Skip to Main Content
Book Chapter

Caspian Petroleum Transportation and Contractual Challenges, 1991–1999

By
Frank C. Alexander, Jr.
Frank C. Alexander, Jr.
Bennett Jones Calgary, Alberta, Canada
Search for other works by this author on:
Published:
January 01, 2000

Abstract

The Caspian experience has taught us not to take the timely construction of export pipelines crossing international borders for granted, even if the economics look good.

—Frank C. Alexander, Jr.

The Caspian region, with its bountiful petroleum resources, opened to foreign investment in 1991 with the collapse of the Soviet Union. The international oil companies (IOCs) rushed to sign host government contracts (HGCs) with host countries for the development of large Caspian oil fields discovered during the Soviet era. Although the geologic risk was comparatively low, the foreign investor IOCs did not attach sufficient significance to the marketing risk peculiar to the region.

The Caspian experience has broken the paradigm that market forces may be relied upon to cause the construction of export pipelines crossing international borders if the quantity (and corresponding value) of reserves is sufficient to warrant the construction of such pipelines. We have learned that international and regional politics can produce formidable obstacles to the construction of such export pipelines, even where the project economics are attractive.

There were also other problems, including the difficulty of melding the Soviet system-based petroleum regimes with the modus operandi of the foreign investor IOCs. One of the most difficult issues has involved the insistence of Kazakstán and Turkmenistan on the application, for some projects, of the complex and overly bureaucratic Soviet style joint venture format HGC.

You do not currently have access to this article.

Figures & Tables

Contents

International Oil and Gas Ventures: A Business Perspective

George E. Kronman
George E. Kronman
Search for other works by this author on:
Don B. Felio
Don B. Felio
Search for other works by this author on:
Thomas E. O’Connor
Thomas E. O’Connor
Search for other works by this author on:
Mindy S. Kronman
Mindy S. Kronman
Search for other works by this author on:
American Association of Petroleum Geologists
ISBN electronic:
9781629810683
Publication date:
January 01, 2000

GeoRef

References

Related

Citing Books via

Close Modal
This Feature Is Available To Subscribers Only

Sign In or Create an Account

Close Modal
Close Modal