ASTANA (Reuters) - French President Nicolas Sarkozy oversaw oil, gas and nuclear deals worth more than $6 billion (3 billion pounds) with Kazakhstan during a visit on Tuesday, establishing France as a key investor in the resource-rich state.
The West sees Kazakhstan, the largest oil producer in the former Soviet Union after Russia, as an increasingly important energy supplier as it ramps up production by tapping new oil and gas fields on its Caspian sea shelf.
France’s Total and GDF Suez on Tuesday got their share of future Caspian output by joining the project to develop the Khvalynskoye gas field, jointly owned by Russia’s LUKOIL and Kazakh state firm KazMunaiGas.
Khvalynskoye is relatively small, with estimated gas reserves of 332 billion cubic metres (bcm), while fields such as Russia’s Shtokman and Turkmenistan’s South Iolotan contain a few trillion cubic metres each.
But it is conveniently placed to feed into the Russian pipeline network and should eventually produce over 8 bcm of gas a year as well as some oil condensate.
Total already plays a central role in developing Kazakhstan’s flagship oil project Kashagan, the world’s biggest oil discovery in the last 30 years, also on the Caspian shelf.
On Tuesday, a consortium led by another French firm, Entrepose Contracting unit Spie-Capag, signed a memorandum with Kazakhstan under which it could get a contract to build a pipeline for the export of Kashagan crude.
Entrepose Contracting said the Yeskene-Kuryk pipeline which will connect Kashagan to the Caspian Aktau port, could fetch 1.2 billion euro in contracts for French companies.
In another energy deal, France’s Areva and Kazakh state nuclear company Kazatomprom agreed to set up a joint venture to market nuclear fuel in Asia and look at the prospects of producing it in Kazakhstan.
The former Soviet republic sits on a fifth of global uranium reserves and is on track to become the world’s top producer of the radioactive metal this year. But it lacks the technology to process uranium into ready-for-use reactor fuel.
France is not alone in developing Kazakh uranium reserves. Canada’s Cameco, the world’s largest uranium miner, is exploring there, while Uranium One this year acquired 50 percent of the Karatau mine in a cash-and-equity deal with its Russian owner, state nuclear giant Rosatom.
China, which plans to import more than 24,000 tonnes of Kazakh uranium between 2008 and 2012 to fuel its own nuclear power expansions, is also present. Beijing Sino-Kaz Uranium Resources Investment Company Limited owns 49 percent in the Semizbai project, which was launched in July.
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Officials said France and Kazakhstan signed a total of 24 deals worth over $6 billion on Tuesday, a high figure even for Kazakhstan, which has secured more than $70 billion in foreign investment since gaining independence in 1991.
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Sarkozy and Kazakh President Nursultan Nazarbayev oversaw the signing ceremonies and referred to each other as “dear friends” at a business forum held after the talks.
Sarkozy praised Kazakhstan’s role in securing stability in the volatile region and said Astana could help resolve the Afghan crisis.
When asked about criticism Kazakhstan has faced over its human rights record ahead of chairing the Organisation for Security and Cooperation in Europe (OSCE), Sarkozy said he was convinced Astana was moving towards OSCE standards.
“We have made our political choice, my dear friend, and I hope you will see that when France makes a political choice it sticks to it to the end,” he told Nazarbayev at the forum.
Writing by Olzhas Auyezov, editing by Keiron Henderson