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06.10.2009.SARKOZY CLINCHES $6 BILLION OF KAZAKH ENERGY DEALS
SARKOZY CLINCHES $6 BILLION OF KAZAKH ENERGY DEALS
(Reuters)
6 October 2009
ASTANA - French President Nicolas Sarkozy clinched oil, gas and nuclear deals worth more than $6 billion with Kazakhstan during a visit on Tuesday, establishing France as a key investor in the resource-rich state.
The West sees Kazakhstan, the largest oil producer in the former Soviet Union after Russia, as an increasingly important energy supplier as it ramps up production by tapping new oil and gas fields on its Caspian sea shelf.
France’s Total and GDF Suez on Tuesday got their share of future Caspian output by joining the project to develop the Khvalynskoye gas field, jointly owned by Russia’s LUKOIL and Kazakh state firm KazMunaiGas.
Khvalynskoye is relatively small, with estimated gas reserves of 332 billion cubic metres (bcm), while fields such as Russia’s Shtokman and Turkmenistan’s South Iolotan contain a few trillion cubic metres each.
But it is conveniently placed to feed into the Russian pipeline network and should eventually produce over 8 bcm of gas a year as well as some oil condensate.
KASHAGAN LINK
Total already plays a central role in developing Kazakhstan’s flagship oil project Kashagan, the world’s biggest oil discovery in the last 30 years, also on the Caspian shelf.
On Tuesday, a consortium led by another French firm, Entrepose Contracting unit Spie-Capag, signed a memorandum with Kazakhstan under which it could get a contract to build a pipeline for the export of Kashagan crude.
Entrepose Contracting said the Yeskene-Kuryk pipeline which will connect Kashagan to the Caspian Aktau port, could fetch 1.2 billion euro in contracts for French companies.
In another energy deal, France’s Areva and Kazakh state nuclear company Kazatomprom agreed to set up a joint venture to market nuclear fuel in Asia and look at the prospects of producing it in Kazakhstan.
The former Soviet republic sits on a fifth of global uranium reserves and is on track to become the world’s top producer of the radioactive metal this year. But it lacks the technology to process uranium into ready-for-use reactor fuel.
HUMAN FACTOR
Officials said the two sides signed a total of 24 deals worth over $6 billion on Tuesday, a high figure even for Kazakhstan, which has secured more than 70 billion in foreign investment since gaining independence in 1991.
Sarkozy and Nazarbayev oversaw the signing ceremonies and referred to each other as “dear friends” at a business forum held after the talks.
Sarkozy praised Kazakhstan’s role in securing stability in the volatile region and said Astana could help resolve the Afghan crisis.
When asked about criticism Kazakhstan has faced over its human rights record ahead of chairing the Organisation for Security and Cooperation in Europe (OSCE), Sarkozy said he was convinced Astana was moving towards OSCE standards.
“We have made our political choice, my dear friend, and I hope you will see that when France makes a political choice it sticks to it to the end,” he told Nazarbayev at the forum.
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