Kazakhstan's Vice Minister Comments on Economic Impact of CPC Pipeline Attack

Vice Minister of National Economy Arman Kasenov commented on the possible impact of damage to the Caspian Pipeline Consortium (CPC) on the economy of Kazakhstan, Orda.kz reports.

According to preliminary data, the consequences may take about two months to be remedied, which could lead to a reduction in Kazakh oil exports by a third.

However, according to Kasenov, specific conclusions can only be made after a detailed damage assessment.

There are stress tests for a variety of scenarios. Including, for example, a fall in oil prices or an increase. In this case, we are considering a situation in which export volumes are reduced. Of course, we have such stress scenarios. We know how this or that factor affects economic growth, but for now we need to assess whether we are really talking about 30% of exports and the time period that has been announced. After that, we will be able to make accurate outlooks.

According to the Vice Minister, Kazakhstan will not experience a significant negative impact, even if its exports drop hypothetically. 

He noted that oil production accounts for about 9% of the country's economy, and even a 5% decrease in this indicator will not have a critical impact.

I think it will have little effect.

In 2025, oil production in Kazakhstan is expected to increase by seven million tons.

Even if there is a temporary reduction in exports, by the end of the year we will produce more oil than last year, which will offset any possible negative consequences.

He also spoke about the possible effects of the end of the war against Ukraine. 

According to him, a peaceful conflict settlement will improve the region's investment environment and will have only positive outcomes.

I personally really hope that the conflict will end peacefully. As you know, our position is that we are for a peaceful settlement of the conflict between the Russian Federation and Ukraine. Those negotiations (Trump and Putin - Ed.), of course, we have high hopes for them.

Arman Kasenov emphasized that the end of the war in Ukraine will positively affect the economic situation in the region.

In this case, we can expect higher investment activity from foreign investors in our region, including Kazakhstan. Supply chains will improve, and restrictions that apply to the Russian Federation will be lifted.

The Caspian Pipeline Consortium reported an attack on its facility in Russia on February 17.

Seven Ukrainian drones struck the Kropotkinskaya station. The station temporarily stopped operating.

The Ukrainian Armed Forces confirmed that this operation was part of a strategy to destroy Russia's fuel and energy infrastructure. At the same time, experts believe Russia will not sustain significant losses since the CPC is not economically vital.

Original Author: Zhadra Zhulmukhametova