Tag Archives: Kazakhstan

Bashneft looks for fuel in Kazakhstan

OCT. 4 2016 (The Conway Bulletin) – Russian oil company Bashneft said it will explore the possibility of buying into the petrol station market in Kazakhstan. Bashneft already operates in Kazakhstan, where it produces around 500,000 tonnes of petroleum products. Sales representative Kirill Kasterin said the company now wants to sell petrol under its own brand. Bashneft owns around 70 filling stations in Russia.

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(News report from Issue No. 299, published on Oct. 7 2016)

Comment: Regional economies begin to steady, writes Sorbello

OCT. 7 2016 (The Conway Bulletin) — Central Banks across Central Asia and the South Caucasus seem to have switched off their crisis mode, as inflation slows, oil prices pick up and remittances begin to regenerate.

Excited about the imminent re-start of the Kashagan offshore oil project, Kazakhstan is looking stronger, after months of uncertainty regarding its currency and its budget stability.

An important sign of the country’s recovering health was the rate cut by Kazakhstan’s Central Bank this week, which said that with inflation back into the 6 – 8% band that it was targeting and that monetary policy could be eased.

This decision has been in the Central Banker’s thinking over the past few weeks. That much is clear. Daniyar Akishev has been showing, for the first time, a more confident and determined tone.

And countries less impacted by oil prices, from Armenia to Kyrgyzstan, have also tried to boost their rather slow economic activity by lowering or keeping low interest rates in the past weeks.

All currencies from the region have been hit by a stronger US dollar over the past two years, and their depreciation led inevitably to a sharp increase in consumer prices.

Some — such as Azerbaijan, Kazakhstan, Kyrgyzstan and Georgia — needed strong monetary interventions. Others, such as Tajikistan, Armenia and Uzbekistan stabilised at a comparatively faster pace.

Last month, Russia’s Central Bank said migrant worker remittances to Kyrgyzstan had increased by 21%, reflecting a higher migration rate. On the other hand remittances to Tajikistan and Uzbekistan fell because of a drop in the number of migrants. Perhaps this is the Eurasian Economic Union effect?

Kyrgyzstan and Tajikistan are among the top remittance-dependent countries in the world.

As the ship seems steadier, however, countries across the region will have to cope with more domestic problems, chiefly in the banking sector and other private sectors hit hard by the economic downturn.

As shown this week with the bankruptcy of Bank Standard, Azerbaijan’s financial sector doesn’t seem to have fully recovered from the crisis. And in western Kazakhstan, where oil is the job creator, a month-long strike just ended with the workers obtaining higher salaries and the company winning state tenders. There is still work to do.

By Paolo Sorbello, Deputy editor, The Conway Bulletin

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(News report from Issue No. 299, published on Oct. 7 2016)

EuroChem to increase production in Kazakhstan

OCT. 4 2016 (The Conway Bulletin) – Switzerland-based fertiliser producer EuroChem said it would increase investment in its phosphate mine in southern Kazakhstan to try to drive up production. EuroChem produces 640,000 tonnes of phosphate rock annually at its Zhambyl mine. It wants to more than double this.

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(News report from Issue No. 299, published on Oct. 7 2016)

Kazakh government defuses worker unrest

ALMATY, OCT. 5 2016 (The Conway Bulletin) — Betraying its nervousness over labour disputes, the Kazakh government stepped in to end a strike by 2,000 workers at an oil company near Zhanaozen in the west of the country.

To end the strike, the government promised the company employing the workers a major contract boost which will allow it to increase salaries — meeting the strikers’ demands.

The strike over pay had been building, sporadically, for weeks but had only been supported by a few dozen people, some of them on hunger strikes. It was only on Sept. 30, when 2,000 strikers rallied for the first time demanding higher salaries from Burgylau, a local subcontractor for the state-owned Ozenmunaigas, that the government sent senior offi- cials to defuse what to them had become an intolerable scenario.

Zhanaozen, a scruffy town built in Soviet times to house labourers working on nearby oil fields, is seared into the Kazakh national conscience.

In 2011 clashes between protesters and police killed at least 15 people and plunged the government into perhaps its most serious post-Soviet crisis. Hundreds of riot police poured into the region and emergency powers were imposed. Eventually, the government was forced to guarantee jobs and wages in the region.

Importantly the clashes in Zhanaozen in 2011 have defined Kazakh labour disputes. Since then big business and the government have shown an unwillingness to face down worker demands.

And so it proved again. A Burgylau executive had told workers that the company was unable to pay workers any more because it wasn’t making a profit. This changed, though, after a visit from Alik Aidarbayev, governor of the western Mangistau region, who offered Burgylau another $18m worth of contracts in exchange for meeting the workers’ demands.

Burgylau is a subsidiary of KazPet- roDrilling.

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(News report from Issue No. 299, published on Oct. 7 2016)

Kazakhstan cuts interest rates

ALMATY, OCT. 3 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank cut interest rates by 50 basis points to 12.5%, its third rate cut this year, saying that slower inflation and a renewed confidence in the local currency were signs of economic recovery.

Most analysts were taken by surprise by the Central Bank’s decision, although Daniyar Akishev, the Bank’s chief, had hinted at possible rate reductions in recent weeks.

And the Central Bank said that another rate cut was likely at the next policy meeting in November .

“If the slowdown in inflation continues and stable growth in tenge deposits is confirmed, a reduction in the base rate before year-end isn’t excluded,” the Bank said its statement on the rate cut.

Inflation, which had reached 17% in annualised terms, has slowed to 5.6% in the first nine months of 2016, prompting the rate cut.

In the past nine months, the tenge/US dollar exchange rate improved by 14%, contributing to increased stability.

The tenge had lost half of its value overnight in August 2015, when the Central Bank ditched the peg to the US dollar. Months of uncertainty followed, sending the tenge further down and prompting successive rate increases.

Since the appointment of Mr Akishev in November last year and the stabilisation in oil prices at around $50, up from $27 at the start of the year, confidence in the country’s economy has slowly strengthened and recovered.

Oil is the cornerstone of Kazakhstan’s economy. The collapse in oil prices from around $110 per barrel in 2014 to $40 had undermined its prospects.

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(News report from Issue No. 299, published on Oct. 7 2016)

Average income drops in Kazakhstan

SEPT. 30 2016 (The Conway Bulletin) – High inflation over the past year has brought down average income for Kazakhs, according to the Statistics Committee. Average revenues per person in Kazakhstan for the first six months of the year grew by 12% compared to the same period in 2015, but a 16.8% growth in consumer good prices meant that average purchasing power decreased.

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(News report from Issue No. 299, published on Oct. 7 2016)

Russia returns the skull to Kazakhstan

OCT. 6 2016 (The Conway Bulletin) – Russia returned to Kazakhstan the skull of Keiki Batyr, one of the leaders of the 1916 Kazakh revolt against Russia. In 1923, Keiki Batyr was captured and killed by the Red Army. Kazakhstan had asked Russia to return Keiki Batyr’s skull for burial. In August, Russian PM Dmitri Medvedev agreed to return the relic to Kazakhstan.

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(News report from Issue No. 299, published on Oct. 7 2016)

Kashagan to increase Kazakhstan’s oil shipments

OCT. 6 2016 (The Conway Bulletin) – Natig Aliyev, Azerbaijan’s energy minister, said that, once operational, the Kashagan offshore will increase Kazakhstan’s oil shipments to Baku to 150,000 barrels of oil/day, feeding into the Baku-Tbilisi-Ceyhan pipeline. Mr Aliyev’s statement relied on the assumption that the Caspian Pipeline Consortium, which pumps oil around the Caspian Sea to the Russian port of Novorossiysk, and the Kazakhstan-China pipeline will not be able to absorb the additional 370,000 barrels of oil/day that Kashagan will produce at its peak. Kazakhstan has slashed oil shipments from Aktau to Baku this year.

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(News report from Issue No. 299, published on Oct. 7 2016)

Putin deals with Kazakh President

OCT. 4 2016 (The Conway Bulletin) – Russian President Vladimir Putin and Kazakh President Nursultan Nazarbayev met in Astana at the Kazakhstan-Russia Business Forum and signed several bilateral agreements worth $4b. Both parties said they want to boost trade ties. No specific details of the deals were released.

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(News report from Issue No. 299, published on Oct. 7 2016)

Kazakhstan focused Central Asia Metals boosts output by 38%, pushing shares to 6-month high

ALMATY, OCT. 5 2016 (The Conway Bulletin) — Kazakhstan-focused copper producer Central Asia Metals reported a 38% growth in production in Q3 2016 compared to the same period last year, because of the expansion of its Kounrad project near Lake Balkhash.

The company, listed in London, said it could potentially surpass its goal of producing 14,000 tonnes of copper this year. In the first nine months of the year, it produced 11,010 tonnes of copper cathode, up 31% compared to last year.

The news sent its shares up 3.6% to 181.75p, its highest level since April. The depreciation of the Kazakh tenge after the Central Bank ditched the peg to the US dollar in August 2015 also helped the company cut production costs which should help its full-year results.

“As a result of the devaluation of the tenge as well as some engineering cost savings, we remain confident that we can complete this capex programme approximately 25% below our initial budget of $19.5m,” chairman Nick Clarke said.

Central Asia Metals mainly exports its copper products to Turkey. Its exposure to other markets is limited.

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(News report from Issue No. 299, published on Oct. 7 2016)