Caspian Sea: Offshore Exploration, Discoveries, And Strategy
Authors: Fradkin L.A. , Gulyy S.V. 
Published: March 2010

Abstract
The Caspian Sea region has become a major focus of oil activity since the break up of the Soviet Union. There are four sedimentary basins in the region, each containing substantial proved hydrocarbon reserves. Five independent states (Russia, Kazakhstan, Azerbaijan, Turkmenistan, and Iran) share these reserves. The primary challenges of the area include: high cost of oil and gas transportation; territorial disputes; complicated seismic and geological conditions; and sensitive ecology. Early activity in the region was disappointing; however, several recent oil and gas discoveries, including what may be the largest offshore oil field in the world (Kashagan in the Kazakhstan sector), may renew interest.
This paper reviews the major geological features and prospect types, as well as technical and economic developments. Historically, Caspian offshore activity has been mainly restricted to the multinational oil companies. However, recent developments could provide avenues for smaller companies and consortiums to participate. Activity in the area has resulted in new 3D and transition zone seismic data, multi-client seismic surveys and equipment and services on a shared-cost basis. A summary of available reserves and economic cases modelling is provided. Companies that can balance risk and target size, forecast the development strategies, and manage local politics should consider investing in the Caspian Sea region.

Introduction
The Caspian Sea region was one of the earliest oil producing areas, and could become again a very important oil-producing centre in the 21st century, with its own infrastructure, marketing and E&P strategy (Figure 1). The Caspian Sea is a landlocked sealake, with an area of 373,000 square km. It reaches its maximum depth of 980 m in the south, while the shallow northern part averages only 5 m. Petroleum resources of the region could exceed 32 billion tons (225 billion bbls) of oil and 22 tcm (800 tcf) of gas(1), with current proven reserves of 5.3 billion tons (37 billion bbls) and 8.3 tcm (290 tcf). The increase is mostly expected from the Caspian Sea offshore areas in Kazakhstan, Azerbaijan, Russia, and Turkmenistan (Table 1).
Currently, the Caspian Sea region contains several of the world's largest oil and gas production projects outside of North America and the North Sea. They are owned and operated by Western oil companies under Production Sharing Agreements or similar terms. Some of these projects are: Chevron's Tengiz; Agip-BG' Karachaganak; the BP led Azeri-Shirag-Gyuneshli; Kazakhstan Offshore Consortium' Kashagan; and several others.
The non-finalized legal status of the Caspian offshore sectors has not prevented many companies from signing and proceeding with their E&P contracts. About 30 companies from 18 countries are now involved in exploration and production activities in the Caspian offshore region.
New opportunities are emerging for transportation, trade, supply, marketing and oil servicing. A new Caspian Pipeline Consortium (CPC) pipeline connects the 1.4 billion tons (10 billion bbls) onshore Tengiz Field with terminals in the Black Sea, providing direct access to the world market rather than relying on the Russian oil transportation system.