The Panorama newspaper reported that the Supervisory Council of Atyrau Refinery held a meeting on June 9 to address the company's financial issues in light of the drop in world oil prices. The council took a decision on the disposal of non-efficient fixed assets and the reduction of excessive material stocks. It approved a restructuring programme whereby some subdivisions not linked to the used technology will be separated. The possibility of raising investment was also considered. The company will seek loans for the renovation of its heating and power plant, the construction of an oxygen-nitrogen plant and for some other projects which are believed to be short paying.

Currently, Atyrau Refinery shareholders include: KazakhOil, a holder of a state share of 41%, the Swiss company Telf A.G.—18.336%, employees—25.5%, Imantau—0.4%, Kazkommertsbank—0.5%, A.O. Securities—0.1%, Almaz Engineering—0.06% and other individual shareholders—13.9%.

***

The U.S. company CCL Oil has reportedly retained the management of Pavlodar Refinery thus far having appointed a new chairman—Alexander Krechinsky who replaced Oleg Li at this post. Anatoly Dudka has retained the post of General Manager of the plant. According to company's department of industry, transport and communication in order to make a profit the refinery has to process 2.5m tonnes of crude per year. Last year, it only processed 1,607,000 tonnes meaning that the refinery was operating with losses.

***

According to the vice president of the U.S. company Texaco who has been operating Kazakhstan's giant oil and gas field Karachaganak, the field should be producing 10.5-11.0 million tonnes of oil and gas condensate within four years (The current production is 3.5 million tonnes). Increasing the output will be possible due mainly to the quota (7.0 million tonnes of crude to be pumped yearly via the Caspian Pipeline Consortium pipe) allotted to the Karachaganak project. Texaco, with a 20% share in Karachaganak, is a partner in the British Gas, Agip and LukOil alliance.

In the previous issue of Kazakhstan Weekly News (June 8) we provided information (quoted from the Delovaya Nedelia newspaper) on the delay of Halyk Savings Bank of Kazakhstan's (HSBK) debut Eurobond issue due to recent developments in Russia. In reference to this Mr. Bahit Jolaman, an official of AIG Silk Road Capital Management who was involved in HSBK's road show gives a different opinion "there has been a strong interest among investors in the wake of the bank's road show. However, due to pricing considerations, the management of the bank has decided to delay the transaction until improvements in the market warrant the issue."

The bank may go forward with the bond issue in a month without a new road show. Lehman Brothers has been acting as the lead manager for the issue.

The national telecommunication company Kazakhtelecom has become the first in Kazakhstan to obtain a license for cellular communication services under the GSM standard. The licence was issued to the company by the Ministry of Transport and Communication on June 8. Under the license, Kazakhtelecom will use a 900 MHz band for which it has paid a lump sum of US $16.5m. Moreover, the company has voluntarily refused an exclusive right to use GSM in Kazakhstan. This move will place other potential GSM operators under equal conditions. A tender for them is scheduled to be held on July 31.

NB: We would like to inform our clients that Kazakhstan Weekly News is also available free of charge on E-mail. To subscribe via E-mail, please contact us on Lydia@kazks.kz or Madina@kazks.kz.