Tag Archives: Kazakhstan

Kazakh court jails IS group

JULY 12 2016 (The Conway Bulletin) — A court in Aktobe, northern Kazakhstan, sentenced 12 people who had allegedly tried to join the ranks of the extremist IS group in February. The suspects received sentences of between 6 and 8 years in prison. The court said the group had tried to travel to Syria to join an IS training camp. Kazakhstan’s government has repeatedly emphasised its efforts towards combating Islamic extremism.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Azerbaijani, Kazakh and Uzbek ministers meet in Astana

JULY 12 2016 (The Conway Bulletin) — With the exception of Turkmenistan, foreign ministers of the Caspian Sea littoral states met in Astana to continue drafting a resolution which should resolve ongoing disputes over the legal status of the Caspian. Kazakh PM Karim Massimov also attended. The ministers said the convention will be signed at a heads of state meeting next year in Astana.

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(News report from Issue No. 289, published on July 15 2016)

Kazakh bank still suffers from Global Financial Crisis

JULY 8 2016 (The Conway Bulletin) — Kazakhstan’s Halyk Bank is still suffering from the impact of the 2008 Global Financial Crisis, ratings agency Standard & Poor’s said as it downgraded the bank’s outlook because it had not been able to reduce the proportion of toxic assets in its loan portfolio. In the first six months of 2016, overdue loans grew to 11.7% of the bank’s total portfolio, up from 9.2% at the end of 2015. Halyk Bank is the second-largest bank in Kazakhstan. President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev own Halyk Bank.

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(News report from Issue No. 289, published on July 15 2016)

Kazakh CB approves RBS sale

JULY 4 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank approved the sale of the local subsidiary of Britain’s Royal Bank of Scotland to Russian lender Expobank, owned by Igor Kim. The deal had been announced in June. Earlier this year, Mr Kim bought RBS’s Russian subsidiary. The sale of RBS is considered important for Kazakhstan’s ailing banking sector.

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(News report from Issue No. 288, published on July 8 2016)

Kazakh police reports suicide case

JULY 5 2016 (The Conway Bulletin) — Kazakh police reported thatTair Kaldybayev, found guilty of defamation by a court in Almaty in May, committed suicide in his prison cell. Kaldybayev, a businessman, was accused of having funded a smear campaign against Kazkommertsbank in 2014, which appeared on the Nakanune.kz website. The website director, journalist Guzyal Baidalinova was sentenced for libel.

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(News report from Issue No. 288, published on July 8 2016)

Business comment: Contracts of the century

JULY 8 2016 (The Conway Bulletin) — After the fall of the Soviet Union, multinational oil companies flocked into Central Asia and the South Caucasus to strike new deals around the Caspian Sea.

Kazakhstan in 1993 and Azerbaijan in 1994 awarded two massive licenses to Chevron and BP respectively. Both contracts became known as “the contract of the century”.

They became the largest oil projects in Azerbaijan and Kazakhstan, both operated under Production Sharing Agreement schemes, which gave significant advantages to the multinational companies in recovering their initial capital expenditures.

In the new era of sustained low oil prices, however, the Azeri-Chirag-Guneshli (ACG) group of offshore oil fields in Azerbaijan has had a different fate from Tengizchevroil in west Kazakhstan.

Azerbaijan’s President Ilham Aliyev has repeatedly pushed BP and its partners to increase production and continue to invest in spite of lower returns. Since mid-2014, when oil prices started plunging, ACG’s output growth has been sluggish at best. Now a potential corporate war over ACG between BP and Exxon contrasts strikingly to the success story of Tengizchevroil.

After years of mulling over an expansion and balancing costs, the consortium decided to launch a $36.8b investment that will boost production by 2022. This is a relief for Kazakhstan.

Tengiz has one of the lowest production costs in the region, at around $5.3/barrel, which makes it an easy bet even when oil prices are so low.

After the hype of the 1990s, now it seems clearer which of the two really deserved to be called the “contract of the century”.

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(News report from Issue No. 288, published on July 8 2016)

Border police stops Kyrgyzstan and Kazakhstan bound trucks

JULY 1 2016 (The Conway Bulletin) — The Russian border police stopped 43 goods trucks travelling from Ukraine to Central Asia at the border with Belarus. The trucks were bound for Kazakhstan and Kyrgyzstan, but were stopped because of new Eurasian Economic Union (EEU) regulation that appears designed as a retaliation forWestern imposed sanctions on Russia. The EEU is a Russia-led economic bloc that includes Kazakhstan, Kyrgyzstan, Armenia and Belarus.

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(News report from Issue No. 288, published on July 8 2016)

TCO approves $36.8b project for Tengiz oil field in Kazakhstan

JULY 5 2016 (The Conway Bulletin) — Tengizchevroil (TCO), a Chevron- led consortium, approved a $36.8b expansion project for the Tengiz oil field in west Kazakhstan. The consortium said the expansion will boost production by 45% to around 39m tonnes/year by 2022. Tengiz is Kazakhstan’s most profitable oil field.

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(News report from Issue No. 288, published on July 8 2016)

Kazakhstan’s Tengizchevroil approves $37 billion expansion plan

ALMATY, JULY 5 2016 (The Conway Bulletin) — After prevaricating for three years, Tengizchevroil (TCO), a Chevron-led consortium, approved the $36.8b expansion of the Tengiz oil field in west Kazakhstan.

Low oil prices had thrown the Tengiz expansion plans into doubt, so the decision will be a huge relief to the Kazakh government which has been looking for ways to stimulate output to beat slowing GDP growth.

The so-called Future Growth Project will boost production at TCO by 45% to 39m tonnes/year by 2022.

Government officials and company representatives lauded the deal, the largest private investment in the world’s oil industry for a decade.

“This decision made by major international companies re-affirms that the Republic of Kazakhstan is a country with favourable business climate where long-term investments can be made with confidence,” the Kazakh minister of energy Kanat Bozumbayev said in a press release.

Through its state-owned energy company Kazmunaigas, Kazakhstan owns 20% of TCO. The other shareholders are Chevron (50%), Exxon (25%) and Lukoil’s subsidiary LukArco (5%).

The development of the Tengiz oil field near Atyrau has been one of the West’s success stories in the former Soviet Union. It is Kazakhstan’s largest oil producer, pumping out a third of its total output, and exports via the CPC pipeline that sweeps through Russia, north of the Caspian Sea to Novorossiysk on the Black Sea.

This compares to the Kashagan oil project in the Caspian Sea which is years behind schedule and billions of dollars over budget.

Analysts said that TCO had decided that oil prices were steadily moving back up and that low steel prices and cheap labour made the timing right for expansion.

The consortium said the expansion will generate as many as 20,000 jobs during the peak construction phase.

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(News report from Issue No. 288, published on July 8 2016)

SFO to look into Kazakh ENRC

JULY 3 2016 (The Conway Bulletin) — The British government gave the Serious Frauds Office extra funding to complete its ongoing corruption investigation into ENRC, a Kazakh miner that quit the London Stock Exchange in 2013. The company is accused of having paid bribes to win contracts in Kazakhstan and Africa. Three prominent Kazakhstan-based businessmen, Alexander Mashkevich, Alijan Ibragimov and Patokh Chodiev, founded ENRC, now called Eurasian Resources Group.

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(News report from Issue No. 288, published on July 8 2016)