Politics, Geopolitics & Conflict
Kazakh Oil and the Long Road to the WTO
This week, as Kazakhstan—after 19 years of trying—has finally had its membership in the WTO formally approved, we will take a brief look at Kazakhstan’s oil scene and what’s out there for foreign investors.
First things first, Kazakhstan’s WTO process was a painfully long one because of slow progress in enacting energy reforms, among other key reforms and tariff regimes. At the same time that the WTO has approved Kazakhstan’s membership in the club, the Kazakh government has announced plans to build a fourth oil refinery in Mangistau and that the construction of this refinery would likely be done in cooperation with Iran. Talks to this end have already been launched with the Iranian Oil Ministry. Oil from Mangistau will be sent to northern Iranian ports, while Iranian oil from the south will feed Mangistau and beyond. The refinery project is estimated to cost around $6 billion and the two sides are hoping to sign a construction deal by the end of this year. Kazakhstan needs the refinery as its other three cannot meet the local demand for petroleum products and fall short by about 1.5 million tons (30% of the total market demand, which is largely now covered by imports from Russia).
Overall, however, this is what potential foreign investors should be looking at: Kazakhstan is the largest landlocked country in the world and it sits right between…