In this issue:
The following is a selection of media stories on
"2005 KAZAKHSTAN Industrial and Innovation Strategy: News Business Opportunities",
an international investment conference which took place in San Diego, CA,
September 8-9, 2005
Kazakhstan Making Progress in Drive to Diversify Its Oil-Based Economy
Leaders discuss Kazakh oil
Kazakhstan Calls for Increased U.S. Investment to Help Bring More Oil to Market
Kazakhstan sees Iran as possible future oil route
Kazakhstan Making Progress in Drive to Diversify Its Oil-Based Economy
Friday September 9, 10:05 pm ET
SAN DIEGO, Calif., Sept. 9 /PRNewswire/ -- Kazakhstan is making impressive strides to diversify its economy away from petroleum and is focusing on developing a range of technology-based industries, the nation's First Deputy Prime Minister said today at a U.S.-Kazakh business conference designed to encourage investment in the Central Asian country.
"Kazakhstan is open for business and I invite you to invest," said Sauat Mynbayev, who is also Minister of Industry and Trade.
Foreign investment in Kazakhstan has amounted to $30 billion since 1993, which is the highest input among post-Soviet republics after Russia. Of that, more than 40 percent was invested in oil and other extraction industries. The United States is the largest investor with $608 million invested during the first quarter of 2005. Mynbayev told the group that Kazakhstan has developed an Industrial and Innovation strategy that looks at several key "non- extraction" (oil, natural gas, coal) industries for development. These include: information technology, pharmaceuticals, tools, tourism, construction equipment, software, alternative energy and others.
"We are committed to diversifying our economic infrastructure so that we will be able to compete effectively with other nations in the 21st century," Mynbayev said. "We believe such action will help us to continue our pattern of growth, which has seen our Gross Domestic Product rise about 10 percent annually."
As proof of that commitment, Mynbayev said Kazakhstan has created "technical parks" that support various technologies. One, for example, is the "Alatau IT-Park," which functions as a "free economic zone" for the development of information technology. The zone was set up with both Kazakh and U.S. investment. Blue Chip firms such as HP, Microsoft, Tales, IBM, Samsung and SUN Microsystems have signed on. Biotechnology is another area under development.
Mynbayev pointed to other actions being taken to spur economic development, including tax cuts and incentives.
Gosman Amrin, chairman of the Kazakhstan National Innovation Fund, said that the government created the fund in 2003 as part of its industrial and innovation strategy. The strategy includes the creation of a venture capital system and private sector investment. The fund provides access to capital and other incentives.
Mynbayev and Amrin spoke at an economic investment conference titled, "2005 Kazakhstan Innovation and Industrial Strategy: New Business Opportunities." Minister of Energy Vladimir Shkolnik and Talgat Abylgazin, Deputy Prime Minister of Kazakhstan Transport & Communications also participated. U.S. participants included Congressman Darrell Issa (R-Calif), Deputy Assistant Secretary of State Paul Simon, Deputy Assistant Secretary of Commerce Eric Stewart and U.S. Chamber of Commerce Chairman Jeffrey Crowe.
Source: Government of Kazakhstan
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San Diego Union Tribune
Leaders discuss Kazakh oil
100 executives attend meeting in Coronado
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
September 10, 2005
With the rising price of energy spurring a search for more fuel sources, U.S. officials and oil company executives met yesterday at the Hotel del Coronado to discuss the possibility of extracting more oil from the Central Asian republic of Kazakhstan.
Currently, Kazakhstan – an oil-rich country surrounded by Russia, China and several former Soviet republics – produces 1.3 million barrels per day.
But by 2015, industry analysts say, that oil production will more than double to 3.5 million barrels a day, which could make Kazakhstan one of the world's top five producers.
Which is why more than 100 executives from such companies as Chevron and ExxonMobil met with Kazakhstan's energy and industry ministers, as well as high-ranking officials from the U.S. State and Commerce departments and Export-Import Bank.
Kazakh Energy Minister Vladimir Shkolnik said his country has enough oil to help stabilize world fuel prices, but it needs more investment to build pipelines.
"We have invested billions of dollars over the years to develop and upgrade our pipeline and transport system," Shkolnik said. "Still, we need to improve our ability to move more oil from the Caspian Sea to world markets, and that requires greater investment in this infrastructure."
Since the breakup of the Soviet Union in 1991, $33 billion in investment has flowed into Kazakhstan, with about a third of the investment coming from the United States, led by Chevron and ExxonMobil.
In the past couple of years, however, U.S. oil companies have faced growing competition from China.
On the western side of the country, a consortium led by Chevron is building a 935-mile pipeline to take Kazakh oil through Georgia and into Turkey. But to the east, China's two top oil companies – CNOOC and CNPC – are exploring ways to bring Kazakh oil into the Chinese heartland.
With revenue coming from both sides, the Kazakh government is trying to diversify its economy by bringing other industries in. At yesterday's conference were representatives of such companies as General Electric, which is selling locomotives to Kazakhstan; John Deere, selling agricultural combines; and AES Inc., which is rebuilding the country's Soviet-era electrical grid.
"With all the oil money percolating through the economy, a large number of U.S. companies are beginning to be interested in Kazakhstan," said William C. Veale, executive director of the U.S.-Kazakhstan BusinessAssociation.
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Kazakhstan Calls for Increased U.S. Investment to Help Bring More Oil to Market
Friday September 9, 10:05 pm ET
SAN DIEGO, Sept. 9 /PRNewswire/ -- Kazakhstan has the oil resources to help stabilize world oil prices, but needs increased investment to bring transport capacity up to production capacity, the nation's minister of energy said today at U.S.-Kazakh business conference here.
"We have invested billions of dollars over the years to develop and upgrade our pipeline and transport system," said Minister of Energy Vladimir Shkolnik. "Still, we need to improve our ability to move more oil from the Caspian Sea to world markets, and that requires greater investment in this infrastructure."
Kazakhstan has been dependent on Russian pipeline infrastructure to bring oil to market, and is seeking to diversify its exports routes. That includes the BTC pipeline from Baku in Azerbaijan via Georgia and Turkey to the Mediterranean as well as the Kazakhstan-China pipeline, both of which bypass Russian territory.
Shkolnik then cited Kazakhstan's oil production outlook as follows:
-- In 2005, the country expects to produce 1.3 million barrels of oil a
day and 28.7 billion cubic meters of natural gas per year.
-- By 2010, those figures are expected to climb to 1.8 million barrels a
day and 52.5 billion cubic meters of natural gas per year.
-- By 2015, the Central Asian nation could produce 3 million barrels of
oil a day and 79.4 billion cubic meters of natural gas per year, which
could make Kazakhstan the world's fifth largest oil producer.
Shkolnik reiterated his nation's commitment to observing strict environmental standards for "extraction" industries such as oil, natural gas and coal, which accounts for 80 percent of the country's electricity production. He also said that Kazakhstan was dedicated to the peaceful use of nuclear power as the third largest producer of uranium with 21 percent of world uranium resources. With an annual production growth rate of 12 percent, Kazakhstan may become the world's largest uranium producer by 2010.
The energy minister said that despite current high energy prices, Kazakhstan was determined to diversify its economy to be less dependent on oil, which accounts for about 27 percent of the country's Gross Domestic Product. Diversification efforts include the development of information technology, pharmaceuticals, alternative energy sources, and other non-extraction industries.
Shkolnik spoke at an economic investment conference title "2005 Kazakhstan Industrial and Innovation Strategy: New Business Opportunities." First Deputy Prime Minister Sauat Mynbayev, Talgat Ablygazin, Kazakhstan Transport & Communications Deputy Prime Minister, and Gosman Amrin, chairman of the Kazakhstan National Innovation Fund, participated in the conference, as did Congressman Darrell Issa (R-Calif), Paul Simons, deputy assistant secretary of state, Eric Stewart, deputy assistant secretary of commerce and Jeffrey Crowe, U.S. Chamber of Commerce chairman.
Source: Government of Kazakhstan
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Kazakhstan sees Iran as possible future oil route
San Diego, September 9 (Reuters) - Kazakhstan's Oil Minister Vladimir Shkolnik said the Central Asian nation could turn to Iran for an extra route to export oil as current pipelines reach their limits in a decade or so.
The nation, which is about five times the size of France, expects output to surge to 3.5 million barrels per day (bpd) by 2015 from less than half that now, which would put the former Soviet state in the world's superleague of oil producers.
Even after expanding the Caspian Pipeline Consortium route through Russia, the Atyrau-Samara also through Russia, the new Baku-Ceyhan line and shipments to China, Kazakhstan will need to find more room, if current estimates hold, Shkolnik said on the sidelines of a conference for potential investors.
Asked whether Iran would be a possible location for a new pipeline, he said through a translator: "Iran is included in the considerations which are made on this particular issue."
He added, however, that decisions on how to ship oil are made by private oil companies.
Shkolnik also said that swap operations with Iran -- sending Kazakh oil to the north of Iran in exchange for Iranian oil in the south -- could be "rather profitable."
Kazakhstan, now among the world's top 20 oil producers, pins its hopes of future prosperity on developing its Caspian Sea oil riches. Shkolnik reiterated that the government plans to tender Caspian oil blocks next year, but gave no detailed timeframe.
Shkolnik also said he expected the price of oil to fall from current high levels, though he said it was difficult to predict oil prices. A price drop "is only natural, except I don't think it will be as low as $20-$25 a barrel -- maybe $40-$45," he said.
French major Total had said in June that Iran remained a promising future export route for at least part of the crude from Kazakhstan's Kashagan field in the Caspian, despite U.S. opposition to Tehran.
Kashagan, discovered in 1999, was the world's largest offshore field in 30 years and its volumes are so huge that other export routes will be needed, Total's Vice President for the Caspian, Jean Michel Salvadori, said at the time.
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News Bulletin of the Embassy of the Republic of Kazakhstan to the USA and Canada
(Compiled from own sources and agency reports)
Contact person: Roman Vassilenko
1401 16th Street NW, Washington DC 20036
Tel.: 202 232 5488, ext. 104, Fax: 202 232 5845
