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Kazakhstan: More Oil And Gold Facilities Going Private

Almaty, 15 January 1997 (RFE/RL) -- Kazakhstan this month is offering for privatization more of its state-run oil and gold facilities.

They are two major oil refineries, at Pavlodar in the north of the country and Aqtobe in the northwest, and the Vassiylkovskoye gold mine, also in the north.

The two oil refineries, which together account for more than 35 percent of Kazakhstan's refining capacity, are being offered by the State Committee on privatization of oil and gas production objects. Pavlodar, which dates from the 1960s, exports its production to Russia and other members of the Commonwealth of Independent States (CIS).

The privatization committee's press service told an RFE/RL correspondent in Almaty that six companies have already registered to take part in the tender for Pavlodar. These are Harricane Hydrocarbans of Canada, Axiss Industries of the U.S.A., Intermediterranean of the U.S.A., SS Oil of Britain, and two Kazakh companies, Amadeus and Radikal. Of these, Harricane is already present on the local energy scene, as last year it purchased the YuzhNefteGaz oil and gas complex in the south of the country.

There's no word on the expected price for Pavlodar, which is reported to be in good working condition despite its age.

The Aqtobe plant is less well known than Pavlodar and has only about one-third of the bigger refinery's production capacity. It's also reported to be in financially worse shape as an enterprise. These factors work against it as an investment object, even though it is geographically better situated than Pavlodar as it is closer to the huge Tengiz oil field.

Investor interest has been correspondingly less. The privatization committee says that so far only one company, the U.S. giant Exxon, has officially registered to participate in the tender, which closes at midday on January 24.

Another big U.S. company, Texaco, has also indicated some interest, but has not yet joined the tender process. The committee told our correspondent that under Kazakh law the tender will have to be cancelled if no competitors participate. Whether Exxon will then put in a private bid for the plant isn't clear.

If the two privatizations are successfully carried through, it will mean that all Kazakhstan's major oil facilities will have been privatized, mostly to foreign interests.

On the gold front, the disposal of one of the world's biggest gold mines is expected to be finalized by the end of this month. It is the Vassiylkovskoye complex in North Kazakhstan. A top representative of the British Diamond Resources Company, Robert Friedland, has already held detailed negotiations about the purchase of the mine.

Our correspondent says the situation surrounding the Vassiylkovskoye Gold Mine should become clear by the end of this month.