GULF STATES EXPAND CASPIAN ACTIVITIES.

Author:Smith, Pamela Ann
 
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Pamela Ann Smith reports on the involvement of Saudi Arabia and other Gulf states in the oil and gas industries of Kazakhstan.

Although many Washington commentators and oil industry experts regard the huge oil and gas reserves of Central Asia as a potentially rival source of supply to those of the Arab states and Iran, this view is not widely shared in the Gulf. In the past few years some of the most innovative companies in Saudi Arabia and Oman have been rapidly expanding their activities in the Caspian Sea and in the Former Soviet Union (FSU).

Convinced that "globalisation" is here to stay, they are forging a new path that combines Arab expertise in the hydro-carbons industry with the Gulf's long traditions of free trade to offer products, services and technology that can compete with those of the big, established international oil corporations.

Nimir Petroleum Company, owned by Abdulrahman and Sultan bin Khalid bin Mahfouz, is currently operating in Kazakhstan, Azerbaijan and Russia. The Dabbagh Group, another Saudi concern, has undertaken joint ventures with the state oil company, Kazakhstan Caspishelf (KPS) and Kazak Gas, and is also involved in the country's hotel, airlines and telecommunications sector. The Oman Oil Company was one of the pioneers that helped to set up the Caspian Pipeline Consortium (CPC). Its partners include the two huge US oil majors Chevron and Mobil, as well as LUKoil and Rosneft of Russia.

"We have key interests in Kazakhstan," notes Penny Esson, Nimir's Corporate Affairs Manager in London. Nimir was awarded a production licence to develop the country's North Buzachi oil field in November, 1996. Located on the north-eastern coast of the Caspian Sea, the company says it "holds promise for significant petroleum reserves." Under the terms of a contract signed in May last year, Nimir will set up a pilot programme to determine the field's commercial potential, followed by a full-scale development programme.

In Azerbaijan Nimir has a 50 per cent share in a joint venture with another Saudi company, Delta Oil, Delta Nimir Khazar Limited (DNKL), which in turn has a 1.68 per cent interest in the Azerbaijan International Oil Company (AIOC), the huge conglomerate of 11 international hydrocarbons corporations developing the country's substantial oil reserves in the Caspian Sea.

In partnership with the state oil company of the Azerbaijan Republic (Socar) and AIOC, Nimir is helping to provide technology and services for the...

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