Tag Archives: Kazakhstan

Kazakhstan cuts oil exports via Russia because of contamination

FEB. 28 2020 (The Bulletin) — Kazakh officials said that they were cutting oil exports via the Russian Baltic Sea port of Ust-Luga next month because of continued contamination issues with its own oil production. Reuters reported that Kazakhstan had planned to send 800,000  tonnes of oil through Ust-Luga in March but that this has been cut back to 600,000 tonnes. It also said that CNPC Aktobemunaigas, a subsidiary of China’s CNPC, has detected high levels of organic chloride in its oil. 

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kaspi.kz posts jump in profits and talks up IPO options

ALMATY/Feb. 27 2020 (The Bulletin) —  — Four months after postponing an IPO on the London Stock Exchange, Kapsi.kz, a Kazakhstan-based banking and technology group, said that income rose to 197b tenge ($525m) in 2019, a 79% rise from 2018.

Kaspi.kz which owns Kapsi Bank, one of the largest high street retail banks in Kazakhstan, postponed its IPO because it said that market conditions were poor, although analysts said that it may have been irked by receiving a poorer market reception than expected. 

Kapsi.kz has close links to the Kazakh elite and, until the start of 2019, Kairat Satybaldy, the nephew of Kazakhstan’s former president, Nursultan Nazarbayev, had officially owned the biggest stake in the company. 

The company’s other main shareholders are Baring Vostok funds, Goldman Sachs, chairman Vyacheslav Kim and CEO Mikheil Lomtadze.

Reuters quoted sources inside Kaspi.kz saying that the company was once again considering an IPO and quoted Mr Lomtadze as saying: “We continue to monitor market conditions closely in relation to our potential initial public offering.”

In its full-year report, Kaspi.kz said its revenue had increased by 37%.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan wants to raise $500m on Russian bond market

FEB. 26 2020 (The Bulletin) — Kazakhstan plans to raise $500m on the Russian bond market over the next few months, Reuters reported by quoting Kazakh finance minister Alikhan Smailov. This is the first time that Kazakhstan has gone to the Russian debt market rather than the Western debt market to raise funds. Mr Smailov said that the Russian market was less of a foreign currency risk because the tenge and the rouble tend to move together and that debt was also cheaper when compared to the West.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan and Iran sign deal to build Special Commercial Zone in Aktau

FEB. 25 2020 (The Bulletin) — Kazakhstan and Iran signed a deal to build a joint special commercial zone in Aktau that will be aimed at helping shift goods between Iran and Central Asia. Media reports said it will cost around 15m euros to build the 5 hectare site in Aktau. Relations, and trade, between Iran and Central Asia have been increasing over the past five years. Kazakhstan’s main exports to Iran are barley, wheat and rolled iron. Iran sends pistachios, dates, apples, plastics, tableware and meat processing equipment to Kazakhstan and Central Asia. 

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazmunaigas looking at London IPO later this year

FEB. 25 2020 (The Bulletin) — The deputy CEO of Kazakhstan’s state-owned oil and gas company, Kazmunaigas, Zhakyp Marabayev, said that it would be looking to list on the London Stock Exchange in October or November. Kazakhstan has talked up the sale of shares in Kazmunaigas for years as part of its “People’s IPO” but has constantly delayed going ahead with it, often saying that market conditions were not right.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakh opposition activist dies in police custody

ALMATY/Feb. 24 2020 (The Bulletin) — Opposition activists accused the Kazakh police of brutality and neglect after one of their colleagues died in police custody.

The government denied that police had mistreated Dulat Agadil, 43, and accidentally killed him in a Nur-Sultan police cell and instead said that he had died of an underlying heart condition.

“I can fully assure people that, unfortunately, the activist Agadil passed away as a result of heart failure. To make any claims counter to this is to go against the truth,” President Kassym-Jomart Tokayev said in a statement.

The statement was not enough, though, to take momentum away from opposition activists who called for a rally four days later in Almaty. Police snuffed out the rally by detaining up to 40 activists before the protest but opposition leaders have promised to continue demonstrations.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Promotion for Kazakh General blamed for Zhanaozen shootings

ALMATY/Jan. 16 2020 (The Bulletin) — A senior Kazakh government official accused by human rights activists of ordering police to open fire at protesters in the oil town of Zhanaozen in 2011 has been promoted to head the State Guard Service.

General-Colonel Kalmukhanbet Kassymov is seen as a hardline loyalist. He was Kazakhstan’s interior minister between April 2011 and February 2019 and will now head up one of the most senior paramilitary units in the country. The State Guard Service is tasked with providing security for President Kassym-Jomart Tokayev and also for former president Nursultan Nazarbayev.

At least 14 people were killed in Zhanaozen in December 2011 when striking oil workers clashed with security forces during celebrations for the 20th anniversary of Kazakhstan’s independence from the Soviet Union. Video shot on shaky mobile phones showed police firing at fleeing workers.

Human rights groups have accused Gen. Kassymov of ordering armed police from central Kazakhstan to travel to Zhanaozen, in the western oil region of Mangistau, to confront and, ultimately, shoot protesters.

Gen. Kassymov, 62, is a professional policeman, making his way up through the ranks to become deputy head of the Zhambyl region police force in 1990 before moving into the Presidential Administration in the newly independent Kazakh government. From February 2019, after nearly eight years as Kazakhstan’s interior minister, Gen. Kassymov was made Secretary of Kazakhstan’s Security Council and an aide to the President.

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— This story was first published in issue 434 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

New Chinese cement factory opens in Uzbekistan

DEC. 28 2019 (The Bulletin) — Uzbek president Shavkat Mirziyoyev officially opened a new Chinese-built chemical production complex near Navoi in the centre of the country. Mr Mirziyoyev said that the plant had “changed Uzbekistan’s dependence on imports of PVC, caustic soda, and created a large number of new jobs”. It also further cements China’s influence, in business and politics, in Uzbekistan.

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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

— Copyright owned by the Central Asia & South Caucasus Bulletin

Finance company relocates from Bermuda to Nur Sultan’s AIFC

JAN. 9 2020 (The Bulletin) — The Astana International Finance Center (AIFC), the government-backed project in Nur Sultan that was supposed to kick start the Kazakh capital as a regional financial hub, said that a company called Kazakhstan Energy Reinsurance Company had relocated from Bermuda. The AIFC said that the Kazakhstan Energy Reinsurance Company, an affiliate of state energy company Kazmunaigas, would maintain all the legal rights it enjoyed in Bermuda.

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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

— Copyright owned by the Central Asia & South Caucasus Bulletin

Comment: Kazakhstan needs to improve oversight of its aviation sector

— The crash of Bek Air flight 2100 is a tragedy that would have been avoided with better industry oversight. The government should now prioritise this, writes Paolo Sorbello.

JAN. 13 2020 (The Bulletin) — Early on Dec. 27, a Bek Air passenger plane flying from Almaty to Nur-Sultan crashed into a building just seconds after taking off. This tragedy shocked Kazakhstan, 12 of the 102 people on board were killed, but it was an accident waiting to happen.

Owned by Nurbol Sultan, one of Kazakhstan’s richest men, Bek Air is a low-cost airline in Kazakhstan and does not hold a licence to fly abroad. In 2016, Bek Air became the only Kazakh aviation company to refuse to take the IOSA, a safety audit by the International Air Transport Association (IATA). It said the cost of taking the safety test was prohibitive but this line of reasoning was dismissed by other local airlines, who said the cost of the audit was a fraction of the price of a ticket.

Other passenger airlines in Kazakhstan, Air Astana, SCAT, and Qazaq Air, are registered with the IATA. FlyArystan, the low-cost division of Air Astana that was established in 2019, flies on Air Astana’s Airline Operator Certificate (AOC) and is therefore also a full member of the IATA.

The Kazakh aviation market is price sensitive and this is where Bek Air was competitive. Its tickets between Almaty and Nur Sultan had generally been cheaper than Air Astana’s, the flagship Kazakh airline. Fares on FlyArystan, though, were comparable to those of Bek Air.

One European pilot explained why the Bek Air flights were cheap: “The difference in pricing is the missing zeal in maintenance and safety checks.”

After the crash, infrastructure minister Roman Sklyar admitted that “Bek Air and others have the right to fly in Kazakhstan because local standards are not the same as IOSA”. This is a worrying shortfall that needs correcting.

We are still waiting for the full results of the investigation but even so, the government’s response has been timid. Bek Air’s licence was stripped indefinitely. Sklyar could have said the government would work to bring airlines up to standard but he didn’t and this is an opportunity missed.

Passenger airlines in Kazakhstan should be held accountable to international standards whichever the route they fly. Some flight routes across Kazakhstan last three hours, longer than most flights in Europe.

The Kazakh government has to make sure that it shows that it can learn from this crash and improve oversight of its aviation industry. This is the least that can be done in the memory of those killed in Bek Air flight 2100.

–Paolo Sorbello if a journalist and analyst based in Almaty

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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

— Copyright owned by the Central Asia & South Caucasus Bulletin