KAZAKHSTAN’S ENERGY POLICY

NIKOLAI KUZMIN,
Editor of the political section of the business weekly “Expert Kazakhstan”, Almaty
The evolution of Kazakhstan’s energy policy is quite evident. The country does not set its oil and gas policy alone. In this respect its independence is very relative.
Astana believes that it is necessary to take account of the interests of consumers and transit countries. Especially as many actors in the Central Asian region take an interest in Kazakhstan. That’s why the government tries to make compromises and serve the conflicting parties’ interests.
Such behavior is due to the fact that the majority of the Kazakh energy resources are controlled by private companies, including the foreign ones. Lately, the state has been trying to be more engaged in the energy sphere. For all that, the Kazakh state does not dominate in the oil and gas sphere.
I do not think that the efforts to consolidate the state-controlled assets simply reproduce the Russian pattern of relations with the foreign partners.
This is also true of Kazakhstan requiring that the Italian company Eni and its partners share their rights to manage the Kashagan deposit. What is being done is development of the project in accordance with the Product Sharing Agreement. It is clear that given the high prices, such an agreement is bad for the state. So, it comes natural that the attempts are being made to revise the agreement’s terms, but, as a rule, an environmental factor is being used to bring pressure to bear.
As regards the Kashagan deposit, Kazakhstan is interested, above all, in the controlled share increase, and then, in the stable oil and gas production. The point is that now the state budget is completely independent from petrodollars. All the energy incomes arrive at the national fund. Moreover, Kazakhstan makes too many petrodollars, excessive amount. The Kashagan oil and gas are embedded inconveniently, and for the time being there are no reliable technologies to supply the energy resources to the export pipe. So, strange as it may seem, Kazakhstan is happy that the Kashagan resources will be produced later.
Still, the situation with the foreign partners is far from the renationalization scenario. If to follow this logic, one can cite a lot of facts showing that the Chinese, the Russians or the national authorities control the energy sector. Without any doubt, the actual situation is different. There are various tendencies, neither of which is being completed fully and logically, and various channels for energy transportation.
On the whole, multivector energy policy is peculiar to the Central Asian countries. For example, Turkmenistan simultaneously develops the projects of construction of the Caspian and Transcaspian pipelines. The Turkmen President signs the documents with Russia for development of one project, speaks that the other must be developed and builds a pipeline to supply the resources to China.
It does not mean that the Turkmen or Kazakh government has a pro-China or pro-Russia lobby. The USA, China and Russia are influential enough to promote their interests without consolidated lobby in the parliament or the government agencies. These countries have partners in Kazakhstan with whom they implement the projects. The decisions are made at a high level. Of course, the interests of the oil and gas branch leader “KazMunayGas” are taken into account.
I do not see pro-Russia or pro-China factions. If China wishes, it gets the projects with ease in Kazakhstan. This happens against a background of Kazakhstan’s mistrustful attitude to China’s activity. A great deal depends on how strongly the national authorities are interested in development of the energy cooperation with Kazakhstan.
For instance, the EU suggests the independence from Russia as a dividend from cooperation. However, Kazakhstan does not find itself dependent on Russia, the country has no such a problem.
The same is true of the USA. While Russian President Vladimir Putin often visits the Central Asian countries (and not only the capitals) showing interest in the joint projects, the USA shows little interest. If American President George Bush arrives in Mongolia and doesn’t visit Kazakhstan afterwards, the local elites regard this as the U.S. weak interest.
Not to mention the politics. Moscow is not pleased with the strengthening of the presidential power in Kazakhstan and Nursultan Nazarbayev’s unwillingness to resign. For all that, Russia continues to support the Kazakh leader and his policy including within the Shanghai Cooperation Organization and Eurasian Economic Community. The Kazakh elite, in its turn, takes that into consideration.
Therefore, all the foreign actors in the Central Asian market have theoretically equal chances. But Kazakhstan is more favorable towards Russia and China.
September 10, 2007
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