There is no
doubt Kazakhstan is extremely rich in natural
resources. Could you please elaborate on this
richness and the contribution and importance
of the gas, oil products and ferrous metals
to overall economic growth?
The economic situation in Kazakhstan is
favorable right now. During the last three
years we observed an increase in GDP. This
is mostly due to the growth of the oil and
gas sector and, of course, to the increased
amount of explored mineral resources. Out
of total exports, oil and gas and mineral
resources contribute 80%, whereby 40% belongs
to the oil and gas, 32% to metallurgy, and
4.5% to mining industry. The annual growth
is about 10-12%.
This year we will explore about 45 million
tons of oil. By 2010 we are planning to
reach the level of 100 million tons of oil
per year, which is 2 million barrels per
day. Our plans are connected with the exploration
of Caspian Sea Shelf. This year we announced
the commercial opening of Kashagan oil reserve.
Reserves to be explored are about 1 billion
tons. I think that this estimate is very
conservative. First oil should be explored
at the end of 2005. We have a problem regarding
the transportation of this oil to the international
markets. Last year we launched the production
at CPC Pipeline. This year we will transfer
11.5 million tons of oil through this pipeline.
We also have a functioning pipeline between
Atyrau and Samara with the capacity of 15
million tons, which operates good. We also
use other means of transportation such as
railway and sea. After the CPC pipeline
reaches its full capacity, it will transfer
about 67 million tons of oil. However, according
to our estimates, this capacity will not
be enough for the full transportation of
oil and the deficit will rise in 2008. That
is why we are working on several projects
right now. One of them is BTC, which means
Baku, Tbilisi, and Zhaikhan. The project
is successfully developing. We also look
for other alternatives. Of course, we have
several problems such as the utilization
of gas. There are also very strict environmental
rules. Besides, it is technologically hard
to implement. Anyway, this project is successful.
At the same time with this project, we work
on service sector that is services for production
of goods in developing oil and gas sector.
We began the construction of polyetilen
pipeline plant in Atyrau. We already started
the production of metal pipelines at Aktau
plant.
At last July's IBC Conference in London
on Kazakhstan, you indicate the objective
of diversification of the oil and gas sector.
Could you elaborate more on that?
Many companies work in the oil and gas
sector such as Exxon Mobil, Agip, Philips
Petroleum, Shell, British Gas, and British
Petroleum. Currently, only 10% of explored
oil belongs to the state and other 90% is
private, which means that the national company
KazMunaiGas and the rest by private companies
explore about 5 million tons of oil. The
system of highway pipelines still belongs
to the state as well as one refining plant
on the west of the country. I think that
this is good because it helped to stimulate
the development of oil and gas sector and
attract investments. The main problem of
oil transportation has been solving well.
We signed a long-term agreement with Russian
Federation on transportation of oil through
its territory.
I would like to highlight to the readers that
we have a problem of development of the oil/chemical
industry. This is due to huge amount of oil
and gas that can be used in the production
of chemical goods. Therefore, I would like
investor's to turn their attention to this.
I believe that it can be a possibility for
an investment having in mind that gas should
be utilized anyway. There are four methods
of gas utilization. The idea of the first
method is the re-injection of gas into the
storage in order to preserve the pressure
of this storage. The next method is the purification
and consequent sale of this gas on the market.
The third alternative is the use of this gas
in the gas turbines in the production of electricity.
The last, forth method is for the production
of chemical goods. We think that we can further
work on this and it is very perspective kind
of business. |
Recently, the
oil and gas giant, KazMunaiGaz, was established.
There have been several positive and understanding
reactions from energy analysts. What then
are your visions and expectations surrounding
KazMunaiGas?
The Government formulated the goal that
our national company has to become strong.
That is why we merged two companies - Kazakh
Oil and KazTransGas -. 100% of the shares
belong to the state and the company is managed
by our Ministry. We had several reasons
for doing this. The first was the reduction
of administrative costs. The next was the
increase of the assets. The third reason
was to make this company participating in
all future projects on behalf of the state,
including the project on shelf. We hope
that this company will become famous and
explore a lot of oil. Another aim of the
company is the development of service sector.
KazMunaiGas began to operate and it has
already showed good results.
Before we go into the production of
copper and other mineral resources, I would
like to know more about your ambitions.
What do you foresee for the oil and gas
sector?
As I mentioned before, we are looking forward
to producing 2 million barrels per day in
2010. After that we are expecting to double
or triple this figure (and I do hope I am
not an optimist in saying this). Today,
about 75 -76 million barrels per day are
produced and used in the world. There are
different expert estimates. One of them
states that in 10 years the usage of oil
will increase to the level of 105 million
barrels per day. We hope that by that time
Caspian oil will play noticeable role.
Now, your Ministry also oversees other
very important energy sectors in Kazakhstan.
Would you, please, highlight the most interesting
and eye-catching projects in sectors other
then oil and gas sector?
We have project of exploration of copper,
ore, zinc, magnesium, lead, and other mineral
resources. We are planning to explore 468.000
tons of copper concentrate where 422.000
tons will be pure copper. We also have projects
connected with ferro metals, gold, silver,
phosphor, chrome and others. These are the
main goods that bring revenues to Kazakhstan.
Besides, oil and gas, our Ministry is responsible
for the production of electricity, chemical
industry, geological problems, and the use
of natural resources. We are also responsible
for aerospace industry (the Baikonur Space
Center) as well as for the nuclear activity
and uranium industry. In nuclear and uranium
questions we work closely with American
and Russian colleagues.
You mentioned that you work closely with
Americans, Europeans and Russians? How many
opportunities do you see for Asian companies
to come to Kazakhstan and invest in Kazakh
energy and mineral resources?
A Japanese company is already taking part
at Kashagan oil exploration project. We
are also negotiating with the Indian State
Oil Company to participate in Kazakhstan
oil exploration. We also work with Chinese
colleagues that have 80% of shares at Aktubinsk
oil reserve. They work very well.
You have a long experience in the energy
sector having had different responsibilities,
most notably as the Minister of Energy and
Mineral Resources. What has been your personal
challenge in and contribution to the development
of the energy sector in Kazakhstan?
The main challenge was to conduct reforms
in energy sector, oil and gas as well as
electricity sector. 10 years ago everything
belonged to the state. We had to create
a new legislature and implement privatisation.
Only this allowed the development of the
energy sector and the attraction of new
investments. It was our main challenge and
we overcame it. I would like to mention
here that the bravest person was our President,
Mr. Nazarbaev. He was the one who made it
real even though many were against this.
The most difficult challenge was to change
the mentality of people and we did it. Everything
else was the task of technology.
Having in mind that our readers are
from the international community, and Asia
in particular, do you have the final message?
Talking about Asian readers, I would like
to highlight that we are very attentive to
the development of energy sector in Asian
countries. This market is developing very
dynamically. We hope that our resources, such
as oil, gas, gold, and uranium, will satisfy
demand of Asian countries. I am very positive
about the development of atomic energy in
Asian countries. We hope that our uranium
will be used in atomic electric stations in
Asian countries. We will work further in this
direction. |
V.I.P. INTERVIEWS 
