NON-RUSSIAN OUTLETS FOR TENGIZ OIL.

The first trainload of oil from Kazakhstan’s biggest oil field, Tengiz, arrived in China on January 17. Officials of the American-run Tengizchevroil company expect to supply at least one million tons of crude oil from that field to China in 1998. According to Russia’s official news agency, Tengizchevroil has to resort to railroads as a means of exporting its oil because Russia has imposed stringent quotas on the transport of Tengiz oil through Russian pipelines. This has limited Tengiz exports to only a fraction of the huge field’s potential and has forced the company to route more oil by rail — usually a less economic method — than by pipe. Either way, the lion’s share of Tengiz exports went through Russia last year, but this is now changing. (Itar-Tass, January 17)

Tengiz is a $20 billion joint venture in which the U.S. companies Chevron and Mobil hold a 45 percent and a 25 percent interest, respectively, with Kazakhstan holding another 25 percent. Russia’s LUKoil holds the remaining five percent and wants to obtain more at the expense of the major partners. An international consortium originally formed in 1992 plans to build an export pipeline from Tengiz via Russia with Western capital. But the work has yet to begin, as financial and organizational arrangements have still not been finalized. Meanwhile, small amounts of Tengiz oil are already being delivered by tanker across the Caspian Sea to Azerbaijan and further by rail to Georgia for export to international markets. These amounts are scheduled to increase considerably in 1998. Moscow’s tactics can and often do slow down oil development in the region, but ultimately spur efforts to find alternative export routes and customers outside Russia.

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