Far away from Astana, the glitzy capital of Kazakhstan, uranium exploration is taking place at an unprecedented rate. Located in the steppe region of Southern Kazakhstan, Inkai is as desolate and cold as it can get in Central Asia. However, this region holds some of the largest uranium reserves in the world. At the moment, Kazakhstan is the largest producer of uranium, and international companies know that their chances of becoming major uranium companies depend on theirstakes in Kazakhstan.

Chevron (CVX) has undertaken uranium exploration projects inMcDermitt Caldera in the U.S., but I think it is about time it ventured into the steppes of Kazakhstan. If Chevron decides to venture into Kazakhstan, its main competitor would be Cameco (CCJ). The uranium mines at Inkai are owned 60% by Cameco and the rest is owned by Kazatomprom. Kazakhstan’s dictator Nursultan Nazarbayev is central to the development of uranium projects within the country and has been more than welcoming in terms of granting licenses and contracts to western companies.

Uranium projects are high on priority in Kazakhstan and there is a lot of international interest in the projected plans. For instance, Japan signed a deal with Kazakhstan’s state-owned nuclear giant, Kazatomprom, so that nuclear fuel is supplied to Japan by 2013. After the March 2011 Fukushima Daiichi nuclear disaster, Japan has resorted to closing all its nuclear facilities, including the one in the northern tip of the country in Tomari.

While Japan maintains that these have all been placed on recess, it does not clarify when the nuclear plants within the country will be functional again. It is possible that the government will choose to restart the plants once safety and environmental concerns are addressed. Green activists have been fighting against operating nuclear plants within Japanese territory after the Fukushima disaster. Japan may have found it convenient to seek the assistance of Kazakhstan to secure nuclear fuel for its energy requirements.

As much as 30% of Japan’s energy requirement is met by nuclear fuel and the country simply cannot do without it. The new deal with Kazakhstan will further strengthen the case of uranium companies directly or indirectly, as they will gain from deals with Kazatomprom. Kazatomprom works closely with international uranium companies in order to explore newer deposits and also to process uranium ore that is unearthed. Moreover, the Kazakh government has vowed to make nuclear plants in Kazakhstan the safest in the world.

At this point, it is noteworthy to consider Cameco’s success in its uranium business. Chevron has a very successful natural gas and oil exploration profile, but is not as bullish as it should be when it comes to uranium exploration. Considering how respected Chevron is in international circles, now is the right time to strike a deal with Nazarbayev and make the most of the uranium deposits in Kazakhstan. Moreover, its only competitor in that country would be Cameco, and I believe Chevron would be able to muscle in or at least coerce Cameco to sell some of its stakes to Chevron.

What most analysts fear is the integrity of Nazarbayev, who at the end of the day is a dictator. The policies and contracts may change when a dictator is deposed or when the regime falls. In Kazakhstan’s case, Nazarbayev is the president for life of that country. There is virtually no opposition to his rule whatsoever and any existing opposition is dealt with severely. At the same time, the U.S. government has supported Nazarbayev as much as possible.

This is because Kazakhstan is of strategic importance to the U.S., Russia and China. The three superpowers have been at loggerheads trying to charm Nazarbayev. The U.S. has managed to secure a number of nuclear and uranium related projects and also access to certain military facilities. Russia, on the other hand, still operates its launching pads from Kazakhstan, and the government of Kazakhstan rents it out to Russia.

This strategic importance can mean that the world powers will continue to maintain equilibrium in Kazakhstan and will try to be in good terms with Nazarbayev. Nazarbayev, on the other hand, knows that both foreign corporations and governments depend on him for doing business in this Central Asian country. On that note, he seems to be a pretty good businessman anyway. He has chosen some of the best and most successful companies to run projects in Kazakhstan.

Apart from Cameco, Chevron has very little competition in terms of uranium mining in Kazakhstan. Most of its competitors in Kazakhstan are engaged in oil and natural gas exploration and production. Almost 30% of oil that is produced in Kazakhstan comes from Tengizchevroil, a shareholder of Chevron. Exxon Mobil (XOM) and ConocoPhillips (COP) operate in the oil and gas sector as well. They have all successfully run businesses in Kazakhstan.

Eni SpA (E) on the other hand is being probed by a Milan prosecutor for international corruption. However, Kazakh ministry allayed fears that this would affect its Kashagan oil project. A good thing about Nazarbayev’s government is that he stands by the companies that he invites to his country.

In the next few months, I expect Chevron to consider the opportunities that await in Kazakhstan and hit the nail upon the head by signing contracts with Nazarbayev, who is only too eager to let western companies jump right in. Considering the support that the Kazakh government has from China, Russia and the U.S., Chevron has little to fear about the long-term repercussions of working with a dictator. On the other hand, Chevron’s uranium business in Kazakhstan and elsewhere in the world will be consolidated and will reflect in its profits.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.