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Books on Kazakstan
REPUBLICAN REFERENCE
Area (sq.km)
2,717,300
Population
15,143,704
Principal
ethnic groups
Kazaks 44.3%
Russians 35.8%
Ukrainians 5.1%
Germans 3.6%
and many others
Capital
Astana
(formerly Akmola)
Currency
Tenge
President
Nursultan Nazarbayev
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Update No: 302 - (27/02/06)
Does the Kyrgyz route beckon?
The Kazaks are extremely sensitive to what is happening elsewhere in Central
Asia. It is one year on from the Tulip Revolution in neighbouring Kyrgyzstan, a
major event for the whole region. Kazak President Nursultan Nzarbayev's daughter
was married to former Kyrgyz President Askar Akayev's son (they are now
divorced). Relations are certainly close, but fraught.
The revolution's detractors present a consistent set of charges: Since the fall
of the former, political instability has been unleashed, popular discontent has
increased and organized crime plays a larger role in government. Added to the
mix is the charge that the revolution weakened Kyrgyzstan's delicate
geo-strategic position and exposed it to unwelcome attention from powerful
regional players Russia and China.
These supposed outcomes are then used to explain neighbouring Kazakstan's
preference for a Singaporean model of non-democratisation. "Evolution, not
revolution," the new Kazakstani slogan used to justify President Nursultan
Nazarbayev's authoritarian rule, is but faintly challenged inside the Washington
beltway.
Triumphant re-election
He was overwhelmingly re-elected in December. His eyebrow-raising 91 per cent
re-election victory was met by congratulations, not criticism, from Washington.
For Kazakstan has emerged as the closest thing the United States has to an ally
in Central Asia, after the expulsion of US armed forces from a base in
Uzbekistan. Nazarbayev, who has ruled Kazakstan since 1989, stands for
stability, if also unfortunately clan and familial corruption.
But probably he is genuinely popular, like Putin. The economy after all is the
most rapidly growing one in the world, GDP clipping along at over 10% per annum.
This gives the regime a legitimacy and solidity altogether lacking in the other
giant of Central Asia, Uzbekistan. It is all premised of course on massive
energy and mineral wealth at a time of sky-high prices. As with Putin,
Nazarbayev has the essential political quality of being lucky.
Another Nazarbayev foe slain by gunmen
Nevertheless, there are blots on Nazarbayev's escutcheon all the same. Under
Mr. Nazarbayev the country has largely avoided the violence that plagues Russia,
which colonized and occupied it for a century and a half. Until last year, no
politician or journalist had been slain.
Alas, a top opposition leader, his driver and his bodyguard were found fatally
shot on February 13th in an apple orchard in the foothills outside Almaty,
Kazakstan's main city. The killing of a second opposition leader in three months
is likely to tarnish the image of the president.
Altynbek Sarsenbayev, 43, along with his usually unarmed bodyguard, Baurzhan
Bekbosyn, and driver, Anatoly Zhurablyov, were killed "very professionally
by one bullet to the back and one to the head," said Oraz Jandosov, an
opposition colleague who saw the bodies. Mr. Jandosov, who with Mr. Sarsenbayev
was a co-chairman of the main opposition party, Ak Zhol, said Mr. Sarsenbayev's
car was found in Almaty. Police said the deputy interior minister had been put
in charge of the investigation.
Three months earlier, a less-central opposition figure was found dead in his
house with three bullet wounds to the heart and the head.
Police suggested that Zamanbek Nurkadilov, a popular former mayor of Almaty
married to a pop star, had committed suicide. He had threatened to disclose
material proving presidential corruption, and a local journalist was fatally
struck by a car after interviewing him.
This time, Mr. Jandosov said, "it seems to have been very brutal and
organized, with, apart from the police of course, no pretence of suicide or
accident. There is no doubt that the motive was political."
Mr. Nazarbayev took over the judiciary and parliamentary branches in 1995,
retaining the loyalty of Mr. Sarsenbayev and Mr. Jandosov, who helped him
implement one of the most thorough privatisation programs in the former Soviet
Union. Mr. Jandosov served as head of the central bank and deputy prime
minister, and Mr. Sarsenbayev served as information minister, national security
council chairman and ambassador to Moscow.
But abuses by Mr. Nazarbayev's relatives, who with the president's overt
approval took control of vast swathes of the fast-growing economy and the
security services, led several disillusioned Nazarbayev supporters to go into
opposition.
Mr. Sarsenbayev, who once was considered among Mr. Nazarbayev's closest allies,
recalled in an interview two months ago that he had been the last of his group
to break with the government. He quit when two members of the reformist group, a
governor and a former minister, were imprisoned on charges that were denounced
as fabricated.
Russian energy partnership with Kazakstan faces reality check
Although Russia has long viewed Kazakstan as its top energy partner in
Central Asia, Kazakstan now appears to be seeking ways to diversify its energy
partnerships, and to avoid over-reliance on Russia. Putin attended Nazarbayev's
January 11th presidential inauguration in Astana. The visit, Putin's first to a
foreign leader's inauguration, was seen as an unprecedented gesture toward
Kazakstan.
In recent years, Nazarbayev, annoyed by Western criticism of human rights abuses
and graft in Kazakstan, has appeared intent on fostering better ties with
Moscow, which has avoided criticizing his domestic policies. Little heed was
paid by Russia to warnings last year by visiting Kazakstani opposition leaders
that Kazakstan's political system is corrupt. Instead, attention has focused on
promotion of bilateral economic and political cooperation with the Central Asian
state.
In talks between the two leaders during the inauguration ceremonies in Astana,
that pattern held. On January 12th, Russia and Kazakstan signed an agreement to
establish the Eurasian Development Bank, a jointly run bank to be based in
Kazakstan's commercial capital, Almaty, and to encourage regional economic
growth. Under the agreement, Russia will contribute two-thirds of the bank's
charter capital of US$1.5 billion, and Kazakstan one-third.
Putin also pledged to prioritise Russia's energy ties with Kazakstan, and to
cooperate on joint energy projects in third countries. However, Nazarbayev made
no secret that Kazakstan's energy ties with Russia were not without problems.
Notably, the Kazakstani president urged Putin to facilitate the transit of
Kazakstani oil and gas -- as well as grain -- through Russian territory.
Kazakstan now funnels around 16 million tons of crude each year through Russian
pipelines.
The proposal came on the heels of a series of breakthroughs for Russian-Kazakstani
ties in the energy field. Last December, Gazprom Chief Executive Officer, Alexei
Miller, and Kazakstani Energy and Natural Resources Minister, Vladimir Shkolnik,
agreed to establish a joint venture to process Kazakstani natural gas at the
Orenburg plant Siberia. Negotiations on the joint venture will be completed in
the near future, according to Miller and Shkolnik; no specific timeframe for the
project has been released.
Expectations are also riding high for the joint exploration of another major
natural gas field in the Caspian Sea - a project finalized in conjunction with a
January 2005 border treaty on delimitation of the two countries'
7,500-kilometer-long frontier. In a statement following his summit with Putin,
Nazarbayev predicted that the exploration would eventually double bilateral
trade between Russia and Kazakstan.
Yet despite Moscow's long-standing support for Nazarbayev, Kazakstan has begun
to look further afield to diversify its energy and foreign investment options.
Notably, in December 2005, Nazarbayev formally inaugurated the 1,000-kilometer
long Atasu-Alashankou pipeline to funnel crude oil to China, an energy-ravenous
neighbour intent on tapping into Central Asia's oil and gas stores. In a message
to his Chinese counterpart, President Hu Jintao, Nazarbayev described the
pipeline as a sign of a bilateral "strategic partnership" between
China, a traditional Russian sparring partner, and Kazakstan.
However, as the Russian daily Nezavisimaya Gazeta observed, neither Russia nor
China intend for the pipeline to cut Russia off entirely. The US$800 million
Atasu-Alashankou pipeline is expected to pump 10 million tons per year, but it
would need Russian crude from Western Siberia via the Omsk-Pavlodar-Shymkent
pipeline to reach its full capacity of 20 million tons by 2010.
Yet despite promises to funnel Siberian oil to China, the Atasu-Alashankou
pipeline appears to be a development detrimental to Russian economic interests.
In the short term, the Atasu-Alashankou pipeline will render Russian oil
shipments by rail to China economically non-viable. As a result, the Russia
railway giant OAO RZD is set to lose up to 4 billion roubles (US$140 million) a
year in revenue.
Apparently aware of Russia's vulnerability, Nazarbayev's suggestion that Putin
facilitate Kazaktani grain transit through Russian territory was not
coincidental. Kazakstan's grain deliveries to Georgia in 2005 indicated that
relations between Astana and Georgian President Mikhail Saakashvili's
pro-Western government are growing warmer - even as ties between Moscow and
Tbilisi are increasingly strained.
Kazakstani reluctance to take sides in the political standoff between Russia and
Georgia has already earned Georgian praise. Kazakstan is a reliable economic
partner, who depends less on "political caprices," said Saakashvili
after talks with Nazarbayev in Astana on January 10th. The remark was an
apparent reference to Russian Gazprom's recent decision to increase the price
for natural gas exported to Georgia, a move Georgians widely interpret as
intended to pressure Tbilisi's pro-Western government into closer ties with the
Kremlin. The leaders of two other countries that have also been affected by
higher Russian gas prices - Azerbaijan and Ukraine - joined Saakashvili at
Nazarbayev's inauguration.
After talks with Nazarbayev, Saakashvili said that he wanted to see Kazakstan
become his country's top investor. "Kazakstan is an investor which has
economic goals and is less dependent on political caprices: that is very
important," Saakashvili told reporters. Georgian Foreign Minister Gela
Bezhuashvili announced after the January 11th talks with his Kazakstani
counterpart, Foreign Minister, Kasymzhomart Tokayev, that Kazakstan could invest
up to US$1 billion in Georgia.
Already, reportedly, the investments have begun to flow. Following
Bezhuashvili's announcement, Georgian media carried reports that the Kazakstani
BankTuranAlem plans to invest around US$200 million in various hotel projects in
the Black Sea region of Adjara. The bank has also begun to consider financing a
US$350 million oil refinery in Georgia, the Russian news agency RIA-Novosti
quoted BankTuranAlem Board of Directors Chairman, Mukhtar Ablyazov, as saying.
Energy issues, however, appear likely to provide the sharpest sting for Moscow.
Despite repeated Russian offers to rely on oil transit through its territory,
Kazakstan has decided to join the Baku-Tbilisi-Ceyhan (BTC) pipeline, a
US-backed venture meant to offer Caspian Sea energy producers an alternative to
traditional Russian energy transit routes. In a January 10th meeting with
Azerbaijani Prime Minister, Artur Rasizade, Kazakstani Prime Ministe,r Daniyal
Akhmetov, confirmed Kazakstan's plans to join the BTC project, the Kazakstani
prime minister's press service said in a statement.
An intergovernmental agreement between Kazakstan and Azerbaijan to transport
Kazakstani oil through the pipeline involves setting up the Aktau-Baku system to
ship Kazakstani crude in tankers across the Caspian Sea. The plans involve
shipment of 7.5 million tons of Kazakstani crude through the Baku-Tbilisi-Ceyhan
pipeline. That amount is expected to eventually increase up to 20 million tons
per annum.
Given its independent energy policy and enormous oil and gas reserves, Kazakstan
could eventually emerge as a serious competitor to Russia in global markets. And
the Kazakstani authorities have taken notice. The guest list for Nazarbayev's
inauguration ceremony "came as a confirmation of our country's firm
international position, its status as a leader in Central Asia," announced
Kazakstani Foreign Ministry Spokesperson, Yerzhan Ashykbayev, in a January 16th
statement.
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Top
AVIATION & SPACE
Kazakstan to launch 3 satellites by 2008-09
Kazakstan intends to launch three satellites in the next 24-30 months, said
Kazak prime minister, Danial Akhmetov. "In the next 27 months we will
launch the second geostationary land remote-sensing satellite. At the same time
we will talk about another telecom satellite," Akmetov said at the new
government's session on January 24th, reported Interfax News Agency.
"Thus, in the next 24-30 months, Kazakstan should have three geostationary
satellites in orbit, and this is the task we have to solve," he said. The
Kazak Air Space ministry should develop relations "not only with the
Russian space agency," he said. "We should develop our relations with
other space states as well. Only diversification in this direction can be
effective," he said. Kazakstan plans to create three groups of satellites
by 2012, Serik Turzhanov, head of the Kazkosmos company, said at the end of
2005, four telecom satellites, four land remote-sensing satellites and several
satellites for the global navigation system.
Kazakstan is setting up airlines with govt stake
Kazakstan will set up another airline in which the government will hold a stake,
Kazak Prime Minister, Daniyal Akhmetov, said at a cabinet meeting on January
24th, Interfax News Agency reported.
"I ask you to submit a proposal to the government relating to the
establishment of one more air company to operate on local routes," he told
the transport and communication minister. "The time of tendering Air Astana
has gone. We see that the initial steps had been absolutely right and correct,
but competition is the best locomotive. Purposeful stifling of competition does
not meet the long- term objectives of the government or the population as a
whole," Akhmetov said. "I think the second company will be a factor in
increasing competitiveness," he concluded. Air Astana currently dominates
the national air travel market. It was set up in 2001, with the Kazak government
owning 51 per cent of the company, and Britain's BAE Systems owning 49 per cent.
«
Top
ENERGY
KazTransGaz to boost capacity of central Asia-centre pipe
Kazak state gas transport concern, KazTransGaz, a subsidiary of KazMunaiGaz,
plans to increase the capacity of the Central Asia-Centre pipeline to 55 billion
cubic metres per year in 2007. "In 2006-2007 we will ensure a guaranteed
capacity for the Central Asia-Centre pipeline of more than 55 billion cubic
metres," Intergaz-Central Asia General Director, Daniyar Berlibayev, said
at a meeting, reported Interfax News Agency.
He said that KazTransGaz has already developed a programme for increasing the
capacity of the Central Asia-Centre pipeline and ensuring reliable operations
for undisrupted gas transit from Central Asian countries to Russia. "This
year we will start to implement a number of major investment projects that will
increase the capacity of the pipeline," he said. Berlibayev said that
KazTransGaz plans to use some of its profit from 2006 to finance this project.
The Kazak Energy and Natural Resource ministry announced earlier that annual gas
transportation through the Central Asia-Centre pipeline would increase to 75
billion cubic metres - 90 billion cubic metres by 2010. It was also reported
that an increase in the pipeline's capacity to 80 billion cubic metres would
require investment of about two billion Euro and to 100 billion cubic metres -
an additional 1.1 billion Euro. The Central Asia-Centre pipeline passes through
Turkmenistan, Uzbekistan and Kazakstan and supplies Turkmen gas to Russia and
Ukraine. The total transit capacity of Kazak gas pipelines amounts to over 50
billion cubic metres per year, of which the Central Asia-Centre pipeline
accounts for 42 billion cubic metres.
Abdrakhmanov: Kazakstan must up oil equipment gear
At the moment the share of orders of Kazak-made petroleum equipment by overseas
oil companies operating in Kazakstan is a meagre one per cent. A representative
of national company Kazakstan Engineering, Yessirkep Abdrakhmanov, told New
Europe in an interview in Astana that given the rapidly developing oil industry
in Kazakstan and long-term prospects of Caspian development, this figure is
nothing but discouraging.
Abdrakhmanov said he hopes the development of the oil industry of Kazakstan will
help other economic sectors, including local machine building represented by
major Kazakstan businesses. High oil prices make it possible for oil companies
to carry out exploration and to invest funds into new technologies and
equipment. Kazakstan is engaged in two unique major investment projects: The
second phase at Karachaganak is completed and the second generation plant
project in Tengiz is under way. However, the main hopes are placed on the
development of Kazakstan sector of the Caspian Sea. By 2015 Kazakstan intends to
increase oil production by 150 million per year.
The above should instil hope for non-stop orders on equipment, but,
unfortunately, this is far from being the case as the local producers have
expected. Though some changes are obvious, Abdrakhmanov said. After the collapse
of the Soviet Union and breach of economic relations between enterprises, supply
of special equipment and spare parts to the former Soviet republic was
suspended. By that time Kazakstan failed to dispose of its own petroleum
equipment. A decade ago the bulk of inherited equipment was worn out and badly
needed replacement. For example, in 2002 wear of rigs operated on oil fields
made 90 per cent, pumping units - 78 per cent and storage facilities- 52 per
cent. At present, development of petroleum machinery largely depends upon
activities of two major national companies: KazMunaiGas as a customer of
equipment and Kazakstan Engineering as its manufacturer. Kazakstan Engineering
which was set up two years ago has united 19 large enterprises of the Kazakstan
former defence industry.
In 1998 KazMunaiGas National Company designed and adopted a special "Programme
of developing new types of petroleum equipment on local enterprises and
establishing of the country machine-building potential." Things began to
change after its approval. The last six years have yielded definite results.
Thus, if in 1997 KazMunaiGas engaged only three local plants, in 2000-2002 their
number reached 10 and in 2004 - 24 enterprises. To date local businesses produce
about 200 items of special equipment, materials and spare parts for petroleum
industry. Next year will see production of 46 new types of equipment. Many
machine-building plants fully or partially have re-oriented their production
profile. For example, the share of oil and gas equipment at the largest Heavy
Machinery Works located in Petopavlovsk in North Kazakstan makes 85 per cent,
whereas this indicator for five other sectors such, as: energy, metallurgy,
agriculture, rail roads and mining industry amounts to 15 per cent, Abdrakhmanov
said. "However, it's too early to say that domestic manufacturers satisfy
demand in petroleum equipment. Much is yet to be done in this sphere." The
representative of Kazakstan Engineering says oil tycoons prefer ordering
petroleum equipment from overseas companies.
The main reason is in non-compliance of Kazakhstan goods with international
quality standards, he admitted. Kazakstan manufacturers willing to recover have
collected and filled required documentation to obtain the ISO-9000. By mid-2005,
13 out of 19 enterprises - members of Kazakstan Engineering received a
certificate of compliance with international requirements. "It took years
to receive the above - (ISO 9000 introduction takes as minimum 1.5 years). While
we were collecting all documents investors kept ordering only their overseas
companies," Abdrakhmanov said. More than 200 machine-building enterprises
have introduced International System of Quality so far, and more than 30
enterprises out of them have obtained certificate of compliance with the Russian
Register, Moody's and others. Yet, there are many enterprises that haven't
started to introduce ISO 9000 due to the lack of funds. Introduction of this
standard into each enterprise will cost approximately four million tenge.
Nowadays companies lay new requirements. "They say it's good that you've
got ISO 9000, but now you must register with us as potential manufacturers of
equipment," Abdrakhmanov said. Many enterprises have undergone this
procedure as well, but at the last meeting held in January 2005 between
machine-builders and investors representatives of TCO and KPO b.v. said that
some three-four internationally reputed firms win bids and now Kazakstan
companies should agree upon sub-contract works. During the last years,
investors, pressured by Kazak manufacturers, have given in to some of their
demands. Kazakstan participation in their projects makes 30-40 per cent. Only
one per cent out of them are orders made to machine-building enterprises.
"Investors haven't shown any interest so far," Abdrakhmanov said.
Partly investors are right. Steel produced by Ispat Karmet, the only specialised
enterprise is of poor quality. Local enterprises import steel of the required
quality. Its price is unstable as well and is always on a rise. Last year the
prices on steel increased by 30 per cent. Contracts for Equipment executed by
and between local enterprises and oil companies fail to incorporate such leaps.
Thus, our manufacturers sell at a disadvantage. Since 1993 talks over the
construction of a new steel foundry in Kazakstan are in progress, but petroleum
and machine-building experts attribute local manufacturers' main problems to the
lack of working capital and marginal costs of production in introduction of new
items, hence a patently losing position in tenders hold by oil producing
companies is in place.
Under the Law On State Procurements a company during the tender procedure should
give preference to under bidders. As a rule, overseas companies offer better
prices. The scheme of tax and duties' payment in importing originating goods and
semi-products makes a serious obstacle. Foreign manufacturers of goods for KPO
b.v. are better positioned than local enterprises and enjoy preferences over
terms of VAT payment. The North Caspian Project fails to allow any privileges
for payment of customs duties and VAT to Kazakhstan companies compared to
overseas companies. Customers seeking to observe the Law have to refuse in
placement of orders with local companies, thus, failing to help them to their
feet. This problem is to be addressed at the government level, experts say. The
Kazakstan Engineering representative also named two other problems hindering
development of local petroleum machine-building: lack of long-term orders, thus
depriving large enterprises of stability; and these enterprises are to work
without advance payment. Designing of the new equipment though by order is
actually funded by the enterprise itself. In conclusion, Abdrakhmanov believes
that Kazakstan machine-building companies could increase the production by 25-30
per cent, and with the state support - by 50 per cent.
Poland urges Kazakstan to participate in Odessa-Brody
Poland sees cooperation with Kazakstan in the oil and gas sector as a guarantee
of not only its own energy stability, but of that of the whole Europe. The
latest gas conflict between Russia and Ukraine has forced the Polish government
to intensify its efforts to look for new and more stable ways to supply
hydrocarbons to the country. Polish Economy Minister, Piotr Wozniak, talked to
New Europe in an interview in Astana about transporting Caspian hydrocarbons to
Europe.
Minister, how can you explain such a growing interest of Poland in Kazakstan
hydrocarbons lately?
Kazakstan is an important partner for us from the point of view of possible
diversification of the energy sources. Today it is the most important task of
our new government. A way to achieve this objective may be the construction of
Odessa-Brody-Gdansk oil pipeline. And we are seriously interested in Kazakstan's
participation in this project.
But there have been talks about this project for years, and so far it is only
talks…
Not only Poland is interested in this project, but also the EU. So the
interests of our country intertwine with the interests of all Europe. As you
know, as early as in 2003, a trilateral declaration was signed that evaluated
this project as "a project of energy security of Europe." Already some
real steps have been made. Last year the EU allocated two million Euro for a
feasibility study and appointed a consortium to work on it. And already in
January this year we expect to receive the first information about economic
expediency of this project.
With respect to Kazakstan's involvement in this project, as far we know, this
country is looking for new export markets for its oil, of which the annual
production will hit 150 million tonnes by 2015 according to the (Kazak) minister
of energy. We can see Kazakstan's efforts expanding its transport opportunities,
and the construction of an oil pipeline to China is a step in this direction.
Since you have mentioned energy security of Europe, how would you evaluate
the recent "gas row" between Russia and the Ukraine?
The gas situation in the Ukraine has affected not only Poland, but also
Austria, Italy and France. All Europe has felt the impact of this problem. We
had to use severe saving measures and to cut gas supplies to our industrial
enterprises.
This is not new to us. A similar situation happened in February last year when
the Yamal gas pipeline was shut off for two days. And this issue has already
been discussed in the EU. In Poland supplies are controlled by private companies
and not by the government. And we have asked our firm about the reasons for such
a situation. But nobody has provided any official explanation to it as to what
had happened. This is the risk. And we could live with such a risk, but for that
we should know when and for how long the supplies will be reduced so that we
could prepare ourselves accordingly. But it's not the case now. This is exactly
why we are looking for alternative gas supplies. And this partly explains our
interest in Kazakstan.
Did Poland influence the gas conflict between Russia and the Ukraine?
Poland, as a EU member, must resolve all issues in accordance with the EU
principles, therefore we acted through the official channels. But in any event,
all gas supplies from Russia are carried out under Gazprom contracts and it is
Gazprom that should comply strictly with its obligations. In case of any
difference with the Ukraine, the Russian company should provide alternative
supplies to us. But it has not been the case. That is why we now intend to
revise the contract conditions with Gazprom. We intend to receive gas at the
Ukraine-Russia border and then to sign separate contracts with the Ukraine for
the transit of our gas through its territory.
Minister, as it is known, Polish PKN Orlen competed with KazMunaiGas in
another deal - acquisition of Unipetrum refinery, Czech Republic, and it
purchased the plant. Now their interests have met in Lithuania. Why did PKN
Orlen decide to buy Mazeikiu Nafta as well?
Orlen has ventured this acquisition because it was interested in expanding
its product market. Although a private company, it is large and strong and its
stock trades high at the exchange. The company has strategic interests in the
east. And after the acquisition of Unipetrum in Czechia, the company is
primarily looking at enhancing its commercial opportunities. Orlen owns a large
network of service stations in the country, and Mazeikiu Nafta is attractive not
only because of its proximity to Poland but also because it is not just an oil
refinery but a whole complex that has an access to the transit terminal in
Butinge, which creates additional opportunities for successful export and import
of oil products.
And how many refineries does the company own?
Today two: a refinery in a Polish town of Plotzk and Unipetrum in Czechia.
Should it get the new deal, Mazeikiu Nafta will become the third refinery on
Orlen's assets.
You have also mentioned joining the forces and capabilities of two oil
companies: Polish Orlen and Kazak KazMunaiGas in the Mazeikiu Nafta tender in
Lithuania. It's an interesting position, how can you explain it with the two
companies being competitors in essence?
This is a question to the company rather than to me. But I think that Orlen
is looking for good oil suppliers at the same time. And KazMunaiGas with its
obvious potential is a good partner as far as oil supplies are concerned, as it
has good relations with Transneft. Besides, considering Kazakstan's ambitious
plans, not entire oil produced will be sold through Russian and China. And this
was discussed openly with (former Kazak) Minister of Energy, Valdimir Shkolnik.
And (former Kazak) Minister of Economy (Kairat) Kelimbetov, also mentioned that
Kazakstan is interested in diversification of its oil export routes. Cooperation
in the oil and gas sector is mutually beneficial. Poland and Lithuania are EU
members and this provides a guarantee of a stable legal environment and thus
firm guarantees for KMG, as the agreement will be based on standard European
conditions. And Orlen is a good brand in Europe. It may therefore make sense for
the two companies to join their forces and to detail the conditions on which
they can cooperate.
Kazak, Japanese firms establish uranium JV
Kazak nuclear corporation, Kazatomprom, signed a strategic partnership agreement
with the Japanese Sumitomo Corporation and Kansai Electric Power Corporation in
Astana on January 22nd, Interfax News Agency reported.
The sides agreed to set up a joint venture for the development of the Mynkuduk
uranium deposit in southern Kazakstan, the joint press release said. The
partners will produce and sell uranium. The Japanese corporations will buy out
the stock of the Abbak company, set up by Kazatomprom. Kazakstan will have a 65
per cent share in the new venture, with Sumitomo holding 25 per cent and Kansai
Electric Power 10 per cent.
Initial investments will amount to 100 million Euro, the press release said.
Abbak will start uranium production on a semi-commercial basis as early as 2007,
and achieve commercial production proper of 1,000 tonnes by 2010. The mine is
expected to have a life of 22 years and produce 18,000 tonnes of uranium, the
press release said.
Sumitomo will market most of the uranium in Japan. The state-owned Kazatomprom
boosted mine production 29.5 percent to 4,300 tonnes of uranium in 2005, Mukhtar
Dzhakishev, the corporation's director, told a press conference in Astana
following the signing of the agreement with the Japanese companies.
He said Kazatomprom aimed to become the world's biggest uranium mining
corporation by 2010." The USSR used to produce 13,000 tonnes of uranium
annually in better years, and Kazakstan will occupy a key position on the world
nuclear energy market by 2010," Dzhakishev said. Kazatomprom explores and
mines natural uranium and is Kazakhstan's operator for imports and exports of
uranium and its compounds, nuclear power plant fuel, special-purpose equipment
and technology. Kazatomprom is currently one of the world's top three uranium
producers. Set up in 1997, it controls the geological outfit Volkovgeologia,
Ulba Metallurgical Plant, the MAEK-Kazatomprom nuclear power plant, and the High
Technology Institute. Kazatomprom also own stakes in the Inkai, Katco,
Zarechnoye, BerilliUM and UKR TVS joint ventures. It also manages the
Stepnogorsk Mining and Chemicals Combine.
Scottish trip to boost Kazakstan trade links
Members of Aberdeen City Council's Economic Development sub-committee are being
urged to back plans for Lord Provost, John Reynolds, to visit Kazakstan later
this year as this will boost business relations, reported Kazinform.
It is expected that Lord Provost would be accompanied by an officer from the
City Council's Economic Development. This was suggested at a report which said
that the proposed visit is supported by UK Trade and Industry and the Kazak
embassy. Lord Provost has also been offered complimentary flights by a major
airline.
In her report to the committee, City Council Head of Economic Development, Rita
Stephen, said, "In 2003, the Lord Provost visited Kazakstan and signed a
Memorandum of Understanding with three Western Oblasts, these being among the
key regions in relation to oil and gas activity." Reynolds would use this
spring's visit to sign memorandum with a fourth.
The report reads, "In November 2004, the Akim of one of the neighbouring
regions visited Aberdeen as a keynote speaker at a major oil and gas conference
and to learn more about the development of SME (small and medium-sized
enterprises) oil and gas companies over the last 30 years." During this
visit, Akim discussed the MOU and how it would help to develop the supply chain
in Kazakhstan.
Stephen added that the main desire of the Akims is to identify ways that more of
their local businesses can find ways to access the opportunities in the oil and
gas sector. The key policy of Akims is developing links between SMEs.
Astana, Budapest to boost bilateral ties
The Ambassador of Kazakstan to Central and Eastern Europe, Sagynbek Tursynov, on
January 19th met the president of Hungary, Laszlo Somlyody, the Kazakstan
Embassy in Hungary said recently, Interfax News Agency reported.
Somlyody praised the achievements of Kazakstan and expressed willingness of
Hungary to cooperate with Kazakstan and showed an interest in further expansion
of bilateral relations in various domains. He confirmed that Hungary would
readily receive the president of Kazakhstan, Nursultan Nazarbayev, with an
official visit to Hungary any time convenient this year. This will enhance both
sides to share views on all issues of interest. Somlyody stressed expedience of
hosting a regular session of the Kazakstan-Hungarian intergovernmental
commission for trade and economic cooperation within the trip.
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