Newspaper article THE JOURNAL RECORD

Phillips Petroleum Probes Kazakhstan Investments

Newspaper article THE JOURNAL RECORD

Phillips Petroleum Probes Kazakhstan Investments

Article excerpt

ALMATY, Kazakhstan -- Phillips Petroleum said it's considering expanding its investments in Kazakhstan, a country whose oil- producing potential is attracting an increasing number of Western oil companies.

Wayne Allen, chairman of the Bartlesville-based oil company, met for an hour Monday with Kazakh President Nursultan Nazarbayev to discuss new ventures, one of which includes a study on producing natural gas liquids in the landlocked central Asian nation.

Last month, Phillips joined with Inpex of Japan to pay $500 million to the Kazakh government for drilling rights offshore Kazakhstan in the Caspian Sea. The company's efforts are a sign of confidence in the prospects for Kazakhstan's oil business even as oil prices droop near their lowest in a decade and nations in the Middle East such as Iran and Kuwait try to attract more Western oil- company investment. "The sky's the limit" for the oil reserves potential of Kazakhstan, Mike Coffelt, vice president of exploration at Phillips, said at a press conference in Almaty, Kazakhstan. Phillips is a relative latecomer to work in Kazakhstan, where bigger rivals such as Chevron and Mobil already are the nation's leading oil reserve holders. With proven oil reserves of about 8 billion barrels, Kazakhstan's potential for new ventures isn't as big as Iran or Kuwait. Both of those nations have reserves of roughly 95 million barrels of oil, about seven times the size of Alaska's giant Prudhoe Bay field. Kazakhstan has estimated it needs about $40 billion to fully define the size of and develop production from its oil reserves. The nation is anxious to attract foreign investors to help stanch its $500 million budget deficit this year. The big problem with Kazakh oil reserves always has been how to get them to market. No major export pipeline exists to haul crude from the two big fields developed by Chevron, Mobil, Texaco Inc., BG Plc and their partners. Chevron's Tengiz field currently pumps about 190,000 barrels of oil a day, though most goes by rail through Russia to reach markets. …

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