Kazakhstan concerned over situation at Aktobemunaigaz

/Interfax-Kazakhstan, Jan.08, 00/ - The leadership of Kazakhstan is "seriously concerned" over the situation surrounding the oil extraction enterprise Aktobemunaigaz, of which 60% of the shares belong to the China National Petroleum Corporation (CNPC). The Kazakh Foreign Ministry and the republic's ambassador to China, Kuanysh Sultanov, have been instructed to report the situation at Aktobemunaigaz to the appropriate Chinese state structures so that both sides could jointly work out measures toward normalizing the situation at the Kazakh enterprise, a government official has told Interfax. Astana believes that the situation with Aktobemunaigaz is "unworthy" of the level of "partnership" that has developed between the two "neighboring" countries, the source said. In 1997, Kazakhstan and China concluded agreements concerning oil extraction and transportation for a total of over $9.5 billion. As part of these accords, the joint development of the Uzen oil field, the largest in Kazakhstan, and of the Aktyubinsk oil and gas field, got underway in 1998. CNPC bought 60% of the Aktobemunaigaz shares for $325 million and pledged investments of $4 billion in its development over the coming 20 years. In April 1999, 2,000 Kazakh specialists were laid off following the elimination of Aktobemunaigaz' drilling, transport, and construction departments. (Before CNPC bought up more than 60% of the Aktobemunaigaz shares, the staff of the company was 9,600 people strong.) The management then promised the workers employment in newly created jobs and, pending their re- employment, pay them 30% of their wage in allowances, which, however, have never been paid. The former staff of the disbanded Aktobemunaigaz workshops addressed an appeal to Kazakh President Nursultan Nazarbayev and the government at a meeting in early December 1999, requesting that the situation be resolved. The deputy general director at Aktobemunaigaz recalled in an interview with Interfax that the shares' purchase-sale contract stipulated a one-year period during which there would be no lay-offs at the enterprise. This deadline expired in September of 1998. "The investor did not violate the contract," he said. According to information published in mid December at a session of the permanent commissions of the maslikhat [legislature] in the Aktyubinsk region of western Kazakhstan, Aktobemunaigaz' main shareholder CNPC fulfilled the 85.4%, of the 1998 investment plan, and in 1999 invested no more than $70 million of the $117.4 million called for by the contract. CNPC had undertaken to invest $485 million in the development of Aktobemunaigaz over five years, the session reported. The maslikhat commissions passed a ruling recommending that Aktobemunaigaz not lay off workers, resolve the issue of the workers already dismissed, and get started on building a new gas processing plant. It was reported earlier that CNPC planned to ship to China 450 thousand tonnes of crude oil from the Aktyubinsk fields in 1999. In 1998, Aktobemunaigaz supplied China with 360 thousand tonnes of crude against the first 1.7 thousand tonnes after the agreements were signed in 1997. The export of oil to China is to be raised to over 500 thousand tonnes this year. Oil is transported to China by rail. At present, Kazakhstan and China are exploring the possibility of building an oil pipeline from Western Kazakhstan to China. The project is estimated at a cost of $3-3.5 billion. The pipeline would stretch some 3,000 kilometers and have an annual pumping capacity of no less than 20 million tonnes of crude.