The Week in Kazakhstan: The Nationalization Shuffle

During a trip to Moscow on October 7, Tokayev joined Russia’s Vladimir Putin and Uzbekistan’s Shavkat Mirziyoyev in a ceremony to launch the shipments of Russian gas to Uzbekistan, via a network of pipelines going through Kazakhstan. The pipelines, once used to bring Central Asian gas to Russia, will now be used to meet Uzbekistan’s growing domestic demand for gas.

The international oil consortium operating the offshore Kashagan field told the government they may seek international arbitration over a $5 billion environmental fine levied against them, Bloomberg reported, citing people familiar with the matter, on October 12. The North Caspian Operating Company, which includes Dutch-British Shell, Italy’s ENI, US’ Exxon, France’s Total, China’s CNPC, Japan’s INPEX, and Kazakhstan’s Kazmunaigas, denied any wrongdoing.

People’s opinions on the construction of Kazakhstan’s first nuclear power plant are divided, according to a survey conducted by Demoscope. The survey’s results, published on October 12, show that 46.6% of the population supports building a nuclear station, while 37.7% are against. This runs contrary to the government’s narrative that the majority of the people support the construction. In his September 1 speech, Tokayev said the people will be asked about the nuclear station via referendum.

Since 2022, the Anti-corruption Agency was able to retrieve around 856 billion tenge ($1.78 billion) in funds that had been illegally withdrawn, the agency said on October 13. In July, Tokayev signed a new law on the return of illegally-withdrawn assets. The Agency plans to obtain the return of an additional 180 billion tenge ($375 million) by the end of the year. Details about the origin, ownership, and use of these funds remain unclear.

The Ridder combined heat and power plant was nationalized for the symbolic price of 1 tenge, the minister of energy said on October 12. In July, news about the purchase of the plant, an important source of energy for the eastern provinces of Kazakhstan, had been linked to businessman Amirzhan Nabiyev. He said he would have worked to repay the plant’s debt towards the national budget, which stood at around $10 million. When addressing the sale of the plant, however, the ministry of energy did not mention Nabiyev.

The shares of Phystech II, an oil company operating in the western Mangistau region, were transferred to the state, KASE, the Kazakhstan Stock Exchange, said on October 13. Phystech II shares had been linked to Kairat Boranbayev, a wealthy businessman who made a deal with the prosecutor and gave up several assets he owned in connection to a series of court cases. In September, Boranbayev was sentenced to six years for embezzlement.

KASE and AIX, the Astana International Exchange, could be merged next year, KASE CEO Alina Aldambergen said on October 11. By March next year, the two stock exchanges will develop a road map to integrate their services.

Kazakhstan’s GDP grew by 4.7% in the first nine months of 2023, the ministry of economy said on October 10. Construction and IT services showed the largest growth indicators.

We asked the ministry of finance why they struck Gazprombank off the​ list of people and organizations that receive funds or assets from abroad, which was published amid criticism on September 20. On October 12, the ministry said the list only includes organizations and people “involved in legal assistance, public opinion polls, sociological surveys, etc.”. The ministry noted that around 22,000 public associations work in this sphere in Kazakhstan. The list published in September consists of around 240 names.