GK For PG Students

President Lee Myung-Bak signs deals with Kazakhstan and Uzbekistan; KazMunaiGas Exploration Production signs four new exploration contracts; National Bank of Kazakhstan to decrease gold exports; Kazakhstan to bring in reforms to privatize economy and prom

      In a significant development, South Korean President Lee Myung-Bak as part of his Central Asian tour, signed $8 billion worth deals with Kazakhstan. One project, worth $4 billion, will see South Korean firm LG Chem jointly build a petrochemical complex in Kazakhstan and the other $4 billion project involves building a coal-powered electricity-generating plant in southern Kazakh city, Balkhash. 1In Uzbekistan, the South Korean President, signed an agreement to support Uzbekistan’s plans to develop the Surgil gas field, located near the Aral Sea. The Uzbek State Committee for Geology and Mineral Resources forged a joint venture with South Korean Shindong Resources to explore and develop the Sautbay tungsten deposit in the north-central Navoi region. The two sides signed the $120 million deal during the Uzbek-Korean business forum. 2

In another development, Kazakhstan energy major KazMunaiGas Exploration Production (KMG EP), the listed arm of Kazakh state oil and gas company KazMunaiGas (KMG), announced that it had finalized an agreement to acquire 100 percent subsoil use rights to explore four hydrocarbon blocks— Temir and Teresken blocks in northwestern province of Aktobe; Karaton Sarkamys block in the Atyrau province; and fourth contract is adjacent to the oilfields of Uzen and Karamandybas. It is estimated that the four blocks hold around 1.5 billion barrels of oil. 3

In the meanwhile, the National Bank of Kazakhstan on August 23rd reiterated its right to buy “in full” the gold produced in Kazakhstan in order to maintain its reserves. The move is expected to decrease the amount of gold exported by Kazakhstan. 4

According to Kazakhstan’s Economy Minister Kairat Kelimbetov, Kazakhstan plans to launch the first wave of share flotation for several of its state firms around the middle of 2012. Between 5% and 15 % of some national companies will be sold on the Kazakhstan stock exchange in the ‘People’s IPO’. Some of these companies are KazTransOil, Air Astana, Kazakhstan Electronic Grid Operating Company (KEGOC) and Samruk-Energo. 5 A second wave of public stock sales will follow in 2013 and other enterprise shares will be floated in 2014 and 2015. In the meanwhile, Kazakhstan will restructure the existing six special economic zones (SEZs) and create three new ones to spur economic growth, Kazakh Minister of Industry and Trade Asset Issekeshev announced last week. 6

In other developments in the region, the Japanese Embassy in Kyrgyzstan announced that Japan will provide an emergency grant of $350,000 to partially finance Kyrgyzstan’s upcoming presidential election, to be held on October 30, 2011. Interim President Roza Otunbayeva earlier estimated the cost of the Kyrgyz presidential poll to be $10 million, and had expressed concern that the country would not be able to afford it. 7

1. 1. “Korea signs $8B in deals with Kazakhstan”, Universal Newswires, August 25, 2011 at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=10042
2. 2. “Korea-Uzbek trade can hit $10B, Korean leader says”, Universal Newswires, August 25, 2011 at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=10041
3. 3. “Kazakh energy major signs four new exploration contracts”, Universal Newswires, August 24, 2011 at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=10025
4. 4. “Kazakh central bank reemphasizes purchase rights to all Kazakh gold”, Universal Newswires, August 23, 2011 at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=10019
5. 5. “Kazakhstan to launch people’s IPO in mid-2012”, Universal Newswires, August 23, 2011 at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=10017
6. 6. “Existing Kazakh SEZs to be restructured, minister says”, Universal Newswires, August 22, 2011 at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=10009
7. 7. “Japan provides financial assistance for Kyrgyz presidential poll”, Universal Newswires, August 23, 2011 at http://www.universalnewswires.com/centralasia/kyrgyzstan/viewstory.aspx?id=10018