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Equities

The KASE-Shares index decreased by 3.53% to 189.62 by the end of period on September 21 2004.   

 KASE-Shares index and weekly volume of trades

Note: KASE-Shares index is based on ask prices for equities in A Listing

In the period between September 15 and September 21 2004, the volume of equity trades at the KASE increased to USD 90,125,383 from USD 12,139,052 in the previous period. The shares traded during the period were common shares of Almaty Kus (ALKS), Bank TuranAlem (BTAS), Bank Caspiyskiy  (CSBN), Narodniy Bank (HSBK), Kazakhmys (KZMS), Ordabasy (ORDB),  Rakhat (RAHT), Temirbank (TEBN), ValutTransit Bank (VTBN), ValutTransit Zoloto (VTZL) and Zerde (ZERD) and preferred shares of Alyuminiy Kazakhstana (ALKZp), Bank Caspiyskiy  (CSBNp), Narodniy Bank (HSBKp), KazChrome (KZCRp), Ordabasy (ORDBp), ValutTransit Bank (VTBNp) and ValutTransit Zoloto (VTZLp). (Irbis)

Company News

Oil & Gas

The opening ceremony for the launch of construction of the Atasu (Kazakhstan)-Alashankou (Chinese) oil pipeline will take place on 28 of September. This question will be discussed at a session chaired by Daniyal Akhmetov, prime minister of the RK on 18 September.

Earlier, it was reported that the construction of the main line, with a length of 977.5 kilometers and capacity of 10 million tonnes is suggested for completion in 2005. The construction is being carried out by the state owned oil companies of Kazakhstan and China - CNPC and JSC NC KazMunayGas. (Kazakhstan Today)

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The Board of Directors of PetroKazakhstan Inc. has approved and established the third quarterly dividend payment at CAD 0.15 per share. The record date is October 15, 2004 and the date of payment is November 1, 2004. Shareholders domiciled in the United States will receive a dividend payment in the equivalent of US dollars

PetroKazakhstan is a vertically integrated, international energy company, celebrating its seventh year of operations in Kazakhstan. It is engaged in the acquisition, exploration, development and production of oil and gas, refining and sale of oil and refined products.

PetroKazakhstan shares are traded in the United States on the New York Stock Exchange, in Canada, on the Toronto Stock Exchange, in the United Kingdom on the London Stock Exchange and in Germany on the Frankfurt exchange under the symbol. (Golden Eagle Partners)

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In January – August 2004, the Kazakhstan based national oil and gas company, KazMunayGas (KMG) produced 5.852 million tonnes of oil and gas condensate, for an increase of 11.9% vs. the first eight months of 2003, read a KMG press release distributed on Monday.

According to the statement, the company exceeded its production target by 117,000 tonnes.

The company also produced 589 million cubic meters of natural gas during the first eight months of the year, or 0.7% above target.

The statement indicated that in 2004, the company plans to produce 8.66 million tonnes of oil and gas condensate.

Throughput at the Atyrau Oil Refinery, a division of KMG, amounted to 1.899 million tonnes during the first eight months of the year, or an increase of 24.4% year-on-year, including 1.445 million tonnes of KMG oil.

The throughput target for the year amounts to 2.4 million tonnes, including 1.7 million tonnes of KMG oil.

Meanwhile, oil transportation through the KazTransOil (a division of KMG) system in January-August 2004 amounted to 25.118 million tonnes, or up by 12.8% year-on-year. Overall volume for the year is planned at 35.708 million tonnes. (Kazakhstan Today)

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The USA is planning the expansion of the Caspian Pipeline Consortium project (CPC). The US Ambassador to Russia, Alexander Vershbow said on Tuesday at a session of the International Congress, “EURASEC – Business World”.

“I hope that the project partners will agree on the expansion of the project”, A. Vershbow said. According to Mr. Vershbow, the CPC project proves that investment provides genuine opportunities for strengthening Russian-US relations.

“The most significant US investments have been made into the development of the Tengiz deposit in Kazakhstan and the CPC infrastructure”, the US Ambassador stressed. These investments that were made by Chevron and ExxonMobil are assessed in the billions of dollars, and they exceed all other US investments in the region”, Vershbow added.

The CPC oil pipeline, the Tengiz – Novorossiysk, with a total length of 1,580 km, connects the deposits in western Kazakhstan with the Russian coast of the Black Sea.

Russia has a 24% stake in the CPC, Kazakhstan owns 19%, and the Sultanate of Oman owns 7%. The private oil companies participating in the consortium are; Chevron Caspian Pipeline Consortium Company (15%), LUKarco B.V. (12.5%), Rosneft-Shell Caspian Ventures Limited (7.5%), Mobil Caspian Pipeline Company (7.5%), Agip International (N.A.) N.V. (2%), BG Overseas Holding Limited (2%), Kazakhstan Pipeline Ventures LLC (1.75%) and Oryx Caspian Pipeline LLC (1.75%). (Interfax-Kazakhstan)

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BG Group Plc, a partner in the international consortium for the development of the Kashagan deposit, may refuse to sell its stake in the Kashagan project because of an absence of an agreement with the Kazakhstani government, according to a local lawyer with ties to the company.

According to a press release, growing oil prices could increase the cost of the stake and may defer BG’s intention to sell its 17% share in the Agip KCO Consortium, which is developing the Kashagan deposit.

Earlier, the Kazakhstani Energy and Mineral Resources Minister, Vladimir Shkolnik told a group of foreign journalists that Kazakhstan hopes to reach consensus during talks with Agip KCO on the purchase of the BG stake.

BG intended to sell its stake in Agip KCO, which is carrying out drilling work at a number of deposits in the Kazakhstani sector of the Caspian Sea, and the largest of which is Kashagan. The consortium members intended to buy the 16.67% share. The government of Kazakhstan announced its intention to buy the stake for USD 1.23 Billion in June.

Agip KCO includes Eni (operator with 16.67%) TotalFinaElf holding 16.67%, ExxonMobil with 16.67%, Shell owning 16.67%, Inpex with 8.33%, Phillips holds 8.33%, and BG owning 16.67%.

Agip KCO was established after the signing of a 40-year PSA in 1997. It will begin commercial production of Kashagan in 2007 - 2008.

Agip KCO said Kashagan holds an estimated 7 billion - 9 billion barrels of recoverable oil and total geological reserves are estimated at 38 billion barrels. (Interfax & Bloomberg)

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MangystauMunayGas (MMG) OJSC produced over 3.4 million tonnes of oil in January – August 2004, 432,420 tonnes greater than during the corresponding period of last year.

In 2004, the company plans to produce 4,850,000 tonnes of oil for a total amount of KZT 76,071,765. In 2003, the company produced 4.8 million tonnes of oil.

Currently, the average daily output at the KalamkasMunayGas operational department (OD) totals 10,600 tonnes of oil. Specialists assess the balance of reserves at the Kalamkas deposit as 0.5 billion tonnes of hydrocarbons. Recoverable reserves are 166.6 million tonnes. 96 million tonnes of oil was produced at the Kalamkas deposit since the beginning of its commercial life, and annual output totals 3.7 million tonnes.

The daily output at the Zhetybay deposit currently totals 4,000 tonnes. From year to year, the growth of output at MMG exceeds 5%.

Currently, the MMG operates 15 deposits, and among these are two major ones, the Kalamkas and Zhetybay. Total oil reserves at the deposits total 960 million tonnes, and recoverable reserves are over 180 million tonnes. The main MMG shareholder is the Indonesian Central Asia Petroleum Ltd. (Interfax-Kazakhstan)

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The net profit of the oil transportation company, KazTransOil (KTO – a division of the national oil company KazMunayGas) totalled KZT 7.154 Billion in January-June of 2004 versus KZT 7.668 Billion for the corresponding period of last year, KTO financial reports on the KSE read.

The volume of the company’s services for the first six months of the current year amounted to KZT 29.12 Billion versus KZT 29.481 for the same period of 2003, and the cost of services totalled KZT 16.777 Billion and KZT 15.807 Billion, respectively.

As of the beginning of July of the current year, KTO’s own capital totalled KZT 153.334 compared with KZT 145.93 Billion during the same time of 2003, and charter capital remains at the previous level – KZT 32.885 Billion. The company’s assets at the end of the accounting period reached KZT 195.773 Billion compared with KZT 191.381 Billion as of the end of July 2003. (Interfax-Kazakhstan)

Banking and Finance

The National Bank of Kazakhstan believes that the dissemination of information regarding the financial instability of the largest Kazakhstani bank, amounts of provocation and was aimed at the destabilization of the Kazakhstani banking system, and has discredited the image of banks.

Speaking on the high rate of development of the Kazakhstani banking sector over the past several years, the National Bank emphasized no definitive macro-economic factors exist for the bank to go bankrupt. Recently, information was disseminated alleging Kazkommertsbank is experiencing an instable financial situation linked with tax inspections that were conducted at the bank not long ago. The conclusions of these inspections are not final however, and the results are expected to be appealed based on differences in interpretation, “regarding apparent violations of tax legislation”. Therefore, “it is too early to indicate amounts that will be required as payment by the bank”, a National Bank representative said. However, in any event, the level of payments should not adversely affect the banks’ financial health and will in no way negatively affect its clients.

“The National Bank of Kazakhstan reserves the right to appeal to appropriate authorities in order to prevent action on the part of these individuals and organizations, which are attempting to gain political capital by inflicting harm on our citizens”.

For the first 8 months of 2004, the aggregate capital held by Kazakhstan’s banking system increased by 30.5% and totalled KZT 291.6 Billion. The aggregate assets of banks increased 30%, up to KZT 2.2 Trillion. (Kazakhstan Today)

Metals and Mining

At the Aktas deposit in the Karaganda Oblast, with discovered reserves of approximately 6.7 million tonnes of quartz, metallurgists began the implementation of a program for the production of metal silicon. The Deputy President of the BASKO Company, Vyacheslav Kostyuchenko provided this information during the Central Asian International exhibition, Mining World Central Asia 2004.

According to Mr. Kostyuchenko, “currently, work for the opening of a quartzite quarry and the construction of an enrichment factory began at the deposit. This is the first stage of the silicon production program”. Investments for the first stage are to total USD 2 Million. The launching of a company for the production of quartzite concentrate using natural quartz from Kazakhstani deposits is scheduled in June-July of 2005.

The second stage, will be, “the industrial synthesis of quartz concentrate, as a result of which we’ll obtain silicon”, Kostyuchenko reported, and added, “the investment for the implementation of the second part of the program will total USD 100 Million. Construction of the plant for metal silicon production will take 4 to 5 years”. “We have already conducted negotiations with companies from Russia, the Ukraine, Germany and China on obtaining investment for construction, and they have agreed”, he said. (Kazakhstan Today)

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The Corporation Kazakhmys JSC will be reorganized into a limited liability partnership (LLP).

This decision was a result of the annual general meeting of company shareholders on August 31, 2004, a Kazakhstan Stock Exchange message read, referring to the minutes.

According to the message, shareholders approved the restructuring of the Kazakhmys JSC Corporation into an LLP, and an order for the exchange of its shares into market shares in the partnership.

The message also said that shareholders decided, “to cancel the 3rd and 4th issues of shares in connection with reorganization”.

Kazakhmys specializes in the production of refined copper and copper related raw materials in Kazakhstan, uniting the Zhezkazgan brass works (former Zhezkazganzvetmet), the Balkhash mining and metallurgy centre, the Zhezkent ore mining and processing enterprise, the Eastern Kazakhstan copper and chemical centre, and others.

One of the major shareholders is Samsung. (Interfax-Kazakhstan)

Energy and Power

Aksu TETS, a JSC Eurasian Energy Corporation subdivision (EEC, Pavlodar Oblast) produced 6.931 billion kW /h of electrical power during January–August 2004 vis-à-vis 6.448 billion kW/h for the same period of 2003.

According to the company press service, 11,045,000 tonnes of coal was produced during the reporting period at the Vostochniy strip mine, also an EEC subdivision. This amount is equal to the level in 2003.

The quality of coal has also improved. Thus, in 2003 the figure for the minimum energy value was 3,956 kcal /kg, and ash content was 42.9%. The same figures in 2004 respectively were an energy value of 3,969 kcal/kg, and ash content was 42.6%.

EEC includes Aksu TETS, Vostochniy coal strip mine and production-repair plant. 25.19% of JSC EEC is state-owned, 68% is held by legal entities, and legal entities and individuals own over 6.81% of privileged shares. JSC EEC is a member of the Eurasian Industrial Association that also includes the JSC Sokolov–Sarbay Ore-Dressing Plant (Kostanay Oblast), JSC Aluminiy Kazakhstana (Pavlodar Oblast), the coal strip mine JSC Shubarkol Komir (Karaganda Oblast) and transnational company KazChrome. (Interfax-Kazakhstan)

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Sogrinsk CHP, (East-Kazakhstan oblast), owned by the US company AES opened a new ash dump with a cost of about USD 1.7 Million.

The press release said that the ash dump was built “in record time”.

An AES Sogrinsk CHP LLP representative told Interfax-Kazakhstan that the launch took place on Thursday, although it was planned to occur in November 2004. Construction began in January 2004. The planned production period is 11 years and the design capacity is 528,000 cu meters.

The press release also said that another large environmental protection facility in Eastern Kazakhstan, the AES Ust-Kamenogorsk CHP ash dump, would be put in operation during October.

AES is a leading world power corporation specializing in the generation and distribution of electrical power. Its sales volume for 2003 totalled USD 8.4 Billion. AES supplies 45,000 megawatts of electricity to consumers in 27 countries via 114 power generation and 17 distribution companies employing 30,000 staff. (Interfax-Kazakhstan)

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The auction of the state majority holding of shares in the Taldykorgan Transportation-Electricity Grid Company JSC is scheduled for October 27th of the current year. An announcement from the State Property and Privatisation Committee (Goskomimushestvo), within the Ministry of Finance of the RK was published in the official press on Tuesday.

The JSC provides for the supply of electricity to the city Taldykorgan (administrative centre of Taldykorgan Oblast), which has over a 100,000 population. The size of the shares amounts to 100% of the charter capital. There are 1,083,873 shares in the package.

The starting price is KZT 1 Billion (current rate - KZT 135.43/USD 1); the guarantee fee is KZT 200 Million.

Foreign investors are invited to participate in the tender. A press release said that upon completion, the commission would announce which proposal contained the highest bid price and therefore satisfies tender conditions.

If the tender finds that two or more applicants have submitted an equal proposal, a British style auction for the privatisation will be conducted among these applicants. The press release stated that according to tender conditions, the potential participant would assume obligations for the stable operation of the company, will be required to preserve the type of activity that the company is currently engaged in, along with other conditions. (Interfax-Kazakhstan)

Transport and Telecommunications

In November 2004, the Russia-based group of companies IKO (Yekaterinburg), the official dealer of KOMATSU products in the CIS, plans to open its first service centre in Kazakhstan in Astana, IKO Director General, Vsevolod Chirkovski told.

“Currently we are completing talks with Kazakhstan concerning the choice of production space, assembly of equipment and opening of an IKO service centre in Astana designed to maintain KOMATSU equipment”, Chirkovski said.

“The planned volume of investment for the first service centre in Kazakhstan will be USD 1.5-2 Million,” he said.

According to his estimates, currently, the mining industry in Kazakhstan utilizes about 40 units of KOMATSU equipment. The model line includes large trucks, bulldozers, graders and forklifts. He added that in the near future, IKO plans to deliver up 100 pieces of KOMATSU equipment annually, which is why the service centre is necessary.

In the future, IKO will open additional service centers in different regions of Kazakhstan. (Interfax-Kazakhstan)

Money Markets

KZT/USD market rate dynamics during the week