EU regards Russia as a reliable partner in its search to diversify its sources of energy. (May 29)

Russia's oil reserves dwindling, report warns
A report by the Russian Natural Resources Ministry asserts that the country might exhaust its explored oil reserves by 2040 at current rates of exploitation and exploration. The report claims that if, as expected, Russia increases production to 400 million tons per year by 2020 and if the search for new oil deposits is not stepped up, current reserves will be depleted by 2040. (May 29)

Caspian interparliamentary assembly proposed
During talks in Baku on Friday with Azerbaijani President Heidar Aliev, Russian Federation Council chairman Sergei Mironov proposed that Russia, Azerbaijan, and Kazakhstan establish a Caspian interparliamentary assembly. The positions of those three countries on dividing the Caspian are virtually identical. Aliev, however, argued that such a body should also include the two remaining Caspian littoral states, Iran and Turkmenistan, whose positions differ sharply from those of the remaining three. (May 29)

Georgian, Russian companies sign pipeline agreement
The Georgian International Oil Co and Russia's Rosneftegazstroi have signed an agreement to establish a joint venture, Gruzrosneftegazstroi, to implement pipeline construction projects. Among the projects in question is a branch pipeline from Novorossiisk via Abkhazia to Supsa on Georgia's Black Sea coast. Rosneftegazstroi has also expressed interest in joining in construction of the planned Baku-Tbilisi-Ceyhan oil export pipeline. (May 29)

Kazakhstan backs Baku-Ceyhan pipeline
Bidding farewell to Azerbaijani President Heidar Aliev on Saturday at the end of his tour of duty as Kazakhstan's ambassador in Baku, Rashid Ibraev said Kazakhstan will use the planned Baku-Ceyhan pipeline to export oil from the huge offshore Kashagan field. He said Astana does not rule out extending that pipeline eastward across the Caspian seabed to Aktau. During talks in Washington last December, US President George W Bush and his Kazakh counterpart Nursultan Nazarbaev reaffirmed their shared commitment to the Baku-Ceyhan project. (May 29)

Kazakhstan to strengthen Caspian defenses
Visiting the Aqmola garrison on Tuesday, Kazakh Defense Minister Colonel-General Mukhtar Altynbaev said Kazakhstan will deploy additional ground and coast guard units on its Caspian Sea coast in the near future to augment the naval and border guard forces already present there. But he dismissed as implausible media speculation that Iran may attack Kazakhstan, despite Tehran's denunciation of the recent Russian-Kazakh agreement defining the two countries' respective sectors of the Caspian. "It is unlikely that anyone will start a war with Kazakhstan," Altynbaev concluded. (May 23)

Azerbaijan, Iran narrow differences on Caspian
On Sunday, the second day of his official visit to Tehran, Heidar Aliev met with Iranian religious leader Ayatollah Ali Khamenei, who paid tribute to the historic ties between the two countries but warned against interference in the Caspian Sea by unnamed "big powers" that, he claimed, do not want to see conflicts in the region solved. Aliev said at a joint press conference that the two countries have succeeded in narrowing the differences between their countries' views on the legal status of the Caspian. Upon his return to Baku on Monday, Aliev denied that Azerbaijan had agreed to suspend exploitation of the Alov and Sharq Caspian oilfields, of which Iran claims ownership. (May 22)

Russia lifts oil-export quotas
Russian Prime Minister Mikhail Kasyanov said after a Friday meeting with representatives of leading oil companies that his government will not extend beyond June 1 the self-imposed oil-export quotas introduced at the beginning of the year at the request of the Organization of Petroleum Exporting Countries. Kasyanov noted that the government and the oil giants believe "the oil market is approaching stabilization, and it is time to lift the restrictions". Among those who met with Kasyanov were Yukos head Mikhail Khodorkovskii, Surgutneftegaz president Vladimir Bogdanov, LUKoil vice president Anatolii Kozyrev, Tyumen Oil Co (TNK) president Semen Kukes, Sibneft president Yevgenii Shvindler, and Rosneft president Sergei Borganchikov. As the global economy recovers, Kasyanov has decided to act in the best interests of the Russian state budget, siding with the United States and Europe on the issue of export quotas, Rossiiskaya gazeta commented on Saturday. (May 21)

Battle for control of Slavneft continues
A court in the Russian district of Ufa issued a verdict last week annulling the decisions of an extraordinary meeting of Slavneft shareholders on May 13, including the election of Yurii Sukhanov to be the company's president. Legal experts of the State Property Committee, which holds a controlling stake in the oil giant and which supported Sukhanov's selection, have dismissed as groundless the Ufa decision, which was issued on May 13 but only made public on Friday. The court ruled that the shareholders' meeting did not have the authority to annul the contract of former Slavneft president Mikhail Gutseriev. It was unclear who filed the suit, but Aleksandr Parshukov, a spokesman for the State Property Committee, said no one from the company had been invited to attend the Ufa hearings. (May 21)

Iran reaffirms position on Caspian
Azerbaijani President Heidar Aliev began his long-anticipated three-day visit to Iran on Saturday with closed-door talks in Tehran with his Iranian counterpart Mohammad Khatami. In a short press briefing prior to those talks, Khatami reaffirmed Iran's official position that the Caspian Sea, to which he referred by its Farsi name Mazandaran, is a lake whose resources should be exploited on the basis of agreements among all five littoral states. (May 21)

US Caspian envoy visits Azerbaijan
Steve Mann, the United States' envoy to the Caspian region, held talks in Baku on Thursday with Azerbaijani President Heidar Aliev and oil-sector officials on unspecified minor obstacles to the planned Baku-Ceyhan oil-export pipeline and approaches to dividing the Caspian Sea among the five littoral states. Mann commended the "realistic approach" demonstrated by Russia, Kazakhstan, and Azerbaijan to dividing the sea into sectors. Russia and Kazakhstan have just signed an agreement demarcating their respective sectors, and Aliev reaffirmed on Thursday that Azerbaijan and Russia will probably do the same next month. Mann stressed that the dispute between Azerbaijan and Turkmenistan over ownership of two Caspian oilfields can and must be resolved through negotiations. (May 20)

Iran condemns Russian-Kazakh agreement on Caspian
Hassan Rowhani, secretary of Iran's Supreme National Council, has informed Russian Ambassador to Tehran Aleksandr Maryasov that any bilateral or trilateral agreement concluded among Caspian littoral states on exploiting the sea's resources, including that signed on Monday between Russia and Kazakhstan, is legally invalid. Rowhani further warned that any foreign interference or presence in the Caspian could jeopardize the stability of the region. The Tehran Times has similarly condemned the Russian-Kazakh agreement as "unacceptable". The paper accused Russia and Kazakhstan of pressuring the three remaining littoral states (Azerbaijan, Iran, and Turkmenistan) "to accept a plan to divide the Caspian's natural resources based on their geographical borders and the length or their coastlines". Iran, which has the smallest share of the sea (14 percent), wants it divided into five equal sectors. (May 17)

Russian energy giants make top 500 list
Four Russian energy companies have been included in a list compiled by the Financial Times of the 500 largest global corporations. Yukos, with a total capitalization of US$18.7 billion, was the highest-ranking Russian company, in 227th place. Gazprom ranked 250th, while Surgutneftegaz came in 344th and LUKoil came in 362nd. The newspaper noted that the appearance of the Russian companies on the prestigious list can be attributed to the relative reduction in capitalization of leading transnationals because of the downturn in the global economy and the relatively rapid growth of the Russian energy companies. (May 14)

Gas giant to keep embattled auditor
Gazprom says it will retain PricewaterhouseCoopers (PwC) as the auditor of its 2002 results, despite the opposition of minority shareholders. The company said PwC had won the tender over KPMG and that the decision will be submitted to the board of directors for approval. According to Dow Jones, the decision is a blow to a campaign against PwC spearheaded by fund manager Hermitage Capital Management, which has filed suit in a Moscow court alleging that PwC filed "false and misleading audits" in the late 1990s and 2000. (May 14)

Oil flows again through Azerbaijan-Georgia pipeline
Shipments of Azerbaijani Caspian oil via the Baku-Supsa export pipeline resumed on Thursday. The shipment of oil was suspended on May 6 after thieves damaged the pipeline in western Georgia, causing the leakage of some two tons of crude. Police have arrested two local residents in connection with the incident. (May 13)

Travel to oil-and-gas region now requires special visa
Russian Prime Minister Mikhail Kasyanov signed a decree on Monday virtually closing the Yamalo-Nenets Autonomous Okrug to foreigners. Authorities in Yamalo-Nenets have attempted repeatedly over the past five years to restrict access to the okrug, and at least twice each year have sent draft legislation to the federal authorities to tighten borders because of rising levels of crime and drug addiction. Finally, last October, President Vladimir Putin expressed support for Governor Yurii Neelov's desire to limit travel, but he reportedly didn't want to close the okrug completely. Putin and Neelov agreed to set up a commission to study the situation and to present suggestions by July 1. However, Kasyanov beat the commission to the punch. Before the 1990s it was practically impossible to enter the okrug without a special visa. There are currently 20 territories in Russia to which access to foreign citizens is restricted. (May 8)

Azerbaijan denies polluting Caspian
Azerbaijani Environment Minister Hussein Bagirov denied on Monday that the development of the country's offshore Caspian oilfields is a major source of pollution of that sea. He said that 85-90 percent of pollution is caused by waste products from large rivers that flow into the Caspian, in particular the Volga and the Kura, which flows from Armenia via Georgia into Azerbaijan. Azerbaijani officials last month blamed Armenia for high levels of pollution in the Kura, but later rejected an Armenian proposal for joint monitoring of the pollution level. Guseinov said on Monday that Azerbaijan does not blame Georgia for the pollution of the Kura. (May 8)

Oil thieves damage pipeline in Georgia
Thieves tapped into the Baku-Supsa oil-export pipeline in western Georgia, but caused only minor damage and an insignificant spill of oil, Caucasus Press reported on Tuesday. It was the first such occurrence during the three years since the pipeline was commissioned. (May 8)

Russian oil production up despite promise to OPEC
Russian oil production was up 8.8 percent in the first four months of this year, despite Moscow's pledge to the Organization of Pertroleum Exporting Countries (OPEC) to cut oil exports by 150,000 barrels per day, according to Energy Ministry statistics. Production was nearly 7.3 million barrels per day in the first third of this year, compared with an average of 6.7 million barrels in 2001. Natural-gas production increased 2.6 percent during the same period to 210.2 billion cubic meters. (May 7)

Presidents discuss oil exports
The presidents of Azerbaijan, Georgia and Turkey, Heidar Aliev, Eduard Shevardnadze, and Ahmet Necdet Sezer, met in the Turkish city of Trabzon on Monday and Tuesday to discuss exports of Caspian oil and gas via Georgia and regional security and unresolved conflicts in the South Caucasus. Sezer in his opening address stressed the strategic and economic importance of the South Caucasus, noting the need for increased cooperation, including in the military sphere, among the three countries to avert possible terrorist attacks on oil and gas pipelines. But Georgian state chancellery official Shalva Pichkhadze specifically denied on Monday that the three countries are planning to forge a military alliance, or that their military cooperation is directed at a third party. The three presidents plan to meet again in Tbilisi in one month's time to discuss gas exports. Georgian International Oil Corp president Giorgi Chanturia said the presidents of Kazakhstan, Ukraine, Moldova, Romania, and Armenia could also be invited to that meeting. (May 3)

Russia to raise oil export tax
Russia plans to increase oil export duties to US$20.40 per ton, more than twice the current $9.20 per ton. The decision was made at a meeting of a government commission responsible for protecting Russia's foreign trade, Finance Minister Aleksii Kudrin said. At the same meeting, the government commission decided to scrap a 3-5 percent export tax on ferrous metals, Kudrin said. The commission also decided to lower export duties on liquefied gas from 40 euros ($36) to 20 euros per ton, commission secretary Andrei Kushnerenko said. (May 2)

Poland proposes building tankers in Kazakhstan
During a one-day visit to Astana this week, Polish Foreign Minister Wlodzimierz Cimoszewicz discussed with his Kazakh counterpart Qasymzhomart Toqaev and President Nursultan Nazarbaev the possibility of Polish shipyards building tankers to transport Caspian oil, and the opportunities for Polish construction firms to win contracts in Kazakhstan. Nazarbaev is scheduled to visit Poland next month. (May 2)

Turkmenistan invites Ukrainian participation on pipeline
During talks in the Caspian port of Turkmenbashi (Krasnovodsk) on Monday, Turkmen President Saparmurat Niyazov suggested to his visiting Ukrainian counterpart Leonid Kuchma that Ukrainian firms could supply equipment for, or participate in, the construction of the planned pipeline to export Turkmen gas via Afghanistan and Pakistan. Niyazov is to meet this month with the leaders of Afghanistan and Pakistan to discuss that project. Niyazov and Kuchma also signed an agreement on the development of interstate relations. (May 2)

Russian, Kazakh governments agree on Caspian
Russian and Kazakh government officials have reached preliminary agreement on the joint development of the Kurmengazy, Tsentralnoe, and Khvalyn Caspian oil fields. Russian Deputy Foreign Minister Viktor Khristenko has said that a corresponding agreement will be signed this summer. Under an 1998 agreement, Kurmengazy is in Kazakhstan's sector of the Caspian and the other two fields in the Russian sector. (Apr 30)

Russia's energy minister pushes for oil exports to US
Russian Energy Minister Igor Yusufov said after meeting with US Undersecretary for Energy Robert Card that present conditions are suitable for Russia to became a permanent supplier of energy to the US market. Moreover, Yusufov said Russia also wants the United States to "give a signal to the West that Russia is a reliable place for investments in the energy sector". Yusufov said he and Card share the opinion that "close cooperation in energy supplies is profitable for both national economies and should not be dependent on political factors". Card said he believes that the development of the Russian energy sector has strategic significance for the United States. (Apr 30)

Moscow fine-tunes oil policy with Venezuela
Russian Energy Minister Igor Yusufov has met with the secretary general of the Organization of Petroleum Exporting Countries (OPEC), Ali Rodriguez, who is expected to step down soon to head Venezuela's national oil company at the request of Venezuelan President Hugo Chavez. Yusufov and Rodriguez discussed the coordination of Venezuelan oil policy with Russian interests on the world energy market. Adnan Shihab-Eldin, Rodriguez' deputy and the head of OPEC's scientific research department, also briefed Yusufov and his staff on OPEC's vision of the future of the global oil market. (Apr 30)

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