Oil and Gas makes Central Asia a key player in the world

Oil and Gas for decades now have been one major element, the whole world specially the western world is striving and stretching to get control over. Whichever place on the planet has Oil and Gas reserves is a key player geopolitically on the global map. For decades there has been reliance on middle east countries and so middle east has dominated Oil and Gas industry over a period of time. But the instability in the region for political reasons have led big countries to look out for another place for Oil and Gas. And so many big buyers are now heading towards Central Asia for Oil and Gas. New finds in Central Asia has risen hope amongst the big buying countries like US as well. This exploration of Oil and Gas reserve in Central Asia has however sparked The New Great Game, of which China and Russia are main two players.

Though worldwide lot of efforts are going on to create and sustain alternative source of energy but without a doubt there is still no substantial ¬†alternative to oil and natural gas. In this sense Central Asia plays a key role in global energy security. Today Central Asia is considered to have all the necessary aspects of becoming a key area for Oil and gas production and distribution. This region is quite big and contains quite prolific oil and gas basins. Kazakhstan and Turkmenistan possess large reserves of oil and natural gas, both on-shore and off-shore in the Caspian Sea, which they urgently seek to exploit. Uzbekistan has oil and gas reserves that may permit it to be self-sufficient in energy and gain revenue through exports.¬† Among five stans of the region Kazakhstan is most developed and is also enjoying most foreign investment which has given this country enough boost to explore and supply oil and gas to this region. With big international investments particularly from China some of the world’s largest oil fields occurring here, Kazakhstan has lot of potential to play major role in the world as oil and gas supplier. Kazakhstan happens to be the ninth largest country in the world and still has lot of its area to be explored. Giant field such as Kashagan in Kazakhstan is the world’s largest offshore field.

Kazakhstan, Tajikistan and Uzbekistan in particular should be focussed more as these three represent different levels of development of oil and gas in the region. Turkmenistan has lot of potential too. Although Uzbekistan was partly explored during Soviet era but Uzbekistan does not enjoy as much international investment as Kazakhstan does. So Uzbekistan still has lot to do to attract investments for oil and gas ¬†exploration. Uzbekistan’s central and western parts are in focus because they are still underexplored. Uzbekistan is also playing a role as transit country to bring gas from Turkmenistan to Europe and China. Tajikistan and Turkmenistan are both at early stages. They are both yet to be developed further for oil and gas. South Yoloten in Turkmenistan is one of the world’s top three gas fields.

Now what is the problem with these countries? Problem is transforming their natural resources into actual output and then delivering it out. For now its major outflow is towards European market. China on the other hand is making great strides specially in Turkmenistan. In just two-and-a half-years the China National Petroleum Corporation (CNPC) built the 2,200km Central Asia Gas Pipeline from its Bagtiyyarlik concession in north Turkmenistan, across Uzbekistan and Kazakhstan, and into Chinese Xinjiang. And if Afghanistan becomes stable Turkmenistan would be able to supply to India and Pakistan too. For now for export routes, Central Asian countries are dependent on international companies or else they have to pay very high if they use soviet era transit system through Russia. These International companies don’t find these oil and gas reserves countries easy to partner with. Also Turkmenistan and Kazakhstan trying to hold full control of its resource and projects make it difficult for international companies to invest here.

One major consequence of the demise of Soviet era in this region was an intense political and commercial competition for control over the vast energy resources of countries of new and vulnerable Central Asia. This is going on and so everyone has an eye and wants to make a strategically move with Central Asian countries. India too is trying to have its presence and alliance with these countries. Talks for oil and Gas pipelines have been going on. India being 4th largest energy consumer in the world needs more supplier. Central Asia, with its abundant oil, gas, and uranium reserves as well as hydroelectric potential, is key to reducing its energy dependency on the Middle East.