Mungo Soggot
MINERAL and Energy Affairs Minister Pik Botha
wants a South African oil field deep in the
heart of the old Soviet Union. He told the
Mail & Guardian this week he is trying to
perusade local oil companies to form a
consortium to buy an oil field in Kazakhstan,
one of several politically unstable republics
deep in the heart of the Commonwealth of
Independent States.
Botha, who returned from the mineral-rich
republic of the former Soviet Union this week,
said South African companies had to snap up
the opportunities in Kazakhstan before the
Americans got there first. He was not daunted
by the widespread perception that it is tough
doing business in Kazakhstan. Botha believes
the country will be politically stable in the
long run.
Botha said he would report back to the private
sector on the lucrative opportunities which
had emerged during his reconaissance mission.
“We can’t forfeit this kind of money. It is
good money. I want to tell South African
companies to spread their wings, spread their
technology and fly out.”
But it appears he will have a difficult time
convincing them. Colin McClelland of the South
African Petroleum Industry Association
confirmed analysts’ suspicions that the local
subsidiaries of the major international oil
companies would not be interested. That leaves
the only two locally owned companies, Engen
and Sasol. A spokesman from Energy Africa,
Engen’s exploration arm, said it was
concentrating on Africa. “There is lots of oil
all over the world. Resources have to be
deployed carefully.”
Another senior South African oil company
official said Kazakhstan was an exceedingly
difficult country to work in and that the
experienced multi-national oil majors
operating there were cautious.
According to information services group MAID
Africa/Profound, foreign businessmen have
complained increasingly of corruption, and of
the need for backhanders to get things done
there. It quotes the Economist Intelligence
Unit as saying the trend to greater
authoritarianism in Kazakhstan would carry on
and opposition groups would continue to be
harassed as President Nursultan Nazarbayev
consolidated his political power.
The Caspian Petroleum Consortium’s remained
unable to reach agreement on which route to
build a pipeline to a deep sea port in the the
Black Sea continued — a hurdle which had to
be cleared to make an increase in Kazakhstani
production worthwhile.
Botha said the proposed consortium could
include South Africa’s state oil company, the
Strategic Fuel Fund (SFF), with which South
Africa’s private sector oil companies have a
tetchy relationship.
McClelland said Botha should take along oil
company representatives if he went on such
expeditions — not just state oil company
officials.
The former long-serving foreign minister said
he had been accompanied by SFF general manager
Kobus van Zyl and a representative from the
Chamber of Mines on his trip, which had been
arranged after an invitation from the
Kazakhstani government. Kazakhstan had the
11th-largest oil reserves in the world, and
believed new finds could boot it up to number
five.
He said there was not only great potential for
oil companies, but there was considerable
scope for local mining companies in
Kazakhstan, where mining techniques were
primitive. “It would be a picnic for our gold
mining companies.”
Meanwhile, Botha said he was also exploring
the possibility of securing credit lines for
South African exports to Iran, using the
Iranian crude oil South Africa imports as
collateral. Iran, which has a US ban on its
oil, is South Africa’s main supplier of oil.