Tag Archives: Kazakhstan

Kazakh leader’s nephew gets KNB post

JAN. 20 2016 (The Conway Bulletin) – Samat Abish Nazarbayev, the 37- year-old nephew of president Nursultan Nazarbayev, was appointed deputy head of the KNB, Kazakhstan’s intelligence service, the eurasinet.org website reported. Samat Abish Nazarbayev is the son of Bolat Nazarbayev, President Nazarbayev’s brother. By appointing him to a senior position in the KNB, Pres. Nazarbayev is strengthens his control over it.

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(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan increases uranium output

JAN. 19 2016 (The Conway Bulletin) – Kazakhstan increased its uranium production by nearly 5% last year to 23.8m tonnes, media reported quoting the Kazakh nuclear agency Kazatomprom. Kazakhstan is the world’s largest producer of uranium. Kazakhstan has been increasing uranium production for a decade. Analysts have said that uranium exports may be a good future bet as countries look to boost nuclear power.

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(News report from Issue No. 264, published on Jan. 22 2016)

Stock market: Tethys, KAZ Minerals, Centerra

JAN. 21 2016 (The Conway Bulletin) — Tethys shares dropped to their lowest price since listing in 2011, falling 18% over the last week to 1.75p. Our graph shows its fall since the start of December.

Problems at its operations in Tajikistan may have dented investors’ confidence. China’s CNPC and France’s Total, its partners in the Bokhtar oil project, have said they want Tethys to exit the venture.

Last week, also, the Tajik government joined the fray and said it might expropriate 25% of the licensed area, as production hasn’t started yet.

Commodities prices were stable, after months of depreciation against the US dollar. But this has not helped all miners in the region. In fact, Centerra shares fell, due to the ongoing controversy with its Mongolian operations. On the upside, KAZ Minerals continued its upward trend, thanks to the continued depreciation of the Kazakh tenge. Its costs are in tenge. Its earnings in US dollars.

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(News report from Issue No. 264, published on Jan. 22 2016)

Central Asia and South Caucasus welcome Iran

JAN. 16/17 2016, ALMATY/Kazakhstan (The Conway Bulletin) – Countries in the South Caucasus and Central Asia applauded the end of western sanctions against Iran, a move they hope will turn their southern neighbour into a strong trade and diplomatic partner.

But, as well as adding a hopefully vibrant economy on their southern fringe, the reemergence of Iran also presents a major potential downside.

Low commodity and oil prices have been a major contributor to an economic downturn that has shaken the region. Adding Iran’s large oil reserve to the market will further pressure prices which are already hovering around 12-year-lows of $28/barrel, down from $115/barrel in the summer of 2014.

Most countries in the region issued a statement applauding Iran’s return to the international fold.

The Kazakh foreign ministry said: “It is a critically important step in creating a safer world.”

It also said that Iran had signed its first post-sanctions international agreement with Kazakhstan’s Air Astana to open an Almaty-Tehran flight in 2016.

In the South Caucasus, Armenia and Georgia are trying to negotiate gas supply deals with Iran, and Azerbaijan may be able to persuade Tehran to fill part of its TANAP gas pipeline running via Turkey to Europe.

Elham Hassanzadeh, Research Fellow at the Oxford Institute for Energy Studies, said Iran could become an important trade and diplomatic partner for Central Asia and the South Caucasus.

“It will certainly be an easier partner to trade with [than previously],” she told The Conway Bulletin in an interview.

“The cost of doing business with Iran will be significantly lower than that of during the sanctions era while less economic and political restrictions on a given country in the region could be translated into less antagonism and conflict and more collaboration and constructive dialogue.”

She said, though, that energy would be at the forefront of relations. “A good number of Azeri and Turkmen companies are planning to invest in Iran’s oil and gas sector,” Ms Hassanzadeh said.

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(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan orders to pay $25m for ditching building plans

ALMATY, JAN. 18 2016 (The Conway Bulletin) — An arbitration court in Stockholm ordered a Kazakh state- owned company to pay €22.7m ($24.8m) to Estonian construction company Windoor for reneging on a building deal in Astana.

The case is important as more and more infrastructure projects in Kazakhstan grind to a halt with the deepening economic slump.

In the Stockholm case, Windoor, which specialises in glass-aluminium structures, filed a lawsuit against state-owned Diplomat Stroi Servis for €18m ($19.7) after it failed to pay for work it had carried out on a conference centre.

In 2012, Windoor and Baltiiski Dom, a Kazakh construction company, agreed a deal to build a 40,000 square metres diplomatic conference centre behind the Kazakh ministry of foreign affairs.

In an interview via email with The Conway Bulletin, Mailis Lintlom, the Windoor chairman, said: “By early 2014, it became clear that the construction of the project was behind schedule and that Windoor would not be able to start the [installation] work of the facade at the agreed time.” In February 2015, in line with the worsening economy in Kazakhstan, Windoor was told that the project had been “frozen”, triggering Windoor’s arbitration action.

At the end of December 2015, the Stockholm court said Diplomat Stroi Servis, owned by the Economic Department of Kazakhstan’s ministry of foreign affairs, will have to pay a €4.7m premium on Windoor’s court claim.

A Kazakh court will have to enforce the payment and Windoor is still waiting for a judicial confirmation of the award.

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(News report from Issue No. 264, published on Jan. 22 2016)

China lifts grain barriers for Kazakhstan

JAN. 15 2016 (The Conway Bulletin) – China has lifted administrative barriers that had restricted Kazakhstan’s grain exports to its neighbour, Kazakh first deputy PM Bakytzhan Sagintayev told media. He said that the lifting of the various barriers would make it far easier for Kazakhstan to sell grain to China. Grain has become, over the past decade, an important export commodity for Kazakhstan.

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(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan’s ArcelorMittal increases salaries

JAN. 18 2016 (The Conway Bulletin) — Steel-maker ArcelorMittal Temirtau said it would retroactively increase salaries for its workers by 6.8% from Jan.1, 2016. The company, a subsidiary of India’s ArcelorMittal, operates steel plants and coal mines in the Karaganda region in central Kazakhstan. In 2014 and 2015, the company argued with workers and the government over salaries and VAT refunds.

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(News report from Issue No. 264, published on Jan. 22 2016)

Kazakh tenge depreciation hits revenues at Air Astana

ALMATY, JAN. 18 2016, (The Conway Bulletin) — Kazakhstan’s national airline Air Astana reported a 21% drop in revenues in 2015, a sign that the economic downturn is hurting state- owned companies.

Air Astana was not explicit about exactly what triggered the sharp drop in revenue. In a press release, Air Astana CEO Peter Foster said: “A sharp fall in revenue was more than compensated for by significant cost savings, including, though not limited to, jet fuel savings.”

Revenue in 2015 dropped to $738m. Net profit rose to $47.4m from $19.5m.

An Air Astana spokesperson told The Bulletin that more explanation on why revenues had fallen so sharply would be given in a full year report to be published over the next few weeks.

The suspicion is that the depreciation of the tenge has hit Air Astana hard. Its income is mainly in tenge and its costs in US dollars or euros. The tenge has lost 50% of its value over the past five months.

Air Astana is supposed to lease 7 aircraft from Netherlands-based AerCap, a deal priced in euros. The fall in the tenge makes the deal expensive.

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(News report from Issue No. 264, published on Jan. 22 2016)

Gazprom Kyrgyzstan pays debt

JAN. 18 2016 (The Conway Bulletin) – Gazprom Kyrgyzstan, a fully-owned subsidiary of Russia’s Gazprom, paid off a $41.6m debt that the Kyrgyz company has owed to its Kazakh counterparts since 2004. Gazprom bought Kyrgyzgas for $1 in 2014, promising to pay off its debts. This deal appears to underline Gazprom’s drive to make good on this promise.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakh leader calls for early election

JAN. 20 2016 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev called a parliamentary election for March 20, more than a year ahead of schedule. Officially MPs asked him to bring the election forward from 2017 because they said that they had fulfilled their mandate. Unofficially, the Kazakh political elite appear to be increasingly worried about civil disobedience linked to worsening economic conditions.

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(News report from Issue No. 264, published on Jan. 22 2016)