While Kazakhstan trumpets its future role as a major player on world oil markets, the headache of transporting crude from this remote ex-Soviet republic worried executives at an industry forum here.

Landlocked Kazakhstan represents the world's major oil discovery of recent decades with billion of tonnes of estimated reserves, but its distance from world markets and uncertainty over the Caspian Sea's legal status are a concern.

In the shorter term the problem of how to transport oil and natural gas out of Kazakhstan is not insurmountable.

Existing pipelines, ships and trains are all available and the industry's prospects have been boosted by the commissioning of the Caspian Pipeline Consortium (CPC) link to the Black Sea - used by the huge Karachaganak oil and gas condensate field, whose biggest shareholders are British Gas and Italy's Agip.

CPC currently has a capacity of 28 million tonnes per year which could rise to some 67 million tonnes of oil annually, 75 per cent of it from Kazakhstan, Ian MacDonald, CPC's chairman, told an audience at the Kazakhstan International Oil and Gas Exhibition.

By the end of this year Kazakhstan and Azerbaijan are likely to produce a draft agreement on supplying Kazakh oil to a Western-funded pipeline being built from Azerbaijan's Caspian coast to the Mediterranean, a senior official at the Kazakh state's Kazmunaigaz oil and gas firm said.

The route across the Caspian and through the Baku-Tbilisi-Ceyhan (BTC) pipeline being built by a BP-led consortium, 'should be considered as a single transport system,' Kairgeldy Kabyldin said.

But in reality getting the oil across the Caspian to Azerbaijan remains a headache, partly due to the five Caspian sea states' inability to agree on how to delimit the sea, a problem thrown up when four of them - Kazakhstan, Azerbaijan, Turkmenistan and Russia - became independent in 1991.

While a number of bilateral agreements have been approved there is no overall agreement and the fifth state Iran has been pushed hard for a better deal.

Investors are highly unlikely to invest in a pipeline through contested waters, particularly due to questions of liability in the event of oil spills, and it was no surprise when Kabyldin declared the idea of building a pipeline under the Caspian 'not on the agenda.'