Kazakhstan's oil industry

Kazakhstan, which is the size of Western Europe, has "the largest oil and gas reserves in the Caspian Sea basin, and is producing 1.5 million barrels of oil a day today. It is projected to produce 2.5-3.5 million barrels of oil a day by 2015, surpassing today's output by Qatar or Iraq," Ariel Cohen wrote September 27, 2006, in the Washington Times.

"Kazakhstan contains significant quantities of gas and oil in particular. Kazakhstan sits near the northeast portion of the Caspian Sea and claims most of the Sea's biggest known oil fields. Kazakhstan's combined onshore and offshore proven hydrocarbon reserves have been estimated between 9 and 17.6 billion barrels (comparable to OPEC members Algeria on the low end and Qatar on the high end)."&mdash;MBendi.

Attraction: "huge oil reserves"
Kazakhstan&mdash;and its oil industry&mdash;have "grown in importance because of its huge oil reserves," the Associated Press reported September 25, 2006. "With the other four former Soviet Central Asian nations being more authoritarian, too unstable, too poor, or a combination of all three, Kazakhstan emerges as the West's logical ally in the strategic energy-rich region north of Afghanistan and Iran."

President George W. Bush is "pursuing closer ties to oil-rich Kazakhstan despite what human rights observers have said is a disturbing backslide toward autocracy in the former Soviet republic," the AP said.

Oil Investment Climate
"Kazakhstan's investment climate and production sharing agreements (PSAs) with Western companies are much more liberal than that of neighboring Russia, which cracked down on the Yukos oil company in 2003, and now is severely limiting the Sakhalin Island energy investment projects by Exxon, Shell and others," Cohen wrote.

"Kazakhstan is light years ahead of the neighboring Uzbekistan and Turkmenistan in terms of economic reform and growth. It boasts a thriving non-energy sector, including small- and medium-size enterprises, and has a great potential in agriculture.

"It has grown consistently at 9 percent a year since 2000, and has quickly reached a GDP per capita of $3,000, with further growth projected. The U.S.-Kazakhstan trade volume doubled since 2004," Cohen wrote.

Bush administration, Kazakhstan's oil and the "Wayback Machine"
In 1994, when Vice President Dick Cheney was a member of Kazakhstan's Oil Advisory Board, he "helped broker a deal between Kazakhstan and Chevron, a company where Secretary [of State] Condoleezza Rice served on the Board," Mark Ames wrote June 1, 2006, in The eXile.

"Today, US oil companies have large stakes in Kazakhstan's oil fields. But most of the oil being pumped goes through Transneft lines out of the Russian port in Novorossiisk. America has been battling with Russia to get Kazakhstan to pump its oil through an alternate pipeline, the Baku-Ceyhan pipeline, that goes through Azerbaijan, Georgia and Turkey," Ames wrote.

In 1998, "with the heads of Chevron Corp. and Texaco Inc., Cheney [was] one of just a dozen members of Kazakhstan's Oil Advisory Board, created by the country's president as a sounding board." On June 13, 1998, in Amarillo, Texas, when he was CEO of Halliburton, "Cheney spoke at the annual meeting of an influential group of oilmen, the Panhandle Producers and Royalty Owners Association," Harkavy posted in 2004 on The Village Voice Blog Bushbeat.

"Greg Rohloff, a business writer for the Amarillo Globe-News, covered the speech and wrote at the time that 'the current hot spots for the major oil companies are the oil reserves in the Caspian Sea region.' Rohloff's story continued:


 * "The potential for this region turning as volatile as the Persian Gulf does not concern Cheney.


 * "'You've got to go where the oil is,' he said. 'I don't worry about it a lot.'"

2006: Via the Atalaw Pass to China
The first phase of a 3,000-kilometer cross-border pipeline from Kazakhstan to China has been completed via the Atalaw Pass, which is located in Northwest China's Xinjiang Uygur Autonomous Region. The pipeline "will transmit 10 million tons of oil a year, a figure that will double when the entire project is completed in 2011", then capable of producing "5.5 million tons of refined oil a year," Zhu Minjie, "a customs officer at the Alataw Pass told Xinhua" in September 2006. 

"The 960-kilometer pipeline was jointly developed by the China National Petroleum Corporation (CNPC) and the Kazakh state energy company, Kazmunaigaz [was] designed to transmit 20 million tons of oil a year, 15% of China's total crude oil imports for 2005."

"Experts say the move will help enhance China's oil supply and provide an ideal outlet for Kazakhstan's oil exports," Asia Times reported. "The new oil shipping route will link Chinese consumers with the oil fields of the Caspian Sea, as well as alleviate China's excessive reliance on the Strait of Malacca, a traditional route for 80% of China's imported oil."

"In 2004, commercial and security ties between Kazakhstan and China were strengthened when Beijing signed a deal with Astana to build a pipeline from the Caspian Sea to western China," Gundzik wrote in the June 9, 2005, Asia Times.

"The pipeline deal with Kazakhstan prompted Beijing to pledge increased military and technical assistance to Kyrgyzstan, through which this pipeline passes. Despite its small size and lack of natural resources, the geostrategic importance of Kyrgyzstan, which hosts military bases for both Russia and the US, is enormous," Gunkzik wrote.

1999: To Europe, Oil to the US
"The oil of the Middle East, as well as that of the former Soviet Union (the Caucases, the Caspian Sea and Kazakhstan)! Three pipelines are competing to bring oil from the former Soviet Union to Europe. Around these pipelines wars are breaking out everywhere&mdash;Chechenya, Georgia, Nagorny-Karabakh, Kurdistan," Michel Collon wrote in March 1999, in Solidaire (translation).

"Controlling such a pipeline brings in fees for 'rights of passage' amounting to $20 million a DAY! Above all it is the US who wishes to control this black gold by depriving their European rivals of it. This is why they have just got themselves 'invited' to install a military base in Azerbaijan," Collon wrote.

Settling U.S. Bribery Investigations
In April 2007 Baker Hughes announced that it had paid $44.1 million to settle investigations by the United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) into the company's operations in Angola, Kazakhstan and Nigeria. In its statement the company announced that:


 * a company subsidiary "pled guilty to violations of the Foreign Corrupt Practices Act (FCPA) as a result of payments made between 2001 and 2003 to a commercial agent retained in 2000 in connection with a project in Kazakhstan";


 * "The company agreed with the SEC to the entry of a Consent Judgment charging violations of the anti-bribery provisions of the FCPA arising from the engagement of agents to obtain contracts in Kazakhstan. The Consent Judgment also charges violations of the books-and-records and internal-controls provisions, and the terms of a September 12, 2001 cease-and-desist order, arising from these and other activities in Kazakhstan, Angola, Nigeria, Indonesia, Russia, and Uzbekistan."

Radio Free Europe reported that a quarter of the fine related to Baker Hughes' activities "developing the huge Karachaganak natural-gas field in northern Kazakhstan" and the the court was told the company had "paid $4.1 million in bribes from 2001-03 to an intermediary, who in turn transferred money to a high-level executive of KazakhOil, the state oil company at the time. Additionally, the complaint says, in the period of 1998-99, kickbacks of more than $1 million were paid to a KazTransOil executive."

National

 * Kazakhstan National Oil Company (KNOC)
 * KazTransOil (part of KazMunaiGaz JSC (formerly Kazakhoil))

Foreign

 * Baker Hughes (an oil services company)
 * Chevron
 * Greenoak (Norway)
 * Eni SPA (Italy)
 * Exxon Mobil
 * INPEX (Japan)
 * Petrokazakhstan (Canadian registry; owned by China National Petroleum Corporation (CNPC) via its wholly-owned subsidiary China National Petroleum Corporation International (CNPCI))
 * ConocoPhillips
 * Petrom (Romania; majority owned by Austria's OMV)
 * Royal Dutch Shell
 * Tasbulat (subsidiary of Petrom)
 * Too Kom Munai (subsidiary of Petrom)
 * Total SA (France)

Related SourceWatch Resources

 * Baku-Tbilisi-Ceyhan (BTC) pipeline
 * Cheney Energy Task Force / National Energy Policy (May 2001)
 * China's oil industry
 * Iran's oil industry
 * Nimir Petroleum
 * peak oil / peak oil: we have oil
 * Pipelineistan
 * Russia's oil industry

Profiles

 * Country Analysis Brief: Kazakhstan, U.S. Department of Energy.
 * Profile: Kazakhstan Oil and Gas, MBendi (Africa).
 * "Bush and Central Asia Oil" at BushWatch.com.

Websites

 * CaspEnergy.com / Caspian Energy website.
 * KazakhstanOil.com / Kazakhstan Energy website.

Maps

 * Map: Kazakhstan: Oil & Gas, CIA World Factbook.
 * "Kazakhstan - ethnic variety and oil wealth" by Philippe Rekacewicz, Le Monde diplomatique, March 1994.

1995

 * Martha Brill Olcott, "Oil and Politics in Kazakhstan," Caspian Crossroads, No.1, Winter 1995.

1998

 * "Dick Cheney Ain't Studyin' War No More. As an Iraq attack seems nearer, he's in a far quieter oil patch as CEO at Halliburton," BusinessWeek, March 2, 1998.
 * Greg Roloff, "Cheney's experience pays off as a CEO," Amarillo Business Journal, June 13, 1998.
 * Daniel Williams, "Oil-Soaked Azeris Find Affluence Elusive," Washington Post, September 7, 1998.

1999

 * Jonathan Power, "America's Push on the Caspian Pipeline is Not Good Sense for the Oil Companies," The Transnational Foundation for Peace and Future Research, December 2, 1999.

2000

 * William Ratliff, "Oil-rich Kazakhstan could ease U.S. pain," San Jose Mercury News ('OilCrisis.com), April 4, 2000.
 * "Large oil site secured in the Caspian Sea," Asia Times, July 26, 2000.

2001

 * Kazakhstan 21st Century Foundation, Press Release: "Representatives of the Democratic Forces in Kazakhstan Demand U.S. Oil 'Bonuses' to Corrupt Politicians and Consultants Be Returned to Kazakh People," PRNewswire, January 10, 2001. An "An Open Letter to Members of Congress From Representatives of the Democratic Forces in Kazakhstan," January 9, 2001, follows.
 * Ranjit Devraj, "The oil behind Bush and Son's campaigns," Asia Times, October 6, 2001.
 * Laura Flanders, "Oil omissions. Bush Sr., Cheney have big stakes in Saudi status quo," WorkingForChange, October 17, 2001.
 * Clark Kee, "'You've Got to Go Where the Oil Is'," The Dubya Report, October 29, 2001.
 * Damien Cave, "Stuck in the Gulf. Could Central Asian oil, piped through a rebuilt Afghanistan, wean the West from the Mideast? Chances are slim," Salon, October 29, 2001.
 * Damien Cave, "The United States of oil. No administration has ever been more in bed with the energy industry -- but does that mean Big Oil is calling Bush's shots?" Salon, November 19, 2001.
 * Greg Moses, "The Afghanistan Command: If Oil, Then US There to Stay," November 26, 2001.
 * News Release: "President's Statement on Caspian Pipeline Consortium," Office of the White House Press Secretary, November 28, 2001.
 * Don Williams, "Questions Barbara Walters Didn't Ask George W. Bush," CounterPunch, December 5, 2001.
 * "Joint Press Conference with Nursultan Nazarbayev, President of the Republic of Kazakhstan," Secretary of State Colin L. Powell, Presidential Administration Building, Astana, Kazakhstan, December 9, 2001 (U.S. Department of State News Release).

2002

 * Dale Allen Pfeiffer, "The Forging of 'Pipelineistan'. Oil, Gas Pipelines High Priority for U.S. in Central Asian Military Campaigns," From the Wilderness, 2002.
 * Ted Rall, "Bush Fuels Oil Conspiracy Theory," AlterNet, January 10, 2002.
 * Michael Lelyveld, "Kazakhstan: Talk of oil pipeline through Afghanistan seen as premature," Radio Free Europe/Radio Liberty (EurasiaNet/Kazhegeldin.addr.com), February 2, 2002.
 * Michael C. Ruppert, "The Elephant in the Living Room," From the Wilderness (GlobalResearch.ca), March 26, 2002.
 * Larry Chin, "Big Oil, the United States and corruption in Kazakhstan," Online Journal/GlobalResearch.ca, May 12, 2002: "The escalating '9/11 war,' is at its core, a battle for control for the last remaining supplies of world oil."
 * Larry Chin, "Big Oil, the United States and corruption in Kazakhstan" (Part 2 of 2), Online Journal, May 16, 2002.
 * Karen Talbot, "Afghanistan, Central Asia, Caucasus: Key to oil profits," People's Weekly World, May 17, 2002.
 * "Kazakhstan: Oil and Natural Gas Exports," U.S. Department of Energy, July 2002.
 * "Kazakhstan: Investment and Trade," Spencer Abraham, Secretary of Energy, Remarks at conference on Kazakhstan, Overland Park, Kansas, July 1, 2002.
 * Press Release: "Bush Administration Official Talks Trade in Kazakhstan," U.S. Department of Commerce, November 15, 2002.
 * "Asian States Battle over Caspian Wealth," Yellow Times (GlobalPolicy.org), December 1, 2002.
 * Paul Brown, "Kazakhstan: Oil Money Threatens to Make Killing Fields," The Guardian (UK) (GlobalPolicy.org), December 4, 2002.
 * Jeff Gerth, "Bribery Inquiry Involves Kazakh Chief, and He's Unhappy," New York Times (NCSJ.com), December 11, 2002.

2003

 * S.S. Misra, "Caspian Oil and Gas. Pipeline Politics," ASIAN Affairs, April 2003.
 * Peter Dale Scott, "If ExxonMobil Is Not Indicted for Payments in Kazakhstan, What Has This To Do With Iraq?" University of California, Berkeley, April 13, 2003.
 * "Big Oil's Dirty Secrets," Economist (GlobalPolicy.org), May 8, 2003.
 * Christopher Pala, "Oil scandal hits Kazakhstan," Washington Times (Johnson's Russia List), May 17, 2003.
 * Sergei Blagov, "Kazakhs: Let's talk about succession," Asia Times, October 3, 2003.
 * "In pursuit of the snow leopard," Asia Times, November 8, 2003.
 * Greg Palast, "Baker Takes the Loaf," AlterNet, December 9, 2003.

2004

 * Michael T. Klare, "Bush-Cheney Energy Strategy: Procuring the Rest of the World's Oil," Foreign Policy in Focus, January 2004.
 * Sergei Blagov, "Russia puts business before politics in Kazakhstan," Asia Times, January 13, 2004.
 * Daniel Kimmage, "Big Plans For Kazakhstan's Oil," Radio Free Europe/Radio Liberty, February 25, 2004.
 * Heather Timmons, "Kazakhstan: Oil Majors Agree to Develop Field," New York Times (CorpWatch.org), February 26, 2004.
 * Sergei Blagov, "Oil-rich US ally Kazakhstan looks to China," Asia Times, February 27, 2004.
 * W. Joseph Stroupe, "Strategic squeeze over Caspian resources," Asia Times, May 11, 2004.
 * Conn Hallinan, "The Oil Connection. Bush and Sharon," CounterPunch, May 26, 2004.
 * Matthew Yeomans, "Dispatch From Kazakhstan. Astana, city of black gold," Slate, July 19, 2004.
 * Harkavy, "Clearing up a 'fundamental misunderstanding' regarding Dick Cheney," The Village Voice, August 13, 2004.
 * Michael T. Klare, "Oil Wars. Transforming the American Military into a Global Oil-Protection Service," TomDispatch.com, October 7, 2004. Intro by Tom Engelhardt.
 * Michael Blackman, "Abundant oil makes Kazakhstan a country to watch," The Age (Australia), December 1, 2004.
 * W.B. Schwarz, "Pop goes the Bush mythology bubble Part 2: 9/11 Commission and Bridas," Online Journal (YuricaReport.com), December 10, 2004.

2005

 * Alexander Sukhanov, "Caspian oil exports heading east," Asia Times, February 9, 2005.
 * "Kazakhstan: Major Oil and Natural Gas Projects," U.S. Department of Energy, April 2005.
 * Mark Ames, "The Black-Gold'n Horde. How America Is Conquering Russia," The eXile (Russia), June 3, 2005.
 * "Kazakhstan expects Russian oil for PRC pipeline," Asia Times, June 11, 2005.
 * Ken Silverstein, "A Corrupt, Brutal Dictator in the White House? Maybe just for a visit," Harper's Magazine, July 14, 2006.
 * Vladimir Socor, "Kazakhstan's Trans-Caspian Oil Export Plans and Its Competitors," Eurasia Daily Monitor, August 17, 2005.
 * "China's CNPC to Buy PetroKazakhstan for $4.2B," Reuters (Fox News), August 23, 2005.
 * "Kazakh oil coup for China, India cries foul," Asia Times, August 24, 2005.
 * Jeff Moore, "China's Kazakh prize: The expert opinion," Asia Times, August 25, 2005.
 * "Kazakhstan refuses to help ONGC in oil firm sale," Asia Times, August 30, 2005.
 * "CNPC, Kazakhstan reach agreement on oil deal," Asia Times, October 20, 2005.
 * Jackson Diehl, Op-Ed: "An Oil-Rich Test for Bush. Fair Elections in Azerbaijan and Kazakhstan Could Energize a Region," Washington Post, October 23, 2005.
 * "CNPC finalizes PetroKazakhstan acquisition," Asia Times, October 28, 2005.
 * Dave Cohen, "There's A New Kid In Town -- Iran Versus Kazakhstan," The Oil Drum, November 23, 2006.
 * Ronan Thomas, "Khazakhstan in black and white," Asia Times, December 6, 2005.
 * F. William Engdahl, "China lays down gauntlet in energy war," Asia Times, December 21, 2005.

2006

 * F. William Engdahl, "Central Asia, Washington and Beijing Energy Geo-Politics," Financial Sense University, January 3, 2006.
 * Christopher Pala, "China Pays Dearly for Kazakhstan Oil," New York Times (China Institute), March 16, 2006.
 * "China Offers To Build Second Pipeline From Kazakhstan," ITAR-TASS (Radio Free Europe/Radio Liberty), April 13, 2006.
 * "Kazakhstan oil to arrive in China soon," People's Daily Online, April 29, 2006.
 * "Cheney's Trip to Kazakhstan Takes Him to Oil's 'Final Frontier'," Bloomberg, May 3, 2006.
 * Cheryl Glaser, "Oil puts Kazakhstan on Cheney's itinerary," American Public Media, May 5, 2006.
 * "Cheney Visits Kazakhstan to Talk Oil," NewsMax, May 5, 2006.
 * Ilan Greenberg and Andrew E. Kramer, "Cheney urges Kazakhs to bypass Russia," New York Times/International Herald Tribune, May 6, 2006.
 * "Cheney backs nations’ ambitions to join NATO. Vice president says Croatia, Macedonia, Albania would 'rejuvenate' alliance," Associated Press (MSNBC), May 7, 2006.
 * Bill Weinberg, "Cheney does Kazakhstan," World War 4 Report, May 7, 2006.
 * Vladimir Socor, "Cheney Visit Spotlights Kazakhstan's Pivotal Role," Eurasia Daily Monitor, May 8, 2006.
 * F. William Engdahl, "The US's geopolitical nightmare," Asia Times, May 9, 2006.
 * Vladimir Socor, "Stung by Cheney's Comments, Moscow Plays Energy Card," Eurasia Daily Monitor, May 11, 2006.
 * Gwynne Dyer, "Is Dick Cheney bribing his way into Kazakhstan oil?" The New Vision (Uganda), May 14, 2006.
 * Katrina Vanden Heuvel, "Cheney's Oily Interests," The Nation, May 16, 2006.
 * Robert Dreyfuss, "Oil Diplomacy," TomPaine.com, May 18, 2006.
 * Larry Chin, "Dick Cheney Reignites Grand Chessboard," From the Wilderness, May 22, 2006.
 * "Kazakhstan oil piped into China," China View (XinhuaNet.com), May 25, 2006.
 * "China-Kazakhstan oil pipeline goes into operation," People's Daily Online, May 26, 2006.
 * Mark Ames, "Cheney Starts New Cold War Over Oil," The eXile (AlterNet), June 1, 2006.
 * "Bush Urges Azerbaijan, Kazakhstan To Sign Oil Deal," Agence France Press/Associated Press (Radio Free Europe/Radio Liberty), June 6, 2006.
 * "Kazakhstan May Supply Iran With Oil," IRNA (Radio Free Europe/Radio Liberty), June 6, 2006.
 * "Eurasia: Kazakhstan Squeezes In On BTC Pipeline Project," Radio Free Europe/Radio Liberty, June 16, 2006.
 * "U.S. Welcomes Kazakh-Azerbaijani Pipeline Deal," Associated Press (Radio Free Europe/Radio Liberty), June 22, 2006.
 * Bruce Pannier, "Kazakhstan: Presidential Son-In-Law's New Role Highlights Energy Politics," Radio Free Europe/Radio Liberty, June 27, 2006.
 * Ted Rall, "U.S. Plants Seeds of Disaster in Kazakhstan," Common Dreams, July 6, 2006.
 * "Kazakhstan-China oil pipeline opens to commercial operation," People's Daily Online (China), July 12, 2006.
 * "Pipeline up and flowing," Asia Times, July 13, 2006.
 * Vladimir Socor, "Constanta-Trieste Pipeline Proposal for Kazakhstan's Oil," Eurasia Daily Monitor, August 3, 2006.
 * Peter Baker, "With Kazakh's Visit, Bush Priorities Clash. Autocrat Leads an Oil-Rich Country," Washington Post, August 29, 2006.
 * Sherwood Ross, "Oil Seen as Reason for US Middle East Invasions," Scoop (New Zealand), September 4, 2006.
 * "Romania's Petrom approves Kazakhstan oil field development plan," Platts, September 22, 2006.
 * Yuri Zarakhovich, "Coming On Strong. Kazakhstan's oil has made it the leading player in Central Asia. But economic success doesn't guarantee democracy," TIME Magazine (Europe), September 25, 2006.
 * "US Pursues Ties to Oil-Rich Kazakhstan," Associated Press (truthout), September 25, 2006.
 * Anne Gearan, "U.S. Pursues Closer Ties With Kazakhstan," Associated Press (Forbes), September 25, 2006.
 * A. Mammadov, "New Norwegian-Kazakhstan Joint Enterprise 'Batumi Terminals' Established," Trend News Agency (Azerbaijan), September 25, 2006.
 * N. Kirtskhalia, "Batumi Oil Terminal Forming Union with KNOC," Trend News Agency (Azerbaijan), September 25, 2006.
 * Michael Steen, "Leader's U.S. visit mixes Kazakh oil and democracy," Reuters (Boston Globe), March 26, 2006.
 * William Mellor and Le-Min Lim, "China's Oil Deals With Iran, Myanmar Put It at Odds With U.S.," Bloomberg, September 27, 2006.
 * "Kazakh Oil Field Takes the Best from Both East and West," Reuters (Mos News), September 27, 2006.
 * Yuri Zarakhovich, "Kazakhstan Comes On Strong. The country's oil has made it the leading player in Central Asia, and a welcome visitor to the White House. But economic success doesn't guarantee democracy," TIME Magazine, September 27, 2006.

2007

 * "Baker Hughes Settles Previously Disclosed FCPA Investigations", Media Release, April 26, 2007.
 * Nikola Krastev, "Kazakhstan: U.S. Firm Pleads Guilty In Bribery Case", Radio Free Europe, April 30, 2007.