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Books on Kazakstan
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Update No: 313 - (25/01/07)
Kazak presidential authority boosted
President Nursultan Nazarbayev likes to ring the changes from time to time to
show who is boss. So did Yeltsin. He is aware that his political career is
nearer its end than its beginning. The sudden death of President Saparmurat
Niyazov of Turkmenistan brought that home with a brutal bump in December.
A recent political shake-up in Kazakstan appears to have strengthened his
position, enhancing his administration's ability to accelerate economic
development plans. Nazarbayev reshuffled his cabinet after accepting former
premier Daniel Akhmetov's resignation on 8th January. Nazarbayev appointed Karim
Masimov, a 41-year-old technocrat, to replace Akhmetov - a move approved by
parliament on 10th January. In addition, the president on 11th January announced
a change in the Senate leadership, naming the former foreign minister,
Kasymzhomart Tokayev, as the new chairman of legislature's upper chamber,
replacing Nurtay Abikayev, who will now serve as Kazakstan's ambassador to
Russia.
Nazarbayev appointed Marat Tazhin as the country's new foreign minister, and
named Viktor Khrapunov, formerly the governor of the East Kazakstan region, as
minister for emergency situations. In addition, former economy minister Aslan
Musin has become deputy premier and Galym Orazbekov - a former deputy minister
with experience in the defense and oil businesses - has become trade and
industry minister, while Zhanseit Tuymebayev - the former ambassador to Russia -
becomes minister of education and science. The president also named a former
close aide, Yerbol Orynbayev, as the prime minister's chief-of-staff.
The Chinese route
The new prime minister, Masimov, could push Kazakstan in a slightly
different trade direction - placing greater emphasis on China. He has an
extensive background in foreign trade, and is said to be a fluent Chinese
speaker. He can also speak English, Russian and Arabic. His official biography
states that he studied at Wuhan University in China, and worked as an official
Kazakstani trade representative in both Hong Kong and Urumchi. From 2003-2005,
he served as an aide to Nazarbayev. He was a deputy prime minister prior to his
appointment to the top post.
Tazhin, the new foreign minister, quickly took steps to dampen speculation about
any radical foreign policy departures, insisting that Kazakstan would continue
"to pursue a multi-vector policy governed by the economic and political
interests of our country," the Interfax news agency reported.
Akhmetov in retrospect
Although the timing of the reshuffle took some observers by surprise, the
fall of Akhmetov's government had been long predicted. Kazakstani media outlets
began speculating about Akhmetov's fate following Nazarbayev's reelection in
late 2005. The speculation subsided briefly before reviving last autumn.
Akhmetov was never a particularly popular or charismatic premier, but in
Kazakstan what counts in a prime minister is not charm, but loyalty. And
Akhmetov had plenty of that. As a staunch Nazarbayev supporter, it was Akhmetov
who was sent to take over as governor of Pavlodar Region when
governor-turned-opposition leader Galymzhan Zhakiyanov was arrested in 2001.
Akhmetov returned to head the government in 2003, becoming the fourth prime
minister in independent Kazakstan.
His government, however, was tainted by scandals over the deaths of opposition
leaders Zamanbek Nurkadilov and Altynbek Sarsenbayev. The accuracy of the
official verdict of suicide for Nurkadilov's 2005 death was openly questioned,
while the trial and investigation into the 2006 murder of Sarsenbayev were held
to be flawed. However, Interior Minister Baurzhan Mukhamedzhanov, who came under
heavy criticism over that case, kept his post in the new government, he also had
rather spectacularly demonstrated his loyalty.
Fresh face at the helm
Masimov is another Nazarbayev loyalist who will be able to woo foreign
investors and diplomats alike; the new government may also be seen as an attempt
to give fresh life to Kazakstan's 2009 OSCE chairmanship bid.
Addressing parliament on 10th January, Nazarbayev outlined his priorities for
the new government: to pursue his pet project of making Kazakstan one of the
world's 50 most competitive countries, continue administrative reform, improve
state and budget planning, develop the regions, boost the pension system,
continue the focus on macroeconomic policy, train a competitive work force,
improve infrastructure, bring the best of corporate management into the running
of the state and diversify the economy.
A new government will help distance authorities from the scandals that unsettled
Kazakstan's political landscape. Changes in the Senate leadership more strongly
signal Nazarbayev's desire to put the Sarsenbayev murder in the past. The
announcement on 11 January that Senate Chairman Abikayev would become the new
envoy to Russia upstaged Akhmetov's resignation. During the Sarsenbayev trial,
Abikayev was implicated in the murder plot by the man subsequently convicted of
the killing, who alleged that Abikayev had planned to stage a coup.
The real winners?
With the Senate speaker constitutionally first in line to succeed the
president in the event of the chief executive's death or incapacity, the post is
a key one. The new Senate leader, Tokayev, is a Nazarbayev loyalist who is also
seen as a significant player in his own right, and who is said to lead one of
the most influential interest groups within the governing establishment.
Local political observers believe Tokayev - a former premier often tipped as a
leading presidential possibility - is the biggest winner in the reshuffle.
Another group deemed to have gained is that of Timur Kulibayev, the president's
second son-in-law, as Masimov is rumoured to be his associate.
What remains unclear is the effect of the reshuffle on the president's eldest
daughter and son-in-law, Dariga Nazarbayeva and Rakhat Aliyev. With Nazarbayev
engaged in constant manoeuvrings to balance the interests of the rival clans,
observers will be closely watching for further moves.
The change of government should be viewed as part of wider intrigues. Nazarbayev
was not necessarily dissatisfied with the Akhmetov cabinet's performance. It was
perhaps more a move driven by the needs of the moment: the president wants to
shore up the executive - in much the same manner that he strengthened the
legislative branch by vastly expanding the presidential party - as he enters a
key phase of what is expected to be his last term in office.
Nazarbayev aims to ensure that when the presidential succession does occur, it
takes place in an orderly manner, and follows the course he desires. Indeed,
even while they continue to manoeuvre around the president, all the interest
groups are keen to promote a stable transfer of power. The fall of the
government and the change of senate leadership should be viewed in the context
of manoeuvrings to secure the post-Nazarbayev era.
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ENERGY
CITIC to sell KazMunaiGaz stake in Nations Energy
China's CITIC Group will sell Kazak national oil and gas company KazMunaiGaz a
50 per cent stake in Nations Energy for US$955 million, New Europe reported.
"Under the previously signed agreement, CITIC Group pledges to offer
KazMunaiGaz a 50 per cent stake in Nations Energy for US$955 million after it
acquires 100 per cent of Nations Energy shares," the Kazak company said in
a press release on January 5th.
The sum of US$955 million is half of what "CITIC Group will pay for the 100
per cent stake in Nations Energy," the press release says.
The agreement of principles regarding the future purchase of the Nations Energy
shares was signed by KazMunaiGaz and CITIC Group on December 29th, 2006. The
document outlines a set of conditions for financing the acquisition of the 50
per cent stake in Nations Energy and provides the fundamental principles of
joint corporate governance.
CITIC Group's deal to purchase 100 per cent of Nations Energy shares was
successfully finalised on December 30th.
The main oil asset of Nations Energy in Kazakstan is Karazhanbas oil field.
Karazhanbasmunai company extracts 50,000 barrels of oil equivalent a day and
controls reserves of 340 million barrels.
The recent deal and last year's purchase of PetroKazakhstan by China's CNPC for
US$4.2 billion came as part of China's drive to bolster its positions in
Kazakstan's oil and gas sector. China is currently engaged in developing several
major fields in the west and south of Kazakstan. An oil pipeline linking
Kazakstan and China was built a year ago. Its initial capacity of ten million
tonnes of oil a year will be doubled in the future.
Tengiz field hits 1 billion barrel mark
Tengizchevroil announced that the Tengiz Field produced its one-billionth barrel
of oil on December 23rd, 2006, a little less than 14 years since TCO was
founded, New Europe reported.
The Tengiz Field is the deepest developed super-giant oil field and is now
further distinguished from most of the world's other oil fields by passing the
billion-barrel mark. "Tengiz is a great example of how technology,
oil-field expertise and partnership can overcome complex challenges and harsh
operating conditions to achieve success. In the years ahead, with continued hard
work, operating and technical ingenuity, and partnership with stakeholders TCO
will continue to grow and produce many more billions of barrels of oil,"
said Todd Levy, TCO director general. Tengiz Field was discovered in 1979 and
first placed in production in 1991. Recoverable reserves are estimated between
six and nine billion barrels of oil.
Kazakstan to be among top ten oil producers by 2015
Kazakstan plans to increase annual gas production to 80 billion cubic metres by
2015 and expand the network of export pipelines running through neighbouring
countries, including Russia, President Nursultan Nazarbayev said, New Europe
reported.
"Today, Kazakstan is an important link in the global energy infrastructure.
It is our task to guarantee stable and safe export routes for Kazakstan's
hydrocarbons," Nazarbayev said in an interview with the official newspaper
Kazakstanskaya Pravda published on December 30th.
Kazakstan's geographical location makes a network of export pipelines through
neighbouring states necessary, while the presence of US, European, Russian and
Chinese companies in the republic's oil and gas sector "makes broad
international cooperation in energy exports a must," he said.
"The commissioning of the Atasu-Alashankou oil pipeline with an annual
handling capacity of 20 million tonnes, and Kazakstan's joining of the
Baku-Tbilisi-Ceyhan project, which will handle up to 10 million tonnes of oil
annually at the initial stage before increasing it up to 25 million tonnes, as
well as the development of the Northern Caspian oil pipeline and the expansion
of its capacity from the current 23 million tonnes to 60 million tonnes, is
evidence of the country's serious work to develop new export routes," the
Kazak president said. Kazakstan's energy security policy is part of the
country's balanced foreign policy strategy, he said.
"Kazakstan is therefore one of the few states with large untapped energy
resources. The world's largest oil field to have been discovered in the past 25
years is in Kazakstan," the president said.
Astana, Beijing discuss 2nd segment of Atasu-Alashankou
Preliminary agreements on the construction of the second segment of the
Kazak-Chinese oil pipeline and a gas pipeline from Turkmenistan across Kazakstan
were reached during a visit to China by Kazak President, Nursultan Nazarbayev,
recently, a source said, Interfax News Agency reported.
"The sides made a political decision to start negotiations on the
construction of the second segment of the Atasu-Alashankou pipeline. The new
segment will connect the existent pipeline to the Kenkiyak field and thus reach
the Caspian coastline," he said.
Kazakstan has not chosen its construction strategy: an international consortium
may be formed for implementing the project or China and Kazakstan may build the
new pipeline unaided, the source said.
China welcomed the decision to carry on the pipeline's development.
The sides also discussed the construction of a Turkmen-Chinese gas pipeline
through Kazakstan. An agreement on China's participation in a gas survey and
production in Turkmenistan was signed during a Chinese visit of late president
Saparmurat Niyazov in 2005. KazMunaiGaz President Uzakbai Karabalin was the
chief Kazak negotiator in Beijing.
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EUROBONDS
Bank Turanalem places US$1bn in Eurobonds
Kazakstan's Bank, TuranAlem, has placed two tranches of Eurobonds totalling US$
one billion, the bank said in a press release. The bank placed 30-year Eurobonds
for US$750 million at an annual 8.375 per cent and two-year Eurobonds for US$250
million at a rate of Libor + 160 basis points, a press service representative
said, Interfax News Agency reported.
US investors bought most of the Eurobonds. Investors from Europe and Asia also
bought the bonds. The bank started a road show for the Eurobonds in Los Angeles
on January 5th. JP Morgan and Credit Suisse were the organisers. TuranAlem
Finance B.V., a subsidiary of Bank TuranAlem, placed bonds totalling 20 billion
Japanese yen at a rate of 4.25 per cent on December 28th, 2006. The issue has a
discount of 99.4 per cent and will mature in December 2016. The bonds were
partially placed among a limited number of investors.
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FOREIGN LOANS
EDB to loan Oriel Resources US$60m to develop Kazak ore
The Eurasian Development Bank (EDB), jointly with Germany's WestLB and
Bayerische Hypo- und Vereinsbank AG, has signed an agreement with Oriel Voskhod,
a Kazak-based subsidiary structure of Britain's Oriel Resources, on a US$120
million loan, the EDB said in a statement, New Europe reported.
The EDB will provide US$60 million in financing for ten years. The first tranche
of the loan will be issued in the first quarter of 2007. The money will be spent
on the development of Voskhod chromite ore fields in Kazakstan's Aktyubinsk
region. Up to 40 per cent of the products produced at the field is to be
delivered to Russian plants. The EDB was set up by Russia and Kazakstan to help
the stable development of the economies of the two countries, maintain a high
rate of economic growth, expand mutual trade, develop other forms of economic
cooperation, and encourage direct investment, including in the form of
private-state partnership. The main area of the bank's activity is the financing
of investment projects.
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FOREIGN TRADE
Kazakstan, Iran will broaden trade ties
Iran's Ambassador to Kazakstan, Ramin Mekhmanparast, has said that trade between
Iran and Kazakstan would grow to US$ five billion in the next four years. "Kazakstan
and Iran's leaders have reached an agreement to bring trade to US$ five billion
in the next three to four years," the Iranian diplomat told a news
conference in Almaty on December 28th, New Europe reported.
"An accord was reached by the intergovernmental commission in mid- December
to increase trade and economic relations to US$2.5 billion in 2007," the
Iranian ambassador said, noting that the two countries' foreign trade was US$900
million in 2005 and roughly US$1.5 billion in 2006. The accent in economic
cooperation will be put on the energy and petrochemical sectors, and on the
transportation of Kazak oil through Iran, he said. "Joint construction of a
petrochemicals plant is to begin in Iran, and a similar plant will be built in
Kazakstan," Mekhmanparast said.
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