Investment climate in Kazakhstan improves due to agr’ts inked by President Nazarbayev and lets foreign capital feel confident – IEA Deputy Director Richard Jones

July 3. KAZINFORM. ASTANA

Investment climate in Kazakhstan improves due to agr'ts inked by President Nazarbayev and lets foreign capital feel confident - IEA Deputy Director Richard JonesJune 30 in the Atyrau region in the presence of the President of Kazakhstan, Nursultan Nazarbayev, and the British Prime Minister David Cameron’ the launching ceremony was held to start production facilities of the North-Caspian project for development of the Kashagan oil field. Project investment totaled more than $ 40 billion. After this project starts planned production volumes, Kashagan will produce up to 450 thousand barrels of oil per day.

Importance of the abovementioned project, role of Kazakhstan in global energy market, investment attractiveness of the country were spoken about with the deputy executive director of the International Energy Agency (IEA) Richard Jones, who is also an ex-U.S. Ambassador to Kazakhstan in the years 1998-2001.

– For the global energy market the North-Caspian project is a very important one. It was made possible thanks to investment climate that has been created in Kazakhstan. Those international documents that have been endorsed by President Nursultan Nazarbayev and which allow foreign capital to feel confident in Kazakhstan. The investment climate in Kazakhstan increases. Speaking of Kashagan project, given the available routes for Kazakh oil to the world market in the first place, it will be shipped to Europe. And, although in the world balance Caspian oil resources make up only 2 percent of this supply, it surely play an important role in maintaining prices of raw materials and profitable for a producer and a consumer. This will strengthen the role of Kazakhstan as one of the leading suppliers of raw materials. We can say that this project is one of the key challenges that are changing the global energy landscape.

– Mr. Jones, can you tell more about the energy landscape?

Today, the overall ratio of the balance of supply and demand has not changed, but there are a number of points. Now sit is changing the supply chain, and now we are seeing a market … There are new volumes from new sources and new quality on the other side of the supply chain, leading to a change in the market structure. Changes are required in approaches of suppliers and distributors, and consumers.

We expect hydrocarbon revolution in the U.S., and now we see that the development of domestic production in the U.S. is growing more rapidly than expected, along with a decrease in oil production in the OPEC countries, which may seriously affect the world oil market, with changes in North Africa. As for demand, opens a new chapter in the oil industry in the countries which are not members of the OECD.

-But lately, some experts say about increase in demand for oil, while others, on the contrary, say about reduction in demand. What opinion are you?

-In my opinion, overall oil demand growth will be moderate. Given the overall economic growth of the IMF, we expect overall growth in demand over the next five years, about 6, 9 million tons per day. But in general, the rate of increase in demand for hydrocarbons will slow in the coming years. However, China will still be the main driver of global energy demand, and we expect that China’s demand for energy will reach 12 million barrels per day in the coming years. In addition to China, there are some key growth regions such as Africa, where energy demand is growing at 4% per year.

-And what is the role of Kazakhstan as a whole and the Caspian countries in the energy landscape?

-Caspian region in view of its vast resource base has to play, and will continue to play a significant role in the global energy market. But this will require significant investment and effort, and therefore governments of the Caspian countries should ensure the transparency and integrity of investment contracts, and maintain the policies pursued by Kazakhstan now.

-In the near future Kashagan oil will go to the world market. Wouldn’t it compete with the heavier oil, which is now transported through the CPC?

Light-oil from low permeability reservoirs creates challenges for the mixture of CPC since it starts competing for markets. This may cause decrease in demand for mixture pumped by the CTC. And you might consider looking for alternative markets, such as Asia. However, expansion of the CPC is relevant in terms of debottlenecking and security of energy supply.

-Mr Jones, let me congratulate you on the North-Caspian project entering the next stage of development, and with the upcoming 15th anniversary of Astana, where you for several years have headed the U.S. Embassy in Kazakhstan!

-Thank you! My congratulations on the holiday too!

http://www.inform.kz/eng/article/2571288

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