Identifier
Created
Classification
Origin
09ASTANA1170
2009-07-13 08:10:00
UNCLASSIFIED
Embassy Astana
Cable title:
KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, JUNE 21-JULY 4
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UNCLAS SECTION 01 OF 02 ASTANA 001170
SIPDIS
STATE FOR SCA/CEN, EEB/ESC
STATE PASS TO USTDA
E.O. 12958: N/A
TAGS: PGOV ECON EPET EINV EFIN KZ
SUBJECT: KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, JUNE 21-JULY 4
UNCLAS SECTION 01 OF 02 ASTANA 001170
SIPDIS
STATE FOR SCA/CEN, EEB/ESC
STATE PASS TO USTDA
E.O. 12958: N/A
TAGS: PGOV ECON EPET EINV EFIN KZ
SUBJECT: KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, JUNE 21-JULY 4
1. SUMMARY: This information is drawn primarily from the
Kazakhstani local press and has not been verified for accuracy.
-- Banking Sector News
-- GE Locomotive Assembly Plant Opened in Astana
-- KazMunaiGas Acquires Rompetrol Group
-- Kazatomprom Launches Semizbay Mining Project
-- KMG E&P Bids on Iraq Oil and Gas Fields
-- Kenkiyak-Kumkol Pipeline Completed Ahead Of Schedule
BANKING SECTOR NEWS
2. According to a June 26 BTA Bank press release, BTA's losses
confirmed by the international audit company Ernst and Young for the
first five months of 2009 totaled 1.413 trillion tenge ($9.39
billion). (NOTE: The audit incorporated findings from 2008 bank
activity which had not been fully accounted for to date. END NOTE.)
BTA claims these losses were the result of bad loans made by former
management and that despite the losses, the bank has sufficient
liquidity to continue normal operations.
3. Russian Central Bank Governor Sergey Ignatyev would not
specifically comment on the possible purchase of BTA by Russia's
Sberbank during a June 26 statement in Moscow. According to
Ignatyev, who also chairs the Sberbank Supervisory Board, due
diligence on BTA has not yet been completed, but it appears that the
big bank still has big problems.
4. Kazakhstani press reports that as of June 26, the Chairman of
the Managing Board of Samruk-Kazyna National Welfare Fund, Kairat
Kelimbetov, has been elected one of four independent directors on
the Supervisory Board of Sberbank. Kelimbetov will be responsible
for oversight of the bank's reporting procedures and the protection
of minor stockholder interests. According to the press, Kelimbetov
is the first Kazakhstani citizen elected to serve on Sberbank's
Supervisory Board.
5. Russian retail bank VTB24 and related investment bank
VTB-Capital will be represented in Kazakhstan by its subsidiary JSC
VTB-Kazakhstan, serving clients in Almaty as of July 1, 2009.
According to a VTB-Kazakhstan press-release, the bank will focus on
corporate clients and small and medium enterprises, and hopes to
eventually expand operations into other Central Asian countries.
6. The Financial Supervision Agency has announced that previous
plans to increase minimal capital requirements for commercial banks
as of July 1 have been postponed until October 1. According to the
new requirements, the minimum capital requirements will be 5 billion
tenge (approximately $33.2 million) for Almaty and Astana-based
banks, 3 billion tenge (about $19.9 million) for housing and
construction savings banks, and 2 billion tenge (about $13.3
million) for regional banks. The FSA says it is also considering
establishing additional requirements to encourage the regional
expansion of larger banks outside the two largest metropolitan
areas.
GE LOCOMOTIVE ASSEMBLY PLANT OPENED IN ASTANA
7. President Nursultan Nazarbayev hosted the grand opening of the
new General Electric locomotive assembly plant located on the
outskirts of Astana on July 3. Designed to assemble GE Evolution
Series locomotives for Kazakhstan and the surrounding region, the
43,000 square meter plant is scheduled to begin production by the
end of 2009. At full capacity, the facility is expected to employ
600 and be capable of assembling 100 locomotives per year. (NOTE:
Components for the locomotives will be manufactured in Grove City
and Erie, Pennsylvania. END NOTE.) The assembly plant's grand
opening immediately follows the May announcement by GE
Transportation of a 15-year, $500 million service contract to
maintain and enhance the performance of Kazakhstan's current fleet
of TE10 locomotives.
KAZMUNAIGAS ACQUIRES ROMPETROL GROUP
ASTANA 00001170 002 OF 002
8. On June 26, Kazakhstan's national oil and gas company
KazMunaiGas (KMG) became the sole owner of Romania's Rompetrol Group
NV (TRG) after it completed the acquisition of a 25 percent stake in
TRG from Rompetrol Holding SA. "As the largest foreign investor in
Romania, KazMunaiGas will continue implementing investment projects
related to the Petromidia Refinery Reconstruction Program, operating
the Midia marine terminal, and expanding TRG's retail network both
in Romania and abroad," said KMG President Kairgeldy Kabyldin.
KAZATOMPROM LAUNCHES SEMIZBAY MINING PROJECT
9. On July 3, Semizbai-U LLP, a joint venture of Kazakhstan's
national nuclear company Kazatomprom and China's Guangdong Nuclear
Power Corporation, plans to conduct startup-setup operations at a
new mine at the Semizbai uranium field in Akmola oblast. The mine,
with a 500-ton annual production capacity, will begin operations by
the end of 2009, and reach full capacity by 2012.
KMG E&P BIDS ON IRAQ OIL AND GAS FIELDS
10. On July 1, KMG subsidiary KMG Exploration and Production (E and
P) announced that in the third quarter it would receive geological
information about oil and gas fields in Iraq which were put out to
tender, analyze opportunities and risks, and decide whether to
participate in the bidding process. KMG E and P, along with eight
other oil and gas companies, was successfully pre-qualified during
the second licensing tender.
KENKIYAK-KUMKOL PIPELINE COMPLETED AHEAD OF SCHEDULE
11. On July 1, KazStroiService reported the completion of the
Kenkiyak-Kumkol oil pipeline ahead of schedule. Test oil was pumped
through the line by the Kazakhstan-China Pipeline joint venture of
KazTransOil and China National Oil and Gas Exploration and
Development Corporation. KazStroiService is the main contractor,
and KazTransOil is the pumping operator.
HOAGLAND
SIPDIS
STATE FOR SCA/CEN, EEB/ESC
STATE PASS TO USTDA
E.O. 12958: N/A
TAGS: PGOV ECON EPET EINV EFIN KZ
SUBJECT: KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, JUNE 21-JULY 4
1. SUMMARY: This information is drawn primarily from the
Kazakhstani local press and has not been verified for accuracy.
-- Banking Sector News
-- GE Locomotive Assembly Plant Opened in Astana
-- KazMunaiGas Acquires Rompetrol Group
-- Kazatomprom Launches Semizbay Mining Project
-- KMG E&P Bids on Iraq Oil and Gas Fields
-- Kenkiyak-Kumkol Pipeline Completed Ahead Of Schedule
BANKING SECTOR NEWS
2. According to a June 26 BTA Bank press release, BTA's losses
confirmed by the international audit company Ernst and Young for the
first five months of 2009 totaled 1.413 trillion tenge ($9.39
billion). (NOTE: The audit incorporated findings from 2008 bank
activity which had not been fully accounted for to date. END NOTE.)
BTA claims these losses were the result of bad loans made by former
management and that despite the losses, the bank has sufficient
liquidity to continue normal operations.
3. Russian Central Bank Governor Sergey Ignatyev would not
specifically comment on the possible purchase of BTA by Russia's
Sberbank during a June 26 statement in Moscow. According to
Ignatyev, who also chairs the Sberbank Supervisory Board, due
diligence on BTA has not yet been completed, but it appears that the
big bank still has big problems.
4. Kazakhstani press reports that as of June 26, the Chairman of
the Managing Board of Samruk-Kazyna National Welfare Fund, Kairat
Kelimbetov, has been elected one of four independent directors on
the Supervisory Board of Sberbank. Kelimbetov will be responsible
for oversight of the bank's reporting procedures and the protection
of minor stockholder interests. According to the press, Kelimbetov
is the first Kazakhstani citizen elected to serve on Sberbank's
Supervisory Board.
5. Russian retail bank VTB24 and related investment bank
VTB-Capital will be represented in Kazakhstan by its subsidiary JSC
VTB-Kazakhstan, serving clients in Almaty as of July 1, 2009.
According to a VTB-Kazakhstan press-release, the bank will focus on
corporate clients and small and medium enterprises, and hopes to
eventually expand operations into other Central Asian countries.
6. The Financial Supervision Agency has announced that previous
plans to increase minimal capital requirements for commercial banks
as of July 1 have been postponed until October 1. According to the
new requirements, the minimum capital requirements will be 5 billion
tenge (approximately $33.2 million) for Almaty and Astana-based
banks, 3 billion tenge (about $19.9 million) for housing and
construction savings banks, and 2 billion tenge (about $13.3
million) for regional banks. The FSA says it is also considering
establishing additional requirements to encourage the regional
expansion of larger banks outside the two largest metropolitan
areas.
GE LOCOMOTIVE ASSEMBLY PLANT OPENED IN ASTANA
7. President Nursultan Nazarbayev hosted the grand opening of the
new General Electric locomotive assembly plant located on the
outskirts of Astana on July 3. Designed to assemble GE Evolution
Series locomotives for Kazakhstan and the surrounding region, the
43,000 square meter plant is scheduled to begin production by the
end of 2009. At full capacity, the facility is expected to employ
600 and be capable of assembling 100 locomotives per year. (NOTE:
Components for the locomotives will be manufactured in Grove City
and Erie, Pennsylvania. END NOTE.) The assembly plant's grand
opening immediately follows the May announcement by GE
Transportation of a 15-year, $500 million service contract to
maintain and enhance the performance of Kazakhstan's current fleet
of TE10 locomotives.
KAZMUNAIGAS ACQUIRES ROMPETROL GROUP
ASTANA 00001170 002 OF 002
8. On June 26, Kazakhstan's national oil and gas company
KazMunaiGas (KMG) became the sole owner of Romania's Rompetrol Group
NV (TRG) after it completed the acquisition of a 25 percent stake in
TRG from Rompetrol Holding SA. "As the largest foreign investor in
Romania, KazMunaiGas will continue implementing investment projects
related to the Petromidia Refinery Reconstruction Program, operating
the Midia marine terminal, and expanding TRG's retail network both
in Romania and abroad," said KMG President Kairgeldy Kabyldin.
KAZATOMPROM LAUNCHES SEMIZBAY MINING PROJECT
9. On July 3, Semizbai-U LLP, a joint venture of Kazakhstan's
national nuclear company Kazatomprom and China's Guangdong Nuclear
Power Corporation, plans to conduct startup-setup operations at a
new mine at the Semizbai uranium field in Akmola oblast. The mine,
with a 500-ton annual production capacity, will begin operations by
the end of 2009, and reach full capacity by 2012.
KMG E&P BIDS ON IRAQ OIL AND GAS FIELDS
10. On July 1, KMG subsidiary KMG Exploration and Production (E and
P) announced that in the third quarter it would receive geological
information about oil and gas fields in Iraq which were put out to
tender, analyze opportunities and risks, and decide whether to
participate in the bidding process. KMG E and P, along with eight
other oil and gas companies, was successfully pre-qualified during
the second licensing tender.
KENKIYAK-KUMKOL PIPELINE COMPLETED AHEAD OF SCHEDULE
11. On July 1, KazStroiService reported the completion of the
Kenkiyak-Kumkol oil pipeline ahead of schedule. Test oil was pumped
through the line by the Kazakhstan-China Pipeline joint venture of
KazTransOil and China National Oil and Gas Exploration and
Development Corporation. KazStroiService is the main contractor,
and KazTransOil is the pumping operator.
HOAGLAND