News: Monday, March 01, 2010 
Article of the Day
Western Oil Companies feel the Heat in Kazakhstan
Fine levied on group developing gas field stirs concern government may adopt Russian-style pressure tactics
By Guy Chazan
A consortium of Western oil companies developing a huge natural-gas field in Kazakhstan was slapped with a $21 million fine Friday, the latest step in a pressure campaign that is raising concern among investors in the oil-rich Central Asian state.
The consortium developing the Karachaganak natural-gas project, above, in Kazakhstan was fined by the government over environmental issues.
The move, against the group developing a field called Karachaganak, is reminiscent of tactics deployed by Russia, which also used penalties and investigations to coerce Western oil majors into giving state companies stakes in their projects.
Kazakhstan, on the shores of the Caspian Sea, is currently scrutinizing all the landmark oil deals it signed in the early 1990s, many of which are now seen as being unfairly skewed towards the international oil companies.
The biggest deals, known as production-sharing agreements, or PSAs, were supposed to lock in favorable tax regimes. But authorities now want to open them up and remove their exemptions from tax changes so as to increase government revenues from the oil sector.
The Kazakh Finance Ministry is currently analyzing 17 contracts, including the main PSAs, and may recommend sweeping changes.
"We have issues regarding their legality," said Deputy Finance Minister Daulet Yergozhin in an interview. "There are certain clauses, including on tax, which may need to be amended to bring them in line with Kazakh law."
He said the ministry would present the findings of its analysis to the government by April 1.
Friday's fine was imposed on Karachaganak Petroleum Operating B.V., or KPO, which is led by Britain's BG Group PLC and Eni SpA of Italy.
Many observers think it is a prelude to Kazakhstan's state-owned oil company, KMG, forcing its way into the consortium.
The companies referred all questions to KPO, which declined to comment.
A person familiar with the matter said the consortium may appeal the fine in Kazakhstan's Supreme Court.
KPO is vulnerable because it is the only big oil-and-gas project in Kazakhstan in which KMG doesn't have an interest.
Last December, Kazakh authorities confirmed they wanted KMG to become a partner in Karachaganak, although BG and Eni deny there have been any discussions on it joining the consortium.
"This is part of the 'bully then buy out' model," said Ana Jelenkovic, a Central Asian expert at consultancy Eurasia Group.
There are precedents for such a scenario. A long-running dispute between Kazakhstan and an Eni-led group developing another huge oilfield, Kashagan, ended with KMG doubling its stake in the venture.
That echoed the travails suffered by Royal Dutch Shell PLC, which was forced to sell a majority stake in its massive Sakhalin 2 natural-gas project in Russia's Far East to OAO Gazprom after a long campaign of official harassment.
A statement Friday from the Kazakh prosecutor general's office said a regional court had fined KPO for environmental violations such as excessive dumping of waste dating back to 2008.
KPO is currently seeking to recover more than $1 billion in export duties which it says were illegally levied on the venture by the Kazakh government in 2008.
Analysts say the Kazakh authorities could pay back the $1 billion and get a 10% stake for KMG in the venture in exchange, the Wall Street Journal reports.
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Kazakhstan General
As OSCE Chair, Kazakhstan to focus on Regional Security, Afghanistan Rehabilitation
By Ashok Dixit
Strengthening regional security, promoting inter-ethnic and inter-religious tolerance, enhancing the scope for the introduction of further measures to reduce proliferation of nuclear weapons, solving
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Astana defends Record during UN Human Rights Review
By Joanna Lillis
As Kazakhstan chairs the Organization for Security and Cooperation in Europe (OSCE) this year, its human rights record is coming under scrutiny.
Kazakhstani
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Oil and Gas Sector
KazMunaiGas invests $1.37 Billion into Kashagan in 2009 - CFO
KazMunaiGas invested more than KZT 203 billion ($1.37 billion) in the development of the Kashagan project, the state company’s Chief Financial Officer Asiya Syrgabekova told Trend
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KMG E&P to buy back Preferred Shares
KazMunaiGas Exploration and Production (KMG E&P), the London-listed subsidiary of the Kazakh national oil company, said Friday it intends to buy back up to 100 percent
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Nabucco Gas Link to Europe may secure Turkmen Supply by April
By Ben Farey
The Nabucco pipeline, conceived to bring natural gas to Europe via Turkey from around the Caspian Sea, may clinch a supply contract with Turkmenistan
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Finance and Investment
Fitch affirms Kazakhstan's Bank CenterCredit following Kookmin Stake Increase
Fitch Ratings has affirmed Kazakhstan-based Bank CenterCredit's (BCC) ratings, including its Long-term Issuer Default Rating (IDR) of 'B' with a Stable Outlook.
A full rating breakdown
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Kazakhstan to allocate $8 Billion for Industrial Development Program
Kazakhstan will allocate $8 billion annually from the National Fund for its industrial development program, President of Kazakhstan Nursultan Nazarbayev stated at a plenary session of
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Financial Performance exceeds Forecasts for First Two Months of 2010 - Masimov
Prime Minister of Kazakhstan, Karim Masimov stated at the Council of Entrepreneurs under the President of Kazakhstan that the financial indicators for the first two months
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Kazakhstan emerging as most Proactive Finance Market – Islamic Bankers
By Mushtak Parker
Of the CIS countries, Kazakhstan is emerging as the most proactive and advanced Islamic finance market. According to foreign Islamic bankers recently visiting Astana,
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Metals and Minerals
ArcelorMittal Temirtau looking for Iron Ore Deposits in Kazakhstan
ArcelorMittal Temirtau, the Kazakh unit of the world’s largest steel maker, is searching for new supplies of iron ore in Kazakhstan for its planned steel plant
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ArcelorMittal Temirtau to increase Production by 20 Percent in 2010
ArcelorMittal Temirtau, the Kazakhstan unit of the world’s largest steel maker, plans to raise output by 20 percent in 2010 to 3.6 million tons, Reuters reported.
“We
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Kazakhstan to launch 23 Metallurgy Projects in 2010
In 2010, as part of its Accelerated Innovative Industrial Development Program, Kazakhstan will launch 23 projects in the domestic metallurgical industry, local media have reported citing
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Trade and Consumer Goods
Best of India Exhibition opens in Almaty
Exclusive Indian products like pashmina shawls, cosmetics and incense are on display at a two-week exhibition in Kazakh city Almaty that aims at strengthening trade and
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Communications and Transportation
Kazakhstan hindering Russian Space Missions - Official
Kazakhstan, home of the space base used to launch rockets to the International Space Station (ISS), is interfering with Russian space missions, the head of Russia's
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Project to check Media Legislation for Conformance with International Standards
Project to check Media Legislation for Conformance with International Charges
The project titled - International Mass Media Standards and National Legislation has been launched in Kazakhstan, Kazakhstan
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People and Training
Turkmenistan appoints New Ambassador to Kazakhstan
Magtymguly Akmyradov has been appointed the new ambassador of Turkmenistan to Kazakhstan, a press release from the Turkmen president stated, Kazakhstan Today reports citing Turkmenistan.ru.
President of
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Regional Business News
Tsunami glances Off Japan, Russia
The tsunami from Chile's deadly earthquake hit Japan's main islands and the shores of Russia today, but the smaller-than-expected waves prompted the lifting of a Pacific-wide
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Kyrgyzstan applies for $160 Million Loan from EurAsEC Anti-Crisis Fund
Kyrgyzstan has applied for a $160 million loan from the EurAsEC Anti-Crisis Fund, Minister of Finance of Russia, Alexey Kudrin, stated following a session of the
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Turkmenistan - Prospecting in Ashgabat a Bush Family Affair
State-controlled news outlets in Turkmenistan are reporting that former US president George H. W. Bush sent a letter to Turkmen leader Gurbanguly Berdymukhamedov, extending wishes for
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Voting is Brisk as Tajikistan picks New Parliament
By Olga Tutubalina
Voting was brisk Sunday in a parliamentary election that is expected to strengthen the president's nearly two-decade grip on power in Tajikistan, an
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'Rigi planned to meet Holbrooke in Kyrgyzstan'
The captured ringleader of the Jundallah terrorist group, Abdolmalek Rigi, was scheduled to meet US special envoy for Afghanistan and Pakistan Richard Holbrooke at the Manas
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Prices and Statistics
Volume and Share Index by Visor Capital
Date: March 1, 2010; Source: Visor Capital
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Market Movers by Visor Capital
Date: March 1, 2010; Source: Visor Capital
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Oil and Gas Prices
Date: March 1, 2010; Source: Bloomberg.com
| Petroleum
($/bbl) |
|
Price* |
Change |
%Change |
Time |
| Nymex Crude Future |
79.97
|
.31
|
.39
|
01:44 |
| Dated Brent Spot |
77.26 |
.58 |
.76 |
01:45 |
| WTI Cushing Spot |
79.66 |
1.74 |
2.23
|
02/26 |
| Petroleum
(cent/gal) |
|
Price* |
Change |
%Change |
Time |
| Nymex Heating Oil Future |
204.73
|
1.20
|
.59 |
01:43
|
| Nymex RBOB Gasoline Future |
219.83
|
1.04 |
.48 |
01:43 |
| Natural gas
($/MMBtu) |
|
Price* |
Change |
%Change |
Time |
| Nymex Henry Hub Future |
4.77 |
-.04 |
-.89 |
01:18 |
| Henry Hub Spot |
4.75 |
-.09 |
-1.86 |
02/26 |
| New York City Gate Spot |
5.19 |
-.03
|
-.57 |
02/26
|
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Commodities
Date: March 1, 2010; Source: Bloomberg.com
| Commodity |
Price |
Change |
%Change |
Time |
| COPPER FUTURE (USd/lb.) |
339.500 |
11.100 |
3.38 |
01:59 |
| GOLD 100 OZ FUTR (USD/t oz.) |
1118.300 |
-0.600 |
-0.05 |
01:59 |
| SILVER FUTURE (USD/t oz.) |
16.600 |
0.079
|
0.48
|
01:59 |
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Metal Prices
Date: March 1, 2010; Source: Kitco.com
| Silver |
16.57 |
+0.08 |
| Platinum |
1541.00 |
0.00
|
| Palladium |
432.00 |
+1.00
|
| Rhodium |
2,430 |
0.00
|
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Exchange rates
Date: March 1, 2010; Source: the National Bank of Kazakhstan
| 1 USD |
KZT 147.32 |
1 CHF |
KZT 136.69 |
1 CNY |
KZT 21.58 |
1 TRY |
KZT 95.43 |
10 JPY |
KZT 1.65 |
| 1 EUR |
KZT 199.97 |
1 AUD |
KZT 131.11 |
1 KGS |
KZT 3.30 |
1 UZS |
KZT 0.10 |
|
|
| 1 GBP |
KZT 225 |
1 CAD |
KZT 139.13 |
1 RUB |
KZT 4.90 |
100 KRW |
KZT 12.70 |
|
|
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