Russia prepares bill to block Chevron's oil pipeline from Kazakhstan

Dec 14, 2006 01:00 AM

Russia is preparing a bill to define the role of private investors in gas and oil pipelines in Russia aimed at blocking Chevron's Caspian Pipeline Consortium (CPC) oil pipeline, which is to transport oil from Kazakhstan via Russian territory.
"The commission of the State Duma (the lower house of the Federal Assembly) has revived a bill on major gas and oil pipelines", dating from 1999. This draft bill must be examined at the State Duma.

Analysts offered various explanations on the return of this bill. Vladimir Milov, president of the Institute of Energy Policy, said this bill has been designed to “hit” Chevron's CPC oil pipeline project, the only private oil pipeline in Russia currently.
Russian state-owned companies control other transport routes; Transneft is in charge of the oil pipeline network and Gazprom controls the gas pipeline network. For several weeks, the press has been showing concern about the Russian State's aim to block the development of the CPC and to take total controlof this project in which it owns 24 %, ahead of the Kazakh state, which has 19 % and Chevron with 15 %.

According to other analysts, this bill aims to attract private investors by simplifying the rules of the game whilst limiting their share in the network. According to a source at Gazprom, this bill was revived by the gas giant itself because of difficulties it faced in modernising the network alone, whilst also developing numerous new transportation routes such as the North European gas pipeline it is building to Germany.
However, the source emphasised that this bill clearly anticipates that the Russian state will maintain control, with a 50 % stake in the gas pipelines and 75 % in the oil pipelines.

Source: MosNews
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