CHINA STEPS UP PRESENCE IN KAZAKHSTAN OILFIELDS
1/21/04
Ibragin Alibekov
Kazakhstan’s government, acting in response to criminal investigations and tough bargaining with western energy companies, is working more closely with China on energy concerns. Kazakhstani Foreign Minister Kassymsohart Tokaev traveled to Beijing recently and expressed hope that an oil pipeline from western Kazakhstan to China might begin construction by springtime. This projection underscores Kazakhstan’s desire to form broader economic and security ties with the world’s most populous nation.
Tokaev had traveled to Beijing for a gathering of the secretariat of the Shanghai Cooperation Organization (SCO) on January 15. This body became a full-fledged membership organization in 2003, comprising China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. [For an overview, see the Eurasia Insight archive]. Amid numerous stalled post-Soviet collaborations, say observers, the SCO is emerging as a vehicle for Chinese interests.
Beijing considers Central Asia a critical source of potential customers and a worrisome area for potential security threats. China has pursued aggressive policies against Uighur separatists in a semiautonomous province near its western border; Kyrgyzstan has effectively backed the Chinese approach. [For analysis, see the Eurasia Insight archive]. One Chinese expert, speaking on condition of anonymity, told EurasiaNet that China hopes to parley its shared security concerns with SCO members into treaties that promote Central Asian markets and protect sources of Chinese energy consumption.
China has pursued Kazakhstan’s oilfields for many months. In March 2003, a Chinese company pledged $615 million to British Gas for roughly eight percent of the Kashagan oilfield, in the Kazakhstan section of the Caspian Sea. Four other shareholders, all energy giants, exercised their preemptive right to buy the shares. Five months later, China National Petroleum Corporation (CNPC) acquired 35 percent of the North Buzachi oilfield from Saudi oil company Nimir Petroleum. Later CNPC took full control of the field by buying the remaining shares from ChevronTexaco, which has tussled with Kazakhstan’s government. [For background, see the EurasiaNet Business & Economics archive]. The company sold part of its stake in later months to a Canadian outfit called Nelson Resources, in a deal that mystified many analysts.
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