OILING THE WHEELS OF COOPERATION
A Chinese company is not only pumping ‘black gold’ and providing jobs, but also establishing community projects for locals,
Kazakhstan holds a special place in the history of Belt and Road Initiative, because President Xi Jinping proposed the ambitious initiative during a speech at Nazarbayev University in Astana, the Kazakh capital, in 2013.
China has been working closely with Kazakhstan for about 20 years, mainly in the energy sector. That cooperation has expanded since the launch of the landmark project, which comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
Aktobe, in the west, is Kazakhstan’s second-largest region but it has the lowest population density in the country, with just 2.6 people per square kilometer.
It’s also the location of a prime example of the strong links between the two nations: China National Petroleum Corp Aktobe-Munai-Gas, known as CNPC AMG, Kazakhstan’s fifthlargest oil and gas producer.
In June 1997, China National Petroleum Corp, the nation’s largest oil and gas producer and supplier, bought a 60.34 percent stake in the Kazakh company and obtained production licenses for three oil fields and a contract for an oil exploration block.
“The acquisition was the company’s first investment in Central Asia, and the development of the Aktobe project is a prime example of China’s oil and gas cooperation in Kazakhstan,” said Bian Dezhi, general manager of CNPC Kazakhstan Corp, a subsidiary established to oversee operations.
Later, CNPC was awarded four more oil and gas projects in the country, along with two exploration projects and the Kazakhstan-China crude oil pipeline, the Northwest oil pipeline, and phase two of the Kazakhstan-China gas pipeline.
Construction of the 1,454-kilometer-long western section of the Kazakhstan-China gas pipeline was completed on April 14. According to the company, the pipeline can now carry more than 5 billion cubic meters a year from Kazakhstan to Chna.
“China is busy building the Silk Road Economic Belt throughout Central Asia, and we see these oil and natural gas pipelines as an ‘energy Silk Road’,” said Bian Dezhi, general manager of CNPC Kazakhstan.
CNPC now holds 89.17 percent of CNPC AMG, which produced more than 134 million metric tons of crude oil and 72.3 billion cu m of natural gas between 1997 and the end of last year, according to company data.
Wang Junren, general manager of CNPC AMG, said the project has faced several challenges since it was established, including the 2008 global financial crisis and the drop in the price of oil between 2010 and 2015.
“However, thanks to a better energy cooperation environment, such as a higher oil price and positive policies introduced as part of the initiative, the development of CNPC AMG has jumped in the past two years,” he said.
“The initiative is an updated version of China’s international cooperation model, and the Silk Road Economic Belt is helping to raise the level of sustainable cooperation between China and Kazakhstan,” he added.
Wang Yanfeng, deputy chief engineer and head of field operations in Aktobe, said the company’s employees have made many sacrifices to ensure the project’s success.
After working at the company’s oil field in Daqing, Heilongjiang province, for seven years, Wang studied in Moscow from 2001 to 2003 to further his professional skills. After that, he moved to Kazakhstan.
“When I arrived in Aktobe, the company was in a critical situation because the price of oil had almost reached its lowest point and the business was really not smooth. Living and working conditions were also quite poor,” he recalled.
The hardest thing was traveling the 270 km between the oil field and the regional capital, also called Aktobe: “The roads were bad, and there were deep potholes all the way to the field, so we had to ride in an open pickup truck for more than eight hours in winter.”
Acts of charity
CNPC AMG has signed memorandums of understanding with the Aktobe regional government every year since 1997, and has donated more than $47 million to local charities.
The company has spent more than $694 million to boost local amenities, including subsidizing medical services and building infrastructure, such as hospitals and cultural or religious venues, according to Yury Shikarev, deputy director of the general manager’s office.
In 2003, the company bought 80 apartments in downtown Aktobe city. It offered them to World War II veterans free of charge as part of celebrations to mark the 58th anniversary of the end of the war.
“We also spend $63,700 a year on newspaper subscriptions for the old soldiers,” he said. “Furthermore, we sponsored a Veterans’ Day to commemorate them, which received positive feed- back from local people.”
Xu Anping, deputy general manager of CNPC AMG, visits the apartments to meet with the veterans every year.
“For a company exploring natural resources in a foreign country, relations with local governments, and especially local communities, are very important,” he said.
Xu was one of the first Chinese workers to arrive in Aktobe in 1997. He said the CNPC management team understood the need for positive relations and immediately set about cultivating them.
In the first year, CNPC AMG bought and renovated an old sanatorium. When the work had been completed, the company organized a three-month summer camp for the children of its Chinese and Kazakh employees.
“Now, our summer camp is one of the most famous in Aktobe, or even western Kazakhstan. It has become a fairytale land for the children of the region,” Xu said, with pride.