Caspian oil producers eye entering markets

Caspian oil producers eye entering markets

Caspian oil producers eye entering markets

An aerial view shows artificial islands on the Kashagan offshore oil field in the Caspian Sea, off Kazakhstan. REUTERS photo

Caspian oil and natural gas producers have struggled to move their products to world markets, the United States Energy Information Administration (EIA) has said in a recent study about Caspian Sea Region.

“Some countries cooperate and jointly develop export capacity, while others focus on attracting enough investment to create their own routes,” it said.

The Caspian’s coastal countries, along with Uzbekistan, together have an operating crude oil refining capacity of just over 8 million barrels per day, according to Oil and Gas Journal. Russia and Iran together make up about 85 percent of this capacity. As of January 2013, the total crude oil refining capacity of the coastal countries was about 9 percent of the world’s total crude refining.

The report said Russian refineries are scattered throughout the country, whereas much of Iran’s refining capacity is located near its main producing fields and major demand centers. Refineries in the Caspian basins tend to service major fields, usually to produce refined products for domestic consumption or small amounts of exports. “Crude oil not refined in the region is usually pumped to wider pipeline networks, where it can go to refining centers in Western Europe and China,” it said.

There are currently seven operational crude oil refineries within 100 miles of the Caspian Sea with a total crude capacity of 964,000 bbl/d. This is approximately 12 percent of the total refining capacity of the countries, although all of Azerbaijan’s and Turkmenistan’s refinery capacity is in this area.

Azerbaijan and Turkmenistan both have two operational refineries near the sea, while Russia, Iran, and Kazakhstan each have one. Uzbekistan’s three refineries are located in the southeast of the country, far away from the Caspian basin.