Tag Archives: Kazakhstan

Kazakh car imports halve

OCT. 29 2015 (The Conway Bulletin) – In Jan.-Aug. 2015, Kazakhstan imported 54,000 cars, roughly half the amount of cars imported during the same period last year. Russia accounted for 85% of the car import market. Between January and August, the Kazakh tenge was overvalued against the rouble, making imports from Russia cheap. The Kazakh Central Bank effectively devalued the tenge in August.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Smuggled petroleum flows into Kyrgyzstan

OCT. 28 2015 (The Conway Bulletin) – The amount of smuggled petroleum products flowing into Kyrgyzstan from Kazakhstan has increased enormously since the country joined the Kremlin-led Eurasian Economic Union in August, Melis Turgunbayev, director of state-owned energy company Kyrgyzneftegaz, said. He said the flood of smuggled goods had halved the trade in legally imported petroleum products.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kazakh miner to hit target

OCT. 29 2015 (The Conway Bulletin) — London-listed miner KAZ Minerals, formerly known as Kazakhmys, said it is on track to meet its production targets for 2015, despite a slight fall in production during the first nine months of the year. KAZ Minerals also said that it had increased its net debt by 18.8% to $1.9b in Q3. The company may be bullish on output at its copper and zinc mines in Kazakhstan but it has been hit by a fall in commodity prices.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kazakhstan extends capital amnesty

OCT. 23 2015 (The Conway Bulletin) – The Kazakh Senate extended a deadline to repatriate capital that has been offshored by one year to Dec. 31, 2016. Analysts said this was a response to a poor recovery rate. The Kazakh Central Bank has made attracting capital back to Kazakhstan one of its key policies.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kazakh government to fine Karachaganak $2b, say sources

ALMATY, OCT. 27 2015 (The Conway Bulletin) — The Kazakh government is considering levying a heavy fine against Karachaganak, Kazakhstan’s largest gas field, worrying observers who said this could mean a revival of resource nationalism.

According to sources quoted by Bloomberg News, the Kazakh government is likely to impose a penalty against the consortium operating Karachaganak for as much as $2b, in an attempt to earn quick cash for its crisis-hit state budget.

The sources, described as being familiar with the project, said the fine was for failing to meet contractual obligations.

A $2b fine would be the largest-ever penalty imposed on an energy consortium in Kazakhstan, exceeding a 2014 fine on Kashagan of $737m and a 2007 claim on Tengiz for $609m. British BG Group and Italian Eni own 29.5% each. Chevron and Lukoil are the smaller shareholders with 18% and 13.5% respectively. State-owned Kazmunaigas bought a 10% stake in the project in 2012, after a two-year tax dispute.

BG Group, Eni, Kazmunaigas and the Kazakh government all declined to comment.

The Bloomberg story hinted at resource nationalism, said Lawrence Markowitz, professor of Political Science at Rowan University.

“Contestation between Kazakhstan’s government and multinational corporations centres on contracts and this could be a case of a government using fines and penalties to be more predatory on the wealth these deposits generate,” Mr Markowitz told the Bulletin.

Other observers said Kazakhstan may be positioning itself ahead of a contract renegotiation.

“There is certainly pressure in Kazakhstan to change the Production Sharing Agreement contracts signed in the 1990s, because they were too generous for foreign companies,” said Nygmet Ibadildin, professor of Energy Policy at KIMEP University.

Shell agreed to buy BG earlier this year but speculation has mounted that Kazakhstan could exercise its preemptive rights to jump in and buy BG’s share.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kazakhstan’s Intergas to buy back Eurobonds

OCT. 26 2015 (The Conway Bulletin) — Intergas Central Asia said it would buy back $270m of its outstanding Eurobonds due in 2017, media reported. Intergas is a subsidiary of Kazakhstan’s state owned pipeline company KazTransGas. Analysts said the buyback was positive for Intergas as it reduced its exposure to Kazakh banks.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Currency: Kazakh tenge, Kyrgyz som

OCT. 30 2015 (The Conway Bulletin) — In this current regional economic crisis, when currencies are stable it has to be positive.

The US Federal Reserve Bank kept interest rates unchanged, giving some more breathing room to currencies across Central Asia and the South Caucasus.

This was one of the first stable weeks for currencies in the region after heavy turbulence shook, ravished even, the markets.

The three free-floating currencies followed a similar pattern this week, weakening only marginally.

The Kazakh tenge lost just 0.5% of its value against the US dollar, ending at 279.2/$1 on Friday. The Kyrgyz som followed suit losing 0.7% of its value at 69.4/$1. The Georgian lari was stable at 2.39/$1.

In Tajikistan, the Central Bank said the somoni lost 30% of its value in the year to Sept. 2015. On Friday, it was stable at 6.62/$1.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Business comment: IMF’s reforming zeal

OCT. 23 2015 (The Conway Bulletin) — The South Caucasus and Central Asia might be looking at a long term economic crisis, the IMF said, sending a chill down the spines of the region’s investors.

After the shock of the 2008/9 financial crisis, countries across the region picked up pace and restored the steady growth pattern they had witnessed in the early 2000s.

But the current crisis, which Kazakhstan’s President Nursultan Nazarbayev called worse than the 2008/9 financial crunch, could linger on for longer than expected because of its ripple effects on the Russian economy, the IMF said.

Lower oil prices have affected hydrocarbon exporters from the region – big and small, private and state. Several exploration and production projects have become unprofitable and revenues have lost value. The IMF forecast a break- even price of around $60/barrel or higher for both Azerbaijan and Kazakhstan. If oil prices are lower, debt will grow and reserves will shrink.

Tajikistan, Kyrgyzstan and Armenia, had been forecasted to be better off due to lower oil prices, but the fall in the rouble has reduced the value of their remittances and pressured currencies.

And the IMF had a message. Reform is the only option, it said.

“The long-lasting nature of the shocks means that deeper and more durable policy changes will be needed,” Juha Kähkönen, deputy director of the IMF in Almaty said.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kazakhstan can impose Karachaganak fine

OCT. 27 2015 (The Conway Bulletin) – The Kazakh government could impose a $2b penalty on the consortium operating the Karachaganak gas field, Bloomberg News quoted sources as saying.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Nostrum cuts expectations in Kazakhstan

OCT. 27 2015 (The Conway Bulletin) — Hit by delays in infrastructure maintenance, London-listed Nostrum Oil & Gas reduced its production target for 2015 by 9% to 41,000 barrels of oil equivalent per day. In its Q3 statement, Nostrum said repair work at a Kazakh state-owned gas export pipeline was now complete and production was back to normal.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)