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. Last Updated: 07/27/2016

High Hopes For Kazakh Oil Strike

ATYRAU, Kazakhstan -- When a drill belonging to the Offshore Kazakhstan International Operating Co. pierces the seabed in the northeast Caspian on Thursday, oilmen, Kazakh and Western alike, will be holding their breath.

Initial seismic tests at the site have revealed possible hydrocarbon deposits of 4 billion tons, but their existence has yet to be proven. A strike would mean that at least some of the euphoria over riches under the Caspian Sea was justified.

It could also mean big bucks for the consortium's nine members, not to mention steady revenues and renewed investor interest for resource-rich but impoverished Central Asia.

Sergei Kuzovnikov, spokesman for state oil company Kazakhoil, said the OKIOC project had the potential to rocket Kazakhstan into the league of the world's top energy producers and boost its political and economic profile.

"It is understood that striking oil there will create new jobs, more budget revenues, and so on," he said. "But it will also increase Kazakhstan's role on international markets and draw more and more investments to our energy sector."

OKIOC is possibly the biggest offshore drilling project in the world.

It unites Phillips Petroleum of the U.S., Japan's Inpex, Italy's Agip, British Gas, BP Amoco, Norway's Statoil, Mobil, Royal Dutch/Shell and Total.

The consortium says it had spent $170 million by the start of 1999 on various pre-commissioning operations while $300 million were spent on seismic tests before a production sharing agreement was signed with Kazakhstan.

It has brought a specially modified rig to the Kashagan site 75 kilometers off Atyrau in western Kazakhstan.

Analysts said one of the project's key questions will be whether Kazakhstan will be able to free itself of its dependence on Russian pipelines to ship its oil out of the Caspian region.