Tag Archives: Kazakhstan

Oil price fall was wake-up call for Kazakhstan

NOV. 10 2014 (The Conway Bulletin) – The sharp fall in the price of oil has acted as a wake-up call for Kazakhstan, economy minister Kairat Kelimbetov said in an interview with the FT.

Virtually admitting that Kazakhstan had been caught off guard by the decline by roughly a third in the price of oil since June, Mr Kelimbetovsaid that the government was the economy and to make it planning measures to shore up more attractive to investors.

“Next month the government will be ready to announce some counter cyclical fiscal policy, with big plans in infrastructure,” he said in the interview in Almaty.

Economists have warned that a devaluing rouble and falling oil prices will combined to knock Kazakhstan’s growth rate.

And the falling economy is also knocking investor confidence. Energy analyst Sergei Smirnov said that with Brent oil prices falling to a four year low of $82/barrel it makes projects such as Kashagan unprofitable.

“Offshore oil production is always much more expensive than onshore production,” he said according to media.

Kazakh officials who have staked their credibility and the country’s economic prosperity on Kasahgan but the project is already behind schedule and running over budget.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Kazakh President unveils economic plan

NOV. 11 2014 (The Conway Bulletin) – In a speech to the nation, Kazakh president Nursultan Nazarbayev ordered Kazakhstan’s government to spend more money on infrastructure projects to counter the drag caused by a slowing Russian economy and falling oil prices.

The hastily arranged policy speech caught observers by surprise. Mr Nazarbayev usually waits until his state-of- the-nation speech in January to unveil new policy.

“The tough times for which we prepared ourselves with the National Oil Fund have come. It’s time to use these reserves,” he said during his combative address.

Kazakhstan has amassed a sovereign wealth fund of roughly $77b to counter downturns in commodity prices — the economy is mainly reliant on oil and gas exports — as well as to defend the tenge currency when it is under pressure from a falling rouble.

And Mr Nazarbayev is acutely aware that economic progress is a cornerstone of his popularity.

Mr Nazarbayev pledged to inject $3b every year into Kazakhstan’s economy, during 2015/17. He also said that inter-governmental banks have pledged to match this cash injection.

“The investment from the National Fund must be necessarily accompanied by structural reforms,” he said. “This money will be channelled to develop transport, energy, industrial and social infrastructure.”

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Kazakhstan and Kyrgyzstan agree energy deal

NOV. 7 2014 (The Conway Bulletin) – Kazakhstan and Kyrgyzstan agreed a deal for Astana to meet most of Bishkek’s electricity deficit, albeit at a price greater than Kyrgyz President Almazbek Atambayev would have wanted to pay.

The deal, finalised during a meeting between Kazakh President Nursultan Nazarbayev and Mr Atambayev in Astana, means Kyrgyzstan must pay roughly three times more for the imported electricity than Kyrgyz citizens pay for domestically-produced electricity. Importantly, it also shows Kazakhstan’s political clout in Kyrgyzstan is growing.

An estimated deficit of 2b kilowatt hours (kWh) this year, caused by a shortage of water in its reservoirs, public reaction to shutoffs drove Bishkek and the potential to sign the deal.

Mr Atambayev will be relieved to have made the deal to import 1.4b kWh from Kazakhstan but here are still problems. He will have to make up the shortfall from somewhere else, possibly Turkmenistan, and he will have to finance the extra costs.

Currently the government has suggested modest tariff increases beginning Jan. 1. These are bound to irritate people in Kyrgyzstan.

Other agreements reached by Mr Atambayev and Mr Nazarbayev at the meeting are also indicative and suggested that Kazakhstan maintains significant leverage over its weaker neighbour.

Mr Nazarbayev promised that a fleet of Kyrgyzstan-bound fuel wagons, owned by Russian energy giant Rosneft and held by Kazakh customs officials without explanation since April, would be allowed to cross the two countries’ mutual border. He also pledged a $100 million grant to Kyrgyzstan as the country prepares to enter the Eurasian Economic.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Russia may block food transport

OCT. 30 2014 (The Conway Bulletin) – Russia may block trucks and trains carrying food from the EU and Norway to Kazakhstan from travelling across it territory because of an import ban. Russia has banned produce from the EU and Norway in retaliation for sanctions imposed by the West.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

Subsidiary of British caterer bribes Kazakh officials

NOV. 3 2014 (The Conway Bulletin) – A subsidiary of a British catering company paid bribes to Kazakh officials to win contracts, a former employee said, the latest corruption scandal to hit Kazakhstan.

According to Karim Pabani, a former finance director of a Kazakh subsidiary of Compass Group which is one of the 100 largest companies listed on the London Stock Exchange, the company paid for a $19,000 holiday to Dubai for a Kazakh government official and the university fees of the son of another official.

The accusations, which have been denied by Compass Group, will embarrass Kazakhstan which can’t shake off its reputation for corruption. Last month a court in France said it was investigating alleged kickbacks paid by a French company to win Kazakh helicopter contracts.

Mr Pabani’s allegations of corruption with Compass’s local subsidiary Kazmunaigaz Services Compass came during an employment tribunal. He is alleging unfair dismissal.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

Kazakh copper miner company changes name

OCT. 31 2014 (The Conway Bulletin) – Kazakhmys, the London-listed Kazakh copper miner that anti-corruption campaigners say has strong links to President Nursultan Nazarbayev, has changed its name to KAZ Minerals PLC. KAZ Minerals retains the newer copper mines while the older mines in central Kazakhstan will operate under a new company called Cuprum Holding.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

Kazakhstan’s national grid plans IPO

NOV. 4 2014 (The Conway Bulletin) – Kazakhstan’s national grid company, KEGOC, will sell 10% of its shares on the local stock market this year for an estimated $72m. KEGOC will become the second company after oil pipeline monopoly KazTransOil to launch a so-called People’s IPO, a high-profile part-privatisation of some state companies.

Kazakhstan to export power to Kyrgystan

NOV. 4 2014 (The Conway Bulletin) – Kazakhstan has agreed to export electricity to Kyrgyzstan to help ease its impending power problems. The deal is likely to be finalised later this week when the leaders of Kyrgyzstan and Kazakhstan meet. Kyrgyzstan has said low reservoir levels means an electricity shortage this winter.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

Kazakhstan faces fuel supply problems

OCT. 29 2014 (The Conway Bulletin) – Azerbaijani media has refuted a suggestion by Kazakh deputy energy minister Uzakbay Karabalin that it will be able to supply Kazakhstan with enough fuel to make up for its on-going shortfall. Kazakhstan is looking for options to make up for the shortfall, which is frustrating ordinary people.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

Hollande to visit Kazakhstan

OCT. 31 2014 (The Conway Bulletin) – France’s President Francois Hollande will travel to Astana on Dec. 5 for a two day visit, the French embassy in Kazakhstan said. France and Kazakhstan have developed close economic ties. Mr Hollande’s predecessor Nikolas Sarkozy visited Astana a handful of times.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)