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ITRADER - INVEST IN YOUR FUTURE
EURUSD1.08011:49 08.12.16
GBPUSD1.26911:49 08.12.16
EURCHF1.08511:49 08.12.16
USDJPY113.55311:49 08.12.16
AUDUSD0.74911:49 08.12.16
USDCAD1.32211:49 08.12.16
APPLE110.98522:59 07.12.16
GOLD1175.81011:49 08.12.16
EURUSD1.08011:49 08.12.16
GBPUSD1.26911:49 08.12.16
EURCHF1.08511:49 08.12.16
USDJPY113.55311:49 08.12.16
AUDUSD0.74911:49 08.12.16
USDCAD1.32211:49 08.12.16
APPLE110.98522:59 07.12.16
GOLD1175.81011:49 08.12.16

Prices are indicative

The Caspian Sea Oil and Gas in Global Energy Market

iTrader - The caspian sea oil and gas

The Caspian Sea has been in the news lately, mainly because of politics. As the role of the Caspian Sea oil and gas in global energy markets is huge, everyone wants a piece of the pie.

Also known as the Mazandaran Sea, it’s the world’s largest inland body of water that’s landlocked and located between Europe and Asia. As a result, it shares many common characteristics with oceans and lakes.

It’s often listed as the world’s largest lake, but you won’t find any fresh water there. The area is rich in energy wealth as already evidenced by recent discoveries of oil fields and gas deposits, but there’s still a lot more exploration needed.  

But the area is quite volatile as a result the Middle East crisis and the subsequent US military deployment. So there’s a lot of geopolitical jockeying going on.

The Caspian Sea is bordered by the following countries:

  • Iran (Golestan, Guilan, and Mazandaran provinces)
  • Kazakhstan
  • Turkmenistan
  • Republic of Azerbaijan
  • Russia (Astrakhan Oblast, Dagestan, and Kalmykia)

Major players in the global energy market have been quite active in the region for some time now. It has become even more important as a result of the demand generated by emerging economies like India and China. 

What’s Hindering Investment Opportunities?

The major hurdle to enhancing investment opportunities in the area is the fact that it’s difficult and expensive to build and maintain the infrastructure needed to produce, process, and transport the oil and gas. Further, the energy resources are compounded by cold water.

But regardless of the hurdles, development is taking place slowly, but steadily in the Caspian Sea slowly. One major project is the Kashagan project which is on now on the Kazakhstan side. Discovered in the year 2000, the field is estimated to hold 11 billion barrels of recoverable reserves.

Corporations on the Global Bourses

The companies involved in the Kashagan project are all well-known and found on bourses or stock exchanges around the world:

  • Conoco Phillips (NYSE:COP)
  • Eni (NYSE:E)
  • Exxon Mobil (NYSE:XOM)
  • Royal Dutch Shell (NYSE:RDS.A, RDS.B)
  • Total (NYSE:TOT)

This consortium of major international players have already spent approximately $30 billion on field development.

BP (NYSE:BP) is also operating in the Azerbaijan side after buying 5.63% of interest held by Devon Energy (NYSE:DVN). Now their interest in the region is just under 40%.

Other operators with interests in the field are as follows:

  • Chevron (NYSE:CHV)
  • Hess Corporation (NYSE:HES)
  • Statoil (NYSE:STO)

The bottom line is the Caspian Sea holds the necessary resources to supply the energy needs of emerging economies. However, it will come at a very high cost.

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