30 billion barrels of oil reserves: will Kazakhstan become Europe’s gas station?


Riga Kazakhstan’s President Kassym-Jomart Tokayev is a popular host these days. First there was Charles Michel, President of the European Council. Then Germany’s Foreign Minister traveled Annalena Bärbock on. This was followed last Wednesday and Thursday by EU chief diplomat Josep Borrell, who, unlike Baerbock, met Tokayev personally.

Europe is not without competition: China’s President Xi Jinping was also there, and Tokayev played a round of table tennis with Turkish President Recep Tayyip Erdogan.

Kazakhstan has just distanced itself from Moscow and is thus moving into the geopolitical interest of world politics: where is the Central Asian state drifting, that in the east towards China and in the north Russia borders? Will it enter Beijing’s orbit in the future or will it head towards Europe?

That also depends on how the country’s political system develops, whether it can free itself from corrupt structures and establish a foundation of the rule of law. The early elections, which will take place on Sunday, are now highlighting the country’s prospects.

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However, it is not just the question of the political system’s ability to develop that currently arouses the interest of European politicians. It is the sheer need caused by the failure of Russian energy supplies that draws attention to Kazakhstan. Because the state with 19 million inhabitants is a raw material giant, which, according to Alexandra Bykova, arouses greed.

>> Read also: With a visit to Kazakhstan and Uzbekistan, Baerbock wants to set an example for EU rapprochement

The economist and Kazakhstan expert at the Vienna Institute for International Economic Studies (WIIW) confirms that “since the beginning of the war against Ukraine, contacts between Kazakhstan and the EU have intensified”. “The main focus is on the energy question”.

Annalena Baerbock, Muchtar Tileuberdi

The German Foreign Minister and her Kazakh colleague in the capital Astana.

(Photo: IMAGO/photothek)

Sebastian Hoppe from the Berlin Science and Politics Foundation (SWP) confirms Bykova’s view: “Since the war in Ukraine, international attention has shifted to Kazakhstan, including from the EU. That fits into the diversification strategy in economic relations.”

Western Europe is primarily concerned with one question: Can the country replace the loss of Russian energy supplies? Kazakhstan has more than 250 gas and oil fields operated by large corporations such as chevrons, EniTotal, Exxon Mobil, Royal Dutch shell and British Gas.

The country has oil reserves of 30 billion barrels and is the largest oil producer in Central Asia. Oil and gas exports account for 57 percent of total exports, and the EU is already the largest buyer of oil from Kazakhstan.

graphic

Recently, President Tokayev raised hopes in Europe with a view to the failed Russian supplies: “Kazakhstan is ready to use its hydrocarbon potential to stabilize the situation on the world and European markets,” he said.

However, his energy minister, Bolat Akschulakov, put the brakes on the euphoria a little later. Oil production is not comparable to a faucet that you can simply turn on more to get larger quantities. “To produce such amounts of oil, you have to invest a lot of money in the fields and drill well,” he said. “It takes a lot of time and money.”

In any case, according to some observers, the EU discovered the country’s potential comparatively late. “Russia, China, and the USA have also been interested in the country for a long time,” says Christoph Mohr, who heads the Friedrich Ebert Foundation’s representation in Kazakhstan and Uzbekistan.

>> Read here: “Return? I don’t believe in that” – How Putin Thousands of Russians expelled from their homeland

In recent months, he too has observed that the EU’s efforts have “intensified again”. A few days before the election Borrell recently tweeted after meeting Tokayev’s Foreign Minister Mukhtar Tileuberdi about “common opportunities – like trade, energy and the green agenda”.

China’s President Xi Tokayev

Focus on Kazakhstan’s raw materials.

(Photo: IMAGO/ITAR-TASS)

Tokayev has been in office since 2019, when he replaced authoritarian President Nursultan Nazarbayev. After a constitutional amendment in June, he promised the population a “new Kazakhstan” and announced a tough course against corruption and nepotism. “We urgently need to change the situation,” he said before the election, referring to the minimum wage of 60,000 tenge, around 125 euros. “It’s practically impossible to live on that money.”

A total of six candidates are admitted to the election. However, there is no alternative in sight for Tokayev, the competitors are considered to have no chance. The incumbent is supported in the country by a broad alliance of three parliamentary parties, trade unions and business organizations.

Under the amended constitution, a president can only be elected once, but the term has been increased from five to seven years. He has promised that he will no longer place members of the president’s family in posts in state-owned companies and parties, as has been the norm up to now, and announced that he would revive dialogue between the power apparatus and civil society.

International election observers from the Organization for Security and Co-operation in Europe (OSCE) also emphasize the many changes. However, they criticize the fact that recommendations for easier registration of candidates for election or more transparency in media ownership are not being implemented. It is also tricky that the president continues to enjoy special protection of his “honor and dignity” by law, which makes criticism difficult.

After riots in January “still a lot of pressure in the cauldron”

It is only ten months since the oil and gas-rich country was shaken by bloody riots. More than 200 people died in January as protests against high prices and social injustice turned into an unprecedented power struggle.

At the time, Tokayev issued an order to shoot at the demonstrators, whom he described as “terrorists,” and asked Kremlin chief Vladimir Putin to send the Russian-dominated military coalition, the Collective Security Treaty Organization (CSTO), to help. The soldiers quickly calmed the area down and withdrew.

>> Read here: Central Asia: The relationship between Kazakhstan and Russia is shaky

Human rights groups released investigations showing that peaceful demonstrators and people unconnected to the protests were killed by law enforcement and military personnel. And in the run-up to Sunday’s elections, the Kazakh authorities have arrested or sentenced opposition activists in recent weeks, according to media and news agencies.

The Turkish head of state Erdogan (left) and Tokayev

In October, the two presidents played table tennis in Kazakhstan’s seat of government. Erdogan is currently omnipresent on the international stage.

(Photo: IMAGO/APAimages)

“If the election turns out as everyone expects, it will further consolidate Tokayev’s power,” estimates Kazakhstan expert Bykova. “He is very active in terms of economic relations with the EU, so Brussels would benefit from the result,” she said. But she also sees a discrepancy between the economic and political levels: “Another question is how the EU will evaluate the election politically. These two components are quite contradictory, because there is still room for improvement when it comes to democracy and freedom of the press.”

According to Mohr, the problems that led to the protests in January have not yet been resolved: “Most of the demonstrators were motivated by the social inequality in the country. Because the underlying problems are difficult to fix quickly, there is still a lot of pressure in the boiler.”

This can also affect the willingness of private companies to invest. Expert Bykova expects “that foreign investments in the energy sector and transport as well as manufacturing industries will increase – also in the form of loans”. Kazakhstan should also use its own resources to expand the infrastructure. “But I’m not seeing any great interest from private investors at the moment,” says the economist.

Election advertising in the center of the big city of Almaty

Six candidates are admitted to the election

(Photo: IMAGO/SNA)

But further social tensions remain programmed. Hundreds of thousands of Russians have fled to the neighboring country to the south since the beginning of the Russian campaign against Ukraine, a particularly large number since the partial mobilization on September 21 of this year. Since then, rents have risen drastically in many cities in Kazakhstan, and some long-established residents have been pushed out. Food prices are also rising.

Russia, China or Europe: will Kazakhstan choose one of these options? Experts consider this unrealistic. The government is much more likely to remain true to its approach of so-called multi-vector foreign policy in the long term. “Russia is still omnipresent in Kazakhstan,” emphasizes FES representative Mohr. “However, Tokayev has understood that the Russian vector needs to be used less and the EU vector more, and the EU now sees this as an opportunity.”

“Of course, the economy is a door opener. Internally, however, Kazakhstan is still in a difficult situation,” he notes. But the government understood that “something has to be done”. According to Mohr, the majority of the population supports Tokayev’s reform course – “if these reforms are actually implemented”.

With material from dpa.

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