國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Chart 4-12: The Russian-Korea Gas Pipeline
Sakhalin, Russia
Khabarovsk, Russia
Vladivostok, Russia
North Korea
Seoul, South Korea
Russian‐Korea Gas Pipeline
Source: Compiled by author
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
4.4 International Energy Companies Involvement in Central Asia
4.4.1 International Energy Companies Involvement in Kazakhstan
4.4.1.1 Western Countries as Early Comers to Kazakhstan
In the early 1990s under conditions of severe economic crises, the Kazakhstan government passed proposals to extensively attract and allow foreign investment into the country’s oil and gas sector. During the mid-1990s, production share agreements were signed (with foreign companies) for exploring the country’s three major fields – the on-shore Karachaganak and Tengiz fields and the off-shore Kashagan field. Western companies with advanced technology and funds obtained advantageous locations in Kazakhstan’s oil exploitation. Russian dominance in the regional oil trade has been greatly weakened.
The United States and European countries have entered the Caspian Sea area to conduct oil exploration and exploitation activities even as early as the beginning of the Central Asian countries’ independence. With advanced technology, much critical information as well as exploration and mineral rights were obtained at advantageous locations. Therefore, the U.S.
and European oil giants became key players in Kazakhstan and have achieved a competitive advantage in their core business.270 In May 1992, Chevron became the first major Western oil company to begin operations in the newly independent Kazakhstan. Subsequently, foreign companies such as Agip, British Petroleum, Elf, and Turkish Petroleum entered this market as well. In a short span of four to five years, more than 50 oil companies from more than 20 countries began operations in Central Asia conducting oil and gas exploration, development and other business. Most of these oil companies are in Kazakhstan. 271 Russian dominance in
270 Feathers, Lori Ann. “Western Opportunities for Investment in the Oil Industry of the Former Soviet Union,”
Digital Commons @ American University Washington College of Law, 1992, available at:
http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1546&context=auilr, (accessed: 20140520).
271 Bastas, Yusuf Nebi . “The Foreign Policy of Kazakhstan,” DUO Digitale utgivelser ved UiO, May 15, 2013,
‧
the regional oil trade has been greatly weakened. In today's Kazakhstan, Russian companies (of which the most important is Lukoil), other Western companies and Kazakhstan’s domestic enterprises have been engaged in the development of Kazakhstan oil and gas resources
running neck and neck. 272
In the early 1990s under conditions of severe economic crises, the Kazakhstan government passed proposals to extensively attract and allow foreign investment into the country’s oil and gas sector. On February 1993, an agreement on the formation of an
international consortium was reached, consisting of seven foreign companies from the United States, Britain, France, Italy, the Netherlands, Norway {i.e., Agip, British Petroleum, Statoil, British Gas, Mobil, Total, Shell}and Kazakhstan{i.e., KazakhstanCaspianShelf}, to conduct exploration on the Kazakhstani shelf of the Caspian Sea. Financing for this project has mainly been provided by the United States and European countries. 273 In April 1993, America’s Chevron Corporation and the Republic of Kazakhstan officially established a $20 billion joint oil venture, for 40 year duration. 274
During the mid-1990s, production share agreements were signed (with foreign companies) for exploring the country’s three major fields – the on-shore Karachaganak and Tengiz fields and the off-shore Kashagan field. Chevron is mainly engaged in the Tengiz field;
while in July 1992 British Gas and the Italian state oil company (Agip) successfully started to develop the Karachaganak oil and gas field. 275 A consortium, named Kazakhstancaspiishelf,
available at:
https://www.duo.uio.no/bitstream/handle/10852/36938/BastasxMasterxoppgxStatsvitenskap.pdf?sequence=1, (accessed: 20140520).
272 Peterson, A. and K. Barysch, “Russia, China and the geopolitics of energy in Central Asia,” CER, Nov 16, 2011, available at:
http://www.cer.org.uk/publications/archive/report/2011/russia-china-and-geopolitics-energy-central-asia, (accessed: 20140310).
273 “The North-Caspian project: the cradle of Kazakhstan’s Caspian shelf,” Oilnews.kz, Dec 18, 2013, available at: http://oilnews.kz/en/home/portraits/the-north-caspian-project-the-cradle-of-kazakhstans-caspian-shelf, (accessed: 20140513).
274 Morgan, Dan and David B. Ottaway, “Kazakh Field Stirs U.S.-Russian Rivalry,” Washington Post, Oct 6, 1998, available at: http://www.washingtonpost.com/wp-srv/inatl/europe/caspian100698.htm, (accessed:
20140520).
275 Alexandrov, Mikhail. Uneasy Alliance: Relations between Russia and Kazakhstan in the Post-Soviet Era, 1992-1997 (Westport, Connecticut: Greenwood Publishing Group, 1999), p. 262.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
was established to explore the northern Caspian and the Kashagan field, comprising Italy's Eni, the UK's BG Group, BP, Mobil, and France's Total. Other countries’ companies such as Lukoil only later joined in the competition in this segment of Kazakhstan’s market. 276
In Kazakhstan, the CNPC developed the Tengiz and Karachaganak oil fields through the oil company, AktobeMunaiGaz which is the third largest oil producer in Kazakhstan. China’s CNPC Company bought a 50% stake of “Mangistaumunaigaz,”
Kazakhstan's fourth-largest oil company, for $1.4 billion dollars. And the purchasing of Kazakhstan’s “Mangistaumunaigaz” assets by China’s CNPC further tightens Chinese involvement in the Kazakh oil market.277
4.4.1.2 International Companies Involvement in Kazakhstan’s Oil Fields
4.4.1.2.1 Corporate Stakes in the Tengiz field 278
The Tengiz oil field is located in northwestern Kazakhstan, in the city of Atyrau. It was discovered in 1979 and is one of the deepest and largest oil fields in the world. It’s general proven reserves are 6 to 9 billion barrels. It has been in development since 1993 by the Tengizchevroil (TCO) joint venture, which includes Chevron (50 percent), ExxonMobil (25 percent), KMG (20 percent), and LukArco (5 percent). According to predictions, the production of Tengiz oil field will reach 854,000 bbl/d by 2021.
276 “Caspian Region in Focus,” Arabian Oil and Gas, Jul 8, 2013, available at:
http://www.arabianoilandgas.com/article-11274-caspian-region-in-focus, (accessed: 20140520).
277 Peterson, A. and K. Barysch, “Russia, China and the geopolitics of energy in Central Asia,” CER, Nov 16, 2011, available at:
http://www.cer.org.uk/publications/archive/report/2011/russia-china-and-geopolitics-energy-central-asia, (accessed: 20131201).
278 “Kazakhstan,” U.S. Energy Information Administration (EIA) Official Website, Oct, 2013, available at:
http://www.eia.gov/countries/analysisbriefs/Kazakhstan/kazakhstan.pdf, (accessed: 20140520).
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Chart 4-13: Shareholdings of Tengiz Oil Field
Source:“Kazakhstan,” U.S. Energy Information Administration (EIA), Oct 28, 2013, available at:
http://www.eia.gov/countries/analysisbriefs/Kazakhstan/kazakhstan.pdf (Compiled by author)
4.4.1.2.2 Corporate Stakes in the Karachaganak field
Karachaganak, also onshore in northwestern Kazakhstan close to the Russian border, had produced 244,000 bbl/d of condensate as of June 2012. According to Karachaganak
Petroleum Operating (KPO), the field holds reserves of around 9 billion barrels of oil and gas condensate and 47 trillion cubic feet of natural gas. KPO includes BG (32.5 percent), Eni, (32.5 percent), Chevron (20 percent), and Lukoil (15 percent) among its shareholders. 279
279 “Kazakhstan Energy Profile: Second Largest Oil Reserves among Former Soviet Republics – Analysis,”
Eurasia Review, Sep 20, 2012, available at:
http://www.eurasiareview.com/20092012-kazakhstan-energy-profile-second-largest-oil-reserves-among-former-s oviet-republics-analysis, (accessed: 20140325).
Chevron 50%
ExxonMobil 25%
KMG 20%
LukArco 5%