Kazakhstan
News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan
January 30, 2003 Vol. 1, No.5
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In this issue:
Judge Hands Down Rape Sentence On Duvanov
Kazakhstan, Oil Companies Settle Financial Dispute at TCO
Kazakhstan Moves to Join Major League Oil Producers - 120 new offshore blocks to be tendered in 2003-04
National Bank Stops Setting Tenge-Dollar Exchange Rate
Home of Legendary Racehorse Seeks Return to Glory, Profit
Judge Hands Down Rape Sentence on Duvanov
Case is about crime against minor, not Duvanov's professional activity, prosecutors say
Case materials may be presented to professional jurists sent by OSCE
A judge at the Karasai district court found Sergei Duvanov, a 50-year-old journalist guilty of raping a girl and sentenced him to 3 1/2 years in prison on January 28. (See Kazakhstan News Bulletin for October 30, and Novermber 14, 2002).
Prosecutors had called for a seven-year sentence as provided by an article of the Criminal Code for raping a minor whilst being aware of her age. But the court sentenced Duvanov to half that under a different part of the article because it found that he wasn't aware the girl was a minor, according to international observers present in the courtroom.
Observers from the U.S. Embassy, the Netherlands, currently presiding in the Organization for Security and Cooperation in Europe and also representing the European Union, and the OSCE were in the courtroom when the verdict was read. The judge allowed the observers in despite the extreme sensitivity of the rape cases for the victims, which is why they are generally heard behind closed doors in Kazakhstan. The observers were eager to attend because of the nature of the case which involved Mr. Duvanov, one of the opposition journalists.
Both the plaintiff's and the defendant's lawyers said they would appeal the decision, albeit with different goals.
"A total of 18 examinations were conducted, including the molecular examination," said Vasili Martynovski, the raped girl's attorney. "I believe the court investigation was conducted fully and objectively. But we are definitely not happy with the verdict." The girl's other attorney, Erik Nurshin, confirmed at the news conference on January 29 that they would certainly appeal the decision and ask for re-trial.
The OSCE also called for the review of the trial. In its turn, citing the recent independent investigation of an unrelated case conducted by Canadian coroners (see Kazakhstan News Bulletin, January 23) as an example of its openness, the Kazakhstan side has said it is willing to provide access to Duvanov's case materials for the professional jurists sent by the OSCE.
The rape victim, Kristina Kapelyushina, 14, herself has agreed to speak to the media. In an interview with Khabar TV on January 29, she said: "He [Duvanov] said, if you want to, I can help you, I have friends who can get you a job as a model, and you don't have to pay. This was what Duvanov, Uncle Sergei, said. He told me to write down my name, age, telephone, and address. He then took the sheet of paper and left toward the sauna."
"When a search was conducted in the presence of Duvanov and Zhovtis [his lawyer], this note was found tucked between the books and it was recovered," Mr. Martynovski said. "The examination confirmed that it was written by the girl, while Duvanov has been saying all along he doesn't know her age."
The prosecutors claimed Mr. Duvanov's defense behaved non-professionally throughout the case.
"Lawyers for both the plaintiff and the defendant have to present to the court their final statements. Yet, when it came to that, both the defendant's attorney and the defendant himself refused to do so", Dhaksylyk Baitukbayev, prosecutor for Almaty region said. "Also at the stage of preliminary investigation, when Duvanov himself was actively studying the case, his attorneys should have been with him, but instead one of them chose to leave for Europe to celebrate his birthday."
In contrast to Duvanov's attorneys, the prosecutors believe the case have no political undertone. "This case is about a crime against the honor and dignity and health of a minor victim. Neither professional activity, nor convictions of Duvanov play a role in this case," Mr. Baitukbayev said.
The trial also drew comments from Seitkazy Mataev, president of the Journalist Council of Kazakhstan and chair of the Public Council on the Media.
"We have one position among the Journalists' Congress, the Journalists' Union, and the Public Council. We understand that all kinds of things can happen. But we are ready to defend Sergei Duvanov as he is the member of the journalist community," Mr. Mataev said.
The parties have 10 days to appeal. The trial lasted since December 24. Mr. Duvanov was arrested October 28 after the girl and her mother filed a complaint at a local police station saying he raped the underage the previous night at his country residence.
Kazakhstan, Oil Companies Settle Financial Dispute at TCO
Clear way for $3.5 billion investment; U.S. Gov't welcomes news
Tengizchevroil consortium, that develops giant Tengiz oil field in western Kazakhstan, announced on January 25 that the partners had reached an agreement clearing the way for $3.5 billion expansion of the project over the next three years.
The expansion was put on hold last November because of the dispute between the Government and the foreign companies in the Tengizchevroil consortium, or TCO, on the way to finance the expansion. While the Western companies in consortium, led by ChevronTexaco, intended to finance the expansion using the project's oil revenues, the Government objected to it saying it would lead to a significant reduction in its tax revenues from one of the largest taxpayers in the country, in the range of $1billion over the next five years.
The agreement became possible "through a mutually beneficial compromise between the Government and foreign partners", said Zhakyp Marabayev, managing director of Kazmunaigaz, national oil and gas company.
ChevronTexaco vice chairman, Peter Robertson, said that the two sides had agreed on "a funding plan that would provide for the diverse financial needs of the partners."
The U.S. Government welcomed the news, and congratulated the Kazakhstan Government and the partners on the settlement.
"The United States welcomes the January 25 announcement that the TengizChevrOil second-phase expansion project in Kazakhstan has been approved," the State Department said in a January 29 statement. "The $3 billion expansion project is one of the largest foreign investment projects in the former Soviet Union. It will play a major role in developing the Caspian Basin and helping to diversify the world's oil supply".
"The TengizChevrOil expansion project will showcase American know-how, create 7,000 jobs, and help develop Kazakhstan's economy," the State added.
Under the new agreement, the consortium will pay $810 million to the Kazakhstan government, of which $600 million is tax payments to be paid in installments through 2005, the New York Times reported. $210 represents the payment to the Government for the original purchase of the stake in the consortium in 1993. In addition, the consortium will take out a loan to finance the Kazakh government's share of the cost of the expansion, according to Kazmunaigaz, the Kazakh national oil company.
Announcing the agreement on Saturday, the consortium said that it would "immediately lift the suspension and reactivate expansion." The expansion plans include the two components, the construction of the Second Generation Plant and the Sour Gas Injection, which combined would lead to almost doubling the output at the field by 2006, from the current rate of 13 million tonnes per year to between 20 and 23 million tonnes per year.
According to Mr. Robertson, "ChevronTexaco remains committed to a close and long-term partnership with Kazakhstan, the proof of which is the investment of 4 billion dollars we invested in Kazakhstan for the past ten years We believe the expansion projects will become another successful example of cooperation."
Partners in the consortium include Kazmunaigaz, with 20 percent, ChevronTexaco with 50 percent; ExxonMobil with 25 percent, and LukArco of Russia, with 5 percent. The project at Tengiz, considered the 6th largest field in the world with 6 to 9 billion barrels in recoverable reserves, is the largest Western-run oil producer in the former Soviet Union, producing 286,000 barrels a day. The expansion is intended to lift output to 460,000 barrels a day by 2006.
Kazakhstan Moves To Join Major League Oil Producers
120 new offshore blocks to be tendered in 2003-04
Kazakhstan's Economy Minister unveiled ambitious plans on January 27 for the country to become one of the world's top five oil producers by 2015, Reuters reported.
At the heart of the strategy lies a plan to tender 120 offshore structures in the Caspian Sea, already home to the giant Kashagan field, the largest oilfield discovered in the world in the last 30 years.
Kazakhstan is the second largest producer in the former Soviet Union after Russia, with production at a million barrels a day. But Economy and Budget Planning Minister Kairat Kelimbetov sees far more to come.
"To sum up, what we expect is 52.7 million tonnes (around 1.05 million barrels per day of oil output) this year, 56.0 million in 2004 and 61.2 million in 2005," he told Reuters in an interview. The country produced 47.2 million tonnes in 2002.
Kelimbetov said the Government was due to finalize approval of a Caspian Sea development program in April this year, and would then tender a new round of 120 offshore oil blocks in the Caspian in late 2003 or early 2004. He cited the main criteria for companies willing to compete as "ecology, infrastructure, which is very important to foreign investors, and, of course, the tax regime."
"We expect fast oil production growth in 2006 due to the development of new blocks in the Caspian Sea," he said. "The Caspian shelf blocks will be tendered either at the end of 2003 or at the beginning of 2004."
National Bank Stops Setting Tenge-Dollar Exchange Rate
Measure required by this year's adoption of international accounting standards
The National Bank of Kazakhstan, the country's central bank, announced January 29 it was abandoning the practice of setting the exchange rate for the national currency for accounting purposes, The Khabar TV reported. The Bank said the move is required by international accounting standards to which Kazakhstan switches this year.
For a number of years, the Bank has been setting the exchange rate, close to the actual currency exchange's rate, as a guideline for accounting purposes in foreign economic operations. From now on, the Bank will just use the tenge-dollar exchange rate as it is at the end of trading each weekday. The exchange rates for currencies other than dollar and not traded at the exchange would be set according to their exchange rate toward dollar. The Bank will continue to set the tenge-dollar exchange rate for accounting purposes in export-import operations.
The National Bank ceased regulating directly the exchange rate for the national currency in late 1990's. Kazakhstan boasts one of the most robust financial systems in the former Soviet Union. The country's largest banks have received the investment ratings from ratings agencies, which has opened the way for their aggressive foreign borrowing. Offices of major foreign banks, including Citibank, HSBC, ABN-AMRO, also operate in Kazakhstan. In September 2002, Moody's Investors Service upgraded Kazakhstan's foreign currency rating for government foreign currency bonds from Ba2 up by two notches to Baa3, making Kazakhstan the first country in the CIS to achieve the investment-grade rating.
Home of Legendary Racehorse Seeks Return to Glory, Profit
Lugovoi studfarm in the south of Kazakhstan, home to the legendary Absent, called the best racehorse at the 1968 Mexico Olympics, has experienced many troubles throughout the past decade, but recently has begun seeing things change for the better.
In the good old days, the studfarm used to boast a herd of 1,500 elite horses of Akhaltekin and Donskoi breed and used to sell 250 racehorses to consumers around the world annually. Yet, during the first independence years, because of mismanagement and other adverse factors, the farm saw a dramatic decline in its stock and resources and all but went bankrupt.
Recently, however, with the infusion of money and efforts from a horse-loving enthusiastic and a rich entrepreneur, the studfarm, located against the magnificent backdrop of snow-capped mountains and wide juicy grasslands, has seen its fortunes improve. The stables are being rebuilt, the new horses are bought for breeding, and professional jockeys are hired to train them. With the studfarm, the entrepreneur, Khali Bazaraliev, also took charge of local economy and society, rebuilding roads, power lines, sewage, and giving jobs to hundreds of previously unemployed locals.
Horse-wise, Bazaraliev bought 14 racehorses of pure English breed, which are already at the farm. Among the studs are Harrygayton from the U.S., and Argo, the grandson of Behistone, winner of L'Arc de Triomphe in France. The horses are given exquisite selection of high-vitamin food and even have their own towels, as requested by the rules. Another 14 thoroughbreds are currently under quarantine in Germany, waiting to be transported to Kazakhstan.
Bazaraliev's goal for the future: breed new Absents.
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News Bulletin of the Embassy of the Republic of Kazakhstan
(Compiled from own sources and various agencies' reports)
Contact persons: Roman Vassilenko, Aibek Nurbalin
Tel.: (202) 232- 5488 ext. 104, 115, Fax: (202) 232- 5845
