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Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 24,205 22,400 18,300 60
GNI per capita
 US $ 1,510 1,350 1,250 117
Ranking is given out of 208 nations - (data from the World Bank)

Books on Kazakstan


Area ( 


ethnic groups 
Kazaks 44.3%
Russians 35.8%
Ukrainians 5.1%
Germans 3.6%
and many others

(formerly Akmola)


Nursultan Nazarbayev


Update No: 284 - (27/08/04)

Playing to the gallery
The Kazaks are in a different situation to the Russians. But events in Moscow have a big impact in Astana for all that. 
Kazakstan faces elections to parliament in September, just as Russia did last year in December. It was hardly a co-incidence that Khodorkovsky was arrested and the case against Yukos hotted up in late October just beforehand. The government bloc, United Russia, duly romped home an easy victor in the elections. 
Something similar is under way in Kazakstan. The regime is not arresting anyone or instituting any court case. But it is accusing a major foreign investor of tax evasion, British Gas or more specifically its local subsidiary, BG Karachaganak. The sums are piffling compared with those being demanded from Yukos, which could bankrupt the Russian company. On July 19th, citing the results of a March audit, the Kazak financial police accused it of failing to pay $5.4m in customs dues on liquid natural gas it produced between 2001 and 2003 and sold to buyers in Russia. The retrospective nature of the demands and their closeness to the elections are what are disturbing about them. Is BG to become the sacrificial victim, as Yukos looks increasingly likely to be in Russia?
The answer is probably not. The government wants a bigger share of the energy pie, that is assets, not just output and revenues. It recently announced its intention to buy BG's stake in the multinational consortium to exploit the Kashagan field in the Caspian sea, the largest field discovered in the last 30 years world-wide. It has proven reserves of 9-13bn barrels of oil, according to the US Energy Information Administration Though output is not expected to flow until 2008. Kashagan could by then be producing one million barrels per day by 2015, making Kazakstan one of the top five producers world-wide.
Chevron and Mobil moved into Kazakstan in the early 1990s, with Chevron's Tengiz onshore field being a huge $20bn project. When Kashagan was found in 2000, the Kazaks turned to BG to form a consortium with Eni,Shell, ExxonMobil, Total, Conoco- Phillips and Inpex of Japan.

Environmental hazards
The environmental difficulties of the project are formidable and require the latest technology to be tackled effectively. Hence the turn to the majors.
In winter the shallow waters of this part of the Caspian can turn into ice floes that, if carried by high winds, can destroy whole oil rigs. Agip, the operating arm of Italy's Eni, therefore, built concrete-and-steel islands from which to drill.
Kashagan lies beneath the spawning grounds of the Caspian's beluga sturgeon, the only source of the world renowned beluga caviar. Agip is making sure no waste from its drilling is discharged into the sea. It has developed a technology to recycle waste water, previously only employed in submarines. With all these precautions the cost of the project is reckoned to be $29bn.
BG decided to sell its $1.2bn stake in Kashagan last year, offering it to two Chinese firms first. But the government then stepped in and insisted on its own right, as owner of the sub-soil, to buy the stake. It wants to be part of the action, reasonably enough. This will enhance its political standing ahead of the elections.
If a deal can be struck with BG, every party could be satisfied. BG is retaining its 32.5% stake in the Karachaganak field, that has an estimated 6 billion barrels of oil and gas. 
Eni announced that a fifth promising field has been discovered on its exploration patch. There is plenty of oil and gas in the Kazak part of the Caspian and the majors are not likely to lose interest in it.

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Priozyorsk stations refurbished

Kazakstan plans to carry out a project next year to revive optical ground stations for monitoring space satellites in Priozyorsk in the Karaganda Region, New Europe reported recently. 
"The government will assign 800m tenges for the revival and further development of the optical stations in Priozyorsk," Prime Minister, Daniyal Akhmetov, said at a news conference in Astana on August 2nd. "This is an interesting idea and we will start implementing it as of next year," he said. The cabinet is convinced that the project is commercially attractive for both Kazakstan and nations that have communication satellites. Over 120 communication satellites fly over Kazak territory daily. "For seven hours, when virtually all of them fly above Kazakstan, they are incapable of transmitting information to the countries that own them," Akhmetov said. In addition to commercial benefits, Kazakstan "will get a chance to monitor all the satellites flying over it," he said. He added that Kazakstan's first geo-stationary communication and broadcasting satellite, KazSat is expected to be launched before the end of 2005.

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Moody's upgrades Kazakstan's railways to Baa3 from Ba1

Moody's Investors Service on July 16th upgraded to Baa3 from Ba1 the long-term issuer rating of Kazakstan Temir Zholy ("KTZ"), the national railway company of the Republic of Kazakstan and the outlook for the rating is positive, Interfax News Agency reported.
The upgrade reflects Moody's reassessment of the linkage between KTZ and the former Soviet republic of Kazakstan and the likelihood of structural changes that could lead to a change in the relationship with the State. Moody's said in a press release that increasing visibility as to the final structure of KTZ, based on the successful progression of the restructuring programme, has reassured that KTZ will retain a strong connection to Kazakstan for the foreseeable future. Moreover, the rating also takes into consideration the remaining transition and event risk associated with the ongoing restructuring process in the railway sector, which will ultimately transform the business profile of KTZ from that of a full-spectrum rail services provider to that of a more focused provider of infrastructure, cargo and locomotive services. Specifically, KTZ will become a streamlined provider of rail services, with a monopoly position in the management of the national rail infrastructure and dispatching, as well as a competitive position in cargo and locomotive services. Moody's expects KTZ's core revenues to face competitive threats arising from alternative modes of transportation in particular, from the gradual build-up of Kazakstan's oil pipeline system, which is likely to impact on KTZ's largest freight commodity on a profit basis.
Nevertheless, Moody's noted in the press release that company-specific operational and competitive issues are out-weighed from a ratings perspective by the expectation of continued government commitment and support. The positive rating outlook is based on Moody's expectation that there will be no material change in KTZ's link with the Kazak state (measured by the extent of government and regulatory support) during the ongoing reform process and until it reaches completion after 2009.

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Eni division makes news discovery with Kairan-1

Eni SpA unit Agip KCO, operator of the North Caspian Sea production-sharing agreement with Kazakstan's state-owned Kazmunaygas, made a new discovery with the Kairan-1 exploration well in the Kazak sector of the Caspian Sea, Oil and Gas Journal reported recently. 
The well, which was drilled to 3,850m TD, encountered an oil pay zone exceeding 500m, Eni said. The well flowed on test at 4,100 b/d of 44 gravity oil through a 32/64-in choke. Additional appraisal studies currently are underway. Kairan is the fifth discovered field on the 1.4m-acre PSA, following the world-class Kashagan, which has estimated resources of 13bn bbl of oil, Kalamkas, Kashagan Southwest, and Aktote. ENI holds a 16.67% interest in the project.

Atasu-Alashankou pipeline construction advances

Preparation work progress on the construction of the Atasu (Kazakstan)-Alashankou (Western China) pipeline and other issues concerning this project were discussed at another government session headed by Prime Minister, Danial Akhmetov, on July 29th, Kazinform reported. 
Underlining the positive results of the activities of all concerned ministries, institutions and departments implementing the project, he then focused their attention on the fact that the construction of this project would offer invaluable experience in the management of such a huge project.
It was reported at the session that there had been successful negotiations on the main principles and conditions of financing with the Chinese partners of the project. Founding documents for establishing the Kazak-Chinese pipeline joint venture had been signed along with budget estimates and list of staff for the joint venture. They had also had preliminary talks with some lender banks.
The construction of this 977.5km pipeline, with a throughput capacity of 10 million tonnes per annum, should begin this year and be completed by the end of 2005.
Before concluding the session Akhmetov instructed the ministries and departments to accelerate work and fulfil the tasks set out by the president concerning the construction of this pipeline.

Kazakstan to boost oil production by 9.1%

Kazakstan plans to produce 56 million tonnes of oil and gas condensate in 2004, up 9.1 per cent from 51.3 million tonnes in 2003, Kazak Energy and Mineral Resource Minister, Vladimir Shkolnik, said at an expanded government meeting held on August 2nd in which Kazak President, Nursultan Nazarbayev, participated, Interfax News Agency reported.
"According to the forecasts that we have, we will reach production of 56 million tonnes of oil, which means growth of 9.1 per cent by the end of the year," Shkolnik said. He also said that this year the republic plans to produce 16.2 billion cubic metres of natural gas, up 15.5 per cent on an annual basis. He said that coal production would increase 2.0 per cent to 85 million tonnes, and electricity production would increase 6.0 per cent. 

Kazakstan may sign production deal with Rosneft

The government of Kazakstan expects to sign a production sharing agreement with Russia on developing the Kurmangazy oilfield in the Kazak sector of the Caspian Sea, Prime Minister, Daniyal Akhmetov, said in a news conference in Astana, Interfax News Agency reported.
"I am absolutely convinced that the production sharing agreement on the field will be signed at the end of the year," he said. According to Akhmetov, there are no problems in the current negotiating process over the issue and positive work is under way to protect national interests, the news Agency said.
A Kazak government-working group comprised of representatives of various ministries is negotiating the terms of the production with KazMunaiGaz and Rosneft. Russia also hopes that the agreement will be signed in 2004.

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MunaiTas gains €82m from EBRD for pipe project

The European Bank for Reconstruction and Development (EBRD) signed on July 29th a deal to provide MunaiTas with a loan worth €81.6m to refinance a portion of Kazakstan's share in the Kenkiyak-Atyrau oil pipeline project, Interfax News Agency reported recently.
The loan will be provided for 10 years under guarantees by KazTransOil but the interest rate was not revealed. The money will be used to refinance a loan provided by Halyk Savings Bank worth €81.6m for MunaiTas that was granted on collateral for a deposit by KazTransOil due to the high interest rate. MunaiTas agreed to draw up a plan for environmental protection and to prevent accidents, and will introduce ISO standards in its operations under the loan deal. 
MunaiTas Director General, Talgat Dzhumadilayev, said at a press conference following the signing of the agreement that the Kazak share of more than €100m in the Kenkiyak-Atyrau project had been fully paid. The Kazak company had previously received a loan worth €23m from ABN Amro Bank to finance its share in the project. The rest of the money for the project will come out of Kazakstan's share in the net profit of MunaiTas.
The pipeline will cost €206.6m to build, but this could increase to €422.3m. The Kenkiyak-Atyrau pipeline connects fields in Aktyubinsk and Atyrau regions in western Kazakstan with existing export pipelines - the Atyrau-Samara pipeline and the Caspian Pipeline Consortium system to Novorossiisk.
If the pipeline is used in reverse it would be the first section of a pipeline from Kazakstan to China.
KazTransOil operates 6,400km of oil pipelines in Kazakstan and 3,140km of water pipelines. It has storage for 1.243m cubic metres and owns several railroad loading racks. The company transport about 80% of the oil produced in Kazakstan.

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