Identifier
Created
Classification
Origin
06ALMATY557
2006-02-11 10:41:00
UNCLASSIFIED
US Office Almaty
Cable title:  

KAZAKHSTAN ECONOMIC AND ENERGY UPDATE

Tags:  ECON EIND ENRG EPET EFIN KZ ECONOMIC 
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UNCLAS SECTION 01 OF 02 ALMATY 000557 

SIPDIS

DEPT PASS TO EUR/CACEN MUDGE
DEPT PASS TO OPIC - BALLINGER
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER
DEPT PASS TO AID - EE-PHILLIPS/RUSHING
TREASURY FOR OASIA/VELTRI
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS
USDOC FOR 6110/ITA/TD/BI/RHALPERN
ANKARA FOR CFC

E.O. 12958: N/A
TAGS: ECON EIND ENRG EPET EFIN KZ ECONOMIC
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE
January 22 - February 4, 2006

UNCLAS SECTION 01 OF 02 ALMATY 000557

SIPDIS

DEPT PASS TO EUR/CACEN MUDGE
DEPT PASS TO OPIC - BALLINGER
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER
DEPT PASS TO AID - EE-PHILLIPS/RUSHING
TREASURY FOR OASIA/VELTRI
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS
USDOC FOR 6110/ITA/TD/BI/RHALPERN
ANKARA FOR CFC

E.O. 12958: N/A
TAGS: ECON EIND ENRG EPET EFIN KZ ECONOMIC
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE
January 22 - February 4, 2006


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.

-- Law on Private Entrepreneurship Signed
-- Kazakhstan to Invest in Adzharia
-- Samruk is a New National Holding Company
-- ATF Bank to Buy Valut-Tranzit Bank
-- Special State Agency For Almaty Financial Center
-- Protocol on North-Caspian Sea Border Amended
-- KMG First Vice-President Appointed
-- KMG Takes $800-Million Loan for North-Caspian Project
-- Oil Production January 2006


Law on Private Entrepreneurship Signed
--------------


2. The presidential press service reported that President
Nazarbayev signed the law "On Private Entrepreneurship" on
January 31. This law regulates relations between physical
and various legal entities; prescribes such categories of
government activity as state administration, state control
and state support; introduces mandatory accreditation of
entrepreneurs' associations and unions; and determines
functions of expert councils under central and regional
government bodies. (Kazakhstan Today, January 31)

Kazakhstan to Invest in Adzharia
--------------


3. Chairman of the Adzharia's Government Levan
Varshalomidze announced that Kazakhstan's investors intend,
in the next three years, to pour at least $100 million into
tourism infrastructure in Adzharia; the investments would
flow into the renovation of 21 hotels, health resorts and
holiday camps. The Kazakhstan Investors Consortium, with
Bank TuranAlem as the operator, is managing this investment
project. According to the investors' plan, in 2007 three
Batumi hotels will be put into operation, with renovation of
health resorts and holiday camps to be launched

simultaneously. (Interfax, January 26)

Samruk is a New National Holding Company
--------------


4. President Nazarbayev signed a decree on the
establishment of the Samruk National Holding Company JSC,
which is intended to manage the state's shares in national
companies and state-owned enterprises. Sauat Mynbayev, who
has been appointed acting executive director of Samruk
Holdings, confirmed that the charter capital of the new
company would include state shares in Kazakhtelecom,
Kazpost, and KEGOC, the national electrical grid operator.
Mynbayev said the holding company "will approve budgets and
investments for national companies, monitor their activity,
consult the government on the companies' corporate finance
issues, and play an active role in their long-term
strategy." (Interfax-Kazakhstan, February 1)


ATF Bank to Buy Valut-Tranzit Bank
--------------


5. "The management of ATF Bank held successful talks with
the shareholders of Valut-Tranzit Bank on the acquisition of
a controlling stake. The parties agreed on plans for future
development of Valut-Tranzit Bank and for its further
capitalization," an ATF Bank press release reads. ATF Bank
is Kazakhstan's fourth largest bank in terms of assets;
Valut-Tranzit Bank is a mid-sized bank with headquarters in
Karaganda. (Interfax-Kazakhstan, February 3)

Special State Agency for Almaty Financial Center
-------------- ---


6. According to the President's Decree, the Agency for
Regulation of the Regional Financial Center in Almaty (RFCA)
was established as a central executive body outside of the
Government of Kazakhstan. The RFCA is expected to
facilitate the development of the Regional Financial Center
in Almaty. RFCA will be delegated functions from a number
of ministries, including tasks on state registration of
legal entities, taxation, labor control, and visa support.
(Interfax-Kazakhstan, February 6)

Protocol on North-Caspian Sea Border Amended
--------------


7. On January 25 in St. Petersburg, Kazakhstan's President
Nazarbayev and Russia's President Putin signed amendments to
a protocol of the Agreement on the Delineation of the North
Caspian Seabed. According to both governments, the final
protocol will facilitate joint development of the
Kurmangazy, Tsentralnoe and Khvalynskoe oil fields, all
located near the delineation line. The agreement on the
Caspian division (1998) and protocol to the agreement (2002)
defined geographical coordinates for division of the Caspian
seabed and established Kazakhstan's jurisdiction over the
Kurmangazy structure and Russia's jurisdiction over the
Tsentralnoe and Khvalynskoe fields. (Kazakhstan Today -

SIPDIS
Kazakhstan, January 26).

KazMunayGaz First Vice-President Appointed
--------------


8. On January 31 Zhaksybek Kulekeyev was appointed as First
Vice-President of the national oil and gas company
KazMunayGaz (KMG). Kulekeyev, 48 years old, worked most
recently as Head of the State Management Academy under the
President. Before that appointment, he was the Minister of
Education and Science. KMG's previous First Vice-President,
Timur Kulibayev, resigned in late October 2005, reportedly
to head "KazEnergy," a new association created to represent
the interests of energy and power companies before the
government. KMG also established a new position - Managing
Director for Oil Refining and Petrochemistry. Saduokhas
Meraliev, who previously worked as Managing Director of the
KMG Technical Development Department, was appointed to this
position. (Interfax - Kazakhstan, February 1)

KMG Takes $800 mn Million Loan for North-Caspian Project
-------------- --------------


9. On January 29 KazMunayGaz obtained an unsecured loan of
$800 million from western banks to fund the North-Caspian
Project (Kashagan). The period of the loan is 15 months
(with a possibility to extend it to 18 months). The leading
organizers of the loan were Citigroup, BNP Paribas, and
Societe Generale. At the moment Kashagan project
participants are Eni, Total, ExxonMobil, and Shell (18.52%
ownership each),ConocoPhillips (9.26%),and Inpex and KMG
(8.33% each). (Interfax - Kazakhstan, February 3)

Oil Production January 2006
--------------


10. According to preliminary GOK data, Kazakhstan produced
5.0 million tons of oil and gas condensate in January, 5.8%
lower than during the same period of 2005. The figure
includes 0.5 million tons of condensate, up 12.3% year-on-
year. (Interfax - Kazakhstan, February 7)

ORDWAY