News: Friday, July 16, 2010 
Article of the Day
Tax Police start Criminal Investigation of Tengizchevroil
By William Mauldin
Kazakhstan's financial police have started a criminal investigation into the Chevron-led Tengizchevroil oil operation after government officials and prosecutors accused it of $1.4 billion worth of over-production.
The announcement came two days after the oil minister said Tengizchevroil would have to begin paying an oil export tax that the government is reinstating, despite Tengizchevroil’s contention that its longstanding production-sharing agreement rules out such a tax.
The minister said the Karachaganak operation, led by Italy’s Eni and Britain’s BG, also will have to pay the export duty. Karachaganak officials maintain that their production-sharing agreement also prohibits an export tax.
Pressure began to mount on international consortiums that have production-sharing agreements in January, when President Nursultan Nazarbayev ordered officials to do something about the variety of tax regimes in the petroleum industry.
The president said officials should focus on ventures that had originated on the most attractive terms.
Tengizchevroil, which started in 1993, is the prime example.
A year ago, when the economic crisis was hammering oil prices, Parliament enacted a new tax code for the petroleum industry.
With the code change on the books, officials began challenging the tax-stabilization provisions of some production-sharing agreements.
The bottom line is that rapidly developing Kazakhstan wants more revenue from its main income source, the oil and gas industry.
Government officials have said they believe the production-sharing agreements are unfair. They were negotiated in the 1990s, Kazakhstan’s first decade of independence, when the government had little leverage with international oil companies, analysts say.
In the past few years, the government has been trying to remedy the situation, according to analysts.
One indication of that is that government-owned companies such as KazMunaiGas have secured greater influence in the industry.
On Thursday, the tax police alleged that the Tengizchevroil concession, whose two largest shareholders are Chevron and Exxon Mobil, had produced $1.4 billion more oil in the past eight years than its license allowed.
The violation, government officials have said, was drilling below the agreed-upon depth from 2002 to 2010.
Tengizchevroil has denied violating agreements with the government. It said its production-sharing agreement does not stipulate a depth at which it can drill.
Financial police spokesman Murat Zhumanbai said Tengizchevroil had operated an "illegal entrepreneurship involving a particularly large amplification of income."
Chevron and Exxon Mobil had no immediate comment on the criminal case.
On Tuesday, Kazakhstan's finance minister said a new oil duty of $20 a ton, or about $3 a barrel, would apply to Tengizchevroil as well as the Karachaganak Petroleum Operating Group.
Citigroup estimates that the tax could reduce Chevron's earnings per share between 5 and 10 cents a year.
Chevron owns 50 percent of Tengizchevroil, ExxonMobil 25 percent, KazMunaiGas 20 percent and Russia’s LukArco 5 percent, according to the Wall Street Journal.
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Kazakhstan General
Kazakhstan calls for OSCE Conflict-Prevention Mechanism
Kazakhstan is halfway through its year-long chairmanship of the Organization for Security and Cooperation in Europe.
Foreign Minister Kanat Saudabayev, who is the OSCE’s chairman in office
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Kazakhstan delegation checks Kyrgyz destruction
A Kazakhstan government and business delegation has visited the southern Kyrgyzstan city of Osh to look at the destruction caused by ethnic violence last month.
Deputy Prime
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Kazakhstan to ease Security on Kyrgyz border
Kyrgyzstan on July 20 due to the more stable situation in its southern neighbor.
Amangelda Abilkanov, a member of Kazakhstan's National Security Committee, said that since July
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More women become migrant workers
By Karina Davtyan
More Central Asian women are slipping across borders to work because of hard times in their homelands, according to an international consortium which recently
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U.N. Survey of Households is on Tap
The Statistics Agency of Kazakhstan will survey households to obtain information for the United Nations about the situation of women and children in the country.
The information
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Falconry’s Hold on Kazakhstan
By Erik Heinrich
From his high perch, a huge hunting eagle fixes his intense copper eyes on the moving shape below.
He pitches forward, signaling his intention
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Oil and Gas Sector
Kazakhstan to help boost Non-OPEC Oil Output
Kazakhstan will be one of the key contributors to a 300,000-barrel-a-day increase in oil production from countries outside OPEC next year.
Higher production in Kazakhstan, Azerbaijan, Canada,
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These Midnight Trains to Georgia carry Oil
By Isabel Gorst
When Georgia and Russia went to war in August 2008, Georgia’s future as a strategic corridor for Caspian oil exports to the west looked
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South Korean Firm in Talks for Britain’s Dana
The Korea National Oil Corporation, which owns two oil fields in western Kazakhstan, has opened talks to acquire the United Kingdom’s Dana Petroleum.
South Korea’s state-owned
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Finance and Investment
First Almaty company gets subsidized loan
The first Almaty company to obtain a loan under the government’s interest-rate subsidy program is the battery maker Kainar-AKB.
The government’s Damu fund will pay part of
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Value of Central Bank’s Notes falls in June
The value of the interest-bearing notes that the National Bank of Kazakhstan issues to commercial banks fell by 35 between May and June to 174.6 billion
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Insurers’ income from premiums soars 50%
Insurance companies’ income from premiums jumped 50 percent in the first five months of the year to 65 billion tenge, the Financial Supervision Agency reports.
The main
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Trade and Consumer Goods
Restaurants That survived Crisis are Smarter
By Yuilya Islamgulova
The restaurant business has always been risky, insiders say.
Since the economic crisis struck in 2007, about 30 percent of Almaty’s restaurants have closed,
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Communications and Transportation
Mayor inspects Almaty’s First Subway Trains
Mayor Ahmetzhan Esimov and other Almaty officials have checked out the four of the South Korean trains that will whisk passengers through the subway system the
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Internet-access Business Up but Online Stores Lag
By Kseniya Mikhailova
Kazakhstan’s Internet-service-provider business is booming, with revenue jumping 63 percent to $241.3 million in 2008 from $148 million in 2007, according to the Agency
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Turkmenistan Nearly finished with Rail Line
Turkmenistan’s section of a new rail line that will run from Kazakhstan to Iran is nearly finished, according to the Turkmen ambassador to Kazakhstan.
Ambassador Magtymguly Akmyradov
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Regional Business News
Merkel Presses Russia on Human Rights
By Judy Dempsey
German Chancellor Angela Merkel spoke out strongly on human rights during her talks with President Dmitro Medvedev of Russia on Thursday as German companies
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Russia plans Build-up of Black Sea Fleet
By Dmitry Solovyov
Russia plans to renovate its crumbling Black Sea Fleet with 15 new vessels in the wake of a landmark deal with Ukraine to extend
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Russia Ready to supply Afghan Military with Arms
Russia is ready to cooperate with NATO in Afghanistan by supplying arms to Afghan forces, Russia’s RIA Novosti news agency reports.
Andrei Avetisyan, Russia’s ambassador to Afghanistan,
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China’s Thirst for Oil reshapes Geopolitics
Commentary by Hongyi Lai
China’s record oil imports this year have added urgency to its moves to reshape its geopolitical strategy.
China’s crude oil imports reached a new
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Firm may repurchase Diamonds from Russian Government
Russia’s ZAO Alrosa, the world’s largest rough diamond producer, may buy back gems it sold to the government for $1 billion last year as prices rebound,
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Lukoil exporting More through Baltic Port
Russia's Lukoil is increasing exports of oil products from its Baltic Sea terminal of Vysotsk this month to meet growing demand in Europe.
Lukoil, Russia's second-biggest oil
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Russian Pipe Maker’s U.S. Unit Booming
Production at the Russian pipe maker TMK’s U.S. unit jumped 20 percent between the first and second quarters of the year.
TMK, which did not specify the
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Exhibition in China marks Soviets’ Great Patriotic War
China is exhibiting nearly 300 photographs and paintings depicting the Soviet Union's Great Patriotic War against Nazi Germany, the Chinese news agency Xinhua reports.
Besides photographs, visitors
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Prices and Statistics
Volume and Share Index by Visor Capital
Date: July 16, 2010; Source: Visor Capital
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Market Movers by Visor Capital
Date: July 16, 2010; Source: Visor Capital
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Oil and Gas Prices
Date: July 16, 2010; Source: Bloomberg.com
| Petroleum
($/bbl) |
|
Price* |
Change |
%Change |
Time |
| Nymex Crude Future |
76.42
|
-.20
|
-.26
|
02:57 |
| Dated Brent Spot |
75.35 |
.22 |
.30 |
03:07 |
| WTI Cushing Spot |
76.76 |
-.28 |
-.36
|
07/15 |
| Petroleum
(cent/gal) |
|
Price* |
Change |
%Change |
Time |
| Nymex Heating Oil Future |
201.67
|
-.16
|
-.08 |
02:54
|
| Nymex RBOB Gasoline Future |
205.71
|
-.36 |
-.17 |
02:52 |
| Natural gas
($/MMBtu) |
|
Price* |
Change |
%Change |
Time |
| Nymex Henry Hub Future |
4.58 |
-.00 |
-.11 |
02:54 |
| Henry Hub Spot |
4.42 |
.01 |
.23 |
07/15 |
| New York City Gate Spot |
4.96 |
.06
|
1.22 |
07/15
|
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Commodities
Date: July 16, 2010; Source: Bloomberg.com
| Commodity |
Price |
Change |
%Change |
Time |
| COPPER FUTURE (USd/lb.) |
302.250 |
1.050 |
0.35 |
03:14 |
| GOLD 100 OZ FUTR (USD/t oz.) |
1207.500 |
-0.800
|
-0.07 |
03:14 |
| SILVER FUTURE (USD/t oz.) |
18.290 |
-0.072
|
-0.39
|
03:13 |
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Metal Prices
Date: July 16, 2010; Source: Kitco.com
| Silver |
18.26 |
-0.07 |
| Platinum |
1517.00 |
-11.00
|
| Palladium |
461.00 |
-5.00
|
| Rhodium |
2,350.00 |
0.00
|
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Exchange rates
Date: July 16, 2010; Source: the National Bank of Kazakhstan
| 1 USD |
KZT 147.57 |
1 CHF |
KZT 140.73 |
1 CNY |
KZT 21.78 |
1 TRY |
KZT 95.87 |
10 JPY |
KZT 1.68 |
| 1 EUR |
KZT 188.71 |
1 AUD |
KZT 130.08 |
1 KGS |
KZT 3.22 |
1 UZS |
KZT 0.09 |
|
|
| 1 GBP |
KZT 226.18 |
1 CAD |
KZT 143.06 |
1 RUB |
KZT 4.83 |
100 KRW |
KZT 12.27 |
|
|
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