Kazakhstan's Oil

Kazakhstan's proven oil reserves are about 35 billion barrels, enough to supply the whole world for a year at current consumption rates. The government expects this figure to rise to more than 100 billion barrels by 2015, putting Kazakhstan in the world's top five nations for oil reserves. These riches are not only key to Kazakhstan's development but also a magnet to foreign governments and oil companies.

Tenghiz, southeast of Atyrau, is one of the world's 10 biggest oilfields, with reserves of at least six billion barrels and possibly 15 billion. It's being pumped by Tengizchevroil, a joint venture whose main partners are the Kazakhstan government and the US oil giant Chevron. Chevron's gamble in striking this deal way back in 1992, in the turbulent aftermath of the Soviet collapse, bought it some of the cheapest oil of modern times. The Kashagan field, 400m below the Caspian seabed, is three times as big as Tenghiz - it's the world's richest oil find since Prudhoe Bay, Alaska, in 1967, and is likely to come on stream in 2010 (Italy's Eni is the operator heading a multicompany international consortium).

Kazakh oil production in 2005 was 1.3 million barrels a day, making it one of the world's top 20 producers. This is scheduled to at least double (to about 3% of world consumption) by 2015.

Where Kazakh oil goes is a geopolitical issue. Most currently runs through pipelines into Russia, including a major pipe to the Black Sea port of Novorossiysk. Increasing amounts, however, now avoid Russia by being shipped across the Caspian to Baku (Azerbaijan), to feed into the Baku-Tbilisi-Ceyhan (BTC) pipeline, opened in 2005, which takes oil to the Turkish Mediterranean port of Ceyhan. A new Kazakh oil port is being built at Kuryk, 76km south of Aktau, for trans-Caspian tankers. The first oil pipeline from Kazakhstan not to go through Russia was also inaugurated in 2005, from Atasu in central Kazakhstan to western China. This will eventually be linked to the Caspian oilfields, where oil-thirsty China has been buying up reserves.

Kazakhstan also has at least three trillion cubic metres of gas, of which 500 billion are in the Karachaganak field east of Aqtobe. These figures are modest compared with neighbouring Russia and Turkmenistan, but a massive trans-Caspian gas pipeline is under discussion to feed Kazakh gas to Europe - something Russia is unhappy about since it would be bypassed. Kazakh gas production is due to rise from 25 billion cubic metres a year to 45 billion by 2105.

the USSR and Kazakhstan was the last Soviet republic to declare independence. He soon renounced the opportunity for Kazakhstan to become a nuclear power by transferring all 1410 Soviet nuclear warheads on Kazakh soil to Russia. Kazakhstan's first multiparty elections, in 1994, returned a parliament favourable to Nazarbaev, but were judged unfair by foreign observers. There were complaints of arbitrary barring of some candidates, ballot rigging and media distortion.

The parliament, however, turned out to be a thorn in Nazarbaev's side, obstructing his free-market economic reforms, which one deputy called 'shock surgery without anaesthetics'. Nazarbaev dissolved parliament in 1995 and soon afterwards won an overwhelming referendum majority to extend his presidential term until 2000. New parliamentary elections returned a new assembly favourable to Nazarbaev.

In 1997 Nazarbaev moved Kazakhstan's capital from Almaty to Astana, then a medium-sized provincial city in the central north, citing Astana's more central location and greater proximity to Russia. He may also have wanted to mollify Kazakhstan's restive Russian population, concentrated in the north of the country. Despite incredulity at first, the new capital is there to stay and Astana is being transformed at great cost with impressive, sometimes spectacular, new buildings.

Nazarbaev's free-market economic policies won the support of Western governments and companies, some of which paid vast amounts to get a slice of Kazakhstan's large oil and gas reserves, mainly near and beneath the Caspian Sea. In 1999 Nazarbaev had a virtual walkover in new presidential elections after the main opposition leader, Akezhan Kazhegeldin, was barred from standing.

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