Petro-politics and the Kashagan Showdown…

Strongly recommend this comprehensive background post on the current crisis involving the Kazakh government and the international consortium developing the country’s Kashagan field. Of particular interest, was the impact analysis that restructuring the Kashagan project may have upon Kazakhstans’s “petro-promises”:

“….Kazakhstan has engaged to supply multiple customers, most of them powerful, and some of them contiguous neighbors. Along with recent pipelines to China being built in carefully-crafted stages, Kazakhstan has agreed to ship oil via the BTC pipeline through Azerbaijan, Georgia, and Turkey.

About the time that Azerbaijan’s oilfields begin to slow production, Kashagan oil was going to fill the BTC to capacity and extend the life and usefulness of that USD 4 billion project. Oil to the West via BTC was one major guarantor of good Kazakhstan-EU/US relations–not the only one, but a good one.

Not having this oil supply come through hurts Kazakhstan’s westward ambitions. And there is also the inevitable punishment that comes from losing utility. The EU/US will not treat Kazakhstan the same without this production coming through, whether it’s a no-fault situation or not. It’s a matter of who’s necessary to whom: the old quid pro quo. It’s not fair, of course, but that makes no difference….”

This entry was posted on Sunday, September 2nd, 2007 at 1:14 pm and is filed under ENI, Kazakhstan, KazMunaiGas.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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