Risk assessment of transnational oil investment in Central Asia using a fuzzy comprehensive evaluation method

Abstract Central Asia (including five countries: Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan, and Tajikistan) is rich in oil reserves and has become one of the most important target regions for global oil investment. The construction of the Silk Road Economic Belt has prompted Central Asia to look outwards for more collaborations in the oil industry. China's need for oil investment in Central Asia has also increased significantly. This research established a comprehensive index system for assessing the risks of transnational oil investment in Central Asia. The system incorporated political, regulatory, economic, social, and infrastructural indices. Based on the Delphi method and fuzzy comprehension evaluation method, we qualitatively and quantitatively assessed and analyzed the risks of transnational oil investment in Central Asia. The results indicate that the risk score for regulatory risk was highest with the value of 6.1670, indicating a high risk level in transnational oil investment, followed by economic, social, political, and infrastructural risk indices. Of the 18 secondary risk indices calculated, there were seven indices with the probability of high risk occurrence exceeded 30.0% and the descending order was as follows: establishment of mining rights; host country intervention in operations; taxing system; stability of regulations; war and turmoil; labor capital; and ethnic, cultural, and religious differences. These seven critical risks should be watched closely and avoided during transnational oil investment in Central Asia. This study provides a comprehensive understanding of the potential risks of investing oil in Central Asia. The findings demonstrate the causes of these risks and provide a scientific basis for reasonably avoiding oil investment risk and improving investment benefits for both host and investing countries.