7 Major Oil Firms Sign Pact to Explore Caspian : Energy: Preliminary agreement with Kazakhstan would trigger drilling in one of the world’s potentially largest fields.

Seven multinational oil companies signed a preliminary accord with Kazakhstan on Wednesday to start development in the Caspian Sea of what is potentially one of the world’s largest oil fields.

The agreement is the second of its kind for Kazakhstan in 18 months of independence from the Soviet Union. It puts the vast, Central Asian republic firmly on the map of promising oil exporters.

Fairfax, Va.-based Mobil Oil Corp. was joined in the accord by six European companies: British Gas, British Petroleum, the Royal Dutch Shell Group, France’s Total, Italy’s Agip and Norway’s Statoil. The Kazakh oil company Kazakhstancaspishelf, formed in February, is also a partner in the new consortium and will get $12 million from each of the others to help it achieve the capacity to operate on its own.

President Nursultan Nazarbayev said in a statement that the agreement demonstrates Kazakhstan’s “commitment to developing a strong private sector and its responsible attitude toward making the best use of its natural resources.”

San Francisco-based Chevron signed a deal in April to exploit the massive Tengiz oil field near the Caspian Sea in western Kazakhstan. The Tengiz field, with estimated reserves of 6.3 billion barrels, is among the 10 largest in the world.

Prime Minister Sergei Tereshchenko, speaking at the signing ceremony, said surveys suggest that Kazakhstan’s Caspian reserves are several times larger than the Tengiz field.

Income from the Caspian oil fields, he said, will “be used to improve the standard of living of the people of Kazakhstan.”

Though it shares the economic crisis suffered by all the former Soviet republics, this nation of 16.5 million people is rich in natural resources. Apart from oil, it has large reserves of natural gas, coal, copper, gold, lead and other minerals beneath its 1-million-square-mile expanse of farm land, steppe, desert and mountains.

Nazarbayev’s policy of openness to foreign investment has brought a stream of foreign companies and delegations to the leafy avenues of Alma-Ata.

“If you follow this to its logical conclusion, Alma-Ata could become the financial center for investment in the region,” said a Western diplomat in the capital.

Wednesday’s tentative accord launches a joint exploration of the Caspian fields. “The companies will develop ecological and geophysical surveys for summer negotiations,” Tereshchenko said. “In September or October, the final consortium agreement will be signed.”

The seven companies and their Kazakh partner will work together for the first three to four years, surveying Kazakhstan’s entire shelf in the North Caspian. The explored area will then be divided into blocks from which each company will have exclusive rights to extract oil. Profit shares are to be determined in the autumn agreement.

Oil company officials estimated the cost of the initial geological survey at $130 million.

The Caspian Sea is, in fact, one of the world’s largest lakes. It borders three other former Soviet republics--Russia, Azerbaijan and Turkmenistan--and Iran. Oil has been extracted around its edges since the turn of the century, particularly in Azerbaijan.

All of the north Caspian belonged to the Soviet Union until late 1991, and international boundaries between the new states’ territorial waters have not yet been fixed. Kadyr Baikenov, the Kazakh minister of energy, said Wednesday that negotiations to do that are underway and that disputes over oil discovered in the middle of the sea are unlikely.

“If in the North Sea, England and Norway can decide who controls what oil fields, then so can we,” he told reporters. “It is our intention to follow the international practice for inland waters.”