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patriarchal and ordinary new families, but revives them on a qualitatively new basis.
"Vestnik Akademii Nayk Chechenskoi Respubliki", Grozny, 2013, № 1 (18), pp. 165-171.
Oleg Chervinsky,
Editor-in-chief of the journal "Petroleum" (Kazakhstan) KAZAKHSTAN BETWEEN MOSCOW AND BEIJING
After the disintegration of the Soviet Union, Kazakhstan has found itself in an extremely difficult situation. Our country possessing very rich deposits of natural resources, especially hydrocarbons, has been left without access to world markets. Situated in the center of the Eurasian continent between Russia and China, Kazakhstan was unable to export its oil and gas even in small volumes, which it extracted in the conditions of the economic ruin of the early 1990s.
The Chinese direction did not exist at all because there were no pipelines going to the South. The only export arteries were oil and gas pipelines leading to Russia, which it naturally used in order to reach its geopolitical and economic aims.
A vivid example of "pipe pressure" on the neighbor was the history of the development of the unique Karachaganak deposit. It was discovered in 1979 and is one of the biggest oil-and-gas condensate deposits in the world. In the north-western part of Kazakhstan, near the border with Russia, the deposit occupies a territory of over 280 square kilometers. Its hydrocarbon reserves are estimated at nine billion barrels of condensate and 48 trillion cubic feet of gas. The industrial development of the deposit began in 1984 by the Ministry of gas industry of the U.S.S.R. The technological scheme of the deposit development envisaged that the mined raw materials would be
delivered for processing to the Orenburg gas-processing plant. After the disintegration of the Soviet Union the "Gazprom" Corporation has offered the government of Kazakhstan to engage in the joint development of the deposit. But the Kazakhstan authorities turned down the offer, having stated that they intended to invite foreign companies as partners. In an international tender, in which such companies as Eni / BG Group and BP / Statoil, the former turned to be the winner. In 1992 the government began negotiations with the companies "Eni" and "BG Group" on the conditions of an agreement on division of products on Karachaganak. Three years later the agreement was signed. But these foreign firms came across the problem of selling the product. On order of the Ministry of oil and gas of the Republic of Kazakhstan all rights for the mined condensate were transferred to the little-known company "Vaeco Europe." Having shipped the product extracted during two years to a sum of about $74 million, both the shareholders and the government received nothing.
The opposition later accused Kazakhstan's government of cooperation with a little-known trader, which did not bring in sales revenue from export to the country. Moreover, the trader himself was under control of influential Kazakh clans, having a reliable political protection. However, there was no official reaction to these allegations, except several publications in the local mass media. Nor was there any official investigation of this deal.
After the cancellation of the contract with "Vaeco Europe," Kazakhstan was faced with a dilemma: either to terminate extraction on the deposit or again turn to Russia. At long last, the consortium "Karachaganak Petroleum Operating B.V." (KPO) has resolved the problem of marketing its products, by including the Russian company "LUKoil" in its partners. True, Russia as the monopoly owner of
pipelines from the deposit retained the opportunity to dictate its conditions on the cost and volumes of deliveries. Such state of affairs continues to this day, though in a slightly changed form. The KPO has an opportunity to supply oil for export through the pipeline system of the Caspian pipeline consortium (CPC), but in actual fact, all volumes of gas are bought from it by the joint Russian-Kazakh venture "KazRosGaz" controlled by state-owned companies of the two countries.
Prior to 2001, when the Tengiz-Novorossiysk oil pipeline was commissioned built by CPC, the main oil export artery for Kazakhstan's oil was the Atyrau-Samara oil pipeline fully controlled by Russia. The regular annual coordination of export quotas for Kazakhstan took the form of political bargaining. The same is true of the problems of leasing the space-launching site Baikonur, and the preservation of Russian military proving grounds on Kazakhstan's territory, participation of Russian companies in oil-and-gas projects in Kazakhstan, demarcation of borders and the division of the water surface of the Caspian Sea. The field for maneuvering was vast enough, and the Kremlin was engaged in an active game on it.
In order to get rid of this dependence Kazakhstan initiated in 1992 the creation of an international consortium on the construction of an oil pipeline from one of the biggest deposits, Tengiz in the western part of the country, to the Russian port of Novorossiysk. In 1992, an agreement was signed between the Republic of Kazakhstan and the Sultanate of Oman on July 17, 1992, on the setting up of the Caspian pipeline consortium. A month later this agreement was joined by the Russian Federation. However, Oman proved unable to provide enough capital, and in 1996 the project was joined by eight private shareholders representing the interests of the world's biggest mining companies of seven countries working in Kazakhstan and Russia.
Today the CPC oil pipeline pumps up to 35 million tons of oil a year; 30 million tons of this volume is the quota for Kazakhstan. At present the CPC shareholders implement a project of lengthening the trunk oil pipeline, as a result of which its capacity should increase to 67 million tons of oil annually, with Kazakhstan's quota being 52.5 million tons.
Apart from that, during the years of independence Kazakhstan has implemented several more major pipeline projects, including the strategically important pipeline from Kazakhstan to China. In 2012 the country mined 70.2 million tons of oil and gas condensate. Of this amount 68.6 million tons were meant for export. It can safely be said today that Kazakhstan got rid of the need to ask Moscow for export opportunities for its oil. Apart from the already-mentioned increase of Kazakhstan's quota by almost twofold, after completion of the project to enlarge CPC, another important project will be implemented, namely, the second tranche of the second stage of the construction of the Kazakhstan-China oil pipeline with increased capacity of up to 20 million tons of oil a year. Work has also been planned to increase the capacity of several sections of three oil pipelines, which will make it possible to increase the volumes of oil shipments through the sea port of Aktau. These three directions, along with the Atyrau-Samara oil pipeline, will completely satisfy Kazakhstan's export requirements for the next few years.
At the end of 2013 the commercial mining of oil should begin on the Kashagan deposit on the Caspian Sea shelf. Kazakhstan intends to start the earlier project of "Kazakhstan Caspian System of Oil Transportation" (KCSOT). Within the framework of this project it is envisaged to create a new oil-transportation infrastructure on the Kazakh shore of the Caspian Sea, to construct the Eskene-Kuryk oil pipeline, to create new capacities for shipping oil, as well as to enlarge
the sea port of Kuryk, from where oil will be delivered by tankers via the Caspian Sea to the pipeline system Baku-Tbilisi-Ceyhan. It is planned that KCSOT will provide for the transportation of 25 million tons of oil a year at the initial state, with a subsequent increase up to 38 million tons.
In the gas sphere of bilateral cooperation with Russia Kazakhstan has traditionally been playing the role of transiter. Two trunk gas pipelines pass through its territory: Central Asia - Center and Bokhara -Urals, which pump Turkmen and Uzbek gas bought by "Gazprom" to Europe. In 2005-2007 the transit system of Central Asian gas to the Russian Federation via Kazakhstan's territory was practically restored, and the volumes of deliveries were close to those in Soviet time. In 2008 the volume of Turkmen and Uzbek gas through Kazakhstan reached 52 billion cubic meters. In turn, the volumes of gas transportation, which Russia buys from Turkmenistan and Uzbekistan and exports to other countries, via Kazakhstan, Russia and further on by the "Gazprom" system, amounted to 46 billion cubic meters in 2008. Kazakhstan has been a responsible and reliable partner, and with this end in view the presidents of the Russian Federation, Kazakhstan and Turkmenistan signed a joint declaration on May 12, 2007, on building a Caspian gas pipeline. In December of that year a tripartite intergovernmental agreement was signed on cooperation in building this gas pipeline. The project envisaged reconstruction of the old pipeline from Central Asia to Center, from Turkmen Bekdash to Kazakh Beineu with a capacity of up to 10 billion cubic meters a year. The second stage of construction (2010-2017) envisaged the building of a new gas pipeline from Aleksandrov Gai on the Russian-Kazakhstan border with a capacity of 20 billion cubic meters a year. As a result the Caspian gas pipeline system was to be created with an annual capacity of about 30 billion cubic meters. Turkmenistan was
supposed to supply twenty billion and Kazakhstan - ten billion cubic meters.
However, a drop in gas consumption in Europe, which began recently, put in question "Gazprom" requirements for such volumes of Central Asian gas. In this connection it has been decided to freeze the project of the Caspian gas pipeline. In this situation Kazakhstan, which has been increasing gas production with every passing year, had nothing to do, but turn to the bottomless market of China. In December 2010 the construction of the trunk gas pipeline Beineu - Bozoi -Shimkent began, which was supposed to connect gas extraction districts in western and central Kazakhstan with its southern regions suffering from a shortage of energy.
More important: along this pipeline gas can be delivered to the trunk gas pipeline Turkmenistan - Uzbekistan - Kazakhstan - China, which was opened in December 2009 and whose annual capacity is to be 40 billion cubic meters. The first stretch of the Beineu - Bozoi -Shimkent gas pipeline is to be commissioned in 2013, and the second stretch will be started immediately after.
Thus, the only big bilateral Russia - Kazakhstan gas project is cooperation on Karachaganak deposit through the joint venture "KazRosGaz." Apart from that, "Gazprom" may rely on the joint development of two additional deposits: Imashevskoye situated in between the two countries on a territorial stretch near Astrakhan and Atyrau (prospected reserves amount to about 100 billion cubic meters) and Central in the Caspian Sea (prospected reserves are estimated at 20.2 million of standard fuel of C1 category and 149 million tons of standard fuel of C2 category.
Thus, Kazakhstan can today and in foreseeable future engage in marketing gas independently, without Russian help. Besides, gas from Aktyubinsk and western deposits can be exported to China. This year
extraction of gas is to be started on the shelf deposit Kashagan, which will be supplied to the domestic market.
In order to ensure its geopolitical security Kazakhstan has been relying on the many-vector policy in exploiting its natural wealth: among claimants to its natural resources should be representatives of different states. As a result, the first private owners of oil-extracting companies in Kazakhstan were concerns from the United States, Europe and China.
The Russian presence in the Kazakh oil-and-gas sphere is represented by "LUKoil," which was able to build good relations with the young political elite of Kazakhstan and its President Nursultan Nazarbayev. "LUKoil" is the biggest Russian investor in the oil-and-gas sphere of Kazakhstan: it is taking part in seven mining projects on land, four prospecting projects, and also in the Caspian pipeline consortium (CPC). From 1995 the "LUKoil" investments in Kazakhstan's economy comprised over $4.7 billion.
"Rosneft" takes part in two projects in Kazakhstan and "Gazprom - also in two. On the whole, Russian companies account for eight percent of the total volume of oil and 15 percent of gas mined in the country. At the same time the share of American companies amounts to 29 percent of the present volume of oil, and the share of Chinese companies is 24 percent in the country's oil-and-gas sector. Chinese companies are very active in buying oil-and-gas assets. According to reliable sources, China's share in the oil-and-gas sector of Kazakhstan will reach forty percent. Thus, despite the creation of the Unified economic area and Customs Union by three allied states, the business sphere for Russian investors in Kazakhstan is shrinking steadily.
"Pro et Contra," Moscow, 2013, January-April, pp. 35-40.
