APRIL 27 2016 (The Conway Bulletin) – The Kazakh railway authority announced the launch of a new high-speed connection between Astana and Kostanai, which will be operated by Tulpar-Talgo trains. Tulpar-Talgo is a joint venture between a subsidiary of state-owned Kazakhstan Temir Zholy and Spain’s Talgo.
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(News report from Issue No. 278, published on April 29 2016)
ALMATY, APRIL 26 2016, (The Conway Bulletin) — Kazakh oil producers have stopped exporting via the Baku- Tbilisi-Ceyhan (BTC) pipeline as they become increasingly cost-conscious during this period of low global oil prices, a shift that will damage Azerbaijan’s reputation as an energy transit route from Asia to Europe
Data from BTC showed that Kazakhstan’s latest contribution to the pipeline was in January. This is the first time in years that Kazakh producers have suspended shipments for more than a month.
This confirms the marginalisation of BTC as an export route for Kazakh producers, most predominantly Chevron-led Tengizchevroil (TCO).
Analysts said the ditching of BTC as an export route for Kazakh oil, a route once heralded as the region’s saviour, was linked to both contractual and market constraints.
“The contract between TCO and BTC for shipments recently ended, and with the CPC pipeline expansion adding new export capacity, there is capacity to export more TCO oil via CPC, which is a more economical option for TCO at low oil prices,” said Andrew Neff, senior petroleum analyst at IHS.
The CPC, Caspian Pipeline Consortium, is an oil pipeline that sweeps around the northern Kazakh shore of the Caspian Sea and ends at the Russian Black Sea port of Novorossiysk. It was designed in the 1990s to ship oil from TCO, Kazakhstan’s largest producer. It’s been gradually expanded and shipped 1.1m barrels/day in March, nearly double its rate of 10 years ago. BTC’s capacity is 1m barrels/day but in March 2016, it transported 721,500 barrels/day.
CPC is a cheaper export route because, to ship oil to the start of BTC, Kazakh producers needs to transport oil across the Caspian Sea.
Mr Neff, the IHS oil analyst, said that as well as hitting BTC’s earnings, dropping Kazakh oil from its mix will also reduce the quality of BTC exports.
“It will change BTC’s overall blend and lower its quality, as Turkmen crude is heavier, plus it will reduce oil transit revenues for Azerbaijan,” he said.
BTC’s main shareholders are BP with a 30% stake and Azerbaijan’s state-owned SOCAR with a 25% stake.
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(News report from Issue No. 278, published on April 29 2016)
APRIL 28 2016 (The Conway Bulletin) – Kazakh businessman Kenes Rakishev was made chairman of Kazkommertsbank, the company said in a statement. KazKom is the country’s largest bank by assets. Marc Holtzman, who previously served as chairman, will now be the CEO. This completes a takeover process that lasted for two years and involved KazKom’s acquisition of debt-ridden BTA Bank. KazKom’s former majority owner Nurzhan Subkhanberdin resigned as chairman last year.
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(News report from Issue No. 278, published on April 29 2016)
APRIL 27 2016 (The Conway Bulletin) – The EBRD paid €3.3m ($3.8) to become a shareholder in Globaltruck Kazakhstan, a truck operating group. Globaltruck is registered in Cyprus and owns Longrun Asia a start-up trucking company in Kazakhstan. Longrun Asia will use Globaltruck’s equity funds of €10m ($11.4m) to buy up to 300 trucks and trailers.
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(News report from Issue No. 278, published on April 29 2016)
APRIL 24-27 2016, ALMATY (The Conway Bulletin) — A proposed amendment to land registration laws triggered a series of rare protests across Kazakhstan, a reaction that the authorities have handled, so far, with a relative soft touch.
The first and largest rally was held in the western city of Atyrau, when around 1,000 demonstrators gathered to protest against a law which they say would allow foreigners to buy their land. Smaller protests, with a few dozen protesters, were held over the following days in Aktobe, Semey and Aktau.
The amended law is due to come into force in July.
“We are thousands here today, but if they start seizing and selling our land, we will be millions,” one of the speakers at the Atyrau protest said.
Importantly, most of the people at the protests were speaking Kazakh, rather than Russian. Kazakh is prevalent in poorer, more rural sections of Kazakhstan’s society. It is particularly widely spoken in the west of the country, in and around Atyrau, Aktobe and Aktau.
Some analysts said that the protests may have been part of a wider nationalist movement encouraged by the authorities to give a veneer of political discourse without posing any real threat to the elite. Both local governments and officials in Astana dismissed the claim that the new land code would give out land to foreigners.
At a meeting in Astana, President Nursultan Nazarbayev said: “The issue regarding selling land to foreign citizens is out of question. All talks regarding this issue are groundless. Those who heat up these rumours should be brought to justice.”
As The Bulletin went to press, police in Almaty had detained a handful of other activists who had planned a press conference against the new land code.
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(News report from Issue No. 278, published on April 29 2016)
APRIL 15 2016 (The Conway Bulletin) – Russian gold miner Polymetal said its output declined by 4% in the first quarter of the year to 260,000 ounces of gold equivalent, also due to a sharp decline in its Kazakh operations. At the Varvara gold project in north-western Kazakhstan, Polymetal produced 14,000 ounces of gold, 32% less than in Q1 2015, due to lower grade stockpiles. Polymetal said its Kyzyl gold project in north-eastern Kazakhstan is on track to start production this year.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 15 2016 (The Conway Bulletin) – Kazakh President Nursultan Nazarbayev flew to Tashkent to meet with his Uzbek counterpart Islam Karimov to discuss regional security and economic ties. Both leaders emphasised good relations between the two countries. Mr Karimov told Mr Nazarbayev that “we need to synchronise our watches and go in the right direction”, a reference to working more closely together.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 18 2016 (The Conway Bulletin) – ArcelorMittal Temirtau, Kazakhstan’s largest steelmaker, said it will appoint Paramjit Kahlon, the former CEO of an ArcelorMittal steel plant in Ukraine, as its new CEO in May. ArcelorMittal Temirtau has laid off thousands of workers over the past few years as it tries to deal with low steel prices triggered by a glut of supply.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 21 2016 (The Conway Bulletin) – Ratings agency Fitch said Kazakhstan’s GDP will shrink by 1% in 2016 and the value of assets owned by Samruk-Kazyna, the country’s sovereign wealth fund, will decline by $3b, or 5%. Fitch’s accounting is more pessimistic than previous government calculations, which forecast marginal GDP growth for 2016.
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(News report from Issue No. 277, published on April 22 2016)
APRIL 22 2016 (The Conway Bulletin) – When they meet, Nursultan Nazarbayev and Islam Karimov want to show unity between Kazakhstan and Uzbekistan.
But this is often just a facade.
The reality is that the two leaders clash and vie for influence over Central Asia. After all, Kazakhstan is the largest Central Asian country by territory, while Uzbekistan is the most populous.
Last Friday, Tashkent was the final stopover in an international foray by Mr Nazarbayev that had taken in Istanbul and Tehran as well. Mr Karimov seemed happy to receive his neighbour and said the two countries “need to synchronise watches” and work more closely together.
The friendliness and the smiles that the leaders exchanged during the meeting, however, is not a sign that the long-standing rivalry between the two neighbours has subsided. Instead it is a reflection of the economic situation that they find themselves in. They have to try to work together to deal with a worsening economic outlook.
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(Editorial from Issue No. 277, published on April 22 2016)