Oil Firms Ask Russia to Expand Pipeline Capacity
ChevronTexaco Corp. and its partners are urging Russia to let their oil-pipeline venture expand capacity as part of their plan to export more from Kazakhstan and Russia to the Black Sea.
The Caspian Pipeline Consortium, or CPC, in which ChevronTexaco owns 15%, plans to increase oil exports 42% to 640,000 barrels a day this year, the pipeline venture said Wednesday.
The partners, which include Exxon Mobil Corp. and Royal Dutch/Shell Group, have spent $2.7 billion to build the link.
“CPC is already operating above its mechanical design capacity as far as Caspian original oil is concerned,” CPC General Director Ian MacDonald said. “In December, we received over 400,000 tons of Russian oil at Kropotkin,” a loading terminal in central Russia.
CPC, which ships oil from fields in Kazakhstan to a Russian terminal near Novorossiisk on the Black Sea, is seeking permission from Russia and Kazakhstan to more than double shipments to 1.34 million barrels a day by 2008, about six years earlier than planned. Russia, CPC’s largest shareholder, has been delaying the permission for more than a year.
Kazakh President Nursultan A. Nazarbayev proposed Wednesday that his Russian counterpart, Vladimir V. Putin, make a decision that will let the pipeline expand capacity, Interfax news service reported. Kazakhstan is CPC’s second-largest shareholder.
Last year, the Russian government criticized the pipeline venture, saying it was less profitable than pipes run by Russia’s oil pipeline monopoly, OAO Transneft. Russia has been calling CPC to raise pumping fees to generate larger dividends for shareholders.
ChevronTexaco Chief Executive David O’Reilly said in July that his company might invest $5 billion to $10 billion in energy projects in Russia, according to the country’s Industry and Energy Ministry at that time.
Shares of San Ramon, Calif.-based ChevronTexaco rose $1.09 to $52.49 on the New York Stock Exchange.
CPC has contributed more than $500 million to the Russian government in taxes and fees from 1998 to 2004, MacDonald said in the statement.
After expanding, the pipeline will provide more than $1.5 billion a year in tariff revenue at current rates.
