Chinese energy major CNPC is about to snap up a stake in Kazakhstan’s super-giant Kashagan oil field just as the project prepares to start commercial production, expanding an already significant Chinese presence in Kazakhstan’s energy sector.
Astana says it will buy a foreign-owned stake that is up for sale and which India had been eying. A top Kazakh industry official has said the government plans to sell this share to state-run CNPC.
News of the shakeup broke on July 2, when the Oil and Gas Ministry announced that it had notified Texas-based ConocoPhillips of its intention to exercise its legal right to have first option as the American company divests itself of its 8.49 percent stake in Kashagan in a bid to streamline its assets.
The statement did not say what the government – which already owns a 16.85 percent stake in the seven-member consortium operating Kashagan, the North Caspian Operating Company (NCOC) – intends to do with its newly-acquired stake. However, on July 1 the head of Kazakhstan’s state energy company KazMunayGaz (KMG), Lyazzat Kiinov, shed light on Astana’s plans: it will buy ConocoPhillips’ stake and also sell a stake to CNPC, he told Reuters.
Kiinov did not specify the price but confirmed that it would be over $5 billion: “not substantially, but more.”
In the end, CNPC is expected to hold ConocoPhillips’ 8.49 percent stake, leaving the remaining holdings unchanged: oil majors ExxonMobil, Shell, Total, and Eni each hold 16.85 percent (as does KMG), and Japan’s INPEX holds 7.56 percent.
A Russian rocket has exploded and crashed shortly after taking off from the Baikonur space-launch site in central Kazakhstan. The incident is likely to make further waves in Russo-Kazakh relations, which are already strained over cosmic cooperation.
Dramatic live video broadcast by the Rossiya 24 channel showed the Proton-M rocket taking off from Baikonur then veering off course before bursting into flames, breaking up and crashing to the ground.
The rocket engines cut out 17 seconds after takeoff and it crashed 2.5 kilometers from the launch pad, Russian space agency Roskosmos said. It added that there were no reported casualties or damage at the scene of the crash. Video of the incident showed the burning rocket, which was carrying three satellites into space, setting fire to the ground where it landed.
A Russian space industry source told RIA Novosti that problems with the flight control system were the likely cause of the crash, but Kazakh Emergencies Situations Minister Vladimir Boyko preliminarily put it down to engine failure, as a result of which there was “combustion of fuel, some of which fell to the ground and continued to burn,” he said in remarks quoted by Tengri News.
Villagers in a valley in eastern Kazakhstan knew what to blame when they kept being hit by misfortune: the restless spirits of one of their illustrious ancestors, unearthed from his elaborate grave a decade ago by archeologists.
Now, to the chagrin of historians from Kazakhstan and Russia who have spent 10 years studying the body for clues about the ancient Scythians who inhabited the steppes of Eurasia, the body has been returned to the grave to appease those spirits, KTK TV reports.
The villagers had lobbied heavily to have the body returned from Almaty, where it was being studied, and buried because “since the burial mound was dug up, utter misfortune has befallen the region: hurricanes keep raging over and over, cattle is dying in the villages, and children are being born sick. All this, the villagers said, was because historians disturbed the spirits of the ancestors.”
The Scythian nobleman, originally buried decked out in gold as a mark of respect for his rank, was returned to his original grave near the settlement of Shilikty at a ceremonial burial, and the villagers now plan to erect a memorial in his honor. The hapless historians have managed to secure agreement that they can reenter the grave for more studies if the need arises.
Kazakhstan is a treasure trove of amazing archeological finds. The jewel in the crown is the Golden Man, found in the Issyk burial mound just outside Kazakhstan’s commercial capital, Almaty, in 1969. Believed to have been a young Scythian prince who lived in the 4th or 5th century BC, he was interred wearing some 4,000 gold ornaments.
UK Prime Minister David Cameron raised human rights concerns with his hosts during a two-day visit to Kazakhstan. But not even the most delicately phrased admonition seems likely to prompt President Nursultan Nazarbayev’s administration to alter its current political course.
A consortium consisting of a trio of oligarchs and the Kazakh government has moved one step closer to taking control of a London-listed natural resources giant with major operations in Kazakhstan.
The consortium bidding to win control of the Eurasian Natural Resources Corporation (ENRC) submitted a slightly revised offer to take the company back into private hands on June 24, after its initial proposal last month fell flat when minority shareholders said it undervalued the company.
However, the new offer valued the embattled company at even less: The terms were similar to last month’s proposal but the value was slightly down due to changes in dollar-sterling exchange rates and falling share prices.
The new offer proposes paying shareholders $2.65 in cash plus 0.23 of a share in London-listed copper miner Kazakhmys in exchange for each ENRC share. Kazakhmys, ENRC’s largest stakeholder with 26 percent of the company, issued a statement on June 24 saying it was accepting the offer despite believing it “may undervalue ENRC and its assets.”
Kazakhmys said it did not believe it could secure better terms, and that it would raise $887 million from the sale that could be targeted to its core business. If approved by shareholders, the deal would remove the firm from ENRC.
The endangered saiga antelope has had a rough few years in Kazakhstan, hunted mercilessly by poachers for its horns and wracked by a deadly sickness that has seen thousands of these endangered long-nosed antelopes perish on the steppe.
Yet amid all the doom and gloom there is a glimmer of hope: Kazakhstan’s saiga population has more than doubled over the last five years, according to figures released by the Ministry for Environmental Protection.
The country’s saiga population now stands at 137,000 against just 61,000 five years ago, the ministry said. The news comes less than two years after officials reported that efforts to conserve this creature – listed as critically endangered on the International Union for Conservation of Nature’s Red List – were bearing fruit as numbers passed the symbolic 100,000 mark in Kazakhstan.
The population has since grown by over a third, but today’s figures are still a far cry from Kazakhstan’s million-strong population of the 1970s. Since then the saiga – an unusual-looking creature with a distinctive long, humped nose that allows it to filter air during the dusty summer months and breathe warm air during the freezing winters – has been hunted mercilessly by poachers for its horn, which is prized in Chinese medicine.
Uzbekistan’s pop police have banned several star musical acts for undermining the Central Asian nation’s “moral heritage and mentality” by being insufficiently patriotic.
Three pop stars (Dilfuza Rakhimova, Otabek Mutalkhuzhayev, and Dilshod Rakhmonov) and two groups (Ummon and Mango) have had their licenses stripped, which means they cannot perform in public. Uzbeknavo, the official association controlling Uzbekistan's lucrative pop music business, made the announcement on its website this week.
An Uzbeknavo meeting heard “criticism of songs that are not in line with our national spiritual values, our moral heritage and mentality,” the sternly worded statement said.
“It is our duty to praise the Motherland, rubbing its earth onto our eyes and praising its people and its happiness,” it explained.
Seven other performers received reprimands and were warned to get in line by July 1. Uzbeknavo evidently had patriotism on the agenda as it met to discuss celebrations of Uzbekistan’s 22nd anniversary of independence on September 1.
Uzbeknavo made no mention of Uzbekistan’s most famous pop star, however.
A poster in Tashkent offers a warning about human trafficking.
The United States has given Uzbekistan the lowest possible rating in its annual report on human trafficking and forced labor.
Uzbekistan was downgraded (along with Russia and China) from Tier 2 to Tier 3 in the State Department’s annual Trafficking in Persons report for failing to make sufficient efforts to combat the trade in human flesh.
The June 19 report had harsh words for Tashkent: “The Government of Uzbekistan remains one of only a handful of governments around the world that subjects its citizens to forced labor through implementation of state policy.”
The use of forced labor in the cotton harvest featured strongly in the findings: “Internal labor trafficking remains prevalent during the annual cotton harvest, in which children and adults are victims of government-organized forced labor. There were reports that working conditions in some fields during the cotton harvest included verbal and physical abuse and lack of freedom of movement.”
There was no immediate reaction from Tashkent, which has always denied state-sponsored forced labor and points to its efforts to combat people trafficking.
The US report noted that last year Tashkent enforced a decree banning child labor in the cotton fields, resulting in a “sweeping reduction” in the number of children under age 15 in the harvest, but said that older children and adults were still being forced to reap cotton.
News of a foiled terrorist plot to blow up civilian targets in the Kazakhstani capital Astana emerged recently, just as authorities consider the adoption of draconian new controls to root out extremism.
Getting hard currency in and out of Uzbekistan, with its notoriously tight controls over cash flows, is about to become even harder as Tashkent brings into force draconian new checks over bank transfers that will hit investors and individuals, foreign and local alike.
The new rules, announced by the UzDaily.uz website on June 17, launch a new monitoring system that forces banks to report a wide range of bank transfers into and out of Uzbekistan to the tax authorities. The report said the rules were approved on June 12, but did not specify when they will come into force.
For foreign companies, these include fines received from local partners via transfer for breaching agreements. Dividends or profits repatriated abroad to foreigners who have founded companies in Uzbekistan also come under the rules. (The right to repatriate profits is theoretically assured to foreign investors under Uzbek legislation, but frequently breached due to the Byzantine hoops through which they must jump to repatriate their money.)
The rules also cover payments to non-residents for sales of shares in Uzbekistan-based businesses and of property in Uzbekistan, which will hit both foreign companies and foreign individuals.
The rules aren’t just targeted at foreigners: Uzbek citizens will also be hit as the transfers they receive and make come under scrutiny. Any transfers abroad from Uzbek banks by individual account holders above the equivalent of $10,000 per calendar year will come under the microscope, as will all transfers from abroad to their accounts from foreign companies.
Transfers of funds via international services such as Western Union and MoneyGram – used by many labor migrants abroad to send remittances home – are not covered by the rules.