Russia has reached an agreement with Oman on the purchase of the country's 7 percent stake in the Caspian Pipeline Consortium (CPC), Deputy Energy Minister Stanislav Svetlitsky told journalists on Friday. “We have accepted their offer for the whole 7 percent. We have submitted our offer to Oman,” he said. At the same time, Kazakhstan is still interested in buying the stake, and for this reason no definitive decision has been made on who will buy it or how it will be distributed among the consortium's remaining state shareholders, Russian and Kazakhstan, Svetlitsky said. He said Russia might take hold of 4 percent and Kazakhstan of 3 percent of the stake. Oman has decided to back out of the CPC because of the unprofitability of the project. Russia and Kazakhstan enjoy priority rights to buy Oman's stake, which is valued at $799 million. Hungarian company MOL has also expressed interest in the stake, but Russia and Kazakhstan have announced they would like to increase their shares in the project if Oman withdraws. The CPC owns the 1,580 kilometer long Tengiz-Novorossiisk oil pipeline, which links oil fields in western Kazakhstan and Russia's Black Sea coast. The CPC pipeline pumped 32.6 million tons of oil in 2007. There exists a feasibility study for a proposal to augment the CPC's capacity to 67 million tons of oil per year. The CPC's shareholders are Russia with 24 percent, Kazakhstan with 19 percent, and Oman with 7 percent. The rest of the consortium belongs to private companies, such as Chevron Caspian Pipeline Consortium Company (15 percent), LUKARCO B.V. (12.5 percent), Rosneft-Shell Caspian Ventures Limited (7.5 percent), Mobil Caspian Pipeline Company (7.5 percent), Agip International (N.A.) N.V. (2 percent), BG Overseas Holdings Ltd (2 percent), Kazakhstan Pipeline Ventures LLC (1.75 percent), and Oryx Caspian Pipeline LLC (1.75). CPC broke even for the first time in 2007, with net profit of $423 million. Russia has repeatedly expressed its concerns over the project's economic inefficiency, including a debt of $5 billion.
