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                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 7, 1993                   TAG: 9304070088
SECTION: BUSINESS                    PAGE: B4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: ALMA-ATA, KAZAKHSTAN                                LENGTH: Short

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KAZAKHSTAN, CHEVRON MAKE DEAL ON OILFIELDS

Kazakhstan and Chevron Corp. signed an agreement Tuesday to develop one of the world's largest oilfields in a deal seen as a bellwether for foreign investment in the former Soviet Union.

The agreement, said to be the biggest joint venture ever undertaken in a former Soviet republic, provides for Chevron to develop the Tengiz oilfield and the much smaller Korolev field in western Kazakhstan over 40 years at an estimated cost of $20 billion.

Chevron negotiated for five years, first with the Soviet government, then with Kazakhstan after the Soviet collapse in 1991.

President Nursultan Nazarbayev and Kenneth Derr, chairman and chief executive officer of Chevron, signed the accord in Alma-Ata, the capital.

The agreement "culminated five years of courtship, and now we begin a long relationship," Derr said.

Tengiz contains an estimated 20 billion to 25 billion barrels of oil, of which an estimated 6 to 9 billion barrels are considered recoverable. The field is said to be as rich as Prudhoe Bay in Alaska.

Tengiz alone eventually could be worth more than $325 million a year to Chevron, said Eugene L. Nowak, an oil industry analyst at Dean Witter, Discover and Co., a New York brokerage firm.

A key benefit for the American company is that oil already is being produced at Tengiz, and Chevron can tap into its share of revenues immediately, Nowak said.

Chevron expects to invest about $1.5 billion in Kazakhstan in the first three to five years of the project. It is studying whether to transport the oil through Iran or to build a pipeline from the fields, which are along the Caspian Sea, to the Black Sea.

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