CASPIAN REGION

Ashgabad though looking forward to a meaningful dialogue with Baku, however, is not going to abandone its positions.

Many issues have arisen between Baku and Ashgabat, and the Turkmenian side is ready "to solve them positively", a source in the government of Turkmenistan who decided to remain unnamed has told to the correspondent Media-Press.

If the summit of the coastal states will be held in Turkmenbashi, has continued the source further, all these questions can be discussed there. However, if the President Geydar Aliyev's visit to the USA will be prolonged for two - three weeks, as news agencies inform, it will be hardly possible to expect his arrival to Turkmenistan. Besides, some more issues in regard with the Iranian side's approach to the solution of the Caspian status problem remain unsolved, therefore, the meeting in Turkmenbashi, seemingly, may not be held within the planned terms.

Commenting on the last reports on intention of Turkmenistan to develop marine hydrocarbon deposits with the assistance of foreign investments, the collocutor has declared, that "Ashgabad is not going to refuse signing contracts with the foreign oil companies". There is prepared "enough of diverse projects attracting foreign investments in development of Turkmen deposits including the known "Serdar" (in Azerbaijan it is named "Kapaz"), but Ashgabad did not force their realization. "It was very important for us to determine structures' legal ownership on the Caspian. The deposit "Serdar " in the Soviet time was called "Intermediate", as " between Turkmenistan and Azerbaijan, inasmuch it is to a great extent closer to our coast, - he noted. Actually, the deposits of "Azeri" and "Shiraq" which are being developed within the frameworks of the "Contract of the Century", are not purely Azerbaijanian", - the source has emphasized.

He reminded that in 1997 Russian "LUKOIL" and "Rosneft'" have signed an agreement with SOCAR as per development of the "Serdar" deposit, but after the protests on the Turkmen part this bargain was actually cancelled. "In any case, - summarized the representative of official Ashgabat, - we are looking forward to meaningful dialogue with Baku. In this case we certainly shall assert our interests".

The Head Summit of the Caspianside States is to be held toward the end of April

The Head Summit of the Caspianside States on the status of the Caspian is to be held toward the end of April this year.

As Minister of Foreign Affairs of Azerbaijan Vilayat Gulyev has informed Turan, within the upcoming days the Ministry of Foreign Affairs of Turkmenistan should submit an exact date of the meeting, and the Azerbaijani side will coordinate it with the operating schedule of the President of Azerbaijan.

Caspian Energy - "Delovaya Nedelya" (Business week, Kazahstan) Gulshen Ashirova

IN CASE OF A SCALE DEVELOPMENT OF ENERGY RESOURCES UZBEKISTAN CAN LEAVE THE NEIGHBOURS BEHIND ON PRODUCTION OF THE "BLACK GOLD"

Soon Uzbekistan may become a hydrocarbon center of the region, in which case it can outstrip even the neighboring Kazakhstan, where more than 26 million tons of oil is extracted annually. According to forecasts of analytical centers of the world leading oil companies, first of all Europe and the US, the hydrocarbon stocks of Uzbekistan considerably exceed similar resources of all other republics of Central Asia altogether.

According to an opinion of these centers' experts, the oil and gas recovery in Uzbekistan is more economic, far more effective and requires much less expenses than in the neighboring republics, where basic article of export are power resources. There are also economic reasons for being optimistic. Thus, during the period of independent development from 1991 through 1999 Uzbekistan achieved essential success in transition to the market system, economic and financial stabilization, the processes of system, structural economy transformation and banking system were enforced, prevented decrease in production, the institute of the population social protection is established, process of development of multistructure economy is going with an accelerated rate, grounds have been built for realization of investment long-term strategy, including foreign capital participation, especially in the hydrocarbon field.

Uzbekistan - the only country in the CIS which has not allowed oil and gas recovery recession - DIAGRAM

During 1991-1999 production of liquid hydrocarbons (oil and natural gas liquids) has tripled, having made more than 8 million tons per annum, production of gas - increased up to 1,4 times in 1999 and reached 55,6 billion cubic meters, that is the highest parameter in the Central Asia. Among the East-European states and countries of CIS Uzbekistan occupies third place on reconnoitered reserves of natural gas, second place on liquid hydrocarbons. Generally confirmed potential resources of Uzbekistan on oil constitute over 5,3 billion tons, condensate -480 million tons and gas - 5095 billion cubs. The basis of such optimistic estimation is results of research by the scientists and experts of geologic-geophysical materials obtained in Uzbekistan for more than 100-year period of prospecting works, oil recovery and gas lay.

171 deposits of oil and gas are open in Uzbekistan. Among them the oil recovery is carried out on 51 deposits, production of gas on 27, and condensate - on 17 deposits. Altogether out of 171 of open deposits the production of hydrocarbons is carried out on 73 of them, 53 deposits are prepared for industrial development and on 35 testing activities are carried out. The existing today amount of possible oil and gas reserves are estimated by experts in over 1 billion USD, availability of prepared and revealed perspective objects and "traps" (over 100) allow to successfully carry out hydrocarbon explorations in all hydrocarbon regions of Uzbekistan.

Alongside with hydrocarbon potential in the country there is an advanced infrastructure, power, water, human resources, transport ways ramified network of main gas pipelines working capacities of oil and gas processing and, most importantly, there is a growing demand for oil produced in Uzbekistan in the countries of Central Asian market. In combination it enables attraction of foreign investments into the hydrocarbon fields of Uzbekistan. With the purposes to increase the efficiency of pioneering and testing works, increase of volumes of the reconnoitered stocks of raw hydrocarbon and establishing of favorable conditions for attraction of the direct foreign investments in hydrocarbon sector of Uzbekistani economy. On April 28 of this year the president of the Republic Islam Karimov has signed a decree "About measures on attraction of the direct foreign investments in pioneering and oil and gas recovery". The decree is directed on intensive realization of search and prospecting works in Ustyurt region and other perspective hydrocarbon areas of the republic. In this regard wide attraction of the direct foreign investments is a major priority in the development of hydrocarbon industry of Uzbekistan. The document states that the reopened oil and gas deposits in Ustyurt region may be given to foreign companies, which have carried out pioneering works on the specified deposits, for development on conditions of concessions for the term of up to 25 years with the right of term of development prolongation.

Foreign companies are given the most favored nation treatment

According to the Decree of the President of Uzbekistan the foreign companies involved in conducting search and prospective works on oil and gas are given the most favored nation treatment ensuring an exclusive right on realization of search and prospective works on certain territory with subsequent development of any deposits revealed on the specified territory by establishing a joint venture or upon conditions of concession. Besides investors receive a priority right to be granted new territory for the search and prospective works continuation in case of irrecoverability on territories contracted on realization of these works, of resources having industrial value. They also are entitled the properties and unobstructed export stipulated by the constituent documents of joint venture or concessional contract of a part of the extracted hydrocarbons, as well as products of their processing on the tolling basis.

The state guarantees reimbursement of actual expenses on search and prospective works at opening deposits having industrial value, in case of transfer them for the further development to National Holding Company (NHС) "UzbekNefteGaz". Foreign companies carrying out search and prospective works on oil and gas, and also attracted by them foreign contract and subcontract organizations are exempted from payments of all kinds of taxes, deductions and tolls working on the territory of Uzbekistan, for the period of realization of prospective works, as well as customs fares (except for taxes for customs registration) at import of the equipment, material and technical resources and services necessary for realization of search, prospective and other accompanying works. It is determined by the decree that the general duration of search and prospective works carried out on an exclusive basis by the foreign companies on the stipulated territories cannot exceed 5 years. In case of revealing areas posing interest for further realization of prospective works, the opportunity of continuation of the works is given to the foreign companies within the boundaries of these areas for a term of 3 more years. A joint venture on oil and gas recovery formed with participation of foreign companies carrying out search and prospective works on oil and gas, are exempted from payment of income tax for a period of 7 years from commencing oil and gas recovery. Upon expiration of the specified term the rate of income tax of the specified enterprises is to be established at a rate of 50% from the current rate. These JV's are also exempt of property and income tax of the foreign participants of individual share and obligatory sale of part of the currency proceeds from realization of production received as a result of activities on production and processing of oil and gas for the period of compensation of an enclosed capital on search and prospective works.

The NHC "Uzbekneftegaz" is vested functions of an authorized body regulating hydrocarbon activities (search, pioneering, oil and gas recovery) on the territory of the Republic of Uzbekistan and state authority regulating concessions in the oil industry with the right of signing a contract on carrying out oil/gas extracting activities, supervising their realization, observance of the stipulated by the legislation and contract conditions of activities according to the resolution of the Cabinet of Ministers, as well as licensing for search, prospective development of the hydrocarbon deposits, oil and gas recovery.

"Uzbekneftegaz" has already developed investment projects on 16 blocks of hydrocarbon regions of Uzbekistan for consideration and adopting of resolutions by the potential investors on joint realization of projects on a mutually profitable basis. The above blocks are selected in the most perspective parts of hydrocarbon regions of the republic. In order to reduce potential investors' risk the open deposits of oil and gas are already included in these blocks for input them in operation. The borders of prospective blocks are conditional, and under the offers of the investors they may be changed. Alongside with it if an investor will offer another site not included into the structure of the offered projects, the company "Uzbekneftegaz" is ready to give the investor the site chosen by him for conducting prospective works on oil and gas.

A potential investor might conduct prospective works on any area of Uzbekistan in combination with commissioning his chosen deposit out of the ones prepared for industrial development. Thus, all territory of Uzbekistan, including the Ustyurt region today is open for the potential investors for conducting prospective works on oil and gas.

Summarizing the stated above, we can be certain that first, decree of the president of Uzbekistan "About measures on attraction of the direct foreign investments in investigation both oil recovery and gas" is a reliable guarantee for the foreign companies and should be their stimulus in attracting foreign investments into the hydrocarbon field of Uzbekistan.

Secondly, there is an appropriate hydrocarbon potential for realization of the given decree in Uzbekistan.

Thirdly, the Uzbekistani "open doors" policy should expedite the decision-making process on the part of potential investors interested in making business in Uzbekistan on the most favorable investment conditions. Thus, the given decree of the President of Uzbekistan in combination with the potential of subsoil hydrocarbon saturation in this country grants a unique opportunity for contributing investments into the hydrocarbon field of the Republic.

Oil pipeline in China will not yet be constructed

CNPC considers that the construction of an oil pipeline from Kazakhstan to China is not expected in foreseeable future. Whether or not the given project will be realized, it "basically depends on availability of hydrocarbon resources reserve" in the Kazakhstan region, whence it is planned to export it to China through the pipeline, said President of CNPC-International Ltd. Jou Zipin. As he said, so far there was no confirmation of the sufficient volume of hydrocarbon raw material. It was earlier planned that the oil pipeline Western Kazahstan - China according to Kazakh - Chinese top arrangement in 1997, will be laid for export of the Aktyubinsk oil extracted now by a Joint Stock Company "CNPC- Aktobemunajgaz " (66,7% of shares of the enterprise belongs to CNPC), to the developing regions on the west of PRC and, probably, for transportation of it to the coast of Southeast Asia. According to the feasibility REPORT, the extent of the pipeline should constitute about 3 thousand km., cost about $ 3.0 billion, minimal throughput volume - 20 million tons of oil per annum. At the present moment "Aktobemunajgaz" extracts about 2,6 million tons of oil and this year it plans to increase production up to 3 million. However almost 80% of the extracted oil now goes to Russia to the Orsk Oil Refining Plant (ORP) for processing. Thus the analysts consider that the deposits on which "Aktobemunajgaz" works may not give the volume sufficient to build the pipeline.

Ministry of Foreign Affairs of Kazakhstan considers that Turkey does not have grounds to quote export of the Kazakhstan oil through straits Bosphorus and Dardanelles to the Black sea

On Thursday Minister of Turkey on Sea Business Ramazan Mirzaoglu has declared, that the increase of volumes of transportation of the Kazakhstan oil (within the framework of the KTC project) may result in hazardous situations at the Black Sea straits, informs "Habar" agency. In this connection Turkey does not exclude an opportunity of quoting export of the energy carriers from Kazakhstan via the sea straits. Minister of Foreign Affairs of Kazakhstan Erlan Idrisov considers that the realization of the KTC project will not result in critical overload of the Black Sea straits and consequently there are no grounds for introduction of restrictions on cargo tankers passing through Bosphorus.

American company Access Industries has obtained in Trust management 25,12 percents of shares of the Kazakh oil-extracting Joint Stock Company " SNPS - Aktobemunajgaz "

The committee of state property and privatization of the Ministry of Finance of Kazakhstan has signed with the American company Access Industries /Eurasia/ a contract on transfer in Trust Management of state package of shares of oil-extracting JOINT STOCK COMPANY "SNPS - Aktobemunajgaz".

As the source in the Kazakhstan oil circles has informed PRIME-TASS on Thursday, the state package of shares is passed at a rate of 25,12 percents for attraction of additional investments into oil-extracting industry of Kazakhstan, for production volume increase and realization of oil, as well as reduction of the production cost price and increase of incomes "SNPS - Aktobemunajgaz".

The share transfer does not entail transition of the property rights. Validity term of the contract is 5 years. The managing company carries out trust management of "SNPS - Aktobemunajgaz" on its own behalf, but in interests of the proprietor - Kazakhstan - "upon conditions determined by the contract".

According to the contract conditions Access Industries, in particular, undertakes to ensure access of Joint Stock COMPANY "SNPS - Aktobemunajgaz" to transport system and processing capacities of the "Orsknefteorgsintez" industrial plant belonging to the Tyumen Oil Company / Russia / - to the business partner for Access Industries.

Besides the American company has pledged to promote investment attraction into the activity of Joint Stock COMPANY "SNPS - Aktobemunajgaz" at a rate of up to 1,4 billion USD within 5 years, as well as increase of oil recovery up to 6,26 million tons per annum.

63 percents of the shares of the Joint Stock COMPANY "Aktobemunajgaz" belong since 1997 to the Chinese CNPC, which activity repeatedly was exposed to critic. In particular, in the spring of 1999 Chinese partner reduced about 2 thousand employees of the Kazakh enterprise with the purpose of the production cost price reduction. Besides in opinion of the Kazakh side, CNPC has not kept up to the investment program: in 1998 by 85,4 percent, and in 1999 instead of 117,4 million USD as was planned, it invested in the development of "Aktobemunajgaz" 70 million USD.

Regional Power Network Companies of Kazakhstan are to be privatized

The Regional Power Network Companies (RPNC) of Kazakhstan will be privatized. The deputy of the Prime Minister, the Minister of Energy and Mineral Resources Vladimir Shkolnik has announced on Tuesday at the government session of the Republic.

According to his information the privatization of regional companies through which power from the suppliers is transferred to consumers, will promote realization of the power market development program. It will raise reliability and quality of power supply, attracting investments for modernization and expansion of electric networks.

The main obstacle in privatization of RPNC at the present moment is their large credit debts mainly to the budget and suppliers, Shkolnik has informed. There is an arrangement already achieved with EBRD on allocation of 761,000 ECU for payment of advisers' expenses for privatization of state shareholdings RPNC. The process of privatization is supposed to be complete in the first quarter of 2002.

* 21 RPNC work in Kazakhstan. in 11 companies among them state shareholdings have remained --

Vladimir Putin deems necessary to strengthen protection of oil sector in Chechnya

President of Russian Federation Vladimir Putin has declared the necessity to strengthen safety and protection of the oil sector of Chechnya today at the Russian Federation Council of Security session. The President said that during the operation in Chechnya 16 burning wells were extinguished, but as much was lit yet again, ITAR-TASS informs.

" Damage to this industry is comparable with volumes of the federal program for restoration of economy of Chechnya", - Vladimir Putin emphasized.

"Restoration of economy of Chechnya, - said the president, - should be accompanied by strengthening of measures on object protection". " We should not waste our money", - he emphasized.

Volume of oil recovery in Chechnya in 2002 will reach 1 million tons - Vladimir Hristenko

Volume of oil recovery to the enterprises of "Grozneft" in 2002 may make 1 million tons. Vice-prime Minister of Russian Federation Viktor Khristenko declared it today after the Russian Federation Council of Security session.

ITAR-TASS quotes that he said the daily production volume in Chechnya today will constitute about 1 thousand tons. 12 crews restore the destroyed wells.

By the end of the current year, according to Vladimir Hristenko, the number of employees of "Grozneft'" may make around 3,000 man.

Volume of an oil recovery in Tatarstan in 2006 can reach 30 million tons.

Volume of oil recovery in Tatarstan in 2006 can reach 30 million tons, considers Ravil Ibatullin, the director of Research And Project Institute Of Oil of Tatarstan (TatNIPIneft, Bugulma). This result can be achieved under two conditions: if the Joint Stock COMPANY of "Tatneft'" will keep stability in production, and small oil companies will continue the tendency to grow, IA of "Tatarinform" informs.

27.3 millions tons of oil have been extracted in 2000 in the Republic. The important achievement of the latter years is the provision of outstripping gain of stocks of oil in comparison with production. At the same time, the share of deep stocks, as well as high-sulfur oil will grow in the long term perspective. Drilling is a major investment element of maintenance of production level of the Joint Stock COMPANY "Tatneft'" and its growth altogether on the Republic. Therefore the strategic task for the Joint Stock COMPANY is increase of debit of new wells, as the further growth of investments in drilling, in opinion of R.Ibatullin, might appear poorly effective.

Volume of an oil recovery in Russia in January, - February 2001 has increased on 5,5 % and made 51,984 million tons.

Volume of an oil recovery in territory of Russian Federation in January, - February 2001 has made 51,984 million tons, or 105,5% from the corresponding level of similar period of 2000.

According to the statistic data, the leader of the Russian oil extracting, the LUKOIL company has extracted within the period specified 10,261 million tons of raw material, which is 0,4% higher than the corresponding parameter of January - February of the last year.

The Russian oil companies "JUKOS", "Surgutneftegaz", "Tyumen oil company" and "Tatneft'" in January, - February 2001 have extracted 6,896 million tons (117,8%), 6,821 million tons (106,3 %), 5,071 million tons (151,2 %) and 3,993 million tons (98,6 %) of oil accordingly.

Within the considered period Russia produced 98,735 billions - DIAGRAM

Turkmenbashi is going to Kiev

A representative delegation led by vice-president of "Neftegaz of Ukraine" company Mikhail Derkach has discussed with experts and officials of Turkmenistan an opportunity for Ukraine to participate in the development of hydrocarbon deposits located on the Turkmen shelf of the Caspian in a course of negotiation in Ashgabat. Agency Media-Press was informed about it by the source in government of Turkmenistan.

According to the information of the collocutor, in the context of the agreement about the Turkmen-Ukrainian cooperation signed earlier by the presidents Saparmurat Niyazov and Leonid Kuchma, the cooperation of efforts of the two countries in development of RPNC of Turkmenistan is stipulated. In particular, Kiev was officially proposed to establish JV's for development and operation of some deposits of oil and gas on the shelf of the Caspian.

As a high ranking official of Ashgabat emphasized, now "active preparation goes full speed" for the official visit of the President Saparmurat Nijazov planned for May of this year to the capital of Ukraine. In the course of this visit, the source believes, not only some "old problems between Kiev and Ashgabat will be solved (as it is known, Ukraine has not yet paid all debt sum for the Turkmen gas supplied), but also new agreements signed which will allow to speak about a large-scale cooperation between the two countries in the development of sea deposits of Turkmenistan".