Reasons behind Kazakhstan Oil Minister replacement

05 июля 2013, 11:39

Kazakhstan’s political analysts have shared their opinions with a journalist on possible reasons behind Oil and Gas Minister Sauat Mynabayev’s being relieved of duties.

Their opinions appeared to be quite contradictory. For instance, Dosym Satpayev, a famous analysts, believes the Minister was relieved of duties mostly over delays of commercial production at the giant Kashagan oilfield. The multiple delays had a negative impact on the economy’s development outlooks. “For instance, Moody’s Investors Service has recently forecasted the country’s economy growth at 5% in 2013 and 2014, pegging the growth figures to the Kashagan oilfield prospects. Since the start of the year there have been contradicting estimates of when exactly the oilfield will be launched. According to this year’s estimates, the oilfield was supposed to start commercial production in July, then Italian Eni suggested it would be September, with some following rumors of further delays to early 2014. It seems like Mr. Mynbayev was unable to “press” the investors to speed up the matter”, Mr. Satpayev said.

Dosym Satpayev

Dosym Satpayev. ©

Besides, the analyst believes that Minister Mynbayev held the position “too long” [from 2007]. However, the analyst highly estimated Minister Mynbayev’s results, highlighting that “he was one of the most active ministers; under his supervision the rules of the game for investors were substantially changed [to the benefit of Kazakhstan]. “I believe he will be offered another meaningful position. There are not so many true professionals in the O&G sector. [The newly appointed] Uzakbai Karabalin is not a new figure in the industry. It’s obvious that he is expected to take a tougher stance and tougher decisions related to oil production”, Mr. Satpayev believes.

Analyst Marat Shibutov shares Mr. Satpayev’s opinion. He believes the new Minister Karabalin will immediately attend to actual production issues. “With all his merits, Mr. Mynbayev failed to raise oil production output at Kashagan and other oilfields”, Mr. Shibutov believes.

 Marat Shibutov

Marat Shibutov. ©

Sergei Smirnov, an expert with the Institute for Political Solutions, voiced a different opinion. He believes Mynbayev was relieved of his duties due to a number of failures. During his ministerial tenure Kazakhstan faced greater shortages of fuel, namely petrol. The analyst believes the promise to have all the three oil refineries [based in Pavlodar, Atyrau and Shimkent] overhauled by 2016 will not be kept. “For all the time in this position Minister Mynbayev didn’t solve a single serious issue in the industry (…) Mr. Karabalin has been in the industry all his life; there is hope he is better positioned to have things done”, analyst Smirnov believes.
“As for Kashagan, the Oil and Gas Ministry has little power to accelerate the process (…) the oilfield is technically complicated. The PSA under which the investors are supposed to pay back their investments first and then to have revenues brought to the state coffers makes them interested in delaying the actual production. The agreement is fallacious”, the analyst said.

Sergey Smirnov
Sergey Smirnov. ©Yaroslav Radlovskiy/

Mr. Oleg Yegorov, an expert with the Economics Institute under the Ministry of Education and Science, believes the country’s O&G Ministry under Minister Mynbayev pursued a wrong policy with regards to neighboring Russia. Notably, with regards to disputes over Karachaganak gas; over suspended supplies of Russian-made AI-92 petrol to Kazakhstan; over suspension of crude supplies to Russia for processing.

“Instead, Kazakhstan will be supplying crude to China to an oil refinery located 200 km away from the border. The processed crude will be sent back to Kazakhstan along a special pipeline. There is a question of economic viability of the solution, given that a kilometer of this to-be pipeline will cost $1 million (…) Why should we complicate relations with neighboring countries”, Mr. Yegorov believes.

“As far as the actual production at Kashagan is concerned, the responsibility for the delays lies not only with Minister Mynabayev, but also with his predecessors”.

“The newly appointed Karabalin is well-positioned for the post, given the current debts of Kazakhstan. We are buying assets in Georgia, Romania, stakes in Kumkol (…) these are substantial amounts. There should be a new person, a new minister to look into what can be done to develop the national oil company (…) to the benefit of Kazakhstan’s people”, Mr. Yegorov summed up.

Oleg Yegorov

Oleg Yegorov. Photo courtesy of

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