OREANDA-NEWS. The Caspian Pipeline Consortium (CPC) is operating at a loss, and the situation can only be rectified by raising oil-shipment tariffs, the head of the state pipeline monopoly said Tuesday.

The 935-mile Caspian pipeline links oil fields in western Kazakhstan with Russia's Black Sea coast.

Semyon Vainshtok, Transeft [RTS: TRNF] CEO, said it is perfectly logical in this context to transfer the management of Russia's 24%-stake in the CTC to Transneft.

"Russia must make a profit," he said, adding the CTC's losses have exceeded $5,5 billion.

"To turn the situation around, we will have to consider sharply raising [oil transportation] tariffs," he said.

In addition to Russia, CPC shareholders include Kazakhstan (19%) and Oman (7%).

In 1996, the CPC was joined by eight producer companies, representing international, Russian and Kazakh organizations, including Chevron, LUKoil, ExxonMobil, BP, Rosneft, Shell, ENI, BG and KazMunaiGaz.

The 1,510-kilometer (935-mile) CPC oil pipeline system was launched in 2001 and now transfers 30 million tons per year (604,110 bbl/d).