Kazakhstan Changes Energy Strategy on the Way to WTO
European Union and Kazakhstan are about to sign a partnership agreement on energy supplies. The agreement will secure access to Kazakh oil resources for the EU. Kazakhstan moves actively towards the EU because it has been dissatisfied with Russia’s policy on major energy projects, and because it is in a hurry to join the WTO.
European Commissioner for External Relations Benita Ferrero-Waldner met with Kazakh President Nursultan Nazarbaev in Astana. The parties plan to sign a memorandum of intent in the sphere of energy policy in early December, during Nazarbaev’s visit to Brussels.
Alfa-bank analyst Konstantin Batunin said that Astana has very ambitious plans. Kazakhstan extracted 60 million metric tons of oil in 2005, and wants to increase this number to 150 million tons during 10-15 years. However, the country is unable to supply more oil to the EU without agreements with Russia.
Kazakh oil has 3 routes, 2 of which are acting: through Druzhba and Caspian pipeline consortium (KTK). Yet, supplies through KTK already exceed the design capacity of the first strand – 28 million metric tons per year. The EU has repeatedly offered to expand KTK to 67 million tons. However, Russia set such a high transportation tariff that it is not lucrative for Kazakh companies to sell oil to EU independently.
Thus, Kazakh authorities think of using the third route – the Baku-Tbilisi-Ceyhan (BTC) pipeline which seems very attractive for the EU because it detours Russian territory. So, Russia will not be able to use oil supplies through the BTC as an instrument of political pressure, like it was with natural gas in Ukraine last winter.
Yet, the main incentive for Kazakhstan is the EU’s promise to support its entry to the WTO already next year. Astana hopes to finish WTO negotiations by the end of 2006 or in the first half of 2007. “It is possible. But it actually depends not only on Kazakhstan, but also on all members of the working group,” explained the Chairman of the Working Party on the Accession of Kazakhstan to the WTO Amb. Vesa Himanen.
Alexander Sidorov, Alma-Ata; Natalia Grib
All the Article in Russian as of Oct. 23, 2006
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