Oil affairs have always been closely related with geopolitics; a matrix of political forces striving for the defense of their energy interests. Geopolitics has always been the basis for energy relations between countries more so now that the geopolitical essence of oil relations has became much more evident.
Unfortunately, oil is concentrated only in certain regions in the world while many countries don’t have sufficient oil reserves a fact that could have very harsh long-term consequences for their economic stability. Access for oil for the majority of leading actors such as China, the USA, and the European Union is limited.
In fact this situation creates complex and unstable consequences of increased importance. It also means that the political component in energy relations will dominate, complicating the whole range of issues. The modern structure of energy relations under increased global competition is more susceptible to growing energy related geopolitical threats of global and regional scale.
Oil is at the heart of the economic development in all countries no matter how developed they are. Recent trends show that the global energy markets are becoming more unstable and volatile mainly because of the gradual depletion of oil reserves in some countries like Mexico and Indonesia, and the rapid growth of oil consumption throughout the world. It should be noted that today there isn’t any real substitution for oil while biofuels and other so-called «breakthroughs» are not a genuine way out from the energy impasse.
A prolonged trend of increasing prices and supply volatility can severely restrain economic recovery in the United States, Europe and Japan. Oil shortages would be particularly disruptive to stability in Asia, the area with the fastest economic and oil demand growth. However, the depletion of oil reserves and the increased growth of consumption are not the only problems; unwise geopolitical actions and strategies are much more important.
While such tendencies require mutual and coordinated response, some countries act with self-interest in mind in an attempt to increase their «share» in the global energy sector. Energy is becoming a substantial driver in the global geopolitical balance. Nowadays, we witness the tendency for the revision of global and regional rules of energy relations. Intense competition for unimpeded access to the world’s natural resources is continuing and is likely to further increase. In contrast, a comprehensive and coordinated international approach is necessary to avoid tensions in order to achieve stability and security in the sphere of energy relations.
Oil and energy issues are a decisive factor for the formulation of a real politics, in the form of “petropolitics”. Some global actors try to establish control over key oil-producing regions while others are ready to use their position of power to thrust their political priorities and principles of energy nationalism on others; to use oil as an instrument for political pressure. Deepening tensions between importing and exporting countries have a negative impact on global energy relations. The greatest risk is that this struggle will someday breach the boundaries of economic and diplomatic competition and enter the military realm.
Essentially, we have moved from a world in which energy was sufficient to meet the needs of the world's major consuming nations to a world in which energy supply is insufficient to satisfy global requirements, and that this in turn is going to affect the balance of world power. As a result, the current situation in international energy affairs and real politics can shift permanently the balance of world power.
The approach of Kazakhstan to energy geopolitics
Kazakhstan, located in the epicenter of oil geopolitics, in a region that is very sensitive to change. Given the size of the Kazakhstan oil sector, the republic has a unique and critical role in the regional power game.
However, Kazakhstan, regarded geopolitics as a suitable instrument for evolving cooperation and mutual interdependence. This is based on the fact that diversified and open oil policy can create favorable conditions for resolving the complex problems and impasses which have become apparent by now. Kazakhstan will never take part in unjustified actions that can inflict damage on interests of other players of global oil market. And it has already evaded geopolitical tensions concerning oil.
The leadership of Kazakhstan understands that only a cooperative approach, free from bias is able to promote strategic interests of both exporting and importing countries. Energy security, a key factor of international stability, is one of main politic and economic priorities for Kazakhstan. The country has already become an important element of the global energy infrastructure, and the foreign policy of Kazakhstan is concentrated in providing safe export routes for domestic hydrocarbon resources.
Kazakhstan aims to improve the continental energy rapport, for instance, including proposal of Asian Energy Strategy and Asian Energy Dialogue, elaborated with a close involvement of KazEnergy Association, under the SCO structure. Kazakhstan is in the midst of an oil boom a fact that has made the country one of the fastest-growing economies in the world. Energy policy is based on strict economic pragmatism and mutual approach. Kazakhstan builds a constructive energy interaction with the EU, the USA, Russia, and China that clearly is guided by the principle of non-discrimination, and regards the latter as a main feature of any energy cooperation between states in spite of their potentially intersecting geopolitical objectives.
It is important to note that Kazakhstan strives to consolidate a balanced regional system of energy cooperation. The republic intends to maintain relations with foreign investors in line with the earlier policy of mutually beneficial cooperation. The underlying element of this formula is to provide an opportunity to unrestrictedly participate in development of promising oil and gas fields, in return for respect of key national interests and aims for the development of Kazakhstan.
Kazakhstan is blessed with an abundance of natural resources and the giant discoveries at Tengiz, Karachaganak and Kashagan have placed the country among top leaders in terms of worldwide oil reserves. Yet, Kazakhstan is a country that remains relatively under-explored. So, at a time when new hydrocarbon resources are scarce and exploration is becoming more difficult and costly, the country is ideally placed for further exploration and growth. Peaceful and constructive cooperation will be able to provide the needed environment for economic growth.
The major priority of the national energy policy is to provide with stable and diversified supplies of hydrocarbons to the international markets. The current transit potential is exploited with a view to maintaining the balance of interests of the major consumers of energy resources. However, inadequate pipelines and port facilities can severely constrict the ability of Kazakhstan to increase production and exports, taking into consideration the fact that domestic production of oil will grow to 120 million tons to 2015. Until recently, all of the pipelines used to transport oil and natural gas from Kazakhstan went through Russia, which is itself an oil and gas producing state.
But now Kazakhstan has achieved the diversification of the pipeline routes. Apart from the already existing export routes such as Atyrau – Samara and the CPC, there are new planned routes. Plans are afoot to join the Baku – Tbilisi – Ceyhan pipe; of special importance is the Kazakhstan – China route, the first phase of which is already in development. The country is not losing sight of possible transportation of energy resources to the South of Asia.
In conclusion, Kazakhstan will be able to provide its oil to different markets, mitigating the risks of energy supply and allowing neighboring countries to effectively secure their energy balances.