Tag Archives: Kazakhstan

Kazakh court fines Karachaganak

MARCH 2 2016 (The Conway Bulletin) – A Kazakh court fined the consortium operating the Karachaganak gas and condensate field in the north of the country 526b tenge ($1.5m) for environmental damage. The court said the KPO consortium emitted around 43.8 tonnes of pollutants into the atmosphere between April and July 2015. KPO consortium shareholders include BG Group, ENI, Chevron, Lukoil and state-owned Kazmunaigas.

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(News report from Issue No. 270, published on March 4 2016)

S&P downgrades Kazakhstan’s Baiterek

FEB. 26 2016 (The Conway Bulletin) – Ratings agency Standard & Poor’s downgraded the credit ratings for Baiterek Holding from BBB-/A-3 to BB+/B. S&P said “the likelihood of extraordinary government support to the consolidated Baiterek group [is] almost certain”. It said its negative outlook mirrors that of the agency’s latest assessment of Kazakh sovereign credit. Baiterek’s subsidiaries include the Development Bank of Kazakhstan and the Investment Fund of Kazakhstan.

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(News report from Issue No. 270, published on March 4 2016)

Amnesty criticises Kazakhstan

MARCH 3 2016 (The Conway Bulletin) – Amnesty International accused the authorities in Kazakhstan of turning a blind eye to torture and the mistreatment of prisoners. The human rights group said the authorities often didn’t bother to investigate torture cases alleged against police and prison staff. The criticism will embarrass Kazakhstan which has said it had improved the treatment of prisoners.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakh telecoms launch 4G

MARCH 2 2016 (The Conway Bulletin) – Telecoms companies in Kazakhstan are rolling out 4G services after the government opened the market up to competition at the end of 2015. Tele2 Kazakhstan said it launched 4G services in several central and eastern districts in Kazakhstan, building on its merger with Altel in November. Before the market was liberalised, Altel had been the only licensee of 4G services. Kcell and Beeline also said they will launch pilot 4G coverage in major cities.

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(News report from Issue No. 270, published on March 4 2016)

Editorial: Azerbaijani, Kazakh, Georgian civil unrests

MARCH 4 2016 (The Conway Bulletin) – The economic downturn that has hit Central Asia and the South Caucasus in the past two years has dented people’s purchasing power.

Most people earn salaries in their local currency but these have lost between 50% and 25% of their value in the past months.

This has triggered some social unrest, especially in the South Caucasus. In January, people in Azerbaijan took to the streets to protest against rising food prices and stagnating wages.

The same reasons were voiced by miners in Tkibuli, Georgia, who went on strike for two weeks asking for a 40% increase in salaries. Now reports have emerged from Yerevan where market stall owners briefly scuffled with police over rental prices.

In Central Asia, protests are less frequent and, generally, silenced quickly by the authorities. Last month, however, dozens of Kazakh women banging pots and blowing whistles protested in Almaty about mortgage repayments.

The crisis is starting to bite hard and the people are growing increasingly restless.

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(Editorial from Issue No. 270, published on March 4 2016)

Kyrgyzstan considers Muslim debt

FEB. 26 2016 (The Conway Bulletin) – Perhaps following Kazakhstan’s lead, Kyrgyz parliamentarians are going to discuss the potential to issue a so-called sukuk, media reported. A sukuk is a debt which adheres to Islamic laws and principles. One of the advantages is that a sukuk may attract a greater range of potential investors from the Middle East and South-East Asia. The Kyrgyz parliament still has to discuss new laws aimed at easing a route to issuing a sukuk.

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(News report from Issue No. 270, published on March 4 2016)

Kazakh CBank introduces new rules

FEB. 29 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank imposed new rules for exchanging tenge into US dollars in an effort to bolster its tenge currency, which has lost around half its value in the past 12 months. From now, Kazakhs will have to present photo ID if they want to exchange more than 1m tenge ($2,860) into any foreign currency. This is half the previous level.

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(News report from Issue No. 270, published on March 4 2016)

FDI drops in Kazakhstan

MARCH 2 2016 (The Conway Bulletin) – Foreign direct investment (FDI) in Kazakhstan’s oil and gas sector dropped by 72% to $1.9b last year compared to 2014, data from the Central Bank showed. The data shows just how heavily Kazakhstan’s oil and gas sector has been hit by the economic downturn. Proportionally, FDI to Kazakhstan’s oil and gas sector was harder hit than any other part of its economy.

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(News report from Issue No. 270, published on March 4 2016)

Kazakh KMG EP revenues collapse by 37% in 2015

ALMATY, FEB. 26 2016, (The Conway Bulletin) — KMG EP posted a 37% fall in revenues in 2015 to 530b tenge ($2.4m), its lowest since 2009, because of depressed oil prices.

KMG EP is the exploration and production branch of Kazakhstan’s state-owned energy company Kazmunaigas. The collapse in KMG EP’s revenues mirrors the rest of Kazakhstan’s oil and gas sector.

But, although it posted a drop in revenue, KMG EP also boasted a 400% rise in net profit to $1.1b.

This was linked to the depreciation of the Kazakh tenge. KMG EP’s income is mainly in US dollars and its costs are in tenge.

Lower taxes and the write-down of its Ozenmunaigas field in western Kazakhstan also helped KMG EP’s profit. Ozenmunaigas had become a drain on the company, pulling in investment and extra salaries after rioting by workers in 2011.

But it was the depreciation of the tenge that drove most of KMG EP’s profit. KMG EP “recognised a foreign exchange gain of 449b tenge ($2b), as over 93% of cash and financial assets were denominated in foreign currencies at the time of the currency devaluation,” the company said in its annual report.

This boost, though, essentially disguised what would have been a loss in 2015, as analysts pointed out.

“The FX gain is a one off profit and will not affect the future operating profit of the company,” Gulmariya Zhapakova, analyst at Halyk Finance, said in a report.

KMG EP’s yearly report also said that salary inflation would hit it in 2016. It is under pressure from workers and their unions to raise salaries after the tenge lost half its value over the past year.

Production in 2015 was flat. KMG EP and its subsidiaries extracted 12.4m tonnes of oil.

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(News report from Issue No. 270, published on March 4 2016)

Egypt’s Sisi visits Kazakhstan

FEB. 26 2016 (The Conway Bulletin) – Egypt’s President Abdel Fattah al- Sisi flew to Astana for talks with Kazakh President Nursultan Nazarbayev, a rare visit to Kazakhstan from a Middle Eastern leader. A few days before Mr Sisi’s visit, Kazakhstan restored air links to Egypt. It cut them at the end of last year after an alleged bomb planted by Islamic radicals blew up a Russian Plane. There was no news of any agreements signed at the meeting.

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(News report from Issue No. 270, published on March 4 2016)