Tag Archives: Kazakhstan

KAZ Minerals gets funding

DEC. 13 2016 (The Conway Bulletin) — London-listed copper miner KAZ Minerals said it had been given a $300m loan from state-owned Kazakhstan Development Bank to fund the development of the Aktogay mine in eastern Kazakhstan. The loan will have a maturity of 8-1/2 years. At a press conference, Oleg Novachuk, the company’s chairman, said that the total debt of the company totalled around $2.5b.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Kazakh energy ministry forecasts Kashagan production

DEC. 14 2016 (The Conway Bulletin) — A report from Kazakhstan’s energy ministry forecast total production at Kashagan to reach 308m tonnes in total by 2041, the KazTAG news agency reported. This is important because it shows the size of the oil field and just how much oil the consortium developing it can expect to produce during the lifespan of the production sharing agreement. ENI, Shell, Kazmunaigas, Inpex, Total, ExxonMobil and CNPC are the consortium members.

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(News report from Issue No. 309, published on Dec. 16 2016)

Tethys’ Kazakh subsidiary resumes sales

DEC. 12 2016 (The Conway Bulletin) — London-listed Tethys Petroleum said its Kazakh subsidiary had restarted gas sales to the state- owned distributor Intergas Central Asia after a seven-week suspension. Intergas Central Asia cut the gas supply contract with Tethys Aral Gas in October. At the time, Tethys was locked in a row with Kazakh investors who had promised to deliver a cash injection.

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(News report from Issue No. 309, published on Dec. 16 2016)f

Stock market: OPEC

DEC. 16 2016 (The Conway Bulletin) — The collapse in oil prices since 2014 has hit the economies of Central Asia and the South Caucasus. Every now and then, though, a new touted solution emerges, be it maximising oil output to earn as much as possible or freezing output and waiting for sunnier days.

Both Azerbaijan and Kazakhstan, the main producers in our region, have played with the idea of “freezing” oil production, although this is more a reflection of a drop in production at aging oil fields rather than a conscious choice. An agreement reached between members of OPEC and other producers seems to have solved the headache in the medium-term. The parties pledged to cut output, forcing prices up.

This measure, however, lasted just a few days.

After the US Federal Reserve raised interest rates for the first time in one year on Wednesday, the US dollar soared against all commodities, cancelling out the progress made after the OPEC-sponsored meeting.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Kazakhstan details mortgage plan

ALMATY, DEC. 12 2016 (The Conway Bulletin) — The Kazakh government plans to stimulate the housing market by subsidising mortgages under a programme dubbed Nurly Zher, which means the Bright Land in English.

At a government meeting, the economy ministry said that the plan would help build 1.5m new houses over the next 15 years. It said that the state would invest $5.3b into the scheme and that the private sector would invest $47b.

“To encourage private developers to take advantage of available credit resources the state will subsidize part of the interest rate on loans extended by banks,” the economy ministry said in its statement.

The plan is an ambitious attempt by the Kazakh government to stimulate its flatlining economy. GDP growth has been stagnan, pulled down by low oil prices and a recession in Russia. The tenge has lost around 50% of its value and ordinary Kazakhs are feeling the pinch. This year rare anti-government protests sprung up across the country.

The government has said that it will restructure old mortgages and has also said it will subsidise the interest rate on new mortgages by knocking 7 percentage points off the cost of borrowing. Commercial rates for mortgages in Kazakhstan are currently around 17%. Under the government’s plan, new mortgage holders will pay only 10%, with the government paying the equivalent of 7% of the mortgage.

Even so, people are sceptical.

“I’m scared of whole economic situation in the country,” said Bolat Mukashev, 25. “You don’t know what will happen tomorrow and there is no stability. Any moment tenge might collapse again and there is a high chance I could lose my job.”

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Russia to start sending more oil to China via Kazakhstan

ALMATY, DEC. 15 2016 (The Conway Bulletin) — Russia will increase oil shipments to China via Kazakhstan by 28.5% in 2017, giving Kazakhstan’s income a much-needed boost from transit fees.

The deal also comes a few days after Russian state-owned Transneft said that it would stop taking Kazakh oil at the Caspian Sea port of Makhachkala because the consistency of its blend had changed.

Rosneft, Russia’s state-owned giant, will export 9m tonnes/year to China via the Kazakhstan-China pipeline, up from the current 7m tonnes/year, according to traders interviewed by Reuters. The pipeline, with a capacity of around 15m tonnes/year, has been utilised below capacity for years since its completion in 2009.

Russia needs to increase its export capacity to China to fulfil contracts signed in 2013. New pipelines are being built in Siberia to send Russian gas directly to China but, for now, it still needs to use Kazakhstan’s infrastructure.

The actual value of the deal has not been revealed but it will be a boost for Kazakhstan which has been struggling economically since oil prices collapsed in 2014.

This was some positive news for KazTransOil, a few days after Transneft said it would stop accepting Kazakh oil at its Caspian port of Makhachkala, citing incompatibility with the Ural blend. KazTransOil will re-route its exports to Russia via the Atyrau-Samara pipeline from Jan. 1, 2017. This is a route that KazTransOil already uses to export some oil.

The Transneft decision came after Lukoil, Dragon Oil and Mitro International decided to pull out of Makhachkala and re-route exports to the Baku-Tbilisi-Ceyhan pipeline.

The Kazakh crude, Transneft said, is not sulphurous enough to be blended with Russian oil.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

EBRD loans 100m euro to Kazakhstan

DEC. 12 2016 (The Conway Bulletin) — The EBRD agreed a €100m ($104m) loan to state-owned electricity company Samruk Energo, specifically designed to help with its privatisation plan. The company, a subsidiary of sovereign wealth fund Samruk-Kazyna, plans to privatise nine of its subsidiaries next year. The loan will be issued in tenge or roubles.

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(News report from Issue No. 309, published on Dec. 16 2016)f

Kazakhstan links two gas pipelines, boosting flows to China

ALMATY, NOV. 29 2016 (The Conway Bulletin) — Kazakhstan’s state- owned distributor KazTransGas said it had completed building a compressor station that will link two main gas pipelines and allow it to pump more gas to China, a key client for Central Asian energy producers.

The Bukhara-Bishkek-Almaty pipeline will now be linked directly to the Kazakhstan-China gas pipeline, boosting Kazakhstan’s transit capacity and securing supplies to Almaty, Kazakhstan’s biggest city. The route will allow the giant gas fields in the west of Kazakhstan to pump gas directly to China.

Dair Kusherov, deputy director of KazTransGas enthused about the options that linking the pipelines would bring.

“First, we have opened a route to export domestic gas to China, expanding our export and transport capabilities,” media quoted him as saying at the opening of the compressor station. “Second, the link will provide uninterrupted gas supplies to the city of Almaty and Almaty region. Third, the new station provides a backup route for uninterrupted gas supply to consumers in Almaty via gas pipeline bypassing the territory of the Kyrgyz Republic.”

Boosting its gas transit options eastwards also highlights China’s dominance over energy flows from Central Asia.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakh President declines to rename Astana

NOV. 26 2016 (The Conway Bulletin) — In a carefully orchestrated show of modesty, Kazakh president Nursultan Nazarbayev declined to rename Astana, the capital city he built on Kazakhstan’s windswept steppe, after himself. He made the announcement during an interview with Russia-24. Parliament had made the suggestion earlier in November. Mr Nazarbayev critics accuse him of building a personality cult. Mr Nazarbayev has appeared more interested in burnishing his image and legacy over the past few years, allowing statues of himself to be built and appearing on a new bank note. Analysts had said he may fancy renaming Astana after himself.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Tax authorities in Kazakhstan investigate Karachaganak

NOV. 24 2016 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev said the tax authorities are investigating the consortium operating the Karachaganak gas and condensate field in the north of the country for unpaid taxes and that the government will seek a new profit sharing scheme. Anglo-Dutch energy company Shell and Italy’s Eni are the field’s operators and largest shareholders with a 29.25% stake each. US-based Chevron (18%), Russia’s Lukoil (13.5%) and state-owned Kazmunaigas (10%) own the rest.

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(News report from Issue No. 307, published on Dec. 2 2016)