Kazakhstan Chamber of Commerce in the USA

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Kazakhstan Daily News Roundup – April 22, 2011 0

Posted on April 22, 2011 by KazCham

ENERGY:

Karachaganak dispute to be settled by H1 – minister
(SRI) – Kazakhstan hopes to settle the long-running dispute with the operators of the Karachaganak gas condensate field in the first half of this year, Oil and Gas Minister Sauat Mynbayev told reporters on Thursday.

Karachaganak partners pay $773 million in export duty
(SRI) – Karachaganak Petroleum Operating (KPO), the Western-led consortium developing the Karachaganak gas condensate field in western Kazakhstan, paid $773 million in export duties in 2008-2010, Oil and Gas Minister Sauat Mynbayev said.

KMG EP completes $164-million Ural Group acquisition (SRI)

Kazakhstan oil refining down 10.4% in January-March (Interfax – Kyiv Post)

BUSINESS AND ECONOMY:

BTA posts profit for third straight quarter; bonds fall by record (Bloomberg)

Air Astana to fly to Tbilisi and Samara in 2011 (Interfax)

National Bank of Kazakhstan: Exchange rates April 22, 2011 (Kazakhstan Today)

Indicators – April 21, 2011 (Reuters)

REGIONAL:

Uzbekistan says signs China deals worth $5 billion (Reuters)

Uzbek rappers to turn more humane, patriotic – official (AFP)

Kyrgyz MPs sacrifice rams to banish “evil spirits” (Reuters)

SOURCE: http://silkroadintelligencer.com/2011/04/22/kazakhstan-daily-news-roundup-april-22-2011/

Kazakhstan Daily News Roundup – March 16, 2011 0

Posted on March 16, 2011 by KazCham

On the Way to Petro-Power 0

Posted on February 01, 2011 by KazCham

Kazakhstan’s oil industry is booming and the country will need to expand its export pipelines to keep up with current oil production. Birgit Brauer reports

KAZAKHSTAN HAS TRIPLED oil production since gaining independence in 1991, reaching a record 6.5 million tons in 2009. Over the coming decade, it is set to double production yet again, putting the country in league with the world’s top ten oil producers.

This enormous surge, expected to start when the giant oil field Kashagan in the Caspian Sea comes on-stream by 2013, will inevitably require new and expanded export pipelines. Almost 90 percent of oil produced today is already being channeled to international markets.

Most of Kazakhstan’s oil goes north via pipelines through Russia. Some also goes east to China and west (by barge) across the Caspian and then by pipeline through the Caucasus to the Mediterranean, or by rail to Georgia’s Black Sea port Batumi.

Diversifying pipeline routes has proved a winning formula for Kazakhstan. It reflects its long-standing multi-vector foreign policy, which seeks good-neighborly relations with all major powers in the region. Translated into energy diplomacy terms, it means Kazakhstan does not rely on one single export route or transit country. This serves economic and security interests while minimizing attempts at influence by other states. It is also a policy promoted with great vigor in the 1990s by the U.S. government, whose embassy officials in Kazakhstan and Azerbaijan handed out bumper stickers reading: “Happiness is multiple pipelines.”

The bulk of Kazakhstan’s crude is transported via the 1,510km Caspian Pipeline Consortium (CPC) route, which carried 34.6 million tons of oil last year, including 16 million tons from the largest producer, Chevron-led Tengizchevroil. Since 2001, it connects Tengiz and other fields in western Kazakhstan with the Russian Black Sea port of Novorossiysk. In December, after many years of negotiations, CPC shareholders – the governments of Russia and Kazakhstan, as well as some of the big private oil companies operating in Kazakhstan – finally agreed to increase the pipeline’s capacity to 67 million tons by 2014, with 50 million tons reserved for Kazakh oil.

This was very welcome and long-awaited news. But it also signified, of course, that Russia will remain Kazakhstan’s principal oil export transit route in the foreseeable future. In addition to the CPC pipeline, a second and older pipeline to Russia runs from Atyrau in western Kazakhstan to Samara, where it links to Russia’s Transneft pipeline system connecting to the world via Black Sea ports. Its capacity currently stands at about 17 million tons per year and is to be expanded to 26 million by 2015.

The other two routes are the Kazakhstan-China pipeline and the Baku-Tbilisi-Ceyhan pipeline (BTC). The third and final segment of the 2,200km Chinese pipeline, which starts in Atyrau and ends in Alashankou in northwestern China, was completed in July 2009. It had an initial annual capacity of 10 million tons, to be increased to 20 million tons. Last year, the pipeline carried 7.7 million tons of crude into China.

The 1,768km BTC pipeline, which begins in Azerbaijan, runs through Georgia, and ends in the Turkish port city of Ceyhan, has been receiving Kazakh oil only since late 2008. It can transport 50 million tons per year; however, it carried only 1.9 million tons of Kazakh crude in 2009. That’s because Azerbaijan fills most of the pipeline with its own – for now. In a few years, Azerbaijan’s oil production is expected to decline. This will free up space for newly flowing Kazakh oil.

National oil and gas company KazMunaiGas is in the process of getting infrastructure ready to facilitate oil exports via the BTC. It is setting up the Kazakhstan Caspian Transportation System (KCTS), which includes the construction of a 762km pipeline from Eskene in western Kazakhstan to Kuryk; a new oil terminal in the south near the Caspian port of Aktau; the creation of a new fleet of tankers; and new port facilities in Baku. The throughput capacity of the pipeline, which will start operating by the time production begins at Kashagan, will initially be 23 million tons per year and subsequently will increase to 35-36 million tons per year. Kazakhstan’s oil producers, who will join KCTS, will be able to connect to the BTC pipeline via a shuttle system of sea tankers.

Gas has so far played a much lesser role for Kazakhstan than oil. Reserves are not as significant as its oil reserves and production does not even cover the country’s domestic needs. Kazakhstan has primarily served as transit for natural gas exports from Turkmenistan and Uzbekistan to Russia and to China.

But with production at the huge Karachaganak oil and gas condensate field in western Kazakhstan on the rise, this is about to change. Natural gas production in Kazakhstan is for the most part associated gas, a by-product of oil extraction. As oil production goes up, so will associated gas production. As a result, new gas pipelines will have to be considered, too. ?

Birgit Brauer, Ph.D., is The Economist correspondent in Almaty, where she has lived and worked since 1996. Her book on the oil sectors of Azerbaijan, Kazakhstan, and Russia is to be published by Palgrave in 2011.

Source: Invest in Kazakhstan 2010

Kazakhstan Daily News Roundup – January 26, 2011 0

Posted on January 26, 2011 by KazCham

HEADLINES:

Karachaganak fined $27 million for environmental violations
(SRI) – Kazakhstan hit the Karachaganak Petroleum Operating (KPO), the Western-led consortium developing the Karachaganak gas condensate field, with fines totaling KZT4 billion ($27 million) for environmental violations last year, the Environmental Protection Ministry said in a statement.

Kazakhmys to list on Hong Kong Stock Exchange
(SRI) – Kazakhmys, Kazakhstan’s largest copper miner, plans to raise $500-600 million via an Initial Public Offering (IPO) on the Hong Kong Stock Exchange, the Dow Jones newswire reported citing unnamed sources familiar with the situation.

Kazakhstan mulling restrictions on foreign listing
(SRI) – Kazakhstan’s financial regulator plans to oblige local companies seeking a listing abroad to float some of their stock on the domestic market or face sanctions if they do not comply with the requirement.

ENERGY:

KazMunaiGas likely to redirect oil products to Turkish market (TREND)

CNG-fuelled buses for Kazakhstan (BioEnergy News)

BUSINESS AND ECONOMY:

Development Bank of Kazakhstan sells notes (Reuters)

Russia, Ukraine and Kazakhstan to come back to grain pool creation idea (AgriMarket.Info)

National Bank of Kazakhstan: Exchange rates January 26, 2011 (Kazakhstan Today)

Indicators – January 25, 2011 (Reuters)

REGIONAL:

Iran offers energy projects to Turkey (AFP)

School hijab ban divides Muslim Azerbaijan (AFP)

Magnitude quake 6.1 hits Tajikistan – USGS (Reuters)

SOURCE: http://silkroadintelligencer.com/2011/01/26/kazakhstan-daily-news-roundup-january-26-2011/

Higher Oil Prices Are Not Enough 0

Posted on January 21, 2011 by KazCham

Anthony Robinson looks at what the government’s new tax laws, plans to modify production-sharing agreements, and higher oil prices mean for Kazakhstan’s oil industry

HIGHER OIL PRICES have come as a relief to Kazakhstan’s fast-growing oil and gas sector, which continued to invest heavily in major field development and infrastructure. Exports, whose value dropped sharply as oil prices fell from a 2008 peak of $147/barrel, are also rising – giving a boost to tax revenues and enabling the government to replenish the National (oil) Fund and rebuild central bank reserves.

Despite cutbacks at some of the higher cost, older fields, overall oil and condensate production is being boosted by the giant on-shore fields of Tengiz and Karachaganak. Overall production rose nearly 7 percent to 76.5 million metric tons last year, of which 68 million metric tons were exported, according to Sauat Mynbaev, the minister of oil and gas. He forecasts output of 80 million metric tons this year.

But a return to higher prices is not enough to allay the concerns of the international oil companies about the new tax code introduced in 2009 – and indications that the government wants to modify the long-term production-sharing agreements (PSAs) signed in thel990s to reflect the huge changes in oil prices and other factors since they were signed. The new tax code is specifically designed to raise the burden on energy and metals producers in order to lighten it on small and medium enterprises. The idea is to support diversification of the economy away from its current unhealthy reliance on the extractive industries, which require vast amounts of capital but employ relatively few people.

Government spokesmen have said that the Kashagan PSA is unlikely to be modified – reflecting the on-going nature of the investment, the technical complexity of safely operating the giant off-shore field, and the fact that KazMunaiGas (KMG), the state oil and gas company, negotiated a new deal two years ago which gives it an equal share with the four international oil majors running the project -Exxon-Mobil, ENI, Shell and Total, with smaller stakes for Japan’s Inpex and Conoco-Phillips. KMG also has

without a state equity share is Karachaganak – but this anomaly is not likely to last long. Both Oil and Gas Minister Mynbayev and KMG Chairman Kairgeldy Kabyldin have confirmed that the government wants an equity stake for KMG in Karachaganak.

UK-based BG and Italy’s ENI are joint operators of the Karachaganak field with each currently holding a 32.5 percent stake, and the balance held by Chevron with 20 percent and Russia’s Lukoil with 15 percent. Karachaganak is one of the world’s richest deposits of gas condensate, a high quality light oil, with an estimated 1.2 billion metric tons of oil and condensate and 1,350 billion cubic meters of gas. It was in a parlous state when the western partners inherited the polluted and badly managed Soviet-era field on which they have spent several billion dollars to turn into a well-run, profitable business.

Mindful of the damage done to Russia’s standing with foreign investors by Rosneft’s takeover of Yukos, BP’s struggles at TNK, and the forced purchase by Gazprom of the Shell-controlled Sakhalin liquefied gas venture, the government is seeking an agreed solution at Karachaganak. But it cites KMG’s stake in the other two large projects as precedents and argues the broader case for the state to hold substantial stakes in the nation’s richest resource projects.

The standoff at time of writing was accompanied by pressure from the government’s tax, environmental protection, labor and other agencies which presented the KPO consortium with a $1.3 billion cocktail of disputed tax claims and fines for alleged infractions of ecological, labor and other codes, which KPO disputes. Industry commentators, who recall similar pressure when KMG was seeking parity in Kashagan, suggest the claims could be at least partially dropped as part of a deal over the desired KMG stake.

On May 19 deputy oil minister Lyazzat Kiinov told reporters at an oil and gas conference in Paris that the government would not force an entry into the company, adding: “We are ready to repay the historical costs and contribute to our share equally with other other partners.” Mehmet Ogutcu, BG’s director for international and governmental affairs, later told Bloomberg that KPO shareholders wanted to resolve the tax and other issues with the government as soon as possible and were trying to work out a common position with regard to the future composition of the consortium.

What unsettles the international oil companies, who are about to embark on multi-billion dollar “third generation” developments, is that the Karachaganak saga is taking place against the background of increasing ambiguity about the government’s commitment to PSAs, and suggestions that the new tax laws should be universally applicable in the name of transparency and “leveling the playing field” for all foreign investors. Kazakhstan’s track record thus far indicates that changes will continue to be negotiated and ultimately be acceptable to both sides. Prime Minister Karim Massimov addresses these concerns in an interview on pages 22 to 25.

Meanwhile, the rapid development of new gas technologies, which have opened up vast shale deposits in the United States, Poland and elsewhere, is having a big impact on assumptions about future global gas prices and supply patterns -just as Kazakhstan’s associated gas output from the new deep oil fields is rising strongly.

Most Kazakh gas is associated with oil production and will be re-injected to keep up pressure in the oilfields. The government also imposes heavy fines on gas flaring, which fell by more than 60 percent in 2009 as oil companies invested in gas treatment plants to supply domestic customers and small power stations. Gas from the condensate field of Karachaganak is already exported to Orenburg in Russia for processing, and by the middle of 2010 Kazakh gas will also be exported to China via a new export line from Beinau to the Chinese border, which will also supply gas to southern Kazakhstan.

Looking further ahead, some Kazakh gas could also be exported to Europe. But this will require either building an expensive liquefied natural gas plant and liquefied gas tankers, or a gas pipeline to cross the Caspian to Baku. This investment will not be forthcoming until Europe makes up its mind whether to opt for the Nabucco project, entailing a new pipeline through Turkey to Central Europe, or Russia’s South Stream project under the Black Sea. Neighboring Turkmenistan, with vast on- and off­shore gas reserves, faces a similar dilemma.

Against this uncertain background, the government is also pressing ahead with plans to develop a domestic gas-based petrochemical industry and export value-added petrochemicals – mainly to China. ?

Anthony Robinson is a former Financial Times Moscow correspondent, and East Europe editor and originator of the Russian business newspaper Vedomosti.

SOURCE: Invest in Kazakhstan 2010

Kazakhstan Daily News Roundup – October 28, 2010 0

Posted on October 28, 2010 by KazCham

HEADLINES:

Kazakhstan to levy new $1.2 billion tax claims against Karachaganak venture
(SRI) – Kazakhstan is considering new tax tax claims totaling $1.2 billion against Karachaganak Petroleum Operating (KPO), the Western-led joint venture developing the Karachaganak gas condensate field in western Kazakhstan, Reuters reported on Wednesday, citing a Kazakh official.

Kazakh, Georgian banks more attractive than Russian peers
(bne) – Banks from the former Soviet republics are out performing their Russian rivals, according to a report from VTB Capital. VTB’s top pick from the region is Bank of Georgia, but Kazakhstan’s Halyk Bank and Kazkommertsbank (KKB) are also interesting and trading at a discount to their Global Emerging Markets (GEM) peers.

KazakhGold abandons reverse takeover deal
(SRI) – KazakhGold said on Tuesday it had temporarily abandoned the deal to take over its Russian parent Polyus Gold amid opposition from the Kazakh government.

ENERGY:

Kazakhstan can use pipelines bypassing the Bosporus and Dardanelles – Nazarbayev (Interfax)

Areva presents to Kazakh president a project for construction of a fuel assembly plant (Interfax)

BUSINESS AND ECONOMY:

Central bank to keep refinancing rate at 6-8% until 2015 (SRI)

Kazkommertsbank seeks re-entry into post-crisis Eurobond fold (Financial Times – Mergermarket)

Kazakhs approve 2011 budget with 2.8% deficit (Bloomberg)

France Kazakhstan trade deal (euronews)

Eurocopter signs two strategic agreements with Kazakhstan (defpro)

National Bank of Kazakhstan: Exchange rates October 28, 2010 (Kazakhstan Today)

Indicators – October 27, 2010 (Reuters)

METALS AND MINING:

Frontier Mining close to production (Investors Chronicle)

Central Asia Resources hits shallow gold including 15m at 8.1g/t in Kazakhstan (Proactive Investors)

POLITICS:

Kazakh President and NATO Secretary General discuss cooperation (Interfax)

Kazakh President and European Commission President sign several bilateral agreements (Interfax)

Kazakh politician gets egg on his face for irking nationalists (EurasiaNet)

Kazakhstan to invest $50 million into Afghanistan’s education program (Itar-Tass)

SOURCE: http://silkroadintelligencer.com/2010/10/28/kazakhstan-daily-news-roundup-october-28-2010/

Kazakhstan Daily News Roundup – October 21, 2010 0

Posted on October 21, 2010 by KazCham

HEADLINES:

Karachaganak could be facing new claims – tax official
(SRI) – Kazakhstan may issue new tax claims against Karachaganak Petroleum Operating (KPO), the Western-led joint venture developing the Karachaganak gas condensate field in western Kazakhstan, a Ministry of Finance official said on Wednesday.

Kazakhstan considering KazMunaiGas IPO in London in 2011 – Samruk-Kazyna
(SRI) – Samruk-Kazyna, the state-owned holding and investment company, plans to sell up to 20% of the national oil company KazMunaiGas as early as next year, Bloomberg reported citing Samruk-Kazyna head Kairat Kelimbetov.

Iraq auctions off large gas field to KazMunaiGas, KOGAS
(AFP) – The largest of the three fields up for sale went to a Kazakh and Korean consortium; the next biggest to a Turkish-Kuwaiti-Korean bid; and the smallest to a Turkish-Kuwaiti joint venture.

ENERGY:

KMG EP crude output up 15% year-on-year in first nine months of 2010 (SRI)

Tethys Petroleum announces successful closing of $100-million public offering (Marketwire)

BUSINESS AND ECONOMY:

Indicators – October 20, 2010 (Reuters)

METALS AND MINING:

Korean steelmaker to form material joint venture in Kazakhstan (SRI)

Polymetal plans to acquire 85% interest in Kazakh mine (SRI)

ENRC mines a seam of anger in Katanga (Financial Times)

POLITICS:

Irksome to President, Kazakh PM still loved by his people (EurasiaNet)

SOCIETY:

All Kazakhstan’s citizens must speak Kazakh – Nazarbayev (Interfax)

SOURCE: http://silkroadintelligencer.com/2010/10/21/kazakhstan-daily-news-roundup-october-21-2010/

Kazakhstan Daily News Roundup – October 6, 2010 0

Posted on October 06, 2010 by KazCham

HEADLINES:

Karachaganak to bring down expansion costs to $10 billion
(SRI) – Karachaganak Petroleum Operating (KPO), the Western-led venture developing the Karachaganak gas condensate field, may bring the down the cost of the third phase of development to as low as $10 billion, Bloomberg reported on Tuesday.

Eurasian Development Bank face of close ties between Russia and Kazakhstan
(bne) – Relations between Russia and Kazakhstan are tight as the two counties have become strategic partners – and the Eurasian Development Bank (EDB) is the face of that.

Kazakhmys chairman sells stake for $1.3 billion
(SRI) – Kazakhmys Chairman Vladimir Kim sold an 11% stake in the company, nearly a third of his stake, to the Kazakh state-owned holding and investment company Samruk-Kazyna for about $1.3 billion, Kazakhmys said in a statement.

ENERGY:

Rosneft to extend Kurmangazy exploration contract – Kulibayev (SRI)

Kazakhstan to produce 130 million tonnes of crude by 2020 – Minister (SRI)

Kazakhstan to produce 130 million tonnes of crude by 2020 – Minister (Reuters)

BUSINESS AND ECONOMY:

National Bank of Kazakhstan: Exchange rates October 6, 2010 (Kazakhstan Today)

Indicators – October 5, 2010 (Reuters)

METALS AND MINING:

Central Asia Metals to start offtake talks this week (Reuters)

Kazakhstan plans to boost coal exports to 32 million tonnes by 2014 (SteelOrbis)

POLITICS:

Kazakh official denies presidential staff chief had stroke (RFE/RL)

Kazakh doctor admits false diagnosis of Health Minister (RFE/RL)

REGIONAL:

Turkmen activists barred from human rights meeting (AP)

Environmentalists decry risks of new Armenia nuclear reactor (AFP)

SOURCE: http://silkroadintelligencer.com/2010/10/06/kazakhstan-daily-news-roundup-october-6-2010/

Kazakhstan Daily News Roundup – August 26, 2010 0

Posted on August 26, 2010 by KazCham

HEADLINES:

Karachaganak stake sale talks to conclude in weeks – Eni
(SRI) – Karachaganak Petroleum Operating (KPO), the Eni- and BG-led consortium of oil companies developing the Karachaganak field, is currently in talks with Kazakhstan to finalize the sale of a stake in the project, Eni CEO Paolo Scaroni said on Wednesday.

Samruk-Kazyna files claim against BTA over loans
(SRI) – Samruk-Kazyna, Kazakhstan’s state-owned holding and investment company, filed a claim in a Kazakh court against BTA Bank and “some of its creditors” over $300 million in transactions, BTA said on Wednesday.

U.S. judge rejects BTA Bank’s bid to stop lawsuit (SRI)

BUSINESS AND ECONOMY:

Samruk-Kazyna files claim against BTA over loans (SRI)

STX Group to build two icebreakers for Kazakh company (SRI)

Moody’s affirms Halyk Bank’s Ba2/D- ratings (Moody’s)

Former Ministry of Trade official named new head of Kazakhstan Investment Fund (SRI)

Living in fear in London: the exiled Kazakh banker accused of $2 billion fraud (Evening Standard)

Kazakhstan’s GDP to grow 5% in 2010 – Economic Development Ministry (Interfax)

Kazakhstan to supply feed grains to Tatarstan (Interfax)

Air Astana reports strong performance during first half 2010 (eTravel Blackboard)

SOCIETY:

Kazakh circus owner leaves lion in van overnight (SRI)

SOURCE: http://silkroadintelligencer.com/2010/08/26/kazakhstan-daily-news-roundup-august-26-2010/

Kazakhstan Daily News Roundup – August 19, 2010 0

Posted on August 19, 2010 by KazCham

HEADLINES:

Kazakhstan reasserts control over big energy projects
(bne) – On the heels of news that KazMunaiGas has signed off on the deal to increase its stake in the Kashagan project come reports Kazakhstan is close to striking a deal over the Karachaganak venture, under which the international consortium developing it would avoid export duties in return for handing over a stake.

Kazakhmys says copper output flat until 2014
(Reuters) – Declining ore grades will keep copper production by Kazakhmys in check until 2014, beyond which the Kazakh miner plans to boost output by as much as 60 percent by bringing several major projects on stream.

ENRC earnings up 63%, cautious on outlook
(Reuters) – Kazakh miner ENRC posted on Wednesday a 63 percent rise in first-half earnings per share on higher output and prices but was wary about commodity prices in the second half.

ENERGY:

Alhambra begins drilling at Kerbay (Marketwire)

Jupiter Energy underpins future growth with strategic investor (Proactive Investors)

BUSINESS AND ECONOMY:

Kazakhstan, Belarus do not join Russia grain export ban (Reuters)

European property and Kazakh wealth (Financial Times Blog)

Kazakhstan to export 6 million tonnes of grains (AgriMarket.Info)

Grain production to total 15.4 million tonnes in bunker weight (AgriMarket.Info)

Baltika-Almaty closes merger with Derbes Breweries in Kazakhstan (Food Industry News)

National Bank of Kazakhstan: Exchange rates August 18, 2010 (Kazakhstan Today)

METALS AND MINING:

Sunkar first-half loss narrows 24% (SRI)

POLITICS:

Nazarbayev adored as Kazakhs eye Kyrgyz strife with suspicion (EurasiaNet)

Nazarbayev proposes to establish a committee for migration policy and reform investigation authorities (Interfax)

Kazakh president signs decree on reformation of law-enforcement system (Interfax)

SOCIETY:

Well-known Kazakh businessman missing (RFE/RL)

Kazakhstan’s scrum queens (EurasiaNet)

SOURCE: http://silkroadintelligencer.com/2010/08/19/kazakhstan-daily-news-roundup-august-18-2010/



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