Nazarbayev delivers speech on WTO membership
President Nursultan Nazarbayev addressed the nation yesterday, June 22 as the talks on the country's accession into the World Trade Organization (WTO) came to a long-awaited end.
Kazakhstan finalized the negotiations on its terms of its membership in the World Trade Organization with WTO members at the Working Party meeting on Kazakhstan’s accession on June 10.
Members of the Working Party welcomed the conclusion of "one of the most challenging negotiations,” in the 20-year history of the organization.
Kazakhstan will become the 162 nd
member of the organization, said the president.
"Membership will open new horizons for our economy and will give Kazakhstan more stable access to foreign markets," he said, while noting the country's investment attractiveness will grow as well.
It took Kazakhstan 19 years to finally achieve favorable terms, said Nazarbayev.
The draft Accession Package spells out Kazakhstan's terms for WTO membership, and was submitted to the WTO members for formal approval on June 22.
The package contains the draft report from the Working Party outlining the country's reformed trade regime and its commitments as a WTO member; the draft Schedule of Concessions and Commitments on Goods; and the draft Schedule of Specific Commitments on Trade in Services, according to Kazinform.
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Kazakhstan's estimated gold reserves published
By Aynur Karimova
Kazakhstan's gold reserves are estimated at 9.5 tons, prompting the need for further geological study, Bazarbay Nurabayev, chairman of the Geology and Subsoil Use Committee under the Kazakh Investment and Development Ministry said at the 6 th
International Astana Mining & Metallurgy Congress on June 17.
Nurabayev claims this figure includes resources of gold ore deposits with a total volume of 7.7 tons and complex gold deposits in the amount of about 2 tons.
"Forecasted reserves in the categories of P1 and P2 amount to 53 percent," Nurabayev noted.
"The resources in the categories of P1 and P2 generally characterize the real prospects for discovered gold ore regions."
The majority of gold deposits are located within the eastern, central, northern, and southern regions of Kazakhstan.
Nurabayev went on to add that the country’s estimated copper resources stand at roughly 100 million tons, 33.4 percent of which are resources in the P1 and P2 categories.
Copper resources are mainly concentrated within the discovered ore fields of the central, eastern and western regions of Kazakhstan.
"Projected reserves of zinc and lead in Kazakhstan are estimated at 135 million tons and 58 million tons, respectively. Zinc and lead reserves are mainly concentrated in the eastern, southern, central and western parts of the country," he stressed.
He also said Kazakhstan will apply the Australian method of granting the right for subsoil exploration by adopting the Code on Subsoil and Subsoil Use.
Today, according to official data, less than 15 percent of Kazakhstan's explored metal reserves and only 75 of the 282 identified gold deposits are being mined.
The country receives less than 1 percent of total foreign investment in metals exploration.
The development of the mining and metallurgical industries is among the top priorities of the Kazakh government.
President Nazarbayev has given instructions to increase the country’s gold production to 70 tons per year in the coming years.
In 2015, Kazakhstan transitioned to its second Five-Year Program for Industrial and Innovative Development.
In 2014, the industry provided 18 percent of gross added value in the country's economy and accounted for 2.9 percent of employment in the country.
The government is implementing its Plan for the Development of Rare-Metal Industries of the Mining and Metallurgical Industry for 2015-2019, overseeing the legal and regulatory support for the industry, improving the state system of industry regulation, providing mineral resources, expanding scientific and technological support for the creation and development of Kazakhstan's industry, and creating and expanding rare metal production facilities, according to Azernews.
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Kazakh hopes up on Kashagan
By Paolo Sorbello
On June 17, Kazakhstan’s Prime Minister Karim Massimov said the Kashagan oilfield will resume operations by the beginning of 2017 at the latest. This is a rare show of confidence by the Kazakhstani government towards the long-overdue project, which was supposed to change the game in Caspian energy geopolitics.
When it was discovered in 2000, the Kashagan offshore field was the largest successful exploration venture of the previous three decades. Kashagan gave Kazakhstan confidence in the stability of its budget for the subsequent decades.
The naming of the field after one of the most important poets in the country’s history, Kashagan Kurzhimanuly, was very deliberate.
However, “kashagan” can also be translated as “unreachable, unattainable,” which ironically reflect the continuous delays.
Discounting a brief start of operations in September 2013, the giant oilfield is already a decade behind schedule. Its operations were first planned for 2005, but technical difficulties have pushed back the date for its first crude.
This has been worrisome for both transnational energy companies investing in the project and for the government of Kazakhstan, anxious to reap the benefits from its offshore gem as the other fields in the country were depleting at a fast rate.
The North Caspian Operating Company (NCOC) is the consortium of companies that are developing the field. It has invested more than $50 billion in the project over the past 15 years (an overrun of $40 billion since the first quote).
On June 9, St?phane de Mahieu, managing director of NCOC, said output will resume in the second half of 2016 and, after a few months at 90,000 barrels per day (bpd), output will go up to 180,000 bpd in 2017, reaching the maximum capacity of 370,000 bpd at the end of 2017, concluding the first phase. Once the first phase is completed, “A decision will be taken then on implementing the second stage of development,” he told the government agency Kazinform.
The NCOC is formed by Eni, Royal Dutch Shell, Total S.A., ExxonMobil, KazMunayGas (each with 16.81 percent), China National Petroleum Corporation (8.4 percent), and Inpex (7.56 percent). Not all voices within the consortium partners agree to the timeline. In November 2014, Total SA’s chief of exploration and production Arnaud Breuillac said output would resume by 2017. In March this year, Royal Dutch Shell agreed that production will restart in 2017 given the replacement activities
on the pipes, which are due to be completed by the end of 2017.
Kazakhstan’s president Nursultan Nazarbayev, meanwhile, is hoping for a faster recovery. “By the end of the year or in 2016 we hope to get some oil from the field” he said in a speech shortly after his re-election in April 2015.
Nazarbayev added that Kazakhstan doesn’t need Kashagan to prosper: “The current oil production is enough. When delays like this happen, I always say that more will remain for our future generations.”
Amid delays and hopeful declarations, the reality is that when it began operations in September 2013, the pipes that brought the crude to the processing plants showed leaks. These leaks have proven impossible to repair and Italian firm Saipem was given another $1.8 billion contract to re-build the conduits. The new pipeline has to meet higher standards against corrosion and is said to cost around 10 times more than an ordinary pipeline.
Last March, during the presentation of its triennial strategy for the period to 2018, ENI was the first to count on Kashagan to resume operations in the second half of 2016, projecting the first oil on its balance sheets. So far, Kashagan has been a great, if virtual, asset for the companies involved in the consortium. The delays have allowed them to have a “projected income” from Kashagan each year and the companies have used capital expenditure in the project as a tool for the diversification
of their portfolio. Cost overruns, however, have discouraged some companies, like ConocoPhillips, which opted out in 2013, and might become too great a burden for the others players who have been chasing the “unreachable” Kashagan dream, according to the Diplomat.
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Gazprom ready to meet Azerbaijan's gas import demands
Russian Gazprom, a global energy company, has expressed readiness to meet Azerbaijan’s demands in gas import in the needed volumes.
This remark was made by Alexey Miller, Gazprom head, at the business meeting with Rovnag Abdullayev, the head of Azerbaijan's state energy giant SOCAR, during the St. Petersburg International Economic Forum on June 19.
The meeting participants discussed the further development of cooperation in the energy field.
“In connection with the increase in domestic gas consumption in Azerbaijan and the country’s economic growth, Gazprom is ready to meet Azerbaijan’s demands in gas import in the needed volumes,” Miller said.
Currently, Gazprom has a contract (with the possibility of extension) on purchasing Azerbaijani gas signed October 14, 2009. The contract between SOCAR and Russia’s Gazprom allows suspending and resuming gas supplies at any time.
Later, SOCAR and Russian Gazprombank signed an agreement to finance the construction of plants for production of polypropylene and high density polyethylene by SOCAR Polymer Company in Azerbaijan.
According to the document, Gazprombank will allocate a loan worth $489 million for SOCAR Polymer with the repayment period of 10 years, Azernews reports.
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Turkmenistan boosts oil production
By Huseyn Hasanov
Turkmennebit (Turkmenoil) state concern of Turkmenistan has produced around 2.163 million metric tons of oil since early 2015, or 0.1 percent (2,200 metric tons) more than in the same period of 2014, Turkmen Ministry of Oil and Gas Industry and Mineral Resources said.
Enterprises carrying out drilling work play a great role in the growth of oil production by the state concern, said the ministry.
It was planned to drill 97,534 meters in accordance with the program in early 2015, while in fact, this figure reached 117,435 meters (by 19,901 meters more than the planned volume), according to the Turkmen Ministry of Oil and Gas Industry and Mineral Resources.
The ministry added that 8,629 meters have been drilled in excess of the plan for the target use, while 11,272 meters have been drilled for search purposes since early 2015.
A total of 34 wells have been drilled by Turkmenoil state concern since early 2015, said the country’s ministry, according to Trend.
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Shah Deniz Consortium awards new contracts
By Aynur Karimova
The Shah Deniz Consortium has awarded two new contracts worth $363 million as part of overall progress of the second stage of development of Azerbaijan's giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea.
"Shah Deniz Stage 2 and South Caucasus Pipeline Expansion (SCPX) projects continue to move forward at pace with significant progress already achieved at all fabrication and construction sites across Azerbaijan and Georgia," BP said on June 22.
As part of these developments Shah Deniz has recently awarded two further contracts in support of the development of future flanks following first gas in 2018. These contract awards underpin the schedule for project delivery and complement the progress being made across multiple areas of this major development project.
The two newly-awarded contracts, which follow on from the key Stage 2 contracts announced earlier, include a $297 million contract for the supply of the subsea production system (SPS) hardware and a $66 million contract for the second of three planned batches of subsea production trees and ancillaries required for the full field development.
The first contract was awarded to FMC Kongsberg Subsea AS.
The scope of work under this contract includes the supply of equipment for the production clusters 3, 4 and 5 consisting of subsea manifolds, associated controls and connection equipment. The delivery of equipment will take place in phases over a period from 2016 to 2021.
The second contract was awarded to OneSubsea (UK) Ltd. The delivery of equipment will take place in phases over a period from 2016 to 2021.
The Shah Deniz field, one of the world's largest gas-condensate fields, was discovered in 1999. Its reserves are estimated at 1.2 trillion cubic meters of gas. Overall, the field has proven to be a secure and reliable supplier of gas to Azerbaijan, Georgia, Turkey, and Europe.
The gas which will be produced at the second stage of Azerbaijan's Shah Deniz field development will be the main source of the Southern Gas Corridor, which envisages the transportation of the Caspian gas to European markets, according to Azernews.
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Oil Prices end a bit higher
Oil prices eked out a gain Monday as investors weighed concerns about ample crude-oil supplies against hopes that Greek debt negotiations would succeed.
Light, sweet crude for July delivery settled up 7 cents, or 0.1%, at $59.68 a barrel on the New York Mercantile Exchange. The July contract expired at settlement Monday. The more-actively traded August contract settled up 41 cents, or 0.7%, at $60.38 a barrel.
Brent, the global benchmark, rose 32 cents, or 0.5%, to $63.34 a barrel on ICE Futures Europe.
U.S. oil prices have hovered near $60 a barrel for weeks as investors weigh the currently oversupplied market against growing demand and cutbacks in new drilling. The physical market for crude oil remains weaker than many analysts expected, damping some investors’ hopes that prices would recover quickly this summer.
“The second quarter of 2015 is winding down with little change to show for it,” said energy brokerage Powerhouse in a note. “Prices have moved into a slow grind waiting for the other shoe to drop.”
Many crude-oil cargoes in the Atlantic Basin, which includes North Sea and West African oil, are searching for buyers, an indication of weak demand. Demand for crude oil is typically strong in the summer as refineries run at high rates to produce gasoline and other fuels, so the tepid demand is “a worrying sign for fall,” when refinery activity slows down, said Morgan Stanley in a note.
On Monday, European policy makers appeared to offer hope that a deal on bailout aid for Greece was within reach. Failure to clinch a deal could put Greece on the road to bankruptcy and an exit from the eurozone. If no deal is reached and Greece leaves the euro, this could mean lower oil prices if the news strengthens the dollar, analysts said. A stronger dollar makes oil, which is traded in dollars, more expensive for buyers using foreign currencies.
Gasoline futures fell 1.4% to $2.0297 a gallon on concerns that supplies are overwhelming demand, even during the busy summer-driving season when consumption is usually at its high.
Gasoline futures slumped 2.9% last week after inventories unexpectedly rose. Refineries have been running at unusually high rates to churn out gasoline, and many investors expected driving demand to be especially strong this summer due to an improving economy and relatively low prices at the pump.
Diesel futures settled up 0.1% at $1.8694 a gallon, according to Nasdaq.com
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