Economics, Energy, Energy Market, Forum, Gas, Gas Market

The agenda of the Eurasian Forum KAZENERGY-2015 reflects the current key transformations taking place in the oil, gas and energy market.

The Forum includes plenary and agenda sections, as well complex sub-forum activities, including scientific conferences, roundtables, innovative school sections, the Youth Forum and Women’s Energy Club meeting.

Furthermore, with the purpose of demonstrating the latest technological achievements in the energy sector, the X Eurasian Forum holds an exhibition titled “Energy4us: Innovative Energy”.

At the opening of X Eurasian Forum KAZENERGY, Timur Kulibayev, the Chairman of KAZENERGY Association, thanked the participants for their cooperation with the Association and the Forum KAZENERGY that has lasted for ten years since its creation. According Mr. T. Kulibayev, “the agenda of this Forum is interesting because it may have been the first time in the last decade for the world to confront several concurrent challenges in global geopolitics, economy, humanitarian sphere, and scientific and technological community.” “Some of them require operational solutions, therefore some ideas are expected to be born in the course of our discussions today, because tomorrow it might be too late”, said the Chairman of KAZENERGY.

Minister of Energy Vladimir Shkolnik read the Greeting Letter of President of the Republic of Kazakhstan Nursultan Nazarbayev addressed to the Forum participants.

According to the letter, “The oil, gas and energy sector is one of the national economy segments being the driving force of the country”.

“Within the ten years of its existence, the KAZENERGY Association has strengthened its role as a leading industry association. The Association is a link between government and businesses, which assists in attracting investments to implement new technologies. The Eurasian Forum KAZENERGY is progressing rapidly together with the Association.

Presently, the Association has special objectives. The extensive development of Kazakhstan’s energy resources must be supported by innovation, new energy efficiency standards, and spillover effect on the processing sector of economy.

I am sure that it is a common mission for all companies joining the Association KAZENERGY. Our common efforts will ensure the development of highly efficient energy industry meeting the advanced international standards.

I sincerely congratulate you on this anniversary! I wish you to achieve success in business, as well as intensive development and prosperity!” said the Head of State in his Letter.

The high-rank guest, Viktor Zubkov, Special Representative of the President of the Russian Federation for Cooperation with Gas Exporting Countries Forum (GECF), Prime-Minister of the Russian Federation (2007-2008), Chairman of the Board of Directors, PJSC Gazprom urged the Forum participants to focus on the factors that significantly influence the behavior of gas market players.

"The significant shift of responsibility to gas suppliers in the EU countries that has happened in recent years has accelerated the diversification of our foreign economic risks and strengthened the eastern vector of the Russian gas export”, said Mr. Zubkov.

He reminded that currently Russia is building a gas pipeline “Power of Siberia” to fulfil the current contract for supply of over a trillion cubic meters of gas from Russia to China (38 billion cubic meters per year for 30 years), mainly from the resources of Yakutia and Irkutsk gas production centers.

“In parallel, we are working on the terms for the gas pipeline project “Power of Siberia-2”, for the future yearly supply of 30 billion cubic meters of natural gas to China from the resources of Western Siberia and the available reserves make it possible. In general, we see great prospects in the development of gas supplies to the Asia-Pacific region (APR). Thus, the APR countries’ share of in the world’s primary energy consumption reached 46% in 2014, and we expect their share to increase in our gas export structure from 7% to 19 % by 2020, with a later increase to 41% by 2035,” said Mr. Viktor Zubkov.

“Meanwhile, the European gas market remains to be the major export market for our gas, and we strengthen the reliability of gas supplies westward via diversification of export routes by implementing the projects Northern Stream-2, and Turkish Stream,” said V. Zubkov.

Speaking on the partnership between Kazakhstan and Belarus, the Russian guest noted, “Additionally, our countries have a common understanding of the need to mitigate the negative impact of low hydrocarbon prices on their economies, which appear very contrasting on the backdrop of the recently-stable high oil and gas revenues”.

 “In my opinion, this is exemplified by the New Economic Policy “Nurly Zhol” (“Way to the Future”), announced by President of the Republic of Kazakhstan Nursultan Nazarbayev in November last year and implemented with the use of 3 billion dollars annually from the country’s National Fund in 2015-2017. I am confident that this policy, in combination with the “100 concrete steps” announced by the President in May of this year, will enable the people and economy of the Republic of Kazakhstan to overcome the adverse external economic factors with ease. I suppose that besides the people’s wisdom and trust to the country leadership, the obvious success of Kazakhstan is also contributed by its constructive participation in global and regional integration processes, with Russia, in the first place. In particular, approximately 85% of oil exports and 99.5% of gas exports originating in Kazakhstan transit the Russian Federation, and our historically close relations are now developing to a new level under the Customs Union and the Eurasian Economic Union,” noted Viktor Zubkov.

In his speech, French Prime Minister of 2007-2012 François Fillon stressed the need “to make the right choice and learn from the past mistakes”. “Kazakhstan is a lucky country. Because it has wonderful natural fossil resources. Oil reserves in the country amount to 3% of the world’s resources... However, due to the drop in oil prices, the whole country and particular regions will have to adapt for some time... EXPO-2017 Exhibition is a kind of position explaining how to carry out this energy transformation. Opportunities for carbon emission reduction will become a wonderful combination to develop all possible renewable energy sources. Paradoxically, however, the timing is not the best for this transformation. Because oil will be the best source to implement this transition,” said Mr. Fillon.

Speaking on geopolitical energy aspects, the French politician noted that Europe “needs to develop common approaches to the energy policy in the field of prices, emissions, transportation and other issues.” “It is time to move on from a kind of “guerilla fight” in these matters to a common policy based on expert opinion”, said Mr. Fillon. He highlighted the Eurasian Economic Union, created by Kazakhstan, Russia and Belarus, as a promising institution in this respect.

In general, François Fillon explained the importance of energy discussion by stating, “The discussions of the energy future are the discussions of the entire planet’s future”.

Nuer Baikeli, Chairman of the Chinese National Energy Administration, speaking on the Kazakhstani-Chinese cooperation in the energy field, said this cooperation is currently experiencing a new round of development. In particular, he noted that the national programs of Kazakhstan and China “Silk Road" and “Nurly Zhol”, initiated by the Heads of both the countries, presuppose a significant growth in the economy, including such important areas as energy and infrastructure. The Chinese visitor stressed the need for joint development of several areas. Among them is the stimulation of oil and gas industry, cooperation in nuclear industry, renewable energy sphere, infrastructure development, technology manufacture, including oil, gas and energy equipment, and promotion of business social responsibility. In general, he highlighted the huge cooperation prospects between the two countries.

In turn, the Board Member (Minister) for energy and infrastructure of the Eurasian Economic Commission of EAEU, Tair Mansurov, noted, “Every year the fuel and energy complex requires increasingly enhanced technologies”. “Therefore, one of the major tasks of the EAEU is to move from reliance on primary energy exports outside the Union to reliance on technological leadership in energy production, transformation and accumulation. In the long term, the cooperation between the EAEU countries will focus on effective operation between the common markets of energy sources, joint development and use of energy efficient technologies, participation in nuclear projects, joint construction of energy infrastructure, development of a transit potential, increased use of renewable and alternative energy sources”, said Mr. Mansurov.

In their turn, the speakers of the Plenary Session “The World 2015: New Reality for Energy Markets”, Joseph Toth, President of the World Petroleum Council (WPC) and Kandeh Yumkella, Special Representative of the UN Secretary-General, Chief Executive, Sustainable Energy for All Initiative discussed the issues of energy security in the major regions of energy production and consumption and the transformation of Sustainable Development Goals 7 (SDG-7) into kilowatt-hours for real people. According to the annual report “World Energy Outlook until 2035” recently published by BP, the energy demand growth will reduce from 1.5% to 1.4% per year until 2035. This outlook reflects the end of the rapid growth phase in energy demand of developing countries in Asia, particularly, in China, where the growth was due to industrialization and electrification. The world’s oil consumption growth will be concentrated in countries outside the Organization for Economic Cooperation and Development (OECD). The OECD oil demand already peaked in 2005, and will only fall until 2035.

By 2035, China will  become the world’s largest oil consumer overtaking the United States. By the early 2020s, the largest gas importer will be located in the Asia-Pacific region. A half of the gas demand growth will be covered by the increasing conventional gas production, mostly provided by Russia and Middle East, with the other half covered by shale gas.

Meanwhile, the U.S. shale gas production will have reduced from 100% of the global shale gas production to approximately ¾ by 2035. Liquefied natural gas (LNG) will play a dominant role in global gas supplies via pipelines: its global supplies will grow by 8% per year until 2020. The world’s oil market will feel the impact of increasing hard-recoverable oil extraction in the US for several more years, but the oil of the Middle East will strengthen its positions in the coming few years.

Alternative energy will also manifest the fastest growth in the future. Its development prospects will largely depend on the level of state support.