23.10.2005 Commercial News: http://www.bisnis.doc.gov
Oil & GAS
KPO TO DEMONSTRATE ACHIEVEMENTS AT KIOGE 2005
Karachaganak Petroleum Operating B.V. has announced its participation in KIOGE 2005, the largest international oil-and-gas exhibition in the Caspian and Central Asian regions supported by the Kazakh government. Over 400 domestic and foreign companies have already confirmed their intent to participate in the expo, and
over 1,000 delegates have registered to participate in the Oil and Gas Kazakhstan conference.
KPO B.V. would demonstrate its achievements at KIOGE, with particular focus on environmental protection issues and successes in the provision of industrial security, according to Kazinform.
ENERGY SPECIALISTS CALL FOR SECTOR REFORM
President of Kazakhstan’s Union of Energy Engineers Mr. Trofimov met with senior energy specialists in Almaty, where the need for reformation of the national energy system and renovation of obsolete equipment was discussed. According to Mr. Trofimov, the legislative and regulatory base in the energy sector does not correspond with modern requirements, which creates difficulties for effective operations in the sector. Under sector modernization, renovation of equipment and implementation of new technologies should be the priorities. Additionally, a specific institutional organization is needed to handle various energy aspects and problems. Over 100 representatives of industrial enterprises from all over Kazakhstan, and manufacturers of energy equipment from other countries took part in the meeting, according to Kazinform.
PETROCHEMICAL INDUSTRY DEVELOPMENT PLANNED
Implementation of the general plan for creation of a petrochemical industry in Kazakhstan would require US $7 B of investments over a 15-year period as reported by Andrew Spears, Vice President of Nexant Ltd., during a meeting with the government. Nexant Ltd. is the company hired to create the general plan.
According to Mr. Spears, additional investments are most likely to be needed for infrastructure development in order to support other petrochemical projects. According to Interfax-Kazakhstan, PM Daniyal Akhmetov supports the plan.
PAVLODARENERGO JSC INVESTS KZT 1.5 B
Pavlodarenergo JSC is currently implementing its investment program for 2005-2007. The company plans to invest KZT 1.5 B in the
modernization of equipment at TPP-2, which has been operating since 1961, and TPP-3 that was launched 33 years ago and supplies heating and electric power for houses and industrial enterprises in the city. The financing will be spent to renovate capacity and increase electric power production.
The launch of the new infrastructure would enable to produce extra 50mW of electric power. The program includes modernization of the gas purification system and reduction of atmospheric emissions, according to Kazinform.
MOLIBDENUM ORE PROCESSING FACTORY PLANNED FOR CONSTRUCTION
A factory with capacity of 1 million tons of molybdenum ore per year is planned to be constructed at the Stepnogorsk Mining-Chemical Facility (SMCF in the Akmola Oblast) within a three-month period.
The Moliken JV, was created jointly with the British Eureka Mining Company for the processing of ores from the Shorskoye deposit. It is also planned to launch mines at the Kyzyltu and Seletinskoye deposits. From 2005 to 2007, over US $180 MM of investments are planned for the development of the SMCF in accordance with Kazatomprom’s program. Kazatomprom is a national operator for import and export of uranium. The company is amongst the three leading uranium-producers in the world. Kazatomprom includes the Ulbinsky Metallurgical Plant, the Mining Company LLP, Volkovgeologiya, the MAEK-Kazatomprom LLP energy facility, and the Institute for Advanced Technologies LLP.
In 2004, Kazatomprom produced 3,320 tons of natural uranium, in comparison with 2,952 tons in 2003. One sixth of the global discovered molybdenum resources, or over 249 thousand tons, are located in Kazakhstan. However, no enterprise exists in
the country for the production of molybdenum products. Molybdenum is used widely for the production of special types of steel and catalysts for oil processing industry, according to Interfax-Kazakhstan.
ECONOMY & FINANCE
AKTAU PLASTICS PLANT TO START BITUMEN PRODUCTION
The ATOLL JSC, a subsidiary company of the Kazakhstani Sat & Company LLP, is planning to produce bitumen at the Aktau Plastics Plant, as reported by Nurlan Abduov, the general director of Sat & Co. LLP. ATOLL has submitted an application to the Development Bank Kazakhstan for allocation of funds for the project of total cost US $35-30 MM. The facility’s capacity will be 250-300 thousand tons of bitumen annually, producing a variety of petrochemical products.
Bitumen is currently produced at Pavlodar oil processing plant, although the facility mainly uses raw materials imported from Russia and is not able to satisfy the nationwide demand in Kazakhstan, according to Kazakhstan Today.
TRANSPORT & COMMUNICATIONS
FAST PASSENGER TRANSPORTATION TO BE LAUNCHED IN 2006 IN ASTANA
A new high-speed passenger transport project will be launched in Astana during the second half of 2006, if the governmental approves the project, which was jointly created by the European Bank for Reconstruction and Development and TransTec, as reported by the Head of the Astana Administration Umirzak Shukeev. Based on the results of studies held by the EBRD and TransTec, it is recommended to introduce a light track tramway (LTR) system as the most flexible in terms of climatic and economic viewpoints. According to the Project Manager Riner Mayer, during the first phase it is planned to construct 9.5 km of track. Project implementation is planned for two years.
According to Mr. Mayer, the launch of the first branch of the fast passenger transport system would cost KZT 37 B, 60 MM. The precise terms for the launch of the new transport system are unknown at this time. The project will be submitted for the government’s consideration first, Kazinform reports.
AIR TRANSPORTATION SYSTEM BEING DEVELOPED
Prospects for civil aviation development were considered during a government meeting headed by the PM Daniyal Akhmetov. Based on approximate estimates, the domestic and international passenger flows are forecasted to grow 4-6 times within the next decade. For this reason, it is necessary to expand the aircraft park and improve the company’s staff. The PM recommended speeding-up the development of the project for the strategic development of Air Astana, according to Kazinform.
KAZAKHTELECOM IS KAZAKHSTANI TELECOMMUNICATIONS LEADER
The Euromoney International Publishing House has published a list of the best companies in CIS for 2005. Experts from the Authorised Agency for Financial Analysis have acknowledged the national company Kazakhtelecom as the leader in telecommunications industry.
The level of development in the telecommunications sector reflects the overall level of development in the country, the President of Kazakhtelecom, Hairat Karibzhanov believes. According to Mr. Karibzhanov, the company’s income for the first half of 2005 is 3 times that of Rostelecom. Kazakhtelecom invests in social projects, including fixed-line installation in rural areas and Internet connection at schools, according to Interfax-Kazakhstan.
CENTER FOR ENTREPRENEURSHIP DEVELOPMENT OPENS
The Kazakhstani Crediting Fund (KCF), with the support of ExxonMobil Kazakhstan and USAID, has opened a Centre for Entrepreneurship Development (CED) in Astana. US $1.15 MM will be allocated by the partners as part of a joint project to increase opportunities for micro, small and medium sized businesses. USAID will allocate US $350 thousand, ExxonMobil Kazakhstan US $300 thousand, and the KCF US $500 thousand.
“The CED will support thousands of entrepreneurs and promote job creation,” CED General Director Shalkar Zhusupov stressed, according to Interfax-Kazakhstan.
BTA OBTAINS US $25 MM LOAN FROM WACHOVIA BANK
Bank TuranAlem has signed an agreement with the American Wachovia Bank on attraction of US $25 MM as a loan intended for the needs of small and medium sized enterprises in Kazakhstan. The loan is guaranteed by the Overseas Private Investment Corporation (OPIC). These funds will be primarily available for entrepreneurs engaged in the processing industry, construction, services and other sectors. The funding source does not permit providing credit to market monopolists, or enterprises that engage in the production and sale of military and tobacco products or the gambling industry.
During the first half of the year, small and medium sized businesses obtained 2,900 loans for a total sum of US $93 MM, according to Kazakhstan Today.
PRESIDENT APPROVES ALMATY CONSTRUCTION PLAN UNTIL 2020
President Nursultan Nazarbaev gave positive estimation to the investment proposal for construction strategy in Almaty until 2020. Presenting the concept during the meeting, the Chairman of the Council of Forum of Kazakhstani Entrepreneurs (FKE), Raimbek Batalov, said that investments in the construction of infrastructure, social facilities, and housing until 2020 would average
US $29 B, out of which, over US $17 B would be intended for housing, and US $11 B for social facilities. 165 kindergartens, 117 schools, 23 sports-health facilities, 30 polyclinics and 140 trade centers are planned for construction during the mentioned period.
Mr. Batalov also said that investments into transportation infrastructure would amount to nearly US $2.5 B.
Almaty has a population of 1.3 million people, and is the largest city in Kazakhstan. The city was formerly the national capital until December 1997, according to Interfax-Kazakhstan.
EBRD LOANS $16 MM
The European Bank for Reconstruction and Development is loaning the equivalent of US $16 MM to the Saudi Arabian Turkuaz Edible Oil Industries (TEOI), for the expansion of sunflower oil production in Kazakhstan. According to the Director of the EBRD Kazakhstan Representative Office, Andre Kuusvek, for the first time, the EBRD is granting a loan, not in US dollars, but in Kazakhstani tenge.
Nafez El-Morhabi is the general manager of Savola Turkuaz Edible Oil Industries, which possesses 90% of TOEI’s shares and stressed that The company received an EBRD loan which was more affordable in comparison with credit offered by commercial banks on the domestic
In addition, Mr. El-Morhabi stressed that the EBRD loan will be aimed at the improvement of technology for processing sunflower seeds at a plant in Aktobe in addition to the expansion of sunflower plantations.
El-Morhabi said that currently the company produces nearly 22.5 thousand tons of sunflower oil annually. The EBRD has invested over 950 MM euros in Kazakhstan over a 13-year period. The bank provided
assistance through 10 projects to the state sector and 30 projects to the private sector, according to Interfax-Kazakhstan.
IMPORTED DRUGS THAT CONTAIN VITAMINS TO INCREASE IN PRICE
The lack of coordination between the Agency for Customs Control and the RK Ministry of Health, resulted in price growth of 25-30% for vitamins containing drugs imported into Kazakhstan, the President of the Association for the Support and Development of Pharmaceutical Activity (ASDPA) Zuriyat Sybankulova pointed out during a news conference in Almaty. According to Ms. Sybankulova, certain pharmaceutical companies have been suffering significant profit losses during the last four months, as they’re unable to manage customs processing for their cargos. Dozens of tons of drugs that contain vitamins intended for treatment and prevention of a number of diseases are being kept in temporary storage. This occurred due to automatic reaction on the part of customs officers to changes spurred by the agreement on universal trade nomenclature for external economic activity (TN EEA) of the Eurasian Economic Community member-states.
As a solution to the problem, representatives of pharmaceutical companies have suggested following provisions of the RK Tax Code, which stipulates that drugs should be VAT exempt, before any needed resolution is passed. “Each day of delay at customs leads to losses for producers, and this means that the prices for drugs for
the everyday consumer is increasing,” a ASDPA news message read, according to Kazakhstan Today.
KAZAKH-MADE SKODAS HAVE ARRIVED
The first Skoda automobiles have been delivered for sale in Ust-Kamenogorsk, the capital of the East Kazakhstan Oblast. The cars were assembled at the local Asia Auto plant according to Anatoly Balushkin, the Chairman of the Board of Directors of Bipek Auto. The cost of a Skoda automobile is US $14 thousand.
The plant has assembled 123 Skoda vehicles so far; 4 new cars are being put together each day. It is now planned to make 500 Skoda cars this year. The plant also plans to launch the assembly of the Skoda Superb model by the end of this year. Bipek-Auto is the exclusive representative of the Russian AutoVAZ in Kazakhstan, according to Interfax-Kazakhstan.
TURKMENISTAN’S POPULATION OBTAINS 4 B CUBIC METERS OF GAS
During a conference dedicated to the development of the oil-and-gas, energy and geological industries, organized annually as part of the social support program, the country’s population obtained over 4 billion cubic meters of subsidized natural gas, and over 2 billion
kWh of power energy.
The conference coincided with the Day of the Workers of the Oil and Gas, Energy and Geological Industries, which was celebrated in September in Turkmenistan, and included discussions on the prospects
for the development of the industry and ways to manage its integration into the global energy system. The potential hydrocarbon resources in Turkmenistan are 45.44 billion tons of oil equivalent. Out of this volume, the conference mentioned that nearly 24% have already been produced and are in use, according to the official TURKMENISTAN information agency.
new | october 2005