Lack of Export Insfrastructure Hinders Kazakhstan’s Bid to Become Oil Power

Lack of Export Insfrastructure Hinders Kazakhstan’s Bid to Become Oil Power

ASTANA, Kazakhstan -- Kazakhstan, with its vast reserves of hydrocarbons, is on a path to become a petro-power on a global scale. That, at least, is the plan of the Kazakh government, oil companies with access to the rich oil fields of Kazakhstan, and those seeking alternatives to OPEC oil. However, as oil production in the landlocked country increases in the years ahead, Kazakhstan could find itself without viable export routes to bring its hydrocarbon wealth to market.

In 2007, Kazakhstan produced approximately 1.45 million barrels of oil per day (bpd), of which it exported around 1.2 million bpd. Kazakhstan's production has steadily risen since the mid-1990s, and the government plans to double today's output by 2015, when the giant Kashagan field starts to produce and other projects reach peak capacity.

Kazakhstan's oil flows to the world market mainly through Russia, and to a lesser extent through Azerbaijan, Iran and China. The dominating position of the Russian connection is the consequence of Kazakhstan's Soviet legacy and the international isolation of Iran, which would offer the most direct and logical export path.

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