Khazkhistan looks to India as China tightens hold on its oil economy

Kazakhstan, which to India's dismay denied the Kashagan oilfield to ONGC Videsh Ltd and instead sold it to China last year (See: Kazakh govt helps CNPC oust ONGC from ConocoPhillips stake deal), now wants Indian oil companies to participate in exploration projects in partnership with Kazakhstan's state-run oil company KazMunaiGas.

Khazkhistan looks to India as China tightens hold on its oil economyAs a prelude, Kazakhstan has invited Indian firms to participate in bids for oil and gas blocks in partnership with state-run KazMunaiGas.

Obviously, Kazakhstan wants to make amends for its action last year when, after agreeing to offer ONGC Videsah a stake in Kashangan oilfield for about $5 billion, it sold off the block to China.

Kazakhstan is also eager to join an international oil pipeline venture with India and other countries similar to the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and is looking to reduce its dependence on China, which now controls nearly 40 per cent of the country's petroleum resources.

Once the TAPI pipeline proves successful, Kazakhstan hopes to chart the same route but originating from within its borders to transport its oil and gas resources to markets other than China.

Once the TAPI pipeline starts operating, then laying a parallel crude oil pipeline that runs from Kazakhstan to India wold be easier.

China, which secured a major Kazakh oil reserve, is fast developing the oilfield and is laying pipelines for transportation of oil and is now playing a major part in the country's economy.

The Kazakh government is concerned with the growing Chinese influence, which now controls almost 40 per cent of oil and gas business in the country.

Kazakhstan now wants India to be more active on the energy front as it does not want to be over-dependent on China.

India, which is looking to expand its sourcing basket, is expected to send a delegation, including senior officials from the petroleum ministry to Kazakhstan this week to deliberate on the issues.

Kazakhstan is estimated to have 3 per cent of the world's recoverable oil reserves. For India, which imports almost 80 per cent of its oil requirements, Kazakhstan offers a reliable source.