Robert M. Cutler on Energy and Eurasia

Kazakhstan

The OSCE Chairman's Personal Representative for Central Asia and the Vice-President of the EU's European Parliament were in Kazakhstan, the latter maintaining that the EU viewed Central Asia as a key region of global geopolitics today. (This is a change from the 1990s). In Kazakhstan, a joint taskforce amongst the Caspian littoral states is set to co-ordinate further provisions of a draft convention on the Caspian's legal status. The division of the sea-bed appears to remain an intractable issue between Iran on the one hand and, on the other hand, Russia, Azerbaijan, Turkmenistan and Kazakhstan. Meanwhile, Alexei Malashenko explains why a so-called color revolution is unlikely in Kazakhstan, while correctly explaining that the situations in Georgia, Ukraine and Kyrgyzstan differ so substantially as not to be lumped together.

PetroKazakhstan and all that

Fred Halliday has an interesting report of a conference in Cambridge, although it is more of a survey, albeit knowledgeable, of the whole CIS-space. For what it's worth, this I find characteristic of the openDemocracy site in general: it's good for general orientation and some commentary, but it is seldom that the specialists who write there give the full benefit of their specialized knowledge to the reader, in terms of explicating detailed background or bringing clear analytical power to bear. As always, there are exceptions, but this article isn't one of them

     Amongst the commentaries and reports on the CNPC/PetroKazakhstan affair are an articles at Jamestown Foundation, Asia Times onLine, and Gulf Times, the last of which plays up the Russia-vs.-China angle. According to Tehran Times

CPC vs. BTC?

After barrels of ink have been spilt in the 1990s explaining in the first instance why the Baku–Tbilisi–Ceyhan (BTC) pipeline could never be built and, since then, why there would never be enough oil to fill it, the Caspian Pipeline Consortium (CPC), which runs the line from northwest Kazakhstan to the Black Sea has decided to double its present capacity three years ahead of schedule because it turns out that there is enough oil in Tengiz, not to mention Kashagan, to command that capacity and CPC wants to compete for it. In this connection, it is noteworthy that "ConocoPhillips, Eni, Total SA and Inpex Corp.[, which] own 49.8 percent of Kashagan venture, &hellip also hold 15 percent of the Baku–Tbilisi–Ceyhan pipeline."

      But CPC will be unable to put a double-capacity line into service before 2009 at the earliest, whereas Kashagan producers will need to export beginning in 2008, while BTC will need non-Azeri throughput for its present single line until then while its own production ramps up to present capacity. Meanwhile, a SOCAR spokesman anticipates that a doubling of BTC throughput to 2 million barrels per day (bpd) would be possible early in the next decade, if some crude from Kazakhstan, whether Kashagan or Tengiz, were available to pick up the slack after the Azeri offshore fields reach production capacity sufficient to (over)fill current BTC throughput volume.

CACO Integrates EurAsEc

The Central Asian Co-operation Organization (CACO, comprising Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and since October 2004 Russia) has taken a decision to meld itself into the Eurasian Economic Community (EurAsEc, which includes also Belarus and has until now excluded Uzbekistan). CACO, established in February 2002, started out in 1994 as the Central Asian Union (KZ+KG+UZ) and changed its name to the Central Asian Economic Community when TJ joined in 1998.

      EurAsEc on the other hand started out as the Group of Four (Belarus, Kazakhstan, Kyrgyzstan, Russia), an attempt to implement a CIS Customs Union, before expanding its membership and changing its name. EurAsEc now includes, as independent states, the nine republics in Gorbachev's 1991 Nine-plus-One Agreement: minus Azerbaijan, Turkmenistan and Ukraine (but of which the last two, with Moldova, have observer status in EurAsEc).

...but Lukoil Wants to Play Too

Lukoil, which was partner of PetroKazakhstan in developing the Turgai deposits that will be pumped through Atasu-Alashankou, has asserted a pre-emptive right to purchase those assets and is reportedly in negotiations to buy CNPC's stake. Recall that CNPC was recently chosen by PetroKazakhstan over an Indian suitor for its operations in KZ. Meanwhile Lukoil is going to acquire the assets of Nelson Resources in KZ before CNPC has a chance to bid for them.

Kazakhstan-China Energy Ties Tighten...

Not only is the Atasu-Alashankou pipeline making definite progress towards being finished  by the end of the year (or soon thereafter), with an initial throughput of 210,000 barrels per day that is projected to double when full capacity is reached, but also Kazakhstan is looking at China as an important future export market for natural gas. Uzakbai Karabalin, head of the state oil and gas firm KazMunaiGaz, asserts that gas output would skyrocket from 6.5 billion cubic meters (bcm) in 2003 to more than 50 bcm by 2015, and that "the Chinese side has been offered several routes" for KZ gas shipments into China's "East-West" (or better, "West-East") pipeline from Xinjiang to the Han population centres on the Pacific Rim.