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Native Kazaks, a mix of Turkic and Mongol nomadic tribes who migrated into the region in the 13th century, were rarely united as a single nation. The area was conquered by Russia in the 18th century and Kazakstan became a Soviet Republic in 1936. During the 1950s and 1960s agricultural "Virgin Lands" program, Soviet citizens were encouraged to help cultivate Kazakstan's northern pastures. This influx of immigrants (mostly Russians, but also some other deported nationalities) skewed the ethnic mixture and enabled non-Kazaks to outnumber natives. Independence has caused many of these newcomers to emigrate. Current issues include: developing a cohesive national identity; expanding the development of the country's vast energy resources and exporting them to world markets; and continuing to strengthen relations with neighbouring states and other foreign powers.
Update No: 281 - (27/05/04)
The Kazaks are a mix of Turkic and Mongol nomadic tribes who migrated into the Central Asian region in the 13th century. They were rarely united as a single nation. The area was conquered by Russia in the 18th century and Kazakhstan became a Soviet Republic in 1936. During the 1950s and 1960s agricultural "Virgin Lands" programme, Soviet citizens were encouraged to help cultivate Kazakhstan's northern pastures. This influx of immigrants (mostly Russians, but also some other deported nationalities) skewed the ethnic mixture and enabled non-Kazakhs to outnumber natives.
Independence has caused many of these newcomers to emigrate. Current issues include: developing a cohesive national identity; expanding the development of the country's vast energy resources and exporting them to world markets; achieving a sustainable economic growth outside the oil, gas, and mining sectors; and strengthening relations with neighboring states and other foreign powers. After the disintegration of the USSR, Nazarbayev directed the transformation of the Kazakstan's economy, authorizing Western companies to explore and extract fossil fuels in Kazakstan. Nazarbayev led the drive in 1991 to expand the Commonwealth of Independent States (CIS) from the original three members to include eight more former Soviet republics.
Nazarbayev readily agreed to limit his control over nuclear weapons based in his republic and agreed to allow the removal of all nuclear weapons from the republic. In March 1995 the legislature was disbanded after parliamentary elections were declared illegitimate by the Constitutional Court. In April voters extended Nazarbayev's term as president to the year 2000. His term had been set to expire in 1996. It has subsequently been extended.
Common Economic Space
An important development of late is the emergence of a Common Economic Space, agreed by the leaders of Kazakstan, Russia, Ukraine and Belarus in 2003 in Yalta.
The original Yalta treaty of 1944 between Stalin, Roosevelt and Churchill has long been regarded as the foundation document of the Cold War. The new Yalta pact has the promise of being the foundation of a warm and prosperous peace.
The Kazaks are turning into an energy giant, the number two oil producer on the Eurasian continent after Russia. The reserves in the Kashagan basin alone in the Caspian are estimated at 15bn barrels of oil. Kazakstan has a great future in the world economy.
Astana mulls EADS cooperation
Kazakstan might create an integrated air defence system using European radar systems to modernise the Kazak air defence system, New Europe reported recently.
The defence ministry of Kazakstan is taking into account the possibility of signing an agreement with the European Aeronautic and Space Company (EADS) on supplying its radar systems to Kazakstan. This matter was discussed between Kazak President, Nursultan Nazarbayev, and head of the Defence and Security Division of EADS, Thomas Enders, and other EADS representatives during a recent meeting. This system can be operable until 2010.
PetroKazakstan unit to place bonds
PetroKazakstan Kumkol Resources, a subsidiary of Canadian oil company PetroKazakstan, plan to place up to US$200m in Eurobonds, the company said in materials presented to the Kazak Stock Exchange recently, New Europe reported.
The bonds will be issued by PetroKazakstan Finance BV, a subsidiary of PetroKazakstan Kumkol Resources, registered in The Netherlands. PetroKazakstan Kumkol Resources develops oil fields in the Kzyl-Orda region in south Kazakstan. PetroKazakstan Inc has worked in Kazakstan for seven years, exploring, developing, producing and exporting crude, refining oil and selling oil products. PetroKazakstan provides half of the Kazak market's requirement for gasoline, diesel fuel, fuel oil and aviation fuel.
Kazakstan-China pipeline to cost 700m
The cost of the Atasu-Alashankou section of a transnational oil pipeline from Kazakstan to China will amount to 700m, Murat Buldekbayev, press secretary to the Kazak prime minister, said on April 22nd. "The total cost of the Atasu-Alashankou project is estimated at about 700m," he said, Interfax News Agency reported.
Buldekbayev said the pipeline would be financed using credits guaranteed by the Chinese side. He said the start of construction of the pipeline is planned for this summer. "According to documents prepared jointly by Kazakstan and China, it is planned to start building the pipeline in August this year and to complete the linear part of the pipeline in December 2005," he added. The total length of the Atasau-Alashankou section is 998km. This section is the second stage in a project to build a pipeline from Kazakstan to China.
The European Bank for Reconstruction and Development (EBRD) recently announced its decision to grant Kazakstan a loan to finance up to 35% of the cost of commissioning the Kenkiyak-Atyrau oil pipeline project, New Europe reported.
The pipeline will connect the Aktobe region in Central Kazakstan with the city of Atyrau in Western Kazakstan.
From Atyrau onwards crude oil can either be exported via KazTransOil's Atyrau-Samara pipeline and then via Transneft pipelines in Russia or via CPC pipeline directly to the Russian port of Novorossiysk on the Black Sea.
The new oil pipeline will unlock the production potential of the oilfields in Central Kazakstan (including that being developed by CNPC Kazakstan subsidiary) by creating currently unavailable and attractively priced export pipeline capacity.
JV MunaiTas is a new project company established to build and own the proposed pipeline. The sponsors of the project are the Kazak national oil pipeline monopoly KazTransOil (KTO), a subsidiary of the Kazak national oil and gas company KazMunaiGas, with 51% and the China National Petroleum Corp with 49%. KTO will be operator of the project.
Regarding the project's transition impact, EBRD stressed the need for: promotion of institutions, laws and policies that directly promote market function, efficiency and expansion.
The bank also will support the expansion of competitive market interactions. "The project is a first JV pipeline project undertaken in Kazakstan and the first major new JV project undertaken by KMG in which it will have significant control," the project summary said. "Enhanced export alternatives will encourage new investment and development in the area," it highlighted.
As part of due diligence for this project, an independent environmental consultant was retained to complete an environmental consultant was retained to complete an environmental audit of the project. In addition to the environmental audit, the consultant reviewed the status of environmental management of the company and reviewed the Russian version of the environmental impact assessment (EIA) that was prepared for national project approval.
There were no significant environmental liabilities identified in the environmental audit. Operation of the pipeline does not cause significant harm to the environment.
Furthermore, there are engineering controls in place to minimise any potential leakage from the pipeline, and to provide early response in the unlikely event of a leak.
PetroKazakstan to invest 88m in Kazak projects
Canada's PetroKazakstan plans to invest 88m in three projects to use associated gas and to build gas distribution infrastructure in Kyzylorda region in 2003-2004, the company said in a statement recently, New Europe reported.
53m will be invested in building a plant to use gas to produce electricity, with a capacity of 55 megawatts, at the Kumkol field. The plant will annually process 177m cubic metres of associated gas produced at the field.
23m will be invested in the construction of a gas processing plant at the Akshabulak field, which will annually process 300cm of gas and produce 90,000 tonnes of liquefied oil gas and 22,000 tonnes of condensate. The state company KazTransGaz, which is part of national oil and gas concern Kaz-MunaiGaz, plans to build a gas pipeline to transport the gas processed at the plant to Kyzylorda. PetroKazakstan is a vertically integrated oil production and refining company, which will also pay out 12m to build gas distribution infrastructure in Kyzylorda region, including 5m already provided to the regional administration, which will manage the project. The company produces light crude at 11 oilfields, and sells half on the domestic market and exports the remainder. The company supplies 50% of the Kazak market for gasoline, diesel, fuel oil and aviation fuel.
Kazakstan to open up new oil route to China
Bloomberg China National Petroleum Corp. and KazMunaiGaz, Kazakstan's state-owned oil company, plan to extend an oil pipeline from Kazakstan to China to allow shipments to eastern Chinese provinces, including imports from Russia.
China, which overtook Japan last year to become the world's second-largest oil user, has been urging Russia to build its first direct pipeline to China as Asian nations seek to reduce their dependence on Middle Eastern oil. Russia has said it favours a competing pipeline to the Pacific coast that is backed by Japan.
CNPC and KazMunaiGaz, who have agreed to build a 1,300-kilometre pipeline from Atasu, in central Kazakstan, to the Chinese border town of Alashankou, are now developing plans to extend that link beyond Dashanzi in Xinjiang, a province in western China, said Kazak Foreign Minister, Kasymzhomart Tokayev.
"Kazakstan and China will finance the pipeline," he said in Moscow, without giving details on costs. "We invite Russian companies to fill the pipeline, which will need to ship 400,000 barrels of oil per day to be economically viable."
Landlocked Kazakstan, which plans to triple oil production to about 3 million barrels per day by 2015, is seeking new routes to take crude to international markets. Russia probably became the world's biggest oil producer this year, overtaking Saudi Arabia, which restrains output to bolster international prices.
Yukos, Russia's biggest oil exporter, is increasing rail deliveries to China after Russia stalled plans to build an oil pipeline to China from Siberia. The company's project to build a US$2.8 billion link to Daqing faces competition from a counteroffer by Japan to help fund a pipeline from Siberia to the Pacific port of Nakhodka.
Pipeline monopoly Transneft, which backs the Nakhodka plan, says it needs more time to study pipeline routes in Siberia. The Nakhodka link may cost US$10 billion, the Financial Times has reported month.
The future Kazakstan-China pipeline will be connected to Transneft's network in eastern Kazakstan by connecting it with a pipeline from Karaganda, Kazakstan, to the Omsk refinery in western Siberia, the Russian pipeline operator said on its Web site.
The companies may need to invest $700 million to build the stretch inside Kazakstan, Interfax reported, citing Murat Buldekbayev, a Kazak government spokesman. Construction may start this year and would take two years to complete.
The pipeline may be expanded later to 1 million bpd, Kairgeldy Kabyldin, the managing director for transport and infrastructure at KazMunaiGaz, said last October.
Kazakstan to launch Karachaganak gas project
Kazakstan plans to launch the Karachaganak gas project in 2005, Interfax News Agency reported recently.
The government discussed the project recently and Prime Minister, Danial Akhmetov, instructed the pertinent ministries and structures to speed up talks with likely partners in order to get the project going in 2005, the government's press service reported. Akhmetov said the project was important not only for Kazakstan but for the entire Central Asia region. "The prime minister pointed out that the project would be efficient only if gas from Karachaganak went to markets in Europe and the Commonwealth (of Independent States), where prices are expected to go up in the coming years," the press service said. The project envisages the construction of a gas refinery with initial capacity of 10bn cubic metres a year and an export pipeline. The project will cost at least US$1-1.2bn depending on the gas refinery technology. The Karachaganak field is one of the biggest in the world with reserves of over 1.2bn tonnes of liquid hydrocarbons and 1.3 trillion cubic metres of gas. The Karachaganak Petroleum Operating international consortium is developing the field. The British BG Group and the Italian Eni each have a 32.5% interest in the project, ChevronTexaco has 20% and LUKoil - 15%.
FOOD & DRINK
Coca-Cola invests in Kazakstan
New Europe reported that Coca-Cola invested US$1m on additional still water bottling equipment at Coca-Cola Almaty Bottlers in Kazakstan, PR manager at Coca-Cola CIS Services LTD, Zhanat Rustemov, announced recently. The company plans to expand production of bottled drinking water in Kazakstan and will produce still water under the BonAqua trademark. BonAqua currently holds 2% of Kazakstan's bottled drinking water market. The company plans to at least double its share in 2004, Coca-Cola officials revealed.
Moscow and Astana discuss cooperation alternatives
Russian Transportation and Communications Minister, Igor Levitin, met with his Kazak counterpart, Kazhmurat Nagmanov, in Moscow recently to discuss various aspects of cooperation between the two countries in the transportation sector, New Europe reported.
Both sides discussed the preparation of two intergovernmental agreements: on the rail access regime for railway carriers and on cross-border travel fares (313km of Kazak railways run across Russia and 813km of Russian railroads cross the territory of Kazakstan). Levitin instructed his staff to speed up work to draft and agree the blueprints, the Russian Transportation Ministry reported in a statement.
The ministers also discussed an agreement on the navigation of mercantile ships in the Caspian Sea. This document is aimed at facilitating the conclusion of a five-way agreement on sea navigation between the Caspian nations. Options for Russian-Kazak cooperation with the framework of the North-South corridor and on joint projects aimed at increasing freight traffic and improving transportation links were also under discussion at recent ministerial talks. The sides examined the scenario for the development of navigation along the Irtysh River and for the construction of a rail ferry link between Makhachkala and Aktau and of a car bridge across the Kigach River (the Atyrau-Astrakhan highway), on the Russian-Kazak border.
The implementation of this latter project will open a short-cut route for freights from Kazakstan and other Central Asian countries into central Russia, the Caucasus and Western Europe. Levitin and Nagmanov agreed to meet on 17th June and 18th in the Kazak capital of Astana, on the sidelines of the CIS transportation ministers' 24th coordination conference, to run concurrently with the Trans-Eurasia 2004 forum.
MINERALS & METALS
Steel production climbs 11%
Kazakstan increased crude steel production 11% year-on-year to 1.351m tonnes in the first quarter of 2004. Flat roll production grew 11% to 1.05m tonnes, including 10% to 71,900 tonnes of tin plate and tin-plated sheet and 14% to 200,700 tonnes of galvanised roll, the national statistical agency stated recently. Production of carbon electric steel soared 130% to 60,700 tonnes. Production increased by 50% to 13,800 of large- and small- diameter pipes, 92% to 5,500 tonnes of carbon steel sections and angles, 2% to 348,400 tonnes of ferroalloys and 8% to 1.07m tonnes of pig iron, Interfax News Agency reported.
Kazatomprom, Areva target 2005 date for uranium field
France's Areva and Kazakstan's national nuclear corporation, Kazatomprom, signed a deal to commence the commercial phase of the joint uranium-mining project at the Moinkum field towards the end of 2005, New Europe reported recently.
Kazatomprom said in a press release that its head, Mukhtar Dzhakishev, and Anne Lauvergeon, the president of Areva, signed the deal in Paris on April 29th.
Areva, which owns the Katco joint venture, will eventually produce 1,500 tonnes of uranium at Moinkum per year. Moinkum, in southern Kazakstan, contains an estimated 43,700 tonnes of uranium.
Areva owns 51% of the Katco joint venture and Kazatomprom 49%. Kazatomprom and France's Cogema, which is part of Areva, used to own 45% each and Zambezi Holdings SA 10%. But Kazatomprom said Areva bought the 10% from Zambezi Holdings and then sold 4.0% to Kazatomprom. Kazatomprom did not elaborate on the nature of the transaction.
Kazatomprom said it would cost about US$90m to put Moinkum commercial on stream. It said Areva would provide the investment and "market all of the uranium produced initially."
These investment plans are "consistent with the Areva Group's intention to implement its strategy to diversify sources of uranium supply," the press release said.
Kazatomprom said it mined 2,950 tonnes of uranium in 2003, according to adjusted figures, compared with 2,730 tonnes in 2002.
Net profits were 8.46m tenges, or twice as much as in 2002.
Iran, Kazakstan to set up joint transport company
Iran plans to set up a joint transport company with Kazakstan to ship oil through the Caspian from the Kazak port of Aktau to the Iranian ports of Neka and Amirabad, Iranian Ambassador to Kazakstan, Murzato Saffori, announced recently, New Europe reported.
The diplomat said the oil transport company Naftiran Intertrade Co would participate in this project from the Iranian side. Iran assumes that the Kazak participant in the venture will be KazMunaiGaz, Saffori said.
Iran announced at the end of March that it expects oil supplies from Kazakstan to double under a swap scheme over the next two months. In 2003 oil supplies from Kazakstan amounted to 50,000 barrels per day, of which KazMunaiGaz accounted for 30,000 barrels per day and PetroKazakstan - 20,000 barrels per day.
KazMunaiGaz announced earlier that it supplied 1m tonnes of oil to Kazakstan under the swap scheme in 2003 and plans to increase this to 2m tonnes of oil under the same scheme in 2004, while PetroKazakstan will supply 1m tonnes.
Kazakstan supplies oil by tanker through the Caspian to the Iranian port of Neka, and in exchange receives the equivalent at an Iranian port on the Persian Gulf.
In turn, PetroKazakstan currently supplies oil to Teheran Oil Refinery by rail only, but plans to set up regular oil supplies to the Iran through the Caspian.
In exchange the company will receive light Iranian oil in the Persian Gulf.
Astana constructs 4km railroad
Railway Transport Minister, Kazhmurat Nagmanov, announced Kazakstan's plans to construct a 4,000km nationwide railroad, New Europe reported recently.
The railroad will link the China-Kazakstan border in the eastern part of the country with Turkmenistan, and the railroad will stretch further to Iran, Kazakstan Temir Zholy, the national railroad company announced recently. Spending for this project will reach US$4bn. Kazakstan is responsible for financing the project while Turkey and Iran back the construction. Astana recently held talks with Turkmen authorities on the issue. After the negotiations, it will be possible to determine the terms of the project, Nagmanov added.
Astana, Beijing to raise rail transport volumes
Both Kazak and Chinese rail companies recently set for themselves the task of increasing the capacity of the Dostyk-Alashankou rail link to 9m tonnes per annum. The decision was taken during a recent visit to Beijing by Kazak Transport Minister, Kazhymurat Nagmanov, Interfax News Agency reported.
About 7.5m tonnes of freight travelled along this route in 2003. However, the source said that the problem of rail transport between the two countries has become extremely complicated and is hindering the development of trade.
The recent talks in Beijing touched on increasing the speed of rail transport on Chinese territory. Kazak suppliers of oil, pellets, alumina, chrome ore and ferroalloys are ready to sell up to 4.5m tonnes per annum to plants in China, but the Chinese railways are not yet able to handle this amount.
Kazakstan is ready to increase supplies of steel sheet to 4m tonnes, from the present 1.5m tonnes, but this is being prevented by the lack of empty wagons for reloading on Chinese territory. China is proposing to Kazakstan to significantly increase supplies of Kazak oil to China, although at the moment the Chinese railway is not able to ensure the reliable supply of the current volume of 2.5m - 3m tonnes.
During Nagmanov's visit the sides also discussed financing the US$2bn Trans-Kazakstan Railway project, a source said.
This route would provide China with another route to Europe, via the port of Aktau in the Caspian. The new route will use narrower gauge tracks, as in China, which would significantly reduce the transit time.
The sides also paid serious attention to the issue of rail tariffs. Kazakstan and China plan to sign an agreement for the development of rail transport during a visit to China by Kazak President Nursultan Nazarbayev, the source said. He said that the talks did not touch on the construction of a Kazakstan-China oil pipeline.
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