The
4th Eurasian Energy Forum, one of Central Asia’s
pivotal annual conferences, was held in the Kazakh capital of Astana on
September 24th-25th. The Conference’s proceedings were
opened by Kazakh Prime Minister Karim Massimov, while, the Summit’s principal
speakers included Sauat Mynbayev, Kazakhstan’s Energy & Natural
Resources Minister, Randall Gossen, the President of the World Petroleum
Council, Roland Kobia, the Chef de Cabinet (Chief of Staff) of EU Energy
Commissioner Andris Piebalgs, Kairgeldy Kabyldin the President & CEO
of Kazakhstan’s State Oil & Gas Company, KazMunaiGaz (KMG), Gerhard
Schroeder, former German Chancellor and President of Nord Stream S.A., Mark
Albers, Senior Vice President Exxon Mobil and Charles Watson, Senior Vice
President of Shell. The Conference was organized and coordinated by Timur
Kulibayev, the President of Kazenergy, which constitutes Kazakhstan’s Petroleum Association, consisting
of all the major state and private companies active in Kazakhstan’s
oil & gas industry.
It should also be noted that the Summit was addressed by senior executives and dignitaries
such as Gazprom’s Vice President Valery Gobulev, Bulgaria’s Finance & Energy
Minister, Traicho Traikov and the Regional Head of the World Energy Council,
Slav Slavov. Mr. Costis Stambolis, IENE’s Executive Director also attended the
conference, upon the honorary invitation of Jumbulat Sarsenov, Kazenergy’s
Executive Director. Mr. Stambolis had the opportunity to discuss current energy
matters with Bulgaria’s Economy
and Energy Minister Traicho Traikov, whom he invited to address the delegates
of IENE’s 3d Energy Week that will take place in Athens on November 9th-13th.
Mr.Stambolis also met with senior executives
from Kazenergy so as to inform them on the progress made by IENE on the
financing of the IENE-Kazenergy Joint Study on Kazakhstan’s participation in the
Burgas-Alexandroupolis Pipeline Project. The study has been selected for
financing by the International Development Cooperation Department (Hellenic
Aid) of the Hellenic Ministry of Foreign Affairs.
The Conference’s proceedings
were focused on the Exploration and Production programme of the super-giant
(9-13 Billion Barrels of retrievable crude) offshore Kashagan field. It was
notable that since the late 1990s IOCs and Kazakhstan’s
KMG has found over 35 billion barrels of crude oil in Kazakhstan’s
Northeast Caspian Sector. Kashagan’s timely development is the major bet upon
which would depend the success of failure of Kazakhstan’s
top energy priority: its emergence as the largest oil producing state in
Central Asia and the second largest non-OPEC oil exporter after Russia.
Nowadays Kazakhstan produces
around 1,2 mb/d utilizing primarily the Tengiz and Karachaganak oil fields and
exports almost 80% of which are exported to international markets via pipelines
crossing Russia with the
remaining 20% being exported to Iran,
China and Azerbaijan.Today, Kazakhstan wants to increase its
daily output to 2 mb/d by 2015 and 3,5 mbpd by 2020, tapping on Kashagan’s vast
resources potential.
According to a Intergovernmental MoU signed by
Azerbaijan and Kazakhstan in late September a significant part of Kashagan’s
production would be exported to Europe via Baku via the construction of the
KCTS network that would utilize the BTC oil pipeline as well as secondary
pipelines going through Georgia (Baku-Batumi & Railroad Exports to Kulevi)
and Russia (Baku-Novorossisk) to the Black Sea Coast. The KCTS
(Kazakhstan Caspian Transportation System) network will transport oil from
Atyrau to Baku
via a taylor-made tanker fleet.
Simultaneously Kazakhstan would channel a major
part of its exports via the expansion of the CPC capacity to 1,34 mbpd by 2012.
The pipeline connects Karachaganak and Tengiz with the Russian Black Sea port of Novorossiysk. As it was noted by Timur
Kulibayev’s presentation, who also happens to be the son-in-law of President
Nursultan Nazarbayev, CPC’s expansion would begin in early 2010 and is expected
to be completed by 2012. It should further be underlined that according to
Kabyldin’s presentation 340,000 bpd of the 670.000-680.000 bpd of the expanded
CPC capacity will be reserved for transport via the Burgas-Alexandroupolis
pipeline. Apart from its western export destination, Kazakhstan
is already playing a prospectively equally important role in Asia’s energy
geopolitics by fuelling China’s
energy demand.
Over the last few months the Atasu-Alashankou
oil pipeline that connects Kazakhstan’s
Caspian shore with China’s
volatile East Turkestan or Xinjiang province
came on stream. The pipeline is already operational with an initial capacity of
50.000 bpd that is expected to double over a period of 5 years. Meanwhile
another major trans-regional gas pipeline that is expected to become
operational early next year will connect Turkmenistan’s South Yolotan field,
which being developed by China’s CNPC, with Xinjiang transporting eventually up
to 50 BCM/y of Turkmen (30-40 BCM) and Kazakh (10 BCM) natural gas.
Kazakhstan’s emergence as a major energy power
in Central Asia and Central Eurasia in general, would not have been possible if
it weren’t for the carefully crafted and balanced approach President Nazarbayev
implemented in the country’s foreign relations since its independence from the USSR in 1992.
By following a policy that was principled upon the necessity of balancing off
the West, Russia and China,
Nazarbayev has succeeded in attracting several tens of billions of USD in FDI
from western super-majors such as ExxonMobil, Chevron, Shell, and Total.
Kazakhstan has also succeeded in forging a strategic partnership with Russia in the fields of commerce, energy,
defence and diplomacy, since Russia
is and will remain for the foreseeable future the most important transit
country for Kazakhstan’s
energy policy. Despite the fact that Kazakhstan is part of Russia’s post-soviet
“sphere of influence” due to an array of historic, cultural and ethnological
reasons, it has managed to maintain an independent foreign energy and
development policy that makes it a beacon of stability in a volatile area and a
necessary partners for all major state and corporate players active in the
wider Central Asia and Caspian Region.