Kashagan is in the northern Caspian Sea. I've been there. Technically, oil extraction is immensely complex; that is certainly the case here. Production should have started in 2005. No less than US$46 billion has been spent by a consortium featuring Italy's ENI, France's Total, Royal Dutch/Shell, ExxonMobil and ConocoPhillips. Nasty bickering has been the norm. A week ago, Astana finally signed an agreement for China's CNPC to buy the former ConocoPhillips' 8.4% share.
With China stepping in, major hard cash will flow. Beijing is determined to become a major player in the Kazakh energy market. Ideally, Kashagan should be producing 370,000 barrels a day in 2014 and 1.6 million barrels by 2016.
China's strategy in Kazakhstan is basically about oil. But China also badly needs a lot of natural gas. Russia's Gazprom is betting on Beijing's non-stop thirst for gas to facilitate its shift from exporting mainly to Europe. But competition is stiff. And Turkmenistan is a key part of China's equation.
China is already planning expansions for the Central Asia-China pipeline -- which it built and paid for. Exports should be up by 2015. In his Silk Road trip, Xi naturally hit Turkmenistan, inaugurating no less than one of the largest gas fields in the world, massive Galkynysh, which began production only three months ago. Most of the gas will flow through -- where else -- the pipeline to China. China is paying the bill, $8 billion so far, and counting.
Turkmenistan's economy now virtually depends on natural gas exports to China (at 60% of GDP). Beijing's ultimate strategy is to use its Turkmenistan leverage to extract better gas deals from Gazprom.
Kyrgyzstan also features in China's Pipelineistan strategy. Beijing will finance and operate the proposed Kyrgyzstan-China gas pipeline -- which will be a key part of the fourth Turkmenistan-China pipeline. Beijing is also building a railroad linking it to with Kyrgyzstan and Uzbekistan.
Observing all this frenzy, we have to come back to the ultimate adage of the times; while the (Washington) dogs of war bark, the (Chinese) caravan does deals.
Those three evils
The SCO is also involved in boosting this major transportation route connecting East Asia, West Asia and South Asia, and ultimately the Pacific to the Baltic Sea.
Yet Stalin's legacy lives -- as in the demented way he partitioned Central Asia. China will need to shell out a fortune in transportation. Chinese trains are always in trouble traveling on Soviet-era railways. Airline service is dodgy. For instance, there's only one flight every two days between Uzbekistan and Kyrgyzstan (I took it; always crowded, the usual delays, stranded luggage ...)
The SCO was founded 12 years ago, when Uzbekistan joined the members of the original Shanghai Five; China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan. Turkmenistan preferred its splendid isolation.
The original emphasis was on mutual security. But now the SCO encompasses politics and economics as well. Yet the obsession remains on what the Chinese define as "the three evil forces" of terrorism, separatism and extremism. That's code for the Taliban and its offshoots, the Islamic Movement of Uzbekistan (IMU) and the Uyghurs in Xinjiang. The SCO also tries to fight drug trafficking and arms smuggling.
Again in classic Chinese style, the SCO is spun as fostering "mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and seeking common development," in an atmosphere of "non-alliance, non-confrontation and not being directed against any third party."
It may go a long way before becoming a sort of Eastern NATO. But it's increasingly carving its territory as a direct counterpunch to NATO -- not to mention Washington's Central/South Asian chapter of the Global War on Terror (GWOT) and the push for "color revolutions." The SCO is actively discussing its regional options after Washington's withdrawal from Afghanistan in 2014. China and Russia will be deeply involved. Same for Iran -- for the moment a SCO observer.
Xi's Silk Road belt, in principle, is not detonating alarm bells in the Kremlin. The Kremlin spin is that Russia and China's economies are complementary -- as in China's "sizable financial resources" matching Russia's "technologies, industrial skills and historical relations with the region."
One wonders what the adults in assorted rooms in the Beltway think about all this (assuming they know it's happening). Former US secretary of state Hillary Clinton used to wax lyrical about an American-propped New Silk Road. Well, after Xi's trip that sounds like yet another Barack Obama campaign promise.
With China stepping in, major hard cash will flow. Beijing is determined to become a major player in the Kazakh energy market. Ideally, Kashagan should be producing 370,000 barrels a day in 2014 and 1.6 million barrels by 2016.
China's strategy in Kazakhstan is basically about oil. But China also badly needs a lot of natural gas. Russia's Gazprom is betting on Beijing's non-stop thirst for gas to facilitate its shift from exporting mainly to Europe. But competition is stiff. And Turkmenistan is a key part of China's equation.
China is already planning expansions for the Central Asia-China pipeline -- which it built and paid for. Exports should be up by 2015. In his Silk Road trip, Xi naturally hit Turkmenistan, inaugurating no less than one of the largest gas fields in the world, massive Galkynysh, which began production only three months ago. Most of the gas will flow through -- where else -- the pipeline to China. China is paying the bill, $8 billion so far, and counting.
Kyrgyzstan also features in China's Pipelineistan strategy. Beijing will finance and operate the proposed Kyrgyzstan-China gas pipeline -- which will be a key part of the fourth Turkmenistan-China pipeline. Beijing is also building a railroad linking it to with Kyrgyzstan and Uzbekistan.
Observing all this frenzy, we have to come back to the ultimate adage of the times; while the (Washington) dogs of war bark, the (Chinese) caravan does deals.
Those three evils
The SCO is also involved in boosting this major transportation route connecting East Asia, West Asia and South Asia, and ultimately the Pacific to the Baltic Sea.
Yet Stalin's legacy lives -- as in the demented way he partitioned Central Asia. China will need to shell out a fortune in transportation. Chinese trains are always in trouble traveling on Soviet-era railways. Airline service is dodgy. For instance, there's only one flight every two days between Uzbekistan and Kyrgyzstan (I took it; always crowded, the usual delays, stranded luggage ...)
The SCO was founded 12 years ago, when Uzbekistan joined the members of the original Shanghai Five; China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan. Turkmenistan preferred its splendid isolation.
The original emphasis was on mutual security. But now the SCO encompasses politics and economics as well. Yet the obsession remains on what the Chinese define as "the three evil forces" of terrorism, separatism and extremism. That's code for the Taliban and its offshoots, the Islamic Movement of Uzbekistan (IMU) and the Uyghurs in Xinjiang. The SCO also tries to fight drug trafficking and arms smuggling.
Again in classic Chinese style, the SCO is spun as fostering "mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and seeking common development," in an atmosphere of "non-alliance, non-confrontation and not being directed against any third party."
It may go a long way before becoming a sort of Eastern NATO. But it's increasingly carving its territory as a direct counterpunch to NATO -- not to mention Washington's Central/South Asian chapter of the Global War on Terror (GWOT) and the push for "color revolutions." The SCO is actively discussing its regional options after Washington's withdrawal from Afghanistan in 2014. China and Russia will be deeply involved. Same for Iran -- for the moment a SCO observer.
Xi's Silk Road belt, in principle, is not detonating alarm bells in the Kremlin. The Kremlin spin is that Russia and China's economies are complementary -- as in China's "sizable financial resources" matching Russia's "technologies, industrial skills and historical relations with the region."
One wonders what the adults in assorted rooms in the Beltway think about all this (assuming they know it's happening). Former US secretary of state Hillary Clinton used to wax lyrical about an American-propped New Silk Road. Well, after Xi's trip that sounds like yet another Barack Obama campaign promise.
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