KAZAKHSTAN ECONOMIC AND ENERGY UPDATE; APRIL 2 -

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TAGS: ECON EIND ENRG EPET EFIN KZ
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE; APRIL 2 -
15, 2006


ALMATY 00001444 001.2 OF 002



1. Summary: This information is drawn primarily from the
Kazakhstani local press, and has not been checked for
accuracy. The opinions and policies expressed in this
report are those of the authors, not the U.S. Government.

-- Samruk Board of Directors Formed
-- New Environmental Protection Minister Appointed
-- Kazakhstani E-government Portal Launched
-- Bank TuranAlem to Become More Transparent
-- Kazakhtelecom to Strengthen Its Market Position
-- TCO's General Director Changed
-- Kurmangazy Operator Starts Drilling First Well
-- Basell, KMG, SAT Sign MOU for Petrochemical Complex
-- Russia-China Pipeline Might Go through Kazakhstan

Samruk Board of Directors Formed
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2. On April 7, Prime-Minister Akhmetov signed a decree
forming the Board of Directors of the National Holding
Company Samruk. It names the following members: Deputy
Minister of Economy and Budget Planning Bolat Palymbetov,
Deputy Minister of Finance Askar Yelemessov, former Minister
of Industry and Trade Sauat Mynbayev (named Samruk Executive
Director),and current Halyk Bank Board Chair Alexander
Pavlov (named Samruk Independent Director). Timur Kulibayev
was appointed Deputy Executive Director. Kulibayev, 39,
President Nazarbayev's son-in-law, resigned from the
position of the First Vice-President of national oil company
KazMunayGaz in late October 2005. (Interfax - Kazakhstan,
April 12)

New Environmental Protection Minister Appointed
-------------- --


3. President Nazarbayev signed a decree on the appointment
of Nurlan Iskakov as the Environmental Protection Minister
of Kazakhstan. Prior to this, Iskakov worked in the
Presidential Administration and was Deputy Minister of
Environment Protection. Former Minister Kamaltin
Mukhamedzhanov held this position from January to March 2006
and was dismissed upon his own request. (Interfax -
Kazakhstan, April 3)

Kazakh E-government Portal Launched
--------------


4. The State Agency for Informatization and Communications
launched an e-government web portal (www.e.gov.kz),the
Agency's press service reported. The project was
implemented within the framework of the State Program for
Setting up E-government in 2005-2007. (Interfax -
Kazakhstan, 13 April)

Bank TuranAlem to Become More Transparent
--------------


5. Kazakhstan's Bank TuranAlem (BTA) and Financial
Supervision Agency (FSA) signed a memorandum on Cooperation
in Promoting Transparency of BTA Operations. "The
memorandum is aimed to meet legislative requirements and to
increase the level of public trust to the banking system,"
the bank's press release reads. Per this agreement, BTA
"voluntary assumes obligations to divulge information on the
bank's owners, reveal the list of organizations controlled
by the bank as well as information on representatives of
shareholders and independent executive directors in the
board, banks' development strategy and priorities."
(Interfax - Kazakhstan, April 11)

Kazakhtelecom to Strengthen Its Market Position
-------------- --


6. Kazakhtelecom shareholders approved transactions to
acquire a 100% share of Mobile Telecom Service, an

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additional 50% share of Altel, and 54% of Nursat, in
exchange for $220 million, Kazakhtelecom announced.
According to this information, Kazakhtelecom stockholders
already approved the new company's charter and new internal
corporate rules. Kazakhtelecom previously held 50% in
Altel, while Wireless Technology Corporation owned the other
50%. After wrapping up the deal, Kazakhtelecom will become
a 100% owner of Altel. (Interfax - Kazakhstan, April 7)

TCO's General Director Changed
--------------


7. On April 1, Todd Levy was named new General Director of
TengizChevrOil (TCO) TCO's press-service reported. Before
this appointment, Levy was Chevron's Operations General
Manager in the Gulf of Mexico. Earlier Levy took part in
various projects in Angola, Australia and Australasia.
TCO's former General Director Alexander Cornelius, will
assume a position as Vice-President in one of Chevron's
companies in the U.S. (Interfax - Kazakhstan, April 10)

Kurmangazy Operator Starts Drilling First Well
-------------- -


8. On April 12, Kurmangazy Petroleum (a subsidiary of
KazMunayTeniz, KazMunayGaz's subsidiary),the operator for
the development of the Kurmangazy structure in the Caspian
Sea, started drilling its first exploration, the press-
release announced. According to the statement, Lukoil Shelf
Limited is the drilling subcontractor. The work cycle to
drill a well to a design depth of 2,000 meters lasts 78
days. Sea depth at the drilling site is about six meters.
The project is being undertaken on a parity basis by
KazMunayTeniz and RN-Kazakhstan, Rosneft subsidiary.
Kurmangazy PSA was signed on July 6, 2005.
(KazMunayTeniz/RN Kazakhstan press-release, April 12)

Basell, KMG, SAT Sign MOU for Petrochemical Complex
-------------- --------------


9. On March 27, Basell has signed a Memorandum of
Understanding (MOU) with KazMunayGaz Exploration &
Production (KazMunayGaz's operating subsidiary) and
SAT&Company (privately owned conglomerate with industrial,
commercial and service activities) confirming its intention
to construct and operate a new petrochemical project in
Kazakhstan. The project is expected to include an ethane
extraction unit in Kulsary and an integrated petrochemical
complex in Atyrau. The planned petrochemical complex
includes an ethane cracker and polyethylene facilities, as
well as a propane dehydrogenation unit and polypropylene
facility. Start up is planned for 2010. In addition to
providing technology, sales, and marketing services, Basell
intends to participate directly as a shareholder in the
project. (Basell press-release, March 31)

Russia-China Pipeline Might Go through Kazakhstan
-------------- --------------


10. On April 4, following discussions with Russian
President Putin, Kazakhstan's President Nazarbayev announced
that the two presidents had "discussed the possibility that
Western Siberian oil would transit Kazakhstan for delivery
to China. It is possible to develop a similar route for
both a gas pipeline and electric power. All these tasks are
solvable." (RIA News - Russia, April 4)

ORDWAY