74
The latest phases of this “Going Out” policy, by 2008, had developed further to
incorporate.
firstly; “the acquisition of foreign companies for the technical know-how, efficiency, and
their physical assets on the ground”,
secondly; “investments in oil and gas fields abroad in conjunction with diversification of
transport routes”;
and thirdly, “the guarantee of markets for the resources being extracted to be delivered
to, as well as investment credits dedicated to resource development.” (M. Cutler
2014:682–683).
In February 2009, China and Russia signed agreements to allow Chinese financial
agencies to lend around $15 billion to Russian Rosneft, along with $10 billion to
Transneft, in return for the construction of a section of the ESPO oil pipeline from
Russia’s Skorovodino to the Chinese border. According to the agreement, Russia is
to guarantee the supply of significant amounts of oil over a long-term period. The
agreement also ensures that Transneft is to build a 4800 km pipeline from the
Russian city of Taishet to the Pacific Coast in two phases. In the first phase of this
mega project, Russia is to build a pipeline to Skorovodino which holds the capacity
of 1.6 million bpd. It is likely that by 2018, Russia will have developed further oil
fields. Extending the ESPO’s reach from Daqing to Skorovodino and on to the
Chinese border (M. Cutler 2014:682–683).
Before China’s more recent overtures into the Kazakh, Turkmen, and Uzbek
markets, the region was mainly dependent on Gazprom infrastructure for the export
of natural gas to Europe via Russia thus leaving little wiggle room to negotiate
Russia’s prices, terms, and quantity of flow. In fact, the conditions imposed on these
countries, especially Turkmenistan, in terms of energy policy, have been a motivating factor in their market diversification efforts. In the case of Turkmenistan, it has
a direct correlation to that country’s invitation to China CNPC not only to build a
huge pipeline in Turkmenistan but also to have exclusive rights to share onshore
natural gas production throughout its territory. Sino-Turkmen energy relations have
developed rapidly due to the increase of CNPC activities, with representatives of the
company in Turkmenistan becoming so emboldened as to inform Gazprom officials
that Ashkabat was China’s turf when it comes to energy matters (www.theatlantic.
com 2016a, b).
China’s growing involvement in the Central Asian energy sectors is thus striking.
In past years, the CNPC has replaced Gazprom as the region’s energy hegemon,
extracting natural gas from areas such as Turkmenistan and Afghanistan—places
where Western oil companies have had no success. The country has been involved
in every area of the sector—from extraction to pipeline works, refinery networking,
and beyond—on a magnitude never before seen (www.theatlantic.com 2016a, b).
By 2006, CNPC had won the much sought-after rights to Turkmenistan’s onshore
natural gas fields, completing the necessary pipeline work (a staggering 1100 mile
long) by 2009. By contrast, Western companies have failed to build any oil and gas
pipelines from Central Asia to their consume market—despite 22 years of efforts.
The only important pipeline project built by Western companies was the BTC, completed during the Clinton Administration as a means of increasing the flow of
3 International Context of the New Era and the Caspian Sea Region
The latest phases of this “Going Out” policy, by 2008, had developed further to
incorporate.
firstly; “the acquisition of foreign companies for the technical know-how, efficiency, and
their physical assets on the ground”,
secondly; “investments in oil and gas fields abroad in conjunction with diversification of
transport routes”;
and thirdly, “the guarantee of markets for the resources being extracted to be delivered
to, as well as investment credits dedicated to resource development.” (M. Cutler
2014:682–683).
In February 2009, China and Russia signed agreements to allow Chinese financial
agencies to lend around $15 billion to Russian Rosneft, along with $10 billion to
Transneft, in return for the construction of a section of the ESPO oil pipeline from
Russia’s Skorovodino to the Chinese border. According to the agreement, Russia is
to guarantee the supply of significant amounts of oil over a long-term period. The
agreement also ensures that Transneft is to build a 4800 km pipeline from the
Russian city of Taishet to the Pacific Coast in two phases. In the first phase of this
mega project, Russia is to build a pipeline to Skorovodino which holds the capacity
of 1.6 million bpd. It is likely that by 2018, Russia will have developed further oil
fields. Extending the ESPO’s reach from Daqing to Skorovodino and on to the
Chinese border (M. Cutler 2014:682–683).
Before China’s more recent overtures into the Kazakh, Turkmen, and Uzbek
markets, the region was mainly dependent on Gazprom infrastructure for the export
of natural gas to Europe via Russia thus leaving little wiggle room to negotiate
Russia’s prices, terms, and quantity of flow. In fact, the conditions imposed on these
countries, especially Turkmenistan, in terms of energy policy, have been a motivating factor in their market diversification efforts. In the case of Turkmenistan, it has
a direct correlation to that country’s invitation to China CNPC not only to build a
huge pipeline in Turkmenistan but also to have exclusive rights to share onshore
natural gas production throughout its territory. Sino-Turkmen energy relations have
developed rapidly due to the increase of CNPC activities, with representatives of the
company in Turkmenistan becoming so emboldened as to inform Gazprom officials
that Ashkabat was China’s turf when it comes to energy matters (www.theatlantic.
com 2016a, b).
China’s growing involvement in the Central Asian energy sectors is thus striking.
In past years, the CNPC has replaced Gazprom as the region’s energy hegemon,
extracting natural gas from areas such as Turkmenistan and Afghanistan—places
where Western oil companies have had no success. The country has been involved
in every area of the sector—from extraction to pipeline works, refinery networking,
and beyond—on a magnitude never before seen (www.theatlantic.com 2016a, b).
By 2006, CNPC had won the much sought-after rights to Turkmenistan’s onshore
natural gas fields, completing the necessary pipeline work (a staggering 1100 mile
long) by 2009. By contrast, Western companies have failed to build any oil and gas
pipelines from Central Asia to their consume market—despite 22 years of efforts.
The only important pipeline project built by Western companies was the BTC, completed during the Clinton Administration as a means of increasing the flow of
3 International Context of the New Era and the Caspian Sea Region