KazEnergy SECOND EURASIAN ENERGY FORUM

 

KAZENERGY ASSOCIATION CHAIRMAN TIMUR KULIBAYEV OFFERED CIBC TO ESTABLISH KAZAKHSTAN-AZERBAIJAN PETROLEUM CLUB

 

KazEnergy, the Second Eurasian Energy Forum, aimed at discussion of actual issues of development of oil&gas and energy industries: review of analytical information, working out proposals and recommendations, coordination of uniform approaches to creation of effective regulatory mechanisms and practical tools for key sector activity of Kazakhstan’s economy, took place on October 6 through 7, 2007 in Astana.

The forum was opened by Prime-Minister of the Republic of Kazakhstan K.Masimov and Chairman KazEnergy Association T.Kulibayev.

“The Republic of Kazakhstan, a full-fledged member of global economy, is one of centers of sustainable and stable development, including energy industry”, said in his welcome address Prime-Minister of the Republic of Kazakhstan K.Masimov.

“Kazakhstan was and is a reliable and responsible participant in the international energy security system, with its increasingly important role in the global oil&gas industry”, said Prime-Minister of Kazakhstan. He also said Kazakhstan displayed almost 2.5-fold growth of oil production over the last 15 years compared to the global 1/3 increase. At the outset of its independence, Kazakhstan was producing over 26 million tons of crude annualy. This year it was planned to produce 67 million tons of crude, and by 2015, with an account for Caspian fields, Kazakhstan can bring its production to 140 million tons of crude annually.

Alongside production, investment attractiveness in oil&gas and power industry of Kazakhstan is growing up: so, gross inflow of direct foreign investments to country’s economy since 1993 amounted to over $50bn, almost half of which was invested in oil&gas and power sectors. Moreover, sharing almost three-quarters of entire amount are largest investors in Kazakh economy: the USA, Russia, China, UK, the Netherlands, France, Italy and Japan.

“Kazakhstan’s Government still intends to build its mutual relations with foreign investors on the basis of previously laid effective and understood formula of mutual cooperation”, Prime-Minister went on.

Speaking of the oil&gas industry, Prime-Minister mentioned the problems linked to development of Kashagan field. Mr. Masimov said ‘Kazakhstan’s government is ready to lead open dialog to achieve the soonest solution of all issues under the project, and here I will say openly that we will be strictly suppress all misconducts from those who attempt violating Kazakh regulatory and disregard our country’s national interests.’

The government regards the situation with Kashagan project as an individual case and means no harm to legal interests of potential and current investors in Kazakhstan.

“Kazakhstan remains a reliable and stable partner committed to its contract obligations and advocating their permanence. The government of Kazakhstan will be adjusting its position only on those who cannot comply with their obligations”, said the Prime-Minister.

The first working day of the forum started with discussion of strategic issues of oil&gas and energy industry. Through the plenary meeting sounded were the reports of Deputy Chief of Presidential Administration of Kazakhstan Vladimir Shkolnik, Foreign Minister of Kazakhstan Marat Tajin, Minister of Transport and Communications Serik Ahmetov, Vice-Minister of Energy and Mineral Resources Lezzet Kiinov, Director of Oil&Gas Assets Management with Kazakhstan Asset Management Holding Samruk JSC Galiusat Keshubayev, Head of European Commission Representation Adriaan van der Meer, Assistant to Managing Director Chevron International Exploration and Production Ted Atchinson, Senior Director Energy Department with Strategic Research Center Edward Chow and President BG International Ltd. Kazakhstan Louis Affleck and so.

Speaking on perspectives of Kazakhstan’s energy sector in light of global trends of energy development, Deputy Chief of Presidential Administration of Kazakhstan Vladimir Shkolnik said ‘energy today is the vital driving force of global economic progress and it directly influences the wellbeing of billions of people on the planet.’ He said the energy mix at the outset of XXI century displays a stable trend to grow up in all regions and countries of the world. Over 35 years (from 1971 to 2006) energy consumption more than doubled, displaying an increase of 11% over the last decade.

“Looking through the global energy mix, one can see the demand is at 86.8% supplied by fossil fuels such as coal, oil, gas and uranium, while just 13.2% are alternative resources. The trends in energy mix change at a global scale are extremely slow. So, since 1980 fraction of oil in total energy mix fell to 35 from 46%. According to IEA, oil fraction in total energy mix shall fall only by 1% by 2030”, said Mr. Shkolnik.

Speaking of energy security, a key factor of international relations stability, Foreign Minister of Kazakhstan M.Tajin said the years 2010-2014, according to estimations of most competent energy agencies, shall observe a peak of global oil production. It is pretty obvious that after 2014-2015 the global oil production will be declining regardless of currently announced production rise plans, i.e. global forecasting.

Minister of Transport and Communications of Kazakhstan Serik Ahmetov said of investment attractiveness of alternative transportation projects within Eurasian space. He said a significant increase of petroleum cargoes transportation using all kinds of transport is expected in the outlook until the year 2015. Already today this situation makes one think how to maintain the required infrastructure progress rate. With this purpose, as defined in the Transport Strategy up to the year 2015, the Ministry of Transport and Communications are implementing projects in a total amount of $30bn (KZT 3.9trn), including several projects on a concession basis in amount of some $2.5bn (KZT 327bn).

Vice-Minister of Agriculture of Kazakhstan A.Kurishbayeva said of the prospects of production and application of biofuel in Kazakhstan. She said the Concept of Biofuel Market Development in the Republic of Kazakhstan up to the year 2010 and draft Law on Governmental Regulation of Production and Circulation of Biofuel had already been drawn.

President BG Kazakhstan Louis Affleck performed with the report on New Impulses in Development and Competitiveness of Kazakhstan. He said over a long period of time Kazakhstan’s economic strength and foreign investment potential was chiefly defined by energy sector. On the other hand, it is a stable platform to underlie economy diversification, he underlined. Mr. Affleck also said Kazakhstan sat on huge natural resources and owing to huge fields like Kashagan, Tengiz and Karachaganak the republic secured 11th place in the world by oil reserves. However, Kazakhstan is not a completely explored country yet. “So right now, when new hydrocarbon deposits are diminishing and their exploration gets increasingly expensive and complicated, Kazakhstan can enjoy optimum conditions of further exploration and growth”, said Mr. Affleck.

Ted Atchinson, Assistant to Managing Director Chevron International Exploration and Production was speaking of ‘energy security through partnership’ at the forum. He said Chevron was the first Western petroleum company to have launched operation in Kazakhstan when it became independent. “We in Chevron are convinced that energy security is one of the top problems the world community is facing today. Expecting the growth of world’s population by 1.4bn people through the next 20 years, we can forecast a 50% energy demand increase over the same period of time, he said.

Saying of the role of national oil&gas company in competitive economy, Managing Director KazMunayGas NC JSC A. Sirgabekova outlined that from the very moment of its incorporation KazMunayGas was assigned to become a strategically important national operator in exploration, production, processing and transportation of hydrocarbons and represent interests of the government and oil industry of Kazakhstan. She said on the basis of good world practice a set of measures was taken that enabled to complete the process of forming KazMunayGas as a vertically integrated oil&gas company that performs the entire industrial cycle, from upstream to downstream and specialized services.

During his speech, A.Darbayev, CEO KazMunayGas NC JSC, has led a presentation for the forum participants on diversification and provision of stable channels of Kazakh energy resource supply to world markets. He said the trans-Caspian system will comprise oil export terminals on Kazakh coast of the Caspian Sea, tankers and vessels, oil loading terminals on Azerbaijani coast of the Caspian Sea and tie-up facilities to Baku-Tbilisi-Ceyhan system. He also informed that Kazakhstan is on the list of top twenty oil&gas producers in the world, and the oil&gas sector is a source of a quarter of revenues to the state budget; Kazakhstan will be producing some 180 million tons of crude by 2020.

G.Tolkimbayev, CEO, KazEnergy Association, told the forum participants of the support and assistance in training competitive specialists for oil&gas and energy complex. He said the part of KazEnergy Association is to perform the function of a dialog platform aimed, on one hand, to supply companies’ demand for qualified personnel, and on the other hand to create the technical and professional education infrastructure to stand by interests of the government.

The forum was continued by section Main trends of oil&gas industry; Social and environmental aspects of oil&gas and energy projects in the RK; Contemporary state and perspectives of energy development in Kazakhstan.

President and CEO Caspian Integration Business Club (CIBC) Telman Aliyev delivered with his report on Role of CIBC in Creation of Business-Government-Society Dialog. This organization, bringing together over 500 companies in thirty countries, was established in order to develop regional ties between the states, reinforce contacts between governmental agencies and private business and develop integration processes in energy and environmental protection sector.

Issues of mutual cooperation were discussed on September 6 in Astana during the meeting between President and CEO Caspian Integration Business Club (CIBC) Telman Aliyev and Chairman KazEnergy Association Timur Kulibayev.

Telman Aliyev told CIBCNews a Kazakhstan-Azerbaijan Petroleum Club would be established at Mr. Kulibayev’s suggestion. Under the new Club, participation of Kazakhstan’s companies in Azerbaijani projects and vise versa will be discussed.

In the follow-up of the meeting, Chairman KazEnergy Association Timur Kulibayev was handed CIBC Honorary Member Certificate. Mr. Kulibayev expressed his gratitude, saying Azerbaijan was one of the priority cooperation locations for Kazakhstan and this shall be developed.

The forum was led by KazEnergy with the support and participation of Presidential Administration of Kazakhstan, Ministry of Energy and Mineral Resources of Kazakhstan, Ministry of Environment of Kazakhstan, Ministry of Industry and Trade of the RK, Kazakhstan Asset Management Holding Samruk JSC, KazMunayGas JSC, Cevron Munaigaz Inc and other.