08ASTANA754, TURMOIL AT KMG – FIRST VP IDENOV MAY BE OUT THE

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Reference ID Created Released Classification Origin
08ASTANA754 2008-04-15 11:50 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0010
PP RUEHWEB

DE RUEHTA #0754 1061150
ZNY CCCCC ZZH
P 151150Z APR 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2242
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0475
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L ASTANA 000754 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/CEN. EEB 
DOE FOR EKIMOFF 
COMMERCE FOR HUEPER 
 
E.O. 12958: DECL: 04/15/2018 
TAGS: PGOV PREL EPET KZ
SUBJECT: TURMOIL AT KMG - FIRST VP IDENOV MAY BE OUT THE 
DOOR 
 
 
Classified By: AMBASSADOR ORDWAY FOR REASONS 1.4(B) AND (D) 
 
1. (C) KazMunaiGas (KMG) First Vice President Maksat Idenov 
called the Ambassador from Dubai on April 14 and told him 
that he is on the verge of leaving KMG.  According to Idenov, 
KMG President Uzakbay Karabalin met earlier that day with 
President Nazarbayev to complain about Idenov's activities at 
KMG.  Karabalin criticized Idenov's efforts to restructure 
KMG, saying that they were unacceptable, demoralizing, and 
not in accordance with "Kazakh traditions and culture". 
Karabalin also blamed Idenov for problems with the Kashagan 
Memorandum of Understanding.  Idenov said that Karabalin had 
ordered him to write a letter admitting his mistakes. 
 
2. (C) Idenov noted that in reforming KMG he was acting at 
the instructions of Prime Minister Masimov. (Note: 
Karabalin's attack on Idenov came as Masimov was returning 
from China).  He told the Ambassador that Karabalin and Askar 
Balzhanov, Director General of KMG Exploration and 
Production, had planted a story in the media accusing Idenov 
of corruption.  After indicating earlier in their 
conversation that he was considering resigning, Idenov 
concluded by saying "I am going to resign anyway." (Note: 
Idenov later called Coordinator for Eurasian Energy Policy 
Steve Mann  and told him that he would return to Astana on 
Wednesday to submit his resignation.  He said that Samruk 
Chairman Sir Richard Evans asked him not to resign.  Idenov 
also discussed at further length Karabalin's motivations, 
saying that he is trying to get his own people in to the new 
Kashagan operational structure in order to gain access to the 
procurement and supply chain.  Karabalin is also seeking to 
chair the Kashagan management committee, which Idenov 
currently chairs.) 
 
3. (U) On April 15, one media source, RusEnergy, reported 
that Idenov had already resigned, citing a source close to 
Agip KCO. According to the source, Idenov wrote in his 
resignation letter that he is leaving KMG because of 
disagreements with the GOK over Kashagan, in particular the 
heavy demands placed on the project's operator. 
 
4. (C) Comment: The cocksure Idenov may rub some the wrong 
way but he is also a bright light in Kazakhstan's energy 
sector.   His resignation would be a significant loss for KMG 
and a sign that entrenched interests are hesitant to accept 
his serious efforts to reform the company.  Only last week, a 
representative from ExxonMobil told Poloff that she had 
recently attended a presentation by Idenov on restructuring 
and that she was extremely impressed with Idenov's vision for 
KMG. End Comment 
ORDWAY

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