Kazakhstan: Energy Twists and Media Tricks

Kazakhstani bloggers discuss the controversy over the giant oil field Kashagan in Kazakhstan, currently developed by an ENI-led consortium, which postponed the start of production (now until 2010) and announced an increase of the project’s costs (2.5 times up to $136 billion) – for the second time already. The Kazakh government, dissatisfied with the delay, has come out with several sharp-shaped statements and orchestrated a number of aggressive checks from the state agencies.

Megakhuimyak, whose work is connected to the extractive industries in Kazakhstan, reports that the ministry reviews all projects concerning the Kashagan oilfield starting from 1999 and prepares official rebukes on them: “Agip is being raped in every way… All projects – more than 200 of them – are already approved and most of the planned works have been already implemented”. (RUS)

Former WSJ reporter and prominent oil blogger Steve LeVine reflects on the Russia’s role in the regional energy issues: “It starved Georgia of natural gas, cut off Turkmenistan's access to foreign export markets and did the same in Kazakhstan, reducing the value of its giant fields — Karachaganak, one of the world's ten largest natural gas fields, is absurdly reduced to exploitation as an oil field.”

Itsuken has heard that ENI faced problems in Kazakhstan because Russian Lukoil wants to take over Kashagan. Astana has repeatedly made serious concessions to the Kremlin over the past years in the oil sector — e.g. when it agreed to build a joint venture refinery for Kazakh oil in Russia, not in Kazakhstan, or when it was not too insistent about the division of disputable off-shore oil fields.

The government acts in such a unison with ministries, tax agency and even fire services only when the decision is made at the very top. If Lukoil comes to Kashagan we should pray for that everything will turn out all right. They never think too much about environmental security.

Meanwhile, Adam of neweurasia reports on the Kazakh state-owned company’s first large foreign acquisition: KazMunaiGas bought Rompetrol in a deal whose price is not disclosed (RUS).

Another highly debated topic is the state of the Kazakh media. CTC, a Russian media holding, is buying a 20 per cent stake in the Kazakh Channel 31. Channel 31 – although being controlled by presidential office chief Bulat Utemuratov – is known in the country as the only source of unofficial television news. It’s not known yet whether the news service is going to survive or not, because CTC produces exclusively entertaining TV product. By the way, it also buys an Uzbek media holding, controlled by President Karimov’s daughter.

Izumcheg from Astana has a theory that Utemuratov could, in his turn, acquire a stake in CTC and plans to continue exerting influence on the channel’s policy, while the Kazakh officials would have no chance to control the Russian media venture. “Perhaps, some redistribution of power is coming, and Utemuratov is getting ready to use his kompromat [discrediting materials]”, he suggests (RUS).

Almaty-based journalist a-strekoza views the deal from her perspective: “The segmentation of the media market in Kazakhstan is under way. The niche of having a glamorous TV channel is empty. Baitasov (president of Channel 31) is a smart guy: he realizes that glamour can bring more money than political talk-shows, especially taking into account that there is no real politics in Kazakhstan” (RUS).

Besides, it has become known lately that it will be prohibited to take photographs and shoot videos in the new mono-party parliament. Pycm from Karaganda is sarcastic: “This is the right decision. It is much better to send the journos to the construction sites, grain elevators, factories and schools. Members of parliament will vote properly without cameras – according to the Party’s will!” (RUS)

Undoubtedly, both of the issues – oil and free speech – cannot go without mentioning politics. KZBlog is reviewing new appointments in the government, made by President Nazarbayev. “What is odd is that the president’s constitutional reforms required that parliament approves ministers. However, appointments were made the day before the new parliament sworn in”.

Another interesting move is the dismissal of Timur Kulibayev, the president’s son-in-law, as deputy chairman of Samruk, the national holding company that oversees KazMunaiGaz and other major state enterprises. “No reason was given, but most people feel it was meant to counterbalance the annihilation of R. Aliyev as a political force. Or it may be a feint, to ensure that Kulibayev’s future career is not tainted with rumors of preference and nepotism”, KZBlog writes.

Dorovskih, a Kazakhstani living in the United States, compares basic social indices in the States and in Kazakhstan. “In the States you can buy a house for $3,000 (a trailer), for 60,000 (average suburbia), for 140,000 (fine house) or 350,000 (a great one). In Kazakhstan it goes with $50,000 for a trailer, 90,000 for a 1-room apartment on the city outskirt, 300,000 for a 2-bedroom flat, 700,000 for a 200 sq.m. house”. The same depressing comparison follows for cars prices, minimal living standards, education costs and pensions.

Xxrock digs deeper into salary issues by reviewing the top professional salaries in America, as listed by the U.S. Department of Labor. Apparently, doctors are leading the chart with a surgeon earning $181,850 and other medical professionals having $100,000+ annual salaries. In Kazakhstan, a close friend of mine, a surgeon and a professor hardly earns more than $450 per month, working both in a clinic and lecturing at the university.

“Please, correct me if I’m wrong, but the general picture shows that we are a banana republic. It is very bitter”, dorovskih says. Tuganbaev responds with a bitter joke: “- Hi, how are things? – Why are you asking? We live in one country, ain’t we?”


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