Page 4 - AsiaElec Week 34 2022

AsiaElec COMMENTARY AsiaElec

Kazakhstan: Spectre

of Chinese control over

energy largely illusory

ASIA A decade or so ago, it was commonplace in Kazakhstan to China is provided by partly
Kazakhstan to talk about the creeping takeover domestic-owned companies. And China is
of the energy industry by China. far from the main buyer of Kazakh oil. Of the
That hasn’t happened. 65.7mn tonnes of oil and oil products exported
Next month marks the 25th anniversary of a in 2021, 3.6mn tonnes went to China. Buyers in
Sino-Kazakh intergovernmental agreement on Italy, the Netherlands and France received more.
cooperation in the energy industry. Some caution at attempting an overly revi-
State-owned China National Petroleum Cor- sionist assessment on Beijing’s role in Kazakh’s
poration’s maiden acquisition was a 60% stake in energy sector, however. Yerkin Baidarov, a
Aktobemunaigas, an oil and gas company based leading researcher at the Ramazan Suleimenov
in the northwestern Aktobe province. CNPC Institute of Oriental Studies, a government-run
would go on to take over the whole company, think tank, argues that the full scale of Chinese
now known as CNPC-Aktobemunaigas. investments is not always easy to divine.
China also pledged at the time to build a “There are invisible investments, such as Chi-
2,200-kilometre pipeline from western Kazakh- nese capital coming into Kazakhstan through
stan to its own Xinjiang province. Around other jurisdictions, mainly through the Nether-
150mn tonnes of oil have been pumped eastward lands, as well as Kazakh companies with Chinese
along that route since it was installed. involvement,” Baidarov told Eurasianet.
Since 1997, the CNPC has invested more The Kazakh government has at times played
than $45bn into Kazakhstan’s oil and gas sector, hardball with Western investors, mostly espe-
according to a paper presented to a CNPC-spon- cially the ones developing the Kashagan field.
sored conference in Almaty in November. But its stance toward Chinese energy investors
That is a large number, but the trend has gen- is no less unrelenting.
erally not pointed toward growth. In propor- There are few better confirmations of that
tionate terms, China’s presence in Kazakhstan’s than how the authorities have repeatedly probed
oil and gas industry has progressively fallen in CNPC-Aktobemunaigas over the kinds of trans-
recent years. gressions commonly associated with Chinese
Since 2010, China’s share in national oil pro- investors in Central Asia.
duction has halved, from 31% to 16%. Cumula- Last October, anti-monopoly officials deter-
tive investment in the oil and gas sector has been mined that the company had designed a pipe
slowing too, down from $3.7bn in 2013 to $1.3bn supply tender in such a way as to exclude all but
in 2021, according to the National Bank. its own preferred bidder. Later, in May, prosecu-
That latter figure accounts for less than 1% of tors in the Aktobe region found that CNPC-Ak-
investments in Kazakhstan’s energy sector. Com- tobemunaigas was abusing its monopoly
panies based in the Netherlands and the United position on the local liquefied petroleum gas
States are far bigger players, mainly by dint of (LPG) market to maintain prices artificially
their involvement in mega-projects like Kasha- high. And in July, environmental protection offi-
gan and Tengiz. cials reported that the company had committed
Of the 61.2mn tonnes of oil drilled in 2020, numerous waste management and pollution vio-
only around 10.5mn tonnes came from com- lations at its Kenkiyak field and fined it.
panies controlled by CNPC. And most of that This has led to speculation among industry
oil, around 85%, remained inside Kazakh- watchers that the government may seek to rene-
stan, according to the paper from the Almaty gotiate the term of the concession.
conference. Perhaps in a bid to clean up its reputation as a
In fact, most of the oil that is pumped from polluter, China is now investing heavily in green

P4 www. NEWSBASE .com Week 34 24•August•2022