Oil Companies "Irrationally Exuberant" Over Caspian Basin, Says Analyst

[hatrack]

The Caspian Basin is now the scene of intense competition among the United States, Russia and China, which are all battling for control over natural resources and export routes. Maureen Crandall, an economics professor at the Industrial College of the Armed Forces at the National Defense University, said during a September 20 appearance in Washington that the Caspian Basin’s profit potential is probably exaggerated.

To support her contention she pointed to questions about the region's reserves of oil and gas. According to her own estimates, the entire region will be producing 3.6 million barrels of oil per day by 2015, and 3.36 million in 2020. Of that, Kazakhstan will be the largest supplier, and its production is projected to peak at about 2.5 million barrels per day. Her figures are significantly lower than official Kazakhstani estimates, which peg peak production at roughly 3.5 million barrels per day. "Saying it does not make it happen," Crandall said.

Turkmenistan is another country where reserves and production capacity are coming under question. The country currently produces about 60 billion cubic meters (bcm) of natural gas annually, of which roughly 75 percent is exported. Turkmen leader Saparmurat Niyazov has deals in place to ship 130 bcm of gas to China, Russia and elsewhere by 2009. Many experts believe Turkmenistan's reserves are not sufficient to meet these export commitments. Turkmenistan has not released the results of an independent audit of its energy reserves.

From a financial perspective, oil and gas extraction is not going to be as good a business proposition as some might have earlier expected, Crandall said. "I'm suggesting that because the investment climate has changed, this hype is unwarranted," she said. "Reality has caught up to the oil companies." She was a featured speaker in a discussion -- titled "Caspian Energy: Over Hyped and Under Risked?" -- jointly sponsored by the Central Asia-Caucasus Institute and the International Energy and Environment Program, both at the Johns Hopkins School for Advanced International Studies. Crandall also has recently written a book on the same topic, Energy, Economics, and Politics in the Caspian Region: Dreams and Realities.


EDIT

http://www.today.az/news/business/30540.html

[Dogmudgeon]

1. After half a decade of busted drilling, it seems like a flood

If you'll recall the graphs of New Oil Discoveries (available at many peak oil sites), most of them show declining rates of discovery and NO new discoveries in (IIRC) 2001, 2002, and 2004.

So we've possibly discovered some new oil in the Gulf (Jack #2), here-and-there in the Caspian Basin (I'm sure our great and good democratic friend Dr. Rev. Gen. St. Dr. Suparmurat "Savio(u)r of the Whole Freakin' World" Niyazov will give us full access at $10/bbl "with a cherry on top"), and realized that the eeevil Hugo Chávez is sitting on more Asfalto Latino than we can shake a squadron of F-16s at.

So it's a choice between subterranean tar, deepwater subterranean tar, and dealing with a crackerbox dictator who makes the House of Saud look like a model of probity and sane governance.

Exuberant? Possibly. Irrational? Probably. A sound energy policy? Ya gotta be kiddin'!

--p!

[phantom power]

2. "There may be no moment of clarity..."

"only new kinds of delusion and disorder."
--James Howard Kunstler

[hatrack]

3. "We'll keep doing what we do until we can't, and then we won't."

:eyes: