Dr Vladimir Paramonov and Dr Aleksey Strokov: Russian Oil and Gas Projects and Investments in Central AsiaНазад
Dr Vladimir Paramonov and Dr Aleksey Strokov: Russian Oil and Gas Projects and Investments in Central Asia
This report is based on research carried out in 2006-2007 but it is not possible to present all the results because of their significant volume. Therefore only a short review of the current condition of the project and investment activity of Russia and Russian companies is given here; however, the assessment of new trends is shown in full, as are also the main conclusions drawn from the results of all the research.
Key Points *
The actual size of the Russian investment presence in Central Asian oil and gas sectors is fairly modest, at approximately 4 to 5 billion [US] dollars. By far the greatest share (in the order of 80-85%) is concentrated in Kazakhstan; there is a smaller share in Uzbekistan and a so far insignificant amount in Turkmenistan, Tajikistan and Kyrgyzstan. Russian companies aim to invest between 14 and 16 billion dollars over the next five years: primarily in the search for and development of oil and gas fields, but also in the pipeline infrastructure of the region.
* The following trends add a significant amount of uncertainty: the appearance of Kazakhstan as an independent player in the oil and gas sphere; the development of liquefied natural gas and alternative means of transporting hydrocarbons; the formation of alliances.
* Furthermore, the extraction and export of hydrocarbons, upon which Russia and Russian companies are laying their main emphasis today, does not form a stable foundation for long term relationships. Russia is helping the countries of the region to just consume their reserves, at the same time as their national industry is experiencing unsatisfied demand for these strategic resources. This in turn leads to the destruction of a whole range of processing [refining] branches of industry both in Russia and the region. Increasing the volume of exports will almost certainly lead to an acute deficit of hydrocarbons on these states` markets.
* The clearly expressed raw material export orientation of the project and investment activity of Russia makes its future position extremely vulnerable, especially given increasing international competition for hydrocarbons. The Russian monopoly on transportation of oil and gas from Central Asia to external markets is already breaking up.
