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| 10 February 2004 | ||||||||||||||||||||||||||||||||
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Politics and Macroeconomics |
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Collapse
Of Oil Price Wouldn't Create A Budget Crisis in KZ, Deputy Pm Says |
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Even
a serious drop in world oil prices wouldn't create a budget crisis in
Kazakhstan despite the republic's well known reliance on revenues from
its oil sector, First Deputy Prime Minister Grigoriy Marchenko announced
at a meeting at the Ministry of Labour and Social Protection on January
30. At
the same time, Marchenko allowed that "if the oil price drops, or
there is some other global economic crisis, we shouldn't expect the same
rapid rates of salary and pension increases." Marchenko
said the government had the so-called National Fund – which has
accumulated about USD 3 Billion in revenues from oil in recent years -
to fall back on in the event of an economic crisis. "The
National Fund was created for just such purposes," he noted. Marchenko
also said that Kazakhstani should expect social security and pension
reform "not just this year, but within the next several
months". "It could be a heavy workload, but this needs to be done," he concluded. (Kazakhstan Today) |
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Equities |
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The
KASE-Shares index increased by 10.90% to 157.46 by the end of period on
February 4 2004.
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Note:
KASE-Shares index is based on ask prices for equities in A Listing In the period between January 29 2003 and February 4
2004, the volume of equity trades at the KASE decreased to USD 5,296,265
from USD 5,781,983 in the previous period. The shares traded during the
period were common shares of Almaty Kus (ALKS),
Alyans Bank Kazakhstana (ASBN), Bank CenterCredit (CCBN),
Temirbank (TEBN), ValutTransit Bank (VTBN)
and Zerde (ZERD) and preferred shares of ValutTransit
Bank (VTBNp). (Irbis)
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Company News |
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Oil & Gas |
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Dave
Roberts, the Executive Vice President and Managing Director for Central
Asian and the Middle East of British oil major BG plc last week visited
West Kazakhstan oblast. BG
owns a 32.5% stake and is co-operator of the giant Karachaganak oil and
gas condensate field in West Kazakhstan. Italy's Eni SpA is the other
operator for the consortium developing the field, Karachaganak Petroleum
Operating BV. During
his visit to West Kazakhstan, Roberts visited the Karachaganak field and
met with management at KPO as well as employees at the project. He also
toured facilities opened at the field in 2003, notably new units of a
giant processing complex and a new workers' camp. Roberts
also met with West Kazakhstan oblast Akim Nurgali Ashimov. Ashimov and
Roberts discussed ways to improve and expand relations between BG, KPO
and West Kazakhstan oblast. (Kazakhstan
Today) *** The
board of directors of Russian gas giant Gazprom will discuss the
company's participation in the reconstruction of the major Central
Asia-Center gas pipeline reconstruction project in spring 2004,
Zarubezhneftegas General Director Valeriy Gulev announced on January 27
in Orenburg, Russia. Zarubezhneftegas is the operator of Gazprom's
foreign projects. The
Central Asia-Center gas pipeline is the major gas export route from
major Central Asian producers such as Turkmenistan and Uzbekistan to
European markets. The pipeline passes via Kazakhstan and Russia, which
also both produce large quantities of gas. The
gas pipeline reconstruction project envisages boosting the pipeline's
throughput capacity by 2.2 times, which would require the renovation of
the entire infrastructure of the line as well as the construction of a
new parallel line, Gulev said. Kazakhstani
state gas transport company KazTransGas has said that the Central Asia-
Center project could cost upwards of USD 1.5 Billion. Gulev
noted that Gazprom has reached a critical juncture in its Central Asian
strategy: "We have two choices: either purchase and transport gas
[from Central Asia], or sooner or later [Central Asian] gas will reach
Europe via other pipelines and as a result it will disturb the whole
balance of prices in Europe." Gulev
noted that Gazprom has reached agreements to purchase up to 80 billion
cubic meters of gas from Turkmenistan, up to 10 billion cubic meters
from Uzbekistan and up to 7 billion cubic meters from Kazakhstan.
(Interfax) *** US-based
oil company American International Petroleum has announced the sale of
its development rights to the Shagyrly-Shomyshty deposit in Kazakhstan
to another New York-based company, PetroCaspian LLC. PetroCaspian
reportedly paid USD 5.05 Million for the Shagyrly development rights.
The new owners of the field have promised to arrange for a USD 50
Million credit for the project, which reportedly will require a total
investment of about USD 189 Million.
(RusEnergy) *** Major
Aktobe-based oil producer CNPC-AktobeMunayGas, operator of the Zhanazhol
and Kenkiyak oil and gas fields, plans to ramp up oil production at its
fields to 5.3 million tonnes of oil in 2004, the company’s press
service stated. According
to CNPC-AktobeMunayGas press service head Galiya Zhaldybaeva, the
company produced 4.65 million tonnes of oil in 2003, some 282,610 tonnes
more than in 2002. In addition, CNPC-AktobeMunayGas boosted associated
gas output to 11.5 million cubic meters in 2003 and sold over 13,000
tonnes of sulphur. CNPC-AktobeMunayGas,
which is majority owned and operated by the China National Petroleum
Corp., also plans to launch new wells at its two deposits as well as
build a Zhanazhol-Zhem rail link to supply equipment and materials to
the fields. (Kazakhstan
Today) *** Major
Canadian-based oil company PetroKazakhstan plans to ramp its supply to
the Tehran Oil Refinery (Iran) up to 21,000 barrels of oil per day in
the next several months, the company announced in a statement this week.
"Over
the next several months supplies [to the Tehran plant] will gradually
reach their contract level of 21,000 barrels of oil per day (1 million
tonnes per year)," according to the PetroKazakhstan press release. PetroKazakhstan
announced in 2003 that it had reached a swap agreement with the Tehran
Oil Refinery. Under the agreement, PetroKazakhstan will supply the
refinery with crude from its Kazakhstani field, while the Canadian
company will receive a monetarily equivalent volume of light Iranian
crude at Persian Gulf ports in southern Iran. The agreement obviates the
need for PetroKazakhstan to transport its crude across at least part of
the lengthy Central Asian export routes. "The
agreement enables the company to get maximum price for its crude oil
while reducing destination and transportation costs,"
PetroKazakhstan said in its statement. PetroKazakhstan
sent its first shipment of 26,800 barrels to the Tehran plant in
December 2003, Interfax noted. (Interfax) *** Management
at the Atyrau Refinery, one of Kazakhstan's three major oil processing
plants, have been sitting on surplus supplies of refined fuel since
December 2003 even as prices for oil products have risen dramatically
across the republic, a group of minority shareholders alleged at a press
conference in Almaty this week. The
shareholders, led by Almaz Company, which owns a 2% stake in the Atyrau
plant, accuse Atyrau Refinery management of pursuing narrow commercial
interests at the expense of plant shareholders and the public. According
to Almaz President Almaz Kuzhagaliev and Chairman Batyrbek Bizhanov,
they became alarmed by the situation at the Atyrau plant after the
plant's board of directors scuttled a shareholders' meeting scheduled
for January 22. At
their press conference, Kuzhagaliev and Bizhanov called on the majority
owner of the Atyrau plant, state oil and gas company KazMunayGas, to
replace the existing board and some of the management for their alleged
"illegal actions". They accused management of causing losses
to shareholders, including KMG, last year through bad deals and shady
arrangements. They further alleged that KMG stands to lose USD 3 Million
in 2004 that was supposed to go towards the reconstruction of the plant. "Instead
of upgrading the industrial capacities of the refinery, the management
are making shady deals to sell gas or diesel," Kuzhagaliev
asserted. (KazInform) *** Kazakhstani-owned
oil and gas company Nelson Resources Ltd. saw its shares rise 14% on the
Toronto Stock Exchange on February 3 in anticipation that the company
would soon complete its acquisition of a 50% stake in the North Buzachi
oil field in Mangystau oblast. Last
month, Nelson bought a 35% stake in the North Buzachi field from CNPC
International, an affiliate of the China National Oil Company. That
stake rose to 50% on Tuesday once approved by the requisite governments
and a payment of USD 32 million was made by Nelson to CNPC
International. "The
addition of this major asset to our company represents a significant
stride forward in our strategy to be a major independent oil producer in
Kazakhstan," Nelson Chairman and Chief Executive Nick Zana said. Nelson
is also involved in a partnership with state oil company KazMunayGas,
Kazakhoil-Aktobe LLP, to develop the Alibekmola and Kozhasay fields in
western Kazakhstan. (Reuters)
*** Former
Canadian Prime minister Jean Chretien has been named a special advisor
to the board of directors of PetroKazakhstan, the company announced in a
press release this week. Chretien
will advise the board on international relations issues, drawing on his
ten years as Canadian PM as well as his earlier service in the
Ministries of Justice, Finance and Energy and Mining. In
addition to Chretien, the PetroKazakhstan board announced the
appointments to the board of 65-year old Danish entrepreneur Jan Bonde
Nielsen and 52-year old Canadian lawyer Jean-Paul Bisnere. Bonde
Nielson is Chairman and owner of Green Oak Holdings, which runs various
oil-related business projects in Europe and Asia. J.P.
Bisnere is a senior corporate partner at the firm of Davies Ward
Phillips & Vineberg, which is headquartered in Toronto. He is one of
Canada' s leading securities lawyers. According
to financial experts in Toronto, Jean Chretien could help smooth
relations between the Canadian oil company and the Kazakhstani
government. PetroKazakhstan has had disputes with the government in the
past over tax and monopoly issues (stemming from the company's ownership
of one of Kazakhstan's three major oil refineries). (Golden
Eagle Partners)
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Banking and Finance |
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According
to its preliminary financial results, the net profit of major Kazakhstani
private commercial CenterCredit Bank increased by 73% in 2003 and totalled
KZT 1.237 Billion, the bank press service stated. CCB
assets increased by 62% up to KZT 82.7 Billion, while the bank's equity
capital rose by 75% last year to total KZT 10.8 Billion on January 1,
2004. In compliance with its development strategy, CCB intends to continue rendering active support to small and mid-sized business and Kazakhstan's middle class. For this purpose, in 2004 bank plans to allocate considerable resources to improve infrastructure and the quality of services. Notably, the bank spent some KZT 75 Million in 2003 to open 25 cash offices in Kazakhstan. (Kazakhstan Today) |
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Manufacturing |
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Construction
of a major new electrolysis plant is slated to begin near Pavlodar this
year. The
state-owned Kazakhstan Development Bank will fund the first stage of
construction of the new plant, KDB President Kambar Shalgimbaev
announced on Monday. The first phase is expected to cost about USD 300
Million, of which USD 100 Million will be provided by the KDB, and take
about 3 years to complete. Financing for the remaining USD 200 Million
for the project will be organized by the Eurasian Industrial
Association, also known as the Eurasian Bank financial-industrial group,
which will eventually manage the finished plant. Overall, the
construction project is expected to cost nearly USD 1 Billion and take
8-10 years to complete. Once the first phase is complete the plant will
be able to produce 60-66,000 tonnes of aluminium per year. After the
second phase that volume will rise to 120,000 tonnes and after the third
phase – 240,000 tonnes. (Interfax)
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Metals and Mining |
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LNM
Group, the international steel giant that has invested USD 1 Billion
into Kazakhstan's giant Ispat-Karmet steel plant in Karaganda over the
past eight years, now plans to build a pipe plant to serve the oil and
gas industry in the city of Aktau. LNM
Group Chairman Lakshmi Mittal, who was in Astana for talks with
Kazakhstani President Nursultan Nazarbaev this week, made the
announcement during his visit. Over
the next four years, LNM Group will invest USD 450 Million in
Kazakhstan, much of it to build the pipe plant in Aktau, Mittal said. The
company is also continuously taking measures to improve output quality
at Ispat-Karmet, he added. (Khabar) |
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Power |
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The
city of Kentau is looking into the construction of a single heating
plant in the city, South Kazakhstan oblast Energy and Public Utilities
Department senior specialist Tatyana Zorina stated last week. In
the 1990s, Kentau embarked on an ill-fated plan to install 196
mini-boilers at an expense of KZT 200 Million throughout the city to
provide heat. That plan was thwarted by high fuel prices, so the city
and oblast were forced to subsidize heating; thus Kentau residents pay
KZT 42 per square meter for heat that cost KZT122.40 to generate. The
oblast pitches in about KZT 55 Million to heat the city each year. Kentau
authorities are looking at two heating plant projects. One would cost
KZT 750-800 Million and would build a central coal-boiling house with
the capacity to produce 60 gigacalories of heat per hour. The second
project, proposed by Italian firm Team Engineering, would involve the
construction of a KZT 2.5 Billion plant to produce 22 MW/h of both heat
and electric energy, according to Zorina. (Kazakhstan
Today) *** Kazakhstan's
Eurasian Energy Corporation (EEC) has been awarded ISO 9001-2000 quality
management certification, Interfax reported. Axel Henning Stepchen of
German certification company TUEV presented the certification documents
to EEC President Abduazim Rustambekov at a ceremony in Pavlodar this
week, the EEC press service said. The
EEC is the first Kazakhstani energy company to receive ISO 9001-2000
certification. The company decided to pursue the certification route
about 18 months ago in order to improve efficiency. The certification is
valid for three years, with an inspection each year. The EEC, which is a subsidiary of the Eurasian Bank financial-industrial group, operates the Vostochniy coal mine, the Aksu TETS and an industrial repair unit. In 2003 the plant produced some 9.35 billion kW/h of energy, 21.7% more than during the previous year. (Interfax)
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Transport and Telecommunications |
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The
regional administration of Mangystau oblast is lobbying the Kazakhstani
government to help build another Caspian Sea port in the region near the
town of Kuryk, Interfax reported. Mangystau is already home to the Aktau
Seaport, Kazakhstan's main outlet to the Caspian Sea. "A
natural harbour is already at Kuryk. Thus the place is ideal for the
construction of a support base for offshore oil operations. If a free
economic zone is constructed there, investment will flow and the town
could become Kazakhstan's second big seaport town of Kazakhstan,"
Mangystau oblast Akim Bolat Palymbetov said at a press conference. Kuryk
is at present just a sleepy town of 4,800 residents. "Today,"
said Palymbetov, Kuryk is practically empty. We don't get a penny from
there." Palymbetov
said the possibility that the government will bite on the Kuryk offshore
operations base idea "seems realistic", since state oil and
gas company KazMunayGas has submitted plans to begin exploration
drilling in the waters off the coast of the town. (Interfax) *** Kazakhstani
Prime Minister Daniyal Akhmetov at last tackled an issue that has
stymied two of his predecessors over the past five years – the
economic difficulties of state-owned airline Air Kazakhstan. At a
government meeting this week, Akhmetov "instructed the Minister of
Transport and Communication to, within the shortest possible period of
time, clear up the situation at Air Kazakhstan and to prepared proposals
to resolve the companies' problems," the premier's press service
announced. In
September 2002 the government regained full control of Air Kazakhstan,
buying 50% in the airline from Kazkommertsbank, which had taken over
that stake after the carrier defaulted on a loan several years earlier. The
troubled airline has never enjoyed a long period of success since taking
over as the state carrier from an equally troubled predecessor,
Kazakhstan Aue Zholy, in 1997. In the past two years, Air Kazakhstan has
lost a number of profitable routes to a new state-owned airline, Air
Astana, which is a 50-50 JV with Britain's BAE Systems.
(Interfax)
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Money Markets |
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KZT/USD market rate dynamics during the week |
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Currency Rates as of 2 February 2004 |
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Note: Some of the information quoted in this issue has been provided for us by Golden Eagle Partners. For more information on those articles, please contact: jmann1@AOL.com or newswire@ges.kz |
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For
more information and other publications please contact Yelena Kovalenko
at +7 (3272) 596 708
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