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. Last Updated: 07/27/2016

CPC May Earn Taxes Of $20Bln

The government will collect more than $20 billion in taxes over the next four decades from the pipeline running between the Tengiz oil field in Kazakhstan and the Russian Black Sea port of Novorossiisk, a top oil executive said Wednesday.

The 1,580-kilometer pipeline, which will ultimately have a capacity of 600,000 barrels per day, is scheduled to begin full operations on Aug. 6. The Tengiz field is estimated to hold 6.8 billion barrels of oil, making it the world's sixth-largest field.

Annual tax payments and customs duties from the pipeline will reach $300 million by 2008 and peak at $800 million by 2016, said Ian MacDonald, president of Chevron Neftegaz Inc., the Chevron Corp. unit that is the biggest shareholder in the Tengiz field.

The pipeline is expected give Moscow political clout in the strategic Caspian region. Russia has a 24 percent stake in the Caspian Pipeline Consortium, followed by Kazakhstan with 19 percent and Oman with 7 percent. Aside from Chevron, the $2.8 billion project also involves seven oil companies, including Exxon-Mobil and Kerr McGee.

The United States has tried to limit Russia's control over Caspian petroleum exports, backing an alternative pipeline route through Azerbaijan, Georgia and Turkey to the Mediterranean Sea that would bypass Russia and Iran.

Russia has strongly advocated the new route, which takes advantage of some Russian infrastructure and supplements a pipeline to the central city of Samara.

Also, the CPC pipeline runs over mostly over flat steppe and is devoid of natural obstacles, unlike the U.S.-backed route, which crosses the Caucasus Mountains.