Ehat particulalry strikes me is the remark that no-one in the oil patch any longer believes in US Dept of Energy optimism about the size of world oil reserves. If the EIA and heighly-esteemed US Geological Service are *lying thru their teeth* about the size of reserves, that ought to ring alarm bells bigger than Notre Dame.
Mark ---------------------------- By Ben Partridge
London, 16 July 1998 (RFE/RL) -- British Foreign Secretary Robin Cook says the Caspian region will supply a tenth of the world's oil within a decade, a remark that promises a huge petrodollar boom for this impoverished region. But is he being overoptimistic?
A more sober report by the International Institute for Strategic Studies in London said the Caspian region holds perhaps only 3 percent of world oil reserves, much lower than Cook's claim suggests.
The IISS report said estimates by politicians and journalists that the energy reserves of the Caspian region are only a little smaller in scale than Saudi Arabia are, in effect, far removed from reality.
In citing the 10 percent figure, Cook said this week that Britain is to boost its diplomatic representation in the Caspian region because of its growing strategic importance. This assertion is certainly true.
In the past few years, western politicians and oilmen have been drawn like a magnet to the region, lured by the promise of fabulous wealth from oil and gas fields that have yet to be fully explored, especially in Azerbaijan, Kazakhstan, and Turkmenistan.
One report (Economist) said: "The world's oil bosses are falling over themselves to secure a piece of the Caspian action."
Today, the five central Asian states (Turkmenistan, Uzbekistan, Kazakhstan, Tajikistan, and Kyrgyzstan) and three Caucasian republics (Azerbaijan, Georgia, and Armenia) are grabbing world headlines, only six years after emerging from the ruins of the Soviet Union.
Central Asian presidents are feted in Washington, Beijing and Bonn. All the regional powers, Russia, China, Turkey, Iran, as well as the U.S. and the west Europeans, are vying for power and influence.
So how important are the region's oil and gas fields, and what role will they play in meeting world energy demands into the 21st century? The answer to this question depends on who you listen to.
The U.S. Department of Energy said a few years ago that the potential recoverable oil reserves in the region are some 200 billion barrels. This estimate would suggest that the Caspian is only a little smaller in scale as an oil province than Saudi Arabia.
But the recent IISS report said, within the global oil industry, the 200 billion barrels figure is widely dismissed, although it is the figure that recurs most often in political and journalistic analyses.
The problem with this figure is that it leads to the conclusion that the Caspian could somehow be a substitute for Saudi Arabia and the Gulf as a source of oil supplies, leading to less dependence on these regions, with all that this implies for the direction of foreign policy.
But this is highly misleading, according to the IISS report. It says the consensus of oil industry forecasts of the recoverable reserves from the Caspian lie in the region of 25 to 35 billion barrels, or more in line with the more modest reserves of Europe's North Sea.
A report by the Wood Mackenzie consultancy, quoted by the Economist, put it bluntly: the Caspian Basin is not in the same class as the Persian Gulf. It says the region has proven reserves of 70 billion barrels of oil equivalent (i.e. including natural gas). Most of the proven oil is in Kazakhstan's 150 or so explored fields, and most of the gas is in Turkmenistan's huge basin below the desert.
It says these reserves, though smaller than the Middle East, are big by any other standards (and significantly larger than Europe's proven reserves of about 50 billion barrels of oil equivalent). Still, seismic studies of the Caspian indicate geological structures that might conceivably hold a vast wealth of hydrocarbons (many areas have barely been explored.) The Economist report says these seismic studies have tended to encourage Caspian governments to be overoptimistic about the size of their energy reserves.
There is one big problem: the Caspian oil and gas is almost useless unless it can gain access to world markets. That is the challenge for a remote region that lacks access to an open sea. Much will depend on "pipeline politics," or the ongoing debate over the routes of export pipeline, to the north, south, east and west. Whether and when these pipelines are built depends on healthy oil prices, and they have plunged most recently.
So will the Caspian region be able to supply one-tenth of world oil supplies within a decade, as claimed yesterday by British Foreign Secretary Robin Cook? The answer must be: well, perhaps.
-- Mark Jones http://www.geocities.com/~comparty