Kazakhstan leaves rest oil and gas privatisation to next generations

Apr 20, 1998 02:00 AM

Kazakhstan's recent statement that it would suspend privatisation in the lucrative oil and gas sector applies only to new oil and gas fields.
"We consider that the talk primarily concerns issuing licences and signing contracts for new oil and gas deposits," Deputy Finance Minister Orazaly Yerzhanov told.
Kazakh President Nursultan Nazarbayev said recently that privatisation in the oil and gas sectors was over for the next two generations, as enough deals had already been signed.
"For this generation and the next we have completed all contracts," Nazarbayev told. "For the third generation of Kazakhs there's still plenty left...we have got to think about them as well."
Some 40 % of $ 7.5 billion in direct foreign investment has been pumped into Kazakhstan's oil and gas sector. Kazakhstan's total oil reserves are estimated at around 96 bn barrels, while proven reserves amount to 34 bn barrels.
The Kazakh government has already sold stakes in its big energy projects and it now plans to raise funds by selling its stakes to portfolio investors who would later float the shares on the domestic and foreign stock markets.
Kazakhstan recently gave a mandate to 6 investment banks and companies to lead-manage the flotations on stock markets of minority stakes in 4 key companies, seen as future "blue chips." These major companies include two large oil producers -- Aktobemunaigaz and Mangistaumunaigaz -- and Yerzhanov said that this meant that oil privatisation was going on. "There is no talk of suspension of this privatisation," he said. "The signing of the mandate means that privatisation continues.
The government will sell 5 - 15 % in Aktobemunaigaz and 5 - 7 % in Mangistaumunaigaz.

The exact list of what is yet to be privatised in Kazakhstan's energy sector is considered confidential, but Yerzhanov said that in two months the government would prepare and present an exact register of its property.
He said Nazarbayev was demanding that sales of minority stakes in key companies, including oil and gas companies, be pushed through. "This programme is personally controlled by the head of state. The Kazakh leadership has no intention of stopping this process," he said.
The Central Asian state's government hopes that flotations of future "blue chips" would help enliven the currently inert local stock market, launched last September.
Yerzhanov said the sales of stakes would also help raise this year's targeted privatisation revenues by 45 bn tenge ($ 587 mm).

Source: not available
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