|Kazakhstan Sweep 100916
The Associate Press reports on September 16th that Kazakh President Nursultan Nazarbayev has revealed plans to seek an extension to his two-decade long rule by running in the 2012 election according to senior presidential advisor Yermukhamet Yerysbayev. Yertysbayev dismissed concerns over Nazarbayev’s health as unfounded saying that the president may even stay in power until 2020.
World Bulletin reports on September 16th that the two day summit of Turkic speaking nations in Istanbul has come to an end with the heads of state of Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan and Turkey having discussed a multitude of regional issues. Among other issues, the leaders confirmed the importance of a foundation for support of Turkish culture, stated they would promote the studies of the Turkish Academy in Astana, and agreed to establish a Turkish Speaking States Business Council in order foster economic cooperation between the states.
Interfax-Kazakhstan reports on September 16th that the Defense Ministers of Kazakhstan and Ukraine spoke in Minsk about the possibility of setting up a joint venture for maintenance and modernization of military equipment according to the press office of the Defense Ministry of Kazakhstan.
RIA Novosti reports on September 16th that Ukrainian First Deputy Prime Minister Andriy Klyuyev stated the Kazakhstan will join a Ukrainian-Russian space cooperation project following Kazakh President Nazarbayev’s signing of a space cooperation agreement during his recent visit to Ukraine.
Central Asia Online reports on September 15th that the demand for real estate is on the rise in Kazakhstan according to Almaty realtor Kasim Alibekov. He elaborated that the number of customers is increasing in Kazakhstan’s stabilizing economy so demand is higher.
Market Watch reports on September 16th that Bernard Murphy, CFO of Kazakhstan’s Tethys Petroleum, announced that the company had signed a gas sales contract which will move the company into a position of positive operating cash flow. The contract is for the initial sales of gas from the Akkulka gas field in Kazakhstan and will double current gas production and more than double current gas revenue.
1) Kazakhstan's long-serving leader to seek new term
ALMATY, Kazakhstan — Kazakhstan's aging leader will seek to extend his rule to 2017 in the energy-rich nation's next election and may even seek to stay in power until after 2020, a presidential adviser said Thursday, dampening speculation about potential successors.
President Nursultan Nazarbayev revealed plans to seek an extension to his two-decade-long rule during a conversation earlier this month, senior adviser Yermukhamet Yertysbayev told The Associated Press in a telephone interview.
Yertysbayev said the president was even prepared to stand for a further five-year term in 2017.
Speculation about potential successors to Nazarbayev has flourished in recent years in the Central Asian country, but signs that the iron-fisted leader plans to extend his rule in the 2012 election is likely to put those predictions to rest.
Yertysbayev also dismissed rumors about plans by Nazarbayev to dispense with the need for elections and rule indefinitely.
"According to the constitution, there should be an election, and that is what is going to happen," Yertysbayev said.
Nazarbayev, an omnipresent figure in Kazakh political life, has no real challengers to his authority and re-election is all but guaranteed.
Although critics will see the announcement as an indication of the president's determination to hang onto power, Yertysbayev said the longevity of Nazarbayev's rule will ensure the prosperous development of the oil-rich country's economy.
"During his rule, he wants to complete an entire industrial development program" and develop an innovative economy, Yertysbayev said.
Nazarbayev has ruled Kazakhstan unchallenged since the late 1980s when it was still part of the Soviet Union and repeatedly been elected to high office by landslide victories.
Some have expressed misgivings that the 70-year-old leader may not be in sufficiently good health to run the country into his eighties, but Yertysbayev said those concerns were unfounded. "He feels fantastic, both physically and mentally," he said.
Nazarbayev signed off on changes to the constitution in 2007 allowing him to run for office an unlimited number of times. However, under those rules, succeeding presidents will only be permitted to stand for two five-year terms.
In a move that drew vocal criticism from the pro-democracy camp, Nazarbayev declined earlier this year to reject a law overwhelmingly approved by both houses of parliament to appoint him "Elbashi," which is Kazakh for leader of the nation.
The title effectively made Nazarbayev leader for life, giving him the right to approve important national and foreign policies after he retires, as well as granting him lifetime immunity from prosecution for acts committed during his rule.
Other measures passed by lawmakers made defacing images of Nazarbayev an offense and provided property owned by him and his family protection from confiscation.
The prospect of Nazarbayev cementing his hold over the country will reawaken concerns over Kazakhstan's commitment to adopting democratic reforms.
Kazakhstan has come under sustained criticism this year, as it chairs the Organization for Security and Cooperation in Europe — a trans-Atlantic group that includes democracy-promotion as one of its main goals.
Nazarbayev's Nur Otan party won all the seats in a parliamentary election in 2007 that was deemed flawed by international observers, prompting new accusations of authoritarian rule.
Western governments had hoped Kazakh chairmanship of the OSCE would prompt authorities to undertake major political reforms, but critics say little has been done to raise democratic standards.
Nazarbayev has routinely dismissed criticism of poor progress on democratic development, arguing that economic and political stability are of primary importance.
2) Turkish Speaking Countries summit concludes with declaration
Thursday, 16 September 2010 18:08
The 10th Summit of Heads of State of Turkish Speaking Countries in Istanbul ended after signing of a declaration.
President Ilham Aliyev of Azerbaijan, President Nursultan Nazarbayev of Kazakhstan, Kyrgyzstan's interim President Roza Otunbaeva and Turkmenistan's President Gurbanguli Berdimuhammedov were in attendance at the summit hosted by Turkish President Abdullah Gul.
During the summit, the leaders agreed to appoint Turkish diplomat Halil Akinci as the first Secretary-General of the Secretariat who would officially assume his responsibilities following the entering into force of the Nakhchivan Agreement.
During last year's summit in Nakhchivan on October 3, 2009, the leaders signed an agreement about establishment of the Council of Cooperation of Turkish Speaking States.
The headquarters of the Council will take place in Istanbul.
The leaders also decided to celebrate the signing day (3 October) of the Nakhchivan agreement as the Turkish Speaking States Cooperation Day.
They confirmed the importance of putting into practice the initiative aiming at establishment of a special foundation for support of Turkish culture and preservation of Turkish heritage in Baku in order to preserve the rich Turkish cultural heritage.
The leaders stated that they would promote the establishment of a union among universities to support the studies of the Turkish Academy in Astana.
They decided to celebrate the 20th anniversary of the independence of Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan in 2011 through joint activities.
Accordingly, they welcomed the proposal of Turkmenistan to organize a Turkish Speaking States cultural festival in Ashkhabad in 2011.
The leaders also expressed their satisfaction about the successful completion of the referendum in Kyrgyzstan on June 27, 2010. Highlighting importance of the parliamentary elections on October 10 for regional peace and stability, they confirmed that they would continue to support Kyrgyzstan during this transitional period.
The leaders invited international community to actively participate in the International Donor Conference for assistance to Kyrgyzstan to be organized by Kazakhstan in Almaty.
They expressed their deep regret over the raid of Israel to the humanitarian aid convoy sailing in international waters on May 31, 2010, causing the death of nine innocent civilians.
The leaders emphasized the importance of the settlement of the disagreement concerning the nuclear programme of Iran through dialogue and diplomacy for regional and global peace and stability.
The leaders also agreed to establish Turkish Speaking States Business Council in order to foster economic cooperation and decided to explore the possibility of the establishment of the 'Turkic Speaking States' Development Bank' in Istanbul and a joint Insurance Company in order to support development of non-oil sectors and create new opportunities for private sector.
The first summit of Turkish Speaking Countries Cooperation Council will be held in Kazakhstan in 2011 and Kyrgyzistan will host the second summit in 2012.
3) Kazakhstan and Ukraine may set up JV to upgrade military weaponry
Astana. September 16. Interfax-Kazakhstan - The Defense Ministers of Kazakhstan and Ukraine -- Adilbek Dzhaksybekov and Mikhail Yezhel, during the talks in Minsk discussed a possibility of setting up a joint venture for maintenance and modernization of military equipment, said the press office of Defense Ministry of Kazakhstan.
According to a Thursday press release, “the joint venture may employ the assets of a subsidiary of Kazakhstan Engineering National Company to deal with overhaul and modernization of infantry fighting vehicles and armored vehicles, along with technology transfer and exchange of experience."
According to the press office, the defense ministers also discussed an opportunity to create another joint venture in Kazakhstan to manufacture spare parts, tools and accessories, maintenance sets and routine service sets for military equipment repairs.
Kazakhstan Engineering owns and operates the machine building plants of Kazakhstan.
4) Kazakhstan to join Russia-Ukraine space program
Kazakhstan, Ukraine and Russia will work together as part of the Cosmotrans space cooperation project, Ukrainian First Deputy Prime Minister Andriy Klyuyev said on Thursday.
The project provides for the joint use of Kazakhstan's Baikonur space center.
Kazakhstan and Ukraine signed a space cooperation agreement during Kazakh President Nursultan Nazarbayev's recent visit to Ukraine.
"It [Cosmotrans] used to be a Ukrainian-Russian project, but now it is a tripartite project between Ukraine, Russia and Kazakhstan," Klyuyev said.
The Ukrainian Cabinet of Ministers also expects to sign contracts with Kazakhstan to deliver Ukrainian-built An-148, An-158 and An-74 airplanes, he said.
5) Kazakhstan: Demand for real estate on the rise
ASTANA – The government is promising to help as Kazakhstanis celebrate a stabilising economy but struggle with rising housing prices.
“In Kazakhstan, just like in all post-Soviet space, everyone is trying to buy housing. It is both a home and a good investment,” said Almaty realtor Kasim Alibekov.
“Now the economy is stabilising somewhat, and the number of customers is again increasing. True, the prices are going up too, but this is generally in Almaty and Astana because most young people gather there,” Alibekov said.
New real estate is going for 170,000 KZT/m2 (US $1,155/m2) in Astana and 235,000 KZT/m2 (US $1,597/m2) in Almaty, according to Business Resource Central Asia, an analytical firm.
The average cost of residential real estate outside Astana and Almaty is about 100,000 KZT/m2 (US $679/m2). The average cost of construction is about 72,000 KZT/m2 (US $489/m2).
Prices in Astana and Almaty fell 45% during the crisis from their 2005-2007 peak, Svoboda Slova columnist Valerii Efremov said. But prices have resumed marching upward.
Astana and Almaty, always the economic leaders nationwide, now have higher housing costs than much of Europe, according to the real-estate agency KazRielt. A 73.1m-KZT (US $497,000) two-bedroom apartment in Almaty costs three times more than a similar flat in a Bulgarian or Croatian resort.
Internal migration to the coveted destinations of Astana and Almaty keeps driving up demand and prices, said Gauhar Kuanysheva, director of the Department of Residential Real Estate at the Centre for Commercial Real Estate.
Since few Kazakhstanis can buy real estate for cash, they usually borrow. But they pay high interest for the privilege, 13-18% annually on average, according to the NGO Za Dostoinoe Zhilye. Comparable rates in Europe range from 2% (Switzerland) to 4.5% (Austria and Britain), the Bolshoi Servis Nedvizhimosti real estate agency said.
Kazakhstani banks and realtors prefer to see prices keep rising, Efremov said, explaining that banks own many mortgages and don't want the value of the properties to fall, while realtor income is a percentage of sales prices.
Kazakhstani developers help drive up prices, Roman Kostenko, spokesman for the Absolut real estate agency, said September 9 at a roundtable. "Our developers ... want a minimum of 100% profit," he said, contrasting that figure to the worldwide average profit margin of 20-30%.
Prices will keep going up, economist Magbat Spanov agreed.
With housing so costly in the two urban centres, 20-25% of Astana and Almaty's population rent apartments, Centre for Macroeconomic Studies director Olzhas Hudaibergenov said. Apartment rents in those cities start at 73,600 KZT (US $500) per month, realtor Kasim Alibekov said.
"I pay a lot to rent my flat in Almaty," said Almaty English teacher Faina Olzhasova. "I very much want to buy my own flat, but I can't afford it yet."
UN Special Rapporteur on Housing Raquel Rolnik visited Kazakhstan September 13 to discuss the country's housing situation. She asked the government to help homeless Kazakhstanis as well as those who have fallen behind on their mortgages.
“I urge the government to improve its efforts to find a lasting solution for the housing sector,” she said September 13 at a meeting with the heads of Kazakhstan’s state construction agencies, conceding that the government's activities in this area have been commendable.
Meanwhile, the state plans to expand public housing projects.
“I have been working as a schoolteacher for nine years, and I stood in line for public housing. This year I finally got it,” said Aziza, a resident of Astana.
Kazakhstan is re-opening old building-material factories in every region to supply its public housing projects, Vice Minister of Industry and New Technologies Berik Kamaliyev said.
“These are former Soviet building-material factories, which (in their day) moved people out of communal housing. (Re-opening them) will solve many problems.
Construction time will be reduced by one and a half to two times, and the cost of housing will also decrease," Kamaliyev said at a news conference.
The Housing and Construction Savings Bank of Kazakhstan (ZhSSBK) also will begin building housing to sell for 88,400-132,500 KZT/m2 (US $600-900/m2), said Serik Hokin of the Housing and Utilities Authority. ZhSSBK intends to gather a group of investors who wish to purchase flats of similar quality and value. Local authorities then will allocate land, which will come with communication lines pre-installed, for the building project.
6) Tethys Petroleum: Positive Operating Cash Flow Achieved
Sept. 16, 2010, 9:33 a.m. EDT
ALMATY, KAZAKHSTAN, Sep 16, 2010 (MARKETWIRE via COMTEX) -- Tethys Petroleum Limited ("Tethys" or the "Company") /quotes/comstock/11t!e:tpl (CA:TPL 1.74, -0.11, -5.95%) today announced that it had signed a gas sales contract which will move the Company into a position of positive operating cash flow. This contract is for the initial sales of gas from the Akkulka gas field in Kazakhstan and will double current gas production and more than double current gas revenue. First deliveries under this contract are expected before the end of this month.
Bernard Murphy, Chief Financial Officer of Tethys, said, " This is an important milestone for our company as with Akkulka gas on production combined with our existing revenue streams we will have a positive operating cash flow for the Company as a whole. This provides a strong base to grow from with our planned step up of oil production in Kazakhstan from 750 barrels of oil per day ("bopd") currently to 3-4,000 bopd in Q2 2011, and also planned oil production increases in Uzbekistan from our radial drilling program and new horizontal well. It is important to us to generate cash whilst we are appraising our exciting Doris oil discovery in Kazakhstan and exploring for more oil in the immediate area with the goal to become self-funding in the long-term."
Brief Operations Update
Tethys also gave a brief update on current operations activities in Kazakhstan.
On the G6RE (Dodone) well operations are underway to secure the deeper part of the hole prior to commencing a testing programme. Different formation pressures in permeable, potentially oil bearing reservoir intervals in the deeper part of this well have resulted in operations taking more time than originally expected and it is unlikely that the testing programme will commence until sometime next month.
The AKD03 (Dione) exploration well is currently at a depth of 2,823 metres (in what is interpreted to be the middle Jurassic sequence) and casing has been run. In order to obtain early additional data for planning of the Doris area development a limited testing programme was attempted on one of the identified potential oil bearing zones in the well but mechanical issues prevented this test programme working satisfactorily and the results were inconclusive. Having had technical discussions with the Kazakhstan technical regulatory authorities and so as not to compromise the well on reaching the primary target of the Triassic it has been decided to drill to the current planned total depth of approximately 4,300 metres whereupon a comprehensive and efficient testing programme can be carried out on all the identified prospective zones, some of which had live oil shows, and including any zones that are found at deeper levels. Drilling of this well should be completed sometime in October after which the testing programme will commence.
Background Information on the Akkulka Gas Contract:
Gas flows from the Kyzyloi and Akkulka fields along a company-built 56 kilometre pipeline to Tethys' booster compressor station adjacent to the tie-in point to the major Bukhara-Urals export trunkline system where gas fired compressors compress the gas into the trunkline. Kyzyloi field (Phase 1) gas production is already being sold under the long-term take-or-pay contract with Asia Gas NG LLP at a price of US$36 per thousand cubic metres (Mcm) including value added tax ("VAT") which can be recovered by the Company.
The Akkulka (Phase 2) contract is also with Asia Gas NG LLP and is priced at US$38 per Mcm (including VAT). Gas sold under this contract is for domestic sales and as such subject to a small (0.05%) royalty payment to the Kazakh State. The new Akkulka contract runs for a period of 2 years with the parties agreeing to assess the price after one year. The average daily contract quantity for Phase 2 is expected to be approximately 500 Mcm, which gives a total production for both phases together of approximately 1,000 Mcm per day.
Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Uzbekistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
This press release contains "forward-looking information" which may include, but is not limited to, statements with respect to our operations. Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including the risks relating to regulatory approvals and of sufficiency of the proceeds for the purposes contemplated. Operating Cash Flow Positive assumes that all revenue is now realised at the current forecast production levels.
See the description of risks and uncertainties and underlying factors and assumptions relevant to the offering and "forward looking information" contained herein and to the Company's business, including its exploration and development activities, contained in the Annual Information Form dated March 31, 2010 and other corporate filings (which are incorporated herein by reference). The "forward looking statements" contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.