Uzbekistan: In the scrub brush desert south of this ancient Silk Road town, the natural gas well heads are built on modest concrete platforms about the size of basketball courts. Because the gas is naturally pressurized, pumps are not needed to bring it to the surface. Pipes simply kiss the ground and gas pours through them.
The issue is where the gas goes from there.
After the break-up of the Soviet Union, the US and its European allies sought to ensure that Central Asia’s enormous oil and gas wealth would flow through pipelines bypassing Russia. It was the latest version of the Great Game, the 19th century contest between Imperial Britain and Czarist Russia for dominance in the region. Lately, however, the West is falling behind, as a torch lighting ceremony last month made clear.
Power plans: Uzbekistan’s President Islam Karimov (left) and Russian President Vladimir Putin at a horse race in Russia in June. Russian oil company Lukoil last month inaugurated the Khauzak gas field in the Central Asian nation.
Executives from OAO Lukoil, the Russian oil company, and government officials from Moscow had come to inaugurate the latest Central Asia gas field to come online. Developed by Lukoil, the Khauzak field is estimated to hold 400 billion cu. m of natural gas, which Lukoil has sold in advance for the next 32 years to OAO Gazprom, the Russian natural gas giant.
Coming as some political developments in the region had renewed Western companies’ hopes of doing business in Central Asia, the 29 November ceremony—held before a planeload of Moscow-based journalists flown in for the occasion—seemed tailored to remind the world of Russia’s lead in the new Great Game.
“We have a good head start and we will use it,” Russia’s first deputy prime minister, Sergei Ivanov, said from a makeshift podium above the red sands of the Kyzylkum desert.
The Bush administration has identified Central Asia as a promising alternative to the volatile West Asia as a source for oil and natural gas. As American officials pursue a policy of encouraging energy exports that bypass Russia, they are also trying to pry open Central Asia to Western oil investment.
Russia is countering by raising its investment in Central Asian fields and pipelines.
Much is at stake. Russia is the world’s largest natural gas producer and a major supplier to Europe. It relies on Central Asian supplies to meet these commitments.
“The Russians are very keen to fight their corner in Central Asia,” Jonathan Stern, a natural gas expert at the Oxford Institute for Energy Studies, said.
“The Russians are not just cozying up” to Central Asia’s autocratic leaders to achieve their aims, Stern said. “Russian companies have put their money where their mouth is.”
Flush with cash from their own oil boom, the Russians are investing heavily in new development, posing a challenge to Western companies such as Exxon Mobil Corp., Chevron Corp. and ConocoPhillips Co. that are eager to expand their Central Asian operations.