According to some estimates, the Caspian Sea region could produce up to 150 billion barrels of oil, as well as trillions of cubic meters of gas. Such numbers make the area the "most promising petroleum region for the next 20-30 years," according to Terry Koonce, the president and CEO of ExxonMobil Production Co.

But government and business leaders attending a Washington conference on May 19 said that turning oil and gas potential into actual profits will require a much greater degree of stability and accountability in the region than what currently exists.

US Sen. Sam Brownback (R-Kansas), chair of the Senate Foreign Relations Subcommittee on Near Eastern and South Asian Affairs, pointed to Islamic extremism as a potential threat to the development of the oil and gas sector in the Caspian region – which includes Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. The best way to address potential threats to stability, Brownback added, would be for regional leaders to promote cooperation and economic integration.

Jan Kalicki, US Ombudsman for Commercial Cooperation with the former Soviet states, reiterated Washington's support for the development of new Caspian oil and gas pipelines. [See Eurasia Insight]. Kalicki also urged states in the region take steps to improve transparency in the tender process and taxation system, as well as introduce stronger revenue management. Such steps could reduce corruption and thus increase investor confidence.

Chevron Oil Vice Chairman Richard Matzke, noting projections for a rapid increase in Caspian oil and gas production in the near future, said international attention over the near term should focus on the rapid development of oil and gas transportation infrastructure.

Official representatives from Azerbaijan, Georgia and Kazakhstan supported calls for greater regional cooperation. Bolat Nurgaliev, Kazakhstan's Ambassador to the United States, echoed Sen. Brownback's concerns about the destabilizing impact of Islamic radicalism. Tedo Japaridze, Georgia's Ambassador to the United States, called for greater US participation in regional security initiatives. Meanwhile, Natig Aliev, president of Azerbaijan's state oil company, SOCAR, said a lasting peace between Armenia and Azerbaijan would be a critical element of a comprehensive stability strategy.

Andrei Urnov, a representative of Russia's Foreign Ministry, downplayed the need for new pipelines, saying existing pipelines, which pass through Russian territory, could meet transport needs for Caspian oil and gas. In addition, Urnov complained that Russia was not sufficiently represented in global efforts to develop the Caspian oil and gas sector.

The conference was sponsored by the American-Georgia Business Development Council, the US-Azerbaijan Chamber of Commerce and the US-Kazakhstan Business Association.