100 executives attend meeting in Coronado
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
September 10, 2005
With the rising price of energy spurring a search for more fuel sources, U.S. officials and oil company executives met yesterday at the Hotel del Coronado to discuss the possibility of extracting more oil from the Central Asian republic of Kazakhstan.
Currently, Kazakhstan – an oil-rich country surrounded by Russia, China and several former Soviet republics – produces 1.3 million barrels per day.
But by 2015, industry analysts say, that oil production will more than double to 3.5 million barrels a day, which could make Kazakhstan one of the world's top five producers.
Which is why more than 100 executives from such companies as Chevron and ExxonMobil met with Kazakhstan's energy and industry ministers, as well as high-ranking officials from the U.S. State and Commerce departments and Export-Import Bank.
Kazakh Energy Minister Vladimir Shkolnik said his country has enough oil to help stabilize world fuel prices, but it needs more investment to build pipelines.
"We have invested billions of dollars over the years to develop and upgrade our pipeline and transport system," Shkolnik said. "Still, we need to improve our ability to move more oil from the Caspian Sea to world markets, and that requires greater investment in this infrastructure."
Since the breakup of the Soviet Union in 1991, $33 billion in investment has flowed into Kazakhstan, with about a third of the investment coming from the United States, led by Chevron and ExxonMobil.
In the past couple of years, however, U.S. oil companies have faced growing competition from China.
On the western side of the country, a consortium led by Chevron is building a 935-mile pipeline to take Kazakh oil through Georgia and into Turkey. But to the east, China's two top oil companies – CNOOC and CNPC – are exploring ways to bring Kazakh oil into the Chinese heartland.
With revenue coming from both sides, the Kazakh government is trying to diversify its economy by bringing other industries in. At yesterday's conference were representatives of such companies as General Electric, which is selling locomotives to Kazakhstan; John Deere, selling agricultural combines; and AES Inc., which is rebuilding the country's Soviet-era electrical grid.
"With all the oil money percolating through the economy, a large number of U.S. companies are beginning to be interested in Kazakhstan," said William C. Veale, executive director of the U.S.-Kazakhstan BusinessAssociation.
