The Russian presence in the oil market of Kazakhstan becomes more noticeable every year. As the capital of Russian oil companies grows, they increasingly manage to crowd other investors. The fact is that the Kazakhstani oil market is of particular interest for Russia. An important role is played by both the economic reasons for moving south and strategic interests.
Kazakhstan oil as a magnet attracts foreign investors. The industry maintains liberal governance and, in general, the sector has great potential for development. Two Russian oil companies, LUKOIL and Rosneft, operate predominantly on the country's territory. Taking into account the share of LUKOIL in various projects, it can be said that with the participation of the company, more than half of all oil is produced in Kazakhstan. During the work of the company, $ 4.5 billion was invested in the economy of Kazakhstan. The company participates in large mining projects. In particular, LUKOIL has 5% in a project to develop the Tengiz field. It is currently the largest field in the country (in 2005, almost 14 million tons of oil out of 61.9 million tons in Kazakhstan were produced here in 2005). The company also has a 15% stake in Karachaganak Petroleum Operating B.V. engaged in the development of the second largest field in the Republic - Karachaganak. LUKOIL has 50% shares in development companies: Kumkol, Alibekmola and Kozhasai, North Buzachi, as well as the Arman fields. The Russian company fully controls the Karakuduk field.
Rosneft owns a 25 percent stake in the exploration project of the promising structure Kurmangazy on the Caspian Sea shelf (the remaining 50% is owned by KazMunayTenghiz, a subsidiary of KazMunayGaz, and 25% by the option of the Russian Federation). Until the Russian side implements the Option, Rosneft will have rights and obligations under the project in the amount of 50%. The company also has a 50% stake in the joint venture Adai Petroleum Company, operating in the Aday block in the Atyrau region. In addition, through a joint venture with Shell, it participates in the Caspian Pipeline Consortium. By the end of 2006, Rosneft’s investments in projects in the country should amount to about $ 300 million.
A special place in the Kazakh-Russian relations is occupied by the Caspian Sea and the Caspian region. In January 2006, a protocol was signed between the Russian Federation and the Republic of Kazakhstan “Agreement on the delimitation of the bottom of the northern part of the Caspian Sea in order to exercise sovereign rights to use subsoil” (the agreement was signed by the presidents of Russia and Kazakhstan on May 13, 2002). In accordance with this protocol, the authorized organizations of the parties on a production sharing basis, in addition to the Kurmangazy site, have been granted the right to use the Central and Khvalynskoye sites.
The Khvalynskoye deposit is currently working on the preparation and coordination of the budget. At the end of 2007, it is planned to drill the 1st deepwater exploratory well in the “Central” structure.
In addition, Russian companies are engaged in an extensive supply of drilling rigs, oil pumps, pumps and other equipment to the Kazakhstan market. Today in Kazakhstan there is practically no enterprise that would not receive equipment from Russia. All this is only a part of Russia's presence in the oil sector of Kazakhstan.
Economic systems of Russia and Kazakhstan are the most adequate to each other. Both sides are trying to improve the investment climate and come to a mutually beneficial consensus in solving a number of significant problems.
The growing movement of Russian companies in this direction is due to a number of factors.
First, during the time when oil prices remained high, Russian exporters gained enough capital to implement large-scale projects. And first of all, their gaze fell on the dynamically developing Kazakhstan oil market. An important factor in this is the economic and political stability of the region, which reduces the risk of large investments.
Secondly, the development of the wealth of Kazakhstani oil fields is of strategic importance for Russia in terms of ensuring its own energy security. Experts are increasingly saying that Russia is approaching a dangerous limit, which promises not only a breakdown in oil supply obligations, but also problems with the energy supply of the national economy.
There is a natural qualitative deterioration of the raw material base due to the mining in the first place of the most accessible and well-prepared deposits. There is a continuing deterioration in the structure of reserves - the share of "hard-to-recover" already reaches almost 60%. In addition, proven oil reserves are located in remote northern areas of the country, which greatly complicates production and increases the cost of transporting raw materials to processing plants and final consumers. In this regard, Kazakhstani oil projects are in many ways preferable than Russian ones.
In addition to issues of energy security in general in Russia, in such a situation, fierce competition between companies for at least some attractive projects flares up in the country. This problem reduces the opportunities for investment within the country and forces companies to go abroad.
Thirdly, Russia and Kazakhstan are connected by the already built pipeline infrastructure. In terms of oil transit through Russia, Kazakhstan is now ranked first among the CIS countries, exporting a significant part of its oil. Practically all Caspian oil is now transported through Russia, since earlier it was the unified system of trunk oil pipelines of the USSR. This situation limits the independence of Kazakhstan and allows Russia to lobby its interests. In a situation of competition between Russia and Kazakhstan in the global energy market, this situation is extremely attractive for northern colleagues.
Currently, there are two main oil pipelines in Kazakhstan: the main oil pipeline of the country is the Caspian Pipeline Consortium (CPC), which has been operating since 2001. It originates at the Tengiz field, passes through the territory of Russia and ends at the CPC marine terminal near the Russian port of Novorossiysk on the Black Sea. Russia owns a 24% stake in the pipeline, Kazakhstan’s share is 19%. Additional capacity expansion of CPC is planned by 2008 to 58 million tons and by 2011 to 67 million tons.
The Uzen-Atyrau-Samara oil pipeline serves to transport oil from oil fields in the Atyrau and Mangystau regions to Russia. The pipeline runs through the territory of Russia and is connected in Samara with the Russian Transneft system. At the moment, negotiations are underway with the Russian side to increase the capacity of the pipeline to 20-25 million tons per year.
In 2005, approximately 30.5 million tons of crude oil was shipped via the CPC pipeline, and approximately 15.2 million tons of crude oil through the UAS pipeline with total exports of approximately 52.4 million tons per year. This circumstance puts Russia in an extremely advantageous position also in questions of geopolitics in Central Asia. Kazakhstan is a territory of strategic interests not only in Russia, but also in the United States, the European Union and even China. And additional levers of influence, especially if they are associated with the main export product, are extremely important for Russia. This is another important factor that interests Russia. Expansion of presence and, as a result, increasing influence in such an important region.
Also, the ability to influence the export of Caspian oil allows Russia to count on certain advantages in the competitive struggle for sales markets. And the receipts from payment for the export of Kazakh oil constitute a significant source of income in the Russian budget, which is very important in the context of a difficult economic situation.
In this situation, Kazakhstan is actively seeking ways to enter international markets, bypassing Russia. An example is the already commissioned Atasu-Alashankou pipeline. The initial throughput capacity of the pipeline is 10 million tons per year, followed by a planned increase to 20 million tons. This oil pipeline is considered only as the first stage of the Kazakhstan-China oil pipeline project. It is also planned to enter the pipe from Kenkiyak to Kumkol.
In the coming months, an agreement will be signed with Azerbaijan on the accession of Kazakhstan to the Baku-Tbilisi-Ceyhan oil pipeline, which will now be called Aktau-Tbilisi-Ceyhan. In case of signing the contract, Kazakhstan plans by 2008 to increase the volume of oil exports via the BTC pipeline to 7-8 million tons. It is important to note Russia's interest in the Caspian Pipeline Consortium, which, in addition to bringing huge profits to the Russian budget in the form of taxes (about $ 20 billion), also contributes to the development of its oil fields in the Russian Federation in the Caspian Sea.