At a press conference held on Monday 5 October, ITE's vice President, Alex Bernstein, said that despite the financial crisis in Russia and Asian countries and falling world oil prices, the exhibition attracted exhibitors from many foreign countries including Iran, Japan, and China. The number of participants increased 35-40% compared with last year. (Interfax)

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"The EBRD is quite positive about investment opportunities in Kazakhstan", said Martyn Nicholls, the bank's resident representative in Kazakhstan at the ITE conference. "We like the reform programme here and we think that the management of the economy has been prudent and well done." He said that the EBRD would invest USD 700m in Kazakhstan in the coming years and had already committed investments worth USD 550m. The EBRD's current projects vary from upgrading the Ispat Karmet metallurgical plant in northern Kazakhstan to modernising a Caspian Sea port in the west of the country. Nicholls said more loans would be granted in the coming years for 11 projects currently under discussion. (Reuters)

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The major discussions at the ITE conference were around the possible routes of future oil pipelines from Kazakhstan. Richard Morningstar, U.S. secretary of state for Caspian basin energy development focussed on the U.S. strategy for the future pipeline from the Caspian region. "Our policy is that we do not support pipelines through Iran" he said, but he added that the U.S. was more flexible on oil and gas exploration and production projects in Iran and would study these issues "on a case by case basis". (Reuters)

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Carl Burnett, president of Mobil Oil Kazakhstan stated that all the known problems challenging world oil markets would not affect the company's investment strategy in Kazakhstan since Mobil is sure that these are short-term problems. According to him, the Asian region will recover eventually and economic growth will resume which will lead to considerable growth in oil consumption. Burnett also said that "the development of the oil and gas sector in the Caspian region is of strategic importance for the industrial world." As far as oil transportation from Kazakhstan is concerned, Mobil is keen to see U.S.-Iranian relations thaw, because it would provide an alternative pipeline route to world markets. (Panorama)

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The Managing director of Kazakhstan Pipeline Company S.A. (KPC), Jaques Retourne, told the ITE conference that this France-based group is ready to build a 2,080 km oil pipeline from Kazakhstan to the Gulf via Iran for USD 1.6bn and that it was only awaiting approval from the Kazakh government. The main obstacles to the construction of the pipeline are political, including the absence of a final decision on the legal status of the Caspian Sea and the difficulties in crossing Iran and Azerbaijan. The investment for the pipeline would come from French, German and Japanese export credits. Some financing would come from Elf Aquitaine which had offered to purchase 3 million tonnes of Kazakh oil during the first three years of pipeline construction and 10-15 million tonnes during the subsequent 10 years. (Reuters)

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Due to internal problems in Russia, negotiations on the legal status of the Caspian Sea have been postponed at the request of the Russian president until 15 November. This information was released at the conference by the Kazakh First Deputy Foreign Minister ,Yerlan Idrisov. According to him, four states, Kazakhstan, Russia, Iran, and Azerbaijan, have prepared their draft proposals on the Sea's legal status. He noted that "the Caspian states will have to find a compromise and to accept a common concession document that would work for years causing no uncertainty, primarily, for business co-operation". (Interfax)

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According to Nurlan Kapparov, the head of the national oil company KazakhOil , Kazakhstan expects to increase the production of oil to 30 million tonnes in 1999 from about 28 million tonnes in 1998. He told the ITE conference that conditions for the Kazakh oil sector were difficult in 1998 due to limited access to global markets through Russia's pipeline system and depressed world oil prices. According to him, the fall in oil prices will cost Kazakhstan about USD 100m in lost budget revenues. However, he said that foreign investors, who have already spent billions of dollars in the Kazakhstani oil and gas sector, would honour their commitments. (Reuters)

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The Director of Agip KIO, Vinchezo Di Lorenzo, told the ITE conference that the general contractor of the Karachaganak oil and gas deposit (in the north-west of Kazakhstan) is planning to reach an oil output of 6-8 million tonnes in 1998-2000. The project budget over this period will total USD 1.8bn. In 2002-2006, the annual production of oil at Karachaganak will increase to 12 million tonnes and gas to 25 billion m³ with an investment of USD 4bn over this period.

The Karachaganak general contractor for the project is a consortium of Agip and British Gas, each having 32.5%, as well as Texaco (20%) and LUKOil (15%). Kazakhstan is expected to earn USD 48bn during the life of the project.

The consortium has already started the construction of gas processing facilities which will make Karachaganak independent of its Russian partners in Orenburg where gas condensate is being supplied at present. (Interfax)

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Kazakhstan's huge Tengizchevroil onshore oil project will produce about 200,000 bpd of crude in 1998 compared to 140,000 bpd in 1997. The information was released to Reuters by the president of Chevron Overseas Petroleum Inc. which has a 45% stake in the project. He said that low world oil prices had not yet affected capital expenditure in the field, but partners would take this into account in the future. (Reuters)

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Canadian Hurricane Hydrocarbons Ltd who is developing the Kumkol oil field in the south of Kazakhstan, has big expansion plans. Hurricane's director, Werner Wenzel, told Reuters that the output at Kumkol is expected to increase to 80,000 bpd next year from the present 60,000 bpd. Hurricane's total current reserves in Kazakhstan are estimated at 429 million barrels of crude oil. The company, which is a major supplier to two oil refineries in the south and north of Kazakhstan, plans to develop exports to China and Turkmenistan. It is also going to build a power plant near Kumkol which will use associated gas to generate electricity. The plant will also produce over 200,000 tonnes of LPG per year for local consumption. "From the start, Hurricane has been committed to being in Kazakhstan for the long term".(Reuters)

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Phillips Petroleum vice president in charge of Eurasia operations, Bill Berry, told the ITC conference that his company is planning to invest hundreds of millions of dollars in offshore oil and gas plant in Kazakhstan. Last month the company bought, in alliance with Japan's Inpex, Kazakhstan's one-seventh stake in the Offshore Kazakhstan International Operating Company (OKIOC) which aims at exploring and developing Kazakhstan's Caspian Sea shelf. According to estimations is may hold 4 billion tonnes of liquids worth USD 700bn.(Reuters)

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The Manager of the OKIOC, Chris Innes, told the conference that a major drilling barge would arrive in the Caspian Sea in November. It is designed to drill the first exploratory well as provided for under the North Caspian project. According to KazakhstanCaspiShelf, the OKIOC invested USD 300m in preparatory works in the Caspian Sea shelf early this year. (Interfax)

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The President of the China National Petroleum Corporation (CNPR), Shou Xuanchen, told the ITE conference that the Chinese company would finish a feasibility study for an oil pipeline from Kazakhstan to western China in March or April next year and that construction work would then proceed "according to the general agreement" with the Kazakh government. The 3,000 km pipeline from western Kazakhstan to western China is part of a USD9.5bn oil deal closed between CNPC and Kazakhstan in September last year. (Reuters)

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The top management of the Caspian Pipeline Consortium (CTC) pipeline believes that the project will not have competitors in Kazakhstan. "The construction will be completed much earlier than our possible competitors could construct their pipelines. When our competitors enter the market, we will be in place already," said Frederick Nelson. "Our pipeline is designed to carry 68 million tonnes of oil . However, it will not be enough, the more pipelines there are, the better life will be in Kazakhstan", said CPC General Director, Victor Fedotov. (Reuters)