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Will Europe go shopping for oil in the Caspian Sea?

While the realignment of the energy map could bring short-term birth pangs to the European economy, Graeber writes, by the time the eurozone is in full swing, producers from the Caspian Sea may have taken Russia's place as the exporter of choice.

By Daniel J. GraeberGuest blogger / September 12, 2013

A general view shows the Bolashak oil plant on the Kashagan offshore oil field near Atyrau in Kazakhstan.

Leon Neal/Reuters/File

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There may be as much as 48 billion barrels of oil and 292 trillion cubic feet of natural gas in the Caspian region. There's probably even more yet to be discovered. In June, a BP-led consortium operating in the Shah Deniz natural gas field in the Caspian Sea chose a pipeline option that could redraw the European energy map. On Wednesday, operators at one of the largest oil fields in the world, Kashagan, announced the first well was opened for production. With Russian energy shifting its focus elsewhere, the Caspian region may be fast becoming Europe's preferred choice for oil and gas.

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The North Caspian Operating Co. announced Wednesday it produced the first barrels of oil from the Kashagan oil field in the Kazakh waters of the Caspian Sea. NCOC said Kashagan, discovered in 2000, is likely the largest field of its kind with an estimated 35 billion barrels of oil in place. Italian energy company Eni, in charge of the start of production, said initial Kashagan operations would give up around 180,000 barrels of oil per day and eventually ramp up from there. (Related article: Australia NSW to Become Natgas Boom Region?)

British Prime Minister David Cameron visited the region in June to discuss the field's development with Kazakh President Nursultan Nazarbayev. He said he was brushing aside human rights concerns in favor of the interests of British companies eyeing reserves in the Caspian Sea. More than a dozen people were killed during energy sector strikes in the Kazakh oil town of Zhanoazen in 2011. Cameron, however, said the "global race for jobs and investment" was his primary concern. Most of the trade relationship between Kazakhstan and the EU focuses on oil and gas. NCOC, for its part, said its export options for Kashagan target European and Chinese markets. 

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