KAZAKHSTAN OIL REFINERY MODERNIZATION PROBLEMS

Abstract

Kazakhstan is one of world largest oil extracting countries. Nevertheless, Kazakhstan oil refineries prefer to use Russian crude oil. This situation results from the fact that oil exported from Russia to Kazakhstan has for many years been imposed with zero export tax. Moreover, December 2010 Russia and Kazakhstan agreed not to change this regime till 2015. Hence, it is more profitable for Kazakhstan to export own oil and to import that produced in Russia. Resulting from this, as well as taking into account technical condition of domestic refineries, it seems to be unreal that any effective modernization of its oil refineries will be carried out in Kazakhstan within the nearest future. Investment amounts required for the modernization, including those stipulated in programs, three times less than actual amounts. Fuel deficiency is more preferable for government officials than abundance. Lack of modernization means that increased volumes of petrol will be imported nearest years.