3 U.S. Oil Firms Expected to Sign Caspian Pact

Chevron Corp., Mobil Corp. and Exxon Corp. are set to sign Azerbaijan oil development contracts Aug. 1, the Azerbaijan embassy said.

The contracts, which signal the next major involvement of U.S.-based petroleum companies in the oil-rich Caspian region, will be signed in Washington by Azerbaijan President Heydar Aliyev, said Araz Abbasov, third secretary in Azerbaijan’s Washington embassy. Similar agreements with Russia, Turkmenistan and Kazakhstan have been signed as former Soviet republics open up the area to oil development and exportation.

Aliyev was scheduled to arrive Sunday for a week-long state visit. Using Western technology and financing, Azerbaijan is attempting to revive its oil industry, which goes back to the turn of the century. The U.S. government estimates that the Caspian region may contain as much oil as Kuwait’s reserves of 100 billion barrels.

“We look forward to signing an agreement,” said Tom Cooney, Mobil’s spokesman. Exxon and Chevron representative said their companies don’t comment on commercial discussions.

The signing ceremony is planned a few days after production drilling is set to start in the first major oil project involving U.S. companies, the $8-billion offshore Azeri, Chirag and deep-water Guneshli project with an estimated 4 billion barrels of oil reserves. Amoco Corp., Exxon and Unocal Corp. are in the group running that project.

Later in August, a group including Pennzoil Co. will drill the first well in the offshore Karabakh prospect, estimated to contain 1 billion barrels.

Although the three U.S. companies were reluctant to speak about negotiations, the Russian news agency Interfax quoted an official in Azerbaijan’s state oil company, known as SOCAR, as saying that contract signings with Chevron, Mobil and Exxon “can be spoken of with complete confidence.”