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The export plans follow a recent transfer of power in Kazakhstan from long-time ruler Nur- sultan Nazarbayev to Kassym-Jomart Tokayev. During his three decades in power, Nazarbayev advocated warmer ties with China while also remaining on good terms with Russia and the West.
A uent Mandarin speaker, Tokayev is antic- ipated to continue his predecessor’s foreign pol- icies, potentially pulling Kazakhstan closer into China’s orbit or, at the very least, maintaining good relations at a time when the treatment of ethnic Kazakhs in China is a source of tension.
For China, extra Kazakh oil would help bol- ster energy security in Xinjiang region as well as at a national level.
Import agenda
China has been talking about boosting produc- tion in the remote western region for years, with the intent being that greater local oil ows will underpin future economic growth while reduc- ing its growing reliance on eastern China’s oil- elds as well as Russian and Central Asian crude.
In 2018, CNPC outlined plans to spend more than CNY150bn ($21.77bn) by 2020 to boost the region’s oil and gas production. e company’s Xinjiang oil productions amounted 11.45mn
tonnes (229,000 bpd) in 2017. In May, CNPC unit PetroChina said it had drilled 47 wells in the Jimsar shale oil reservoir this year. e reserve contains an estimated 1bn tonnes (7.33bn bar- rels) of oil. Production is projected to reach 1mn tpy (20,000 bpd) in 2021 before rising to 2mn tpy (40,000 bpd) in 2025.
But it is not clear how much of that invest- ment will be allocated to oil projects and how much will lead to natural gas developments. While the country’s oil majors have stabilised crude production over the last year and a half at 3.8mn bpd on average, investment has poured into raising natural gas output. Gas production in the rst ve months of the year climbed 12.9% to 72.49 bcm. At the same time, oil imports have continued to expand, reaching an all-time high of 10.68mn bpd in April.
China’s oil import needs are growing. Being to be able to increase ows of Kazakh and Rus- sian oil into the country’s west would give the sparsely populated and restive region greater access to crude and increased income from tran- sit fees. It would also increase pipeline imports – Beijing’s preferred method of transporting energy purchases given its increased security – from friendly neighbouring economies.™
CNPC’s Kazakh assets.
Image: CNPC
Week 27 10•July•2019 w w w . N E W S B A S E . c o m
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