Chevron Eyes Stake in Baku Ceyhan Pipeline

BAKU (Reuters)–US oil major Chevron Corp. wants about a 10 percent stake in the Baku-Ceyhan pipeline to carry crude from the Caspian Sea to the Mediterranean–Chevron officials said on June 5.

"We are still waiting for an answer from SOCAR (the Azeri state oil company) or the sponsor group…A range of 10 percent (of the stake) is definitely right,” Moustafa Habib–Chevron Eurasia’s general manager–told reporters in an interview during an oil and gas conference in Baku.

Already Kazakhstan’s biggest foreign oil producer–Chevron’s approach to the $2.8-$2.9 billion Azerbaijan-Turkey line marks rare oil company support for a venture long touted by the US and Turkish governmen’s but unpopular with energy firms concerned about the pipeline’s high price.

The planned pipe runs about 1,000 miles (1,737 km) from Azerbaijan’s capital–Baku–through Georgia to the Turkish port of Ceyhan.

Habib said Chevron expected to get an answer from the sponsor group of the project soon–adding that this would happen before the end of the year. He said the company wanted to get the same rights and conditions in the project–which founder members had.

Another Chevron official told reporters that the company considers the Baku-Ceyhan line to be commercially viable. "It’s an excellent route for south Caspian crude and that’s why we are interested in participation in this project," Guy Hollingsworth–managing director of Chevron Eurasia said.

Both officials said Chevron was also waiting for results of drilling on the offshore Absheron block where–according to SOCAR–reserves are as high as three trillion cubic meters of gas.

Azeri President Haydar Aliyev told the conference that gas reserves at Absheron were greater than at the offshore Shakh Deniz field–believed to contain one trillion cubic meters of gas.

Hollingsworth said it was too early to estimate its reserves–but added he was very hopeful about it. He said Chevron–which is an operator of this project–had expected to get preliminary results by the end of June. He put total investmen’s from Chevron in all projects in Azerbaijan in 2001 at $50 million.

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