63
The second reason concerns quality. There is more sulfur in the country’s oil (Ebel
and Menon 2000:85). On the other hand, Kazakhstan’s enormous production and
export potential could still make it one of the major energy players in the region and
also in the world for the next decade (Overland et al. 2010:22).
Bordering the country to the East, China also plays an important role in the
Kazakh energy sector. China has a stake in a number of projects in the country, such
as oil and gas fields, as well as mines for copper, iron, and uranium. China signed
its first agreement with Kazakhstan in 1997. “China’s National Petroleum
Corporation” (CNPC) has purchased a 60% stake in Aktobemunigaz Corp. CNPC
continued to increase its activities in the Kazakh energy sector throughout the
2000s, purchasing PetroKazakhstan for $4.2 billion—the country’s largest overseas
purchase up to the time (Overland et al. 2010:22). The main energy project launched
between the two countries has so far been the China-Kazakhstan oil pipeline, the
Kazakhstan-China oil pipeline stretches more than 3000 km across, and was built in
three phases. The pipeline supplies 5% of China’s daily oil consumption (www.
globalsecurity.org 2017). By 2003, the first phase of the China-Kazakhstan pipeline
had been completed, with the initial capacity comprising of 240,000 bbl/day. The
oil is sourced from the oil fields of the Aktobe region and transported oil as far as
Alashankou in China’s Xinjiang region. The second phase of the pipeline was completed in September 2004 and expanded to a third phase in 2009. The total cost of
pipeline has so far totaled $3 billion (www.globalsecurity.org 2017).
To make the most of the potential of its resources, Kazakhstan has to cooperate
with the region’s biggest players. With enough lucrative deals outside guaranteed,
the country will be able to expand social economic prosperity and extend pipeline
networks to transport oil and gas within a domestic market, expanding free trade in
the energy sector to allow it to reach its economic goals (Ebel and Menon
2000:98–99).
Kazakhstan’s Major Oil Field
Tengiz
Tengiz oil field in Korolev, north of Tengiz, is the largest of its kind in the country,
discovered in 1979. The field produces around 45% of all Kazakhstan’s oil. TCO
Tengizchevroil consortium running the project is 50% owned by Chevron, 25% by
Exxon Mobil, 20% by KazMunaiGas (Kazakhstan’s own state oil company), and
5% by Lukoil of Russia. At present, daily production of the Tengiz field is 595,000
b/day, and Kazakhstan is planning more investment to boost its production capacity
to 875,000 bpd by 2022 (www.ft.com 2017).
In July 2016, Tengizchevroil supported a new investment worth $36.8 billion in
the field, with the goal of enlarging output. The intentions are to boost production to
39 million tons of crude oil per year, equivalent to 850,000 barrels per day, by 2022.
Today, 27 million tons of crude oil is obtained per year, which is more than a third
Kazakhstan
The second reason concerns quality. There is more sulfur in the country’s oil (Ebel
and Menon 2000:85). On the other hand, Kazakhstan’s enormous production and
export potential could still make it one of the major energy players in the region and
also in the world for the next decade (Overland et al. 2010:22).
Bordering the country to the East, China also plays an important role in the
Kazakh energy sector. China has a stake in a number of projects in the country, such
as oil and gas fields, as well as mines for copper, iron, and uranium. China signed
its first agreement with Kazakhstan in 1997. “China’s National Petroleum
Corporation” (CNPC) has purchased a 60% stake in Aktobemunigaz Corp. CNPC
continued to increase its activities in the Kazakh energy sector throughout the
2000s, purchasing PetroKazakhstan for $4.2 billion—the country’s largest overseas
purchase up to the time (Overland et al. 2010:22). The main energy project launched
between the two countries has so far been the China-Kazakhstan oil pipeline, the
Kazakhstan-China oil pipeline stretches more than 3000 km across, and was built in
three phases. The pipeline supplies 5% of China’s daily oil consumption (www.
globalsecurity.org 2017). By 2003, the first phase of the China-Kazakhstan pipeline
had been completed, with the initial capacity comprising of 240,000 bbl/day. The
oil is sourced from the oil fields of the Aktobe region and transported oil as far as
Alashankou in China’s Xinjiang region. The second phase of the pipeline was completed in September 2004 and expanded to a third phase in 2009. The total cost of
pipeline has so far totaled $3 billion (www.globalsecurity.org 2017).
To make the most of the potential of its resources, Kazakhstan has to cooperate
with the region’s biggest players. With enough lucrative deals outside guaranteed,
the country will be able to expand social economic prosperity and extend pipeline
networks to transport oil and gas within a domestic market, expanding free trade in
the energy sector to allow it to reach its economic goals (Ebel and Menon
2000:98–99).
Kazakhstan’s Major Oil Field
Tengiz
Tengiz oil field in Korolev, north of Tengiz, is the largest of its kind in the country,
discovered in 1979. The field produces around 45% of all Kazakhstan’s oil. TCO
Tengizchevroil consortium running the project is 50% owned by Chevron, 25% by
Exxon Mobil, 20% by KazMunaiGas (Kazakhstan’s own state oil company), and
5% by Lukoil of Russia. At present, daily production of the Tengiz field is 595,000
b/day, and Kazakhstan is planning more investment to boost its production capacity
to 875,000 bpd by 2022 (www.ft.com 2017).
In July 2016, Tengizchevroil supported a new investment worth $36.8 billion in
the field, with the goal of enlarging output. The intentions are to boost production to
39 million tons of crude oil per year, equivalent to 850,000 barrels per day, by 2022.
Today, 27 million tons of crude oil is obtained per year, which is more than a third
Kazakhstan