Kazakhstan A huge US investment at risk of anxiety


For many years, Kazakhstan’s vast natural abundance and relatively political stability have made Kazakhstan a mature target for US investment. The current wave of protest is Dozens of deadIs currently making these investments more risky proposals.

Since 2005, US investment in the Kazakh economy has exceeded $ 45 billion, according to Kazakh officials. About 600 US companies do business there.

Chevron Ltd


Exxon Mobil Ltd


Dow Ltd


DuPont Ltd

Prior to the pandemic, Central Asian countries attracted more annual US investment than some European Union member states. No US company has said it plans to withdraw from Kazakhstan, and many say they are watching how the crisis progresses before deciding to invest in Kazakhstan.

The political and social risks of the former Soviet nation have long been regarded as high, but due to its authoritarian system, inherent corruption, and the low standard of living of the population, foreign investors have replaced it. To Focused on its abundant natural resources..

Kazakhstan is a major contributor to the world’s energy supply, producing about 2% of the world’s daily consumption of oil last year, with large reserves of precious metals and coal.this 40% of the world’s uranium production 1 person.

Current crisis by Kazakh authorities Said it was caused by an external force Initially hijacked a peaceful demonstration, but has not yet caused major economic turmoil. However, the operator protests that he has temporarily restricted production on the Tengiz oilfield project, which is 50% owned by Chevron. The operating consortium, Tengizchevroil, is the country’s largest contributor to government revenues.

Chevron executives are surprised that the situation in Kazakhstan has deteriorated rapidly and are assessing how much their activity is exposed to ongoing protests, people familiar with the matter said.However, people pointed out that Chevron holds its assets in Venezuela and said they had worked in challenging places. Despite the political unrestFor example, Chevron said he could afford the turmoil in Kazakhstan.

A Chevron spokeswoman said the company is committed to Kazakhstan, with full recovery in production and a stable work environment.

An army of the Russian-led Collective Security Treaty Organization is guarding Kazakhstan’s power plant.


Russian Ministry of Defense / Zuma Press

Manfred Stammer, senior economist at insurance company Euler Hermes, said the demonstrations could continue in the coming weeks, while the Kazakh government seeks to protect the important role of foreign investment in the economy, while political instability remains. He said it was a risk now.

“Such an event reminds investors of the risks of doing business there,” Stamer said. “You should expect this to be more than one-time.”

Kazakh authorities have sought to reassure foreign investors in the wake of the crisis.

“Our president has made it clear that all foreign investment from Russia and other countries, not just the United States, will be well protected,” Kazakhstan’s Russian ambassador, Yermek Kosherbayev, told Russian national news agency TASS on Saturday. Told to.

After the dissolution of the Soviet Union, the newly independent Kazakhstan turned to the west to support the development of oil reserves and other resources. Chevron entered the Kazakh market in 1993 and signed a 40-year concession through a joint venture between Tengiz Chevron, which includes Exxon, state-owned KazMunayGas, and Russian Lukoil.

Since then, US engineering companies have built infrastructure, and US banks and consumer goods companies have established a domestic presence.

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According to Kazakh Central Bank, nine months of data available from 2021 show that the United States is the second largest investor in the country after the Netherlands, with direct investment of $ 3.2 billion. Trade between the two countries has also grown, with bidirectional trade reaching $ 2 billion in 2019.

“Kazakhs have always understood that they need to build good relations with Russia, China and the United States because they have huge wealth in the ground,” said the former United States of Kazakhstan. William Courtney, Ambassador and Deputy Senior Research Fellow of Land Corporation, said. ..

Successive governments have focused on the United States and have sought both its capital and technical expertise. In September, the Deputy Prime Minister of Kazakhstan

Tyson Foods

Inc, Nebraska-based manufacturer

Valmont Industries Ltd

Several US banks to promote the country as an investment destination, saying that the government will create the necessary conditions to attract more US funds.

Tyson, who is seeking involvement in the Kazakhstan beef processing plant project, said it was too early to determine the impact on interest in investing in Kazakhstan. Valmont said that the safety of the team on the ground is a top priority as it continues the multi-year joint venture announced last year to produce irrigation machinery and equipment.

Health officials say 160 people have died after several days of snowballing and looting in some big cities in Kazakhstan due to falling fuel prices and living standards. Photo: Pavel Mikheyev / Reuters

Focusing on US funding is also part of Kazakhstan’s long-standing goal of balancing the great powers of Kazakhstan’s territory. Despite its close ties to Russia, Kazakhstan, the largest former Soviet nation in Central Asia, has endeavored to maintain good relations with China and the Western nations as a counter to Moscow’s influence. rice field.

Neighboring Russia Sending paratroopers to help restore order At the request of President Kassym-Jomart Kaev of Kazakhstan, it comes when tensions between Moscow and the West reach their highest points in a few years beyond the president.

Vladimir PutinClaims that Russia has a privileged sphere of influence over the former Soviet Union.

Former Chevron executives now say that the relatively open areas enjoyed by oil companies and others in Kazakhstan could become more difficult if the turmoil creates a regime for Russia and China. Center for Strategic and International Studies

“If you’re a Western oil company, your risk profile may just have changed,” Chow said. He added that in the future, these companies will prioritize national stability and the security of oil interests.

The Tengiz oil concession will expire in 2033. A Chevron spokeswoman said the focus was on the $ 45 billion Tengiz expansion project to be completed in 2023, and that the extension of the contract must bring value to all stakeholders.

Write in Georgi Kantchev at georgi.kantchev@wsj.com And Christopher M. Matthews christopher.matthews@wsj.com

Copyright © 2022 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Kazakhstan A huge US investment at risk of anxiety

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