Kazakhstan in world news: May 2006

Prepared by Joseph Urbanas, director of company Kazakhstan Newsline

Oil and Politics
Bloomberg (May 3, 2006)
Cheney’s Visits Oil’s Final Frontier
U.S. VP Dick Cheney’s trip to Kazakhstan took him to a land at the crossroads of the Bush administration’s most pressing policy challenges: Russia, China, Iran and the global clamor for oil.
Kazakhstan is one of few nations able to expand energy output. Wedged between the growing economic influences of China and Russia and could emerge as an alternative oil source as the U.S. seeks to isolate Iran. Cheney’s talks with President Nazarbaev, between stops in Lithuania and Croatia, come at a critical time. Americans are amidst a crisis of rising gasoline prices due to insufficient supply, and in Kazakhstan sits one of the world’s 10 largest oil fields. “The Caspian basin is one the final frontiers of today’s energy development,” said Ariel Cohen, senior research fellow at the Heritage Foundation. “It is important to get this oil to the global markets, preferably bypassing Russian chokeholds.” …..Cheney said that the U.S. wants to help ease post-Soviet countries’ integration into the global economy and alliances such as the European Union and NATO. With Kazakhstan, a mainly Muslim, secular society and Central Asia’s biggest economy, a bigger issue for the U.S. is energy…..Kazakhstan produces about 1 million barrels a day, or about what could be pumped from the Arctic National Wildlife Refuge. By 2015, Kazakhstan’s daily output could triple to 3 million barrels — — 3.6 percent of world output last year….The difficulty is getting the oil out without going through Russia. A key issue is encouraging the Nazarbaev government to develop a pipeline across the Caspian Sea connecting to one from Baku, through Tbilisi and out of Ceyhan to the Mediterranean …Skirting Russian-controlled pipelines would; “break Russia’s stranglehold” on.. Kazakhstan’s oil, Frederick Starr, director of Johns Hopkins University’s Central Asia- Caucasus Institute in Washington said. “Kazakhstan is firmly committed to building it, but needs U.S. and European backing against Russia’s and Iran’s inevitable attempts to prevent it.”….Doing business in Kazakhstan isn’t easy. The World Economic Forum’s Global Competitiveness Report ranked Kazakhstan 61st among 117 countries, unchanged from one year earlier. It is fourth among the 15 former Soviet republics….Political and social stability in Central Asia is an important U.S. goal. The U.S. was evicted from bases in Uzbekistan last year, and wants Kazakhstan’s cooperation, including passage through its airspace, as it conducts military missions in Iraq and Afghanistan. …“There is also a sense that a quid pro quo can be worked out with the U.S., whereby no