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KAZAKSTAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 29,749 24,205 22,400 60
         
GNI per capita
 US $ 1,780 1,510 1,350 119
Ranking is given out of 208 nations - (data from the World Bank)

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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




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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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.

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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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