NORTHERN Caspian Sea is set to become a major oil and gas production hub with potentially more than 50bn barrels of reserves lying under the mostly shallow waters off the Russian and Kazakhstan coastlines, writes Martyn Wingrove . Reserves in the Russian sector of the Caspian Sea are estimated at 33bn barrels (4.5bn tons) by Moscow oil major Lukoil, while the Kazakhstan sector holds the huge Kashagan project with reserves of 13bn barrels, plus other discoveries. Lukoil president Vagit Alekperov said his company had a $13bn of investment in the northern Caspian, in both the Russian and Kazakh sectors. Lukoil could see first oil production from the region in 2008, while the consortium of international oil majors developing Kashagan could bring the project on-line in a similar time frame. Several oil fields cross the boundary of the two sectors and Lukoil is involved in developing them with the Kazakh state oil company KazMunaiGaz. It seems the Tyub-Karagan and Atashsky offshore projects are ahead of two others Khvalynskoye and Tsentralnoye. An environmental impact statement is being written for the Tyub-Karagan project, while seismic studies are due to begin this month. Lukoil could drill the first well in 2005 on the structure. Lukoil's chief of exploration Anatoly Novikov said his company had ten structures and almost 20 leads ready to probe in the coming years in the northern Caspian. Most are in shallow waters, although one of the largest, Yalama-Samur, is in water depths up to 500 m. So far Lukoil has discovered oil and gas on five structures Khvalynskaya, Shirotnaya, Sarmatskoye, Rakushechnaya and one unnamed from eight exploratory wells in the northern Caspian. All of these had commercial hydrocarbon flows, with the highest yields on Khvalynskaya and Sarmatskoye fields, said Mr Novikov. An initial oil and gas reserves estimate for these five discoveries is around 812m tons of oil equivalent, including 100m tons of oil. Drilling on the Yalama-Samur structure, which extends into the Azerbaijan sector and could hold up to 1.1bn in oil reserves, could start before the end of this year. Lukoil expects its Russian northern Caspian block to flow hydrocarbons from 2008 and produce around 10bn cu m of gas and 4m tons of oil annually for 15-20 years starting in 2010.