Realising the Oil Supply Potential of the CIS: The Impact of Institutions and Policies

Abstract

Realising the Oil Supply Potential of the CIS: The Impact of Institutions and PoliciesThis paper provides an overview of the political economy of oil in the CIS. It briefly situates the region's oil sector potential in the global context, before analysing the structural features of the oil sectors by country. It examines the ways in which CIS oil industries have been organised and governed since 1991, as well as questions of transport infrastructure and export routes, which are especially critical for Central Asia's landlocked producers. The paper finally considers the causes and likely consequences of the recent shift towards greater state ownership and control in Russia and Kazakhstan, the region's most important oil producers. The paper's central argument is that these changes have increased the risk that the full hydrocarbon potential of the CIS may not be developed in a timely and economically efficient way.JEL Classification: L71, O57, P28, Q41 Résumé Réaliser le potentiel pétrolier des pays de la CEI : l'impact des institutions et des politiques publiquesCette étude présente un panorama de l'économie politique du secteur pétrolier dans les pays de la CEI. Après une brève description du potentiel de la région, vu dans un contexte global, une analyse des caractéristiques structurelles des secteurs pétroliers pays par pays est présentée. L'étude propose également un examen des modes d'organisation et de gestion des industries pétrolières depuis 1991, ainsi que des questions d'infrastructure de transport et des routes de transit pour l'exportation, qui sont particulièrement cruciales pour les producteurs enclavés d'Asie Centrale. Enfin, les causes et les conséquences probables du mouvement récent vers un contrôle croissant du secteur par l'état en Russie et au Kazakhstan, les deux plus importants producteurs de la région, sont analysées. La conclusion principale de l'étude est que ces changements ont accru le risque que le plein potentiel des pays de la CEI ne soit pas développé de manière opportune et économiquement efficiente.

Assessment of Institutional Quality in Resource-Rich Caspian Basin Countries

“…Oversight provided by Azerbaijan's SAI is weak due to the lack of complete discretion in law to choose what to audit and lack of su¢ cient resources to meaningfully exercise its mandate. 13 This is also a valid argument that under-developed state capacities increased the incentives for states to capture more rents and oil-gas nationalization (see Ahrend and Tompson, 2006). Due to BTI 2012 "rising revenues from the export of oil and gas provide the economic potential for transformation."…”

“…The current literature distinguishes between no less than three di¤erent 'dimensions' of the resource curse: resources are associated with slower economic growth, violent civil con ‡ict, and undemocratic regime types" (Brunnschweiler and Bulte, 2008). 1 Various studies suggest that resource dependent countries have, on average, lower long-run growth rates than countries with a more diversi…ed export structure. It is possible that resource dependence may impact institutional development, which can determine a country's growth potential following resource booms.…”

Oil and Growth in Transition Countries

“…There is still some degree of uncertainty over the exact dimension of the reserves in the region, see e.g., von Hirschhausen and Engerer (1999) and Ahrend and Tompson (2006).…”

Back to the Future? Thoughts on the Political Economy of Expanding State Ownership in Russia

“…As I have argued elsewhere, private domination of the oil sector was an anomaly, but it was a positive anomaly in economic terms; see Ahrend and Tompson (2006). The politics of the state's re-nationalisation of a large part of the oil industry are relatively easy to understand, but this development is unfortunate all the same.…”