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Withdrawal of investors from Kazakhstan tagged alarming syndrome

February 25 2013, 11:13

nur.kz

USA's ConocoPhillips and Norway's Statoil recently announced they intend to sell their shares in Kazakh projects.

This time, the subject touched oil sector, not 'less attractive' industries. Last year, similar steps were made by 'foreigners' in other spheres - banking, energy and so on.

Seems like now it is not that important why they are leaving. The question is who will come in their place?

According to Daniyar Ashimbayev, a political scientist, it's not worth the trouble that American ConocoPhillips and Norwegian Statoil quit projects in Kazakhstan's Caspian Sea [Kashagan and Abai]. 

"There is a plenty of wishers to participate in huge investment projects in Kazakhstan's Caspian shelf, judging by talks being run with companies from Central and Eastern Europe and Asia - China and India, before all."

To recall, last autumn, Conoco Phillips posted on its website it had officially informed Kazakh authorities and partners it intends to sell its share - 8.4% - to India's ONGC Videsh Limited.

At the time, KazMunayGas [KMG], Kazakhstan's oil and gas company, responded that allegedly it does not refuse its priority to buy Conoco's share in Kashagan development project as provided by the country's existing legislation. 

To a similar step by Statoil, KMG put forward an initiative to sign an agreement of principles, a document that virtually binds Norwegians to align conditions of joint activities in Abai project.

Besides, the parties agreed that Statoil would take part in the construction of a self-lifting drilling rig that will be used to develop offshore blocks in the Caspian Sea.

At the moment, both deals are still being negotiated, while no wisher was seen in the horizon over the past several months.

In the situation emerged KMG is the only entity responsible for the future of both projects.

Not to mention that commissioning of the project have many times been delayed, investors suffered huge penalties, which for them entailed loss of share in the project.

Now Kashagan seems to start in a moment with a latest deadline set for the end of the year. It should work.

But the devil may play any trick - perhaps, the Americans know something we are not aware of?

So, no buyer approached since the day the sale was announced three months ago, and respectively KMG should join the game. It was us who more than others worried about raising the share of the domestic company in the project that, by emerged tradition, is often tagged 'unique,' 'record breaking' and etc.

Not surprisingly, the greater part of the people wish the state was a sole participant in most of promising projects. However, one should take into account the fact that involvement of many investors in this project is a sign that our country's oil and gas sector has big future and investment climate is warm, says the politologist.

Theoretically, in order to buy the ConocoPhillips share worth $5.5bn, Kazakhstan could use money from the National Fund. At the same time, many experts have doubts that it is effectively administered. Should we take that risk?

A leap from 16% to a blocking stake - 25% - may at least jeopardize credibility of other investors in us, and at most we will simply have to lead the project in the quality of an operator, for which we neither have specialists, nor funds nor experience.

On the other hand, this simply might be a big financial game.

By leaving and behind-the-scene games around selling stake ConocoPhillips is trying to discredit Kazakhstan as an area of advantageous investment - a thought that comes to mind when you hear an investor leaves just before startup of "the millenium project", one of the nicknames given to Kashagan.

Another version: ConocoPhillips comes from Texas. A large-scale development of previously tied-up oil deposits has started there, which the US President Barack Obama approved in 2009. Perhaps, the board of the company decided it is unfeasible to spend money in a project in the other side of the world and shifted attention to deposits within a hand's reach.

It's worth noting that nothing of the above mentioned explains the attempts by foreign companies to quit Kazakhstan's banking sector, processing sphere and power industry.

Very alarming syndrome!


 

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