Critical for Kazakhstan to pursue oil export options outside of Russia, investor says

Kazakhstan's quality to diversify its seaborne crude lipid export routes distant from Russian territory is captious to the country's economy, the developer of an alternate larboard told CNBC.

"I judge it's little political, much existential question, and we anticipation that besides planetary assemblage is going to enactment that inaugural to person alternate routes successful bid to minimize the effects of immoderate proviso shortages," Nurzhan Marabayev, CEO of Kazakh infrastructure capitalist Semurg Invest, told CNBC's Dan Murphy and Hadley Gamble.

His institution has been moving to make the Kuryk larboard connected the eastbound seashore of the Caspian Sea — a task that includes a bulk cargo terminal, designed for the transshipment of oil, bulk lipid cargo and liquefied petroleum gas. 

Once complete, the larboard could supply an alternate to Kazakhstan's main seaborne crude lipid export route, which presently transports volumes crossed Russian territory via the 1,511-kilometer (939-mile) Caspian Pipeline Corporation's pipeline, for aboriginal shipment from the CPC terminal adjacent Russian larboard Novorossiysk.

Since Moscow's full-scale penetration of Ukraine past year, concerns person mounted that Kazakhstan's reliance connected practice with Russia — with whom Kazakhstan shares a 7,644-kilometer (4,750 miles) borderline and a past of adjacent governmental alignment — could endanger its lipid supplies. Exports from the CPC terminal were intermittently disrupted successful 2022, with Russia citing method and regulatory issues. This included a hold successful the port's restart aft tempest damage, portion Russian method watchdog Rostekhnadzor carried retired an unscheduled inspection, and a little and unenforced Russian tribunal ruling for CPC to halt exports for 30 days.

"Approximately 95% of lipid is going done Russian territory, and we person seen immoderate disturbance past year, and really … it's rather a menace to the Kazakhstan economy, due to the fact that we are depending connected the lipid revenues," Marabayev told CNBC connected Wednesday.

Oil large ExxonMobil — which holds a 16.8% involvement successful the Kasahagan tract and a 25% involvement successful the Tengizchevroil consortium that operates the Tengiz and Korolev fields — signaled akin concerns successful a Feb. 22 securities filing.

"In the lawsuit that Russia takes countermeasures successful effect to existing sanctions related to its subject actions successful Ukraine, it is imaginable that the proscription of Kazakhstan lipid done the CPC pipeline could beryllium disrupted, curtailed, temporarily suspended, oregon different restricted," the institution said, informing of a "loss successful currency flows of uncertain duration" nether specified circumstances. ExxonMobil's after-tax net linked to its Kazakh interests were astir $2.5 cardinal successful 2022.

Kazakhstan is the 2nd largest shaper of the non-OPEC contingent of the OPEC+ conjugation and has typically aligned itself with Russia successful the group's petropolitics. Kazakh output slipped to 1.66 cardinal barrels per time successful January, according to the February contented of the International Energy Agency's Oil Market Report.

The state has been studying imaginable alternate transport routes beyond Moscow's borders, including the anticipation of sending lipid shipments via Azerbaijan's Baku-Tbilisi-Ceyhan pipeline and done the incomplete Kuryk larboard project.

"Major infrastructure has been done, but inactive we request much enactment and attraction to the larboard successful bid to fast-track the improvement of the backstage terminals," Marabayev said. Development began successful 2010, with operations starting six years ago.

Russia and Kazakhstan person historically observed a choky alliance, with Kazakh President Kassym-Jomart Tokayev past twelvemonth calling connected the Moscow-led Collective Security Treaty Organization to nonstop paratroopers into Kazakh territory after nationwide protests erupted implicit substance terms increases.  

But Russia's warfare successful Ukraine has stranded Kazakhstan successful a precarious balancing enactment betwixt Western powers and the Moscow medication of Vladimir Putin. Tokayev deepened engagement with Washington during the Tuesday sojourn of U.S. Secretary of State Antony Blinken, who repeatedly stressed that the U.S. backed Kazakhstan's "territorial integrity."

"Ever since being the archetypal federation to admit Kazakhstan successful December of 1991, the United States has been firmly committed to the sovereignty, territorial integrity, and independency of Kazakhstan – and countries crossed the region," Blinken said.

"In our discussions today, I reaffirmed the United States' unwavering enactment for Kazakhstan, similar each nations, to freely find its future, particularly arsenic we people 1 twelvemonth since Russia launched its full-scale penetration of Ukraine successful a failed effort to contradict its radical that precise freedom."

The world's third-largest lipid producer, Russia has recovered its footing successful the crude markets destabilized by EU and G-7 sanctions implemented against its seaborne exports of crude lipid and lipid products successful December and February, respectively. Kazakh lipid has been exempted from the measures contempt transiting and exiting a larboard connected Russian grounds.

The G-7 has enactment successful spot a strategy that allows Western providers to facilitate captious fiscal and shipping services to non-G-7 countries that acquisition Russian volumes beneath a circumstantial price. Moscow has repeatedly denounced this measurement and threatened to contradict its crude and lipid products to those who observe specified a terms cap.  

The withdrawal has pressured its accumulation levels, which the IEA pegged down to 9.77 cardinal barrels per time successful January. Moscow announced it would trim crude lipid output by 500,000 barrels per time successful March. 

Russia has besides been pushed farther into the Asia markets, present chiefly relying connected Chinese and Indian purchases:

"I deliberation Russia, effectively, is an Asian federation by now. I deliberation India and China will, for a agelong period, beryllium the main buyers of Russia. It's going to go the caller norm," Viktor Katona, pb crude expert astatine Kpler, told CNBC's "Squawk Box Europe."

"I deliberation that's going to beryllium the extremity effect Russia retired of Europe, Russia perennially into Asia, there's going to beryllium caller links into those countries, and that's beauteous overmuch it."