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Kazakhstan and Slovakia Discuss Strengthening Cooperation

Kazakhstan and Slovakia Discuss Strengthening Cooperation The possibility of strengthening cooperation between Kazakhstan and Slovakia was discussed during a working visit to Bratislava of the Deputy Minister of Foreign Affairs of Kazakhstan, Roman Vassilenko on December 11th. Vassilenko held meetings with colleagues in Slovak ministries, parliament, and representatives of business circles. During political and economic consultations with the State Secretary of the Ministry of Foreign and European Affairs of the Slovak Republic, Rastislav Chovanec, the parties discussed bilateral relations and the interaction of the two countries in international platforms. Vassilenko and Chovanec emphasised the dynamic, progressive development of Kazakh-Slovak cooperation. The State Secretary said that Kazakhstan is among the top five countries which Slovak business is interested in cooperation with. Particular attention was paid to the preparations for the tenth meeting of the Kazakh-Slovak Intergovernmental Commission on economic and scientific-technical cooperation and a business forum, which are scheduled for the first half of 2024 in Astana. During talks with the State Secretary of the Ministry of Economy of Slovakia, Vladimir Šimoňák, a positive trend of growth in mutual trade between the two countries was noted, the volume of which increased by 68.5% the first ten months of 2023. Issues of cooperation in energy, transport, machine-building, defense, IT, agriculture and tourism were discussed. Vassilenko proposed expanding the agenda of the upcoming commission in the areas of energy, transcontinental transport and the establishment of new freight routes between Europe and Asia, including the development of the Middle Corridor. In this context, it was proposed that the volume of freight traffic between Kazakhstan and Slovakia be increased. Particular attention was also paid to cooperation in the field of training engineering and technical professions. Currently, over 500 students from Kazakhstan are undergoing technical training and internships at enterprises of the Slovak automotive industry, and the number of students from Kazakhstan studying in Slovak universities continues to grow annually.

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Kazakhstan Increases Oil Exports Along Trans-Caspian Route

Kazakhstan Increases Oil Exports Along Trans-Caspian Route KazTransOil JSC (a subsidiary of Kazakhstan’s national oil and gas company, KazMunayGas JSC), exported 3,620,000 tons of oil from the Caspian port of Aktau in the eleven months of 2023 so far, which is 1,014,000 tons, or 50% more compared to the same period last year, the company said on December 11th. The increase in the volume of transportation of Kazakh oil for export from the port of Aktau is due to an increase in the volume of raw materials shipped towards the port of Baku, from 205,000 tons to 1,238,000 tons, a sixfold increase on the same period in 2022. In addition, in the reporting period, 1,824,000 tons of oil were shipped from Aktau towards the port of Makhachkala (Russia). In 2022, the President of Kazakhstan, Kassym-Jomart Tokayev ordered an increase in the volume of oil transportation along the Trans-Caspian corridor. In accordance with this instruction, JSC NC KazMunayGas and the state oil company of Azerbaijan, SOCAR, entered into an agreement providing for the transportation of 1,500,000 tons of oil per year from the Tengiz field in the direction of the Baku-Tbilisi-Ceyhan oil pipeline.

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Government Buys ArcelorMittal Termirtau for $286 Million

The Minister of Industry and Construction of the Republic of Kazakhstan, Kanat Sharlapayev, announced at a briefing that after eleven rounds of negotiations, the purchase of Arcelor Mittal Temirtau has been completed, Kazinform has reported. Divulging the details of the deal, Sharlapayev stated that “$286 million is the cost of two fully functioning enterprises. In addition, ArcelorMittal will not make any claims against the Government of Kazakhstan. The agreement was reached within the legal framework, in full compliance with international law.” Against a backdrop of ongoing incidents at ArcelorMittal Temirtau JSC, in August of this year, President of the Republic of Kazakhstan Kassym-Jomart Tokayev pointed out serious violations by the company. The Head of State stated that consequences for the enterprise to remain in the Kazakh market were not excluded for AMT. At the time this statement was made, the government was already negotiating with the owners of ArcelorMittal Temirtau on the possible withdrawal of the company from the metallurgical plant. These talks began after the tragic accident that occurred on November 3rd 2022 at the Lenin Mine, a subsidiary of AMT. As a result of these intensive negotiations, on December 9th 2022, a “Standstill Agreement” was signed, which allowed the authorities to evaluate and audit the enterprise. During the negotiations, ArcelorMittal requested $3.5 billion, which did not correspond to the calculations of international consultants. “This became one of the main reasons for the protracted negotiation process,” Sharlapayev said. “Our goal was to purchase the plant at a fair price without incurring costly and protracted international litigation. The urgency and acceleration of the negotiations were also dictated by the need to prevent the shutdown of the enterprise. The agreement between the Government of Kazakhstan and ArcelorMittal can be called a mega-deal, which is of exceptional importance to our country. We have avoided a lot of risks faced by the governments of other countries,” the minister stressed. Sharlapayev also announced three key elements of the deal: - The state has reduced the value of assets from $3.5 billion to $286 million; - Not a single tenge was spent from the state budget on the implementation of the transaction; - The new investor undertakes an obligation to the parent company, ArcelorMittal, to repay a short-term loan of $250 million and a long-term loan of $450 million over four years.

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Kazakhstan Approves Plan for Oil and Gas Industry Development

Kazakhstan Approves Plan for Oil and Gas Industry Development On December 6th, the Government of Kazakhstan approved a comprehensive plan for the development of the largest oil, gas and petrochemical projects for 2023-2027. The plan is aimed at implementing 20 significant projects in the oil and gas industry, oil and gas refining, and the petrochemicals industry, with an expected investment volume of $37.3 billion. In particular, the document provides for the implementation of large oil and gas projects in the Tengiz, Karachaganak and Kashagan fields, aimed at increasing oil production to 105.5 million tons and gas production to 82.1 billion cubic meters by 2027. The construction of gas processing plants provided for in the plan will have a significant impact on meeting the needs of the domestic market for motor fuel. In addition, in order to supply the domestic market with petroleum products, it is planned that by 2029 the production capacity at the Shymkent Oil Refinery will be increased from 6 million to 12 million tons. As a result, the country will produce 18 million tons of fuel per year.

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EBRD Supports Capital Markets in Kazakhstan

The European Bank for Reconstruction and Development (EBRD) on December 6th said it is further developing the financial markets in Kazakhstan by introducing a new local currency interest rate swap derivative - an Overnight Indexed Swap (OIS) - in which the overnight rate is exchanged for a fixed interest rate. An inaugural one-year OIS transaction, based on the Tenge Overnight Index Average (TONIA), was closed with one of the country’s largest lenders, Bank CenterCredit (BCC). The OIS market will allow banks and investors to better manage their interest rate risk, thus making the financial system more stable and financial markets in Kazakhstan more attractive. “The EBRD and Kazakhstan are making significant progress in the development of financial markets. This transaction reconfirms the role of TONIA as the interest rate benchmark in the country, stimulates local currency lending, and encourages more TONIA-linked swaps,” the EBRD’s Treasurer, Axel van Nederveen said. The EBRD believes the new derivative instrument fills an important gap in capital markets and is keen to participate in the development of this, not only as part of its commitment to local currency financial markets, but also as an active participant.

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Kazakhstan’s Road Freight Transportation Sees 22% Growth: A Boon for the Economy

In a recent government meeting chaired by Prime Minister Alikhan Smailov, it was reported that Kazakhstan has seen a significant surge in road freight transportation during the first three quarters of this year. The volume of goods transported by road reached 5.5 million tons, marking a 22% increase compared to the same period last year. This growth trend is also reflected in transit transportation, which has risen by a whopping 44%, climbing from 2.5 to 3.6 million tons. The driving force behind this uptick is the marked increase in cargo transportation to China. Transport volumes have doubled, reaching 1.5 million tons. This surge illustrates the vast potential for further amplifying the volume of transit cargo moving from China to Europe. If the current dynamics persist, transit through Kazakhstan could multiply five-fold by 2029, providing a substantial boost to the country's economic development. Prime Minister Smailov underscored the vital role of developed road freight transportation in shaping the economy. It has direct impacts across all sectors, making it a key factor in the nation's economic landscape. Currently, eight international highway corridors traverse the territory of Kazakhstan, spanning a total length of approximately 13,000 km. These include the Western Europe - Western China route. This promising growth trajectory in road freight transportation positions Kazakhstan as a strategic player in the international logistics and transportation arena. It also underpins the country's commitment to bolstering its economic infrastructure and enhancing its trade relationships, particularly with neighboring China. As we move into 2024, Kazakhstan's transportation sector seems poised for further expansion and success.