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Central Asia: An Emerging Player in
the Global Oil & Gas Energy Sector
Central Asia, with its new-found partnerships with its energy-hungry neighbors, is
coming to the fore of the global energy landscape.
In the past several years, Central Asia has
been gaining prominence in the global energy
sector. While the Middle East remains to be the
vital energy exporter to key markets across the
world, the recent development of Central Asia’s
energy and oil & gas facilities has allowed it to
increasingly perform a significant part in delivering
the energy needs of crucial markets.
Central Asia, comprising the former Soviet
republics of Kazakhstan, Tajikistan, Turkmenistan,
Kyrgyzstan Azerbaijan and Uzbekistan, has, in
fact, long possessed immense volumes of oil and
natural gas. It has estimated reserves of between
110 billion and 240 billion barrels of crude oil,
valued at around USD 4 trillion. Unfortunately,
they have largely remained underdeveloped
due to lack of infrastructure. Owing to this, it
was tremendously difficult for regional energy
producers to transform the region’s raw natural
resources to profitable output and to find suitable
methods of delivery to target markets around the
world.
With the presence of Soviet influence over the
Central Asia’s energy sector, the region’s oil and
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gas resources were predominantly delivered
to Russia, and from there channeled to other
markets of Western Europe. But after the collapse
of the Soviet Union in 1991, the Central Asian
states sought to open their energy resources
to new markets and started to take progressive
initiatives to diversify their export destinations.
The instrumental partnerships: China
Central Asia’s quest to develop its energy sector
on the heels of the fall of the Soviet Union was
largely met with various challenges. The region’s
perceived geopolitical risks, lack of industrial and
civil infrastructure, and demographic difficulties
had all reined in the development of its oil and gas
industry.
In recent years, however, the tide has dramatically
turned for Central Asia, as it found important
energy partners in its neighbors, most notably
in China. Aside from being a viable final point of
trade, China’s investment towards Central Asia
largely contributed to the rapid development of
the region’s oil & gas resources, and in the stark
regeneration and expansion of its energy market.