Can the Caspian Sea be our savior in the energy deal? or Is it worth for the compelling missions? Thus, The Caspian Sea is an newly emerged region of potentially big oil resources. In order to understand the complexity of Caspian Bonanza firstly, control of production of the oil and gas, and secondly, control of the pipelines that will transfer the hydrocarbons the world markets should be examined.

1. Can the Caspian Sea Be Our
Savior?
The Caspian sea is an untouched region of
potentially big oil resources. The newness
of this region could decrease or alleviation
problems that would result from a cutoff
of 25% of oil imported to the U.S. thereby
giving the U.S. a respite in its oil imports
while it tries to create a less oil dependent
nation.

2. Problems with the Caspian Sea area:
• Geopolitics
• Pipelines
• Oil dependence from other countries
• The lack of desire on the part of Americans
to look for alternative means

3. The players include:
• The Five Caspian Sea Neighbors
• The United States
• China
• Turkey
• Other Regional Neighbors like Pakistan,
Afghanistan, and India
• The Oil Companies

4. Oil Dependence from other countries
• It’s not just the United States who is seeking
more and more oil to meet its needs
• Other countries, especially Asian countries, are
going to have additional oil needs in the coming
decades
• China and India with their large populations and
energy hungers, are going to exceed the U.S.
demands for oil in the coming years

5. What the Caspian Sea Oil
Provides ?
• Benefits via the Caspian sea:
• Provides a safety net while other energy
alternatives are being researched and
developed
• The U.S. would be less dependent on the
Middle East and the fragile political
structures that control that region’s oil

6. • Problems:
– There are only estimates as to
the reserves; no one really
knows how much oil exists
– Political instability exists in the
region
– Pipeline security is questionable
– Pipelines to get the oil out have
become a political issue
– China and the United States have
their own agendas as to who
should get the oil and where the
pipelines should go

7. • The Soviet Union controlled • Countries like
most of the region and only Turkmenistan and
had to share a border with Azerbaijan are
Iran.
heavily
dependent upon
Russia
• Russia has the
hegomony
• Now four of the current towards the
countries surrounding the Sea
Caspian Sea and
were once part of the Soviet
Union pipeline deals.

8. Why are pipelines such a big
deal?
• In landlocked central Asia
there is no point in pumping
oil and gas that reach to the
market. All the pipelines in
the area run over Russian soil
and, until now, the Kremlin
show agressive behaviours
toward limiting the access to
pipelines and charging heavy
tariffs.

9. • The Caspian Sea is filled
with possibilities but two
big problems stand in its
way to becoming the
savior to US dependence
on Middle East oil
• Pipelines need to be built
– Politics affect everything
in the region and at this
time it hedge off an
obstacle a productive
solution to the pipeline
problem

10. 900
800
700
600
500
400
300
200
100
0
Turkmenistan Kazakhstan Azarbaijan Russia Iran
Natural Gas Production/bcm 34 35.61 23 546.8 116.3
Natural Gas Consumption /bcm 20 33.68 10.12 367.5 119
Natural Gas Exports 14 17.66 5.564 207.7 4.246
Natural Gas Imports /bcm 0 3.72 0 28.4 7.048
Natural Gas Proved Reserves /tcm 7.504 2.407 849.5 47.57 29.61
World Energy Outlook 2009

11. Legal Issues
• The Status of the
Caspian Sea: Is it a
Lake or a Sea ?
• Boundary disputes
are an issue
between many of
• If it is a sea then the the countries in the
three mile limit of the region
territorial waters
applies and granting of
access permits to
foreign vessels

12. What can be done in order to cope with these problems?
• Regional discussions and treaties are the best means of
solving the boundary disputes
• Contracts between oil companies and the countries
need to address issues of infrastructure, pipeline
security and pipeline transportation
• The United States needs to eliminate the barriers it has
imposed on U.S. oil companies in order to prevent
investment in Iranian oil.

13. The world's fourth largest reserves of natural gas within a singular national
boundary (after Russia, Iran and Qatar) – The World FactBook 1 Jan 2009 est.
The country's total gas resource is 265 tcf or %4 - International Energy
Outlook 2010.
The World Energy Outlook 2010 also projected that Turkmenistan will likely
supply 2.4% of the worlds natural gas production in 2007-2030.
Turkmenistan is not only a gas producer ;
the fourth largest producer of oil ‘197.700 bbl/day’, in the former Soviet
Union after Russia, Kazakhstan and Azerbaijan (The World FactBook est.
2009)

14.  In terms of natural gas, the region in 2010 consumed an
estimated 638.6bn cubic metres (bcm), with demand of 728.8bcm
targeted for 2014, representing 14.1% growth.
 Production of an estimated 788.4bcm in 2010 should reach
936.4bcm in 2014, which implies net exports rising from an
estimated 149.8bcm in 2010 to 207.5bcm by the end of the
period.
The World Energy Outlook 2010

15. The largest natural gas fields are in the Amu Darya basin, with
perhaps half of the country's natural gas reserves located in the
giant Dauletabad Donmez field.
Current gas production in Turkmenistan is primarily from
onshore and mature fields in eastern Turkmenistan
(developed in the Soviet period)

16. Turkmenistan’s policy around Energy Security
• gas export diversification
• ensure fair level of gas export prices
• looking for foreign investment
• weakening Moscow’s leverage & decreasing Gazprom’s profits -
Monopoly
• reliable, long-term security of supply
• continuous economic growth
• viable & economically feasible routes; to find a seat in hard-
currency or global markets

17. 120-mile Korpeje-Kordkuy pipeline
The pipeline was built in 1997 and it cost US$190 million.
from Korpeje field north of Okarem in western Turkmenistan to Kordkuy in Iran
The capacity of pipeline is 8 billion cubic meter (bcm) per year
Iran financed 90% of construction costs, which was later paid back by gas
deliveries.
In 2002 a second pipeline was opened between the two countries with the goal
of expanding Turkmenistan’s exports to 20 bcm/y.

18. Potential alternative routes of evacuation of new
Turkmen gas
• Trans-Caspian gas pipeline
• Trans-Afghani gas pipeline
• “Caspian” gas pipeline via Kazakhstan and Russia
• Various options of gas supply to/via Iran
• Turkmenistan-China gas pipeline

19.  Construction began in the summer of 2008
 The 1,818 km, $30 billion pipeline is intended to export 30 bcm of gas from
Turkmenistan through Uzbekistan and (10 bcm of gas from, planned in 2nd
stage) Kazakhstan into Xinjiang, China.

20.  Strengthens not only Ashgabat, but also Beijing Vs Moscow
 China lending $3 billion to Turkmenistan to develop the South Yoloten
field in 2009
 China Development Bank to fund construction part of Uzbekistan.
 The Russia did not have to compete against another supplier until now!!
 The first stage of the pipeline was completed in 2009.
 The second stage, adding second pipe and increasing capacity up to
40 billion cubic meter of natural gas per year, is projected to be
completed in 2011.

21.  The East–West pipeline is a
planned natural gas pipeline
 would deliver gas volumes for
export to Europe
 the pipeline’s capacity will be 30
billion cubic meters (bcm) of gas
per year
 boost (~ enhance) the European Union-backed Nabucco and other pipeline
projects within the EU-planned Southern Corridor.
 This pipeline will mainly be supplied from the Dauletabad - South Yolotan field
 This PPL is used for also for electricity productions(!)

23. Pipeline Battles
TAPI Vs. IPI
 The Iran-Pakistan-India (IPI), or Peace, pipeline is in the negotiation stage.
 The proposed project would lie 1,700 km for a cost of $7.4 billion.
 High construction costs, disagreements over gas transit fees and U.S. opposition
locked the implementation!!
WHY???
 The U.S. prefers the Turkmenistan-Afghanistan-Pakistan-India (TAPI), or Trans-
Afghan pipeline and provide a similar $7.6 billion, 1,680 km route.

24. • a rival proposal to pipe Iranian gas to
Pakistan and India , thus exclude Iran
• diminish Russian influence in Central Asia
• India obliged to support American foreign
policy goals (The 2006 U.S.-India nuclear
agreement )
• In 2007, Richard Boucher, U.S. assistant
secretary of state, said: "One of our goals is
to stabilize Afghanistan," and to link South
and Central Asia "so that energy can flow to
the south."
• At present, insecurity in Afghanistan is a
major concern
Afghanistan is a strategic piece of real estate “energy bridge”
in the geopolitical struggle for power and dominance in the
region!!

25. Natural Gas Pipeline Framework Agreement between the Government &
a Government Agreement on Measures to implement the gas pipeline
project signed in Ashgabat Dec. 11, 2010
• Turkmenistan will transport about 33 billion cubic meters of natural gas.
• The whole project would cost 4 billion U.S. dollars.

26. Trans-Caspian Pipeline

27. The projected capacity of the pipeline is
30 billion cubic meters (bcm) of natural gas a
year
The route would bypass both Russia and Iran
It would run under the Caspian Sea from Türkmenbaşy to the Sangachal Terminal
where it would connect with the existing the South Caucasus Pipeline (SCP) from Baku
to Erzurum in Turkey
which in turn would be connected to the Nabucco pipeline to Austria
thus taking natural gas from Turkmenistan to Central Europe
Nabucco and trans-Caspian – are interlinked

28. • U.S. opposition to IPI is revealed the Russian antagonism toward
Nabucco.
• the EU and United States redoubled efforts to secure energy deals with
Turkmenistan
• under-sea pipeline from Turkmenistan could link up with the Europe’s
‘great pipe hope’ Nabucco, to aid its own diversification from Russian
energy dependency.
• According to the Russian Natural Resources Ministry, any gas or oil
pipelines across the floor of the Caspian Sea would be environmentally
unacceptable
• Russian Deputy Prime Minister Igor Sechin: ‘depressed regional
demand, over-supply, as well as asserting the EU-backed Nabucco simply
has no future’
• Same market with South Stream

30. project financing
limited technical capabilities in development of gas fields
lack of adequate gas infrastructure; rely on existing pipelines
lack of accountability; authoritarian regime particularly one able to
rely on resource rents, has its risks, both economically and politically
pipelines pose significant risks to the environment and local
communities; the South Caucasus and Baku-Tbilisi-Ceyhan (BTC)
pipelines reveal the challenges
plans could unravel if Turkmenistan’s gas reserves prove less than
expected; Turkmenistan would have to double its exports over the
next 15 years to meet its natural gas commitments based on these
pipeline plans