Abstract
Over the last four decades a number of state-owned enterprises (SOEs) have been declining dramatically in most industries. However, state-owned national oil companies (NOCs) continue to secure dominant positions in most energy-producing countries. In some instances, energy-exporting countries conducted full nationalisation of their resources, while in other cases partial nationalisation took place with governments tightening control over privately owned firms. This chapter begins with general questions on why countries choose to have state-owned enterprises and why countries prefer to nationalize their oil and gas industries. Next, we explore a case of nationalization policies in Kazakhstan’s oil industry in the post-Soviet period. Although there was no full nationalization of the energy sector, the government’s intervention in the industry had become more pervasive. As a result, multinationals in major oil and gas projects were forced to form partnerships with the domestic national oil company (NOC), KazMunaiGas. We then further explore the role of KazMunaiGas NOC in the country’s hydrocarbon sector as the government was determined to ensure more active participation of the domestic NOC in a bigscale energy projects. Despite a special status and a preferential treatment conditions created for the company, KazMunaiGas has to deal with similar challenges that many NOCs face globally. These challenges include improving technological capabilities, access to capital and financial independence, as well as strategic human resource management.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
“Kazakhstan’s Sale of the Century,” The Financial Times, 25 October 1996.
- 2.
Lukoil’s President, Alekperov, is a former senior Soviet energy official.
- 3.
History of KazMunaiGas, company website. http://kmg.kz/en/about/ (retrieved 5 December 2018).
- 4.
KMG company website. http://kmg.kz/en/investors/for_investors/# (accessed 6 December 2018).
- 5.
http://www.kmg.kz/en/ (accessed 6 November 2018).
References
Aharoni, Y. (2000). The performance of state-owned enterprises. The rise and fall of state-owned Enterprise in the Western World (pp. 49–72).
Al-Kasim, F. (2006). Managing petroleum resources: The “Norwegian model” in a broad perspective (Vol. 30). Oxford: Oxford Institute for Energy Studies.
Babai, D. (1988). The World Bank and the IMF: Rolling back the state or backing its role. The Promise of Privatization, 254–285.
Bellini, N. (2000). The decline of state-owned enterprise and the new foundations of the state-industry relationship. In T. Pier (Ed.), The rise and fall of state-owned enterprise in the Western World. Cambridge: Cambridge University Press.
BP. (2014). BP statistical review of world energy. London: Pureprint Group Limited.
Bremmer, I., & Johnston, R. (2009). The rise and fall of resource nationalism. Survival, 51(2), 149–158.
Caves, D. W., & Christensen, L. R. (1980). The relative efficiency of public and private firms in a competitive environment: The case of Canadian railroads. The Journal of Political Economy, 958–976.
Domjan, P., & Stone, M. (2010). A comparative study of resource nationalism in Russia and Kazakhstan 2004–2008. Europe-Asia Studies, 62(1), 35–62.
Dosmagambet, Y., Oskenbayev, Y., Taghizadeh-Hesary, F., & Mukan, M. (2018). Oil price fluctuations, creditworthiness of the financial systems, and SME financing in Kazakhstan. Tokyo: 904. https://www.adb.org/publications/oil-price-fluctuations-creditworthiness-financial-system-sme-financing-kazakhstan.
Gustafson, T. (1989). Crisis amid plenty: The politics of soviet energy under Brezhnev and Gorbachev (Vol. 1028). Princeton University Press.
Hartley, P., & Medlock, K. B. (2008). A model of the operation and development of a national oil company. Energy Economics. https://doi.org/10.1016/j.eneco.2007.12.017.
Heinrich, A., & Pleines, H. (2012). Challenges of the Caspian resource boom: Domestic elites and policy-making. Basingstoke: Palgrave Macmillan. http://search.lib.cam.ac.uk/?itemid=%7Ccambrdgedb%7C5461371.
IEA. (2008). World energy outlook 2008. Paris. http://www.iea.org/Textbase/about/copyright.asp.
Jermakowicz, W., Kozarzewski, P., & Pankow, J. (1996). Privatization in the republic of Kazakhstan. No 0085: CASE-Center for Social and Economic Research.
Kalyuzhnova, Y. & Nygaard, C. (2009). Resource nationalism and credit growth in FSU countries. Energy Policy. https://www.sciencedirect.com/science/article/pii/S030142150900439X.
KMG. (2013). KazMunaiGas annual report. Astana. file:///C:/Users/User.KISI/Downloads/KMG_EP_2013_Annual_Report_ENG.pdf.
KPMG. (2018). Are national oil companies the new international oil companies? https://assets.kpmg/content/dam/kpmg/xx/pdf/2018/08/are-national-oil-companies-the-new-international-oil-companies.pdf.
Luong, P., & Weinthal, E. (2010). Oil is not a curse: Ownership structure and institutions in soviet successor states. Cambridge studies in comparative politics. New York: Cambridge University Press.
Offshore_Technology. (2019). Top ten companies by oil production. https://www.offshore-technology.com/features/companies-by-oil-production/.
Olcott, M. B. (2007). Kazmunaigaz: Kazakhstan’s national oil and gas company. Houston: James Baker III Institute for Public Policy, Rice University.
Olcott, M. B. (2010). Kazakhstan: Unfulfilled Promise. Carnegie Endowment.
Orazgaliyev, S. (2018). State intervention in Kazakhstan’s energy sector: Nationalisation or participation? Journal of Eurasian Studies, 9(2).
Orazgaliyev, S., & Araral, E. (2019). Conflict and cooperation in global commons: Theory and evidence from the Caspian Sea. International Journal of the Commons, 13(2), 962–976. https://doi.org/10.5334/ijc.914.
Palazuelos, E., & Fernández, R. (2012). Kazakhstan: Oil endowment and oil empowerment. Communist and Post-Communist Studies, 45(1–2), 27–37.
Phi, N. T. M., Taghizadeh-Hesary, F., Chuc Anh, T., Yoshino, N., & Chul Ju Kim. 2019. Performance differential between private and state-owned enterprises: An analysis of profitability and leverage. ADBI Working Paper 950. Tokyo. https://www.adb.org/publications/performance-differential-betweenprivate-state-owned-enterprises.
Stevens, P. (2008). National oil Companies and international oil companies in the Middle East: Under the shadow of government and the resource nationalism cycle. The Journal of World Energy Law & Business, 1(1), 5–30.
Taghizadeh-Hesary, F., Yoshino, N., Kim, C. J., & Mortha, A. (2019). A comprehensive evaluation framework on the economic performance of state-owned enterprises. 949. Tokyo. https://www.adb.org/publications/comprehensive-evaluation-framework-economicperformance-state-owned-enterprises.
The Economist. 2011. Big Oil’s bigger brothers – the oil business. 2011. https://www.economist.com/business/2011/10/29/big-oils-bigger-brothers.
The_NOC_Database. (2019). The National oil Company Database. New York. https://resourcegovernance.org/sites/default/files/documents/national_oil_company_database.pdf%0A.
Toninelli, P. M. (2000). The rise and fall of state-owned enterprise in the Western World. Vol. 1. Cambridge University Press.
Tordo, S. (2011). National oil companies and value creation. World Bank Publications.
Vickers, J., & Yarrow, G. (1988). Privatisation. An Economic Analysis.
Victor, N. M. (2007). On measuring the performance of National Oil Companies (NOCs). Program on Energy and Sustainable Development, 1–41.
Wolf, Christian. (2009). Does ownership matter? The performance and efficiency of state oil vs. private oil (1987–2006). Energy Policy https://doi.org/10.1016/j.enpol.2009.02.041.
World Bank. (1995). Bureaucrats in business: The economics and politics of government ownership. Washington, DC.
World Bank. (1996). Kazakstan – Uzen oil field rehabilitation project http://Documents.Worldbank.Org/Curated/En/434291485900234989/Kazakstan-Uzen-Oil-Field-Rehabilitation-Project. Retrieved February 26, 2018. Washington, DC: World Bank.
World Bank. (1997). World development report 1997: The state in a changing world. The effects of brief mindfulness intervention on acute pain experience: An examination of individual difference. https://doi.org/10.1017/CBO9781107415324.004.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 Asian Development Bank Institute
About this chapter
Cite this chapter
Orazgaliyev, S. (2021). Nationalization and the Role of National Oil Companies: The Case of Kazakhstan. In: Taghizadeh-Hesary, F., Yoshino, N., Kim, C.J., Kim, K. (eds) Reforming State-Owned Enterprises in Asia. ADB Institute Series on Development Economics. Springer, Singapore. https://doi.org/10.1007/978-981-15-8574-6_16
Download citation
DOI: https://doi.org/10.1007/978-981-15-8574-6_16
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-15-8573-9
Online ISBN: 978-981-15-8574-6
eBook Packages: Economics and FinanceEconomics and Finance (R0)