The period between the World War II until the collapse of Soviet Union is defined as the Cold War Era in the world’s history. After the dissolution of USSR not only this war came to an end, but also from Baltic region to Central Asia new states have appeared in the international arena.

For years, this closed geography has been an unknown equation for the Western world with its people, culture and surely with its rich resources. Thus, emergence of new countries caused a curiosity with excitement among big actors in the world politics. Especially, Central Asia was defined by many as the region that can be an important center for energy resources and an alternative for Middle East’s hydrocarbon suppliers.

 Until now, it is partially proven that Caspian Basin can represent a good alternative with its hydrocarbon reserves for the world economy. It is hard to say that it can be a hundred percent substitute, but it is for sure that with policies that would be implemented carefully, this region can help for diversification of resources.

In this region one of the most promising countries with its wide territory and rich resources is Kazakhstan. After the collapse of Soviets, Kazakhstan by taking serious and decisive steps has developed relatively a better and stable state structure when compared to others.

Kazakhstan is a country that is located both in Central Asia and Caspian Basin. As neighbors it has Central Asian countries as well as global powers like Russia and China. It is a well known fact that the geopolitical location of a country has always a big impact on a country’s both foreign and internal affairs. Thus, having two neighbors like Russia and China and being in a geography that is geopolitically fragile and attractive, it is so important for Kazakhstan to conduct a well balanced foreign policy. 

What makes this geography so attractive with its deserts and hard climatic conditions? First of all Russia for centuries has been an important actor in the region. This has not changed even after the collapse of USSR. Now, Russia does not want to lose its high hand and conducts a proactive foreign policy in the region. When I talk to Kazakh analysts they say that apart from diplomats and officials, President Putin and Nazarbayev meets almost 10 times in a year. As known also US tries to become a dominant power in the region politically and economically. In fact, the well known “Great Game” still takes place in this geography even though the actors change in time. In this New Great Game the main actors are Russia and the US. However, one should not ignore the rising star of China in the region, especially in Kazakhstan. Since they have to satisfy their energy hunger due to their fast growing economy and being in the same geography they think that these countries can represent a good solution for their problem. 

So, where does Kazakhstan stand in this big picture? According to data of 2005[1], Kazakhstan with its reserves of 39.6 million barrels of oil holds 3.3% of the world’s proved oil reserves. Moreover, Kazakhstan is the second largest producer in the former Soviet Union and produces 1.6% (1.36 million bpd) of the world’s total oil production. The main oil fields of Kazakhstan are Tengiz, Karachaganak, Kurmangazy, Uzen and Kashagan. Among these, “the Kashagan field is the largest oil field outside the Middle East and the fifth largest in the world”[2]. It is estimated this reserve to hold 7-13 billion barrels of oil. Uzen oil and gas field is being operated by Uzmengaz, which is a 100% state-owned company and has 1.5 billon of oil reserves.[3]

It is always Turkmenistan, which is famous of its rich natural gas reserves, but with its 3000 billion cubic meters of natural gas Kazakhstan holds 1.7%[4] of world’s total gas reserves. (Turkmenistan holds 1.6% of total reserves)

Today, Kazakhstan signs Product Share Agreements (PSA) with transnational companies for the development of hydrocarbon reserves in its territory. There are Chevron, BP, Italian ENI, Chinese CNPC and others taking part in energy sector of Kazakhstan. On the other hand, Kazmunaigas a state owned company also plays an active role in this regard.

Being located in the Caspian region Kazakhstan gets involved to the dispute of Caspian’s Status. After the collapse of Soviets the problem aroused with the establishment of new states in the region. While there were only two states; USSR and Iran in the Cold War era, after the collapse of USSR in addition to Iran there emerged Turkmenistan, Azerbaijan, Kazakhstan and Russia. After discoveries of new on-shore and off-shore hydrocarbon reserves and also with its existing reserves Caspian Basin has become a real center of attraction not only for nations of the region but also for the Western world and transnational companies. However, this caused disputes to arouse about the status of Caspian Basin. When I talk to the analysts of the region they say that the problem between Russia, Kazakhstan and Azerbaijan has been mostly resolved. Moreover, Kazakhstan and Russia has moved away in this bilateral agreement between each other and agreed to develop Kurmangazy field jointly.[5]

Kazakhstan produces 65 million tones of oil per year and exports 85% of this production. However, the main export routes passes via Russia. There are three oil pipelines that go abroad from Kazakhstan. One of them goes directly to China, but it is an ignorable amount (around 2.2 million tonnes). Main export routes are the others; CPC pipeline and Atyrau-Samara pipeline. The former goes directly to the Russian port in Black Sea, Novorossiysk and has a capacity of 560.000 bpd. The latter one goes into the Russian territory to the city of Samara and has a capacity of 300.000 bpd[6]. It is planned to increase the daily oil production of Kazakhstan in 2015 up to 3.5 million barrels. Thus, the main question is how Kazakhstan can transport this amount of oil to the world markets. There are three options on the table, upgrading the capacity of existing pipelines, getting connected to the other routes and construction of new ones. In this framework, Kazakhstan plans to transport its oil via Baku-Tbilisi-Ceyhan (BTC) and announced this in 2006. Analysts say that Kazakhstan now examining the feasibility of the project and it is expected that it will start to pump crude oil via this route in the near future. Moreover, during Putin’s last visit to Kazakhstan, he presented the option of Burgas-Alexandroupoulos route for the transportation of Kazakh oil via this pipeline and Kazakhstan has welcomed this proposal. Apart from these projects, which are related with the routes of the west, the amount of oil pumped to the east, to China also will increase.

Turkey has also a great desire to be an energy bridge between Central Asia and Western Markets. In this sense, a Turkish-Italian consortium has started to construct a new pipeline; Samsun-Ceyhan which will carry the oil that comes to Black Sea to Mediterranean. But Putin’s last visit to Kazakhstan and Turkmenistan has changed the big picture and now it is hard to say that the fate of this project would resemble BTC. However, new projects of refinery construction in Ceyhan is planned to be realized to increase the attraction of this port. In this sense, Kazakhstan is really interested in taking part in this refinery construction project and sees this investment an important indicator of Turkish-Kazakh relations.

To conclude, the region has a vital importance for the world’s energy issues and this importance will be more highlighted as long as the oil prices remains in these levels. Today, EU complains about its dependency to Russia and declares that the region would be a good alternative for the diversity of suppliers. However, Central Asian countries wait for concrete steps and feasible projects. If these come with Russia they will not hesitate so much to sign new agreements with this country as we saw during Putin’s visit. In this sense it is important for EU to show its will, to take concrete steps and conduct more proactive foreign policy in the region.

In the last analysis, one of the main problems is how the picture will look like when the natural resources of this geography distributed among the actors like China, Russia and US and how these newly established states will benefit from this distribution. Currently, Russia seems to keep its advantage in this New Great Game. For the future what can be said? The answer will take shape as the each actor makes his move on this multidimensional chess table.

For your comments:

hozertem@gmail.com