HomeEconomyReliance on Hydrocarbons Still Key for Kazakhstan

Reliance on Hydrocarbons Still Key for Kazakhstan

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Trade conferences seldom spotlight adverse traits inside particular industries, however this yr’s Kazakhstan International Oil and Gas Exhibition (KIOGE) in Almaty trumpeted a revival of the oil and fuel sector, each throughout the nation and globally.

Numerous individuals gathered for the primary in-person KIOGE and convention in 4 years.

The plenary session, hosted by former U.S. diplomat Matthew Bryza, targeted on “new challenges” for the business in Kazakhstan, specifically the transition to greener sources of vitality and a renewed deal with ESG standards, which measure corporations’ influence on the setting, society, and governance.

Energy Minister Bolat Akchulakov stated the nation will introduce a brand new mannequin contract for subsoil use aimed to ease regulation and, doubtlessly, permit for tax exemptions.

In the oil areas within the west, the federal government additionally plans the development of a number of petrochemical services, a revival of older plans that have been sidetracked by worth crises and the COVID-19 pandemic.

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Renewable vitality sources have been solely talked about on the finish of Akchulakov’s speech, when he talked concerning the nation’s formidable decarbonization objectives.

Other audio system, amongst them Jamie Webster of the Boston Consulting Group and Joseph McMonigle, secretary normal of the International Energy Forum, harassed the paramount significance of fossil gasoline consumption within the lead as much as decarbonization.

According to Webster, earlier than hydrocarbon demand falls resulting from ongoing efforts for decarbonization, consumption will proceed to extend within the subsequent few years. The key, the speaker argued, is to seek out cleaner sources, corresponding to pure fuel, versus the considerably extra polluting coal and oil.

“Coal production is at the highest; coal’s share in power generation is increasing, compared to the previous declining trend; and Global South countries are turning to biomass,” Webster stated. “These three trends would have not happened if the world had invested enough in the development of the natural gas industry.”

Despite the downward traits highlighted by Akchulakov, notably the possible decline in coal manufacturing in Kazakhstan, official statistics present that extraction of coal has grown by 21 percent within the first seven months of the yr.

For Kazakhstan, the following few years shall be targeted on a consolidation of the oil and fuel sector and IPOs for the principle state-owned corporations.

Thorny points proceed to plague Kazakhstan’s export potential, nonetheless. The Caspian Pipeline Consortium (CPC), which hyperlinks the biggest fields within the nation with the Russian port of Novorossiysk, has encountered a number of hiccups this yr, from marine storms to abrupt stoppages.

Akchulakov reassured the press that the pipeline would resume work at full capability by mid-October, after repairs.

“We will go back to the usual levels of exports once the repairs at Kashagan are also concluded, by October 20,” Akchulakov informed reporters on the sidelines of the convention.

The Kashagan offshore oil discipline, operated by a global consortium, had pumped oil at lowered charges for the reason that starting of August resulting from a gas leak.

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Last week, Kazmunaigas, managed by the sovereign wealth fund Samruk-Kazyna, bought back a 50 percent stake in KMG Kashagan B.V., the Netherlands-registered firm that holds a 16.8 stake within the Kashagan challenge. Kazmunaigas had offered the stake to Samruk-Kazyna in 2015, because it was searching for money to service its debt. Now, because it seems to launch an IPO within the subsequent few years, Kazmunaigas is cleansing home.

At KIOGE, Sanzhar Zharkeshov, Qazaqgaz chairman, introduced that the corporate would launch an IPO in 2025. In addition, the corporate established two new branches, Qazaqgaz Exploration and Production and Qazaqgaz Research and Development.

Qazaqgaz, beforehand referred to as KazTransGas, was headed by Kairat Sharipbayev till mid-January, when he was fired within the aftermath of the city protests that shook the nation from Zhanaozen to Almaty. Sharipbayev was rumored to be near Dariga Nazarbayeva, the eldest daughter of the nation’s former president, Nursultan Nazarbayev.

That each Kazmunaigas and Qazaqgaz will work on pure fuel exploration and improvement might be seen as a battle of curiosity inside state-owned corporations. But Zharkeshov was clear in affirming the brand new position of his firm: “Yes, there should be a standalone natural gas company. As the president said last year, this puts us in line with global trends. I hope this ends the debates in the industry on whether or not this was an appropriate move.”

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