The visit of President Nursultan Nazarbayev to the United States on December 18-21, 2001, became an important occasion and provided a major boost to bilateral relations. The two nations have opened a new relationship based on a "long-term strategic partnership".
KAZAKHSTAN AND THE U.S. CONFIRM "COMMITMENT TO STRENGTHEN THE LONG-TERM STRATEGIC PARTNERSHIP"


Below are the references to the documents signed during the visit as well as clippings of public reaction to it.

·Joint Statement by President George W. Bush and President Nursultan Nazarbayev on the New Kazakhstan-American Relationship.
(Also available at http://www.whitehouse.gov/news/releases/2001/12/20011221-10.html)

·The Energy Partnership between the Republic of Kazakhstan and the United States of America Fact sheet of the U.S. Department of State December 21, 2001
(Also available at http://www.state.gov)

·United States-Kazakhstan Secure Link Agreement Fact Sheet of the U.S. Department of State December 21, 2001
(Also available at http://www.state.gov)

·Congressional Black Caucus congratulates the people of Kazakhstan, December 20, 2001

·U.S. action is helping Central Asia, says Nazarbayev, by David Sands, The Washington Times, December 22, 2001
(Also available at  http://www.washingtontimes.com)

·Bush hosts Kazakh President, signals `deepening relationship', by Bill Pietrucha, The Washington Times, December 21, 2001
(Also available at  http://www.washingtontimes.com)

·Bush welcomes Kazakh president to Washington, The Washington Post, December 21, 2001, advertisement sponsored by the Eurasia 2000 Fund (Almaty, Kazakhstan)

·Kazakhstan's Antinuclear Role , by Graham Allison, The Boston Globe, January 6, 2002.
(Also available online at The Boston Globe)

·Bush, Kazakh Declare Longterm Strategic Partnership By Elaine Monaghan Reuters December 21
( Also available at http://www.reuters.com)

·Bush welcomes Kazakhstan leader, by Kathy A. Gambrell, UPI White House Reporter, December 21, 2001
(Also available at www.upi.com)

·Kazakhstan: Reasons aplenty for Houstonians to be paying attention The Houston Chronicle editorial, December 18, 2001                                       (Also available at http://www.chron.com)

·Ten years of independence, The New York Times, December 21, 2001, Op-Ed by ExxonMobil
( Also available at http://www.reuters.com)

·"A Cause for Celebration" by ChevronTexaco Corp.,  The Washington Post, December 20, 2001
(Also available at http://www.washingtonpost.com)

·Kazakh leader's visit by James Morrison, The Washington Times, December 13, 2001
(Also available at http://www.washingtontimes.com)

·Bush to Meet Kazakhstan President in Washington  Reuters December 11, 2001
(Also available at http://www.washingtontimes.com)

·As the War Shifts Alliances, Oil Deals Follow, By Neela Banerjee with Sabrina Tavernise, The New York Times, December 15, 2001                              (Also available at http://www.nytimes.com)

·Kazakh Leader Urges Iran Pipeline Route, by Patrick E. Tyler, The New York Times, December 10, 2001
(Also available at http://www.nytimes.com)

·Caspian pipeline opens, By Christopher Pala, The Washington Times December 3, 2001
(Also available at http://www.washingtontimes.com)



KAZAKHSTAN AND THE U.S. CONFIRM "COMMITMENT TO STRENGTHEN THE LONG-TERM STRATEGIC PARTNERSHIP"

The year-end of 2001 was marked by a momentous event in the Kazakhstan-U.S. relations.
President Nursultan Nazarbayev visited the United States on December 18-21 at the official invitation of President George W. Bush. The trip resulted in signing of a number of bilateral documents, including the Joint Statement of the two Presidents on the New Kazakhstan- American Relationship (www.whitehouse.gov), in which they confirmed their "commitment to strengthen the long-term strategic partnership and cooperation", and the Energy Partnership Declaration (www.state.gov) that highlighted   "along-term energy partnership" as "one of the key elements of the strategic interaction" between Kazakhstan and the USA.
Mr. Nazarbayev began his visit in Houston, Texas where he met with President George H.W. Bush and former Secretary James A. Baker III, who in 1991 had laid the foundations for the partnership between the two nations. Mr. Nazarbayev presented former President Bush with one of the highest Kazakhstan's awards, the Order of Dostyk of the 1st degree, in recognition of his contribution to the development of an independent Kazakhstan. While in Houston, President Nazarbayev spoke at the Baker Institute at Rice University (www.bakerinstitute.org) on geopolitical challenges facing Kazakhstan. He also met with executives of the largest American companies working in Kazakhstan, whose investment over the years totaled 5 billion dollars, making the U.S. the biggest single foreign investor in the republic.
President Nazarbayev then traveled to New York City in order to pay respect to the victims of the World Trade Center terrorist attacks, among whom was a Kazakhstan citizen. At Ground Zero he laid a wreath and signed the Memorial Wall saying that Kazakhstan "feels sincere sympathy for the American people" and pledging commitment to "spare no effort in building a safer and better world for all". In New York, the President also met with UN Secretary General Kofi Annan for talks on Kazakhstan's role in post-conflict settlement in Afghanistan.
The official part of President Nazarbayev's visit took place in Washington, DC, where he met President George W. Bush, members of Congress and key Cabinet officials.
During his meeting with Co-Chairs of the Congressional Silk Road Caucus, Senator Sam Brownback (R-KS), who was presented with the Order of Dostyk, and Representative Joseph Pitts (R-PA(16)), as well as other prominent members of this group, President Nazarbayev thanked them for their continued support for strengthening the bilateral cooperation. He was particularly grateful for their sponsoring of legislation to graduate Kazakhstan from an outdated Jackson-Vanik amendment and grant it permanent normal trade relations. Senator Mary Landrieu (D-LA) presented the President with a copy of the Senate Resolution # 194 congratulating the people of Kazakhstan on the 10th anniversary of independence (see below).
On December 21 Vice President Cheney hosted President Nazarbayev in his residence for lunch with key Administration members, including secretaries of the State, Commerce, and Treasury.
During  the talks at the White House later that day that lasted less than one hour, Presidents Nazarbayev and Bush discussed a number of wide-ranging issues on the bilateral agenda. In their Joint Statement, they pledged to advance "a shared vision of a peaceful, prosperous and sovereign Kazakhstan in the 21st century that is increasingly integrated into the global economy and the community of democratic nations". Kazakhstan and the U.S. further agreed to "advance cooperation on counterterrorism and non-proliferation, democratic political and free-market economic reform, and market-based investment and development of energy resources".
They discussed extensively the on-going U.S.-led international campaign against terrorism and Kazakhstan's role in rebuilding Afghanistan.
"We reiterate our intent to cooperate in the war against terrorism to its conclusion and within the framework of the international coalition. We also pledge our readiness to cooperate in Afghanistan's reconstruction", the two presidents underscored in the statement.
Kazakhstan proposals on post-conflict Afghanistan include the use of its resources across the wide spectrum of needs. Following the visits of high-level Kazakhstan delegations to Kabul and for the international donors' conference in Tokyo in mid-January, Kazakhstan declared its commitment to serve as a front base for humanitarian efforts. In addition to 70,000 tons of grain supplied by Kazakhstan to help feed the starving Afghans in the framework of the World Food Organization, of which 25,000 tons have already been delivered, the country pledged to supply 3,000 tons of grain in humanitarian aid. It also said it was ready to supply the additional 850,000 tons on commercial basis. Kazakhstan is willing to send its engineers, builders, teachers, doctors, machinery and equipment, etc. to help rebuild the war-torn country. The republic is ready to provide a peacekeeping force for Afghanistan and has pledged to send its Kazbat, a peacekeeping battalion trained under the UN auspices, to join in the British-led international force in Kabul and surrounding areas.
Bilateral cooperation in security sphere was one of the main topics on the agenda of the December 2001 visit. Presidents Nazarbayev and Bush said that the United States would consider enhancing Kazakhstan's assistance programs to strengthen border security and increase defensive capabilities of its military.
Having recognized that Kazakhstan was the first country to renounce its nuclear-weapons status voluntarily, the two presidents reaffirmed their commitment to the nonproliferation of weapons of mass destruction. "Both sides agree on the need for urgent attention to improving the physical protection and accounting of all nuclear, chemical, and biological weapons materials in all possessor states, and to preventing illicit trafficking in these materials," the joint statement said.
The U.S. spent $78 million on facilities under the Cooperative Threat Reduction program to assist Kazakhstan in eliminating START-related systems such as intercontinental ballistic missile silo launchers, strategic heavy bombers, and liquid rocket fuel storage. The presidents pledged to expand their cooperation on nonproliferation under that pact.
Economic and energy cooperation between Kazakhstan and the U.S. was another major theme of the visit.
"We will strive to further develop an attractive, transparent and predictable investment climate. Achieving this goal requires removal of legislative and administrative barriers to investment, strengthening respect for contracts and the rule of law, reducing corruption, and enhancing Kazakhstan's strong record on economic reform," Presidents Nazarbayev and Bush said in their statement.
The U.S. voiced its intention to cooperate with Kazakhstan's integration in the global economy by supporting Kazakhstan's accession to the World Trade Organization.
"We affirm our desire to strengthen our energy partnership to diversify export options for Kazakhstan's oil and gas and to diversify global energy supplies. We share the view that a key element of this effort is development of multiple pipelines that will ensure delivery of Caspian energy to world markets, unfettered by monopolies or constrained by geographic chokepoints", the two leaders said.
In the Energy Partnership Declaration, signed by Foreign Minister Erlan Idrissov and Secretary of State Colin Powell, Kazakhstan and the U.S. pledged to cooperate on energy security and enhanced protection of production and transport facilities and promote further cooperation on electrical power, nuclear energy and environmental protection. For better coordination of these issues, the two nations agreed to establish a Special Energy Partnership Committee to be headed by the respective ministers of energy of Kazakhstan and the USA.

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Joint Statement by President George W. Bush and President Nursultan Nazarbayev on the New Kazakhstan-American Relationship

We declare our commitment to strengthen the long-term, strategic partnership and cooperation between our nations, seeking to advance a shared vision of a peaceful, prosperous and sovereign Kazakhstan in the 21st Century that is increasingly integrated into the global economy and the community of democratic nations. To this end, we will advance our cooperation on counterterrorism and non-proliferation, democratic political and free-market economic reform, and market-based investment and development of energy resources.

These goals further reflect our recognition that the threats of terrorism and proliferation of weapons of mass destruction endanger the security not only of the United States and Kazakhstan, but of the world at large. We therefore seek to develop our security cooperation to address these challenges and foster cooperation among Kazakhstan, its Central Asian neighbors, the United States, and our European friends, partners, and allies. In pursuit of these objectives, we are determined to deepen cooperation bilaterally and within NATO's Partnership for Peace.

We reiterate our intent to cooperate in the war against terrorism to its conclusion and within the framework of the international coalition. We underscore our support for a broad-based Afghan government at peace internally and with its neighbors. We also pledge our readiness to cooperate in Afghanistan's reconstruction.

Recognizing that Kazakhstan was the first country to renounce its nuclear-weapons status voluntarily, we reaffirm our mutual commitment to the non-proliferation of weapons of mass destruction. Both sides agree on the need for urgent attention to improving the physical protection and accounting of all nuclear, chemical, and biological weapons materials in all possessor states, and to preventing illicit trafficking in these materials. We pledge to expand our cooperation on these matters under the United States-Kazakhstan Cooperative Threat Reduction Agreement.

In the spirit of partnership, Kazakhstan and the United States intend to strengthen joint activity in ensuring security and stability in Central Asia. We agree that the expansion of trade and economic ties among the states of Central Asia, and deepening of regional integration in important areas, such as the environment, water resources, and transportation systems are a basis for regional security. The United States will consider enhancing assistance programs to Kazakhstan to strengthen border security and to increase the defensive capabilities of the Armed Forces of the Republic of Kazakhstan.

We recognize that free market economies and the rule of law provide the most effective means to advance the welfare of our citizens and the stability of our societies. The United States and Kazakhstan pledge to advance our bilateral economic, trade, and investment relations, including through expanded contacts between the business communities of our countries. We will strive to further develop an attractive, transparent and predictable investment climate. Achieving this goal requires removal of legislative and administrative barriers to investment, strengthening respect for contracts and the rule of law, reducing corruption, and enhancing Kazakhstan's strong record on economic reform.

We also intend to cooperate to advance Kazakhstan's integration in the global economy by supporting Kazakhstan's accession to the World Trade Organization on the basis of standard and agreed criteria, and its graduation from the Jackson-Vanik Amendment.

We affirm our desire to strengthen our energy partnership to diversify export options for Kazakhstan's oil and gas and to diversify global energy supplies. We share the view that a key element of this effort is development of multiple pipelines that will ensure delivery of Caspian energy to world markets, unfettered by monopolies or constrained by geographic chokepoints. We welcome the recent opening of the Caspian Pipeline Consortium (CPC) Pipeline and underscore our support for development of the Aktau-Baku-Tbilisi-Ceyhan oil export route on commercial terms. We will also work together to protect the rights of foreign investors and to abide by decisions of courts, particularly of international courts of arbitration.

Recognizing that democracy is a cornerstone of long-term stability, we reaffirm our desire to strengthen democratic institutions and processes, such as independent media, local government, pluralism, and free and fair elections. We also reiterate our mutual commitments to advance the rule of law and promote freedom of religion and other universal human rights as promoted by the United Nations and the Organization for Security and Cooperation in Europe, of which we are both members. Finally, we pledge to enhance understanding between the citizens of our two countries by promoting people-to-people exchanges, initiatives of non-governmental organizations, and contacts between business people.

* * *
http://www.whitehouse.gov/news/releases/2001/12/20011221-10.html


U.S. Department of State

Fact Sheet
Office of the Spokesman
Washington, DC
December 21, 2001


The Energy Partnership between the Republic of Kazakhstan and the United States of America

The Energy Partnership Declaration illustrates U.S. commitment to working with the government of Kazakhstan to promote development of its energy sector in accordance with international standards of responsible economic, social, and environmental management.

Kazakhstan has the potential within the next decade to become the second largest oil-exporting nation in the world. The new Kashagan oil field alone, for example, has oil reserves greater than those of the entire United States.

The Energy Partnership Declaration reaffirms U.S. support for multiple export routes of oil, particularly along the proposed Baku-Tbilisi-Ceyhan pipeline linking Kazakhstan's oil fields to the world markets via Turkey.

It also strengthens cooperation on energy security and enhanced protection of production and transport facilities and promotes further cooperation on electrical power, nuclear energy, and environmental protection.
[End]
Released on December 21, 2001
 
* * *

U.S. Department of State

Fact Sheet
Office of the Spokesman
Washington, DC
December 21, 2001


United States-Kazakhstan Secure Link Agreement

The Secure Link Agreement will enhance cooperation in the area of arms control information exchange. Representatives of the U.S. Nuclear Risk Reduction Center (NRRC) and the NRRC-equivalent center of Kazakhstan negotiated the Secure Link Agreement. In December 2000, it was completed and initialed by both sides.

This agreement concerns the technical aspect of the continuing cooperation in the area of arms control information exchange. Moreover, it provides a legal basis for the existence and continued operation of the Government-to-Government Communications Link between the United States and Kazakhstan for the exchange of arms control treaty notifications. It also pledges the U.S. and Kazakhstani sides to communications cooperation in support of any new arms control agreements or arrangements involving information exchange.

The original Nuclear Risk Reduction Center Agreement was signed in 1987 by Former Secretary of State Schultz and then-Soviet Foreign Minister Eduard Shevardnadze Because the 1987 agreement did not extend to the successor states upon the breakup of the Soviet Union, separate agreements were required for Ukraine and Kazakhstan.
[End]
Released on December 21, 2001

* * *

 
The Washington Times
December 22, 2001

U.S. action is helping Central Asia, says Nazarbayev 
By David R. Sands
THE WASHINGTON TIMES

    The U.S.-led military campaign in Afghanistan has dealt a powerful blow to Islamic fundamentalist movements that threaten all of Central Asia, Kazakhstan President Nursultan Nazarbayev said in an interview yesterday.
Reflecting the country's new diplomatic visibility with the massive U.S. deployment to the region, Kazakh and U.S. officials during the president's visit adopted a new statement on strategic relations and signed an accord on long-term cooperation on energy exploration and transportation.
    "The defeat of the Taliban has influenced the situation in Central Asia very positively," Mr. Nazarbayev said in the interview at the Blair House, just hours after meeting with President Bush and senior administration officials. He spoke through an interpreter.
    "The Taliban movement and the Afghan bases were a center for terrorism in our region," he said. "Inside Kazakhstan now we see no threat from Islamic extremism, but it could have penetrated our country and threatened control of oil routes. Now that threat is destroyed."
    But, he added, the al Qaeda terrorist network remains a threat that must be dealt with, even with the success in Afghanistan.
    Although not a front-line state in the Afghanistan campaign, Kazakhstan has won praise from U.S. officials for its early support for the global counterterrorism effort, including the offer of Kazakh military bases and airspace for the United States and its allies. Mr. Nazarbayev said Kazakh intelligence services are also working with their American counterparts.
    "If there are other needs" as the global terrorism campaign proceeds, Kazakhstan "will be willing to supply them," the president said.
    The new focus on Central Asian security has been a diplomatic boon to many of the region's leaders, who had seen relations with the United States suffer in recent years due to concerns over human rights violation and corruption. Uzbekistan's President Islam Karimov, like Mr. Nazarbayev a past target of human-rights complaints, is expected to visit Washington next month.
    Despite repeated State Department criticism of Kazakhstan's human rights record and treatment of political and media critics, Mr. Nazarbayev lunched yesterday with Vice President Richard B. Cheney before meeting with President Bush and Secretary of State Colin L. Powell at the White House.
    In the Blair House interview, the Kazakh president again made a pitch for a pipeline to carry Kazakh oil through Iran, saying that the route was the most efficient economically.
    He said U.S. laws banning participation in such a pipeline only hurt American oil firms. But the Bush administration so far has refused to consider easing the ban.
    The warm U.S. reception for Mr. Nazarbayev has elicited some criticism.
    "We are aware that the United States needs help after what happened September 11," Bigeldy Gabdullin said in an interview this week. "But it is also important that our people know about their leader. We don't know of any burning issue that would cause the U.S. president to give a photo opportunity to President Nazarbayev."
    Mr. Gabdullin was editor of an opposition newspaper in Almaty, Kazakhstan, before being forced to flee the country as his offices were firebombed. He also faced legal charges for "insulting the honor and dignity of the president."
    Mr. Nazarbayev dismissed criticisms of his country's human rights record, citing the large number of political parties and media outlets available in Kazakhstan. He said the topic of human rights had not come up in his talks with President Bush.

* * *


Bush hosts Kazakh President, signals `deepening relationship', by Bill Pietrucha, The Washington Times, December 21, 2001

Ten years ago this Christmas, then President Bush became the first world leader to recognize Kazakhstan's independence from the Soviet Union. A decade later, a second President Bush looks to reconfirm the stable partnership between America and Kazakhstan.
U.S. President George Bush and Kazakhstan's President Nursultan Nazarbayev may be meeting today in only their first face-to-face visit, but the bilateral relationship between the two countries has blossomed since George Bush Sr. recognized the independent Kazakhstan ten years ago. Since then, the two countries have developed a wide-ranging bilateral relationship, most recently in the war against ter-rorism.
According to The White House, today's talks will center on energy issues, economic reforms, and anti-terrorism efforts.
"The visit reflects the deepening relationship between the United States and Kazakhstan on counter-terrorism, non-proliferation, democracy, energy and pipelines, economic reform and Kazakhstan's integration into the global economy," according to a White House statement.
Earlier this month, U.S. Secretary of State Colin Powell met with Kazakh President Nazarbayev in Kazakhstan. They discussed the strategic partnership between the two countries, particularly in the areas of regional security, cooperation in the fight against international terrorism, provision of humanitarian aid to Afghanistan, and prospects for cooperation between the United States and Kazakhstan in other areas. '
According to Powell, he and Nazarbayev "had a thorough discussion of all the issues that define and structure our strategic partnership and relationship."
Nazarbayev told Powell he was ready to station forces of the antiterrorist coalition in the country. Although Kazakhstan has not been asked directly to station forces there, Nazarbayev told Powell that "if such proposals were made, then Kazakhstan will consider them positively."
Kazakhstan's renunciation of terrorism and weapons of mass destruction are not merely a recent effort. In 1993, Kazakhstan became the first nation to voluntarily renounce nuclear weapons in 1993, and the next year transferred over a half ton of weapons-grade uranium to the United States. In 1995, Kazakhstan removed its last nuclear warheads.
"From the first few days [after Sept. 11], Kazakhstan announced that it would be in a coalition with those who struggle against terrorism by all means at its disposal," Nazarbayev said. "We have kept our word. We are following our obligations as determined by UN resolutions as well as our agreement with the United States. Kazakhstan has a com-mon position with America on the post-war rehabilitation of Afghanistan so that it can become a friendly and peaceful state."
Even before Sept. 11, Nazarbayev, speaking at a UN Summit, warned that Afghanistan "posed a serious threat for the world. We have seen how they handle drugs, weapons, how terrorist bases are created there."
But economics, rather than anti-terror coalitions, are the backbone of U.S.-Kazakh relations. The United States is Kazakhstan's largest investor, with American companies investing more than S5 billion in Kazakhstan since 1993.
Nazarbayev noted that with one third of the total volume of investment in Kazakhstan's economy coming from the United States, the economic cooperation has a very solid basis.
"The huge oil and gas resources of Kazakhstan and diversification of supply routes to world markets, in which we have actively cooperated with the Government of the United States of America, have yielded positive results," Nazarbayev said.
Powell said he was "particularly impressed" with the amount of money they [U.S. firms] are looking to invest in Kazakhstan.
"They were talking in the range of S200 billion over the next 5 to 10 years." Powell said, "because they see that kind of potential."
While President Nazarbayev is solidifying his friendship with the current President Bush - the two had contacts before when Bush was governor of Texas - he hasn't forgotten former President Bush. George Bush Sr. hosted President Nazarbayev last Tuesday in Texas. where the Kazakh President also addressed Rice University.

Kazakhstan seeks to stabilize U.S. energy supply
U.S. ally pledges not to cut production
As alternative sources for Gulf oil become critical to America's energy security, Kazakhstan is looming large as a stable source of oil for America's needs.
With over 35 billion barrels of current oil reserves, and between 100 billion and 110 billion barrels of projected oil reserves, Kazakhstan will provide a critical role "in satisfying the energy needs of the West in future years," U.S. Secretary of State Colin Powell said recently.
Commenting on two pipeline projects, one recently completed and the other underway, Powell said they "indicate that there will be stability with respect to supply of fuel and stability with respect to these two projects going forward. And I see nothing in the post-September 11 period that would suggest that we should rethink that."
In his visit with President .Nursultan Nazarbayev earlier this month in Kazakhstan, Powell also was told that despite some fears to the contrary, the Kazakh govern-ment is not planning to renegoti-ate existing contracts, including those in the oil and gas sector.
"We have no  intention  of revising the contracts signed," Nazarbayev told Powell.
Of equally important news, Kazakhstan's Minister of Economy and Trade, Zhaksybek Kulekeyev, also reconfirmed his country's position that Kazakhstan will not cut oil output in the foreseeable future, despite intense lobbying by the Organization of Petroleum Exporting Countries.
"We are not going to undertake any obligations to cut output," Kulekeyev said. "On the contrary, we plan to increase production to 46 million tons [920,000 bpd], including gas condensate, next year."

Religious tolerance a way of life in Kazakhstan
Hardly a day goes by without one hearing the phrase "Muslim extremist," as if the words were inseparable. But just a few hundred miles away from Afghanistan is Kazakhstan, where one finds not only religious tolerance, but an extraordinary level of religious diversity too.
With a population 47 percent Muslim and 44 percent Russian Orthodox, Kazakhstan's remaining nine percent encompasses a wide range of religions, including Roman Catholicism, Judaism, Buddhism and a number of other traditional and non-traditional sects. Overall, there are 2,502 religious groups in Kazakhstan.
Kazakhstan is a secular state that promotes ethnic and religious diversity and tolerance, and freedom of religion is one of the first priorities addressed in Kazakhstan's Constitution. In practice, this has contributed to inter-ethnic and inter-religious harmony among the established faiths in Kazakhstan, from ethnic Kazakhs, who are predominantly Sunni Muslim, to Russian and Ukrainian Orthodox Christians. Roman Catholics, various Protestant denominations, and Kazakhstan's long-standing Jewish community.
In fact, Kazakhstan has had neither religious nor ethnic conflicts within its territory since independence in 1991, an exception in the region.
The 2000 Annual Report on International Religious Freedom: Kazakhstan, released by the U.S. State Department's Bureau of Democracy, Human Rights, and Labor noted that Kazakhstan "is multiethnic, with a long tradition of tolerance and secularism. Relations among the various religious communities are generally amicable."
"The (Kazakh) Constitution provides for freedom of religion, and the various denominations worship largely without government interference," the report notes.
Probably the two largest religious minorities in Kazakhstan are Roman Catholics and Jews.
The exact number of Catholics in Kazakhstan is not known, but is estimated at 300,000. Pope John Paul II visited Kazakhstan last September not only to visit the Catholics living there, but also to help promote President Nazarbayev's public efforts in embracing religious plurality in interfaith settings.
The Roman Catholic Church is also extensively engaged in charity, and cares for the sick, the lonely, the disabled and the elderly. In Almaty there is a canteen for the poor, a free pharmacy and first-aid service. This is the only medical establishment under the auspices of any religion to be registered in Kazakhstan so far.
Anti-semitism also is not prevalent in Kazakhstan.
Jewish leaders in Kazakhstan characterize their relationship with the government as positive. President Nazarbayev personally presented historical records on the late Rabbi Menachem Mendel Schneerson's father, who was exiled to Kazakhstan during the Soviet period, to Lubav-itch leaders in a December 1999 visit to New York. Rabbi Schneerson was the last Lubavitcher Rebbe.
This past August, the National Conference of Soviet Jewry reported that the Jewish community of Kazakhstan celebrated the fifth anniversary of the stone-laying for a future synagogue, and the remembrance day (yahrzeit) of Rabbi Levi Yitzhak Schneerson.
A new Jewish synagogue has been opened in Pavlodar, a major industrial and cultural city in northern Kazakhstan. The synagogue became the fourth new synagogue built in Kazakhstan in recent years.

* * *

Bush welcomes Kazakh president to Washington, The Washington Post, December 21, 2001, advertisement sponsored by the Eurasia 2000 Fund (Almaty, Kazakhstan)

A Century of Change in 10 Years

The vicious terrorist attacks of Sept. 11 made people around the globe understand ever more clearly that peace, democracy and security are not something given once and for all. We need to fight for them.
Today President Nursultan Nazarbayev of Kazakhstan visits the U.S. to meet and talk with President George Bush about further strengthening our strategic partnership in the struggle for a secure world.
The terrorist attacks of Sept. 11 were taken as a personal tragedy by the peoples of Kazakhstan. President Nazarbayev echoed our feelings and expressed unconditional support to the U.S. in the fight against international terrorism.
Visiting Ground Zero on Dec. 19, our head of state not only paid respect to the memory of the deceased, among them a citizen of Kazakhstan, but also reconfirmed our solidarity with the American people.
The American people were one of the first to recognize our independence, which is why President Nazarbayev also visited with President George H.W. Bush and Secretary James A. Baker III, who witnessed the dawn of our partnership, before coming to Washington.
As the world's attention is focused on global war against terrorism and the armed conflict in Afghanistan, we in Kazakhstan, one of the largest nations in the neighborhood, reflect upon our experience in the first decade of independence and would like to suggest that there might be lessons in it for others.
Beyond that, Kazakhstan may serve as a driving force behind the economic development in a crucial part of the world famous for its potential for trouble.
When we regained our independence we faced daunting challenges.
Ten years is but an instant in time. Yet in our "instant", led by President Nursultan Nazarbayev, we have built a peaceful, democratic society and a thriving market economy showing progress every day.
The roots of democracy have grown deep in our soil. From a totalitarian regime ruled from beyond our borders we grew to a functioning democracy that Americans find familiar.
Once the people of Kazakhstan had no political choices. There was one party, the Communists. Today we have 14 political parties of which 4 hold seats in our national Parliament.
Unimaginable a decade ago, more than 2,000 non-governmental organizations and 1,500 independent news media outlets are taking an active part in shaping Kazakhstan's social and political agenda.
People of all of the 130 ethnic groups choose among the teachings of Islam, Christianity, Judaism and more than 40 other religious denominations. All live in our country in peace and harmony and see that as the only way to the future. The recent visit of Pope John Paul II drew the world's attention to the freedom of religious life in Kazakhstan today.
Today Kazakhstan stands shoulder to shoulder with the United States in this just war for the preservation of civilization and security of future generations.
And, as Secretary of State Colin Powell said after a meeting with executives of American companies working in Kazakhstan on December 9 in Astana, he was "particularly impressed" with "the amount of money they are looking at investing in Kazakhstan, in the range of $200 billion over the next 5 to 10 years».
Kazakhstan and the United States have a unique experience of cooperation in the fight for security in the world.
We are confident that the meeting of President Nursultan Nazarbayev and President George Bush will open a new chapter in relations between our two countries and our two peoples. Together we can make ours a better and safer world for all.

Kanat Saudabayev
Ambassador to Washington
December 16, 2001

In the President's words

On December 16, 2001, President Nursultan Nazarbayev addressed the people of Kazakhstan summing up the results of 10 years of its independence. Following are excerpts:
· Kazakhstan was the first state in the world to refuse voluntarily its nuclear weapons. It is an unprecedented contribution to global security and peace in the world.
· We have banned censorship (in the constitution) and announced freedom of expression. We have established an open, pluralistic society. None of thousands of foreign journalists who visited our country faced any obstacles in their professional activities.
· Foreign investments played a great role in our economy. From 1993 to 2000 Kazakhstan attracted direct investments worth $14.7 billion, which is almost one third of foreign investments to CIS countries and about 80 percent of those in Central Asian states.
· Everything that we are proud of today  freedom, openness, liberal policy and economy  was achieved in the country which had not known democracy for decades, where any free thinking had been severely suppressed and private ownership not even mentioned. Ours is one of the most multiethnic and multiconfessional countries of the world. Fate gives us a chance to benefit from this variety.
· Kazakhstan has come of age. It is developing with confidence. For all these years our Independence was a life-giving source that nourished our forces for the good of the Motherland.


Kazakhstan Through American Eyes

Congratulations to you and the people of Kazakhstan on the 10th anniversary of your independence. Kazakhstan should be proud of the successes of the last decade.
Kazakhstan plays a crucial role for the international community, as a bulwark against regional instability and conflict.
President George W. Bush in a letter to President Nazarbayev
December 16, 2001


President Bush will welcome President Nursultan Nazarbayev to Washington on Dec. 21.  for talks on anti-terrorism efforts, energy issues and economic reforms, the White House said on Tuesday.
The visit reflects the deepening relationship between the United States and Kazakhstan on counterterrorism, non-proliferation, democracy, energy and pipelines, economic reform, and Kazakhstan's integration into the global economy.
White House Press Secretary
December 11, 2001


I was pleased that the president indicated a willingness to participate fully in humanitarian efforts, as well as in the reconstruction phase with the use of Kazakhstan's facilities, infrastructure, bases, and especially technical people from Kazakhstan who could help the Afghans build their new country Based on the discussions we have had this morning and also the discussions I had with the American Chamber of Commerce earlier this morning, I come away even more persuaded of the critical importance that Kazakhstan will play in satisfying the energy needs of the West in future years.
Secretary of State Colin Powell speaking to the press in Astana
December 9, 2001


I want to congratulate the people of the Republic of Kazakhstan who celebrated their tenth year of independence as a nation. This important occasion highlights Kazakhstan's economic, political, and cultural growth over the past decade. In light of the many difficulties facing the people of Kazakhstan following the collapse of the Soviet Union, this resourceful nation of over fourteen million people has persevered by overcoming numerous obstacles to emerge as one of Central Asia's most dynamic nations.
As the people of Kazakhstan continue the process of building their nation on the foundation of democracy and economic liberalization, they should know that the United States will be there to assist them in their efforts. Following the barbaric attacks on the United States on September 11, 2001, the government of Kazakhstan immediately offered its unconditional assistance to the United States in our fight against the international scourge of terrorism.
Their heartfelt support for the American people in our greatest time of need has only served to strengthen United States-Kazakhstan relations. The future success of a democratic and free Republic of Kazakhstan will directly benefit the United States by helping to create stability and increased prosperity in the Central Asian region.
Congressman Robert Wexler, House of Representatives
November 1, 2001
* * *


Kazakhstan's Antinuclear Role
By Graham Allison, The Boston Globe, January 6, 2002.
(Also available online at The Boston Globe)

WHEN KAZAKHSTAN is mentioned, most people think of one thing: oil. As the principal source of Caspian energy, Kazakhstan supplies world markets directly through the Caspian Pipeline Consortium.

Opened in September, this pipeline has a capacity of 1 million barrels a day. Furthermore, Kashagan field has been acclaimed as the most significant new discovery of reserves in the past quarter-century.

When President Bush met with Kazakhstan's President Nursultan Nazarbayev at the White House in December, they discussed Kazakhstan's new role in world energy and the campaign against terrorism. The meeting resulted in a joint statement that affirmed their strategic partnership and a US intention to help Kazakhstan integrate more fully into the global economy.

While this meeting addressed important goals, it should also have underlined the significant role Kazakhstan has played in preventing the spread of nuclear weapons. Nazarbayev now has an opportunity to extend that legacy by leading the negotiations for the Central Asian Nuclear Weapon Free Zone Treaty.

In his recent book, ''Epicenter of Peace,'' Nazarbayev affirms Kazakhstan's pride in preventing the proliferation of nuclear weapons. The Semipalatinsk Soviet nuclear testing facility in northeastern Kazakhstan saw more above-ground and underground nuclear tests than any other site on earth. As a result, more than 300,000 people in the region suffer serious health effects from exposure to radiation.

Acutely aware of these consequences, Nazarbayev was the first president among newly independent former Soviet states to call for the elimination of nuclear weapons and the creation of a nuclear-free zone in the Central Asian region.

In theory, Kazakhstan could have emerged as one of the world's nuclear superpowers. Had it taken control of the more than 1,400 nuclear warheads left on its territory when the Soviet Union disappeared, it would commanded an arsenal larger than those of the United Kingdom, France, and China combined. Most of these warheads stood atop missiles aimed at targets in the United States.

Instead, Kazakhstan volunteered to return all nuclear weapons to Russia, signed the Nuclear Nonproliferation Treaty, and entered the world as a nonnuclear state. There are no nuclear weapons in Kazakhstan.

Kazakhstan is now in an ideal position to exercise leadership in the campaign to prevent the spread of nuclear weapons. Nazarbayev has long been a vigorous supporter of the creation of a nuclear weapons-free zone in Central Asia. On Feb. 27, 1997, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan signed the Almaty Declaration, which proclaimed their intention to make Central Asia a territory free of nuclear arms.

Unfortunately, this campaign has encountered difficulties over the last several years, especially because of the 1992 Tashkent Treaty, a collective security agreement originally designed for the states of the former Soviet Union. Russia is the only signatory that believes that this treaty would allow it to redeploy tactical nuclear weapons to Central Asia in order to deal with threats emanating from the region.

Over the last few years, Central Asian members of the Tashkent Treaty expressed their desire to restrict the provisions of the agreement in order to allow for the complete denuclearization of the region. Russia, however, has voiced objections.

As the Central Asian leader with the most accomplished record on nonproliferation issues, Nazarbayev must take the lead to overcome Russia's objections to the Central Asian Nuclear Weapons-Free Zone. Bush could give him a hand. The advantages of creating a stable region free of nuclear threat far outweigh whatever tactical advantages might be gained from a redeployment of nuclear weapons in Central Asia. As the recent campaign in Afghanistan has demonstrated, nuclear weapons have no useful role in the region.

During Nazarbayev's visit to Washington, the United States and Kazakhstan made significant progress by reaffirming their shared commitment to fighting terrorism and guaranteeing international energy supplies. Building upon that foundation, the two presidents should now instruct their governments to overcome remaining obstacles to assure that the nexus between Russia, China, Iran, and Afghanistan remains free of nuclear weapons.


Graham Allison is director of the Belfer Center for Science and International Affairs at Harvard
University's Kennedy School.

This story ran on page E7 of the Boston Globe on 1/6/2002.
© Copyright 2002 Globe Newspaper Company.

* * *


Bush, Kazakh Declare Longterm Strategic Partnership
By Elaine Monaghan
Friday December 21

WASHINGTON (Reuters) - The United States and Kazakhstan signed a pact on Friday underlining their interest in multiple east-west oil export routes and creating a more concrete way to help the ex-Soviet state develop its reserves.

A highlight of a visit by President Nursultan Nazarbayev to Washington, the pact was a reminder of how relations have been strengthened by his support for the U.S. war in Afghanistan, where instability has long troubled the most economically successful of the former Soviet Central Asian states.

Nazarbayev and President Bush met and issued a statement declaring a commitment to strengthening what they called a long-term, strategic partnership aimed at bringing Kazakhstan increasingly into the global economy.

Foreign Minister Yerland Idrisov and Secretary of State Colin Powell also signed an energy partnership declaration that the State Department said ``reaffirms U.S. support for multiple export routes of oil, particularly along the proposed Baku-Tbilisi-Ceyhan pipeline''.

It added, ``It also strengthens cooperation on energy security and enhanced protection of production and transport facilities and promotes further cooperation on electrical power, nuclear energy and environmental protection.''

Idrisov told Reuters the two presidents exchanged letters in which Bush pledged to work to lift sanctions against Kazakhstan which stem from the 1974 Jackson-Vanik amendment that linked trade ties to Soviet-era restrictions on Jewish emigration. In reply, Nazarbayev vowed to continue economic reforms.

Washington has long sought Kazakh support in keeping track of nuclear materials and tightening border controls in the region to prevent the spread of the hardline brand of beliefs that gripped Afghanistan and threaten less stable former Soviet states sandwiched between Kazakhstan and Afghanistan.

The Sept. 11 attacks on the United States that killed about 3,300 people accelerated contacts with many countries including Kazakhstan, visited by Powell earlier this month.

Nazarbayev would like his country to play as prominent a role as possible in the reconstruction of Afghanistan and in humanitarian efforts aimed at feeding its people.

Idrisov said Kazakhstan was also willing to contribute peacekeepers to an international force for Afghanistan.


OIL THE STRONGEST PULL

But the Kazakh resource most likely to bind the two countries in a long-term embrace is oil, which Nazarbayev says could lead to exports of 150 million tonnes from 2015.

The two countries share an interest in opening multiple export routes for the oil, though they differ over one potential route that would be cheaper but would take it through Iran, regarded in Washington as a ``rogue state'' for its support of groups opposed to the Middle East peace process.

Idrisov said Kazakhstan continued to support both the Caspian Pipeline Consortium's pipeline to the Black Sea, opened this month, and the Baku-Tbilisi-Ceyhan route.

But he added, ``Iran is not excluded completely.''
A senior State Department official told reporters the energy agreement provided a framework for the United States to help ``ensure the Kazakhs are able to develop their energy supplies, develop their energy policy.''

``It's a declaration of the ways the governments can cooperate and the fact the governments are cooperating gives a framework for companies to go forward a lot more easily,'' he added.

* * *


Bush welcomes Kazakhstan leader, by Kathy A. Gambrell, UPI White House Reporter, December 21, 2001
(Also available at www.upi.com)

WASHINGTON, Dec. 21 (UPI) -- President George W. Bush on Friday welcomed Kazakhstan's President Nursultan Nazarbayev to the White House for talks on the ongoing U.S.-led campaign against terrorism and the former Soviet republic's role in rebuilding Afghanistan.
"We reiterate our intent to cooperate in the war against terrorism to its conclusion and within the framework of the international coalition," the two leaders said in a joint statement issued after the meeting.
"We underscore our support for a broad-based Afghan government at peace internally and with its neighbors. We also pledge our readiness to cooperate in Afghanistan's reconstruction," the two leaders said.
Kazakhstan was one of six former Soviet republics upon which the United States called for aid as it led an international coalition against Afghanistan in responding to the Sept. 11 terrorist attacks which killed about 3,000 people in New York City and Washington. Kazakhstan offered the use of its air bases and agreed to host American forces there during the military action.
In the meeting with lasted less than one hour, Bush and Nazarbayev discussed weapons of mass destruction, and trade including export options for Kazakhstan's oil and gas supplies. The United States was the first country to recognize Kazakhstan a decade ago, and since then the two countries have developed a wide-ranging bilateral relationship. American companies have invested more than $5 billion in Kazakhstan since 1993 with bilateral trade worth $488 million in 2000.
"We will strive to further develop an attractive, transparent and predictable investment climate. Achieving this goal requires removal of legislative and administrative barriers to investment, strengthening respect for contracts and the rule of law, reducing corruption, and enhancing Kazakhstan's strong record on economic reform," the statement said. The U.S. also voiced its intention to cooperate with Kazakhstan's integration in the global economy by supporting Kazakhstan's accession to the World Trade Organization
The two leaders also said that the United States would consider enhancing Kazakhstan's assistance programs to strengthen border security and increase defensive capabilities of its military.
On weapons of mass destruction, the two countries reaffirmed their commitment to the nonproliferation of weapons of mass destruction.
The United States has been concerned that Saudi exile Osama bin Laden has been attempting to acquire biological, chemical or nuclear weapons and has called on the international community to assist in halting his Islamic extremist group from obtaining the materials and knowledge needed to achieve their goal.
"Both sides agree on the need for urgent attention to improving the physical protection and accounting of all nuclear, chemical, and biological weapons materials in all possessor states, and to preventing illicit trafficking in these materials," the joint statement said.
The U.S. spent $78 million on facilities under the Cooperative Threat Reduction program to assist Kazakhstan in eliminating START-related systems such as intercontinental ballistic missile silo launchers, strategic heavy bombers, and liquid rocket fuel storage. They pledged to expand their cooperation on nonproliferation under that pact.

* * *

The Houston Chronicle
December 18, 2001

Kazakhstan:
Reasons aplenty for Houstonians to be paying attention

Nursultan Nazarbayev, president of the Republic of Kazakhstan, is in Houston this week and will make an address at the Baker Institute at Rice University.
The occasion is that nation's 10th anniversary, on Dec. 16, of its independence from the former Soviet Union. The further occasion is an opportunity for Houstonians to raise their consciousness about Central Asia, a critical part of the world in which a good number of Houstonians are doing business these days and in which many of the same tensions that led to events now unfolding in nearby Afghanistan also are at work.
Kazakhstan is literally at a crossroads where East meets West, where religious ideas meet and clash and where high stakes in the future of the energy industry are being played for.
Kazakhstan, with rich and underdeveloped oil and gas resources, is on its way to becoming one of the world's major energy sources.
"American businesses, the lion's share of which are Houston-based, with an investment of more than $5 billion, are the largest investor in our future," says Kazakh Ambassador Kanat Saudabayev in a letter to the Chronicle sent in advance of the president's visit.
Beyond important economic ties, the ambassador suggests that, in the midst of the global war on terrorism, these might be some leesons for others in his country's first decade of independence.
Indeed, today there 14 political parties and 1,500 independent news media outlets taking part in the communal life of a multiethnic nation of almost 17 million that includes 130 ethnic groups and more than 40 religious sects.
"Kazakhstan can be a major contributor to peaceful economic development of the region," says Ambassador Kanat.
True enough, and important enough.
That's not to say the nation is without its problems, however, and for those uninterested in them, it's the same lack of interest that most of us had about Afghanistan not so long ago.
The ethnic divisions of the country, particularly between the Slavs in the north and Muslims in the south, are a potential source of conflict. Economic growing pains and unequal development, coupled with widespread allegations of political corruption in some areas, trouble the nation as well. And there is evidence that the area is a growing producer of narcotics, as well as a route for drugs flowing north from places like Afghanistan into Russia and Europe.
The strong energy connections between Houston and Kazakhstan are reason enough for more notice here and more hope that prosperity can help the flourishing democracy there.
As we can see on television nightly, there are plenty of other causes to be aware of what is taking place well beyond our borders and normal boundaries of attention.

* * *


Ten years of independence, The New York Times, December 21, 2001, Op-Ed by ExxonMobil

Just a few days ago, the people of Kazakhstan celebrated their 10th anniversary as an independent state. On December 16, 1991, the Republic of Kazakhstan was established, one of many new states that were formed following the disolving of the Soviet Union. Much has been accomplished during these 10 years.
Kazakhstan is a large country, about as large as the United States east of the Mississippi River. Roughly 15 million people live there. It's a country of wideopen spaces, like the American West. The population is about half Muslim and half Christian. Its economy is blessed with abundant natural resources, including oil and gas fields under and around the Caspian Sea and some of the world's most important mineral resources.
When Kazakhstan achieved independence, its future was by no means secure. It had never had a tradition of democratic self-rule, and, worst of all, it had suffered many years of economic exploitation and mismanagement under Soviet rule. To make matters worse, when the Soviet Union collapsed, the entire region fell into a depression on a scale comparable to the 1930s.
Faced with these daunting problems, the Republic of Kazakhstan has made extraordinary strides under the leadership of President Nursultan Nazarbayev. In just 10 years Kazakhstan has established the institutions of democratic government, including a legislature with multiparty representation in parliament. Eighty percent of newspapers, magazines and radio and TV channels are in nongovernment hands. And, despite the potential for ethnic strife comparable to that in other countries of the region, no serious ethnic conflict has occurred.
Just as important has been its success in reconstructing its economy. In the first half of this year, real gross domestic product increased by 14 percent, following an increase of nearly 10 percent last year. One reason for this success has been the government's aggressive privatization program, which has helped foster private enterprise and foreign investment. As a result, more than 80 percent of Kazakh workers are now employed in the private sector.
Of course, much remains to be done. Achieving a freemarket democracy is a journey that is not yet complete. But in a recent speech, President Nazarbayev described his vision for the future: It is "a society where there will be no place for political, religious or national extremism," a country "based on a foundation of political and social justice, economic freedom and the rule of law."
We at ExxonMobil wish to congratulate the people of the Republic of Kazakhstan on their first 10 years of independence. Their efforts offer hope for others in the region because they have shown that a large and diverse nation can find a peaceful path to a better future.

* * *


"A Cause for Celebration" by ChevronTexaco Corp.,
The Washington Post, December 20, 2001

ChevronTexaco congratulates Kazakhstan on the tenth anniversary of its independence and welcomes President Nursultan Nazarbaev to the U.S.
The U.S. business community has long valued its warm and close relationship with Kazakhstan. President Nazarbaev has played a key role in fostering a spirit of friendship and cooperation, enabling investment opportunities and commercial partnerships to flourish.
President Nazarbaev's visit is very timely. Anniversaries are all about sharing with friends, reflecting on the past, but more importantly looking to the future.

* * *

The Washington Times
December 13, 2001
Embassy Row
James Morrison
News and dispatches from the diplomatic corridor.

Kazakh leader's visit
Kazakhstan President Nursultan Nazarbayev will visit President Bush next week for talks on energy issues, economic reform and the war on terrorism.

"The visit reflects the deepening relationship between the United States and Kazakhstan on counterterrorism, nonproliferation, democracy, energy and pipelines, economic reform and Kazakhstan's integration into the global economy," the White House said this week, as it announced the Dec. 21 visit.

The Bush administration has continued the Clinton administration policy of courting Kazakhstan, despite Mr. Nazarbayev's authoritarian rule and his government's poor human rights record. However, the Central Asian nation is rich in oil and other natural resources.

Secretary of State Colin L. Powell visited Kazakhstan last week on his tour of U.S. allies in the war against terrorism and thanked Mr. Nazarbayev for his support. Kazakhstan has granted the United States the right to fly over its territory and offered the use of its military bases.

Mr. Powell told reporters that Kazakhstan is ready to help in the reconstruction of Afghanistan.

"I was pleased that the president indicated a willingness to participate fully in humanitarian efforts," Mr. Powell said.

* * *


Tuesday, December 11

Bush to Meet Kazakhstan President in Washington

WASHINGTON (Reuters) - President Bush (news - web sites) will meet Kazakhstan President Nursultan Nazarbayev on Dec. 21 in Washington for talks on anti-terrorism efforts, energy issues and economic reforms, the White House said on Tuesday.

``The visit reflects the deepening relationship between the United States and Kazakhstan on counterterrorism, non-proliferation, democracy, energy and pipelines, economic reform and Kazakhstan's integration into the global economy,'' the White House said in a written statement.

* * *

The New York Times
December 15, 2001

BUSINESS

As the War Shifts Alliances, Oil Deals Follow
By NEELA BANERJEE with SABRINA TAVERNISE

There is no oil in Afghanistan, but there are oil politics, and Washington is subtly tending to them, using the promise of energy investments in Central Asia to nurture a budding set of political alliances in the region with Russia, Kazakhstan and, to some extent, Uzbekistan.

Since the Sept. 11 attacks, the United States has lauded the region as a stable oil supplier, in a tacit comparison with the Persian Gulf states that have been viewed lately as less cooperative. The State Department is exploring the potential for post-Taliban energy projects in the region, which has more than 6 percent of the world's proven oil reserves and almost 40 percent of its gas reserves.

The United States government cannot compel investment, but it can clear away diplomatic and bureaucratic obstacles. Western oil companies say warming relations with regional powers could yield small openings. Better ties between Russia and the United States, for example, have accelerated a thaw that began more than a year ago over pipeline routes from the Caspian Sea to the West.

"The sharp edges are off that discussion, and things are seen as less of a threat," said Martijn Minderhoud, a senior regional vice president for Royal Dutch/Shell.

But any payoff remains distant. The entrenched problems that hobbled oil investment in Russia and Central Asia before September still exist. Oil companies and regional experts wonder whether significant new oil and gas reservoirs will be opened to foreign investment, whether onerous laws and tax codes will be reworked and whether persistent corruption can be reduced.

This is a period of reassessments among oil companies, and a time of cautious optimism," said Scott Horton, a partner at the law firm of Patterson, Belknap Webb & Tyler in Manhattan. "But all have been badly burned in the former Soviet Union before."

Skeptics, especially in the Islamic world, contend that oil interests lie at the heart of the West's war in Afghanistan. "The Pipeline of Greed," read the headline on a recent article in the Pakistani newspaper Dawn about the American-led attacks on the Taliban and Al Qaeda. "The war on terrorism may well be a war for resources," it said.

The Bush administration says that its war goals have been clear  and do not involve oil. "There is no such hidden agenda," said an administration official. "Operation Enduring Freedom is meant to get rid of terrorism in Afghanistan, Central Asia and the surrounding areas."

Still, the administration lately has discreetly overlooked the pitfalls of doing business in the former Soviet Union. During a visit a week ago to Kazakhstan, Secretary of State Colin L. Powell said he was "particularly impressed" with the money that American oil companies were investing there. He estimated that $200 billion could flow into Kazakhstan during the next 5 to 10 years.

Two weeks earlier, on a visit to Russia, Energy Secretary Spencer Abraham championed the cause of increased foreign investment in Russia's oil industry. On the same trip, David J. O'Reilly, the chairman of ChevronTexaco (news/quote), said his company was reviewing possible projects in the Russian Far East.

Pipelines are the clearest realm of progress. For years the United States and Russia clashed over routes to transport oil and gas from the Caspian Sea region to lucrative Western markets  and the political and economic power that control of those networks conferred.

Russia wanted pipelines built on its territory, and some were. The United States backed a pipeline from Baku, Azerbaijan, to the Turkish Mediterranean port of Ceyhan, bypassing Russia entirely. The pipeline consortium is led by BP and represented by Baker & Botts, the law firm of James A. Baker III, a Bush family confidant and former secretary of state.

Over the last year, Russia's opposition to that route has subsided, and in October, the oil ministry invited BP to make a presentation about it to domestic oil companies. Industry analysts said that meeting would have been unthinkable if ties between the United States and Russia had not improved. Russia's largest oil company, Lukoil, confirmed that it was seriously looking into investing in the project.

The arc of countries in Central Asia where Western oil companies work grazes Afghanistan. But the value of Afghanistan itself, if any, might be as a pipeline route.

Four years ago, the Unocal Corp. (news/quote)  with the State Department's backing  negotiated with the Taliban to build a pipeline through Afghanistan linking Turkmenistan, which is rich in natural gas but landlocked, to Pakistan. Although Pakistan has called for reviving the pipeline, industry experts say oil companies are so far not interested.
But the plan could be dusted off.

"Once we bomb the hell out of Afghanistan, we will have to cough up some projects there, and this pipeline is one of them," said Matthew J. Sagers of Cambridge Energy (news/quote) Research Associates, a research and consulting group. "Can oil companies be persuaded by the United States? It has happened before. Look at Baku-Ceyhan."

That project exemplifies how Washington fosters oil investment. The White House began advocating the Baku-Ceyhan route about five years ago, but oil companies in the Caspian argued that it made little economic sense. At that time, there was little oil from the Caspian Sea. But there was plenty of natural gas, and companies needed a pipeline for it.

They agreed to develop the Baku- Ceyhan oil pipeline if they could get the American government's help to build a parallel gas pipeline, a person close to the Baku-Ceyhan consortium said. The presence of an Iranian company, OIEC, as a 10 percent shareholder in the gas pipeline consortium might have prompted the United States to block the project.

But it did not, and both pipelines are now proceeding.

This fall, the antiterrorism campaign raised oil companies' hopes that relations between Iran and the United States might improve. The industry's favored export route for Caspian oil is through Iran. But while the Bush administration confirms that Iran is sharing intelligence about Afghanistan with the United States, the president is maintaining Washington's longstanding policy against doing business with Tehran.

Western oil companies, showing a bit more faith than before in Central Asia and Russia, are gingerly looking for investment opportunities, industry consultants said. But the barriers are significant.

Through the 1990's, the United States fostered good relations with Kazakhstan to circumvent Moscow. But the relationship cooled when the Justice Department last year began investigating accusations of high-level corruption in oil projects there.

That investigation continues, but Kazakhstan  which holds about 88 percent of Central Asia's oil wealth  has offered the United States use of its airspace and military bases for the war. Its president, Nursultan Nazarbayev, is due in Washington next Friday to meet with President Bush and then will travel to Texas to mingle with oil executives.

Russia would seem the most attractive candidate for investment, given its warming relations with the United States  missile defense aside  and its relatively extensive economic changes.

But Russia is hard to figure. Its recent decision to acquiesce to OPEC's demand to cut exports has been interpreted in differing ways. Moscow might have come under American pressure to go along with the Middle East to protect oil prices, and so ensure political stability among the United States' Arab allies. Or the cut, which went against the official position of the United States, might have defied Washington.

Either way, Western oil companies understand, Russia's underlying motivation is the same: the Russians pursue their interests, which occasionally coincide with America's.

Those Russian interests still preclude serious involvement by Western oil companies in developing most Russian fields, except for complex offshore projects. Russia has tarried in developing tax laws and a production-sharing agreement for foreign oil concerns. Russian politicians fear surrendering oil to foreigners. After years of courting their wealthier and more-experienced Western counterparts, Russian oil companies, made richer by high oil prices, mostly want to go it alone.

"In the last year, the attitude of Russian oil companies to Western ones has changed," said Yevgeny Khartukov, general director of the International Center for Petroleum Business Studies, a nonprofit research and consulting group in Moscow. "Now they don't need them."

* * *

The New York Times
December 10, 2001

Kazakh Leader Urges Iran Pipeline Route
By PATRICK E. TYLER

ASTANA, Kazakhstan, Dec. 9  President Nursultan A. Nazarbayev of Kazakhstan urged the United States today to consider the strategic role of Iran as a transport route for the huge crude oil and natural gas deposits under development in the Caspian Sea region of Central Asia.

Since the collapse of the Soviet Union, the United States has maneuvered diplomatically to bolster the independence of the new countries of the Caspian region.

It has been working to secure the region's oil wealth with Western participation and has been promoting new pipeline routes that would skirt Russia and provide an outlet through Turkey, a NATO country, for one of the largest oil reservoirs in Eurasia.

Up to now, American objectives aimed to exclude Iran as a major player in controlling the flow of oil from the region.

Speaking in a news conference with Secretary of State Colin L. Powell, the Kazakh president said his country's oil export potential would quadruple in the next 15 years.

He noted that although American oil companies had advised that the most direct and cost-effective route to send some of that oil to world markets was through Iran, Washington had been unwilling to consider a proposal that would require the lifting of longstanding sanctions against Tehran.

"I say frankly that our investors who work on oil consider that the most beneficial route is through Iran to the Persian Gulf," Mr. Nazarbayev said.
"I think that the secretary of state avoided this question on purpose. This is not only my opinion, but in addition American companies think this."

In the course of the antiterror campaign in Afghanistan, in which Iran offered to conduct search-and- rescue missions for any American pilots lost near the Iranian frontier, Secretary Powell has said the United States must seize opportunities for strategic shifts in international affairs. And Iran has been on his mind, he said last month in an interview with The New York Times.

But when Mr. Nazarbayev raised the oil transport issue today, Secretary Powell responded with caution, sticking to the current policy line, first developed by President Clinton: that routes through Russia and Turkey were preferred and sufficient to deal with Caspian Sea oil. Still, he did not rule out the prospect that the Kazakh president had raised.

After breakfast with oil company and other executives at the American Chamber of Commerce here, Secretary Powell said he was "particularly impressed" with "the amount of money they are looking at investing in Kazakhstan."

"They were talking in the range of $200 billion over the next 5 to 10 years," he said, "because they see that kind of potential. To get that kind of potential out, you've got to move it. You've got to move all that fuel or crude and natural gas, and so I heard the president carefully, but I did not have a well-structured answer that I would have contributed at that point or now."

One factor that the United States will have to consider, according to a top adviser to the Kazakh president, is whether Caspian countries will simply turn to Chinese, European or Russian companies more willing to accommodate their objectives.

"We are now rethinking the whole situation in Asia," the adviser said.
The United States lists Iran as a sponsor of terrorism and a nation that is secretly developing nuclear weapons. But the rise of a moderate leader, President Mohammad Khatami, and demonstrations by Iranian youths  some chanting pro-American slogans this fall and advocating democratic reform  have stirred American interest in a new dialogue.

As he flew to Moscow after a two- day visit to Central Asia, Secretary Powell said that setting aside the oil transport question for now, "I am open to explore opportunities."

"We have been in discussions with the Iranians at a variety of levels and in some new ways since Sept. 11," he said, pointing out that James F. Dobbins, the American representative to the new Afghan leadership, had worked with Iranian officials in Bonn during negotiations to form an interim Afghan government.

"And I had a handshake and a brief discussion with the Iranian foreign minister at the United Nations," the secretary added, "so there are a number of things going on."

He said the Bush administration did not have any illusions about the nature of the Islamic republic in Iran, where decision making still is in the hands of hard-line religious leaders, but he added, "We've recognized that the Iranian people are starting to try to find a new way forward, and we're open to exploring opportunities."

Before he left Astana, which replaced Kazakhstan's principal city, Almaty, as the capital in 1997, Secretary Powell announced that Mr. Nazarbayev would visit Washington on Dec. 21 at the invitation of President Bush.
In Moscow, Secretary Powell dined with Foreign Minister Igor S. Ivanov tonight after laying a wreath in Pushkin Square, where a terrorist bomb killed 13 Russians in August last year.

Secretary Powell said he wanted to visit the site to express solidarity with Russia in the fight against terrorism while at the same time urging Moscow to seek a political solution to the long war in Chechnya.

Secretary Powell will meet President Vladimir V. Putin on Monday. The two leaders are expected to make progress on a new strategic arms accord that will reduce each side's nuclear arsenal to about 2,000 warheads from the current level of 6,000.

The secretary indicated that the document would carry forward substantial provisions of the treaties known as Start I and Start II that ensure verification and inspection procedures for the nuclear arsenals.

Secretary Powell said the most contentious issue was an agreement to allow the United States to proceed with robust testing of antimissile systems that would violate the Antiballistic Missile Treaty of 1972.

"They continue to find the ABM treaty at the center of the strategic framework," the secretary said. "We have been unable to persuade them otherwise, and they have been unable to persuade us otherwise."

A State Department official traveling with Secretary Powell insisted that no deadline had been set to resolve the issue, "but increasingly, we are constrained by the treaty" as the Pentagon prepares major missile defense tests in the spring.

* * *


The Washington Times
December 3, 2001

Caspian pipeline opens
By Christopher Pala
THE WASHINGTON TIMES

ALMATY, Kazakhstan  The first pipeline built to bring Kazakhstan's oil to world markets was dedicated in Russia last week, four months late and minus the presidents of the two countries through which it passed.

Speeches delivered near the Russian port of Novorossiisk called the 940-mile steel tube a symbol of international cooperation, and that it is indeed: The Russian Federation and American and Russian oil companies have provided most of the $2.6 billion cost, and Russia stands to earn $20 billion over the 40-year life of the pipeline.
But the pipeline is also:
- The first step to Kazakhstan's ambitious plan to deliver 3 million barrels a day in 15 years to world markets and become one of the top three oil exporters in the world.
- A multibillion-dollar bet by Chevron Corp. in 1993 that is now set to pay off handsomely.
- An example of the difficulty of doing business in Russia.
Proof that with perseverance, it can be done.

The pipeline, built by the 11-member Caspian Pipeline Consortium, known as CPC, starts on the desert shores of the northeast Caspian Sea at Tengiz, Kazakhstan, the world's sixth-largest oil field.
The longest 40-inch pipe in the world then curls around the Caspian before striking west across the broad plains north of the Caucasus range and ends at a tanker terminal 10 miles west of Novorossiisk.
When completed, at a final cost of $4 billion, it will be able to carry up to 1.3 million barrels per day (bpd), more than double its initial capacity.

Peak a decade off
Output at the Tengiz field, now 270,000 bpd, is not expected to rise to a peak of 700,000 bpd until the end of the decade, said Tom Winterton, head of the Tengizchevroil consortium exploiting the field.
Thus, the pipe has plenty of room for oil from other fields  - and there lies one of the major disputes that have delayed the opening.
When Chevron took over Tengiz from its post-Soviet managers, it created one consortium for the oil field and a second one to build a pipeline to the Black Sea.
For the first few years, Tengizchevroil, in which Chevron owns 50 percent, diligently overcame such obstacles as the extreme depth of the reservoir (21/2 miles below the surface), its high content of poisonous sulfur dioxide and the high pressure at which the oil was flowing. Production steadily climbed from 25,000 bpd and the jinx that gave Tengiz the longest uncontrolled blowout in Soviet history was overcome.
But in those years, the pipeline consortium got strictly nowhere in its efforts to persuade Russia and its pipeline monopoly Transneft to allow an outlet through Russia to the Black Sea.
It was not until 1996 that two newly created Russian oil giants, Lukoil and Rosneft, bought into the consortium while the Russian government took a 24 percent share. Then things started moving.
Construction took less than three years.
Transneft Director Semyon Vainshtock tried to fight a rear-guard battle, insisting that what was bad for Transneft was bad for Russia, but the pipeline consortium, headed by Russian Sergei Gnatchenko and assisted by Chevron's Fred Nelson, the consortium's deputy general director for projects, argued that Russia stood to gain from the added production in a non-zero-sum game.
That was just the beginning.

Rocky road so far
"We had to go through five Russian local governments," Mr. Nelson said recently. "It wasn't always easy."
Twice, customs disputes halted the flow of the oil at the Russia-Kazakhstan border.
This year, the biggest dispute among CPC members turned ugly and public when it derailed the opening ceremony that had been scheduled for Aug. 6 with the Russian and Kazakh presidents in attendance.
Tengiz oil, until the pipeline was built, was exported entirely through Russia and mostly by rail.
Part of its highly prized light "sweet" crude (which sells for up to a dollar a barrel more than Brent, the benchmark crude oil) was mixed along the way with less desirable Russian crudes to make "Urals Blend," which trades at nearly a dollar below Brent.
"The Russians got a free ride for years," said a diplomat familiar with the situation.
But for the pipeline, Chevron insisted on instituting what is called a quality bank  a system penalizing those who would add low-quality crude to the mostly Tengiz CPC Blend.
Quality banks are used in most places in the world where low- and high-quality crude oils are blended in pipelines, but the Russian partners relented only three days before the planned inauguration date, which was to coincide with the loading of the first tanker. The ceremony already had been canceled.
Then, the port authority of Novorossiisk extended its jurisdiction to the deserted piece of coast where holding tanks are buried near the end of the pipeline. There is no port: floating hoses are used to fill tankers moored offshore.
The move allowed the port authorities to demand a hefty port tax. Negotiations caused further delays. Eventually, said oil analyst Ivan Mazalov at Troika Dialog in Moscow, "They were bargained down quite a bit."
Other delays pushed back the date of the loading of the first tanker to Oct 13.
By the time all the difficulties were ironed out, five fully loaded tankers had weighed anchor and sailed over the Black Sea to the Bosphorus Strait, across the Sea of Marmara, through the Dardanelles to the Mediterranean Sea, and on to refineries in Europe.
A sixth one was loading when the ceremony took place.

Chevron gambled, won
While Russia and the United States ended up represented by deputy ministers, Chevron-Texaco sent Chairman David O'Reilly and the incoming and outgoing vice chairmen of the world's fourth-largest oil company.
That was not surprising: Both the pipeline and the giant oil field it serves are Chevron's babies, multibillion-dollar gambles that finally are paying off. As the foreign biggest investment in the former Soviet Union, oil field and pipeline are testimony that with perseverance, Westerners and Russians can work together.
"CPC is a bellwether project for successful international cooperation," Mr. O'Reilly reportedly said at the ceremony. "It demonstrates the confidence the international business community has to invest in Russia and Kazakhstan."
But if Russia, Kazakhstan and world consumers can join Chevron in rejoicing at the pipeline's completion, Turkey has exhibited mostly concern.
The extra tankers carrying Tengiz oil, which eventually will number three a week, will further clog the Bosphorus Strait that bisects Istanbul and increase the chances that the city of 12 million people some day will have to cope with a major oil spill or even a fire.
But Turkey is committed to upholding the 1936 Montreux Agreement and, barring a catastrophe, Caspian oil will be able to navigate the strait to reach European markets for the foreseeable future, analysts say.

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