09ASTANA673, KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, MARCH 29-APRIL

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Reference ID Created Released Classification Origin
09ASTANA673 2009-04-20 11:58 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO4066
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0673/01 1101158
ZNR UUUUU ZZH
O 201158Z APR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5205
INFO RUCNCIS/CIS COLLECTIVE 1511
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0889
RUEHKO/AMEMBASSY TOKYO 1592
RUEHUL/AMEMBASSY SEOUL 0576
RUEHDI/AMCONSUL DUBAI 0146
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1074
RUEKJCS/SECDEF WASHDC 0988
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1434

UNCLAS SECTION 01 OF 02 ASTANA 000673 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EPET EINV KZ
 
SUBJECT:  KAZAKHSTAN:  ECONOMIC AND ENERGY UPDATE, MARCH 29-APRIL 
11, 2009 
 
ASTANA 00000673  001.2 OF 002 
 
 
1.  SUMMARY:  This information is drawn primarily from the 
Kazakhstani local press and has not been verified for accuracy. 
 
-- Banking Sector News 
-- Etihad Airways to Fly to Astana 
-- New Commodity Exchange Launched 
-- Kazakhstan Raises Loan For Europe-China Transit Corridor 
-- Economic Statistics 
-- KazMunayGas Bid on Iraq Deposits 
-- Kazakhstan President Receives Gazprom President 
-- Austrian-Romanian JV Launches Production 
 
BANKING SECTOR NEWS 
 
2.  The total foreign obligations of the Kazakhstani banking were 
$35 billion as of April 1, the National Bank reported.  According to 
National Bank Chairman Grigoriy Marchenko, banks repaid $3.6 billion 
to foreign creditors during the first quarter of 2009, and are 
scheduled to repay $2.5 billion in each of the remaining quarters of 
the year. 
 
3.  On April 10, BTA Bank Ukraine officially announced that its 
parent, Almaty-based BTA Bank, reduced its share in the Ukrainian 
subsidiary from 49.98% to 9.99%.  BTA Bank promptly refuted the 
announcement and said any such transactions would have been 
conducted without its consent and would not be legally valid.  Arman 
Dunaev, BTA Bank's Chairman, said "the attempt to deprive us from 
the right of ownership is illegal.  We will defend our rights and 
will appeal to the Ukrainian authorities with a request to stop 
illegal actions towards Kazakhstani investors." 
 
4.  According to press releases issued by BTA Bank, UBS and Goldman 
Sachs will act as advisors to the bank.  BTA Bank did not provide 
any other details regarding this decision. 
 
5.  Abu Dhabi-based Al Hilal Bank said it will open the first 
Islamic bank in Kazakhstan.  This will also be the bank's first 
foray outside of the United Arab Emirates.  Al Hilal, which plans to 
open in Almaty during the second half of 2009, will offer 
traditional Islamic financial instruments. 
 
ETIHAD AIRWAYS TO FLY TO ASTANA 
 
6.  Etihad Airways, the national airline of the United Arab 
Emirates, will launch non-stop flights from Abu Dhabi to Astana 
beginning May 7.  The airline already operates non-stop flights from 
Almaty. 
 
NEW COMMODITY EXCHANGE LAUNCHED 
 
7.  The Eurasian Trading System (ETS), a new commodity exchange 
operated jointly by the Regional Financial Center Almaty (RFCA) and 
Russia's RTS Stock Exchange, opened in Almaty in March.  The 
exchange currently facilitates spot trading in grain, but plans to 
add trading in metals, fuel, and lubricants in the near future.  It 
also expects to conduct futures trading.  RFCA chairman Arken 
Arystanov expects the turnover of the commodity exchange to exceed 
$200 million in 2009. 
 
KAZAKHSTAN SECURES LOANS FOR EUROPE-CHINA TRANSIT CORRIDOR 
 
8.  Kazakhstan signed loan agreements with the Asian Development 
Bank (ADB) and the European Bank for Reconstruction and Development 
(EBRD) for the construction of the Western Europe - Western China 
international transit corridor.  ADB will lend $340 million for 25 
years at an annual rate of LIBOR plus 0.2%, with a five-year grace 
period.  The EBRD loan is for $180 million and will be extended for 
19 years at LIBOR plus 1% annually, including a four-year grace 
period.  In addition, Kazakhstan plans to obtain loans for this 
project from IBRD, the Islamic Development Bank, and the Japan 
 
ASTANA 00000673  002.2 OF 002 
 
 
International Cooperation Agency. 
 
ECONOMIC STATISTICS 
 
9.  National Bank Chairman Grigoriy Marchenko said that 2008 was 
marked by the largest inflow of foreign direct investment (FDI) in 
the history of Kazakhstan -- almost $20 billion in gross inflow and 
$14.5 billion in net inflow.  Net FDI for 2008 was 12% of GDP. 
 
10.  Bilateral trade between Japan and Kazakhstan grew from $116 
million to $1.7 billion between 2000 and 2007, according to the 
Kazakhstan Institute of Strategic Studies.  Trade with Japan is 2.5 
times greater than trade with South Korea. 
 
KAZMUNAIGAS BID ON IRAQ DEPOSITS 
 
11.  KMG Exploration and Production (KMG E&P), the production 
subsidiary of national oil and ga
s company KazMunaiGas, has been 
shortlisted, along with nine other companies, to take part in the 
second round of negotiations for the development of Iraq's oil 
deposits, the Khabar television channel reported on April 1.  KMG 
E&P would more likely act as a service provider, rather than a field 
operator. 
 
PRESIDENT NAZARBAYEV RECEIVES GAZPROM HEAD 
 
12.  President Nazarbayev received Gazprom head Alexei Miller at his 
Almaty residence on April 9.  Miller informed Nazarbayev that the 
Kazakhstani-Russian joint venture KazRosGas plans to develop the 
Imashevskoye gas field.  He also said that Russia would soon provide 
Kazakhstan with the results of a geological survey for the 
Tsentralnaya offshore oil deposit in the Russian sector of the 
Caspian Sea.  Miller told reporters that the designed throughput 
capacity of the Prikaspiiski gas pipeline would be boosted from 20 
billion cubic meters (bcm) to 40 bcm. 
 
AUSTRIAN-ROMANIAN JV LAUNCHES PRODUCTION 
 
13.  On April 9, the Austrian-Romanian joint venture KomMunai 
launched commercial production at the Komsomolskoye oil and gas 
field in Mangistau oblast.  The field is expected to produce 480,000 
tons of crude oil a year until 2038.   The Akim (Governor) of 
Mangistau oblast, Krymbek Kusherbayev, hailed the company as an 
"effective investor that managed to start industrial development in 
two years."  The estimated reserves of the Komsomolskoye field total 
13.5 million tons of oil and 2.5 bcm of natural gas. 
 
HOAGLAND

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