Page 23 - bne_Magazine_July_2017

bne July 2017 Cover story I 23
China’s insatiable appetite for Central Asian oil and gas
for about 25% of annual production, independent experts say China has about a 40% share in Kazakh oil,”
Kazakh independent oil industry analyst Sergey Smirnov tells bne IntelliNews. China began shopping for Central Asian oil and gas in the late noughties, but the fall in world oil prices has provided an opening for Chinese buyers to expand their stake in Kazakh oil. The Russian giant Lukoil sold a 50% stake in a Kazakh oil producer to China Petroleum & Chemical for $1.09bn in 2015, as falling oil prices made production less attractive.
China’s expansion should be viewed as ongoing rather than recent,
Kanat Shaku in Almaty
Middle Eastern countries and Russia have traditionally domi- nated the energy markets of Western Europe, leaving the little known but vast reserves of Central Asia neglect- ed. That is, until China revealed its insa- tiable appetite for the region’s resources.
If China continues its current trend, the International Energy Agency estimates that half of Central Asia’s oil and gas exports could go east by 2020, in a marked shift from historic flows to Russia and Western Europe.
In Kazakhstan, the leading energy exporter in the region, the lion’s share of the country's oil production is still done by Western companies.
US giants Chevron and Exxon Mobil together hold a 75% stake in Tengiz, one of the country's largest oil fields, whereas Italy’s Eni is the leading shareholder of the giant Kashagan field, which launched in October 2016.
“The fall in world oil prices has provided an opening for Chinese buyers to expand their stake in Kazakh oil”
The Western grip on Kazakh energy is, however, a waning phenomenon. “Although today, according to official figures, Chinese companies account
Smirnov says, and it is not triggered by current low asset prices. On the contrary, China was “often acquir- ing shares of Kazakhstan’s companies
Kazakhstan-China oil pipeline
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