April:

Arthur SHAKHNAZARYAN

The intrigues dangerous for foreign investors are taking place in Kazakhstan's oil community. Kazakh oil businessmen, having last summer lost their informal corporate leader Timur Kulibayev, started a fierce without-rules struggle for influence between themselves. This process is going on in the shadow of a rather conspicuous phenomenon of removing former elite-lobbyists. Voluntarily or not, foreign investors are also involved in this struggle; intrigues, lobbyists, counter-intrigues… as a result oil businessmen are dismayed, and vague times are looming.

The projects of major foreign oil companies operating in Kazakhstan are seemingly been drawn in the alien political intrigues

ONE AFTER ANOTHER
Last weeks different scandals rocked the oil community of Kaza khstan. At the turn of February Askar Aubakirov, vice-president of The Exploration & Production KazMunaiGaz (EPKMG), was dismissed. In April Zhaksybek Kulekeev, president of the railway company Temir Zholy and former first vice-president of KMG, was arrested. And in the middle of April there appeared information concerning the resignation of Maksat Idenov, first vice-president of KMG.
The former two events, according to the authoritative Russian source rusenergy.ru, could be perceived as the expulsion from power of the persons associated with Timur Kulibayev, who last summer left his post of KMG chairman of board. As far as it concerns Mr. Idenov the situation seems to be different: possibly the point concerns his own character traits.
As is well known, the Italian company Agip KCO was deprived of the role of a single operator in the North Caspian Project (its main part concerns development of the Kashagan gigantic oilfield in the Northern Caspian). According to our confidential sources closely connected with foreign oil companies operating in Aterau, Agip KCO couldn't but notice Idenov's proximity to one of the main Italians' rivals in the struggle for control over the oil project of global significance, i. e. to the company Shell where Idenov worked for several years.
It was not by accident that the publicly indifferent company Agip KCO suddenly 'broke the silence' and burst out into refutation of its people's participation in 'the intrigue regarding Maksat Idenov's resignation, just after the latter had been announced. Rusenergy.ru regarded Idenov as a candidate for the role of one of the informal corporate leaders, after Timur Kulibayev resignation.
It is noteworthy that, according to the media, Mr. Idenov's resignation was ostensibly caused by his disagreement with the government's intentions regarding the Kashagan project and the consortium. Idenov 'retiring' was marked as 'disagreement with the position of Kazakh government with regard to further realization of the Kashagan project concerning the government's more stringent requirements towards the project operator'.
Incidentally, it would be worth recalling that in due time Uzakbay Karabalin, KMG president, worked for Agip for nearly 2.5 years.
The entire intrigue is taking place on the threshold of completion of negotiations, and by the end of May the shareholders of the Kashagan project will create a joint company-operator of the North Caspian project conditionally labeled as OKIOC-2. The Italians are still nourishing certain hopes that they will be able to partly retain their operating role even in the future, after the completion of Experiment/Industrial development phase in Kashagan. Agip KCO didn't disband the working group Full-scale Phase of Development of Kashagan despite the fact that the January agreements nearly unambiguously and clearly designate for the Italians that their operation mandate is valid only for a period of the current development phase, and Agip KCO will be directly controlled by the company-operator OKIOC-2.

THE  BLOC OF  UNIONISTS
In those very days when the resignation intrigue against Idenov was gathering strength Mr. Campbell Kier, general manager and Shell regional representative in Kazakhstan, brought to grass an original idea concerning the future of the North Caspian Project. Shell wants to amalgamate the blocks Zhemchuzhina and Kalamkas-sea with the obvious intention of gaining a stronger position in the North Caspian Project.
Since the past year the British giant Shell has been harboring the idea of combining into one both projects with its own participation on the Caspian shelf, now it is proceeding to public actions. Most probably, the company wants not only to cut down its inputs but also to increase its political influence in Kazakhstan's maritime sector, according to our sources.
The above geological blocks are in close vicinity with each other; moreover, Zhemchuzhina and Kalamkas have similar geological characteristics, explained Campbell Kir at his Almaty press conference. The contract block Zhemchuzhina is being developed by the consortium Caspian Meruerty Operating Company B. V. As for Kalamkas-sea, it participates in the North Caspian Project, which belongs to the consortium of the same name, with Agip KCO as operator. Shell owns 55% share holding in the first company, and 18.52% in the second one. The amalgamation implies construction and exploitation of the common infrastructure, the so called 'unionization'. According to another source closely connected with Shell, if the idea of amalgamation proves viable the joint development of the geological objects will possibly start in 2012.  
'Even today the teams working at Zhemchuzhinas and Kalamkas conduct certain business meetings to decide how to organize cooperation for more optimal development of the oilfields. But all that is in embryo phase. Maybe several years must elapse before we will be able to see some signs of cooperation', said Kier.
With regard to the development, Kalamkas is some two years ahead of Zhemchuzhas. We have to do certain exploration works for Zhemchuzhinas, and the estimates are expected in the period of two years, he said.
Kalamkas along with Kashagan, Aktoty and Kayran occupies the contract territory of drilling works of Agip KCO consortium. Those structures consist of 11 sea blocks situated on the territory of approximately 5.6 thousand sq. km. Currently the membership of Agip KCO looks as follows: ENI (common operator of the project for the time being), TOTAL, EXXON-MOBIL, and SHELL each has 18.52% of share holding, KonokoPhilips - 9,26%, Inpex and KazMunaiGaz - 8.33% each.
Meanwhile in January the participants of Agip KCO came to an agreement about the share increase of KazMunaiGaz in the project up to 16.81%.
The agreement on profit sharing regarding Zhemchuzhinas was signed in December 2005. Shell1 shares the project with KazMunaiTeniz (operator of maritime projects of the national company KazMunaiGaz) -25% and with Oman Pearls Company (daughter enterprise of Oman Oil) - 20%.
The given oil-bearing block of 895 sq. km. is situated 60 km. away from the coast of Mangistau Oblast.
Operation activities on the Zhemchuzhinas project pertain to the joint operational company Kaspiy Meruerty Operating Company B. V.
 Kaspiy Meruerty Operating Company B. V. was created in the Netherlands on 8 January 2007. Its creators are the following participants of the Zhemchuzhinas project: Shell  RD Off-shore Ventures Ltd. with 40% share holding, KazMunaiTeniz with 40% and Oman Pearls Company Ltd. with 20%.
In early October of the last year Mr. Uzakbay Karabalin, president of KazMunaiGaz, announced that the first prospecting well-boring in the sector of Zhemchuzhinas Khazar-1 revealed the signs of hydrocarbons. With the purpose of well-boring, Shell  RD Off-shore Ventures Ltd. signed with Lukoil Shelf a contract on the oil rig Astra. The given contract makes it possible also to conduct in 2008 the second prospecting well-boring in another sector of Zhemchuzhinas - in the Auezov structure.
If Maksat Idenov also adhered to the idea of unionization of the global North Caspian Project and the insignificant Zhemchuzhinas project, he might play a decisive role in their realization if he only managed to strengthen his position in the oil politics, our sources say. If these plans are nevertheless realized, then allied Shell and KMG will have leading positions in developing oil resources in the Kazakh Caspian sector.
Our source in London, expert in Central Asian oil projects, considers that the chances for creation of a separate consortium under Shell leadership, independently from the North Caspian Project, are significant.
'In this regard it is necessary not to forget the deep-water harbor Sagyndy, which is situated 150 km. to the north from Aktau, near the oilfield Kalamkas, and it is also necessary to have in mind the oilfield Dunga, which belongs to Danish MAERSC. The amalgamation of these blocks has realistic perspectives particularly with regard to the fact that as early as in Soviet times a railway branch line had been drawn to Sagyndy', he said.
'It is necessary not to forget French TOTAL's ambitious aspirations to the leading position in the North Caspian Project', stressed the expert.
He considers that in general the situation in the Kazakh oil sector is really unclear: the foreign companies cannot understand anything, and Mr. Nurlan Balgimbayev, new advisor of the Kazakh president, does not show his worth so far.