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Kazakhstan:
Commercial News Update
January 2008
By Beibit Yerubayev, BISNIS Representative for Kazakhstan
INTERNATIONAL
COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,
2007. ALL RIGHTS RESERVED FOR USE OUTSIDE OF THE UNITED STATES.
Contents
Kazakhstan
General
Government approves Foreign Labor Quotas
Foreign
Minister and US Senator Lugar holding Meeting
Oil
and Gas Sector
Max Petroleum
resumes Output at Zhana Makat Field
Max Petroleum
appoints Mark Johnson CEO
President
summons Agip KCO Heads
Kazakhstan
increasing Oil Transit Tariffs
KKMG signs
PSA on "N" Project
Uzbekistan to
supply Natural Gas to Kazakhstan
Ukraine vows
to maintain normal gas supply for customers
Kazakhstan
raises its stake in Kashagan to 16.8 percent
Finance and Investment
Kazakhstan’s
GDP in 2007 reaches about 9 percent
Kazakhstan
Mortgage Company receives Loan from National Budget
KHC explores
Kazakhstan Investment Opportunities
Kookmin Bank
seeks Acquisition Targets in Asia
DEG to
provide Bank CenterCredit Subordinated Loan
National Fund
Assets exceed US $22 Billion
KASE Trades
jump nearly 2.5 Times
Korean
Securities Firms eye Central Asia
Trade and Consumer Goods
Center for
the Development of Commercial Policy and Agricultural Technical University
conclude Cooperation Agreement
New
Zealand Wine comes to Kazakhstan
Vestel Elektronik plans Plant in Kazakhstan
Communications
and Transportation
Astana
Airport became Second in CIS to obtain 3rd Category ICAO Certification
New Port
planned in Mangistau
Kazakhstan General
Government approves
Foreign Labor Quotas
The government has approved quotas for foreign labor for 2008. The decision has
been published in the official media, according to Kazakhstan Today.
The official decision read that the government sought to establish the quota at
a total of 1.6 percent of the “economically active population”.
The quotas are separated into several different categories, which are: first
and second categories (heads of administrative boards at organizations, experts
with higher and secondary vocational training) - 0.60 percent; third category
(qualified workers) - 0.93 percent; and fourth category (seasonal agricultural
employees) - 0.07 percent.
Foreign Minister and US Senator Lugar holding Meeting
US Senator Richard Lugar is visiting
Kazakhstan on January 10-11, Kazinform cited the MFA Press Office as reporting.
Senator will hold meetings with ministries and
departments on cooperation in the energy sector and the implementation of the
Cooperative Threat Reduction (CTR) Program (Nunn-Lugar).
He will also meet with Foreign Affairs
Minister Marat Tazhin, according to Kazinform.
Oil and Gas Sector
Max Petroleum resumes
Output at Zhana Makat Field
Max Petroleum Plc, the UK oil explorer that fired its Chief Executive Officer
in October, resumed production at a field in Kazakhstan after obtaining
government approval for a gas plant and fuel flaring.
Output at the Zhana Makat deposit was suspended in mid- December pending approval
of a so-called gas-utilization plant and a permit to flare fuel. Production
resumed “within two weeks of being shut-in,'' Max said today in a statement
distributed by the Regulatory News Service, without elaborating, according to
Bloomberg.
President summons Agip KCO Heads President
Nursultan Nazarbayev has summoned the heads of the six foreign oil companies
headed by Eni that control the Kashagan oil field to a meeting on January 11,
the Wall Street Journal reported on Monday. Chief Executive Paolo Scaroni told
the newspaper he would recommend that Eni retire the almost 9 percent of its
shares it holds and begin a new share-buyback program, according to
Interfax.
Max Petroleum appoints Mark Johnson
CEO
Thursday January 2008, oil and gas Exploration
Company Max Petroleum Plc announced that Mark Johnson has been appointed as the
company's chief executive officer and a member of its Board of Directors,
effective January 22, 2008. The London, UK-based company also outlined its
plans to restructure its Board of Directors. Max Petroleum noted that the new
chief executive officer has more than 26 years of experience in the oil and gas
sector, which includes 24 years of his working with major oil and gas
companies.
A mechanical, as well as a petroleum engineer by profession, Mark has held
several senior posts with British Gas, Chevron (CVX), Texaco, and Transworld
E&P.
His worldwide experiences range from Kazakhstan, the Middle East, and West
Africa to Trinidad & Tobago, and the US.
During his tenure from 1998-2003 as Managing Director of the North Buzachi
project in Kazakhstan for ChevronTexaco, he was instrumental in establishing
the first Texaco subsidiary operating in Kazakhstan. Also, Johnson initiated
the production operations, which grew to more than 9,000 barrels of oil per
day, or bpd, as well as secured government approval to further increase
production to 42,500 bpd. Finally, he negotiated the sale of this subsidiary to
the Chinese National Petroleum Company in 2003.
In conjunction with Johnson's joining the company as a director and chief
executive officer, the company said that current executive chairman Jeffs would
move to the post of non-executive chairman of the Board. Lee Kraus and Bob
Holland will continue with their roles of non-executive directors, while
Michael Young will join the Board as finance director, the company added.
Further, the British company stated, that all the three key persons would
constitute an executive committee of the Board, with Kraus continuing to
oversee the company's farm-out process.
Commenting on the appointment, Jeffs, said, “The appointment of Mark as CEO
means that Max Petroleum now has the senior management team in place to
implement its ambitious growth plans. We have met the challenges of 2007. The
company is in as strong a position as ever to capitalize on its highly
prospective assets in Kazakhstan.”
MXP.L is currently trading on the LSE at 67.75 pence, up 2.75 pence, or 4.23
percent, on a volume of 796,465 shares, according to RTT News.
Kazakhstan increasing Oil Transit
Tariffs
The Agency for the Regulation of Natural
Monopolies has issued new tariffs for oil transit tariffs via KazTransOil
pipelines.
The export tariff for the transit of 1 ton of oil per 1 square kilometer will increase by 24,9 percent to KZT 3,015 (US $ 24.9) excluding
VAT. The tariff was formerly KZT 2,413 (US $19.96), according to
RosBusinessConsulting.
KMG signs PSA on
"N" Project
The Ministry of Energy and Mineral Resources
and KazMunaiGas have signed a production sharing agreement (PSA) for a project
simply called "N".
The ministry has decided to give KazMunaiGas subsoil usage rights for the N
contract site under a PSA with the inclusion of a signature bonus and an
operations program that includes ecological projects and the drilling two
exploration wells.
The PSA stipulates that the company should fund social projects, train
Kazakhstani professionals, and conduct monitoring over the contract territory,
the KMG Press Office reported.
Uzbekistan to supply Natural
Gas to Kazakhstan
The administration of
KazMunaiGas, KazTransGas, Gazprom and Uzbekneftegas met in Tashkent, where
Kazakhstan and Uzbekistan reached an agreement on natural gas supply to the
southern regions of Kazakhstan in 2008, the KMG Press Office reported.
A related press release stated that the price would remain at its current
level. Kazakhstan's demand for imported natural gas will be met fully,
according to IA Trend.
Ukraine vows to maintain
normal gas supply for customers
Prime Minister Yulia
Tymoshenko promised on Wednesday that Ukraine would maintain normal supplies of
natural gas for its domestic and foreign customers despite national oil and gas
company Naftogaz being, in her words, "on the verge of bankruptcy."
"We will prevent any irregularity and will be doing everything to prevent
any instability being felt either in Europe or Ukraine," Tymoshenko told
reporters after meeting with new Naftogaz chief Oleh Dubyna.
The premier said
her government would investigate alleged former shady schemes at Naftogaz but
promised that it would be very careful to prevent the inquiry from having any
adverse effect on Ukraine's gas trade with other countries, such as Russia,
Turkmenistan, Kazakhstan and Uzbekistan, according to Interfax.
Kazakhstan
raises its stake in Kashagan to 16.8 percent
ASTANA. Jan 14 - The
Kazakh side has carried through talks on the Kashagan project with other
stakeholders in the Agip KCO consortium running the project, a source close to
the talks told Interfax.
"Kazakhstan defended its position. All the country's
interests have been maintained," the source said.
“Kazakhstan has increased its stake in the project and has
become a major stakeholder; it received the demanded compensation as
well," the source said.
Meanwhile, Kazakh Energy and Mineral Resources Minister Sauat
Mynbayev said that Kazakhstan reached an agreement to increase the stake of
KazMunaiGaz, a Kazakh national oil and gas company, in Kashagan project up to
16.8 percent; however, a price agreement has yet to be reached with ExxonMobil,
one of the major stakeholders in the project.
In the summer of 2006, the Kazakh side protested the slow
pace of the Kashagan project and an increase in projected costs to $136 billion
from $57 billion previously. It threatened to strip Italy's Eni of its status
as project operator. The two sides have been in negotiations ever since.
The Agip KCO
consortium was formed shortly after the signing of the production-sharing
agreement on Kashagan in 1997.
The Kashagan PSA
includes three other structures: Kalamkas, Aktote and Kairan. The four
structures consist of 11 offshore blocks covering 5,600 square kilometers. Kashagan's recoverable reserves are estimated at 7-9
billion barrels at a minimum, while oil-in-place may total as much as 38
billion barrels, according to Agip KCO.
KazMunayGas has
held an 8.33 percent share in Agip KCO. Project operator Eni holds an 18.52
percent stake, as do Total, ExxonMobil and Royal Dutch Shell, ConocoPhillips
has 9.26 percent, and Inpex - 8.33 percent.
Finance and Investment
Kazakhstan’s GDP in 2007
reaches about 9 percent
Kazakhstan’s gross domestic product (GDP) in 2007, according to preliminary estimates, amounted to 8.7 percent, Prime Minister Karim Masimov said during a televised government meeting in Astana on Tuesday.
“The country’s economy last year continued to develop at a high pace and, according to preliminary estimates -- economic growth amounted to 8.7 percent,” Karim Masimov said.
He recalled that more strict conditions for obtaining access to funds on international markets have complicated opportunities for bringing in external financing to Kazakh banks. “As a result, it is expected that in 2008, real GDP growth will amount to 5-7 percent,” Mr. Masimov said, according to Itar Tass.
Kazakhstan Mortgage Company receives Loan
from National Budget
The Kazakhstan
Mortgage Company JSC has informed the KASE by official letter that on December
27, 2007, the government provided the company with loan from the national
budget of KZT 12 billion. The credit was supplied according to a government
resolution dated December 26, 2007 #1295.
The loan has a 20-year payback period with a 0.1 percent interest rate. The
purpose of the loan is to decrease the cost of mortgages from second-tier
banks, according to KASE
KHC explores Kazakhstan
Investment Opportunities
Chairman of Kingdom
Holding Company (KHC), Prince Alwaleed bin Talal bin Abdulaziz Al Saud,
received the Kazakhstani Ambassador to Saudi Arabia, Kairat Lama Sharif, at his
office.
They discussed economic and investment issues related to their respective
countries. Ambassador Sharif commended Prince Alwaleed on his local and
international investments in the various sectors that include hotels, banking
and media.
The meeting focused on potential investments in Kazakhstan. Moreover, the
Ambassador extended an invitation to Prince Alwaleed to visit his country in
the near future to explore investment opportunities there.
The meeting concluded with the Prince expressing his willingness to explore
investment opportunities in Kazakhstan and to visit soon, according to the
Khaleej Times.
Kookmin Bank seeks
Acquisition Targets in Asia
Bank CEOs said they
would focus on developing new earning sources and strengthening risk management
capabilities this year, instead of pursuing aggressive asset growth.
In their New Year's messages, they forecast banks would face stronger
competition with non-banking firms in 2008 as more depositors are expected to
draw their funds out of bank accounts to invest in stocks and bonds.
Kookmin CEO Kang Chung-won said he would make efforts to develop new growth
engines, overseas markets and strengthen non-banking businesses to overcome the
challenges.
``This year, we plan to set up branches in Suzhou and Harbin in China. We will
also try to find other acquisition targets in Asia,'' Kang said. Kang earlier
said Kookmin is looking to take over controlling stakes in unspecified banks in
Indonesia and Kazakhstan as part of its global expansion strategy. He said
Kookmin would become a majority stakeholder in banks in some Asian markets, and
set up operations in China and Vietnam. The ongoing paradigm shift in the
banking sector will pose threats to lenders, but it can also be an opportunity
to achieve sustainable growth, he said. Reaffirming his goal of making the
country's largest lender into a leading Asian bank, Kang said he is eager to
increase investments on global markets, according to the Korea
Times.
DEG
to provide Bank CenterCredit Subordinated Loan
Bank CenterCredit has signed a US $40 million subordinated loan agreement with
the German Development and Investment Company (DEG) German for a 7-year period;
Kazinform cited a DEG press release as stating.
The loan will be used to fund long-term projects executed by the bank’s
clients. DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH - a
member of KfW Bankengruppe is one of the largest European development
institutions, KazInform reports.
National
Fund Assets exceed US $22 Billion
In
2007, the National Fund assets exceeded US $22 billion; Kazinform cited a
Karavan interview with Anvar Saidenov, chairman of National Bank in its
statement:
“I suppose as of the end of the year, the National Fund assets will be
considerable at last. They could exceed US $22 billion, or possibly US $22.5
billion,” Mr. Saidenov said. He added that in the case of a threat to our
economy, the National Fund would act as the main cushion.
“The worst scenario would be -- as a result of the slowing of the world
economy, the growth in oil prices could fall rapidly. For the Kazakhstani
economy, this would be a very negative trend, because it would affect not only
economic growth, but also the potential budget, which could reduce social
programs. For this purpose, we have a number of “cushions”. The National Fund
is the most important of these, and has been established for these purposes in
particular,” he said, according to Kazakhstan Today.
KASE
Trades jump nearly 2.5 Times
In 2007, the sale and purchase of shares on the Kazakhstan Stock Exchange
reached US $8.94 trillion – following an increase by almost 2.5 times. In 2007,
the sale and purchase of corporate bonds jumped by 43 percent to US $4.3
trillion, according to Khabar.
The main purchasers on the Kazakhstan Stock Exchange are banks, pensions and
mutual funds, according to the Khabar Agency.
Korean
Securities Firms eye Central Asia
Securities companies are accelerating efforts to boost their global networks by
setting up beachheads overseas in line with the Capital Market Consolidation
Act.
Brokerage houses such as Daishin and Daewoo are lining up this year to set up
offices in oil-rich Kazakhstan.
Daishin Securities said the Central Asian country is attractive because of its
abundant energy reserves, and an increasing number of domestic companies are
looking to expand there.
By setting up its base there ahead of others, it plans to increase its services
to firms with the aim of becoming a global investment bank.
After making inroads into China, Vietnam and Indonesia, Daewoo Securities is
also considering Kazakhstan as its next growth platform. It said it plans to
set up a unit there to expand services in the Central Asian region.
Hyundai Securities, meanwhile, is aiming to launch a fund investing in energy
companies in Kazakhstan by the end of this month.
Woori Investment & Securities, Korea Investment & Securities and Good
Morning Shinhan Securities are also considering expanding into Central Asia
this year.
Mirae Asset Securities plans to open offices in India this year. The company
with its sister firm, Mirae Asset Investments, plans to establish bases in the
United States. Mirae Asset Group already has units in Hong Kong, China, Vietnam
and the UK. Park Hyun-joo, the group chairman, noted in his New Year speech
that it is time to ambitiously seek overseas markets for further growth.
Woori Investment is aiming to build up networks in Southeast Asia by launching
its first global hedge fund operated in Singapore. It said the fund will invest
in a variety of products such as equities, real estate and energy, targeting
annual returns of 20 percent, according to Korea Times.
Trade and
Consumer Goods
Center
for the Development of Commercial Policy and Agricultural Technical University
conclude Cooperation Agreement
The Center for the Development of Commercial Policy at the Ministry of Industry
and Commerce of Kazakhstan and the Institute for the Development of
Professional Skills at the S. Seifullin Kazakh Agricultural Technical
University have signed a framework cooperation agreement, according to
Kazakhstan Today
The agreement was concluded to disseminate
knowledge about WTO accession and international commercial policy.
"Trade in
agricultural products is one of the main sectors of international commerce.
Therefore, cooperation between the Kazakh Agricultural Technical University and
the Center for the Development of Commercial Policy for knowledge exchanges and
training of experts in the agricultural sector is a priority," the
President of the Center for the Development of Commercial Policy, Dzhanybek
Iskakov said:
"The negotiations concerning agriculture in the context of the process of
joining the WTO, taking into account the new round of negotiations on the
liberalization of world trade between WTO members are one of the most complex
and long lasting, as agriculture plays a main role in the economy of almost all
countries of the world," he said. Bilateral negotiations with WTO member
countries for Kazakhstan's aspiration to join the WTO should be completed in
2008, according to Kazakhstan Today
Raimbek Group introducing Hypermarkets to Kazakhstan
The
Raimbek Company is introducing a format of shopping center to Kazakhstan – a
wholesale market chain.
Raimbek
plans 20 new hypermarkets in all large cities across the country, Berik
Tapyshev, general director of the Wholesale Club LLP (retail division under the
Raimbek Group) said that investments for the project would be US $500 million.
A single
wholesale location will require from US $10 to US $40 million. The estimated
period for a return on investment per site is 7 years.
These new
hypermarkets will be based on Sam’s Club and Costco in the US and the Cash
& Carry in Europe. The company will take out loans to finance the
construction. Its main partner is Bank CenterCredit.
According
to Tapishev, the first wholesale market will be opened in Almaty in the winter
of 2008. The store will offer 10 thousand types of goods – from food to
household appliances. He says that wholesales markets will help consumers
economize their time and money, with a mark up of less than 5 percent.
Raimbek Group plans to begin with 5
wholesale markets in Almaty, Biznes & Vlast reports.
New Zealand Wine comes to Kazakhstan
A
tiny Martinborough winery is toasting its first order in Kazakhstan, and Kiwis
living in the country are already eagerly awaiting their first sip from
home. The Alexander Vineyard hopes that when you ask Kazakh's what
comes from New Zealand, this is what they would say.
"The 2005 Alexander pinot is a gold medal winner, it has good body,
fruity, and is enjoyable," says Michael Finucane of Alexander
Vineyard. In what's believed to be a Kiwi wine industry first, it's being
exported to the Central Asian republic - the ninth-largest country in the
world. So far there are only 20 cases, but the vineyard is already receiving
emails from excited expatriates.
This
is some welcome news for the family operation after frosts wiped out 96 percent
of its harvest.
Despite being awarded five stars, the winery is virtually unknown in New
Zealand, but it boasts fans in Japan, America and Russia, according to TVNZ
(New Zealand).
Vestel Elektronik plans Plant in
Kazakhstan
Executive board member of the Turkish Vestel
Elektronik, Levent Hatay was quoted as saying in business daily Referans that
the company aims to grow 60-70 percent in 2008, both domestically and in
exports. It plans to open two television factories abroad, including one in
Kazakhstan, according to Reuters.
Communications and
Transportation
Astana
Airport became Second in CIS to obtain 3rd Category ICAO
Certification
The
Astana International Airport has received a certificate confirming its
compliance with ICAO Category 3 A requirements for two landing strips
simultaneously. The Civil Aviation Committee jointly with the Commission for
the Certification of Aerodromes and Equipment under the Interstate Aviation
Committee (IAC) conducted the certification.
The state-of-the-art technology introduced at the airport allows dispatchers to
identify aircraft during periods of low visibility.
This is
the second airport in the CIS following Pulcovo in Saint Petersburg to obtain
third category ICAO certification for two landing strips simultaneously. The
Domodedovo and Sheremetyevo-2, Moscow airports also have third category
certification, but with a single runway, the MTC Press Office reported.
New Port planned in Mangistau
The
Sartas Port is scheduled to be commissioned in Mangistau Oblast under the
execution of the Sartas – Teniz Port project. According to plan, a new ship
repair plant, as well as small metalwork and Ferro concrete production complexes
will be constructed.
Moreover, the port will include a ship filling station, a floating
concrete-mixing plant, and self-propelled barges for the technical maintenance
of ships. Total investments into construction are estimated at US $310 million.
According
to experts, the implementation of the project will provide for the constant
service of sea-based oilfield facilities through reducing the load on the Aktau
and Bautino ports, Khabar reported.
Some of the figures listed in the text are in
local currency – KZT (KZT). The current exchange rate is 1 USD = 120.5 KZT
For more information on topics covered in this
report as well for obtaining contact information, please contact:
BISNIS
Representative for Kazakhstan
Beibit Yerubayev
Tel/Fax: +7 (7172) 23 63 17
Mobile: +7
701 742 55 66
For more information on Kazakhstan, visit BISNIS
Online at
http://bisnis.doc.gov/bisnis/country/kazakhstan.cfm
BISNIS (www.bisnis.doc.gov) is part of the U.S. Commercial Service (www.export.gov)