BOGDAN KAZIMIERZ MARCINKIEWICZ – Energy matters – „Parliament Magazine”
2010-03-08
Kazakhstan’s wealth of natural energy resources makes it an important partner for the EU, writes Bogdan Kazimierz Marcinkiewicz.
Over the last decade Kazakhstan has developed its economy and become a leader in central Asia as a result of free market reforms. After regaining its independence, Kazakhstan’s economy was in a critical situation at the beginning of the 1990s, with a GDP of minus 12 per cent. Following gradual economic collapse, Kazakhstan’s authorities faced the problem of choosing a development strategy, deciding to cumulate investments in the crude oil and natural gas sector, which helped increase state incomes and allowed for an ambitious programme of modernising the whole economy. The result was the "strategy for Kazakhstan 2030", announced by president Nursultan Nazarbayev in 1997. Openness to foreign investments, especially in the crude oil sector, brought stabilisation and economic growth. In 1998, as a result of the economic crisis in Russia and a huge drop in oil prices, Kazakhstan’s GDP was minus 2.5 per cent, but by 2000 there was growth of 9.6 per cent. This huge jump and the growing economy made the country the fastest growing market in the Caspian Sea.
It is estimated that Kazakhstan’s resources are of 30 billion barrels of crude oil, placing it 11th in the world. The same position is occupied by the natural gas resources, calculated to be between 1.5 and two trillion cubic meters. In 2006, in the context of increasing oil and gas production, president Nazarbayev said that Kazakhstan would soon be one of the pillars of energy security in Europe and Asia. In addition to oil and gas, the country also has the largest hard coal resources in central Asia (more than 30 billion tonnes), huge copper resources (fifth in the world) and uranium (19 per cent of documented world resources).
Kazakhstan grew rich on the oil boom, wit the value of oil exports averaging €12 bn - accounting for some 70 per cent of the value of the country’s total exports. According to official data, the oil and natural gas sector accounts for up to 13 per cent of Kazakhstan’s GDP. The strategic geographical location of Kazakhstan is also important. This allows the country to control the flow of energy and raw materials from central Asia to the east (China) and west (Russia, the EU) - something which is very important in the context of growing competition for controlling limited resources.
When it comes to energy, Kazakhstan is strongly connected with Russia, due to its location. We should remember that these two countries (as well as Azerbaijan) are the biggest exporters of energy materials in the region, something which brings them closer. Kazakhstan has also sought to strengthen energy cooperation with the EU, signing a "declaration of intent" in 2006which aims to facilitate the import of oil and natural gas from the large central Asian republic. It is supposed to be a step towards reducing the bloc’s energy dependence on Russia and the Middle East, although it is clear that successful cooperation is more important to Europe than to Kazakhstan.