Tag Archives: Kazakhstan

Kazakhstan details mortgage plan

ALMATY, DEC. 12 2016 (The Conway Bulletin) — The Kazakh government plans to stimulate the housing market by subsidising mortgages under a programme dubbed Nurly Zher, which means the Bright Land in English.

At a government meeting, the economy ministry said that the plan would help build 1.5m new houses over the next 15 years. It said that the state would invest $5.3b into the scheme and that the private sector would invest $47b.

“To encourage private developers to take advantage of available credit resources the state will subsidize part of the interest rate on loans extended by banks,” the economy ministry said in its statement.

The plan is an ambitious attempt by the Kazakh government to stimulate its flatlining economy. GDP growth has been stagnan, pulled down by low oil prices and a recession in Russia. The tenge has lost around 50% of its value and ordinary Kazakhs are feeling the pinch. This year rare anti-government protests sprung up across the country.

The government has said that it will restructure old mortgages and has also said it will subsidise the interest rate on new mortgages by knocking 7 percentage points off the cost of borrowing. Commercial rates for mortgages in Kazakhstan are currently around 17%. Under the government’s plan, new mortgage holders will pay only 10%, with the government paying the equivalent of 7% of the mortgage.

Even so, people are sceptical.

“I’m scared of whole economic situation in the country,” said Bolat Mukashev, 25. “You don’t know what will happen tomorrow and there is no stability. Any moment tenge might collapse again and there is a high chance I could lose my job.”

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Russia to start sending more oil to China via Kazakhstan

ALMATY, DEC. 15 2016 (The Conway Bulletin) — Russia will increase oil shipments to China via Kazakhstan by 28.5% in 2017, giving Kazakhstan’s income a much-needed boost from transit fees.

The deal also comes a few days after Russian state-owned Transneft said that it would stop taking Kazakh oil at the Caspian Sea port of Makhachkala because the consistency of its blend had changed.

Rosneft, Russia’s state-owned giant, will export 9m tonnes/year to China via the Kazakhstan-China pipeline, up from the current 7m tonnes/year, according to traders interviewed by Reuters. The pipeline, with a capacity of around 15m tonnes/year, has been utilised below capacity for years since its completion in 2009.

Russia needs to increase its export capacity to China to fulfil contracts signed in 2013. New pipelines are being built in Siberia to send Russian gas directly to China but, for now, it still needs to use Kazakhstan’s infrastructure.

The actual value of the deal has not been revealed but it will be a boost for Kazakhstan which has been struggling economically since oil prices collapsed in 2014.

This was some positive news for KazTransOil, a few days after Transneft said it would stop accepting Kazakh oil at its Caspian port of Makhachkala, citing incompatibility with the Ural blend. KazTransOil will re-route its exports to Russia via the Atyrau-Samara pipeline from Jan. 1, 2017. This is a route that KazTransOil already uses to export some oil.

The Transneft decision came after Lukoil, Dragon Oil and Mitro International decided to pull out of Makhachkala and re-route exports to the Baku-Tbilisi-Ceyhan pipeline.

The Kazakh crude, Transneft said, is not sulphurous enough to be blended with Russian oil.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

EBRD loans 100m euro to Kazakhstan

DEC. 12 2016 (The Conway Bulletin) — The EBRD agreed a €100m ($104m) loan to state-owned electricity company Samruk Energo, specifically designed to help with its privatisation plan. The company, a subsidiary of sovereign wealth fund Samruk-Kazyna, plans to privatise nine of its subsidiaries next year. The loan will be issued in tenge or roubles.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Kazakhstan links two gas pipelines, boosting flows to China

ALMATY, NOV. 29 2016 (The Conway Bulletin) — Kazakhstan’s state- owned distributor KazTransGas said it had completed building a compressor station that will link two main gas pipelines and allow it to pump more gas to China, a key client for Central Asian energy producers.

The Bukhara-Bishkek-Almaty pipeline will now be linked directly to the Kazakhstan-China gas pipeline, boosting Kazakhstan’s transit capacity and securing supplies to Almaty, Kazakhstan’s biggest city. The route will allow the giant gas fields in the west of Kazakhstan to pump gas directly to China.

Dair Kusherov, deputy director of KazTransGas enthused about the options that linking the pipelines would bring.

“First, we have opened a route to export domestic gas to China, expanding our export and transport capabilities,” media quoted him as saying at the opening of the compressor station. “Second, the link will provide uninterrupted gas supplies to the city of Almaty and Almaty region. Third, the new station provides a backup route for uninterrupted gas supply to consumers in Almaty via gas pipeline bypassing the territory of the Kyrgyz Republic.”

Boosting its gas transit options eastwards also highlights China’s dominance over energy flows from Central Asia.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakh President declines to rename Astana

NOV. 26 2016 (The Conway Bulletin) — In a carefully orchestrated show of modesty, Kazakh president Nursultan Nazarbayev declined to rename Astana, the capital city he built on Kazakhstan’s windswept steppe, after himself. He made the announcement during an interview with Russia-24. Parliament had made the suggestion earlier in November. Mr Nazarbayev critics accuse him of building a personality cult. Mr Nazarbayev has appeared more interested in burnishing his image and legacy over the past few years, allowing statues of himself to be built and appearing on a new bank note. Analysts had said he may fancy renaming Astana after himself.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Tax authorities in Kazakhstan investigate Karachaganak

NOV. 24 2016 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev said the tax authorities are investigating the consortium operating the Karachaganak gas and condensate field in the north of the country for unpaid taxes and that the government will seek a new profit sharing scheme. Anglo-Dutch energy company Shell and Italy’s Eni are the field’s operators and largest shareholders with a 29.25% stake each. US-based Chevron (18%), Russia’s Lukoil (13.5%) and state-owned Kazmunaigas (10%) own the rest.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Opec, Azerbaijan and Kazakhstan

DEC. 2 2016 (The Conway Bulletin) — Oil prices shifted up more than 10% after OPEC, the group of oil exporting countries, agreed to reduce output by 1.2m barrels/day starting in January.

This is good news for oil-rich countries across the South Caucasus and Central Asia, as the potential positive impact on oil prices could be sustained for a few months longer.

Throughout 2016, OPEC has repeatedly pledged to decrease output if non-OPEC countries also participated in the cut. In reality, though, the issue at stake was Saudi Arabia’s unwillingness to relinquish market share to Iran, who had just re-emerged from western sanctions and rapidly increased its output.

Now Saudi Arabia will slash 500,000 barrels/day from its output of around 11m barrels/day. Other OPEC countries will cut a total of 700,000 barrels/day and some non- OPEC countries pledged cuts for 600,000 barrels/day. For reference, the total cut would be 20% larger than Kazakhstan’s total oil production in 2016.

In fact, both Kazakhstan and Azerbaijan have used the OPEC deals as smokescreens to conceal declining production figures, as some of their projects have become unsustainable at low oil prices.

The output from the giant offshore field of Kashagan, which is three years late in hitting commercial levels of production, is no consolation either for Kazakhstan. Analysts have said that the field, sited in the northern part of the Caspian Sea, is profitable only with oil prices at $100/barrel at a minimum, a figure that is currently not on the horizon.

This means that Kazakhstan’s government will have to wait longer to reap the benefits of its largest oil basin.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakh court sentences gunman to life

NOV. 28 2016 (The Conway Bulletin) — A court in Aktobe, west Kazakhstan, sentenced seven men who shot dead eight people in a series of attacks earlier this year to life jail sentences. Eighteen more people who helped the group were given between two and five year prison sentences. The judge described the men, who attacked a police outpost, as Islamic extremists.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Trump and Kazakh President share telephone call

ALMATY, NOV. 30 2016 (The Conway Bulletin) — In a telephone conversation with Kazakh president Nursultan Nazarbayev, US President-elect Donald Trump described Kazakhstan as a “fantastic success” and a “miracle”.

A briefing of the telephone conversation released by Kazakh president Nursultan Nazarbayev’s press service said that the two leaders had also agreed to meet up shortly.

“D.Trump stressed that under the leadership of Nursultan Nazarbayev our country over the years of Independence had achieved fantastic success that can be called a ‘miracle’,” the Akorda press release said.

US media later reported that Mr Nazarbayev was the 44th national leader that Mr Trump had spoken to since winning the US election in November. He is also the only leader in the South Caucasus/Central Asia region that he has spoken to.

Importantly for the region, the Akorda press service quoted Mr Trump as saying that he was confident that US-Russia relations can be improved.

“US President-elect underscored that taking into account the results of a telephone conversation with the Russian President Vladimir Putin, he is very optimistic about the prospects of developing cooperation between Washington and Moscow,” the press release said.

Russia is the main economic driver for the region and poor US- Russia relations have been one of the factors that has stumped low regional economic growth, pushing Kazakhstan towards a recession.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kazakh court sends to jail land protest organisers

ALMATY, NOV. 28 2016 (The Conway Bulletin) — A court in western Kazakhstan sentenced the organisers of a land protest earlier this year to five years in prison, triggering outrage from their supporters and human rights workers.

The two men, Max Bokayev and Talgat Ayan, were convicted of inciting social unrest, spreading false information and creating public disorder. They pleaded not guilty and have said that they were just exercising their right to protest against land reforms which the government planned to introduce.

Reports from the courtroom said that supporters of the two men sung the national anthem and shouted “Freedom!” when they were driven away in a police van.

Mihra Rittmann, Europe and Central Asia researcher at Human Rights Watch, said the two men had been jailed for political reasons.

“Jailing Bokayev and Ayan for nothing more than peacefully expressing dissenting views is an outrageous miscarriage of justice,” she said. “Max Bokayev and Talgat Ayan should be freed immediately.”

For the authorities, the jail sentences marked the final clampdown on a unprecedented period of unrest.

It started in April in Atyrau with a local protest organised by Bokayev and Ayan against the government’s reforms which focused on making it easier for foreigners to buy and own land in Kazakhstan.

The protests, though, gathered pace and within a fortnight had spread to major urban centres across the country, worrying Kazakh president Nursultan Nazarbayev. In some cities, protesters fought with riot police. They only stopped when he intervened, repealed the proposed reforms and sacked a handful of government officials.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)