China potentially could supplant Russia as the main energy broker in central Asian countries that don’t have their own significant fossil fuel resources, suggested 10 graduate fellows from the region at Johns Hopkins University’s School for Advanced International Studies.
But the relationship would be more commercial than geopolitical, the Fall 2013 Rumsfeld Fellows in the Silk Road Studies Program at SAIS’s Central Asia-Caucasus Institute added. Several countries in the region are aggressively pursuing waste energy and other biogas alternatives as well as hydropower, they said.
“So the question becomes what the development of local firms pursuing green technology means alongside China’s presence,” said S. Frederick Starr, the institute’s chairman who moderated the discussion. “The people in this region are more resourceful than some outsiders believe. What’s happening on the smaller scale may mean more and be a bigger response to the fear of Chinese dominance than they expect.”
An audience member—Alexandros Petersen, advisor to the European Energy Security Initiative at the Woodrow Wilson Center for Scholars—asked the fellows about China’s possibly replacing Russia as the region’s main outside energy supplier. “If [China National Petroleum Corp.] begins to distribute natural gas in central Asia, it brings tremendous potential leverage,” he said.
Responses ranged from acknowledgment that future problems could result to an observation that the Chinese are gaining ground in the region’s energy resource development and transmission joint ventures because they are easier to work with than western or Russian partners.
As for CNPC possibly replacing Russia’s Gazprom as the Caucasus and Central Asia’s main outside gas source, Ibrahim Musaev, development director at Global Business Incubators in Uzbekistan, said, “It’s not a matter of ‘if,’ but ‘when’. The Chinese have huge financial reserves.”
Russia’s influence, meanwhile, is becoming more cooperative than confrontational, some fellows said. “You still can’t avoid mentioning Russia with regard to the region’s energy development,” noted David Oniani, deputy director of the Georgian State Oil & Gas Corp. “But in the next few years, I think we’ll see a very different Russia with regard to energy projects.”
Gazprom, which has been Russia’s main presence, is stepping back as other companies move in, he continued. “Rosneft is discussing cooperation with Azerbaijan on several midstream projects,” Oniani said. “The only business door open to Russia these days is more cooperation.”
Rosneft is the Russian company which is opening that door most frequently, he said. “Its agreement with ExxonMobil in 2011 is dormant now, but could come to life as Chevron pursues its interest in exploring the Ukranian continental shelf,” Oniani said.
Nazir Sharipov, president of Kazakhstan-based Tethys Petroleum Ltd.’s Tajikistan division, said its exploration of about 24,000 sq km in southern Tajikistan found 156 structures containing an estimated 227 billion boe. It signed deals with France’s Total SA and CNPC to explore the formation’s subsalt and Jurassic layers, he said.
“CNPC entered the deal in a farmout,” Sharipov said. “So it combined Total, a company with the right technology, with CNPC, which is financially strong. CNPC also signed a deal with Tajikistan and Turkmenistan to build a pipeline. All it needs is more investment stability and cooperation.
“Still, people in our country would like to see more westerners because of their financial and operating practices as well as technology,” he added. “It also would provide more diversification.”
Contact Nick Snow at email@example.com.