Estimates of the Caspian Sea region's proved crude oil reserves vary widely by source. For this reason, EIA estimates proven oil reserves in the region range between 17 and 49 billion barrels, which is comparable to OPEC members Qatar on the low end, and Libya on the high end. In 2006, regional oil production is expected to total 2.3 million bbl/d, comparable to annual production from South America's second largest oil producer, Brazil. During 2007, EIA expects over 200,000 bbl/d of annual production growth, comprised mostly of growth from Azerbaijan. By 2010, EIA expects the countries of the Caspian Sea Region to produce between 2.9 and 3.8 million bbl/d, which would exceed annual production from South America's largest oil producer, Venezuela. (For more information, see: Caspian Sea Region: Key Oil and Gas Statistics ).

Sizeable oil production growth has come primarily from the north Caspian states of Kazak hstan and Azerbaijan . The country briefs for Kazakhstan and Azerbaijan provide a more detailed description of the oil resources at these fields. Development of the region's oil resources has been led by three major projects: Tengiz and Karachaganak (in Kazakhstan), and Azerbaijan's Azeri, Chirag, and deepwater Gunashli (ACG) field. Combined, these three projects produced an average of 693,000 bbl/d from Jan.-Sep. 2006, roughly 30 percent of the regional total. Development of these decade-old key projects gave rise to an influx of new investment and infrastructure development that constitutes the "second Caspian oil rush," the first having occurred in the late 1800s. Following these discoveries, major new finds were announced in Azerbaijan at Shah Deniz in 1999 ("total reserves" of roughly 15 Tcf of natural gas and 600 million barrels of condensate), and in Kazakhstan at Kashagan in 2000 (recoverable reserves estimated at 7-9 billion barrels of oil equivalent, with further potential totalling 9 to 13 billion barrels using secondary recovery techniques).

By comparison, other countries in the Caspian Sea region have not made substantial progress towards developing their hydrocarbon resources since independence. Proven oil reserves in Turkmenistan and Uzbekistan are considerably smaller than those in their neighboring states, and the political regimes in Ashgabat and Tashkent have received less favorable consideration by foreign investors. As a result, although multinational oil companies have initiated numerous large-scale projects in Azerbaijan and Kazakhstan, Turkmenistan and Uzbekistan have received only smaller-scale deals.

Turkmenistan's and Uzbekistan's leading oil projects, also listed in Table 1 , are significantly smaller and markedly less developed than those in Azerbaijan and Kazakhstan. Some companies have been successful in the upstream sector in Turkmenistan with Production Sharing Agreements (PSAs). Petronas began producing around 10,000 bbl/d from the Diyarbakir field in mid-2005, Dragon Oil is produced roughly 18,000 bb/d from its Cheleken deposit during the first half of 2006, and Burren Energy is producing around 17,500 bbl/d from its onshore Nebit Dag block.

The Russian oil company, LUKoil, began exploration of the north Caspian in 1995 and is working to produce natural gas by 2008. Lukoil announced in early 2006 that it had found a large oil prospect at the V. Filanovskogo offshore field. The company plans to bring six fields in the Russian section of the Caspian Sea online with production starting at the Y. Korchagina field in 2008. Lukoil expects its six fields, which contain roughly 6.5 million barrels of hydrocarbons, to reach maximum output 140,000 b/d by 2016. One of these fields, Khvalinskoye, will be tapped by a 50:50 joint venture between Lukoil and Kazakhstan. In July 2003, LUKoil and Gazprom established a joint venture with Kazakhstan's state oil company, KazMunaiGaz, to develop the Tsentralnoye hydrocarbon structure, located on the border of the Russian and Kazakhstani offshore sectors. According to a LUKoil press release , the Tsentralnoye structure holds recoverable reserves of roughly 20 Tcf of natural gas, and drilling is expected to begin in 2008.

The Kurmangazy field sits on the border of Russia and Kazakshtan, and a May 2002 agreement delineated the Russian and Kazakh sectors of the Caspian Sea and paved the way for the field’s development. Rosneft and Kazmunaigaz signed a $23 billion PSA in July 2005 to develop the 7.33- billion-barrel field. The first well was drilled in early 2006 but came up dry. France’s Total had sought a 25 percent share of the project but has since suspended talks over its participation after the disappointing drilling results.

In the mid-1990s six exploratory wells were drilled in the Iranian sector of Caspian Sea, but they did not yield commercially available discoveries. During 2006, Lukoil and Kazmunaigas offered to cooperate with the Iranian Northern Drilling Company (NDC) on oil field development in the Caspian Sea. The Iranian side has 6 months to consider this proposal. NDC also signed an agreement in January 2006 with China’s Oilfield Services Ltd to drill in waters over 2000 feet deep.

In December 2005, Lukoil announced it had made a major discovery on the Anaran exploration block at the Azar field in western Iran. According to Lukoil, the block could contain as much as 1 billion barrels of recoverable oil. The Anaran block includes three other structures: Changuleh-West, Dehloran and Musian. Lukoil entered into the Anaran project in 2003 with a working interest of 25 percent, while Norsk Hydro holds 75 percent. Norsk Hydro has previously said that Anaran could be producing up to 100,000 bbl/d by 2010.