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Update No: 303 - (27/03/06)
Murder of oppositionist shocks the nation
Kazakstan is normally considered a stable country in what is otherwise a
turbulent region, Central Asia. One just has to think of Baluchistan,
Afghanistan, Uzbekistan and Kyrgyzstan to realize the truth of this.
But an event has occurred to shatter this safe image. The professional murder of
one of the leading opposition politicians, Altynbek Sarsenbaev, has shocked the
nation and has destroyed any notion that it is an island of stability in
volatile Central Asia. On February 13th, two days after disappearing, Mr
Sarsenbaev, 43, a former minister and ambassador, was found on the outskirts of
Almaty, the commercial capital, along with the bodies of his driver and
bodyguard. All three had been shot in the back and in the head.
The opposition has called the killing politically motivated and claimed that it
was ordered by senior government officials, since Mr Sarsenbaev had neither
business interests nor criminal ties. The brutal death was unprecedented in
authoritarian Kazakstan, at least until recently, as was the procession of well
over 2,000 people who followed his coffin as it was carried through the centre
of Almaty on February 15th.
Mr Sarsenbaev left his post as ambassador to Russia in 2003 to join the
opposition party, Ak Zhol (Bright Path), as co-chairman because, says Bulat
Abilov, once also a co-chairman, he wanted his children "to grow up in a
normal democratic country." After the party split in early 2005, he was the
co-founder of Naghyz Ak Zhol (True Bright Path) and also a member of the united
opposition movement, For a Just Kazakstan (FJK). Indeed, Mr Sarsenbaev was the
brain behind the FJK. As a former confidant of President Nursultan Nazarbaev, he
knew Kazak politics better than most oppositionists. His death has weakened the
opposition considerably, and is probably bad news for the authorities as well,
because he was a reasonable opponent always ready for dialogue.
It is also of note, although rarely mentioned in public, that part of Mr
Sarsenbaev's great influence was probably due to his senior position within the
ranks of the Alban, a subdivision of the Elder Horde, one of Kazakstan's three
great traditional tribal groupings, the others being the Lesser and Middle
Hordes. Another opposition politician, a former mayor of Almaty named Zamanbek
Nurkadilov, who was found dead under mysterious circumstances last November,
also hailed from the Alban. In his case, the police detectives called to the
scene said the case was being treated as suspected suicide, despite the
professional killing that had involved three shots through a sound muffling
cushion, with fatal wounds to both the brain and the heart.
This police complacency of course, points the finger of suspicion to the very
The opposition now has to decide how it will react. The chairman of FJK,
Zharmakhan Tuyakbai, has condemned the "political terror" and called
on President Nazarbaev to act. Other opposition figures have openly called on
the population to rise up. Sergei Duvanov, an opposition journalist, blamed the
murder on "Mr 91 Per Cent"--the president, who has been at the helm
since 1989 and won re-election last December with 91% of the vote--for having
created the kind of regime that allows such killings to take place.
President establishes sustainable development fund
Presdent Nazarbayev has signed an order on the establishment of a JSC
"Sustainable Development Fund "Kazyna," Kazakstan Today
correspondent reports, citing the presidential press service.
"To improve the state management system in the area of industrial and
innovative development and to create favourable conditions for provision of
economic growth of the state I order the government of RK to create a Joint
Stock Company "Sustainable Development Fund "Kazyna."
By the same order the Head of State has instructed the government to approve a
memorandum on basic principles of the JSC "Sustainable Development Fund
"Kazyna," to approve a list of juridical persons with state
participation, whose property rights and rights of enjoyment for state share
holdings will be passed to "Kazyna."
China sees Kazakstan as safe source of oil
China, which for a long time has turned its back on Central Asia, is
reaching out to Kazakstan, Central Asia's biggest country, for one major reason:
China is keen to diversify its sources of energy as much as possible. Last year,
China National Petroleum, a state-owned corporation, bought PetroKazakstan, a
Canadian- run company that had been the largest independent oil company in the
former Soviet Union, for US$4.18 billion, and spent another US$700 million on a
pipeline that will take the oil to the Chinese border. PetroKazakstan was the
largest foreign purchase ever by a Chinese company. Chinese oil producers were
already operating four smaller oil fields in Kazakstan.
"China is being increasingly dependent on Middle East oil and it wants a
supply that would be blockade-proof in case of a conflict over Taiwan,"
said Thierry Kellner, a Free University of Brussels specialist in Chinese
relations with Central Asia.
But Beijing is paying a high price. Soon after the sale, Kazakstan forced the
Chinese company to resell a third of its new acquisition to Kazmunaigaz, the
state oil company and industry regulator.
A spokesman for Kazmunaigaz, Mikhail Dorofeyev, has said the deal was expected
to be finalised by the end of March. The Kazakstan authorities are also believed
to be easing the way for Lukoil of Russia to acquire the other half of Turgai
Petroleum that it now jointly owns with PetroKazakstan. In addition, a local
court recently awarded Lukoil a US$200 million judgment against PetroKazakstan.
It remains unclear how much of PetroKazakstan's oil China will be able to send
through its new pipeline. Also unknown is the profitability of the pipeline
itself, which depends on the addition of crude oil from Siberia that Russia has
not yet committed to sell.
The Chinese oil company's vice president, Zhou Jiping, was ebullient at the
pipeline's inauguration last December, near the eastern Kazakstan town of Atasu.
"This is the new Silk Road," Zhou said, adding that he hoped China
would continue to acquire more oil assets in Kazakstan. China is widely believed
to be getting a bid ready for another Canadian-owned oil company, Nations
Energy, whose output is one- third that of PetroKazakstan.
"The Chinese are overpaying, but they have a lot of money from exports, and
they want to spend it on any equity oil they can find," said Robert Ebel,
chairman of the Energy Program at the Centre for Strategic and International
Studies in Washington and co-director of the Caspian Sea Oil Study Group.
"Price is less important than reliability and building good will in the
Kazakstani government," said Kellner, at the Free University.
If the pipeline reaches full capacity, it will carry 400,000 barrels a day,
about 8 per cent of China's current energy needs.
Chinese leaders have viewed with alarm the establishment of US military bases in
Central Asia after the terrorist attacks of Sept. 11, 2001. Beijing considers
the region its backyard, and has tried to turn Kazakstan's long-time president,
Nursultan Nazarbayev, from closer relations with Washington, Kellner said. At
the same time, Russia continues to have an influence.
When Nazarbayev delivered a major policy speech on March 1, he listed
"increasing integration with Russia" as Kazakstan's top foreign
priority and "improving cooperation" with China as its second.
Maintaining a "long-term, stable partnership" with the United States
came in third place.
But beyond investments in the rich yet challenging Caspian Sea oil deposits,
which are expected to turn Kazakstan into one of the world's top five petroleum
exporters, the United States has less to offer Kazakstan than China does.
Even though most Kazaks view China with fear and suspicion, Nazarbayev approved
the Chinese pipeline because it offers an extra oil export route that reduces
his landlocked country's dependence on neighbouring Russia, Azerbaijan and
Turkey. Eventually, a sixth of Kazakstan's total oil production could flow to
The risks inherent in getting Kazakstan's oil to its main market, Western
Europe, were highlighted last year when Russia blocked the expansion of a
Western-owned pipeline running from the North Caspian shore to Russia's Black
Sea that was expected to carry a major portion of Kazakstani oil. As a result,
Tengiz, Kazakstan's second-largest field, operated by ChevronTexaco, has had to
plan for more costly transportation by rail.
EU to boost energy ties with Kazakstan
EU Energy Commissioner, Andris Piebalgs, intends to pay an official visit to
Kazakstan in April-May 2006 to boost ties with the oil-rich former Soviet
republic. The European Commission considers Kazakstan as an absolute leader and
strategic partner in the region, state news agency Kazinform quoted Piebalgs as
telling the head of the Kazakstan mission to the EU Ambassador, Konstantin
Zhigalov, on January 25 in Brussels.
In the course of his visit to Kazakstan, the commissioner will meet with Kazak
authorities, determine prospects of collaboration and investment in the
framework of power dialogue between the EU and the former Soviet republic,
attend production meetings of energy companies and sign an investment agreement
between the government of Kazakstan and the European Commission on cooperation
in use of atomic energy for peaceful purposes.
Energy resources make up 80 per cent of Kazak exports to Europe. In 2005 energy
exports accounted for five billion Euro. Kazakstan is the third largest oil
exporter to EU countries. According to Kazakstan's state oil company KazMunaiGas,
Kazakstan is expected to produce between 1.2 to 1.3 billion barrels of oil per
year by the year 2015. Most of this growth will come from the TengizChevroil,
Karachaganak and North Caspian projects. The biggest oil fields in Kazakstan
are: Kashagan, Tengiz, Karachaganak, Kumkol, Kurmangazy, Ouzen (onshore
exploration) and Janajol. Kashagan is the most important oil field in the world
outside the Middle-East. The production estimate of this Caspian site ranks it
second after the Ghawar field in Saudi Arabia. According to recent geological
studies, the Kashagan reserves would be estimated at 38 billion barrels, with a
minimum recoverable quantity of 12 billion barrels. Kazakstan's total reserves
are estimated at around 60 to 70 billion barrels.
Russia, Kazakstan to boost economic cooperation
Kazakstan Prime Minister, Daniyal Akhmetov, and Russian Regional Development
Minister, Vladimir Yakovlev, discussed on February 24th, in Kazakstan, issues
concerning deepening commercial and economic cooperation, the premier's press
service said, Interfax News Agency reported.
In particular they shared views on various aspects of reforming the housing and
utilities infrastructure, electric energy development and cross-border
cooperation strengthening. The sides also stressed the need to boost efficiency
of frontier and customs services.
Akhmetov familiarised himself with the activity of the Russian ministry engaged
at present in addressing local self-government issues, construction and
fulfilment of sectoral programmes. Upon completion of the meeting, Akhmetov
noted the importance of widening trade and economic collaboration of two states'
At the same time, special attention is paid to the development of depressed
regions by means of strengthening big regional centres, Yakovlev explained.
Meanwhile, Russia's Sibakadembank has opened an office in Almaty. "The
opening of an office in Almaty is timely since the growing cooperation between
Russia and Kazakstan requires more financial interaction and
accompaniment," Sibakadembank chairman of the Board Igor Kim said at a
presentation at the new office. Kim said the office would represent the
interests of Sibakadembank as well as Mezhtorgbank, Zheldorbank,
Uralvneshtorgbank, and Dalvneshtorgbank. The five banks have formed an alliance.
Sibakadembank plans to open offices in Kiev and the Baltic states soon, which
will enable it to expand the opportunities for its clients and partners, he
said. The net assets of Sibakadembank amounted to 985.9 million Euro as of
January 1st 2006, capital totalled 137.1 million Euro and profit for 2005
totalled 34.9 million Euro. The bank expects to increase those figures this year
to 3.215 billion Euro, 355 million Euro and 90 million Euro, respectively.
Russia and Kazakstan will sign production sharing agreements developing the
Khvalynskoye and Tsentralnoye offshore oil fields in the Russian sector of the
Caspian Sea after the two countries ratify amendments to a protocol on Caspian
floor division, a Kazak minister said. "The amendments, agreed by the
Russian and Kazak governments in January 2006, need ratification by the State
Duma and the parliament of our country. After that we will have the opportunity
to work under a production sharing agreement without additional permission
prescribed by Russian legislation," Energy and Mineral Resources Minister,
Baktykozha Izmukhambetov, said, Interfax News Agency reported.
A 1998 agreement on the division of the northern Caspian floor and a 2002
protocol to it gives Kazakstan sovereignty over the Kurmangazy oil field and
gives Russia sovereignty over Tsentralnoye and Khvalynskoye. The two countries
decided to develop these fields jointly. There already exists a 55-year
production sharing agreement on Kurmangazy. "Naturally, as soon as we've
gone through ratification, negotiations will start on production sharing
agreements on (Khvalynskoye and Tsentralnoye)," Izmukhambetov said.
PetroKazakstan oil production down 23%
PetroKazakstan produced 5.514 million tonnes of oil last year, down 23 per cent,
Interfax News Agency reported on February 28th.
Overall production by the company, including the 50 per cent stake in
Kazgermunai and Turgai Petroleum totalled 5.514 million tonnes of oil last year
(42.7 million barrels), about 15,108 tonnes a day, the company said in a press
release. Production in 2004 totalled 7.18 million tonnes (55.3 million barrels)
or 151,103 barrels a day. PetroKazakstan Kumkol Resources, a subsidiary of
PetroKazakstan, produced 3.079 million tonnes of oil (23.8 million barrels) or
8,436 tonnes a day (65,346 barrels), according to the press release. The company
drilled 10 exploration and 16 appraisal wells at Aryskum, Kyzylkiya, and
Maibulak fields and Kolzhan and Doshan structures.
KazMunaiGaz considers petrochemical complex
KazMunaiGaz Exploration and Production, a subsidiary of the KazMunaiGaz national
oil and gas company, has completed a feasibility study on the construction of
the first integrated petrochemical complex in Kazakstan and planned to present
the results of the study at the end of February or the beginning of March,
KazMunaiGaz deputy director general, Rustem Bekturov, said, Interfax News Agency
"A detailed feasibility study on the petrochemical complex has already been
worked out by our company. It is currently being inspected and will officially
be announced at the end of February or the beginning of March," he said.
Petrochemical production will be set up on the core of Atoll in Atyrau.
Construction will begin in one year. "A great deal of time will be spent on
preparatory procedures - announcing tenders for engineering, designing and
determining a financial consultant. Thus, the construction itself will actually
only be a year - in January-February 2007," he said. Bekturov said he could
not cite any specific timeframe for the completion of the plant.
"Construction is a long path, and for now we wouldn't want to name a
specific date for the work to be finished," he said.
Kazakstan, Basell plan to set up petrochemical JV
Kazak Prime Minister, Daniyal Akhmetov, and Volker Trautz, president of the
Dutch-based Basell, one of the world's leading polyolefin producers, decided to
set up a joint venture to produce gas and base petrochemical products at a
recent meeting in Astana, reported Interfax News Agency.
Akhmetov instructed the country's Energy and Mineral Resources ministry along
with interested government agencies to set up a special working group, the prime
minister's press service said in a statement. A number of issues dealing with
developing petrochemicals in Kazakstan were discussed during the meeting, the
statement says. The two discussed the prospects for building a competitive
petrochemical complex on a world scale to produce polyolefin and polyethylene.
Basell is the world's largest producer of polypropylene and advanced polyolefins
products, and a leading supplier of polyethylene and catalysts.
Gilat announces four new contracts in Kazakstan
Gilat Satellite Networks, a provider of products and services for
satellite-based communications networks, announced on February 1 that it has
expanded its market leadership in Kazakstan by signing contracts to deploy
broadband satellite networks for four of that country's leading telecom
operators, reported Interfax News Agency reported.
The contracts have been signed with Technoservice Lyuks, Jarykh, JSC and SC
Kazaktelecom. Technoservice Lyuks Ltd., a newly established satellite
communications operator, will deploy SkyEdge VSATs for a nationwide network to
support telephony and high-speed Internet access for corporate applications.
Jarykh Ltd. will be used for enterprise-wide data applications. JSC Astel is
deploying its first SkyEdge VSAT hub in Almaty, with VSATs throughout Kazakstan
for the mining sector, banking and other corporate networking applications. JSC
Kazaktelecom, the country's largest telecommunications operator, will deploy a
network of SkyEdge VSATs throughout the territory for internet access, always-on
data communications and telephony for schools, banks, government institutions
and mining companies.
Kazaktelecom President, Khairat Karibzhanov, said, "Over the years, Gilat's
continually evolving VSAT technology has consistently helped us serve
Kazakstan's enterprises, institutions and private users. The unified SkyEdge
product family gives us the scalability, flexibility and modularity to meet our
customers' needs in the most efficient manner possible."