Oil drives interest in Kazakhstan's elections

KAZAKHSTAN:  The next president of the oil-rich Asian nation will be courted by China, Russia and the US, writes Chris Stephen…

KAZAKHSTAN: The next president of the oil-rich Asian nation will be courted by China, Russia and the US, writes Chris Stephen in Astana

The eyes of Beijing, Moscow and Washington will be on the presidential election in Kazakhstan this weekend, and the reason sits not in the presidential palace in the capital, Astana, but under a patch of sea thousands of miles away.

Four years ago oil reserves of at least 30 billion barrels were discovered under the Caspian Sea, making the field, the Kashagan, the second biggest in the world.

This discovery, following others in recent years, has transformed this once backward republic into a pot of gold being fought over by oil companies from the three powers.

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All of which makes the presidential election being held here tomorrow one of the year's pivotal events.

The focus of attention is the incumbent president, Nursultan Nazarbayev (65), whose brooding features have dominated the country since it gained independence from the Soviet Union in 1991.

A former blast furnace engineer, he moved up the ranks of the Communist Party during Soviet times, becoming the general secretary of the party in 1989.

When the USSR collapsed in 1991 Nazarbayev won election to president, and was given a further term by referendum in 1995, winning a further seven-year term in 1999 in an election criticised by some international monitors.

The country he presides over is troubled. Opposition groups who have united to oppose him behind a single candidate, Zharmakhan Tuyakbai, accuse the president of failing to spread the oil wealth.

Outside Astana and the commercial hub, Almaty, poverty is common across this vast arid land.

Adding to the tension is the mysterious murder last month of a key opposition figure, Zamanbek Nurkadilov, found at his home shot three times.

Nurkadilov had quit his post in government last year, alleging corruption in foreign oil deals, and he had become a key figure in the opposition alliance For A Fair Kazakhstan.

For the oil companies and foreign governments looking in, the winner of the election matters less than stability. Demonstrations of the sort seen in a chain of elections throughout former Soviet states this year would add tension to a three-way scramble for oil.

American oil companies took an early lead here and across central Asia in the late 1990s, deploying their superior expertise around the Caspian, the world's largest inland sea.

But allegations of bribery involving Mobil executives, one of whom was jailed by a New York court for tax evasion two years ago, has not helped the US reputation.

All prospect of joint projects has gone and, despite this being proclaimed the age of globalisation, the business of oil exploration remains a national prerogative.

Russia's government has taken control of oil companies formerly privatised, while China has always worked this way. The oil majors in the US are meanwhile competing against these state giants, and each other.

This competition, for what constitutes the world's largest untapped oil reserves, has spilled over into a game of great power chess in which states are being ticked off on coloured maps according to their changing allegiances, much as the great powers did in the 19th century.

In a struggle Kipling christened "The Great Game", British and Russian envoys competed for influence among central Asia's potentates, criss-crossing the region by horse or camel to offer gold, bolt-action rifles or high-tech gadgets like the electric telegraph.

Today's envoys are oil executives who move by Gulfstream jet and bring with them spreadsheets showing the billions of dollars that can roll out if their projects are realised.

This game has been punctuated by a series of dramatic elections over the past year.

In March the opposition in tiny Kyrgyzstan donned the colours of Ukraine's US-backed Orange Revolution and stormed government buildings after monitors declared an election rigged.

Kyrgyz president Askar Akayev fled for his life, new elections were held and the US has won enough influence to extend a giant airbase here.

Two months later troops in neighbouring Uzbekistan shot at least 200 protesters in prodemocracy protests. When the US complained, Uzbekistan chucked it out of an air base and signed oil and military deals with Russia.

The US celebrated once more in the summer when it opened a pipeline to take Caspian oil through friendly nations - Azerbaijan, Georgia and Turkey - with no stops in unfriendly Russia or Iran.

When Azerbaijan's president Ilham Aliyev's government won questionable elections in October, US criticism was muted.

China meanwhile stole a march on its rivals, buying Kazakstan's state oil company Petrokazakhstan for €3.4 billion.

"This whole thing began as a US influenced region," says Adam Landes, an oil and gas expert for investment experts Rennaissance Capital. "As Kazakhstan improved supply, Kazakhstan revisited matters, and is now shifting towards China."

All of which ensures plenty of the world's oil executives will be having a working weekend. World's ninth-largest country with an ethnically diverse population of 15m.

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