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Kazakh-China Diary: How do you say 'oil' in Klingon?

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10 October 2011 09:14

Anthony Bubalo and Konrad Muller are undertaking fieldwork for a new project examining Kazakh-China relations. Earlier posts in this series here, here and here.

Last week Kazakhstan held its two major annual energy conferences: Kazenergy in Astana and the Kazakhstan International Oil and Gas Exhibition (KIOGE) in Almaty. I attended a couple of sessions of the latter.

The line-up was impressive, including the Kazakh Minister for Oil and Gas (pictured at his KIOGE press conference, left), executives from the local and international energy companies and senior energy envoys from the US and UK. Of the presentations I saw, however, two stuck in my mind. 

The first was by the British Ambassador to Kazakhstan. I have never before watched anybody simultaneously translate themselves; this is effectively what he did, reading one paragraph of his speech in Kazakh and then translating the same paragraph into English. 

His admirable effort was certainly appreciated. It drew repeated rounds of applause from some Kazakhs in the audience. A young couple seated near me whooped in admiration. His accent and somewhat halting delivery did, however, make his Kazakh sound at times remarkably like Klingon, the alien language of the famous warrior race from Star Trek.

The second striking presentation was by Nikolai Platonov, General Director of the Caspian Pipeline Consortium (CPC). He provided a detailed overview of the Consortium's plan to increase the capacity of its oil pipeline from Kazakhstan's Tengiz oilfield, on the shores of the Caspian, to the Russian Black Sea port of Novorossiysk from the current 28.5 million tons per year of mostly Kazakh (and some Russian) oil to 67 million tons by 2015. In fact, the pipeline has been shipping up to 35 million tones a year, by using anti-friction agents, and could reach 76 million using the same technology once the expansion is complete. 

The expansion plan is not news to anyone who follows these issues, but Platonov's presentation underlined one of the curious features of the Kazakh-Chinese energy relationship and a key focus of our study.

Kazakhstan shares a long eastern border with the world's fastest growing oil market — in fact, neighbouring Xinjiang province is being developed by the Chinese into a major energy hub. Yet most of Kazakhstan's oil flows westward. In comparison to the CPC's current 35 million tons, the sole oil pipeline to China only achieved its 10 million tons a year capacity last year (including, apparently, a small volume of Russian oil). There are plans to expand this to 20 million tons by 2013, but it is not clear that this amount of oil will even be available for the pipeline by then. 

Unlike some global resource exporters, Kazakhstan is not placing all its energy eggs in a Chinese basket. The reflects a mix of factors: the government's policy of pursuing diverse markets, local fears and sensitivities about China (some of which Konrad noted in his earlier post), and the Byzantine nature of Central Asian pipeline politics. 

Equally, our impression from the last two weeks in Almaty is that that the Chinese have adopted a patient strategy. The Chinese have significant investments here — they are now responsible for around a quarter of Kazakhstan's oil production — but are treading carefully. The purchase by China National Petroleum Corporation (CNPC) of privately-owned MangistauMunaiGas in 2009, for example, was done in partnership with the Kazakh state oil company, thereby assisting the Kazakh Government's avowed policy of clawing back stakes in national assets sold off in the 1990s.

My day at KIOGE ended with a quick tour of the trade exhibition. According to event organisers there were 495 exhibitors from 30 countries. Exhibitors offered scale models, mini-skirted promotional girls and miniature sweets as they spruiked everything from drilling rigs to legal services. CNPC had a large and impressive display (pictured left) and there were a significant number of smaller Chinese exhibitors. The overall impression though — whether intended or otherwise — was of China being one among many seeking a piece of the Kazakh energy pie.

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