Kazakhstan News Bulletin Released weekly by the Embassy of The Republic of Kazakhstan
______________________________
Vol. 4, No. 41, October 3, 2001
Politics
·
President Nazarbayev, Chancellor Shroeder discuss fight against terrorism
·Kazakhstan's Ambassador to the U.S. appointed Ambassador to Canada
Economy
·Government expects USD 1 billion rise in foreign investment in 2002
·The New York Times: A Breakthrough for Kazakhstan's Oil
·KazakhOil to issue USD 100 million Eurobond
·U.S. and Kazakhstan study the project of "an Aktau-Baku oil corridor"
POLITICS
President Nazarbayev, Chancellor Shroeder discuss fight against terrorism
President Nursultan Nazarbayev, on a visit to Germany, met with Federal Chancellor Gerhard Schroeder in Berlin on October 2 to discuss bilateral relations, the situation in Central Asia and the rising tension around Afghanistan. The two leaders agreed that the entire civilized community should unite its efforts in order to defeat terrorism.
During talks on October 1 with German Foreign Minister Joschka Fischer, Mr. Nazarbayev argued that the UN should play an "important role" in efforts to stabilize the situation in Afghanistan, according to the "Frankfurter Allgemeine Zeitung." Nazarbayev and Fischer agreed that the international reaction to the terror attacks in the U.S. must not precipitate a war either between civilizations or between religions. Mr. Nazarbayev expressed appreciation on 2 October of the fact that "Germany does not equate terrorism with Islam." Nazarbaev and Fischer also discussed trade and economic cooperation and the situation of ethnic Germans in Kazakhstan, numbering as many as several hundred thousand.
Senator Mary Landrieu hails Kazakhstan's response to terrorist attacks
Senator Mary Landrieu (D-LA) delivered a speech before the United States Senate praising the position taken by Kazakhstan President Nursultan Nazarbayev and the Government in the wake of terrorist attacks in New York and Washington. "In light of the direct threat to world freedom that we faced on September 11, 2001, Kazakhstan has emerged as one of the only 'silver-linings' in Central Asia. I am very grateful for the outpouring of support from the President of Kazakhstan, Mr. Nursultan Nazarbayev", said Sen. Landrieu. Welcoming Kazakhstan's readiness to support measures undertaken by the United States to fight against terrorism, with all the means necessary, she submitted the entire statement of the president of "the key ally in Central Asia" into the Congressional Record.
The Senator praised Kazakhstan's contribution to nonproliferation, which with the U.S. support successfully dismantled the fourth largest nuclear arsenal in the world inherited from the former Soviet Union, and stressed that this country "continues to set a model for the global community in its leadership on unilateral disarmament and nonproliferation".
According to Sen. Landrieu, Kazakhstan's continued economic and political stability is critical to the long-term success of the Central Asian nations, thus, the United States "needs to continue to support the Government of Kazakhstan". For these reasons she have co-sponsored S. 168 that authorizes the extension of nondiscriminatory treatment to the products of Kazakhstan.
Kazakhstan's Ambassador to the U.S. appointed Ambassador to Canada
President Nazarbayev signed a decree naming Kanat Saudabayev, current Ambassador to the United States, as Kazakhstan's non-resident Ambassador to Canada.
Local elections set for October 20
Kazakhstan is to hold elections of the heads of local administrations on October 20, the Central Election Commission announced. The elections are to be held in certain rural areas of all 14 regions of the country.
The measure, making good on the previous public commitment of President Nazarbayev, represents further movement of Kazakhstan towards greater democracy. The results of these elections will be used as a basis for further expansion of election practices all the way up the executive power. Currently, the President of the country, publicly elected for a 7-year term with next election scheduled for 2006, appoints the akims (governors) of the regions and cities.
Kazakhstan has recently taken another step on a road toward democratic society, which was broadly welcomed by the international community. On July 31, 2001, the OSCE said it "commends Kazakhstan for having abolished the so-called exit visas by governmental decree on July28. In light of the OSCE commitments and repeated recommendations from the OSCE to Kazakhstan on this issue, the abolition constitutes an important step towards guaranteeing to Kazakh citizens the full enjoyment of freedom of movement".
ECONOMY
Government expects USD 1 billion rise in foreign investment in 2002
The Government of Kazakhstan expects foreign investment in the republic to rise to 4,5 billion in 2002 from USD 3,5 billion this year, Minister of Economy and Trade Zhaksybek Kulekeyev said on September 27, 2001. Of the overall figure, roughly USD 3,35 billion is expected to be invested in Kazakhstan's three largest oil and gas projects: the Tengis oil field, the Kashagan deposit in Caspian Sea and the Karachaganak gas condensate field.
According to Kulekeyev, Agip KCO, the company developing the Kashagan field, will invest USD 1,5 billion in 2002, while Tengizchevroil and Karachaganak Integrated Organization will invest USD 850 million and USD 1 billion, respectively. "From 2003, foreign investment will reach USD 5 billion (a year)," the Minister said.
National Fund reserves near USD 1.2 billion
The Kazakhstan's National Fund has accumulated USD 1.158 billion since its inception at the beginning of the year, Finance Minister Mazhit Esenbaev told the members of the Parliament on September 27. The fund, which is fed by extra tax revenues from oil and gas companies in the republic, was created in January based on USD 600 million earned in the sale of a 5% state-owned stake in JV Tengizchevroil. Mr. Esenbaev further noted that the fund, most of which is invested in foreign treasury bonds, "has incurred no losses since its creation".
The New York Times: A Breakthrough for Kazakhstan's Oil
The Caspian Pipeline Consortium Tengiz-Novorossiisk oil export pipeline is poised to begin shipping oil to the world markets in the next few days, the New York Times reported on October 2. The USD 2.6 billion, 1,510-km (980-mile) long pipeline is the first export route dedicated exclusively to delivering Caspian region crude to the world markets.
"Although the timing is awkward, the pipeline is a major breakthrough for the country, where immense reserves of oil have been found, but in remote locations far from a pipeline or seaport that could bring the oil to market efficiently. And it is a breakthrough for Tengizchevroil, a joint venture led by Chevron that is developing the giant Tengiz field," the New York Times said.
"With the new pipeline and other development projects like the Kashagan offshore field, Kazakhstan hopes to more than double its output, to 2 million barrels a day in 2010, from 840,000 barrels a day this year, furthering its ambition to become one of the world's top five oil producers. Although there is short-term concern about an oil glut as most big economies around the world slow, most analysts agree that in the long term, Kazakhstan will find demand for all that oil and more.
"The pipeline promises to be a big cost saver for Tengizchevroil, which has grown since its creation in 1993 to become Kazakhstan's largest single producer at 260,000 barrels a day, or 12 million tons a year. "The savings of the pipeline will be about $25 per ton," said Tom Winterton, general director of the Tengizchevroil venture. "At a million tons a month, you can see pretty substantial savings."
"Tengizchevroil is mainly American-owned; Chevron has half; Exxon Mobil has one-quarter; a Russian partnership, LukArco, holds another 5 percent; and the Kazakhstan government owns the other 20 percent. It is one of the largest employers in the region, with 3,200 workers. The latest phase of expansion, undertaken to take advantage of the pipeline, will raise its total investment to $4 billion
"Central Asia is a tense and uncertain region in the wake of the terrorist attacks in the United States", said the Times, but "oil executives in the area say they see little added threat to the safety of oil operations after Sept. 11."
Major international oil and gas exhibition opens in Almaty
Representatives of Kazakhstan's burgeoning oil and gas industry gathered in Almaty October 2-5 for the 9th annual Kazakhstan International Oil and Gas Exhibition and Conference, KIOGE 2001. The exhibition at the Atakent Exhibition Center will feature stands by 360 oil and gas and hydrocarbons-related companies from 35 countries, including the U.S., Britain, Italy, France, Norway, Russia, China and others, promoting their top-flight services and latest technological wares.
"Both our country and its oil industry are developing progressively," said Vice Minister of Energy Uzakbai Karabalin on the conference. "Whereas last year we produced 35 million tons, this year we will extract 40 million tons." Further expansion of production volumes will mostly come through the expansion of operations on Tengiz field, Karachaganak gas condensate field and recently discovered Kashagan field in the offshore Caspian, the vice minister indicated.
KazakhOil to issue USD 100 million Eurobond
National oil and gas company "KazakhOil" plans to tap into the world financial markets with a debut USD 100 million eurobond issue in November 2001, Nurlan Balgimbayev, its president, declared at KIOGE-2001.
Mr. Balgimbayev said the company would use the money to finance the priority development projects. Last year, Moody's and Fitch IBCA agencies respectively allocated to KazakhOil the credit ratings of Ba2, equal to the sovereign rating, and BB- with the positive outlook, which is a sign of confidence on behalf of foreign investors to KazakhOil, noted Mr. Balgimbayev.
U.S. and Kazakhstan study the project of an Aktau-Baku oil corridor
U.S. and Kazakhstan governments are discussing the project of an Aktau-Baku oil transport corridor, U.S. Ambassador to Kazakhstan Larry Napper said at KIOGE-2001. He noted that currently the U.S. Trade and Development Agency is studying the relevant infrastructure in Azerbaijan and Aktau. The Ambassador hopes the governments of Kazakhstan and Azerbaijan will shortly start negotiating a transportation agreement that will establish a legal framework for the Aktau-Baku corridor.
Ambassador Napper indicated that consortium of companies developing the Baku-Tbilisi-Ceyhan pipeline intends to begin the USD 120 million engineering study of the route. The primary studies have been completed, he said, and the consortium was planning to order pipes and other equipment by the end of this year.
"With the development of Karachaganak, Tengiz and Kashagan, Kazakhstan will face a problem of dealing with accompanying natural gas", said the U.S. Ambassador. There will be two options for consideration, the re-injection of the gas and its transportation to the world markets.
"The U.S. Government is ready to support Astana in developing the transport corridor for the transportation of gas to the world markets, including to Europe", said the diplomat.
Separately, he stressed that the U.S. is firm in the belief that "the Caspian delimitation should occur peacefully" and underscored the need to pay particular attention to the environment protection.
* * *
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
