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The latest Kazakhstan business news is provided by East West Business Reports, which regularly publishes the KAZAKHSTAN BUSINESS REPORT and associated special reports.
KAZAKHSTAN BUSINESS REPORT
A Publication of East-West Business Publications 515 Madison Avenue New York, New York
© 2001 East-West Trade Publications eastwesttradereports@email.com
May 15, 2001 Vol. 1 Issue 1
Kazakhstan Foreign Investment Climbs
Sharply in 2000
Kazakhstan received over USD 2.751 billion in foreign direct investment in the year 2000, 48.7% more than in 1999 and twice the amount of investment in 1998, according to figures released by the National Statistics Agency announced.
Roughly one third of the investment, USD 993.4 million, was received from US-based investors, while British and Italian companies invested USD 462.2 million and USD 351 million last year, respectively. These largest investing countries were followed by Russia, whose firms spent USD 163.2 million in Kazakhstan, Canada at USD 144.9 million and the Netherlands with USD 109.9 million in investment.
Parliament Approves Budget Amendments
The Kazakhstani Parliament has passed the second reading of a package of amendments to the 2001 state budget. Of the KZT 25 billion in higher-than-expected budget revenues, deputies agreed to direct KZT 13 billion to the charter capital of the National Development Bank. The remaining KZT 12 billion will be earmarked to provide subsidies for the agricultural sector, as well as to address the defense needs to reinforce the country's southern border.
At the request of deputies, the government agreed to reduce its request for the amount of the surplus to be directed to the National Development Bank from KZT 15 billion to KZT 13 billion. That KZT 2 billion will be used to assist newly repatriated Kazakh immigrants, fund the development of Taldykorgan, the recently named capital of Almaty oblast, and to pay compensation to those still suffering from the after-effects of nuclear testing at Semipalatinsk.
During the fall session of parliament, deputies plan to address the issue of raising funding for social programs, including pensions and disability allowances.
Karachaganak Oil Field Starts Drilling
Officials have confirmed that the giant Karachaganak project will begin drilling its first oil on schedule within a week. The joint operation , which combines BG Plc, ENI, Texaco and Lukoil has been in operation since 1998. Karachaganak ranks with Tengiz and Kashagan as the country’s three largest oil projects.
Output at Karachaganak last year was 90,000 tons. This is slated to rise to 155,00 T by the end of 2003, with the completion of facilities and full use of the pipeline to Novorossiisk. Also, by 2003, annual gas output is scheduled to increase to 10 billion cubic meters
KazTransOil Plans Eurobond Issue
The state-owned KazTransOil has announced plans to float a million Eurobond issue, following the securing of its credit rating which is expected later this month. JPMorgan has been chosen to manage the issue.
Established in 1997, KazTransOil manages over 6,400 km of oil pipelines and 3,140 km of water pipelines. It transports about 80% of the country’s oil output.
The funding is earmarked for a new pipeline project to link oil producers in the country’s northwestern Aktobe region with the Caspian Pipeline Consortium (CPC) network. The multinational CPC pipeline, linking the giant Tengiz oil field in western Kazakhstan with Russia's Black Sea port of Novorossiisk, was launched in March. KazTransOil now plans to link several oil deposits in the Aktobe region with the CPC line.
KazTransGaz Forms Holding Company
KazTRansGaz, the state-owned gas transport company, has established a new holding company to manage the company expanding assets. Founded in 2000, KazTransGaz manages all Kazakhstan's three mainline gas pipelines with a combined length of 9,000 km.
It has been confirmed that KazTransGaz will remain in state hands, while its numerous affiliates might be allowed to attract investment capital by issuing bonds and other securities. Timur Kulibayev, chairman of KazTransOil, is slated to become president of the new holding company.
Pension Assets Grow Roughly USD 46 Million in March
The total net assets of Kazakhstan's pension funds grew from UDS 835.4 million to USD 881.4 million (according to the average weighted stock exchange rate of exchange) during the month of March.
Kazakhstan's pension reforms aim generally at gradually replacing the old Soviet egalitarian system with a new scheme based on a person's own contributions to a private account. The republic's pension system consists of 14 private funds and seven asset management companies.
The funds have also emerged as some of the most important investors in Kazakhstan's nascent financial markets. Kazakhstani funds have invested 56.37% of their assets in Kazakhstani Eurobonds and another 19.14% in the corporate paper of domestic companies. Another 6.42% has been invested in state T-bills and central bank notes.
First Quarter Oil Output up 19.5%
Oil production in Kazakhstan rose 19.5% in the first quarter of 2001 to total 8.392 million tons, up from 7.022 million tons a year earlier, Dow Jones Newswires reported citing the national Statistics Agency.
Kazakhstan's gas condensate output also posted strong 10.1% year-on-year growth in the first quarter to total 1.348 million tons.
Gasoline production in the republic increased 8.2% during the January-March 2001 period and totaled 329,000 tons, while gasoil output rose 5.9% during the reported period to total 462,000 tons. Natural gas extraction increased by 6.2% to total 3.136 billion cubic meters during the reported period. Fuel oil output fell by 0.9% to 503,000 tons during the reported period.
New Land Law
Kazakhstan’s New Land Law has been in operation for three months. The law made minor amendments in the prior 1996 law for personal and corporate land ownership. The new law failed to introduce full private ownership of agricultural land. However, the law does permit full private ownership of land for residential and industrial use.
The New Land Law prohibits foreign ownership of land for residential construction and restricts land leases for agricultural purposes to a maximum of 10 years. Foreign ownership of land used for industrial and commercial buildings is permitted.
The law permits short term leases (up to 5 years) and long term leases to a maximum of 49 years (the prior limit had been 99 years)
National Oil Fund Established
President Nazarbayev , by decree, has established the National Oil Fund in order to regulate the fluctuations in government revenues stemming from Under the order, the fund is to invest in foreign equity securities. Capital for the fund will be drawn from corporate income taxes, VAT proceeds, royalties, bonuses and revenues realized from production sharing agreements.
The Oil Fund will be managed by the National Bank and a governing board chaired by President Nazarbayev. Other members of the Fund will include the Prime Minister, Deputy Prime Minister, Chairman of the National Bank, Chairmen of Both Chambers of Parliament, Chief of Presidential Administration, Finance Minister, Chairman of the State Budget Control Committee.
Kazakhstan Increases Crude Production
The Government is continuing with its plans to increase crude supplied to domestic refineries. The goal is to expand oil and gas production by 125% in 2001. Under the plan, shipments to local refineries are targeted to be ahead by about 40% or ▲ 5.5M barrels over last year.
Kazakhstan produced 35.5 million tons of crude oil and gas condensate in 2000. This year's total output is set to rise to 40 million tons
Kazakhstan Confirms Fall of Unemployment
The Government has reported that the country’s unemployment fell last year from 13.5% to 12.8%. These figures include citizens who are unemployed although not registered with the regional unemployment centers. Only about one third of unemployed citizens register with the government. It has been estimated that about 275,00 new jobs were created during 2000, compared with the forecast of 146,000. The Government is projecting that the unemployment rate will fall to 11.5% by the end of 2001.
The government is pursuing [programs to boost employment through developing new incentives for foreign investment to create additional, high paying jobs. . In addition, the country is seeking to strengthen laws to protect the domestic labor market.
New York Times Reports AES Problems
In a widely circulated article highly critical of business conditions in Kazakhstan, the New York Times has reported that US energy company, ASE Corp., has found it difficult to pursue its project in Ekibastuz.
AES reports investing some million in purchasing and modernizing a 16 year old coal-fired generating plant supplying energy in the northern part of the country. The company also bought the rights to operate two thermal plants and four hydroelectric plants near Ust-Kamenogorsk in eastern Kazakhstan.
AES claims to have had continuing problems with regulators, who have blocked rate increases limiting revenues. At present, AES sells electricity for 0.6 cents a kilowatt hour in Kazakhstan, cited as one of the lowest rates in the world. Customers are described as being unaccustomed to paying anything for electricity. AES also complains of encountering constant demands for bribes.
The article also include a lengthy report on the US investigation of the bribery allegations made involving million of payments made to the Kazakh partners of Tractebel SA, the energy arm of the French conglomerate Suez Lyonnaise des Eaux SA.
Kazakhstan Business Briefs:
Confirming progress being made in Kazakhstan, the World Bank has confirmed plans to post a new representative to Kazakhstan. The agency will move its office to Astana.
Kazakhstan April Inflation Total was 1.7%
OIL & GAS
Eni has announced an oil find at west Kashagan Test Well…
Also, Russia’s Termneft oil company is seeking to join west Kazakhstan oil projects
BANKING
Kazkommertsbank has reported a 32% growth in net profit in 2000. The figures were included in the bank’s the bank’s financial statement filed with the Kazakhstan Stock Exchange.
Kazkommertsbank’s assets grew by 51.8% last year to total over KZT 110 B at year-end. The growth in assets was credited to increases in the credit portfolio ▲ KZT 20.5 B, deposits ▲ KZT 9.5 B and the bank’s securities portfolio ▲ KZY 8.8 B. The value of other assets was ▼ KZT 1.2 B.
Temirbank It has also confirmed that it has not in any merger talks
MANUFACTURING & METALS
A new PVC pipe plant has been opened in Stepnogorsk
TRANSPORT & COMMUNICATIONS
Government is considering plans for the construction of a Kostanay-Aktobe rail line.
PRESIDENTIAL AND CABINET OF MINISTERS APPARATUSES
Note that government personnel and also addresses/phones change frequently. Phone numbers for entities located in Astana are often in Almaty)
In Astana: the new national capital, the main address of the national government of Kazakhstan is 11 Mira Street, Astana 473000, Republic of Kazakhstan.
KEY KAZAKHSTAN GOVERNMENT OFFICIALS AND CONTACTS
President, Republic of Kazakhstan: Nursultan Abishevich Nazarbayev
Office of the President
Pl. Respubliki 4
Astana 480091
Tel: 00 7 3272 62 3016
62 77 58
Fax: 7- 3272-6395-95/63-76-33
Ambassador to the United States from the Republic of Kazakhstan Kanat Bekmyrzaevich Saudabaev
First Secretary – Aslan Sarinzhipov
Commercial Counsellor – Mainura Murzamadieva
Presidential Offices in Almaty
General Address in Almaty: Republic Square, 480091, Almaty
-- President's Office - Tel: 62-30-16
-- President’s Representative to Legislature – Zholymbet Baishev
-- Head of President’s Administration - Sarybay Kalmurzaev Tel: 53-45-30
-- Deputy Head of President’s Administration – Yerzhan Utembayev
Chief of Protocol, Zhanseit Tuynenbaev
-- President’s Press‑Secretary (reception) – 62-06-30 tel/fax
-- Reception of citizens - Tel: 62-39-49
-- Official Correspondence Sector - Tel: 63-57-59
-- Chief Specialist – 62-21-15, 62-6- 31
-- Inquiry Office - Tel: 62-53-00
Presidential Administration
Agency for Strategic Planning, Chairman Kairat Nematovich Kelimbetov (former head of president’s socioeconomic planning department)
Ul. Mira 2, Astana
Tel: 32-64-44, 32-62-28
National Security Council
Chairman: Marat Tazhin
Prime Minister Kasymzhomart Tokaev
Prime Minister’s Office (Almaty)
Tel: 62-30-97
Republic Square, Almaty, 480091
Functions: represents cabinet in intergovernmental relationships, attraction of foreign investments, export controls, environment and natural resource usage. Coordinates law and order agencies, development of Astana. Direct control over ministries of Foreign Affairs, Internal Affairs, Justice, Natural Resources and Environmental Protection and Agency for Investment.
Director of the PM's Office: Altay Ablaevich Tleuberdin (ex-Anti-Monopoly Committee Chair, ex-PM Balgimbaev’s Chief of Administration), Oversees Agency for Protection of State Secrets and State arms export enterprise Karu-Zharak.
Office, Cabinet of Ministers
Dom Pravitelstva
Pl.im VI Lenina
Astana
Tel: 7-3272-62-79-66
Fax: 7-3272-63-47-88
Deputy Prime Ministers
First DPM Daniyal Akhmetov: responsible for issues of operational management of the economy, regional development, Industry, Agriculture, Development of the new Astana City Center and coordination of CIS relations. Direct control over ministries of Culture, Information and Public Accord, Education and Science, also over the Agency for Regulation of Natural Monopolies, Protection of Competition and Support of Small Businesses; Agency for Emercency Situations, Agency for Tourism and Sport, and Healthcare Agency.
DPM Vladimir Shkolnik: also Minister of Energy and Mineral Resources, has responsibility for oil/gas, mining and electric power sectors.
DPM Imangali Tasmagambetov: former Akim of Atyrau, oversees social issues, education, culture, science, healthcare, interethnic relations and demographic policy.
DPM Uraz Dzhandosov: responsible for finance and macroeconomic issues, including relations with the international financial institutions.
MINISTRIES OF THE REPUBLIC OF KAZAKHSTAN
Minister without Portfolio: Aitkul Baigazeyevna Samakova (Chairman, National Commission on Family and Women’s Issues)
Ministry of Finance
Minister: Mazhit Esenbaev (former Akim of Karaganda, prior presidential tax policy chief)
Deputy Minister Anvar Saidenov
Deputy Minister for Social Issues: Natalya Korzhova
97 Abylay Khan Av.
Astana 480091
Tel: 3272-62-40-75, 28-00-65
Fax: 3272-62-27-70
Committee of State and Financial Control, 3/95 Ablai Khan Ave., R: 453/4, Almaty Tel: 62-04-32, Fax: 62-29-65
Ministry for Foreign Affairs
Minister Yerlan Abilfaizovich Idrisov
Tel: 32-76-69
Mira str, 10
Astana 480091
Ministry of Energy and Mineral Resources (former Ministry of Energy, Industry and Trade)
Minister Dr. Vladimir Sergeyevich Shkolnik (also Deputy Prime Minister and President, Academy of Sciences)
Bolat Elemanov, First Deputy Minister (former Investment Agency deputy chairman) in charge of licensing procedures and subsurface use contracts
Nurlan Kapparov, DMin. oversees oil industry issues
Uzakbay Karabailin, DPMin. (former KazTransGas Director) oversees gas production, processing, and transportation and will be in charge of supervising the development of the Amangeldy gas field in Zhambyl Oblast
Petr Nefedov, DMin. in charge of overseeing the mining sector
Director of Oil and Gas Department Kanat Bozumbaev
142 Bogenbay Batyr St.
Astana 480091
Tel: 7-3272-62-64 - Almaty
Fax: 7-3272-62-66-30 – Almaty
Main Administration for Mineral Resources (Kazgosnedra)
85 Dostyk Ave. Almaty
Tel: 63-36-58, fax: 63-88-70
State Commission for Natural Resources Reserves (tel: 639531)
Committee for Geology and Sub-soil Security (same address, Tel: 633658, fax: 611609)
Ministry includes also committees for Nuclear Power and Aerospace
Ministry of Energy and Mineral Resources
In Astana
Tel: 7 (3172) 33‑72‑20
Fax: 7 (3172) 33‑71‑64
Ministry of Transport and Communications
Minister Karim Masimov
Tel: (3172) 32-62-77, fax 32-16-96 - Astana 480091
Tel: 7 (3172) 32‑63‑36
Fax: 7 (3172) 32‑10‑58, 32‑49‑50
Deputy Minister: Kabibula Jakupov (wx-West Kazakhstan Akim), in charge of road construction.
Department of Civil Aviation
Tel: 7 (3172) 32‑42‑56
Fax: 7 (3172) 32‑42‑25
Contact: Mr. Bulat Karimov, Head of the Department
Ministry of Agriculture
Minister Sauat Mkhamedbaevich Mynbaev (also presidential advisor)
Tel: 32 37 63 - Astana
State Grain Company Gosprodkorporatsiya – President, Nurlan Smagulov
Ministry of Economy (former Agency for Economic Planning)
Minister Zhaksybek Abdrakhmetovich Kulekeev (formerly head of statistics)
115 Zheltoksan St.
Astana 480091
Tel: (Almaty) 7 3272 62-65-00
Fax: (Almaty) 7 3272 6- 66-05
Note: National Agency for Statistics, 125 Abai Ave. Almaty 480008, Tel: 62-13-23
Note also: Administration for Statistics and Analysis, 44 Markov St., Almaty, Tel: 64-05-12, 64-49-30
Ministry of State Revenue (new)
Minister: Zeynulla Kakimzhanov (ex-Chairman of Halyk Bank)
First Deputy Minister Rakhat Aliev, also Chairman of the Tax Police
Note: Tax Committee of the Republic of Kazakhstan, Pushkin Str. 166, Astana, Tel: 750522, 753022
Ministry of Natural Resources and Environmental Protection
Minister: Andar Mauleshevich Shukputov
Astana
Includes Committee for Forestry (Almaty Tel: 637323, Fax 631933, 502397), Fishing (Almaty Tel: 635995, Fax 631377) and Hunting, Committee for Water Resources (except irrigation, Astana tel 241428)
Ministry of Education and Science
Minister: Nuraly Sultanovich Bekturganov
Includes Committee for Higher Secondary and Vocational Education
Tel: 61 03 33 - Astana
Ministry of Justice
Minister: Igor Rogov
Tel: 32 15 44 - Astana
General Prosecutor: Rashid Tusupbekov
Ministry of Labor and Social Protection
Minister: Alikhan Baimenov
Tel: 26-33-27 - Astana
Ministry of Culture, Information and Public Accord
Minister: Altynbek Sarsenbaevich Sarsenbaev
Tel: (3172)32 24 95 Astana
Ministry of Defense
Minister: Sat Besimbaevich Tokpakbaev (former Commander, National Guard)
Tel: 328081 – Astana
Ministry of Interior
Minister: Bolat Ishakov
First Deputy Minister: Kairbek Suleimenov
STATE COMMITTEES, OTHER AGENCIES AND DEPARTMENTS
Central Bank of Kazakhstan
Chairman Grigoriy Marchenko
New Bank (March 2001) Nauryz-Kazakhstan, Chairman Urazaly Erzhanov
Temirbank change (March 2001): Acting Chairman Erlan Tatishev
State Budget Control Committee
Chairman Musiraly Smailovich Utebaev
National Railroad System (Temir Zholy): General Director – Ablay Myrzakhmetov
Agency for Regulation of Natural Monopolies and Defense of Competition and Support of Small Business
Chairman: Berik Mazhitovich Imashev
Agency for Health Care (new)
Chairman: Mariya Omarova
Astana
Tel: 61-03-33
State Committee on Privatisation
Maksutbek Rakhanov
66 Kazybek bi
Astana 480091
Tel: 7 (3272) 62-85-39 (Almaty)
Fax: 7 (3272) 62-32-80
National Securities Commission
Chairman, Azamat Joldasbekov (new)
Tel: 63‑89‑49
State Customs Committee
Chairman Maratkali Nukenov
Committee for Standardization, Metrology and Certification
Chairman Kerim Primakulov
Tel: 7 (3272) 21-08-08, fax: 21-48-45, 28-68-22
83, Altynsarin Ave, Almaty
Center for Standardization, Metrology and Ecology of the Ministry of Agriculture
38 Dostyk Ave., Almaty
Tel: 61-95-40
Administration for Sanitary and Epidemicological Affairs
84 Auezov St., AlmatyTel: 43-26-55, fax: 43-16-66
Agency on Tourism and Sport (new)
Chairman: Bakytbek Bimanbetov
Astana
Agency of Land Resource Management
Chairman: Bakyt Ospanov
Astana
Tel: 32-02-11
Committee for National Security
Chairman: Alnur Musaev
108 Nauryzbai Batyr St.
Almaty 4800091
Tel: 693605, Fax: 639626
National Agency for Press and Information Affairs
13 Republic Square, Almaty 480013
Tel: 639397, 635284, 639000, 639317
State Central Archive: Inquiry Office
156 Tole bi St. at corner Aitiyev St. , Almaty
Tel: 684096, 684647, 684960, 684315
State Agency on Copyrights and Related Rights
Note National Patent Fund at the Republic’s Scientific Technical Library, 53 Satpayev St., Almaty. Tel: 431722, Head Office 682679,
PARLIAMENT OF THE REPUBLIC OF KAZAKHSTAN
Oralbay Abdykarimov
Chairman of Senate
Tel: 63-52-92
480091, Almaty
Majilis: Lower House of Parliament
Chairman Zharmakkhan Tuyakbay
Tel: 62-30-56, -fax: 50-13-54
480091, Almaty
ALMATY AND OTHER REGIONS
Almaty Oblast Akim: Zamanbek Nurkadilov
Note: Almaty Oblast Administration to move to Taldykorgan summer 2001
Almaty Akim (Mayor): Khrapunov
Committee for Foreign Economic and Cultural Relations of Akim’s Administration
74-A Ablai Khan Ave., Almaty
Tel: 62-41-45, fax: 62-13-72
Atyrau Akim – Serikbek Daukeyev
Karaganda Akim – Kamaltin Eskendirovich Mukhamedzhanov
North Kazakhstan Akim – Kazhmurat Ibrayevich Nagmanev (formerly in presidential organizational control cabinet)
West Kazakhstan Akim – Krymbek Kusherbaev
South Kazakhstan Akim – Berdibek Saparbaev (formerly Kyzl Orda Akim)
Shymkent City Akim (Mayor) – Bulat Zhilkishev, Deputy Akim – Petro Gusev
East Kazakhstan Akim – Vitaliy Mette
Pavlodar Akim – Galymzhan Zhakiyanov
Mangistau Akim – Lyazzat Kiinov
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