CENTRAL ASIA: Economics of natural recourses

Transcription

1 CENTRAL ASIA: Economics of natural recourses Prepared by Aigul Kazhenova (Kazakhstan) Indiana University, 2007

2 MAP OF CENTRAL ASIA

3 Central Asia Countries

4 Population of Central Asia Kazakhstan (15.1 mln), Kyrgyzstan (5.1 mln), Tajikistan (7 mln), Turkmenistan (5.5 mln) Uzbekistan 26.6 mln) Combined population of almost 60 million; a land mass greater than Western Europe

5 Resources of Central Asia Kazakhstan, Turkmenistan and Uzbekistan concern to number of the largest manufacturers of oil and natural gas on the Eurasian continent.

6 World Proved Reserves of Oil and Natural Gas Oil Oil Natural Gas Natural Gas Natural Gas (Billion Barrels) (Billion Barrels) (Trillion Cubic Feet) (Trillion Cubic Feet) (Trillion Cubic Feet) BP Statistical Review Oil & Gas Journal BP Statistical Review CEDIGAZ Oil & Gas Journal Year-End 2005 January 1, 2006 Year-End 2005 January 1, 2006 January 1, 2006 K Z T X U Z

7 GDP per capita UZB TKM TJK KGZ KAZ

8 Exports ($ mln) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 Kaz Krgz Taj Turk Uzb 4,000 2,

9 Imports ($ mln) Kaz Krgz Taj Turk Uzb

10 Kazakhstan Oil Steel Products Copper Total Kyrgyz Republic Nonferrous metallurgy Electric Energy Machine Building Total Tajikistan Aluminum (primary) Cotton fiber Electricity Total Turkmenistan Gas Oil & Oil Products Cotton Fiber Manufactures Total Uzbekistan Cotton, cotton fiber Gold, non-ferrous and ferrous metals Energy Machinery equipment Total

11 Kazakhstan Kazakhstan, the largest of the former Soviet republics among the Central Asia countries. The breakup of the USSR in December 1991 In , the pace of the government program of economic reform and privatization quickened, resulting in a substantial shifting of assets into the private sector. Double-digit growth in % or more per year in thanks to booming energy sector, but also to economic reform, good harvests, and foreign investment.

12 Map of Kazakhstan

13 Economy Reserves of foreign exchange and gold: $7.07 billion (2005 est.) Debt - external: $41.66 billion (2005 est.)

14 Oil and Gas Oil - production: 1.3 million bbl/day (2005 est.) Oil - consumption: 221,000 bbl/day Oil - exports: 890,000 bbl/day Oil - imports: 47,000 bbl/day Oil - proved reserves: 35 billion bbl

15 Current Status of Oil Sector It has proven reserves of 35 billion barrels. The largest onshore oil fields are Tengiz, one of the world's 10 largest oil fields with 6-9 billion barrels of reserves, and Karachaganak with 2.2 billion barrels. Recent seismic studies -suggest that Tengiz may have between 9 and 13.5 billion barrels of oil. -Tengizchevroil, the joint-venture consortium developing the Tengiz field, is comprised of Chevron, Kazakhoil, Mobil.and LukArco -Drilling at Karachaganak is managed by a consortium of ENI, British Gas and Texaco. In addition to major oil deposits, Karachaganak also has 500 billion cubic meters of natural gas.

16 Current Status of Oil Sector Kazakhstan has proven gas reserves of over 2 trillion cubic meters, which is modest relative to neighbors Russia and Turkmenistan. Projected gas reserves are 5 trillion cubic metres. The most promising recent discovery of major hydrocarbon deposits is the offshore Kashagan structure, which is three times larger than Tengiz. The consortium developing this 2,000 square mile block 14,000 feet below the Caspian sea bed includes nine companies: BP Amoco, ENI, British Gas, Mobil, Shell, Total Fina Elf, Phillips, Statoil and Inpex.

17 Transportation Routes Kazakhstan is committed to the development of multiple oil export routes, in order to support its potential oil reserves of billion barrels.

18 Oil Export Routes and Options in the Caspian Sea Region Name/Location Atyrau- Samara Pipeline Baku-Ceyhan ("Main Export Pipeline") Caspian Pipeline Consortium (CPC) Pipeline Kazakhstan- China Pipeline Route Atyrau (Kazakhstan) to Samara (Russia), linking to Russian pipeline system Baku (Azerbaijan) via Tbilisi (Georgia) to Ceyhan (Turkey), terminating at the Ceyhan Mediterranean Sea port Tengiz oil field (Kazakhstan) to Novorossiisk Black Sea oil terminal Aktyubinsk (Kazakhstan) to Xinjiang (China) Crude Capacity Recently increased to 310,000 bbl/d Planned: 1 million bbl/d Currently: 565,000- bbl/d; Planned: 1.34-million bbl/d (by 2015) Proposed 400,000 bbl/d to 800,000 bbl/d Length 432 miles Approximately 1,038 miles 990 miles 1,800 miles Estimated Cost/Investm ent $37.5 million $2.9 billion $2.5 billion for Phase 1 capacity; $4.2 billion total when completed $3 billion to $3.5 billion Status Existing pipeline recently upgraded by adding pumping and heating stations to increase capacity. One-year detailed engineering study completed in June Construction on Turkish section of pipeline began in June Completion of entire pipeline targeted for 2004, exports by Feb First tanker loaded in Novorossiisk (10/01); exports rising to 400,000 bbl/d by end-2002 Agreement 1997; feasibility study halted in September 1999 because Kazakhstan could not commit sufficient oil flows for the next 10 years.

19 Comparison In the states of Near and Middle East the price of the extraction cost of 1 barrel of oil equals 1-1,5 dollars. The basic world producers are located at the ocean coast. In view of that world trade is carried out basically by sea transport. The cost price of extraction of 1 barrel of oil in Kazakhstan on the average is dollars for barrel - i.e. in 10 and more times above, than in the countries Near and Middle East. Land locked countries.

20 Natural Gas Natural gas - production: 18.5 billion cu m (2004 est.) Natural gas - consumption: 15.2 billion cu m (2004 est.) Natural gas - exports: 4.1 billion cu m (2004 est.) Natural gas - imports: NA cu m Natural gas - proved reserves: 3 trillion cu m (1 January 2004) Current account balance: $ million (2005 est.)

21 Kazakhstan's Exports Partners (2005) 13.50% 37.70% 13.40% 10.40% Russia Bermuda China Germany Switzerland France Others 6.70% 9.10% 9.20%

22 Export Overview Kazakhstan Oil Steel Products Copper

23 Turkmenistan Turkmenistan is a largely desert country with intensive agriculture in irrigated oases and large gas and oil resources. One-half of its irrigated land is planted in cotton; formerly it was the world's tenthlargest producer.

24 Export Overview Turkmenistan Gas Oil & Oil Products Cotton Fiber Manufactures

25 Turkmenistan's Exports Partners (2005) 21.50% 6.50% 14.70% 39.20% Ukraine Italy Iran Turkey Others 18.10%

26 Turkmenistan: Direct Foreign Investments To achieve national goals Turkmenistan accepted the National program Strategy of Economic, Political and Cultural Development of Turkmenistan for the Period of Up to The The programme of the oil and gas industry development until 2030, which was adopted on the XVII People s Council, sets priority tasks of state importance before the petroleum workers. It is planned to bring the volume of oil refining to 12 million tonnes until 2010 and 20 million tonnes until Proven gas reserves equals at least 100 trillion cubic feet, while the possible reserves amounts up to 260 trillion, putting Turkmenistan among the world s top 10 countries in terms of such reserves.

27 Pipelines Name/Location Route Capacity Length Estimated Cost/Investment "Centgas" (Central Asia Gas) Daulatabad (Turkmenistan) via Herat (Afghanistan) to Multan (Pakistan). Could extend to India. 700 Bcf/year 870 miles to Multan (additional 400 miles to India) $2 billion to Pakistan (additional $500 million to India) Central Asia- Center Pipeline Turkmenistan and Uzbekistan via Kazakhstan to Saratov (Russia), linking to Russian natural gas pipeline system 3.5 Tcf/year Existing route N/A China Gas Pipeline Turkmenistan to Xinjiang (China). Could extend to Japan. 1 Tcf/year 4,1,61 miles; more if to Japan $10 billion to China; more if to Japan Trans-Caspian Gas Pipeline (TCGP) Turkmenbashy (Turkmenistan) via Baku and Tbilisi to Erzurum, linking with Turkish natural gas pipeline system 565 Bcf in first stage, eventually rising to 1.1 Tcf/year 1,020 miles $2 billion to $3 billion Korpezhe-Kurt- Kui Korpezhe (Turkmenistan) to Kurt-Kui (Iran) Bcf/year; expansion proposed to 459 Bcf/year by miles $190 million; 2005 expansion: $300 million to $400 million

28 Dry Natural Gas Production (trillion Cubic Feet) Uzbekistan UZ Turkmenistan TX Kazakhstan KZ

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31 Uzbekistan Uzbekistan is a dry, landlocked country of which 11% consists of intensely cultivated, irrigated river valleys. More than 60% of its population lives in densely populated rural communities. Uzbekistan is now the world's second-largest cotton exporter and fifth largest producer; It relies heavily on cotton production as the major source of export earnings. Other major export earners include gold, natural gas, and oil.

32 Export Overview Uzbekistan Cotton, cotton fiber Gold, non-ferrous and ferrous metals Energy Machinery equipment

33 Uzbekistan's exports partners (2005) 19% 52% 6% 8% 6% Russia Iran Turkey Great Britain Kazakhstan China others 4% 5%

34 Kyrgyzstan Kyrgyzstan is a poor, mountainous country with a predominantly agricultural economy. Cotton, tobacco, wool, and meat are the main agricultural products, although only tobacco and cotton are exported in any quantity. Industrial exports include gold, mercury, uranium, natural gas, and electricity.

35 Export Overview Kyrgyzstan Nonferrous metallurgy Electric Energy Machine Building

36 Kyrgyzstan's Exports Partners (2005) 19.80% 13% 35.60% United Arab Emirates Russia Kazakhstan China Others 12.60% 18.60%

37 Tajikistan Tajikistan has one of the lowest per capita GDPs among the 15 former Soviet republics. Only 6% of the land area is arable; cotton is the most important crop. Mineral resources, varied but limited in amount, include silver, gold, uranium, and tungsten. Industry consists only of a large aluminum plant, hydropower facilities, and small obsolete factories mostly in light industry and food processing. Suffered from the civil war ( )

38 Export Overview Tajikistan Aluminum (primary) Cotton fiber Electricity

39 Objective preconditions of economic interaction Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan belong to the states which are not having an output to the sea, so to global trading ways. It means, that for these countries trade costs in addition raise. The most of these states have complex topography (a significant part of their territory mountains borrow, deserts and semideserts), that in addition increases costs of economic exchanges.

40 Problems: Insufficient development of an oil-gas-transport infrastructure. Using more expensive railway and water transportation increases the cost of transportation, at least, on 5-7 dollars for barrel. In Turkmenistan and Uzbekistan deficiency of export routes also is seriously felt. In Uzbekistan which is the largest transit center of gas export from Turkmenistan to Russia, export opportunities on gas are limited by a unique gas-pipe Central Asia-Center.

41 Problems The oil-and-gas world prices essentially exceed the internal prices. The further escalating of oil and gas export leads to gradual exhaustion of hydro carbonic potential of the Central Asian States. Central Asia try to low dependence on Russian transit and undertake attempts to find alternative ways of oil and gas transportation to the world market.

42 Caspian Region Oil Pipelines

43 REGIONAL COOPERATION The five Central Asian states, along with Azerbaijan, Iran, Turkey, Pakistan and Afghanistan are also members of the Economic Cooperation Organization (ECO, 1985) with the purpose of promoting transport and economic regional cooperation. Kazakhstan, Kyrgyzstan and Tajikistan are members of the Eurasian Economic Community, EAEC or EURASEC (30 May 2001), along with Belarus and Russia. The EURASEC was established for promotion of the Customs Union under formation and a Common Single Economic Space.

44 Regional cooperation Kazakhstan (together with Russia, Ukraine and Belarus) is a member of the Single Economic Space, which envisages successive steps towards a free trade area then customs union. Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan are the members of Shanghai Economic Cooperation Organization (SCO). Kyrgyzstan is the member of World Trade Organization.

45 Thank you!