* Devoted presidential loyalist takes control of new
* Energy sector drives Kazakhstan's economy
* Growth to be hit by slowdown in Russia this year
(Adds Nazarbayev quotes, detail, background)
By Dmitry Solovyov
ALMATY, Aug 6 Kazakhstan has created a new super
size energy ministry as its economy suffers from the shutdown of
a giant oilfield and the collapse of exports to Ukraine and
President Nursultan Nazarbayev on Wednesday appointed
65-year-old close ally Vladimir Shkolnik, a two times former
energy minister, to head the former oil and gas ministry
combined with the industry and new technologies ministry and the
environmental protection ministry.
"Generally speaking, our energy sector is in disarray,"
Nazarbayev told a government meeting.
"It is hard to understand, why one government body must be
responsible for oil and gas, while another one deals with solid
energy resources, the third department controls the power grid
and the fourth one the nuclear industry," said the 74-year-old
former steel worker whose word is final in Kazakhstan.
"This is why I believe it is time to concentrate the entire
energy sector in the hands of one person."
Until Wednesday, Shkolnik was in charge of national uranium
company Kazatomprom. Kazakhstan is the world's largest producer
of uranium. It is also Central Asia's largest economy and the
second-largest ex-Soviet oil producer after Russia. Economic
growth accelerated to 6 percent last year after a 5-percent rise
But this year's growth is likely to be slower as oil
production will remain stagnant due to halted output at the
Kashagan oilfield, the world's biggest oil find of recent time,
and because of economic slowdown in close trade partner Russia
due to several rounds of U.S. and European Union sanctions
imposed on Moscow over Ukraine.
Kazakhstan's central bank devalued the national tenge
currency by 19 percent in February to ease speculative pressure
on the domestic foreign exchange market, support exporters of
oil and industrial metals and sustain economic growth.
Economy and Budget Planning Minister Yerbolat Dosayev told
the government meeting, however, that due to Western sanctions
imposed on Russia, Kazakhstan's exports there had fallen by 21.7
percent in January-May year-on-year. Exports to Ukraine shrank
by 31.1 percent in the same period.
Kazakhstan will also struggle this year to maintain its oil
output at the 2013 level of 81.7 million tonnes, while the
offshore Kashagan field stands idle, senior government officials
Kashagan started up last September but was halted in October
after gas leaks in its pipelines. Production there may now
resume in the first half of 2016 at the earliest.
Dosayev said industrial output decreased by 0.4 percent
year-on-year in the first half of 2014, while gross domestic
product grew by 3.9 percent. The government had originally
targeted GDP growth at 6 percent this year.
He said the government hoped that internal consumption and
growing internal investment would help sustain growth this year.
The presidents of Russia, Kazakhstan and Belarus have signed
a treaty creating a trading bloc which they hope will challenge
the economic might of the United States, the European Union and
The treaty forging the Eurasian Economic Union will come
into force on Jan. 1.
Dosayev told Nazarbayev that the government would present in
September a detailed plan to counter the negative impact of
sanctions imposed on Russia. He did not elaborate.
Nazarbayev said that Oil and Gas Minister Uzakbai Karabalin
would now serve as Shkolnik's first deputy in the new ministry.
Environmental Protection Minister Nurlan Kapparov will now
head Kazatomprom, Nazarbayev said.
(Editing by William Hardy)