Moscow/Rome, 9 December 1996 (RFE/RL) - Three governments and eight oil companies Friday signed a pipeline deal crucial to developing the Caspian Sea's vast oil reserves. The multinational group is trying to build a $1.5 billion pipeline linking Kazakhstan's Tengiz oil field on the Caspian sea to Russia's Black Sea port of Novorossiysk.
The deal followed last-minute talks in the Russian capital Friday to try and resolve how much involvement a Russian company will have in the operation.
Our correspondent in Washington reports that State Department spokesman Nicholas Burns confirmed the signature of the deal.
The Caspian Pipeline Consortium (CPC) is made up of three states -- Russia, Kazakhstan and Oman -- and eight international oil companies -- Chevron, Mobil, British Gas, Agip, Oryx Energy, Russia's Lukoil and Rosneft and Kazakhstan's Munaigaz.
The Agip statement said the three governments would together control 50 percent of the consortium, which the remainder distributed among the companies. The companies would have rights to exploit deposits in the region served by the pipeline.
The statement said the pipeline would be operated by Russia's state-run Transneft oil pipeline monopoly.
No mention was made in the statement of Transneft taking an equity stake. Reuters news agency had reported earlier a last-minute push by Transneft to take the largest equity stake in the project had complicated the last-minute negotiations.
The signing of the accord by the Consortium, set up in 1992, had been delayed due to disagreements over Transneft's role as operator.
Itar-tass quoted Russia's deputy minister for fuel and energy, Anatoly Shatalov, as saying earlier Friday that construction of the pipeline could begin in 1997 and is expected to take two years to complete.
Shatalov said the pipeline would allow an initial flow of around 28 million tons of oil per year to Western markets, rising later to 67 million tons.
The Agip statement said the accord for the financing of the project is to be undertaken "entirely by the companies which are part of the consortium. Each company will therefore invest a sum equal to double the equity stake it holds."
Shatalov said the accord will have to be approved by the heads of state of Russia, Kazakhstan and Oman as they will control 50 percent of the consortium.