KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, MARCH 8 - MARCH 21,

UNCLAS SECTION 01 OF 02 ASTANA 000722

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E.O. 12958: N/A
TAGS: ECON EIND ENRG EPET EFIN KTDB KZ
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, MARCH 8 - MARCH 21,
2008


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1. Summary: This information is drawn primarily from the
Kazakhstani local press, and has not been verified for accuracy.

-- $1 Billion Loan for Kazakhstan Development Bank
-- New Appointments at FSA
-- MangistauMunayGas Appeals Energy Ministry Decision
-- Karachaganak Consortium Faces Environmental Fine
-- Petrolinvest to Merge Two Kazakhstani Companies
-- Energy Statistics for January-February 2008

$1 Billion Loan for Kazakhstan Development Bank
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2. The state-owned Kazakhstan Development Bank (KDB) has received a
$1 billion syndicated loan on the international markets, according
to a KDB press release. The loan was extended by a group of banks
including Credit Suisse, ING, HSBC, SMBC, Bayern LB, and the China
Development Bank. The Kazakhstan Development Bank is one of several
institutions operating under the umbrella of the state-owned Kazyna
Sustainable Development Fund. (Interfax-Kazakhstan, March 11)

New Appointments at FSA
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3. Alina Aldambergen and Kuat Kozahkkhmetov have been appointed
co-deputy chairpersons of Kazakhstan's Financial Supervision Agency
(FSA). Prior to this appointment, Aldambergen worked as the Deputy
Chairperson of the Almaty Financial Center Agency, and Kozhakhmetov
served as Chairman of the Managing Board of Tsesna Bank. Former FSA
Deputy Chairman Gani Uzbekov was simultaneously dismissed and
transferred to another, unnamed position. (Interfax-Kazakhstan,
March 14)

MangistauMunayGas Appeals Energy Ministry Decision
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4. MangistauMunayGas(MMG),which is owned by Central Asia Petroleum
Ltd. of Indonesia, filed an appeal with the Almaty economic court
against the results of a January 2008 inspection conducted by the
Energy Ministry. The Energy Ministry accused MMG of failing to meet
its investment obligations, and thus causing a $72.2 million loss to
the state budget. (Liter newspaper, March 14)

Karachaganak Consortium Faces Environmental Fine
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5. A Kazakhstani court fined a group of Western energy majors
developing the Karachaganak gas field $15 million for environmental
damages. Kazakhstani authorities accused the Karachaganak Petroleum
Operating (KPO) consortium of unauthorized gas flaring. KPO denied
any wrongdoing and is challenging the fine. (Reuters, March 19)


6. KPO reached an important milestone on March 10. It loaded its
200 millionth barrel of oil into the Caspian Pipeline Consortium
(CPC) pipeline. (KPO press release, March 11)

Petrolinvest to Merge Two Kazakhstani Companies
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7. Polish oil company Petrolinvest plans to merge two Kazakhstan's
engineering and servicing companies, Caspian Services (CS) and
KazakhstanCaspiShelf (KCS) after completing its acquisition of them
over the coming months. (Interfax-Kazakhstan, March 12)

Energy Statistics for January-February 2008
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8. Kazakhstan produced 5.567 billion cubic meters of gas (including
dry natural gas, liquefied natural gas, and natural gas liquids)
during the January-February 2008 period -- which represents a 15.8%
increase year-on-year. Dry natural gas production rose 20.2%
year-on-year to 3.224 bcm. (Interfax - Kazakhstan, March 20)


9. According to the National Statistics Agency, coal production for
January-February grew 18.4% year-on-year to 18,903.9 tons.

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Electricity production rose 11.5% to 15,756.3 million
kilowatt-hours. (Interfax - Kazakhstan, March 21)

ORDWAY