Foreign investors Italian Agip, U.S. Texaco, British Gas, and Russia's LUKOil will invest US $300m in the construction of a processing plant at Kazakhstan's giant Karachaganak natural gas and gas condensate field in 1999. The total investment in the field will reach US $400m next year. The information was released to Interfax by the Prime Minister Nurlan Balgimbaev following his visit to the oil field. Russia's Orenburg gas processing plant has continuously reduced the amount of Kazakhstani gas condensate they process, spurring the government's decision to construct the new plant. (Interfax)

***

Oryx Energy Co, a U.S. company that is developing the Arman deposit and surveying the Mertvyi Kultuk block in the Mangystau region (Western Kazakhstan), intends to drill 5 wells over the next 2 to 5 years. This will increase oil output to 55-60bpd. Recent drilling on the Mertvyi Kultuk block owned jointly with Exxon Corp found about 40 feet of high quality oil pay. However, according to Oryx, the reserves are considered non-commercial at this time due to the remoteness of the deposit and lack of infrastructure, making it currently unprofitable to develop this field. (Reuters & Interfax)

On August 28, the President of Kazakhtelecom, Serik Burkitbaev and Vice President of Siemens Wolfgang A. Hub signed a US $38.5m frame contract to build the Western branch of the National Information Trunk Line (NITL). This fibre optic ring will combine all Kazakhstani regional networks into a united system. The construction will be carried out by the Kazakh party (15% of the contract value). Siemens will be supplying the equipment, organising a service centre, and training the personal (85% of the contract value). The project on the construction of the NITL, with a total length of 9,666 km and a total investment of US $200m, is planned to be implemented between 1998 and 2001. The Eastern branch, with a length of 2,120 km, will be under construction from 1999-2000 and will require US $29m in investment. The final stage will be the construction of a 5,038 km connection, worth US $68m. It will be started in 2000 and completed in 2001. According to Mr. Burkitbaev, it is a 100% Kazakhtelecom project and its payback period is 5-7 years according to a pessimistic scenario and 4-5 years according to an optimistic one. (Interfax)