1. .
THE GLOBAL EDITION OF THE NEW YORK TIMES SPONSORED SECTION THURSDAY, DECEMBER 15, 2011 | 3
Kazakhstan’s 20th anniversary Looking back, thinking ahead
IN HIS OWN WORDS | Timur Kulibayev, head of the National Welfare Fund Samruk-Kazyna AGRICULTURE | Outstanding yields
Stimulating private enterprise as an engine of growth This year marks record grain harvest
for a global leader in agriculture
T
his year, Kazakhstan celebrates its economy and large-scale privatization in vir- development, representing total invest-
20th anniversary as an independent tually all economic sectors. These have ments of $14 billion. The projects are being
B
state. With the fourth-largest subsoil pumped a large amount of investment, both carried out by Kazakhstan’s blue-chip indus- esides being a major supplier of glob- to solid reserves and stable prices on world
deposits in the world, totaling 133 million domestic and foreign, into the economy. Di- trial corporations, including the state-con- al energy, Kazakhstan is among the markets.
tons, Kazakhstan needs to extact the maxi- rect foreign investment since independence trolled national oil and gas company, leading countries in providing its In early November, the ministry of agricul-
mum benefits from these reserves. Its main totals $150 billion. Investors include such KazMunaiGas; the national railroad com- people with food. This year’s grain harvest is ture reported an impressive output of 29.5
SAMRUK-KAZYNA PRESS SERVICE
tool for doing so, the National Welfare Fund leading multinational corporations as Chev- pany, Kazakhstan Temir Zholy; the state nu- almost a third of Russia’s, meaning that Ka- million tons of cereals for the summer har-
Samruk-Kazyna, manages state-held as- ron, Royal Dutch Shell, Arcelor Mittal, RusAl clear company, Kazatomprom; and others. zakh farmers produce nearly three times vest. Favorable weather conditions and im-
sets worth $60 billion, representing around and many others. Attractive fiscal conditions Sectors include oil and gas refining, petro- the amount of grain per capita as their proved irrigation technology, particularly in
half of the country’s annual gross domestic in Kazakhstan have played a large part in chemicals, transportation and nuclear northern counterparts. the south, were the main reasons for the
product and some 320,000 jobs. these investments. energy. Foreign partners include global On Nov. 11, President Nursultan Nazar- rise in productivity. While in previous years,
Though controlled by the According to a study by Ernst multinationals. bayev hailed what he called Kazakhstan’s Kazakhstan was at the bottom of the former
state, Samruk-Kazyna is not a Kazakhstan & Young, Kazakhstan is today Today, Samruk-Kazyna is preparing a largest grain harvest in 55 years: close to Soviet Union’s productivity list, in 2011 its
state company in its own right.
Its core mission is to stimulate
is today one of one of the world’s three fastest-
growing economies, with strong
porfolio of new investment projects worth
$15 billion. It is open to partnerships with in-
30 million tons, including more than 20 mil-
lion tons of wheat. There is still considerable
yield increased to 1.84 tons per hectare, up
from 0.94 tons in 2010. The results put Ka-
private enterprise as an engine the world’s macroeconomic fundamentals ternational companies in such areas as ag- room for growth in the sector, though, to op- zakhstan among the world’s six largest grain
for economic development. three fastest- to sustain this growth. Just a riculture, electricity generation, petrochemic- Timur Kulibayev, head of the National Welfare timize and stabilize agricultural productivity. producers.
To facilitate and encourage few weeks ago, Standard & als, chemicals, offshore oil and gas Fund Samruk-Kazyna. With large markets such as China, India and Deputy Agriculture Minister Marat Tole-
private initiative, Samruk- growing Poor’s upgraded Kazakhstan’s services, mining and metallurgy. the Middle East within reach, there are ex- bayev says that Kazakhstan’s grain export
Kazyna creates, maintains and economies sovereign credit rating from Energy-based resources continue to be Kazakhstan is increasing its market distribu- ceptional opportunities for profitability in a capacity for 2011 will be around 15 million
develops opportunities for BBB to BBB+. the main focus for industrialization projects. tion with the construction of oil and gas ex- sector that employs nearly a third of the tons, up from 10 million in 2010. According
private operators and investors Fitch followed suit, upgrad- Since independence, Kazakhstan has in- port facilities in every direction. Special at- population. to Tolebayev, the country has the potential
to contribute to a dynamic business sector ing Kazakhstan’s long-term foreign and local creased oil output by 300 percent and gas tention is being paid to China and other fast- Farming is still relatively re- to double its output and triple its
in Kazakhstan. currency issuer default ratings from BBB- to output by 400 percent. In 2010, Kazakh- growing markets in East and South Asia. Be- cent in most of Kazakhstan, Kazakhstan’s export capacity, provided the
During its two decades as a sovereign BBB and from BBB to BBB+, respectively. stan was responsible for 2.1 percent of all sides geographic diversification, Kazakh- which has been breeding cattle grain export agricultural sector continues to
nation, under the administration of Presi- The outlooks on the ratings are positive. In oil supplies in the world. stan is seeking to expand its market share for more than 6,000 years. The modernize and new invest-
dent Nursultan Nazarbayev, Kazakhstan the aftermath of the global financial crisis, Hydrocarbon output in Kazakhstan has not just in crude oil and gas, but also in oil cultivation of grain has a long capacity for ments flow in.
has transformed from a derelict former re- which affected Kazakhstan deeply, GDP not yet reached its peak. In 2012-13, com- and petrochemical products. history only in the far south, tra- 2011 will be Substantial reserves, main-
public of the Soviet Union with a stagnant, growth for this year, predicted to reach mercial production at the offshore With an eye toward increasing invest- versed by the ancient Silk Road tained since the mid-2000s,
centrally planned economy marked by soar- about 7 percent, has almost returned to its Kashagan field in the Caspian is set to take ment, production and exports, Kazakhstan from China to the Mediter-
around 15 guarantee that increases in ex-
ing inflation and unemployment to a country precrisis level. off. Initial output is scheduled to reach has played a vital role in the formation of the ranean. In the vast plains in the million tons ternal sales will not harm the do-
of strong economic performance and pro- Kazakhstan’s main challenge lies in 300,000 barrels a day, to be increased in Customs Union with Russia and Belarus, north, Cossack settlers from mestic market and keep the
gress, with growth rates among the highest maintaining its strong economic perfor- stages to a million barrels a day later in the which has been in place since summer central Russia first introduced farming in the price of bread, a sensitive issue around the
in the world. Over this period, Kazakhstan’s mance while shifting its chief source of rev- decade. Kashagan is among the world’s 2010. As of next year, the organization will late 15th century. A breakthrough came, world, affordable. As of Nov. 1, Kazakhstan
GDP per capita has increased more than enues from commodity sales to manufac- richest oil deposits, with recoverable re- become a Single Economic Space, with free however, with the Virgin Land campaign of had 25 million tons of cereal reserves, in-
tenfold, from $700 in the early 1990s to turing and services. Samruk-Kazyna is serves of 1.5 billion tons of crude oil. movement of goods, people, skills and cap- the mid-1950s, initiated by the Soviet leader cluding 22.6 million tons of wheat, 1.64 mil-
$10,000 as of this year. playing a fundamental role in this process. Offshore production is poised to place ital within its borders along with uniform con- Nikita Khrushchev and later supervised by lion tons of barley and smaller quantities of
Kazakhstan has implemented drastic Currently, the fund has 20 large-scale, high- Kazakhstan among the world’s largest oil ditions for external trade. This development, his successor, Leonid Brezhnev. The steppes rice, oats, rye and corn.
reforms, including introducing a market profile industrial investment projects under suppliers. Along with higher production, given Kazakhstan’s position as a tax- were converted into huge crop-growing areas The state agency that controls grain ex-
friendly host for investors, will provide it with in the northern provinces of Kazakhstan and ports also coordinates marketing and sales
free access to a market of 170 million the southern regions of Siberia. operations with two other grain-exporting
OIL AND GAS | Rising production people, thereby increasing investment value This successful campaign propelled Ka- countries, Russia and Ukraine. The agency
The fields where the United States, Europe and China meet and return prospects.
Kazakhstan has earned its place as
gateway to the Single Economic Space. Its
zakhstan into the ranks of global grain pro-
ducers, a position it continues to hold today.
For the first 10 months of 2011, with the
purchases fixed quantities of grain from farms
against guaranteed prices, allowing farmers
to sell their surplus on the free market.
A
2003 state oil and gas development road map for growth is steadily taking shape harvest nearly completed, the value of Ka- Russia expects a harvest of 93.9 million
study assessed Kazakhstan’s exist- in a stable social, political and economic en- zakhstan’s agricultural output was $13 bil- tons of grain, including 55.1 million tons of
ing and potential deposits and off- vironment, benefiting from a legal regime lion, according to the National Statistics wheat, for 2011, and aims to boost the fig-
shore reserves under the Caspian seabed that keeps pace with ever-changing and Agency. For the year, Kazakhstan expects ure to an all-time high of 105 million tons in
at around 8 billion tons of oil equivalent. shifting international conditions and, most cereal output of 26 million tons, a record- 2012. Ukraine is expected to produce nearly
These included 4.35 billion tons of crude oil, important, from its people, who are dedic- breaking figure more than double that of the 53 million tons of grain through the year,
518 billion cubic meters of natural gas and ated to hard work and personal and com- summer harvest of 2010. Last year, farm- with the target for 2012 set at 54 million.
61 million tons of gas condensate, or about munal achievement. Within this framework, ers throughout the Northern Hemisphere This brings the combined export capacity of
two-thirds of Kazakhstan’s total acknowl- Samruk-Kazyna’s task will be to continue to were hit by floods in the southern regions the three former Soviet Union grain produ-
edged reserves of 12 billion tons of oil develop these advantages for the maximum and by drought in the north. In 2011, climatic cers close to 50 million tons in the current
equivalent. benefit of all. conditions have been much better, leading July-to-June marketing period. C.v.d.L.
Kazakhstan’s oil production, which has
risen in the 20 years since independence to
1.4 million barrels a day, is centered on
three major consortiums. Tengiz, the
biggest, is a U.S.-led operation in the central-
west of Kazakhstan. The second, named
KAZENERGY
after the Karachaganak field where it oper-
ates, is a European-dominated venture in
the northwest. The third, on the southwest-
ern peninsula of Mangistau, is operated by a
Chinese-controlled venture, one of the many Multinationals helped Kazakhstan produce 33.96 million tons of crude oil in the first half of 2011.
Chinese projects scattered throughout
Kazakhstan. 32.5 percent stake. Chevron and Lukoil own project at North Buzachi addressed the
In the first half of this year, Kazakhstan 20 percent and 15 percent, respectively. problem of limited gathering and transporta-
produced 33.96 million tons of crude oil and KazMunaiGas’s participation in the consorti- tion capacity, and oil production was in-
6.36 million tons of gas condensate, repre- um is under discussion. creased to 35,000 barrels a day.
senting increases of 3 percent and 5.4 per- As for the China National Petroleum Cor- South of Buzachi, on the Mangistau pen-
cent year on year, respectively. In the same poration, it operates five oil-field develop- insula, CNPC has acquired a 50 percent
period, it produced 19.93 billion cubic me- ment projects. In 1997, CNPC acquired a stake along with KazMunaiGas in the local
ters of natural gas, a rise of 9.2 percent year 60.3 percent stake in AktobeMunaiGas, operator MangistauMunaiGas, which is Ka-
on year. Associated gas totaled 10.14 billion Kazakhstan’s fourth-largest oil company, zakhstan’s third-largest producer after Ten-
cubic meters, up 8.5 percent from the first and in 2003 it increased its shares with an giz and Karachaganak. The purchase fol-
half of 2010. additional 25.12 percent. Production of lowed an earlier one in 2004, when CNPC
In terms of production and capacity, Ten- crude oil has more than doubled, from 2.65 and the China North Industries Corporation
gizchevroil, operating on the Caspian shore, million tons in 1997 to 5.9 million tons in jointly acquired 50 percent of shares in the
is considered the jewel in the crown of Ka- 2006. Konys and Bektas Oil Field (KAM Project),
zakhstan’s oil industry. Led and 50 percent In 2005, in Kazakhstan’s deep south, each taking 25 percent. Located in the Tur-
owned by Chevron of the United States, the CNPC acquired PetroKazakhstan. According gai basin, the field covers 431 square kilo-
consortium includes ExxonMobil (25 per- to an agreement with the Ministry of Energy meters (166 square miles) and has 21.64
cent), KazMunaiGas (20 percent) and Lukoil and Mineral Resources, CNPC transferred million tons of recoverable reserves.
(5 percent). In 2010, Tengizchevroil in- 33 percent of its shares in PetroKazakhstan The Kazakhstan-China Crude Oil Pipeline,
creased output by 15 percent, producing to KazMunaiGas in 2006, retaining the re- with an annual delivery capacity of 10 million
567,000 barrels per day. maining stake. In 2007, PetroKazakhstan tons, is jointly owned by CNPC and KazMun-
Coming in second is Karachaganak, with produced 10.07 million metric tons of oil. aiGas, each with a 50 percent stake. Ac-
reserves estimated at 1.2 trillion cubic me- Shymkent Refinery processed 4.07 million cording to the CNPC: ‘‘The successful Sino-
ters of natural gas and 1 billion tons of gas metric tons of crude oil. Kazakh oil and gas cooperation is highly ap-
condensate and associated oil. Discovered On the shore of the Caspian, in 2003 preciated by the Kazakh government and
in 1979, the field began operating in CNPC purchased 35 percent and 65 per- people, and is generally acknowledged as a
1984 under Karachaganakgazprom. After cent of shares in Chevron Texaco North Buz- successful model of economic cooperation
independence, it was handed over to achi Inc. from Nimir and Texaco, respective- between the two nations. CNPC AktobeMun-
Kazakhstan. ly. As a result, it owns 100 percent of the aiGas has been highly praised many times
The field is being exploited by North Buzachi field. CNPC and Lukoil cur- by both the Kazakh president and prime
Karachaganak Petroleum Operating, along rently have 50 percent holdings in North minister, as they have named CNPC the best
with the joint operators British Gas of the Buzachi and are jointly developing the field. foreign investor in Kazakhstan.’’
United Kingdom and Eni of Italy, each with a In 2007, the second-phase construction C.v.d.L.
ALMATY | Urban transport
Almaty opens first line of underground rail system
O
n Dec. 1, Kazakhstan’s main me- seven stations. The new line is expected to present-day President Nursultan Nazar- We congratulate the people of Kazakhstan
tropolis, Almaty, saw the opening of relieve pressure on Almaty’s busy roads and bayev, who at the time was the chairman of
its first underground rail line, the shorten traveling time for its passengers. the cabinet of ministers of the Soviet Repub- with the 20th Independence Anniversary
second in former Soviet Central Asia after The plan for the network was first con- lic of Kazakhstan. The Soviet breakup, which
the network in Tashkent. The line is 8.5 kilo- ceived and adopted in 1985, when Almaty cut off all funding from Moscow and caused These years have defined the future of the country with a strong and prospering
meters, or just over five miles, long and runs was still the capital of Kazakhstan. Con- major economic havoc for the newly inde- economy, where united efforts have changed the lives of millions of citizens for the
northeast to southwest along two of the struction started three years later, following pendent Soviet republics, disrupted the better, ensuring confidence in tomorrow.
main avenues in the city center, serving a local government decree signed by work. Only in 2003 did sufficient funding be-
come available to resume construction. Along with Kazakhstan, JTI (Japan Tobacco International) has developed equally fast. We
The seven new stations have been dec-
orated with panels depicting different have achieved impressive growth and contributed to the economy by increasing the
stages of Kazakhstan’s history and aspects number of employees to 1,000 highly-qualified professionals, and by investing over 120
of traditional daily life. The line is to be exten- million USD into Kazakhstan’s development.
ded toward the western suburbs of Almaty
in years to come, and a second line will be We have proved ourselves a reliable partner to the state and are looking forward to
constructed toward the northern parts of
the city, including the airport. continue working on this progress together.
The first line has cost around a billion dol-
lars so far, financed by the state. This in-
ALIYA NURMAGAMBETOVA
cludes seven trains supplied by South Ko-
rea’s Hyundai. The entire structure has been
thoroughly tested and proven to be earth-
quake-proof. Automatic signaling and warn-
www.jti.com
ing systems make the overall control net-
work the most advanced in the entire former
Soviet area.
The new subway line, serving seven stops in the city center, will be extended toward the west. C.v.d.L.