akorda.kz

25 Apr 2024
Kazakhstan, Kazakhstan International Affairs, Kazakhstan Business & Economy

Great Britain’s Cameron Signs Strategic Partnership Agreement in Astana

A strategic partnership and cooperation agreement between Kazakhstan and Great Britain was signed by the two countries’ foreign ministers, Murat Nurtleu and David Cameron, in Astana on 24 April.

The Kazakh Foreign Ministry has commented that the document aims to strengthen bilateral relations in a wide range of sectors including foreign policy and security, trade and investment, protection of intellectual property, partnerships in energy and raw materials, transportation, protection of the environment and climate change, banking and financial services, employment and social policy, science, and education.

Nurtleu added: “This comprehensive agreement will be a significant step in taking political, trade and investment relations between Astana and London to new horizons… We believe our strong and mutually beneficial strategic partnership will continue to strengthen all areas, from energy to rare metals, ecology to education.”

Cameron recalled that strategic dialogue between the countries had begun eleven years ago during his first visit to Kazakhstan as Britain’s prime minister and confirmed the UK’s commitment to developing cooperation with Kazakhstan as its key partner in Central Asia.

Memoranda of understanding on opening a branch of Queen’s University Belfast in Almaty and launching Kazakh language courses at Oxford University were also concluded during Cameron’s visit.

At a meeting with Cameron later that day, Kazakh president Kassym-Jomart Tokayev reiterated the importance of collaboration between the two countries and commending the strategic partnership and cooperation agreement, announced, “I am confident that this comprehensive document will definitely give a fresh boost to our multifaceted bilateral agenda.”

Great Britain is among the highest ten foreign investors in Kazakhstan. Since 2005, Kazakhstan’s economy has received $795 million in FDI from the UK and last year alone, over $17 billion.

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Times of Central Asia

president.kz

25 Apr 2024
Kyrgyzstan, Central Asia, Kyrgyzstan International Affairs, Kyrgyzstan Business & Economy

Azerbaijan and Kyrgyzstan Expand Economic and Transport Cooperation

During a state visit to Azerbaijan on 24 April, Kyrgyzstan President Sadyr Japarov joined President Ilham Aliyev in bilateral talks at the 2nd gathering of the Interstate Council of Azerbaijan and Kyrgyzstan.

As a result of the meeting in Baku and in support of a joint declaration to deepen relations, the leaders signed a strategic partnership agreement between Azerbaijan and the Kyrgyz Republic.

In a statement to journalists, President Aliyev referred to centuries-old ties of cooperation, friendship and interaction enjoyed by Azerbaijan and Central Asia, and announced, “Today, the regions of Central Asia, the Caspian Sea and Azerbaijan are of great importance in terms of energy resources, transportation routes and trade. We are seeing great potential here and are strengthening interaction with our traditional partners from brotherly countries. Among them, cooperation with Kyrgyzstan is of particular importance.”

During the meeting, the two governments signed an addendum to the agreement on the authorized capital of the Azerbaijani-Kyrgyz Development Fund, to quadruple it from $25 million to $100 million.
To date, the Fund has received over 40 applications for investment projects in Kyrgyzstan and according to Aliyev, the construction of a five-star hotel financed by Azerbaijan already begun at Kyrgyzstan’s Lake Issyk-Kul, is due for completion by the end of next year.

The president commended the significant increase and potential for growth in trade between Azerbaijan and Kyrgyzstan and reported Azerbaijan’s interest in investing in renewable energy projects in Kyrgyzstan.

With reference to transport, he recommended that consultations proceed on coordination of transport routes in terms of digitalization and tariff policy, to make the route via the Caspian Sea and Central Asia to Europe both faster and more commercially viable.

President Japarov, in turn, referenced Kyrgyzstan’s construction of a secondary school in the Aghdam district of Azerbaijan, saying, “The construction of this school is Kyrgyzstan’s contribution to the restoration of peace in the regions affected by the [Azeri-Armenian] conflict.”

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Times of Central Asia

akorda.kz

25 Apr 2024
Uzbekistan, Uzbekistan Business & Economy, Uzbekistan International Affairs

Uzbekistan and Afghanistan Shore Up Places in Eurasian Transit Corridor

The first meeting of the working group on the development of the multimodal transport corridor Belarus–Russia–Kazakhstan–Uzbekistan–Afghanistan–Pakistan took place in Termez, Uzbekistan on 23 April. Attended by each of the countries’ ministers of transport, the meeting focused on connections between Central Asian states and the CIS through Uzbekistan with South Asia.

According to the Uzbek Transport Ministry, the resulting roadmap, signed by all parties, aims to increase transit cargo transportation through Uzbekistan, Afghanistan, and Pakistan through the introduction of digital documents to speed up and simplify processing.

In recent years, the volume of transit cargo through Afghanistan has increased by over 30%, reaching almost 1 million tons. Following a transit trade agreement between Uzbekistan and Pakistan in 2021, cargo volumes have increased significantly and in 2022, cargo transportation between the two countries through Afghanistan increased 2.5-fold. This year, Uzbekistan plans to transport more than 1 million tons of cargo through Afghanistan to Pakistan.

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Times of Central Asia

Image TCA, Aleksandr Potolitsyn

25 Apr 2024
Central Asia, Kazakhstan Lead Story, Lead Story, Home, International Affairs, Business & Economy, Kazakhstan International Affairs, Kazakhstan, Kazakhstan Business & Economy

Kazakhstan Likely To Insist on Revisions to Kashagan Oil Contracts

Kazakhstan is demanding compensation for lost profits from the North Caspian Operating Company (NCOC), the consortium that manages the Kashagan oil field, and arbitration claims have risen to $150 billion. Sources close to Kashagan told The Times of Central Asia that this should send the message to western energy companies that Kazakhstan is looking to revise previously signed contracts.

While Bloomberg has reported the sum of the claims, citing people familiar with the matter, Kazakh government officials have declined to comment on the situation, claiming that it is a “commercial dispute.”

In April 2023, proceedings against the companies developing the Kashagan and Karachaganak fields began as part of a dispute over cost deductions from oil-sale proceeds of more than $13 billion and $3.5 billion, respectively. An additional $138 billion claim relates to the calculation of the cost of oil production “that was promised to the government but not delivered by the field developers,” according to Bloomberg.

The Ministry of Energy has not yet commented on the new claims. It states that the Kazakh authorities seek to maximize profits from their oil-production projects with the participation of foreign investors, but have been relatively flexible in previous disputes with oil corporations.

International sources note that Eni, Shell, Exxon and TotalEnergies have already invested around $55 billion in Kashagan, and currently the field produces about 400,000 barrels of oil per day. NCOC investors, led by Italy’s Eni, are convinced that production can be increased to 1.5 million barrels per day. NCOC has stated that it acts in strict compliance with the contract. Representatives of Eni confirmed that the Kazakh authorities have applied to the court for arbitration settlement, but did not disclose details.

Earlier, Kazakhstan won a lawsuit against the Kashagan consortium which required them to pay $5.1 billion for damage to the environment. Kashagan is developed by the NCOC consortium, which includes the national company KazMunayGas (KMG) and several foreign energy companies: Eni, Shell (Great Britain), ExxonMobil (USA), Total (France), Inpex (Japan), and CNPC (China).

Member of the Public Council of the Kazakh Ministry of Energy, Olzhas Baidildinov believes that the sharp increase in the amount of the lawsuit is a signal from the Kazakh side to the consortium to revise the contracts.

“In my opinion, it’s obvious that Kazakhstan wants to revise the terms of work on large consortia. At the same time, I have proposed many times to exchange the frozen assets of the Russian Federation for stakes in major projects: Tengiz, Karachaganak and Kashagan. There is a nuance here: for example, the shares in Karachaganak and Kashagan are managed by PSA LLP, which is determined by the authorized body, while the share in Tengiz is managed by KazMunayGas. As we see, on Kashagan and Karachaganak there are arbitration claims filed in international arbitration, there is an environmental issue – but on Tengiz they are silent for some reason. This is either KMG’s unprofessionalism, because the amount of investment expense is very high, or some other unknown issues that need to be addressed,” said Baidildinov.

According to him, the number of claims on Kashagan is notably large. “It can be understood that under the production sharing agreement, which is unknown to the general public, the republic received certain revenues depending on oil prices and in accordance with the output of the project compared to certain parameters of production. As we remember, the launch of Kashagan was repeatedly postponed, there were emergency works and [stoppages]. Apparently, having considered all this, Kazakhstan lodged such a claim. But I will emphasize that no Kazakhstani body has confirmed either the claims or the amount. This information has passed through foreign publications, we can’t say whether it’s true or not,” Baidildinov added.

Baidildinov believes that the Kazakh energy ministry isn’t involved in the making of compensatory claims against the international consortium. “The Ministry of Energy stated that it isn’t commenting on the situation, as it’s a corporate issue. I think the Ministry of Energy is not very involved because it is being handled by PSA LLP, a team headed by Beket Izbastin. I would like to emphasize that the new team that came to PSA is defending the interests of the country. Is it possible to fulfill such claims? Probably not, because today investments in the Kashagan project are estimated at $60 billion. In fact, the claim is 2.5 times larger. Naturally, such an amount will not be paid out. Most likely, we can predict that some terms of the contract will be revised: Kazakhstan’s share will be increased, or other parameters will be changed. In any case, this is a serious signal to international companies, which entered the country on very ‘sweet’ terms. Kazakhstan intends to revise these contracts,” he said.

An Almaty-based expert in distressed assets, Rasul Rysmambetov, in turn is sure that there is a certain amount of bargaining going on between the parties. “No one has confirmed anything yet, so it’s premature to discuss. The lawsuit is big, and apparently there is some bargaining going on between Kazakhstan and the operator of Kashagan. As they say, ask for a camel and they will give you a ram. Nobody really knows how much Kashagan is worth today, although we can say that it’s proven to be a rather overrated project, and there were a lot of expenses that were not fully understood. I do not think that the claims for $150 billion have a clear basis, but rather there is a process of bargaining. Including through the media,” Rysmambetov explained.

Rysmambetov believes that the public will not receive official information either way. He believes that the issue of monetary claims against NSOC will be resolved behind the scenes. “Most likely, the Ministry of Energy will not comment on anything now, everything is decided behind the scenes. But I would like to say that the lawsuits and other things will in no way affect investors and the business climate, as there are no confirmations yet. I do not think that claims for $150 billion will find any serious ground,” he said.

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Times of Central Asia

German investment in Kazakhstan

25 Apr 2024
Kazakhstan, Kazakhstan International Affairs, Kazakhstan Business & Economy

Germany Increases Investment and Trade in Kazakhstan

In a report on the implementation of Kazakh-German projects at a meeting of the Investment Promotion Council on 24 April, Kazakh Invest stated that investment from Germany in Kazakhstan reached an all-time high of $770 million in 2023.

To date, the pool of German initiatives planned for Kazakhstan includes 63 projects with a value of around $54.4 billion and the potential to create 14.7 thousand jobs. The 32 projects already in operation, have created some 6,000 permanent posts.

Bilateral trade turnover between Kazakhstan and Germany is also very positive , having leapt by 24.7% in 2022 and 41.3% in 2023.

Kazakhstan, as its key partner in Central Asia, currently ranks as one of Germany’s top 50 trading partners.

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Times of Central Asia

Photo: Kazakh Ministry of Emergency Situations

24 Apr 2024
Central Asia, Environment, Kazakhstan Environment, Home, Kazakhstan, Features

Kazakhstan Repurposing Floodwater

In a strategic response to the unprecedented spring flooding this year, Kazakhstan is channeling its efforts towards harnessing the disastrous floods to its advantage. The Ministry of Water Resources and Irrigation in Kazakhstan has embarked on a program to utilize the massive floodwaters for future irrigation and environmental sustainability.

In the Atyrau region, which has faced significant flooding, the ministry’s subdivision has taken the initiative of digging 14.5 kilometers of new canals. These aim to redirect the surplus water from the Zhaiyk (Ural) River directly to the Caspian Sea, thereby mitigating the risk of damage in the city of Atyrau. This redirection not only safeguards the city, but also conserves water. According to estimates, up to a quarter of the Caspian Sea – an area the size of Portugal – could be set to disappear by the end of the century.

In the West Kazakhstan region, discharge from the Ural-Kushum irrigation system into the Kamysh-Samar lakes, which have been dry for two decades, has been reported, marking a significant step towards reviving these reserves. Meanwhile, the Tobol River has recorded high water levels for the first time since 2000. The reservoirs of the Tobol River cascade have managed the floodwaters and are now 92% full – a record in recent times.

The Astana Reservoir, meanwhile, is being filled with floodwater with the aim of securing drinking water supplies for the capital for the forthcoming year. In 2023, a shortfall necessitated additional costly water supplies to be redirected from the Satpayev Canal.

In the Akmola region, having been filled with floodwater, irrigation systems such as Alva and Kenbidike are now at full capacity. Rivers in the Tselinograd region have also been replenished, directing a substantial volume of 1.5 billion cubic meters of water towards Lake Tengiz. Furthermore, the Karaganda region’s reservoirs are now brimming, ensuring the region’s needs are covered for the next year. Water from the Kengir Reservoir in the Ulytau region has also been discharged into the Sarysa River, flowing into the Kyzylorda region’s lake system and enhancing its agricultural prospects.

The Almaty region has also benefited from an increased flow from the trans-boundary Ili River into the Kapchagay Reservoir, adding approximately 2.3 cubic kilometers of water into environmentally-threatened Lake Balkhash.

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