Caspian Energy Politics by Overland Indra;Kjaernet Heidi;Kendall-Taylor Andrea;

Author:Overland, Indra;Kjaernet, Heidi;Kendall-Taylor, Andrea;
Language: eng
Format: epub
Tags: Interdisciplinary Studies
Publisher: Taylor & Francis Group
Published: 2009-11-27T00:00:00+00:00

Demystifying the nature of external involvement

Even if outside states on a broad level are engaging with states in the Caspian region, they are not guaranteed a foothold in the economy or the energy sector. While many state and private firms from important outside powers have been able to acquire and establish successful business operations in the region, there seems to be little guarantee that good diplomatic and bilateral relations results in these businesses immediately achieving their aims. This finding seems to challenges some conventional narratives of regional affairs based on the ‘Great Game’.

Marc Lanteigne in Chapter 5 argues that China has been avoiding overt energy competition with the West but will not be content to be relegated to the sidelines. Analysing Chinese energy diplomacy in Central Asia, he finds that China is motivated by rising domestic energy demands and a policy to diversify its energy sources and partners as well as better secure its imports of fossil fuels. This has been accomplished through a series of bilateral and multilateral initiatives undertaken between Beijing and Central Asian governments. China’s role in Central Asia is further analysed in Ryan Kennedy’s chapter on Sino-Kazakhstani relations in the oil sector. Kennedy stresses that, even during periods when Kazakhstan’s relations with China have been exceptionally good and Kazakhstan has prioritized the opening up of an eastern corridor for energy export, Chinese companies have encountered considerable obstacles in developing their energy activities in the country. As a result, the Kazakhstanis have been able to extract a large number of concessions from the Chinese. Counter to the common perception of Kazakhstan as favouring Chinese actors over Western investors, Kennedy argues there is a little evidence of direct competition between Chinese and Western oil firms. He finds that power has shifted from outside actors to Kazakhstan itself as the government uses interest in its petroleum resources to bolster its international role. The challenge apparently is to continue squeezing the Chinese without alienating them. So far, the Chinese companies appear willing to pay a considerable premium for access to assets in Kazakhstan.

These points are important because they demystify the way in which we should interpret and understand the involvement of outside states in the Caspian region. It is not enough just to count the number of state visits and agreements to understand how business-to-business cooperation is unfolding.

The chapter by Stina Torjesen and Indra Overland and that by Heidi Kjaernet analyse, respectively, the interaction of the Central Asian and the Caucasian petrostates with Russia, assessing how the authoritarian traits of the Caspian state regimes foster cooperation in the petroleum sector. The authors argue that although Russia may have suffered some blows in its search for hegemony in the region, it still holds significant normative power as a key actor in the Caspian energy game, as well as in the international and military relations of the region.

In Chapter 9, Nargis Kassenova explores the establishment of the Shanghai Cooperation Organization Energy Club, and rebuts Western fears of it developing into an ‘eastern gas OPEC with nukes’.

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