Richard Matzke, president of Chevron Overseas Petroleum Inc, told an international oil and gas conference that proposals by the Caspian Pipeline Consortium, or CPC, for financing the $1.2 billion pipeline were unacceptable.
The CPC, consisting of Russia, Kazakhstan and Oman, has asked Chevron to provide nearly all of the construction funds in return for a 25 percent ownership interest. "Does this look like a fair and equitable deal?" Matzke asked. "You bet it does not and that is precisely why there is no pipeline."
The pipeline, with planned capacity of up to 1.2 million barrels per day, is due to run from Kazakhstan's giant Tengiz field to Novorossiisk, Russia's main oil export outlet on the Black Sea. The Tengiz field, being developed by Tengizchevroil, a joint venture between the Kazakh state oil company and Chevron, has been plagued by export restrictions imposed by Russian pipeline operator Transneft.
Matzke, in his harshest comments to date on the pipeline financing proposal, said Chevron wanted to take part in the project but not on any terms.
"We will gladly participate in a pipeline in which all owners receive equity and management in proportion to their financial contribution," he said.
Chevron proposed providing 50 percent of the required financing for a 25 percent ownership stake.
"This proposal provides for Kazakhstan and Russia to each own 25 percent by contributing existing assets and leaves 25 percent for another partner that can match Chevron's financial support," he said. The Chevron boss added that Oman had agreed to provide promotional capital of only $25 to $50 million, or 3 percent of the sum that Chevron is being asked to pay.
"As Kazakhstan has recognized, you can't build a pipeline without money. And the promoter, Oman, has not provided any ... it is clearly time for Oman to back off or back out," Matzke said.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.