Atyrau Region is working to improve investment climate, increase foreign investment, says governor

NUR-SULTAN – In this exclusive interview, Atyrau Region Akim (Governor) Nurlan Nogayev talks about continued efforts to develop major industries and SMEs in the region famous for its abundant oil and gas reserves and being home to Tengiz, one of the world’s largest onshore oil fields.

What types of social and economic development issues are on the agenda for your region?

The results of the social and economic development of the region for 2018 are as follows:

Gross regional product of the oblast for nine months of 2018 amounted to 4,911.6 billion tenge (US$12.8 billion). The index of physical volume was 112.5 percent.

The share of the region in the country’s gross domestic product is 12.4 percent.

The gross regional product (GRP) per capita is 7.85 million tenge (US$20,500).

The volume of industrial production amounted to 7.5 trillion tenge (US$19.6 billion); the physical volume index is 110.6 percent.

Products worth 6.8 trillion tenge (US$17.8 billion) were produced in the mining industry; the physical volume index was 111.2 percent.

Approximately 47.2 million tonnes of oil and 23.6 billion cubic metres of associated petroleum gas were produced, which equals 111.8 percent and 113 percent, respectively, compared to 2017.

Tengizchevroil produced 28.6 million tonnes of oil, or 99.7 percent compared with 2017, as well as associated petroleum gas in the amount of 15.6 billion cubic metres (99.3 percent).

The North Caspian Operating Company (NCOC) produced 13,219.6 tonnes of oil (158.6 percent), and 7,746.5 million cubic metres (157.9 percent) of associated petroleum gas.

The volume of industrial output in the manufacturing industry amounted to 590.5 billion (US$1.5 billion) tenge or 108.1 percent.

In 2018, within the framework of the Business Map, there were plans to commission six projects in the amount of 9.4 billion tenge (US$24.5 million) and to create 162 jobs; by the end of the year, five projects were launched in the amount of 6.7 billion tenge (US$17.5 million) and 127 jobs were created:

  1. Mill of Karat LLP (the project cost 4,500 million tenge (US$11,732); 50 jobs);
  2. Production of ready-mixed concrete by New Ascent LLP (the project cost 1,623 million tenge (US$4,232); 30 jobs);
  3. Production of polyethylene bags by Plasticcom LLP (the project cost 27 million tenge (US$70,395); seven jobs);
  4. Production of disposable paper cups by ANTA LLP (the project cost 20.3 million tenge (US$52,927); 18 jobs);
  5. Production of reinforced concrete products by Atyrau Concrete 24 LLP (the project cost 600 million tenge (US$1.6 million); 22 jobs).

Investments in fixed assets amounted to 3,689.5 billion tenge (US$9.6 billion); the physical volume index is 136 percent.

Approximately 793,900 square metres of housing were commissioned in the region (or 127.2 percent in comparison to 2017).

The volume of construction work amounted to 637.2 billion tenge (US$1.7 billion); the physical volume index is 107.2 percent.

As for agriculture, forestry and fisheries, the index of physical volume (services) was 104.6 percent or 67.3 billion tenge (US$175.5 million).

The number of cattle increased 6.9 percent (168,100 head); horses, 8.9 percent (79,300 head); camels, 3.9 percent (31,900 head) and sheep and goats, 3.2 percent (559,900 head).

Approximately 51,600 tonnes (103.8 percent) of meat was produced; milk, 61,400 tonnes (102.2 percent) and eggs, 125.5 million pieces (127 percent).

The number of operating small and medium-sized businesses is 46,756, or 109 percent compared with 2017.

For the third quarter of last year, the unemployment rate was 4.9 percent, as 32,263 new jobs were created (21,214 are permanent and 11,049 are temporary).

The average monthly salary in January-September 2018 was 292,631 tenge (US$762.96), or 112.6 percent compared with January-September 2017.

In terms of taxes and budget, as of Jan. 1, the state budget received 1,387.9 billion tenge (US$3.6 billion) in taxes and other obligatory payments (or 101.1 percent of the forecast); the national budget received 1,101.9 billion tenge (US$2.9 billion) (or 101.1 percent of the forecast); the local budget, 286 billion tenge (US$745.7 million) (or 101.3 percent of the forecast).

Approximately 1,444.4 billion tenge (US$3.8 billion) were transferred to the National Fund.

The volume of retail trade amounted to 279.2 billion tenge (US$272.9 million) or 100.5 percent.

In January-September 2018, the region’s foreign trade turnover amounted to $19.7 billion, or 145.5 percent of the corresponding period of 2017; exports were $17,8 billion (145.4 percent) and imports, $1,9 billion (145.7 percent).

 

What work is planned to improve performance in the coming years?

The akimat (the administration) of the Atyrau Region has been carrying out systematic work to improve the region’s investment climate and increase foreign direct investment in the economy.

Currently, the region successfully cooperates with more than 50 countries of the world. More than 1,000 joint ventures and foreign enterprises have been created and successfully operate in the region.

In order to attract domestic and foreign investment in the regional economy, an international investment forum is held annually in the oblast, as well as Global Oil & Gas Atyrau regional exhibitions and the Atyrau Build construction exhibition. These events host exhibitions of investment projects requiring investments.

The investment potential of the region has a number of positive factors:

  1. Sufficient wind and solar energy to obtain alternative electricity and the presence of self-flowing underground wells makes it possible to create desalination and drinking water production facilities;
  2. Availability of raw materials, including 88 hydrocarbon deposits and 21 vacant deposits of common minerals;
  3. Availability of all necessary infrastructure and favourable investment conditions.

One of the elements of investment attractiveness of the region is the presence of the National Industrial Petrochemical Technopark (FEZ), with a total area of 3,400 hectares, the purpose of which is the construction and commissioning of infrastructure facilities and the development of chemical, petrochemical and related industries. Today, 15 participants are registered on the territory of the FEZ and a number of investment projects are being implemented.

In addition, there are plans to implement such investment projects as the production of polypropylene (with a capacity of 500,000 tonnes per year) and polyethylene (with a capacity of 1.25 million tonnes per year).

The FEZ provides potential participants with a special legal regime in all its territory, which allows tax, customs and other benefits.

 

How much foreign investment was attracted to Atyrau Region in 2017 and 2018? Please tell us about the most significant projects in the construction, manufacturing and agribusiness fields.

Investments in fixed assets amounted to 3.7 trillion tenge (US$9.6 billion) or 135.1 percent from January-December 2017, including foreign investment in the amount of 1.6 trillion tenge (US$4.2 billion).

The main sectors of the region’s economy that form a significant part of the GRP are mining, oil refining, mechanical engineering, trade and construction.

In January-December 2018, the share of the mining sector in the structure of industry was 91.1 percent; the share of manufacturing, 7.9 percent and others, 1.0 percent.

In January-December 2018, the volume of production in the mining industry amounted to 6,8 trillion tenge (US$17.8 billion) and grew by 11.2 percent compared to the previous year.

The basis of the mining industry is oil and gas, sand and salt.

Approximately 47.2 million tonnes of oil and 23.6 billion cubic metres of associated petroleum gas were produced, which is 111.7 percent and 112.9 percent, respectively, compared to the 2017 level.

The mining industry is concentrated mainly in five districts of the oblast: Issatai, Kurmangazy, Kyzylkugin, Makat and Zhylyoi.

Advancement of the mineral resources sector requires large-scale geological exploration in order to increase the exploited reserves.

One hundred and nine mineral deposits have been explored in the region. There are 21 vacant deposits (deposits of construction and technological raw materials) available for investors.

          According to experts, the most promising deposits are:

          1.     Keramzite clay deposits (Makat district) – the reserves equal 49.86 million cubic metres

          2.     Gypsum deposits (Inderskoe No. 98) – the estimated resources are 151.19 million cubic metres.

          There are 626 industrial enterprises in the region, including 18 medium and 19 large enterprises.

          Large manufacturing enterprises operate in oil refining, chemistry, mechanical engineering, food production and construction.

Industrial production is concentrated in the city of Atyrau and Zhylyoi district of the oblast.

The leading enterprises in the region in the field of mechanical engineering are AtyrauNefteMash LLP, Atyrau Pipe Fittings Plant, ChevronMunaiGas Inc. Company Branch, Continent Co. Ltd. LLP; Dossormunaimash LLP, Flowserve LLP, Kazakhstan Integrated Services LLP, KazTurboRemont LLP, Novus Sealing Caspian LLP and ZhigerMunaiService LLP.

In the field of chemistry those are Atyrau Oil Refinery LLP, KasChem LLP, Polymer Production LLP, RauanNalko LLP and TUZ LLP.

The leading companies in the field of construction include Atyrau Polyethylene Pipe Plant of ChevronMunaiGas Company, BatysAlyansStroy LLP, Beton Invest LLP, BIASTECH LLP, Caspian Construction Company Limited LLP, Direct Construction Service LLP, Euroconcrete LLP, ISI Gips-Inder LLP, Kazcomservice LLP and UPTK LLP.

Light industry is represented by CaspiyLanaAtyrau LLP, Ertri LLP and SAFETY SYSTEMS LTD LLP.

Companies in the food industry include Almaly Kus LLP, Amangeldy Production Cooperative, Atyrau Agro Felix LLP, Atyrau Bodene LLP, Atyrau Sauda LLP, Caspian Royal Fish LLP, Karat LLP, Pervomaysky LLP, Saraishyk Breed Livestock Farm LLP, Zaman Group LLP and Zhemchuzhina Health Centre LLP.

These enterprises manufacture products for national companies, as well as other consumers in the region and the near abroad, and can potentially be considered as initiators of the implementation of new investment projects.

 

Could you talk about activities and projects in the field of public-private partnership (PPP)?

In 2017-2018, bilateral agreements were signed in the region on five projects within the framework of the public-private partnership (PPP). These are construction and operation of street lighting in the city of Atyrau; creation and operation of action plans for the early diagnosis of pulmonary tuberculosis, including the development of a diagnostic programme, equipment with specialised software and digital X-ray systems in Atyrau Region; construction and operation of street lighting in the city of Atyrau and transfer to trust management for further modernisation and operation of state communal property held by the Atyrau City State Utility Polyclinic No. 2 (without a purchase option).

For the development of PPP mechanisms, explanatory and methodological work was carried out in the region; as a result, an analysis was made with regard to proposals on construction, reconstruction, trust management and service contracts received from departments and akimats of Atyrau city and districts.

To date, proposals are being received on a number of promising projects in order to expand the use of various forms of PPPs and to do a phased substitution of budget funds for private investment.

In addition, documentation is being drafted for several projects.

 

What work is done to attract tourists? How many tourists visited the region in 2018?

The region pays special attention to the development of tourism. We are one of the leaders in Kazakhstan in terms of business tourism.

At the end of 2017, there were 174,723 people registered in the field of business tourism. The region takes third place in the country, following Nur-Sultan and Almaty. Approximately 135,184 people were registered in the third quarter of 2018 (7,104 more than in 2017).

For the third quarter of 2018, 101,373 visitors were served in domestic tourism (6,561 people more than in 2017) and 49,414 visitors in inbound tourism (8,728 more than in 2017).

Currently, the city of Atyrau has developed and operates a sightseeing tour programme which includes many interesting historical and cultural sights, monuments and entertainment facilities, as well as restaurants and cafés with a variety of cuisines of the people living in the region. At the same time, tourists have the opportunity to visit the creative centre, where weekly shows of the national traditions and customs of the Kazakh people are demonstrated.

Additionally, in summer a trip on excursion boats on the Ural River, flowing in the very centre of Atyrau and dividing the city into two continents, Europe and Asia, is available for the population and guests of the city.

The Akzhayik State Natural Reserve on the Caspian Sea coast has unique species of rare birds listed in the Red Book and amateur sport fishing is permitted, which is of considerable interest for tourists.

In the summer period, guests of the city have the opportunity to visit camp sites along the coast of the Ural River, where entertainment services in the form of rope parks, climbing walls and horse riding are provided.

The region has seven historical monuments included in the list of sacred places in Kazakhstan (Akmechet Necropolis, Araltobe burial mound, Imankara Complex, Mazar of Makhambet Otemisuly, Saraishyk memorial complex, underground mosque of Kulshan Ata and Ushkan Necropolis).

One of the most promising tourist sites in the region is the ancient Saraishyk settlement along the northern branch of the Great Silk Road, which is a source of the greatest interest among tourists and travellers.

At present, work has begun for the infrastructural development of the site and the creation of a visitor centre on its territory.

In addition, there are plans to build tourist industry facilities and a children’s camp on the coast of the Caspian Sea in the Issatai district of the Atyrau region; the corresponding work is also underway to prepare their design and estimate documentation.

A saline lake in the Indersky district allows promoting health tourism in this area. Last year, scientists carried out research and development work on the use of mud and salt of the Inder saline lake for medicinal purposes and obtained a positive result on their indispensability in various diseases. Work is underway on its further development.

Kurmangazy district is quite interesting, because its recreation centres offer hunting and fishing on the Kigach River.

The number of tourists who like active recreation is increasing from countries such as France and Russia. The beautiful natural terrain and clean air of the coast of the Kigach River have a great potential for the development of eco-tourism.

Steppe expanses of Issatai district are convenient for the development of extreme tourism. A route for vehicles and bicycles has been worked out across the region. This route is mainly used by expeditions from countries such as China, France, Germany and Italy.

For the further development of this area, there are plans to popularise and promote this international route by developing a promising new segment – autotourism and caravanning. The planned overhaul of the Atyrau-Astrakhan Highway will be a huge impetus to this end.

Additionally, guests and visitors to the region show interest in the agroindustrial sector, in particular camel, horse and other farms.

Tourist companies of the region continue to actively develop routes in order to boost domestic and inbound tourism.

 

What work is being done to improve the transport system in Atyrau Region?

The length of automobile roads of regional and district significance is 2,000 km.

During 2018, in order to develop transport infrastructure work was carried out to repair roads of regional and district significance – 75.3 km and 200.9 km of the road of the city of Atyrau and suburban settlements covering 268 streets.

A number of projects are being implemented in this direction. One of the major projects being implemented is the continuation of the reconstruction of 123 km in the Karabau-Miyaly section of the Inder-Karabau-Miyaly-Sagiz regional road (section 80-203 km). At the expense of the regional budget, the design and estimate documentation for the reconstruction of the remaining Inder-Karabau section of the road has been developed and sent for expert examination.

A feasibility study for the construction of the 26-km long Atyrau North Bypass Road connecting the Aktobe-Atyrau and Atyrau-Astrakhan roads of national significance and a feasibility study for the construction of the Dossor village bypass of 5.5-km length received a positive conclusion of state examination.

Furthermore, work continues on the overhaul of access roads (with footpaths) to the villages of Akkala and Yntymak, Indersky district; the reconstruction of the Zhastalap-Zhylandy highway of Kurmangazy district; the overhaul of the Kotyaevka-Shortanbai road and intra-village roads of Shortanbai and reconstruction of the access road to the village of Zhan Zhanbai, Issatai district, including intra-village roads.

This year, work is being done on the overhaul of roads in the villages of Mukyr and Sagiz of the Kyzylkoginsky district and on the 0-29 km section of the Ganyushkino-Primorye-Uteri-Kotyayevka regional road in the Kurmangazy district and work has begun on repairing Birlik, Ganyushkino, Kotyaevka, Safon and Tengiz access roads and inter-village roads and the intra-city highway of Kulsary.

In addition, construction of a bridge across the Ural River in the village of Makhambet in the Makhambet district, major repairs of the intra-village roads in the village of Makhambet, intra-village roads in the villages of Akkayin and Taldykol with walkways and construction of a pedestrian bridge across the railway tracks in the village of Akkistau of the Isatai district were commissioned; roads in the village of Zaineden were reconstructed with intra-village roads and overhaul of access and intra-village roads in the village of Toman was done.

By the end of 2018, the length of roads in good and satisfactory condition amounted to 1,113.2 km (54 percent) and 948.4 km (46 percent) were in unsatisfactory condition; in 2019, approximately 60 km of oblast and regional roads to be reconstructed.

In Atyrau, 268 streets with a total length of 200.9 km were built in the suburban settlements of the city in 2018. In particular, work was done on laying roads in the villages of Akzhar-2, Atyrau-1, Birlik, Birlik-2, Damby, Geolog, Kokarna, Munaishy, Talgayran, Tomarly-2, Vodnikov-2, Yerkinkala-2, Zhanatalap-1 and Zhuldyz-1, 2 and 3. In addition, the reconstruction of Baimukhanov, Taimanov and Vladimirskiy streets with a total length of 8 km was carried out and the repair of roads (patching) with a total area of 19,789 m2 was performed.

These works will be continued in 2019 and the scheduled laying of highways in 104 streets with a total length of 99.5 km is planned in accordance with the previously approved project. In addition, design estimates for the construction of roads in 141 streets with a total length of 71.2 km are being developed.

In 2019, there are also plans to reconstruct the section from 0-10 km of the Atyrau-Inder highway in the city. A project is under development for the reconstruction of the 10-20 km section.

In addition, in order to ensure the safety and movement of vehicles in the new Bereke microdistrict, a design estimate of a road junction has been developed, as well as a positive conclusion of the state examination received. The beginning of construction is scheduled for 2019.

As for passenger transportation, by order of the Akim of Atyrau city, the L. B. Goncharov Kazakh Automobile and Highway Academy has been developed and is implementing the Concept of Development of Public Transport in the city of Atyrau for 2017-2022.

In order to update the public transport and improve passenger traffic in the city of Atyrau, the Atyrau-Avtopark entity was established under the Atyrau Social Entrepreneurial Corporation. With the assistance of single operator Kazakhstan Development Bank Leasing, the acquisition of 100 units under the leasing agreement in 2018 and 200 units of buses in 2019 was carried out. Today, 65 new buses are operating in the city. Work continues on the delivery of new buses and the commissioning of routes in accordance with the agreement.