Category Archives: Central Asia & South Caucasus News

Electricity prices increase in Azerbaijan

JULY 15 2016 (The Conway Bulletin) — Azerbaijan’s government said that it is considering an increase in electricity prices for households of 16.7%, local media reported. The price will increase from 0.06 manat to 0.07 manat/kWh. This is the first price increase since 2007. Domestic electricity prices in the South Caucasus are sensitive. People in Armenia and Georgia have demonstrated against tariff increases over the past few years.

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(News report from Issue No. 290, published on July 22 2016)

IS threat worsens in Tajikistan, Uzbekistan, Kyrgyzstan

JULY 15 2016 (The Conway Bulletin) — Russian defence minister Sergei Shiogu said that if countries in Central Asia and the South Caucasus ever sink into Syria-like civil war scenarios, Russia will use its military to intervene. Russia has carried out airstrikes in Syria against the IS extremist group. According to official sources, the number of South Caucasus and Central Asian citizens fighting for IS in Syria is rising.

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(News report from Issue No. 290, published on July 22 2016)

Tajik court sentences Salafist activist

JULY 19 2016 (The Conway Bulletin) — A Tajik court jailed Mukhammadi Rakhmatullo, alleged leader of Salafi, a banned conservative Islamic movement in Tajikistan, for seven years in prison. Rakhmatullo had allegedly returned to Tajikistan after a period working abroad and had continued to run the banned Salafi opposition movement. He was arrested in February during a mass security operation that jailed dozens of Salafists.

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(News report from Issue No. 290, published on July 22 2016)

Azerbaijan’s energy company says Greek gas network deal may collapse

JULY 20 2016 (The Conway Bulletin) — A deal for Azerbaijan’s state-owned energy company SOCAR to lead a €400m takeover of Greece’s gas pipeline network DESFA could collapse after the Greek government agreed a lower-than-expected domestic gas price rise.

Anar Mammadov, CEO of SOCAR’s Greek subsidiary, said after a meeting with Panos Skourletis, Greece’s energy minister that the gas price increase undermined DESFA’s profitability.

“If implemented, those changes would reduce the value of the company and its future profitability

dramatically,” he told media. “The only thing I can say right now is that I can’t see how the tender could be salvaged if those changes are implemented as planned.”

The Greek parliament still has to approve the price rise for it to be implemented.

In 2013, SOCAR won a bid to buy 66% of DESFA, Greece’s gas distributor. The deal was later frozen by the European Commission, citing the so-called Third Energy Package, a 2009 regulation designed to counter vertical integration between gas suppliers and distributors.

In recent months, though, Italy’s Snam has come forward as a potential partner for SOCAR. Snam would buy 17% and SOCAR would take 49%, which mean the takeover complies with the EU’s requirements.

Buying DESFA is important to Azerbaijan because Greece will play a major role hosting part of a pipeline network that will pump gas from the Caspian Sea to Europe.

The EU has called this new pipeline network a vital strategic goal to reduce its reliance on gas supplies from Russia with which it has had increasingly strained relations.

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(News report from Issue No. 290, published on July 22 2016)

Kazakh energy company spat worsens

JULY 19 2016 (The Conway Bulletin) — In an increasingly vicious argument, Kazakhstan’s state-owned energy company Kazmunaigas accused independent directors of its London-traded upstream subsidiary KMG EP, of misrepresenting its position over a buy-out scheme it was trying to promote. Kazmunaigas’ letter, published by Kazakhstan’s stock exchange, said that its purchase offer for KMG EP’s GDRs still stands and that the independent directors had overesti- mated KMG EP’s operational performance.

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(News report from Issue No. 290, published on July 22 2016)

Azerbaijan’s Gilan Holding to construct Baku tower

JULY 19 2016 (The Conway Bulletin) — Azerbaijan’s construction company Gilan Holding picked Switzerland- based Liebherr as the provider of cranes for a skyscraper complex to be built in Baku. Gilan’s project for The Crescent Bay, will include a hotel, a shopping mall and a residential unit and is one of the biggest real estate projects currently planned in Azerbaijan.

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(News report from Issue No. 290, published on July 22 2016)

Trade and GDP shrink in Tajikistan

JULY 19 2016 (The Conway Bulletin) — Tajikistan’s Statistics Committee said that trade turnover in H1 2016 shrank by 2.8%, compared to the same period last year. Overall, Tajikistan posted a negative trade balance, as it exported goods and services worth $439.4m and imported $1.5b. The Committee also said that the country’s GDP grew by 6.6% in H1, in line with government projection of a 7% growth by the end of the year.

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(News report from Issue No. 290, published on July 22 2016)

Turkmenistan reorganises its oil and gas ministry

JULY 15 2016 (The Conway Bulletin) — In a move that took observers by surprise, Turkmenistan abolished its oil and gas ministry which had, officially, run the most profitable economic sector in the country, part of a wider structural reform of the government.

At a cabinet meeting, President Kurbanguly Berdymukhamedov justified the move as an effort to improve management and governance systems n the energy sector.

Turkmenistan is considered an important stakeholder in the world’s energy nexus, and the move shook analysts. It holds the fourth-largest gas reserves in the world and exports gas mostly to China via pipeline. For over a decade, European and US lobby groups have pushed for a Trans-Caspian Pipeline to pump Turkmen gas to Europe. Turkmenistan is also building TAPI, a gas pipeline to export gas to India, via Afghanistan and Pakistan.

Simon Pirani, senior research fellow at the Oxford Institute for Energy Studies, said that aside from internal causes, which are hard to guess, a range of external factors could have played in Turkmenistan’s decision to reorganise its hydrocarbon sector.

“The continuing relationship with China, despite lower off-take of gas than Turkmen officials had hoped, the improved ties with Iran and the quite bad relationship with Russia could all be relevant factors,” he told The Conway Bulletin.

The change, however, is unlikely to shift the way that Turkmenistan does business, a system that revolves around the whims and decisions of President Berdymukhamedov.

“Companies and international organisations are aware that Turkmenistan is a centralised system,” Mr Pirani said.

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(News report from Issue No. 290, published on July 22 2016)

Zhirayr Sefilyan: A radical Armenian war hero

JULY 22 2016 (The Conway Bulletin) — Charismatic and enigmatic, Zhirayr Sefilyan, exists on the fringe of Armenia’s fractious political spectrum. He was virtually unknown outside Armenia until an armed group of his supporters captured a police station in southern Yerevan on July 17, killed a police commander and took several people hostage.

Clashes between anti-government protesters and police followed and now Sefilyan is spoken of in foreign ministries from Russia to the United States.

The slim 49-year-old has the air of a radical outsider. A Lebanese- Armenian, Sefilyan was a young army officer during the war that Azerbaijan and Armenia-backed forces fought in the early 1990s for control of the disputed region of Nagorno-Karabakh.

As an infantry commander, Sefilyan played a key role one of the greatest victories for the Armenia-backed rebels when they captured the city of Shusha.

This battle on May 8 1992 is fixed in Armenian lore, as the point when the war for Nagorno-Karabakh turned in their favour.

Until that point they had been on the backfoot.

After taking Shusha, despite being outnumbered and out-gunned, the Armenia-backed rebels scored a number of victories and rolled back the Azerbaijani forces until a UN-brokered ceasefire in 1994 ended the war.

Afterwards, Sefilyan led veteran groups and campaigned for better pensions, housing and rights. An intense man, his political views appeared to harden over the years and he drifted more and more towards the fringe of the political spectrum. His Founding Parliament movement calls for an overhaul of politics, accusing politicians of corruption. It has never taken part in an election and its support is estimated at a few thousand.

At the movement’s core is Sefilyan. He has now been arrested three times — in 2007, 2015 and in June 2016.

In June, police arrested Sefilyan for possessing illegal weapons. This arrest triggered the hostage-taking in Yerevan on July 17 and the subsequent clashes between protesters and police.

So far one policeman has been killed when armed men captured the police station and more than 50 people have been injured in clashes between police and demonstrators.

Sefilyan, the fringe radical, has now taken centre stage in Armenia’s politics.

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(News report from Issue No. 290, published on July 22 2016)

Turkmen President urges to vote on new constitution

JULY 19 2016 (The Conway Bulletin) — Turkmenistan’s President Kurbanguly Berdymukhamedov ordered the Council of Elders to vote on a new constitution in mid-September. The Council of Elders is an advisory body chaired by Mr Berdymukhamedov widely believed to rubber-stamp his diectorates. A proposed new constitution that would effectively extend Mr Berdymukhamedov’s term as president was published in February.

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(News report from Issue No. 290, published on July 22 2016)