Embassy of Kazakhstan

 
Kazakhstan
News Bulletin
Released by the Embassy of the Republic of Kazakhstan to the United States of America

No 21 August 5, 2008

POLITICS

• Kazakhstan and the 2010 Organization for Security and Cooperation in Europe Chairmanship

ECONOMY

• Kazakhstan, China sign accord on gas pipeline construction
• Iran, Kazakhstan to boost co-op in power sector
• Kazakh oilfield plans role reshuffle after 2013
• Kazakhstan eyes top spot in uranium output

OTHER NEWS

• Torah Classes Grow in Kazakhstan
• The Kazakh Miracle: Recovery of the North Aral Sea

POLITICS

Kazakhstan and the 2010 Organization for Security and Cooperation in Europe Chairmanship

From the web-site of the US Department of State

Richard Boucher, Assistant Secretary for South and Central Asian Affairs
Statement Before the Helsinki Commission
Washington, DC
July 22, 2008

As prepared

I’m pleased to be here today to talk about U.S. policy towards Kazakhstan. I also want to thank the Committee members for their interest and continued engagement and leadership on U.S. policy in Central Asia, including your recent travel to the region. The Helsinki Commission has demonstrated great leadership and bipartisan cooperation in forging a sustained partnership between the United States and the five countries of Central Asia.

There is no doubt that Central Asia is of significant importance to U.S. national interests. Our policy is designed to provide the nations and people of the region with options and opportunity. We support the development of fully sovereign, stable democratic nations, integrated into the world economy and cooperating with one another, the United States, and our partners to advance regional security and stability. We do not view Kazakhstan or any other Central Asian nation as a part of any external state’s special sphere of influence, and our relations are not based on competition with any other power. Rather, we seek to maintain mature bilateral relations with each country, based on our foreign policy goals and each country’s needs, goals and unique dynamics.

Strategic Partnership

The partnership between the United States and Kazakhstan is a strategic one, with three primary goals.

First, we seek to advance democratic and market economic reforms as the best guarantees of their independence and stability.

Second, we seek to further our common security interests, by fighting terrorism, stemming narcotics trafficking and promoting non-proliferation efforts. As you know, Kazakhstan was the first country to renounce its nuclear weapons voluntarily after the break-up of the Soviet Union, and has been a strong and reliable partner on non-proliferation. Through the Nunn-Lugar Cooperative Threat Reduction program, we have cooperated for over a decade to ensure that Weapons of Mass Destruction-related materials and technical knowledge will not fall into terrorist hands.

Third, we seek to foster the development of Central Asia’s very significant energy resources. U.S. companies have recognized Kazakhstan’s potential and are cooperating with Kazakhstan to develop its significant oil and gas resources, currently holding major stakes in Kazakhstan’s three largest oil and gas projects: Tengiz, Karachaganak, and Kashagan.

Kazakhstan in the International Community

Beyond engagement with the United States, Kazakhstan has also made serious efforts to play a helpful role in the international community, and in its region.

Today, Kazakhstan is contributing to coalition efforts in Iraq, where it has deployed engineering troops since 2003. Kazakhstan is also taking on reconstruction programs in Afghanistan totaling almost 3 million dollars. And, as you’re well aware, after an intense debate within the Organization for Security and Cooperation in Europe last November, Kazakhstan was selected to be Chairman in Office for 2010 -- the first former-Soviet republic to achieve that goal.

Kazakhstan’s 2010 Chairmanship of the OSCE

I know that you are most interested in discussing this aspect of our relationship today. Mr. Chairman, the decision to support Kazakhstan’s Chairmanship was not one the United States made quickly or easily. While we welcomed Astana’s initiative and desire to play a leadership role, we felt Kazakhstan had much to do to meet the high standards of Chairmanship. Political institutions, civil society and the independent media remain underdeveloped; the presidency dominates the political system; and the parliament elected in 2007 has representation from only one political party.

Secretary Rice, former Under Secretary Burns, Ambassador John Ordway, my Deputy Evan Feigenbaum and I all engaged actively with Kazakhstan to come to a decision on our support and what Kazakhstan needed to do to prepare for its leadership role. In recognition of its mixed record on political development, we asked Kazakhstan to delay its Chairmanship from 2009 to 2010 so that it would have time to undertake several democratic reforms. In turn, in Madrid Kazakhstan publicly pledged to pass legislation that would modernize the election law, modernize the media and liberalize the registration of political parties by the end of 2008. It also vowed to support the OSCE’s Human Dimension and the autonomy of the Office for Democratic Institutions and Human Rights.

OSCE Commitments

I can assure the Members of this Committee that we are pressing Kazakhstan to meet these commitments fully. Despite slow and uneven progress, President Nazarbayev assured me earlier this year that Kazakhstan will stand by its commitments and he reiterated that commitment before the OSCE Parliamentary Assembly in Astana less than a month ago.

With respect to the elections law, the Central Election Commission invited the political parties, including the opposition, to recommend changes in the election law. The Commission is currently hosting experts meetings on the proposed election law amendments, and expects draft legislation to be ready by the end of the year.

With respect to the media law, the government committed to reform the media law in line with recommendations from the Organization for Security and Cooperation in Europe’s Freedom of Media Representative, which include, among others, reducing criminal liability for defamation in the media and liberalizing registration procedures for media outlets. In late February, the Information Ministry formed a working group of government and non-governmental organization representatives to amend the media law. After initial delays, the working group has now begun work on new media legislation.

With respect to the treatment of political parties, opposition parties and non-governmental organizations have put forward several concrete proposals to liberalize the political party law and ease registration requirements for political parties, but the government has not yet engaged with the OSCE on legislation.

In Madrid, Kazakhstan pledged to support and preserve the current mandate of the Office for Democratic Institutions and Human Rights within the Organization for Security and Cooperation in Europe, including the integrity of its election monitoring efforts. In Vienna, Kazakhstan has not yet begun to play a proactive role in the Human Dimension Committee but we are encouraging them to do so.

In addition to its Madrid commitments, we are also engaging Kazakhstan on ways to improve respect for religious freedom – an OSCE core commitment. We were pleased that Kazakhstan invited the Office for Democratic Institutions and Human Rights to review draft amendments to their religion law and we hope these recommendations are taken into account in the final version.

Clearly, a great deal of work must be done by the end of 2008. We have enlisted our European partners to help, and we have encouraged direct engagement by the Office for Democratic Institutions and Human Rights. My Deputy for Central Asia, George Krol, is in Kazakhstan today, encouraging these same steps. Meanwhile, we will continue to regularly encourage the government to take concrete steps toward reform, and through our assistance programs, we will help provide resources to help them promote democratic reform and the development of civil society and independent media.

Conclusion

Our broader vision is for a strong, independent, and democratic Kazakhstan that is a leader and anchor of stability in the region. We believe Kazakhstan's service as Chairman in Office of the Organization for Security and Cooperation in Europe will help serve that broader vision. Kazakhstan is an important partner for us, one with whom we are broadening economic cooperation, security cooperation, and diplomatic cooperation. We will continue to expand cooperation on reforms, as well. We hope that together, Congress and the Administration will continue to support Kazakhstan’s efforts to advance democratic and economic reforms as the United States’ partnership with Kazakhstan continues to grow and strengthen. 

ECONOMY 

Kazakhstan, China sign accord on gas pipeline construction

RosBusinessConsulting, Russia

Kazakh oil and gas company KazMunayGas and China National Petroleum Corporation (CNPC) have signed an agreement on the basic principles of the construction and use of the Kazakhstan-China gas pipeline, the press office of KazMunayGas said today. The document, which was signed in Astana on Wednesday, stipulates the principles guiding the project's funding, the setting of tariffs, ship-or-pay provisions, and includes the issue of the project's profitability.

The China-Kazakhstan oil pipeline is part of the Turkmenistan-China backbone pipeline. The pipeline's capacity is expected to reach 10bn cubic meters of gas per year in 2009 and 30bn cubic meters in 2012.

Iran, Kazakhstan to boost co-op in power sector

Tehran Times, Iran

 Iran’s Power Industry Syndicate and Kazakhstan's Electricity Grid Operating Company (KEGOC) have signed a memorandum of understanding to boost cooperation.

Mohammad Parsa, Iran’s Power Industry Syndicate’s Chairman, and Satkaliyev Almasadam Maidanovich, President of KEGOC signed the MOU.

According to the signed MOU, the Iranian side is supposed to export technical engineering services and electrical equipments to Kazakhstan.

Iran’s Power Industry Syndicate will also provide the ground for Kazakh companies to take part in Iran’s power section privatization and the Kazakh side is supposed to help Iranian companies to take part in Kazakhstan power industry’s bids.

Cooperation in power saving, reducing electricity dissipation over power transmission and distribution lines, study and investment in renewable energy resources such as wind and solar energies, and technology exchange are among the MOU’s other stipulations.

The two sides also expressed hope to have joint investments in one another’s power industry

Kazakh oilfield plans role reshuffle after 2013

Reuters

Western companies developing the giant Kashagan oilfield in Kazakhstan will get new roles after the completion of the project's initial development stage, Kazakh state oil and gas firm KazMunaiGas said on Thursday.

In June, Kazakhstan and the ENI-led group agreed to hold off the start of production until 2013 after a year of tension over the world's biggest oil discovery in 30 years. The amended deal is due to be finalised by October 15.

The consortium unites Eni, Royal Dutch Shell Plc, Exxon Mobil Corp, Total, ConocoPhillips, KazMunaiGas and Japan's Inpex Holdings Inc.

As part of the new scheme, Shell will manage Kashagan's offshore operations after 2013, said KazMunaiGas spokesman Arzhan Takachakov.

"The project will be divided into various parts," he said. "Apart from the offshore part of it there will be shipping and refining divisions.

"ENI will have a certain role in the operating company that will be established. I don't know exactly what it will be," Takachakov added but did not say who will be in charge of the other divisions.

A Shell spokesman in Kazakhstan confirmed the management structure would change after 2013, but said the future roles have yet to be assigned.

"By October 15 it will be clear," said the spokesman.

The stand-off over Kashagan started in August 2007 when the government accused its shareholders of allowing costs to spiral to $136 billion from $57 billion, and missing the original 2005 production start target.

The June deal mapped out a new floating royalties structure for Kashagan requiring it to pay 3.5 percent of output to the government at global prices above $45 a barrel, 7.5-8 percent at $130, and 12.5 percent at $195.

It also stipulated the consortium would not be able to use proceeds from oil production to compensate for costs sustained after October 2013 -- a move designed to prevent cost rises.

Under an earlier deal, KazMunaiGas was to double its stake in Kashagan to 16.81 percent for $1.78 billion, with other shareholders agreeing to cut their stakes on a pro-rata basis.

Kazakhstan eyes top spot in uranium output

World Nuclear News

Kazakhstan aims to overtake Canada and Australia to become the world's leading uranium supplier next year. The country is also getting involved in all stages of the front-end of the nuclear fuel cycle.

Kazakhstan's state-owned nuclear energy company, KazAtomProm, said that its uranium output should increase from more than 9000 tonnes in 2008 to some 12,826 tonnes in 2009. The company's strategic marketing department estimates that Canada's uranium production in 2009 will be about 11,100 tonnes, while Australia will produce some 9430 tonnes.
 
According to figures from the World Nuclear Association (WNA), Kazakhstan produced some 6637 tonnes of uranium in 2007, accounting for 16% of total world production of 41,279 tonnes. It was the third largest uranium producer after Canada (9476 tonnes, 23%) and Australia (8611 tonnes, 21%).
 
KazAtomProm has a strategic program to increase its uranium output to 15,000 tonnes per year by 2010. The company has several uranium production projects that have either just began operating or about to start up. So far in 2008, the West Mynkuduk (design capacity 1000 tonnes per year), the Khorasan-1 (3000 tonnes) and the Kaynarsky (300 tonnes) projects have all began operating, but have yet to reach their full capacities.
 
Meanwhile, the company's Irkol project (750 tonnes per year) and the Inkai project (2000 tonnes) are both scheduled to open in August. The South Inkai project, which is currently in pilot production, is expected to enter commercial production of 2000 tonnes per year in 2009.
 
In addition, KazAtomProm is set to launch two further uranium projects next year: the Khorasan-2 project with a design capacity of 2000 tonnes per year and the Semizbay project with a capacity of 500 tonnes per year.

More than mining

Kazakhstan wants to use its uranium reserves to participate in all stages of the front-end of the nuclear fuel cycle - the stages from mining uranium, through its chemical preparation and enrichment to the manufacture of fuel ready for use in a reactor. 

In early June, KazAtomProm and Canada's Cameco announced the formation of a new joint-owned company, Ulba Conversion LLP, to move forward with development work on a 12,000 tonne uranium hexafluoride conversion facility in Kazakhstan. The new company will be 51% owned by Kazatomprom, with Cameco holding 49%. The announcement follows on from a memorandum of understanding signed by the two companies in May 2007. The project will now move to the first stage of a feasibility study funded by the partners based on their participating interest, and expected to be completed in 2009.

Also last month, KazAtomProm signed a strategic agreement in the front end of the nuclear fuel cycle with France's state-owned Areva. Under the terms of the agreement, Katco - a 51%-49% joint venture between Areva and KazAtomProm - should produce 4000 tonnes of uranium per year until 2039, sales of which will be made entirely by Areva. Areva will also provide engineering assistance to construct fuel fabrication lines with an annual capacity of 1200 tonnes in KazAtomProm's metallurgy plant in Ulba.

Kazakhstan is also participating in a joint uranium enrichment plant in Russia. The plant will be constructed in Angarsk and is expected to begin operating in 2011.
 
In August 2007, KazAtomProm purchased a 10% stake in Toshiba's Westinghouse Electric, which supplies nuclear power reactors. During a visit last month by Kazakh president Nursultan Nazarbayev to Japan, an agreement for further cooperation in nuclear energy was signed between KazAtomProm and Toshiba.

OTHER NEWS

Torah Classes Grow in Kazakhstan

Chabad.org

The Jewish community of Almaty, Kazakhstan, welcomed Rabbi Menachem and Racheli Naparstek, Chabad-Lubavitch emissaries who moved to the town to head up adult Jewish education there.

Their presence will supplement the work of Rabbi Mendy and Elki Gershovits, who opened the local Chabad House four years ago and have since established a host of programs, including a children’s education project funded by philanthropist Lev Leviev.

Since their arrival last month, Menachem Naparstek has been teaching an additional 10 weekly Torah classes for the community, while Racheli Naparstek has been preparing for the upcoming school year at the Ohr Avner Chabad Day School, where she will serve as a teacher.

“There is so much to do here,” said Elki Gershovitz. “Please G-d, the community will keep growing and growing.” …

The Kazakh Miracle: Recovery of the North Aral Sea

Environment News Service

ASTANA, Kazakhstan, August 1, 2008 (ENS) - Water is returning to the North Aral Sea in Central Asia that had shrunk to a quarter of its former size during the last half of the 20th century. Fish, sea birds and reptiles have begun to repopulate the Aral Sea and surrounding area.

Although the seashore is shared by only two countries, Kazakhstan in the north and Uzbekistan in the south, the Aral Sea Basin is fed by two large rivers, which run through the mountainous countries of Afghanistan, Tajikistan and the Kyrgyz Republic and through the plains of Uzbekistan, Kazakhstan and Turkmenistan.

The Aral Sea began to shrink in the 1960s, when massive diversion of water for cotton and rice cultivation under the Soviet Union drained the two rivers that feed the sea, the Syr Darya and Amu Darya.

The resulting three-quarters decrease in volume of the Northern Aral Sea by 1996 devastated the surrounding environment and ruined the traditional fishing economy of the bordering villages.

This week the government of Kazakhstan announced that its US$260 million rescue program for the Northern Aral Sea is working.
A portion of the Kok-Aral Dam (Photo by Brigitte Brefort courtesy World Bank)

Launched in 2001 by Kazakhstan President Nursultan Nazarbayev and supported by the World Bank, the program has increased the North Aral Sea's surface by about 30 percent since the last assessment was conducted in 2003, according to a statement Wednesday by the Kazakh Foreign Ministry.

The North Aral Sea's surface increased from 2,550 square kilometers (985 square miles) in 2003, the ministry said, to 3,300 square kilometers (1,275 square miles) in 2008.

And the sea's depth increased from 30 meters (98 feet) in 2003 to 42 meters (138 feet) in 2008.

To increase the volume of water being discharged into the northern part of the sea, the US$85.8 million Kok-Aral Dam was built jointly by the Government of Kazakhstan and the World Bank, with the bank providing a loan of US$65 million.

The 13 kilometer (8 mile) long dam separating the smaller North Aral Sea from its larger, saltier and more polluted southern part was completed in August 2005. Since completing the dam, Kazakhstan has been able to keep the water from the Syr Darya River in the North Aral Sea.
The Kok-Aral Dam is allowing the North Aral Sea to fill with water from the Syr Darya River. (Photo courtesy JAXA)
Newly reconstructed, rebuilt, and rehabilitated waterworks along the Syr Darya are increasing the carrying capacity of the river, filling the Northern Aral Sea and benefiting farmers by irrigating their lands.

With the water level now higher in the northern part of the sea, a sluice can begin operating to allow excess water to flow into the parched South Aral Sea.

"As poor people around the world struggle to keep food on their tables in the face of rising prices, it is gratifying to see that Kazakhstan has found a way to give back fishermen and their families their way of life on the North Aral Sea," said World Bank President Robert Zoellick, who hails from the United States.

"The return of the North Aral Sea shows that man-made disasters can be at least partly reversed, and that food production depends on the sound management of scarce water resources and the environment," said Zoellick.

It's called the Kazakh Miracle. "We see the water now coming back, we are overwhelmed," says a Kazakh spokesperson for the rescue program who declined to be identified. "Indeed, all who witnessed the disaster and have since seen the regeneration have spoken of a miraculous transformation," he said.

In the recent past only one species of fish remained in the North Aral Sea. Today, 15 different species have been recorded - bringing back work and income to about 100 local fishermen.
Aral Sea fishermen are smiling again. (Photo by Brigitte Brefort courtesy World Bank)

Fish exports have restarted and the local industry is growing. In the last year, two processing plants and three fish receiving centers have opened. Two more processing plants are scheduled and a new factory building fiberglass fishing boats is planned.

Even the local climate has improved since the dam was completed. As the lake dried up, winters became colder and harsher, and summers became hotter and drier. Blowing dust, laden with pesticides and other chemicals, is routinely scoured from the dry lake bed and poses a severe public health hazard.

But more recently, local news reports recorded more rain in the former port city of Aralsk, once stranded 100 kilometers (60 miles) from the shore of the shrunken sea. The sea is now creeping closer to Aralsk, bringing hope to its people.

The frequency of sandstorms has decreased and the fish and waterfowl returned as the water level recovered. Fishermen are returning to the city and are planning to stock millions of young fish and to re-introduce the sturgeon to revive the lucrative fishery.

The Aral Sea recovery project now enters its second phase focused on the revitalization of the dry former seabed with the cultivation of the native shrub saxaul. The plan is to accelerate the expansion of vegetative cover by planting saxaul in dried out areas, which is expected to increase the rate of natural regeneration, attracting other plant and animal species.

Saxaul is a shrub indigenous to the arid salt deserts of Central Asia. Reaching heights of three to 10 meters, its thick bark acts as a water storage organ, so that water for humans and livestock can be extracted by pressing quantities of the bark. This hardy plant is known to prevent sand dune movement and protect arable lands, roads and buildings from sand debris.

The saxaul planting project started in April when seeds were sown on the first 500 hectares (2 square miles). The objective of the US$10 million Aral Sea bed rehabilitation project is to plant about 80,000 hectares (310 square miles) over a period of 10 years.

Pasture rehabilitation is part of the recovery program's next stage. The objective is to rehabilitate 75,000 hectares (290 square miles) of grass rangeland to be used for pasture. The recent increase in livestock numbers led to this program, which aims to develop sustainable approaches to rangeland management.

News Bulletin of the Embassy of the Republic of Kazakhstan
Contact person: Zhanbolat Ussenov
Tel.: 202-232-5488 ext 104; Fax: 202-232-5845
E-mail: zhan@kazakhembus.com