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Update No: 298 - (27/10/05)
Nazarbayev warns foreign NGOs ahead of presidential
Kazak President, Nursultan Nazarbayev, is seeking re-reelection in presidential
elections in December. He cautioned foreign nongovernmental organizations (NGOs)
recently that their activities will be closely watched.
The Kazak president warned foreign NGOs not to interfere in the country's
politics and threatened to prosecute them if they meddled in the election
campaign. Nazarbayev is obviously concerned about a repeat of the coloured
revolutions that have hit other former Soviet states, although he has little
cause for real worry. The economy is doing spectacularly well, growing around
10% per annum on the basis of the vast republic's huge energy and mineral
Speaking to a gathering of civic groups in Astana, Nazarbayev devoted a good
portion of his speech to the work of foreign NGOs. In particular, the Kazak
president emphasised the negative roles he said such groups played in recent
changes of power in Georgia, Ukraine, and neighbouring Kyrgyzstan. Most in the
West would seem them as having had a positive role instead. No matter - as
Kipling put it:
"The West is the West; and the East is the East
And never the twain shall meet."
Except of course they are these days, as in Kyrgyzstan.
Nazarbayev said that in the wake of the so-called coloured revolutions in those
countries, Kazakstan's parliament has sought to pass new legislation placing
strict guidelines on the work of foreign NGOs. The proposed law on the
activities of NGOs in Kazakstan was overruled by the Constitutional Council in
August, but Nazarbayev said members of parliament were justified in seeking to
further regulate the role of NGOs.
"They [parliament] have seen the dangers that arose in neighbouring
countries when foreign NGOs insolently pumped in money and destabilized society.
The state was defenceless against this and what is happening now in these
countries you all know very well," Nazarbayev said.
Nazarbayev said NGOs, particularly foreign-based, have no right to finance
political parties, especially during election campaigns. He warned that
authorities would be paying special attention to NGOs ahead of December's
presidential vote. "Our parliament and government will follow closely
foreign and Kazak NGOs' activities to see if they observe our laws and our
constitution," Nazarbayev said.
Kazakstan is not the only country in Central Asia to try to restrict or regulate
the activities of NGOs, but it is the next country in the region to hold
Nazarbayev was among the leading critics of Kyrgyzstan's Tulip Revolution in
March and has said he believes foreign NGOs helped overthrow the government
there. What must have been especially vexing for him was that the former
president Akayev's son is married to his daughter in an echo of tribal dynastic
alliances of pre-communist days.
Some in Kazakstan, such as independent politician Zhaqsybay Bazylbay, see the
issue of NGOs and their activities as a security matter. Bazylbay hopes to run
in the upcoming elections and he sees nothing wrong with placing restrictions on
NGOs in Kazakstan. "I consider the idea of stopping the flow of
[international] grants [to NGOs] as a very correct move," he told RFE/RL.
"Why do you think the president is not right here? If he [the president]
has some good and strong points we have to name them also. I have always
supported and I will support the idea of strengthening our national
But not everyone sees it that way. Seydakhmet Quttyqadam, an independent
political analyst in Almaty told RFE/RL that the monitoring of NGOs has less to
do with security and more to do with keeping the current regime in place.
"Now, all those statements and ideas made by the president, all those
thoughts put forward by his team, are nothing more than an attempt to save their
power. They are trying to shut the mouths of the NGOs by questioning the
legitimacy of their activities," Quttyqadam said.
Dos Koshim, the director of the Independent Observers Network of Kazakstan, has
supported measures to keep foreign groups from meddling in Kazakstan's internal
affairs, but he did not agree that NGOs were responsible for such intrusions.
"Of course, we have to prevent any interference in our internal affairs,
but the stance of authorities that domestic and foreign NGOs in our country and
elsewhere in the world should be put under [their] control is an inconvenient
position. We monitored directly the elections in Georgia, Ukraine, and
Kyrgyzstan and I personally did not see any international NGO spending -- as
they [Kazak authorities] say -- 'tons of money' to bring people out in the
streets," Koshim said.
Meanwhile, Nazarbaev had very different words for Kazak NGOs. Noting that the
government already provides US$3.4 million annually to the country's more than
5,000 NGOs, Nazarbaev said that by 2011 that figure would be "not
less" than US$7.5 million per year.
Kazakstan Law would let state control oil deals
Kazakstan's lower house of Parliament has voted unanimously to let the state
intervene in the sale of foreign-held stakes in oil companies, a move that may
derail China National Petroleum Corp's US$4.18bn (3.51bn Euro) takeover bid for
PetroKazakstan Inc, The Wall Street Journal reported recently.
The bill, which becomes law only after it receives upper-house approval and
President Nursultan Nazarbayev signs it, also seeks to limit property rights for
"strategic resources," which are defined as oil-and-gas assets and
Kazakstan last year amended its sub-soil laws to allow it to pre-empt the sales
of shares on the secondary market, such as China National's deal for Canada's
Asked about the impact of the pending legislation, Ihor Wasylkiw,
Petrokazakstan's vice president of investor relations, said. "It does not
impact our offer [from CNCP]. We're still looking at closing this transaction
shortly after the meeting of our shareholders."
The PetroKazakstan shareholder vote on the takeover offer was in Calgary.
Mr Wasylkiw said it would likely take months for the proposed Kazak bill to be
enacted, were it to win parliamentary approval. He also said that it's
presidential endorsement is far from certain in the wake of a recent summit
between China and Kazakstan in which the two Asian neighbours sought to
strengthen trade and political ties. "It seems inconceivable that the
government of Kazakstan would do anything to hurt its relations with
China," Mr Wasylkiw added.
Kazakstan's energy minister, Vladimir Shkolnik, said his country wanted
"strategic control" over PetroKazakstan's assets and said state oil
company KazMunaiGas was in talks to obtain a stake in PetroKazakstan.
Neighbouring Russia has led a trend of reasserting state control over
"strategic assets" such as oil companies.
Kazakstan is likely to join the world's top 10 oil producers in the next decade
as it develops Caspian Sea reserves. It already has declared that all new
offshore projects must include KazMunaiGas as a partner.
PetroKazakstan, which has all its assets in Kazakstan, produces 150,000 barrels
a day but also owns the most modern of only 3 oil refineries in the ex-Soviet
Central Asian state, at Shymkent.
AVIATION & SPACE
Kazakstan, Israel to cooperate in space
Kazak national company, Kazcosmos, will cooperate with leading Israeli companies
in space exploration, New Europe reported.
The CEO of Kazcosmos, Serik Turzhanov, and rocket technology specialists
Academician Meirbek Moldabekov, and Professor Marat Shimarbaev, visited Israel
recently, the Kazak Foreign Ministry press service said.
A statement read that the aim of the visit was "to establish direct
contacts with the leading Israeli space exploration companies and companies
producing the most up-to-date space technology." Israeli Science and
Technologies Minister, David Lefler, and Israeli Space Agency Director, Zvi
Kaplan, who met the Kazak delegation said that "the visit will mark the
start of aerospace cooperation between Kazakstan and Israel, as well as joint
Kazakstan ups oil and gas condensate output 5.6%
Kazakstan increased oil and gas condensate output 5.6 per cent year-on-year in
January-September to 45.578 million tonnes, a Kazak government official said,
Interfax News Agency reported, quoting a preliminary figure.
The total included 4.661 million tonnes of condensate, up 19.3 per cent
year-on-year. Oil and condensate production in September totalled 4.798 million
tonnes, including 137,732 tonnes of condensate.
Kazakstan seeks solid cooperation with Shell
Kazak Prime Minister, Daniyal Akhmetov, recently met with Shell's executive
Director for Exploration and Production, Malcolm Brinded. The premier expressed
satisfaction with the active participation of the energy group in the
realisation of different projects for development of hydrocarbons' fields in
Kazakstan, the government's press service said, Kazinform reported.
Akhmetov said cooperation with Shell is of great interest for Kazakstan because
of its great experience and modern technologies. Akhmetov informed Brinded for
the plans of oil and gas sector development in Kazakstan. This sphere is one of
the priorities in the development of the industrial production and according to
the premier, the government is to stimulate the attracting of investments into
it. The company is ready to consider the question of its participation in the
Chinese firm clears hurdle in Kazak deal
Clearing the way for the completion of its US$4.18bn acquisition of
PetroKazakstan Inc, China National Petroleum Corp, signed a binding agreement to
sell a 33% stake in the company to Kazakstan's state-owned oil company,
according to people familiar with the situation, the Wall Street Journal Europe
reported on October 17th.
The agreement was signed as expected, ending a heated political controversy over
the Chinese company's acquisition of the strategically important PetroKazakstan,
an oil concern based in Canada but with all its assets in the Central Asian
state of Kazakstan on China's western border.
Kazak officials threatened to block the deal and the country's parliament rushed
through a law that would allow the state to intervene in a sale of strategic
The deal with the state-owned oil company, KazMunaiGaz, which has been under
negotiations since September, was a compromise to allow the Chinese purchase to
In addition to selling the 33% stake for about US$1.4bn to KazMunaiGaz, CNPC, as
the Chinese company is known, will split ownership of an oil refinery equally,
with the Kazak company and agree to process a certain amount of crude through
the facility, named Shymkent, according to the person familiar with the deal.
China has been trying on several fronts to secure oil reserves to power its
surging industrial demand for energy.
Its national oil companies, however, have been rebuffed in several such efforts,
most recently by the US with a failed attempt by government-controlled Cnooc Ltd
to acquire US-based oil producer Unocal Corp earlier this year.
CNPC won a heated bidding war for PetroKazakstan in August, offering a far
higher price than many people had expected. Other bidders subsequently said they
intended to try to top the offer, but no one has emerged.
PetroKaz, KazMunai and CNPC couldn't be reached to comment. The agreement with
KazMunaiGaz is also likely to close the door to any other bidders.
CNPC's bid for PetroKazakstan is scheduled to be approved by the Canadian
company's shareholders and cleared by a Canadian court in the near future. The
purchase still faces a possible hurdle from a legal challenge by OAO Lukoil,
which has said it will appear in the court to oppose the sale to CNPC, according
CNPC has been advised by Citigroup Inc, PetroKazakstan by Goldman Sachs Group
Inc and KazMunaiGaz by Credit Suisse First Boston and ABN Amro.
KazMunaiGaz, CNPC to develop Darkhan field
Kazak national oil and gas company, KazMunaiGaz, and China's CNPC are to jointly
develop the Darkhan oil field in the Kazak sector of the north Caspian Sea,
Kazak First Deputy Energy and Natural Resource Minister, Baktykozha
Izmukhambetov, Interfax News Agency reported on October 5th.
He said that the companies agreed this at the start of September in Beijing.
"This agreement for the joint development of Darkhan structure -
exploration and production - was signed. This is only the start - there will be
following stages in the agreement," he said.
Izmukhambetov also said that KazMunaiGaz and CNPC signed a document
"regarding a feasibility study for investment in the construction of the
Kazakstan-China gas pipeline." According to KazMunaiGaz estimates, the
Darkhan section has forecast geological reserves of 480 million tonnes of fuel
It is located 11 km west of the Bozashy peninsula and 60 km south of the port of
Bautino. The water dept where work is being carried out is three-five metres.
Karachaganak petroleum operating may build gas pipeline
The international consortium Karachaganak Petroleum Operating, the operator of
the Karachaganak gas condensate field, plans to build the
Karachaganak-Aksai-Uralsk trunk gas pipeline in West-Kazakstan region at a cost
of US$130 million, head of the regional administration Alibek Sytdykov said, New
He said that the project would be financed using Karachaganak Petroleum
Operating funds. The pipeline will cost US$5-6 million to design. Implementation
of the project will start in the near future if it is approved by the Kazak
government. The gas pipeline may be built in one year. "To date we have
completed all preparation work. In particular, the allotment of land for the
pipeline agreement has been reached with 78 farms through whose land the
pipeline passes," Sytdykov said. The pipeline will be 150 km and will make
it possible to gasify 32 towns in the Western Kazakstan region. The pipeline
will supply the region's natural gas requirements in full - 500 million cubic
metres per year. Karachaganak gas condensate field is one of the largest in the
world, with reserves of over 1.2 billion tonnes of liquid hydrocarbons and 1.4
trillion cubic metres of gas. Karachaganak Petroleum Operating is developing the
field under a production sharing agreement with the Kazak government. Eni and BG
have 32.5 per cent each in the consortium, ChevronTexaco - 20 per cent, and
LUKoil - 15 per cent.
MINERALS & METALS
SSGPO sales to Russia plummet 33.6% to 2.92m tonne
Sokolov-Sarbai Mining Production Association (SSGPO), Kazakhstan's biggest iron
ore producer, reduced pellet exports 21 per cent and concentrate exports 4.7 per
cent year-on-year in January-August, Interfax News Agency reported.
Rudprom, the Russian agency which collates statistics about FSU ore producers,
told Interfax that SSGPO boosted pellet exports to China 72.9 per cent to 1.022
million tonnes, while exports to Russia plummeted 33.6 per cent to 2.92 million
tonnes. Concentrate exports to Russia fell 15.1 per cent to 1.99 million tonnes.
Exports to Russia fell 74.4 per cent year-on-year in August to 141,000 tonnes of
pellets and 8 per cent to 322,000 tonnes of concentrate. Exports are thought to
have fallen due to a conflict between SSGPO and Magnitogorsk Iron & Steel
Works (MMK), the mining company's biggest consumer, located just over the border
SSGPO and MMK have been unable to agree prices, and SSGPO stopped shipping
commercial ore to MMK in May this year.
MMK arranged alternative ore supplies from Ukraine and Russia, while SSGPO has
tried to redirect sales to China.
MMK and SSGPO then agreed on a partial resumption of supplies, and SSGPO shipped
200,000 tonnes of ore to MMK in August, but this is still a far cry from the
750,000 tonnes a month that MMK bought on average from SSGPO in 2004.
Eureka mining starts developing Kazak molybdenum field
Eureka Mining Plc has started developing the Shorskoye molybdenum field in
Kazakstan, the mining project in the former USSR. Eureka aims to mine 500,000
tonnes of ore with molybdenum content of 0.1 per cent and copper 0.06 per cent
per tonne at the field annually. Eureka Mining and Kazakstan's national nuclear
corporation Kazatomprom have formed a joint molybdenum venture at the
Stepnogorsk mining complex which will process ore mined at Shorskoye.