Journal of Eurasian Studies (Jul 2018)

State intervention in Kazakhstan's energy sector: Nationalisation or participation?

  • Serik Orazgaliyev

Journal volume & issue
Vol. 9, no. 2
pp. 143 – 151

Abstract

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This paper explores the dynamics of state intervention policies in Kazakhstan's petroleum sector between 2001 and 2012. Although the government in this period had become more assertive in relations with multinational enterprises (MNEs), a full-scale nationalisation had not occurred as the state strengthened control over the industry without forcing out oil multinationals. The findings suggest that the increased state intervention in Kazakhstan's petroleum sector was motivated by a rationale of indigenous capacity-building rather than by an exclusively economic rationale of maximising rents. It is often overlooked that the government endeavoured to achieve a greater participation of Kazmunaigas national oil company (NOC) in the domestic energy sector. Contrary to nationalisation, participation doctrine does not prioritise asset expropriation and/or displacing foreign investors. In Kazakhstan, participation strategy facilitated a partnership between the NOC and MNEs with the aim of strengthening local expertise. Keywords: state intervention, nationalisation, participation, Kazakhstan's energy sector