Central Asia in the focus of the Hungarian companies to invest – Péter Szijjártó on Hungary-Kazakhstan economic ties

The Hungarian statesman sat down with Kazinform correspondent to discuss energy investments, joint industrial projects, and Hungary’s commitment to deepening economic cooperation with Kazakhstan.

One of the key purposes of your visit relates to the energy sector. As you said earlier in your social media post, Hungarian companies already achieved “significant success” in the production of oil and natural gas in Kazakhstan. In the same post, you mentioned discussing new strategic projects with Minister Satkaliyev. Could you please elaborate on this topic? What are the initiatives? And what’s in store for oil production in particular within the framework of our cooperation?

The biggest Hungarian company is an oil and gas company called MOL. MOL has been investing steadily in the Kazakh energy sector. They have invested around 200 million dollars when it comes to the Rozhkovskoye field, from where they have been exploiting more than 300 million cubic meters of gas so far and 200,000 tons of condensate. There are five wells already commissioned, and they consider this a very successful project.

Now, based on this success, they would like to continue to be involved in field operations in Kazakhstan. They have been exploring many opportunities, among them the field called Berezovsky, which would mean that a Chinese-Kazakh-Hungarian joint project could take place, which would be pretty much to our interest.

In the meantime, we understand that this new field requires very advanced technologies to exploit oil and gas. MOL has highly advanced technologies at disposal based on their own research and development activities. The technological capabilities of MOL would enable them to contribute to the successful project of exploiting gas and oil from the Berezovsky field.

On the other hand, MOL is more and more active in the field of petrochemical industry, so petrochemical products developed by MOL are also offered to KazMunayGas to be used. Negotiations have been going on about adding KEBCO Kazakh oil to our national energy mix.

There's political openness on both sides. The delivery route is at disposal because the Druzhba pipeline is operational. The only question, only between quotation marks, of course, the only remaining question is pricing, which is the most important one. We hope that the commercial negotiations between MOL and KazMunayGas could be successful and we hope that in the foreseeable future we might be able to add Kazakh oil, oil of Kazakh origin, to our national energy mix.

When do you believe this project could take place in the future?

Whether we buy KEBCO oil or not exclusively depends on the commercial negotiations, and this is up to the two companies. When it comes to decisions about MOL's involvement in additional fields, I hope that very, very soon. Today, my colleague, the Minister of Energy, has committed himself to supporting the inclusion of MOL into these projects.

Moving on from energy to agriculture. It’s been announced that the Hungarian company UBM Group will build four feed and premix production plants in Kazakhstan, with a total investment of $83 million. Why was Kazakhstan chosen for such a large-scale project, and what is the expected economic impact of these plants for both Kazakhstan and Hungary?

Hungary is well known for its highly developed technologies in agriculture. By tradition we are an agricultural country. Of course, if you investigate now the share of GDP when it comes to agriculture, it's like 7, 8, or 9%. But if you add everything—food industry, processing, agricultural machinery—it can amount to 13, 14%, so it's very significant. Plus, traditionally, by heart, by spirit, we are an agricultural nation. Therefore, very highly developed technologies have been in place, which could also be helpful to the Kazakh agricultural sector to be modernized.

And why Kazakhstan? Because Central Asia is in the focus of the Hungarian companies to invest. This is nothing new, we have been building this relationship with Central Asia in a very consistent manner for 15 years. Our affiliation with this region is a longstanding one. Central Europe and Central Asia are close to each other by heart, I think.

What are the other priority areas of economic cooperation between Hungary and Kazakhstan that you currently see? What new projects or initiatives are being discussed or are in the works right now?

The nuclear industry, for sure. I have congratulated all of my colleagues, the Minister of Foreign Affairs, Economy, and Energy, and the President himself for the success of the referendum last year, which allows you to invest in nuclear energy.

Nuclear is the best way of generating electricity because the demand for electricity has been steadily and exponentially increasing. Because the transportation is being transformed to electric, because the demand for the use of heating and cooling systems is increasing, and because the demand of the industry is increasing.

As an outcome of a set of reasons, there's a highly increasing electricity demand globally. Now, how to supply that in an affordable, reliable, constant, cheap, and environmentally protective way? The answer is only nuclear.

Do you have any projects that are already in the works in that field?

Actually, what we understood was that the decision has not been made yet about how many nuclear power plants to build and what kind of design to build, but we are already negotiating about the involvement of Hungarian technologies, namely cooling.

As you know, in the case of a nuclear power plant, cooling is key. The question is what you use for cooling. And so far, most of the power plants are using water for cooling. Now, water is not at disposal everywhere. Therefore, the Hungarian technology of dry cooling could be very useful for the Kazakh counterparts.

Then, another area is pharmaceuticals. The biggest Hungarian pharmaceutical company is number nine on your market. They are considering a location of manufacturing here, which would bring other Hungarian investments to Kazakhstan.

We are also interested in taking part in your road tolling project. Negotiations have been going on. This has been an issue since your president visited us, and an agreement was made there about cooperation in this field.

Since 2018, Hungary has been an observer member of the Turkic Council (Organization of Turkic States). What are the prospects for deepening Hungary’s cooperation with Kazakhstan within this organization?

Nowadays, no one challenges the highly increasing role of Central Asia in global politics and the global economy. No one questions it. I remember a couple of years back, people didn't understand why we started to build relationships or cooperation with this part of the world. Now as the delivery routes are being re-planned, now that the energy sources from this region are important from the perspective of energy security of Europe, everybody understands the importance of this region.

We wanted to be the first ones, and we became the first ones. We are standing in the front of the row. We understand many would like to build a relationship with this region. We definitely count on the trade and the economic relationship to grow. We clearly count on the people-to-people contacts to be more extended.

This is going to be held by the fact that from May onwards, there will be a new direct air connection between the two countries, Shymkent and Budapest. So, Shymkent and Budapest will be connected by air connection, which will help us to further grow this relationship. We hope that the Astana-Budapest flight will be relaunched as well.

Do you see it as a new step in progressing tourism in our countries?

Absolutely. You have a wonderful country. You know, as we are building a tighter and tighter relationship with Central Asia, other people are more and more interested. They want to see with their own eyes where our ancient tribes have spent some time.

They are very curious about how our relatives in this part of the world are so far away, what the similarities are, and whether we still do remember something common. That will bring many Hungarians here, especially now that they will be able to fly directly.

Hungary provides scholarships to Kazakhstani students under the Stipendium Hungaricum program. Are there any plans to expand cooperation in this area?

First of all, on the scholarships, we provide 250 annually. This year, there was a hugely increasing interest. 2,111 Kazakh students have applied for the scholarship, eight times more compared to what we had. The thing is that we have to work on the end of the process, namely that there are usually a lot of applicants, but at the end of the day, not all of the scholarships are being consumed. So, therefore, we have to work on all 250 to be utilized. Once this is the case, then we can negotiate about increasing the number.

What is also very important is that today I have signed the agreement about cooperation between the two diplomatic academies to contribute to the success of the training of the young diplomats of each other. On the other hand, I signed an agreement about the continuation of the work of the Hungarian lecturer at the Eurasian National University, teaching Hungarian.

Where I would like to move forward is to teach Kazakh language at one of the Hungarian universities and Kipchak studies. This should be the next step when it comes to cultural or educational cooperation, which is an extremely important basis for the people-to-people context.

What, in your opinion, is the future for our cooperation?

This cooperation is very stable because it has always been based on mutual respect. We never educated each other. We never judged each other. None of us wanted to interfere in the domestic issues of others. We always respected each other. This mutual respect is very important when it comes to the long-term predictability of a relationship. We are very positive about how we're going to move forward, and we are very positive about the future plans.

Earlier, it was reported that President of Kazakhstan Kassym-Jomart Tokayev awarded the Order of Dostyk (Order of Friendship) of the second degree to Péter Szijjártó, Minister of Foreign Affairs and Trade of Hungary, during his official visit to Astana.

Deputy Prime Minister and Minister of Foreign Affairs of the Republic of Kazakhstan Murat Nurtleu revealed that Hungarian banks are to open their branches in Kazakhstan following the Feb. 17 talks with his Hungarian counterpart Szijjártó.