Interview 180: Comparing Oil Strategies in Azerbaijan and Kazakhstan

As an economist studying the relationship between oil companies and governments in former Soviet countries, Heidi Kjaernet noticed an incongruity. The general theory, Kjaernet says, states that national oil companies should grow more and more independent from governments as they flourish. Articles on the region, however, assumed that the oil companies are permanently in the pockets of their governments.

So Kjaernet decided to look more closely at Azerbaijan, where international companies, primarily BP, work alongside the state-owned SOCAR and bring profit through rent-seeking; and Kazakhstan, where the nationalized KazMunaiGaz controls all of the country’s natural resources. (Chevron and Exxon Mobile also operate in Kazakhstan.)

While Kjaernet’s findings are meant to be used for a theory on how authoritarian governments delegate power to state-owned oil companies, in this interview she shares some practical notes – and predictions – on the oil industries in Azerbaijan and Kazakhstan.