Late last year Russia massed troops on its border with Ukraine and issued draft agreements with the U.S. and North Atlantic Organization spelling out demands for changes to the European security order including no further expansion of NATO. With the US and its European allies and partners embarking on a series of pivotal negotiations with Moscow, mass protest erupted in Kazakhstan. Kazakhstan was experiencing the worst street protest the country has seen gaining independence three decades ago. This instability outburst was causing significant concern in Kazakhstan of two powerful neighbours, Russia and China. However, the importance of Kazakhstan was evident by swift intervention after which the stability was restored and Russia has established for fact that it can act as a security provider and order enforcer in its immediate neighbourhood.

Τrying to outline the global geopolitical and geostrategic situation on a global level as it is shaped for the moment being is a challenge of great magnitude both due to the complexity of the issues and the assessment of the potential impact that developments may have. However, we could come out with the most basic assumption that the "space" in which geopolitical actors especially operate is so called the "World Island", i.e., Eurasia with Africa. Within this region mainly the major global geopolitical actors, the USA, Russia and China cooperate or clash on the basis of the principle of "power" and/or "security" in an emerging multipolar world which resembles the period 1815-1914, the era of the Great Powers, local crises, alliances and the creation of a delicate balance of power which managed to keep the world in a basically peaceful state. The conflict of these main forces in combination with the participation of secondary geopolitical actors takes place in the periphery of the World Island, i.e., where the four main geopolitical complexes can be demonstrated: -this of the water axis Black Sea - Straits - Aegean - Eastern Mediterranean; that of the Wider Middle East (Middle East & North Africa), from the Near/Middle East/North Africa-Mesopotamia-Iran-Afghanistan-Pakistan-India and that of the Far East.

However, regarding the fourth one, the sub-geopolitical complex of East Europe, from the Baltic to the Black Sea, we should focus on the key conflicts between Russia-Ukraine, which could constitute perhaps the greatest global security crisis in the three decades. On all these fronts, the United States is generally trying to limit Russia and China at the same time through its "Dual Containment" strategy. Russia, for its part, is trying to consolidate its sphere of influence in what it calls "Near Abroad," that is, in the countries bordering it, while China is trying through the "soft power" of the Belt Road Initiative (BRI) to consolidate a geo-economic primacy on the World Island.

Energy strategy of Kazakhstan at the mercy of its major neighbours?

The second largest producer in CIS (Commonwealth of Independent States) after Russia, Kazakhstan has the largest recoverable oil reserves in the Caspian Sea region. According to bp’s Statistical Review of World Energy, its proven reserves amounted to around 30 billion oil barrels at the end of 2017, i.e., 1.8% of the proven global reserves (with a production capacity of 86.9 million tons), i.e., 2% of the global production capacity.

Most exports run through the CPC (Caspian Pipeline Consortium) pipeline to the Black Sea. Liquids that are not exported by pipeline are sold in the form of condensate on the local markets and the Russian market. The future development of the Karachaganak field is subject to very important investments targeting primarily the maintenance of the current production, then its expansion (the Karachaganak Expansion Project). Due to investments made by Chevron and ExxonMobil, the US ranks first among the foreign investors in Kazakhstan. Kazakhstan exports most of its oil production.

Natural gas

According to bp’s Statistical Review of World Energy, a year ago, Kazakhstan held 0.6% of the global gas reserves. These are found especially in the west of the country, near the Caspian Sea (29.7% of the proven reserves are concentrated in the Karachaganak field). Another important source of natural gas is the Amangeldy field in the Zhambyl region of southern Kazakhstan.

In Kazakhstan, almost all natural gas is associated gas, i.e. it is exploited in association with oil. Therefore, many fields inject significant amounts of gas back into the ground to maintain pressure for oil extraction. Associated gas that is not reinjected is burned, but the Government has asked producers to reduce flaring, since 2005. Since the introduction of these measures, the burned volumes were reduced by more than two thirds. The development of the petrochemical industry to produce polyethylene and polypropylene from associated gas is another priority of the state. Therefore, it has adopted the General Gasification Scheme of the Republic of Kazakhstan, which provides that 56% of the population will have access to natural gas by 2030.

Electricity, coal, and nuclear energy

Exports account for around 5.7% of the total electricity production and are mainly to Russia, Uzbekistan, and Kyrgyzstan. As the electricity transmission and distribution network was integrated into the electricity network of the former USSR, Kazakhstan must adapt and complete its network to unify it in the entire country. The national electricity transmission network is a complex network of substations and distribution centres that connect power lines from 0.4 to 1150 kV. It forms the basis of the unified electricity network of Kazakhstan and ensures connections between various regions and with the energy systems of the neighbouring countries (Russia, Kyrgyzstan, and Uzbekistan), as well as the electricity transmission between the power plants and consumers in the wholesale market.

Kazakhstan accounts for around 40% of the natural uranium production in the world and has the second largest reserve.

If we talk about uranium, Kazakhstan is global leader, with approximately 40% of the global production and has the second largest reserve in the world (estimated at around one billion tons). Uranium production in Kazakhstan reached 23,391 tons in 2017 and the exported volume (in the form of concentrate) was 23,200 tons. The state-owned company JSC National Nuclear Company Kazatomprom (uranium producer) and its subsidiaries alone produced 12,134 tons of uranium.

Due to the importance of its oil, coal and uranium reserves, Kazakhstan – the ninth country in the world in terms of surface – plays a significant role in the market of these raw materials. Since it obtained its independence in 1991, its development has been intrinsically linked to the capacity to attract foreign investors, especially Americans, to exploit its hydrocarbon fields, whose complex technical characteristics required the intervention and expertise of Western companies. In Kazakhstan, oil accounts for over 80% of the production of “exploitation and extraction” category. Being the main source of revenue from export, foreign currency reserves, fiscal revenue, and foreign direct investments (FID), the oil and gas sector have strategic importance for the Kazakh economy. Exports of mineral products accounted on average for 75% of Kazakhstan’s total exports between 2013 and 2020. The increase in oil production was the result of an influx of foreign investment in Kazakhstan’s oil sector since 1991. International investment took place in the form of joint ventures.

Moreover, Kazakhstan, which rightly takes pride in the presence in the ground of 99 of the 100 items in Mendeleev’s Table, is therefore naturally positioning itself as an exporter of these raw materials. However, it suffers from the isolation between the two very strong neighbours in the north and the east, Russia, and China, and those in Central Asia, in Kyrgyzstan, Uzbekistan and Turkmenistan. Moreover, its area is almost 3 million square kilometres, with a population of only 18 million inhabitants scattered around its periphery. Inheriting the infrastructure built during the Soviet period, the country must bear colossal costs both to modernize it and to integrate it into its vast territory. It is therefore imperative to reconcile with its neighbours to export its raw materials, which are subject to significant transport costs. The big nuclear powers want Kazakhstan for their part because it produces 43 per cent of the uranium consumed annually on the planet. So Kazakhstan means lots of things for the world economy which explains the interest. If we classify the most important Kazakhstan means the following – in uranium production as the first, sixth in bismuth production, seventh in sulphur production, nine in coal exports, ninth in zinc production, tenth in gold production, eleventh in copper production, twelve in gas exports, twelfth in iron ore production, twelfth in lead production, fourteenth in manganese production and seventeenth in phosphate production. But they are not the only ones. It also holds enviable positions internationally in the production of titanium, cadmium potassium, magnesium, rhenium, gallium and almost entire range of known rare earths.

Another area in which Kazakhstan is a central reference point on the planet is crypto currencies. The country has been crypto mining paradise for years. That is why the turmoil brought a sharp drop in the price of bitcoin another crypto currencies. Additionally, it has become an attractive alternative to China for crypto currencies internationally several years ago.

China’s de facto ban on crypto-mining last summer precipitated a boom for the industry in Kazakhstan, where operators took advantage of relatively low electricity costs to turn the country for a while into the second-biggest crypto-mining centre in the world. Today it accounts for 18 percent of the global network of crypto currencies according to the Cambridge Centre for Alternative Finance. In the face of the impending crisis that has pushed the price of bitcoin to unprecedented levels, Kazakhstan has been quick to declare that it intends to help crypto currency mining, a complex process that requires high power computers and therefore electricity.

How will he do that? With the establishment of the new nuclear power plant. In other words, it will replace the energy it provides to those who exile crypto currencies and take them from ignites and diesel to a more powerful fuel, uranium, which it has as much as anyone else on the planet.

Moreover, many analysts forget that Kazakhstan is home to the historic Baiconur Cosmodrome, from where once the former Soviet Union and then Russia fired their missiles and now the American NASA is launching rockets. After all this it is necessary to refer to the official explanation for the episodes in Kazakhstan. Could it maybe not just uprising in the prices of natural goods?

Natural gas, fuel on the international transport route Europe – Western China

A joint action plan was signed to develop the road infrastructure of the Europe-Western China route and the Meridian highway as well. The Europe-Western China transport corridor will allow locations along the route to be linked to transcontinental transportation and earn revenues from the transit traffic passing through their communication arteries. Transport will become a priority for the economy, as the share of transport services in the gross domestic product, may attract revenues and investments in the development of other economic sectors too.

Currently, in Kazakhstan, many hopes rely on building the Europe-Western China route to bring energy on international markets. According to Talgat Arystanbaev, chairman of the Natural Gas Vehicles Association Kazakhstan, the measure will lead to building 100 CNG (compressed natural gas) and LNG (liquefied natural gas) stations across the country.

Currently, China owns a 24% stake in oil production and 13% in gas production in Kazakhstan. Observers believe that Kazakhstan, together with Turkmenistan, will remain important partners for energy exports to China in the future. Moreover, China has quickly built five dams in the Almaty region to produce 480 MW of electricity. It will be the largest Chinese hydropower project in Central Asia. The Kazakh authorities are also holding discussions with the Russian energy company Rosatom for the potential construction of a nuclear power plant.

Kazakhstan becomes a major energy destination for China and the West, given the increased demand for oil and gas in the near future. At the recent high-level bilateral meeting between Kazakhstan’s Prime Minister Askar Mamin and his Russian counterpart Mikhail Mishustin, the two countries signed a Memorandum of Understanding meant to continue the construction of energy corridors to China and Europe and establish the production infrastructure to facilitate the sale of compressed natural gas (CNG).

The two countries also pursue together the prospects of building motorways, as new development vectors, to bring technological innovation and economic development in the regions linking Europe to China. Analysts believe that this transport route will facilitate the increase in export flows and will bring a huge contribution to the development of economies of the participating countries. The Europe-Western China-Russian-Kazakhstan transport corridor will link the ports of Finland through the Baltic States, via Kazan and Orenburg (in Russia) and Kazakhstan, to Western China.

Kazakhstan energy crisis and the struggle for the new geopolitical order

Kazakhstan may be known for its importance in the global oil and gas market, but it is known equally for more important reasons. Otherwise, none has dealt with it so intensely and so massively. The question arise was the energy crisis in Kazakhstan an introduction for global geopolitical change. Taking into consideration that all the aforementioned geopolitical complexes are interconnected since they are part of the world chessboard of the three main geopolitical actors, the question is how the ongoing crisis in Ukraine would affect the Kazakhstan energy future.

Although the governments of Central Asia have largely remained tight-lipped in run up to and during Russia's military assault against Ukraine, markets and member of the public have been less sanguine. In Kazakhstan for example the national currency, plummeted by 13 percent in value against dollar in the hours after news about Russia's bombing campaign. The National Bank rammed up its benchmark interest rate from 10.25 to 13.5 percent on February 24th, which move was made to maintain price stability in deteriorating geopolitical situation.

Moreover, according to prominent analysts, the Ukraine-Russia tensions from the January 2022 and Kazakhstan crisis are two completely disconnected events. What happened in Kazakhstan was purely a domestic event. One should understand that Kazakhstan is very important military ally and economic partner in the former Soviet space and it is a mistake to define the relations of Russia and Kazakhstan in terms of Russian revanchism. However, in terms of potential risks from the perspectives of Western businesses and policy makers, it should be taken into account that any indication of new emerging mass protest could not be quickly resolved. Additionally, any possible indication or intention to reorient foreign policy in favour of Russia or China at the expense of West should be perceived as a key factor in the country's overall stability.