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Gold/Mining/Energy : Steppe Gold (SPE:V) -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (652)	2/19/1998 1:43:00 AM
From: John Menzies	Read Replies (1) \| Respond to of 1248

THE USUAL FROM S&P - FINANCIAL HEALTH STATEMENT Kazakhstan BB- FC, BB+ LC Ratings Affirmed; Outlook Stable LONDON, Feb. 18 /PRNewswire/ -- Standard & Poor's today affirmed its double-'B'-minus long-term foreign currency and double-'B'-plus long-term local currency sovereign credit ratings for the Republic of Kazakhstan. Standard & Poor's also affirmed the republic's single-'B' short-term foreign and local currency sovereign credit ratings. The outlook remains stable. Kazakhstan's ratings continue to be constrained by: Serious structural weaknesses in public finances, mainly owing to the country's inefficient tax administration. This kept tax revenues to GDP at a low 11.5% in 1997, and only a sharp acceleration of privatization allowed the central government deficit of 3.4% of GDP to remain below the budgeted 3.7%. The challenge of achieving further ambitious tax revenue and privatization targets, at a time when high fiscal deficits leave virtually no room for fiscal slippage. Because of a bold, but costly pension reform, resulting in an increase of transfers to the government pension fund to about 4% of GDP, Kazakhstan's 1998 general government deficit will remain at a high 8% of GDP (excluding privatization proceeds of about 2.5% of GDP). The need to improve the quality of governance and political institutions, which is key given the country's short track record of orthodox economic management and the concentration of excessive power in the hands of a very few policymakers. The lack of a decisive breakthrough in securing additional export routes with its neighbors to take full advantage of the country's resource wealth. Efforts to gain access to world energy markets have gained some momentum, but tangible increases in output and exports are not expected before the turn of the century. The ratings are supported by: The government's continued strong commitment to orthodox economic management, structural reforms, and financial stabilization, which is expected to support real GDP growth of about 3% in 1998, and reduction of inflation to below 10% by year-end 1998. The continued low, although rising general government debt burden of about 17% of GDP, and light net public external debt burden estimated at about 14% of exports in 1998, which compare well with those of other rated sovereigns in the double-'B' category. Kazakhstan's moderate external debt service (of about 35% of exports in 1998 including short-term debt), and very low dependence on confidence-sensitive portfolio inflows to finance the current account deficit of about 4% of GDP. The higher tenge rating reflects the government's impressive record of inflation reduction, its commitment to fiscal stabilization, and control over the domestic financial system. OUTLOOK: STABLE The commitment of the country's leadership to systemic reforms, prudent economic management, and a policy environment conducive to continued high foreign capital inflows is expected to support reasonable economic growth, further disinflation, and a manageable external position. The external position is likely to weaken somewhat as a result of continued high public borrowing, but both external debt and debt service should remain manageable until greater export dynamics, deepening domestic capital markets and higher domestic savings ease the constraints. Assuming economic policy continuity, a more positive view on the rating hinges on more tangible results with regard to a breakthrough in exports and sustainable government revenue improvements in order to strengthen public finances and reduce the government's dependence on privatization proceeds as well as market and official borrowing, Standard & Poor's said. -- CreditWire

To: marcos who wrote (652)	2/19/1998 7:12:00 PM
From: John Menzies	Respond to of 1248

This is probably one of the most important issues to resolve for the future of Kazakstan and all the countries around the caspian. NEW YORK, Feb 18 (Reuters) - The head of Chevron Corp's (CHV - news) international oil exploration and production activities on Wednesday said there had been progress toward agreement to get a pipeline built linking giant oilfields in Kazakhstan to the Black Sea port of Novorossisk. Shareholders in the Caspian Pipeline Consortium (CPC), the international group of companies and governments responsible for building the line, met in Moscow earlier this week and neared an agreement to settle differences that have plagued plans for the pipeline, said Richard Matzke, president of Chevron Overseas Petroleum. ''I'm not saying there is a love-fest going on (but) they've come to a much more professional arrangement,'' said Matzke. ''It's a more articulate clarification of the original agreements,'' he elaborated to a small gathering of journalists in New York. He said one of the main sticking points within the CPC, has now been resolved. The three shareholder governments - Russia, Kazakhstan and Oman - have conceded corporate shareholders the control they wanted over the design of the pipeline and over procurement and construction of the line, Matzke said. ''This was more of the issue than the rights of way,'' Matzke said, adding that it was fitting that the companies got that control. After all, he said, they are footing the $2 billion bill for the 1,500 km (940 mile) long pipeline. Rumors circulated earlier this year that the corporate shareholders had frozen funding for the pipeline because the governments had failed to procure the necessary licensing from federal and regional authorities necessary for the construction. ''There were misunderstandings, most of them unintentional,'' Matzke said. He added that the management would not be changed and denied rumors that the discontent had snowballed into calls for CPC director-general Vladimir Stanev to be replaced. "As far as I know, (Stanev) is still there," Matzke said. Chevron owns 15 percent of the CPC, Russia's LUKoil holds 12.5 percent, Mobil Corp [NYSE:MOB - news] and Russia's Rosneft have 7.5 percent each, BG Plc and Italy's Agip SpA have two percent each, and Oryx Energy Company [NYSE:ORX - news] and Kazakhstan's Munaigaz 1.75 percent each. The remaining 50 percent is divided between Russia, with 24 percent, Kazakhstan with 19 percent and Oman with seven percent.