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Deuss oil pipeline threatened by talks

of the world's largest oil fields in Kazakhstan to the Black Sea is facing another hurdle, according to the Interfax News Agency.

Interfax quoted a Kazakh government source as saying the country is seeking talks with Russia early next month to build a pipeline from the Tengiz fields to the Black Sea. The news agency said that preliminary negotiations have already been held.

Such a pipeline would bypass the Deuss-promoted Caspian Pipeline Consortium (CPC), a joint Kazakh-Russian-Omani project that reportedly has run into financing problems in its efforts to link Tengiz to the Russian Black Sea port of Novorossiisk.

Mr. Deuss, the president of the sultanate of Oman-owned and Bermuda-registsred Oman Oil Company Ltd., has been a central figure in the CPC talks, although San Francisco-based Chevron Corp. has refused to join the consortium on the terms spelled out by Oman.

There remains doubt as to whether the CPC can proceed in the absence of Chevron.

Meanwhile, Lukoil, Russia's largest oil company, is negotiating to take a stake in the struggling joint venture between Chevron Corp. and Kazakhstan's government to develop the Tengiz oil fields, a company official said Wednesday.

Talks with the Kazakh side have been underway for several months, Lukoil spokesman Pyotr Neyev said. He declined to give details on the negotiations.

A report by Interfax on Wednesday cited an unnamed source in the Kazakh Oil and Gas Ministry as saying that Lukoil is looking for a 20 percent share in the Tengizchevroil venture.

Kazakhstan, which now owns 50 percent of Tengizchevroil, is likely to sell most of the stake, the source said. Earlier this week, the New York Times reported Mobil was also negotiating for a 25 percent stake.

Earlier this year, Chevron slashed its investment plans at Tengiz, citing continuing difficulties getting the oil to market. After $1 billion in investment, Chevron is producing just 65,000 barrels a day at Tengiz, about half of what the America oil company had planned.

Tengiz is dependent on the Russian pipeline network for export access, but authorities in Moscow frequently have refused to allow increased shipments through the overburdened system.

Lukoil has steadily built up its profile in Russia and the former Soviet republics, winning a 10 percent stake in a $9 billion international venture to drill for oil in the Caspian Sea off Azerbaijan.