• 5 hours Russia Approves Profit-Based Oil Tax For 2019
  • 9 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 11 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 13 hours Oil Production Cuts Taking A Toll On Russia’s Economy
  • 15 hours Aramco In Talks With Chinese Petrochemical Producers
  • 16 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 18 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 1 day Bidding Action Heats Up In UK’s Continental Shelf
  • 1 day Keystone Pipeline Restart Still Unknown
  • 1 day UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 1 day Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 2 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 3 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 3 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 6 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 6 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 7 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 7 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 7 days Rosneft Announces Completion Of World’s Longest Well
Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Will Caspian Oil and Gas Producers Take Russia's Place in EU?

Will Caspian Oil and Gas Producers Take Russia's Place in EU?

There may be as much as 48 billion barrels of oil and 292 trillion cubic feet of natural gas in the Caspian region. There's probably even more yet to be discovered. In June, a BP-led consortium operating in the Shah Deniz natural gas field in the Caspian Sea chose a pipeline option that could redraw the European energy map. On Wednesday, operators at one of the largest oil fields in the world, Kashagan, announced the first well was opened for production. With Russian energy shifting its focus elsewhere, the Caspian region may be fast becoming Europe's preferred choice for oil and gas.

The North Caspian Operating Co. announced Wednesday it produced the first barrels of oil from the Kashagan oil field in the Kazakh waters of the Caspian Sea. NCOC said Kashagan, discovered in 2000, is likely the largest field of its kind with an estimated 35 billion barrels of oil in place. Italian energy company Eni, in charge of the start of production, said initial Kashagan operations would give up around 180,000 barrels of oil per day and eventually ramp up from there.

Related article: Australia NSW to Become Natgas Boom Region?

British Prime Minister David Cameron visited the region in June to discuss the field's development with Kazakh President Nursultan Nazarbayev. He said he was brushing aside human rights concerns in favor of the interests of British companies eyeing reserves in the Caspian Sea. More than a dozen people were killed during energy sector strikes in the Kazakh oil town of Zhanoazen in 2011. Cameron, however, said the "global race for jobs and investment" was his primary concern. Most of the trade relationship between Kazakhstan and the EU focuses on oil and gas. NCOC, for its part, said its export options for Kashagan target European and Chinese markets.

Eurostat, the statistical agency for the EU, said second quarter gross domestic product grew by 0.4 percent for the 27-member EU. OPEC, in its monthly market report for September, said the European economy was returning to growth after 18 months of recession. European economic recovery, the cartel said, was "stronger than expected" and oil demand gains from members of the Organization for Economic Cooperation and Development was "particularly notable" in the Americas and Europe.  The energy appetite from an emerging Europe should only continue to grow.

In terms of natural gas, EU members saw their options expand exponentially when a BP-led consortium operating in the Shah Deniz gas field in the Caspian Sea made a decision on its export route for Europe.  Discovered more than a decade ago, Shah Deniz should peak at 565 billion cubic feet of natural gas, making it one of the largest natural gas fields in the world. Production is expected to enter into full swing in 2017 and European markets should start getting gas through the Trans-Adriatic Pipeline by 2019.

Related article: How I Learned to Stop Worrying and Love Fracking

BP's selection of TAP ended a pipeline war more than 10 years in the running. Kashagan's launch, meanwhile, is being met with criticism over Kazakhstan's human rights problems and the poor return on investments for what's characterized as one of the most delayed, complex and expensive oil projects in the world. Russian energy company Gazprom in July said its gas exports to the EU increased by 29 percent year-on-year. Norway, however, knocked Russia out of the No. 1 spot in terms of gas supplies to Europe. In 2009, 80 percent of Russia's oil exports went to the EU. With demand centers shifting to Asia, however, Russia has started to shift its oil export focus to China.

While the realignment of the energy map could bring short-term birth pangs to the European economy, by the time the eurozone is in full swing, producers from the Caspian Sea may have taken Russia's place is the exporter of choice.

By. Daniel J. Graeber of Oilprice.com




Back to homepage


Leave a comment
  • Richard Kauzlarich on September 16 2013 said:
    Does this overstate the case for the impact of Azeri gas? Not likely to see Shah Deniz II gas until 2018-19 and with global markets changing as rapidly as they are, it will be a different ball-game. Still an good article. Keep them coming.
  • Bob on September 18 2013 said:
    only the extremely naive believe that Azari gas will be cheaper for Europeans than Russian gas.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News