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Kazakhstan: Gloom in Energy Sector as Oil Price Falls

An oil worker walks at an onshore service facility serving installations (one can be seen in the distance) belonging to Kazakhstan’s Kashagan offshore oil field in the Caspian Sea in October 2012. With the global benchmark for oil plunging below $50 per barrel last week, Kazakhstan’s energy sector is feeling the pinch, leading to a dramatic drop in revenues, and consequent layoffs. (Photo: Joanna Lillis)

Sinking oil prices are putting the brakes on Kazakhstan’s once-soaring economy, forcing layoffs in the all-important energy sector.
 
With memories of the months-long strike in the western town of Zhanaozen that culminated in a bloody crackdown in 2011 still fresh in the memory, the government has put measures in place to prevent the seeds of industrial unrest.
 
As the global benchmark for oil was plunging below $50 per barrel last week, Sino-Kazakhstani drilling company Velikaya Stena (Great Wall) announced a raft of layoffs. A company official contacted by EurasiaNet.org on August 12 confirmed that 203 staff had been fired and that another 200 layoffs are expected in the fall.
 
Velikaya Stena, which is based in the western oil-hub city of Aktobe, is only one of many feeling the squeeze from the low price for oil, which accounts for a quarter of Kazakhstan’s economy and 60 percent of its balance of payments.
 

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Joanna Lillis is a freelance writer who specializes in Central Asia.

Kazakhstan: Gloom in Energy Sector as Oil Price Falls

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