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Merkel favors Kazakhstan ties to secure German energy supplies

Germany wants closer energy ties with Kazakhstan, the second largest oil producer among the former Soviet states behind Russia, Chancellor Angela Merkel said, as her government seeks to cut dependence on Russian fuel supplies.

„We have agreed to improve and broaden cooperation on energy matters,” Merkel told a press conference in Berlin after talks with Kazakhstan's President Nursultan Nazarbayev. Merkel offered German expertise to help Kazakhstan retrieve its „huge” natural resources, which, besides oil and gas, include steel, copper and zinc. Europe's biggest economy bought about 33% of its oil from Russia last year and 42% of its gas.

The shutdown earlier this month of Russian oil piped to western Europe via Belarus, amid a row over pricing, added impetus to Germany's bid to diversify its energy supplies. Merkel, holder of the European Union's six-month presidency, said the bloc wants to compete with Russia and China for greater influence in central Asia. Germany, which also holds the chair of the Group of Eight industrialized nations, will „very deliberately” pursue cooperation with central Asia.

Kazakhstan has 3.3% of the world's proven oil reserves and 1.7% of its gas, according to BP Plc's Statistical Review of World Energy. The Kashagan oil field, one of the five biggest in the world, will produce an average 1.2 million barrels a day between 2010 and 2041, Uzakbai Karabalin, president of the national oil and gas company, said on Monday. „Kazakhstan is a very rich country and German business has great interests to promote technological development there,” Merkel said, noting 40% of the central Asian nation's population still live on farming. „There's a chance for our export business.”

Nazarbayev, who has run the country since 1989 - two years before the collapse of communism - said Kazakhstan „is the key market” for German companies in central Asia. Bilateral trade equals more than €4 billion ($5.2 billion) a year Kazakhstan's efforts to improve public safety, tackle human rights abuses and promote legal structures should earn the country the presidency of the Organization of Security and Cooperation in Europe, he said. „We're doing a lot and have a claim to the OSCE chair,” Nazarbayev said. Merkel expressed support for Kazakhstan's bid, saying Germany „can live” with the country in the OSCE chair „provided it carries on with reforms.” (Bloomberg)