041702

Vol. 2, No. 13, April 17, 2002

Politics

President Nazarbayev oversees first large-scale military exercises since independence

Kazakhstan to create human rights ombudsman

Anti-corruption commission to review all closed corruption cases

U.S. provides equipment for anti-terrorism effort

Russian Party registered in Kazakhstan

Economy

ChevronTexaco chief discusses expanding operations in Kazakhstan, says board to visit

Kerr-McGee interested in priming its own oil through CPC System

Kazakhstan Q1 2002 oil output up 15.7% on year at 9.7 million tons

National Fund assets exceed $1.5 billion

POLITICS

President oversees first large-scale military exercises since independence

Kazakhstan on April 16 conducted its first large-scale military exercises since the break-up of the Soviet Union as President Nursultan Nazarbayev looked on.

Kazakhstan "has begun to give more attention to the country's armed forces We should expect threats of terrorism at any time, therefore our military must be prepared. It is costly, but these are necessary expenditures", Mr. Nazarbayev told reporters as he watched about 7,000 soldiers conducting the exercises at the Saryshagan training ground on Tuesday. Military attaches from the United States, Russia, China, Ukraine and the United Kingdom attended. About 28,000 Kazakhstan troops are expected to take part in the exercises overall throughout its duration from April 5 to 20.

Troops on Tuesday practiced conducting a massive strike on a conventional enemy, as well as conducted firing practice with Smelchak mortar with a laser-pointing system, the S-300 surface-to-air missile and the Tochka-U tactical missile.

Kazakhstan to create human rights ombudsman

On April 16, 2002 Secretary of State - Minister of Foreign Affairs Kasymzhomart Tokaev announced that the Government of Kazakhstan will name its first official human rights ombudsman by the end of the year.

Kazakhstan has had a Presidential Human Rights Commission since 1994, but the new ombudsman is intended to be more authoritative, the Government official said. The watchdog will be responsible for ensuring better interaction between the authorities and non-governmental human rights organizations numbering today over 1,600, Mr. Tokaev stated.

The Presidential Human Rights Commission received 629 appeals in 2001, but Mr. Tokaev suggested that the real number of rights violations could be higher. He said the affiliates of ombudsman's offices will be opened in every region, which will help to address the problems in human rights sphere more efficiently.

Anti-corruption Commission to review all closed corruption cases

The recently-created Commission on Anti-corruption Measures and Professional Ethics under the President of Kazakhstan has sent a series of inquiries to the General Prosecutor's Office asking for information on all previously closed or suspended investigations into corruption charges against state officials. The commission held its first meeting in Astana on April 11.

The new Commission, formed at the order of President Nursultan Nazarbaev at the beginning of April, will be open to any Kazakhstan citizen who wishes to report cases of corruption involving state officials. Its sessions will be conducted on a weekly basis. Documents collected from citizens will be thoroughly reviewed by the commission members as well as the Presidential Administration's legal department.

Chairman of the Commission Sat Tokpakbaev vowed that the work of the commission will be transparent and accessible to the public. He told journalists that the commission will draw up a new code of ethical behavior for government workers by the end of April.

US provides equipment for anti-terrorism effort

US Ambassador to Kazakhstan Larry Napper handed over equipment to help Kazakhstan's law enforcement better investigate explosions and bombings at a meeting with officials from the National Security Committee (KNB) in Almaty last week.

The donated equipment will help law enforcement simulate situations when cause of an explosion must be determined. Several Kazakhstan security officers have already undergone training to use the equipment in the United States.

According to the US Embassy press release, the equipment was given within the framework of the Central Asia Security Initiative (CASI) approved by Washington and Astana and providing for joint efforts on anti-terrorist operations, non-proliferation issues and export controls on dangerous or banned materials.

Russian Party registered in Kazakhstan

On April 15, the Ministry of Justice of Kazakhstan registered a new political grouping, the Russian Party of Kazakhstan. The head of the new party, 55-year old Gennady Belyakov, has been the chairman of the Association of Russian, Slavic and Cossack Public Organizations since 1997. According to the Russian Party's program and charter, the group plans to promote public safety and the stable economic development of every ethnic group in Kazakhstan as a well as support Kazakhstan's sovereignty and territorial integrity.

The Russian Party intends to support candidates in presidential and parliamentary election as well as local posts. Some 30 percent of Kazakhstan's population of 15 million is ethnically Russian.

ECONOMY

ChevronTexaco chief discusses expanding operations in Kazakhstan, says board to visit soon

On April 15, 2002 President Nursultan Nazarbayev met with ChevronTexaco Chairman David O'Reilly in Astana to discuss the company's projects in the republic. Following his meeting with president, Mr. O'Reilly announced that ChevronTexaco board of directors would visit Kazakhstan in the nearest future.

"President Nazarbayev showed interest in meeting with ChevronTexaco board and in telling them personally about business opportunities in Kazakhstan," Mr. O'Reilly said. The board includes former US Senator Sam Nunn as well as former top managers at major American corporations such as Boeing, Chrysler and Hewlett Packard. In addition to oil issues, members of the delegations are likely to be interested in investment in other sectors in Kazakhstan, Mr. O'Reilly noted.

"I congratulated President Nazarbayev with Kazakhstan receiving a market economy status. I believe it is an important step toward normalizing trade relations between our countries," ChevronTexaco chief said. President Nazarbayev presented Mr. O'Reilly with the Kurmet award in recognition of ChevronTexaco's significant contributions to the development of the Kazakhstan economy.

Following the meeting with Prime Minister Imangali Tasmagambetov the next day, Mr. O'Reilly said that currently Tengizchevroil, a joint venture 50%-owned by ChevronTexaco and developing giant onshore Tengiz field in western Kazakhstan, produces 37,000 tons of oil a day, of which 30,000 tons are being exported via CPC pipeline to Russia's Black Sea port of Novorossisk. Mr. O'Reilly said the successful operation of the pipeline, launched in the fall of 2001, will allow the joint venture to increase its production.

ChevronTexaco's chief announced that his company will increase its production of Kazakh oil from its present amount of 13 million metric tons per year to 20 million tons per year by 2005. To this end, ChevronTexaco will invest some $1.5 billion over the next three years to expand the production capacity of the Tengizchevroil joint venture. Mr. O'Reilly noted that ChevronTexaco's investments in Kazakh projects to date amount to $1.4 billion.

He also said the joint venture was increasing annually the share of orders it places among Kazakhstan companies. This year, Tengizchevroil, which also includes ExxonMobil with 25% of the shares, is to spend $413 million for these purposes.

Kerr-McGee interested in priming its own oil through CPC System

US-based oil company Kerr-McGee Corp., which is developing fields in western Kazakhstan, plans to begin exporting oil via the Caspian Pipeline Consortium's Tengiz-Novorossiisk pipeline in July or August of this year.

The company will start pumping oil via the CPC pipeline after the completion of construction of a pipeline linking the Atyrau oil transfer station to the Tengiz-Novorossiisk pipeline, Kerr-McGee Government Relations Director Kuralbek Keldzhanov stated on April 9.

Kerr-McGee plans to export 100,000 tons of its 300,000 tons produced in Kazakhstan through the CPC route. Currently the company exports its crude via the Atyrau-Samara pipeline, which is operated by Russian state pipeline company Transneft, but eventually all of its oil will be shipped through the Tengiz-Novorossiisk route, Keldzhanov said.

In 1999 Kerr-McGee merged with US-based Oryx Energy. Kerr McGee/Oryx owns a 1.75% stake in the Caspian Pipeline Consortium.

Kazakhstan Q1 2002 oil output up 15.7% on year at 9.7 million tons

Kazakhstan 's oil output in the first quarter of 2002 rose 15.7% on the year to 9.7 million metric tons from 8.4 million tons, the State Statistics Agency said Monday April 15. This is equivalent to 787,856 barrels a day, compared with 682,267 b/d a year earlier.

Kazakhstan 's combined oil and gas condensate exports in January and February 2002 rose 15% on the year to 4.414 million tons from 3.838 million tons, the agency said.

Kazakhstan plans to boost its output to over 1.1 million b/d by 2004, compared with around 780,000 b/d last year. (For more news from the Agency, visit their web site at http://www.kazstat.asdc.kz.)

National Fund assets exceed $1.5 billion

The National Fund assets reached $ 1.527 billion as of April 16, Chairman of Kazakhstan's National Bank Grigori Marchenko announced at a press conference in Almaty on April 17. Mr. Marchenko said the assets grew by $286.6 million since the beginning of 2002.

Currently 60.35% of the assets are in the savings portfolio with the rest in the stabilizing portfolio respectively. By the end of April, the correlation between the two main functions of the Fund will be reinstated to 75-25 ratio.

The National Fund, modeled after the Norwegian experience of a stabilization fund, was established in January 2001 to accumulate excesses of oil and other revenues to help Kazakhstan stave off the so-called "Dutch disease".

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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