Tag Archives: Kazakhstan

KMG EP revenue rises in Kazakhstan

NOV. 17 2016 (The Conway Bulletin) — London-traded KMG EP, a subsidiary of Kazakhstan’s state-owned energy company Kazmunaigas, posted a 47% increase in tenge-denominated revenue in the first nine months of 2016, compared to the same period last year, mostly due to the weaker tenge/US dollar exchange rate. Production fell by 1.2%, mainly because of a 6% drop at its PetroKazakhstan subsidiary, which operates in the central Kyzylorda region.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Stock market: Tethys Petroleum,Olisol

NOV. 18 2016 (The Conway Bulletin) — After hovering at around 1.5p for several months, Tethys Petroleum’s share price reached rock bottom at around 0.9p in early November, following increasingly worse news coming from its operations in Kazakhstan.

Its prospective local partner, Olisol, first missed a payment of 9.8m Canadian dollars ($7.3m) and later cancelled Tethys’ gas sales contract in Kazakhstan. It then pulled out completely from its initial offer to become a major shareholder in Tethys.

In addition, Tethys’ local subsidiaries were raided by the Kazakh police and their asset frozen.

The stock price picked up again this week after new potential investors came forward and a Kazakh court dropped the charges against the local subsidiaries. But with much work still to be done before a financing agreement is reached and with a pending legal dispute in Tajikistan, Tethys is far from having found a safe harbour.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakh Central bank puts Nazarbayev on bank note

ALMATY, NOV. 15 2016, (The Conway Bulletin) — Kazakhstan’s Central Bank unveiled a new 10,000 tenge bank note depicting a portrait of President Nursultan Nazarbayev, for the first time, next to an image of Astana, the capital city he built on the Kazakh steppe.

Mr Nazarbayev’s critics immediately criticised him for using the bank notes to embellish what they say is already a flourishing personality cult. Daniyar Akishev, head of the Kazakh Central Bank, though, brushed aside complaints and said the bank note was designed to celebrate 25 years of independence from the Soviet Union.

“All Kazakhstan’s achievements since independence are inextricably linked to the first president of the Republic of Kazakhstan, Nursultan Nazarbayev,” he said.

Kazakhstan has been producing eye catching banks notes for years. It won the International Banknote Society’s banknote of the year award in 2012, 2013 and 2014. It’s colourful notes have generally included a historical figure one one side and a modern monument on the other, a meshing together of old and new.

Mr Nazarbayev, president since independence from the Soviet Union in 1991, has worked hard to create a united nation with a Kazakh identity. He has used monuments, slogans and banknotes to achieve this.

Many, though, say that his own personal brand, though, has grown too imposing. In 2011, Almaty city government unveiled a statue outside a park of a suited Mr Nazarbayev sitting on stone.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan’s Kashagan provides oil update

NOV. 14 2016 (The Conway Bulletin) — Kazakhstan’s giant Kashagan oil field produced 1.5m barrels of oil in its first month of operations, official media reported. In daily terms, Kashagan produced an average of 52,600 barrels, far below the minimum threshold of 75,000 barrels/day that the consortium said it needs to produce to keep extraction commercially viable. The Kazakh government had previously said it expects Kashagan to reach an average of 90,000 barrels/day before the end of the year.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan plans a freight company

NOV. 11 2016 (The Conway Bulletin) — Kazakhstan’s national airline Air Astana and its state-owned railway company Temir Zholy will combine next year to create a new air freight company, media reported. It quoted a Temir Zholy official as saying that Kazakhstan wanted to exploit its position between Asia and Europe to boost its economy by acting as a logistics and cargo hub. Uzbekistan has already developed plans to set itself up as a similar transport hub.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Comment: Kazakh electricity plans

NOV. 18 2016 (The Conway Bulletin) — The Kazakh government has cancelled plans to build either a thermal or nuclear power station despite saying for the past decade that an upgrade to its power generating system was vital.

At a press briefing earlier this month in Astana, Kazakh Energy Minister Kanat Bozumbayev said that, despite predictions of the opposite, Kazakhstan actually now has a surplus of power.

“We see no deficit within the next seven years, so we see no [need to build] new facilities such as a nuclear power plant within the next seven years,” he said. This is an important statement for two reasons. Firstly Bozumbayev is doing future generations of Kazakhs a disservice. Secondly he is not being honest with this current generation of Kazakhs.

Both the short-termism and the dishonesty are worrying. Kazakhstan needs more power. Just ask people living in Almaty who have to deal with an increasing number of brownouts. As the country has modernised and grown wealthier, electricity consumption has soared. World Bank data showed that in 2013, Kazakhstan’s per capita electricity consumption was 4,892 kilowatt hours, up from a post-Soviet low in 1999 of 2,838 kilowatt hours.

At the same time, Kazakhstan’s population has grown from just under 15m people in 1999 to just over 17m people in 2015.

Kazakhstan prevaricated for years with various suitors over building a new nuclear power station, its Soviet-era nuclear power station had been decommissioned in 2001, but earlier this year said it had scrapped the idea.

In September, Kazakhstan and Korea’s Samsung also finally admitted that its mothballed $2.5b plan to build a coal-fired power station on the shores of Lake Balkhash to feed electricity to Almaty had also been scrapped.

And here’s the hard truth, the real reason that Kazakh officials said they don’t need a new power station is that Kazakhstan’s finances are currently not up to funding the construction of one.

Last year, Samsung Engineering CEO Park Jung-heum said he had mothballed the Balkhash thermal power project “because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project.”

Power generation plans in Kazakhstan have become the latest victim of the economic downturn. The government should admit this and lay plans to boost production as soon as they can afford to.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan cuts interest rate

NOV. 14 2016 (The Conway Bulletin) — Kazakhstan cut its key interest rate by 50 basis points to 12%, its fourth cut since May, as it looked to give industry a boost. The Central Bank said more cuts were likely but that these came with a potential inflation risk. The Central Bank had raised rates to a high of 17% in February to counter inflation.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

EXPO bridge collapses in Kazakhstan

NOV. 16 2016 (The Conway Bulletin) — A decorative bridge linking two pavilions in Kazakhstan’s headline EXPO-2017 project collapsed, only a few months before the exhibition is scheduled to open. Media reported that nobody was injured, unlike Kazakh pride. President Nursultan Nazarbayev has set much store in using EXPO-2017 to promote the country.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Qazkom and Halyk Bank eye merger to create Kazakh bank giant

ALMATY, NOV. 15 2016, (The Conway Bulletin) — Kazakhstan’s largest lenders, Halyk Bank and Qazkom, are in talks to merge and create a super- sized bank with strong links to the Kazakh elite that would dwarf its rivals, according to sources quoted by Reuters.

Reuters quoted two anonymous sources, who both confirmed that talks were under way and that the merger could be agreed after Halyk redeems a $638m Eurobond in May 2017.

Importantly, one of the sources said that the idea behind the merger traces all the way up to the presidential family.

President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev coown Halyk Bank. Kenes Rakishev, son-in-law of Mr Nazarbayev’s close ally Imangali Tasmagambetov, owns Qazkom. Mr Tasmagambetov is minister of defence.

Qazkom which rebranded last month from Kazkommertsbank, gave a guarded denial that a merger was about to happen. Halyk Bank did not comment.

“Responding to recent rumours, I can say that Qazkom has neither made nor received offers regarding a merger with Halyk Bank,” Qazkom’s press officer, Sergei Chikin, told media

A merger would form a banking superpower in Kazakhstan, four times larger than its biggest competitor, Tsesnabank, owned by Adilbek Dzhaksybekov, head of the Presidential Administration. Analysts, though, are skeptical at the prospects of a merger, which would create a bank with a 40% of the loans market.

“Even if the talks are proved true, the Central Bank is unlikely to allow a merger that would monopolise the market,” Rasul Rysmambetov, director of the Public Fund Financial Freedom, told the Inform-Kazakhstan news agency.

In the past two years, both Qazkom and Halyk have cleaned up their toxic assets, which built up during the Global Financial Crisis of 2008/9. Qazkom had also bought Kazakhstan’s once-largest lender BTA Bank, now riddled with non- performing loans. It also changed ownership, with Mr Rakishev sidelining founder Nurzhan Subkhanberdin.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakh police detains Aktobe FC chief

NOV. 9 2016 (The Conway Bulletin) — Anti-corruption police in Kazakhstan detained Dmitriy Vasilyev, director at Aktobe Football Club, for embezzling 300m ($882,000) of public funds, official media reported. Mr Vasiliyev allegedly paid illegal premiums for Aktobe’s performance in Kazakhstan’s Premier League. FC Aktobe is owned by the finance department of the local government.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)