Kazakhstan's Oil Refining Sector & Other Industries.

Kazakhstan has three oil refineries - at Pavlodar, Shimkent and Atyrau - with a combined capacity of 427,093 b/d. A law issued in 2001 regulates oil refining and the sale of oil products in the country. It specifies the minimum volumes of crude oil to be processed by the refineries and gives the government the right to schedule their maintenance.

Oil products from the Atyrau refinery, which is controlled by the state through KazMunaigaz (KMG), the integrated giant into which all state companies in the petroleum sector including KazakhOil were merged in February 2002, have been sold below cost to local farmers during the sowing seasons as the agricultural sector needs cheap fuel.

In April 1998, for example, Kazakh President Nursultan Nazarbayev abruptly dismissed KazakhOil's CEO Baltabek Kuandykov because the latter had allowed oil product prices to be raised just before the sowing season.

In 2004, KMG Exploration and Production (E&P) was created to handle both upstream and downstream operations of assets belonging to the states and those which KMG Holding was to acquire in the subsequent years.

KMG E&P was also to operate abroad, which the group's website said will be done "according to the international standards of quality and preservation of the environment, rational use of power resources for the good of development of the state".

The prospects for expansion in basic industries are huge. Apart from its hydrocarbon resources, Kazakhstan is rich in uranium, gold, iron ore, chrome ore, nickel, cobalt, lead, uranium, bauxite and aluminium oxide. The country has the world's largest reserves of zinc, wolfram, barite and molybdenum, and it is estimated to have about 25% of the global uranium reserves. It has the world's third largest reserves of copper and manganese.

During the Soviet era, Kazakhstan accounted for nearly 20% of the USSR's output of coal and half its reserves of lead, tungsten, copper and zinc. Kazakhstan has large deposits of titanium, magnesium, chromium and phosphates which are mined and processed in the country. It also processes iron ore, bauxite and aluminium oxide.