08ASTANA2152, KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, OCTOBER 12-25

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Reference ID Created Released Classification Origin
08ASTANA2152 2008-10-31 05:56 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9724
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2152/01 3050556
ZNR UUUUU ZZH
O 310556Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3698
INFO RUCNCIS/CIS COLLECTIVE 0751
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0150
RUEHKO/AMEMBASSY TOKYO 0860
RUEHIT/AMCONSUL ISTANBUL 0077
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2034
RUCNDT/USMISSION USUN NEW YORK 1983
RUEHNO/USMISSION USNATO 2319
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0309
RUEKJCS/SECDEF WASHDC 0229
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 0860

UNCLAS SECTION 01 OF 02 ASTANA 002152 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
STATE PLEASE PASS USTDA FOR DAN STEIN, EXIM FOR GLAZER, OPIC FOR 
BALLINGER, USAID FOR EE PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
COMMERCE FOR 4231/ITA/MAC/MLONDON, 6110/ITA/TD/BI/RHALPERN 
 
E.O. 12958:  N/A 
TAGS: PGOV ECON EIND EAGR EPET EFIN KZ
SUBJECT:  KAZAKHSTAN:  ECONOMIC AND ENERGY UPDATE, OCTOBER 12-25 
 
ASTANA 00002152  001.2 OF 002 
 
 
1.  SUMMARY:  The information in this Kazakhstan economic and energy 
update is drawn primarily from the Kazakhstani press. 
 
-- Deposit Insurance Increased 
-- EU-Kazakhstan WTO Talks:  Update From Aitzhanova 
-- News From the Agricultural Sector 
--  Pipeline News 
-- K-WAC Ltd. To Design Facilities for Kashagan 
-- Samruk-Kazyna May Purchase Energy Assets in Europe 
-- New Oil Refinery in Aktobe 
-- Energy Statistics 
 
DEPOSIT INSURANCE INCREASED 
 
2.  The Kazakhstani government has raised the ceiling for bank 
deposit insurance from 700,000 tenge (approximately $5,833) per 
account to 5 million tenge (approximately $41,666).  According to 
"Khabar" television, 54% of accounts at Kazakhstani commercial banks 
hold deposits of less than 5 million tenge. 
 
EU-KAZAKHSTAN WTO TALKS:  UPDATE FROM AITZHANOVA 
 
3.  Kazakhstan's proposed export duty on minerals, energy transit, 
and financial services access are key outstanding issues in 
Kazakhstan's WTO accession talks with the European Union, the press 
reported on October 15.  According to Vice Minister of Industry and 
Trade Zhannar Aitzhanova, the EU opposes introduction of the export 
duty.  She also said that Kazakhstan is not yet ready to allow 
foreign banks and insurance companies to open branches in the 
country.  Nevertheless, Aitzhanova believes that Kazakhstan's WTO 
entry talks are nearing completion.  Kazakhstan has finalized 
bilateral negotiations with 21 of 25 countries. 
 
NEWS FROM THE AGRICULTURAL SECTOR 
 
4.  Agriculture Minister Kurishpayev is encouraging foreign 
investment in Kazakhstan's agricultural sector, Reuters reported on 
October 23.  Kurishpayev said that Kazakhstan is positioned to meet 
booming agricultural demand in the region.  According to official 
statistics, only 1.2 percent of the $76 billion in total foreign 
investment in Kazakhstan since 1993 has been in the agriculture 
sector. 
 
5.  A quota on sugar imports initially introduced in March of this 
year has been extended to July 1, 2009.  It had been set to expire 
on October 1. 
 
6.  According to the Tajik Chamber of Industry and Trade, Kazakhstan 
will resume wheat exports to Tajikistan.  Kazakhstani grain 
companies are ready to supply wheat within the framework of 
agreements reached during Tajik President Emonali Rahmon's visit to 
Kazakhstan in May 2008. 
 
PIPELINE NEWS 
 
7.  Nurtas Shmanov, Director General of KazTransOil, a KazMunayGas 
subsidiary, announced that the capacity of the Atyrau-Samara oil 
pipeline will be expanded to 17 million tons in 2009.  Separately, 
Russian Energy Minister Sergey Shmatko said that Kazakhstan is 
seriously studying the possibility of transporting oil through the 
Eastern Siberia-Pacific Ocean pipeline.  However, Kazakhstani 
Minister of Energy and Mineral Resources Sauat Mynbayev called this 
just "a hypothetical possibility," adding that actual oil volumes 
have not been discussed. 
 
8.  The "Interfax" wire service reported on October 13 that at a 
 
ASTANA 00002152  002.2 OF 002 
 
 
meeting with Prime Minister Masimov, China National Petroleum 
Corporation (CNPC) Director General Wang Dongjin said that the 
construction of the Kazakhstan-China gas pipeline might be completed 
ahead of schedule. 
 
K-WAC LTD. TO DESIGN FACILITIES FOR KASHAGAN 
 
9.  Agip KCO has chosen K-WAC Ltd., which is owned by Worley Parsons 
Europe Ltd (45%), CB&I UK Ltd. (25%), and Aker Engineering & 
Technology AS (30%), for front-end engineering and design services 
for Phase II of the Kashagan project. 
 
SAMRUK-KAZYNA MAY PURCHASE ENERGY ASSETS IN EUROPE 
 
10.  The press reported on October 22 that the newly-established 
Samruk-Kazyna National Welfare is considering buying energy 
infrastructure assets in Europe as part of the implementatio
n of the 
government's "Road to Europe" program. 
 
NEW OIL REFINERY IN AKTOBE 
 
11.  According to an October 22 "Khabar" television report, 
AktobeMunayGas plans to build an oil refinery in Aktobe with an 
annual processing capacity of 8 million tons of crude. 
 
ENERGY STATISTICS 
 
12.  According to the National Statistics Agency, from January to 
September, Kazakhstan produced 43.25 million tons of crude oil and 
24.49 billion cubic meters (bcm) of natural gas, an increase of 5.4% 
and 10.7%, respectively, over the same period in 2007.  From January 
to August, Kazakhstan exported 41.17 million tons of crude oil and 
gas condensate, valued at $30.78 billion, which represented a 0.6% 
decrease in export volume, but (because of higher prices) a 78% 
increase in export value over the same period in 2007.   From 
January to August, Kazakhstan exported 11.98 bcm of natural gas, 
valued at $709.4 million -- which constituted a 16.6% increase in 
volume and a 60.1% increase in value over January to August 2007. 
 
HOAGLAND 
1

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