Category Archives: Central Asia & South Caucasus News

Turkmenistan proposes discounts for airlines

DEC. 12 2016 (The Conway Bulletin) — In a move designed to increase its competitiveness for the lucrative trans-asia aviation market, Turkmenistan is offering large discounts to airlines that stop at its airport near Ashgabat, media reported. Uzbekistan and Kazakhstan have also tried to position themselves to attract international airlines flying from Europe to East Asia. Earlier this year, Turkmenistan unveiled a new terminal building.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Russia to start sending more oil to China via Kazakhstan

ALMATY, DEC. 15 2016 (The Conway Bulletin) — Russia will increase oil shipments to China via Kazakhstan by 28.5% in 2017, giving Kazakhstan’s income a much-needed boost from transit fees.

The deal also comes a few days after Russian state-owned Transneft said that it would stop taking Kazakh oil at the Caspian Sea port of Makhachkala because the consistency of its blend had changed.

Rosneft, Russia’s state-owned giant, will export 9m tonnes/year to China via the Kazakhstan-China pipeline, up from the current 7m tonnes/year, according to traders interviewed by Reuters. The pipeline, with a capacity of around 15m tonnes/year, has been utilised below capacity for years since its completion in 2009.

Russia needs to increase its export capacity to China to fulfil contracts signed in 2013. New pipelines are being built in Siberia to send Russian gas directly to China but, for now, it still needs to use Kazakhstan’s infrastructure.

The actual value of the deal has not been revealed but it will be a boost for Kazakhstan which has been struggling economically since oil prices collapsed in 2014.

This was some positive news for KazTransOil, a few days after Transneft said it would stop accepting Kazakh oil at its Caspian port of Makhachkala, citing incompatibility with the Ural blend. KazTransOil will re-route its exports to Russia via the Atyrau-Samara pipeline from Jan. 1, 2017. This is a route that KazTransOil already uses to export some oil.

The Transneft decision came after Lukoil, Dragon Oil and Mitro International decided to pull out of Makhachkala and re-route exports to the Baku-Tbilisi-Ceyhan pipeline.

The Kazakh crude, Transneft said, is not sulphurous enough to be blended with Russian oil.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Azerbaijan to switch to fully floating currency in 2017

DEC. 12 2016 (The Conway Bulletin) — Azerbaijan plans to switch to a fully floating currency next year, the Central Bank said, signalling more turbulence for the manat.

The Central Bank has relaxed the manat’s peg to the US dollar twice in the past couple of years, allowing it, in effect to lose half its value. It has also been managing a fall of around 19.5% since June to trade at 1.79/$.

Media quoted the head of the Central Bank, Elman Rustamov, as saying that macro-stability meant that the time was now right to move to a fully floating currency.

Many Azerbaijanis would disagree, though.

As The Conway Bulletin has reported previously, many ordinary Azerbaijanis have lost confidence in the manat and have been trying to withdraw their savings and convert them into US dollars. Many banks in Baku have run out of US dollars.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Russian police arrests Tajik men for plotting attack

DEC. 12 2016 (The Conway Bulletin) — Police in Moscow said that they had arrested citizens of Moldova and Tajikistan who had been planning a series of attacks. Security services said that the men were linked to the radical IS group and had been acting under the orders of a commander based in Turkey. Intelligence agencies worry that Central Asia has become a key recruiting ground for IS.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Oil output drops in Azerbaijan

DEC. 14 2016 (The Conway Bulletin) — Azerbaijan produced around 1.5% less oil and gas condensate in the first 10 months of the year, media quoted its statistics committee as saying, reflecting its inability to maintain production. Azerbaijan has previously used OPEC oil cuts as a fig leaf to explain its falling production. The reality is, though, that it hasn’t been able to maintain output.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

EBRD loans 100m euro to Kazakhstan

DEC. 12 2016 (The Conway Bulletin) — The EBRD agreed a €100m ($104m) loan to state-owned electricity company Samruk Energo, specifically designed to help with its privatisation plan. The company, a subsidiary of sovereign wealth fund Samruk-Kazyna, plans to privatise nine of its subsidiaries next year. The loan will be issued in tenge or roubles.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Uzbekistan adopts budget deficit

DEC. 13 2016 (The Conway Bulletin) — Uzbekistan’s Senate adopted a government budget for 2017 with a deficit of around 1%, media reported. This is the second consecutive year that Uzbekistan has said that it will run a budget deficit and points to a new, and entirely relative, openness. Uzbekistan, like its neighbours, is having to deal with a sharp economic downturn. Uzbek economic data is notoriously unreliable.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

EU extends its mission in Georgia

DEC. 12 2016 (The Conway Bulletin) — The European Council extended by two years the length of its mission monitoring the boundaries separating Georgian forces and Russia-backed separatist forces in the Georgian break away regions of South Ossetia and Abkhazia. Officially called the European Union Monitoring Mission, it is now mandated to patrol between the two sides until the end of 2018. It was set up after a war in 2008 between Russia and Georgia. The monitoring mission costs the EU around 18m euro ($19m) per year.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Armenian economy shrinks

NOV. 30 2016 (The Conway Bulletin) — Armenia’s economy shrunk by 2.6% in the third quarter of the year, the country’s statistics agency said, confirming the poor economic sentiment in the country. In the third quarter of 2015 Armenia’s economy had grown by over 3%. Armenia is reliant on Russia which is suffering from a harsh economic downturn, linked to a fall in oil prices that has tipped it into recession.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Kyrgyz President says Russia should leave Kant

DEC. 1 2016 (The Conway Bulletin) — At a press conference, Kyrgyz president Almazbek Atambayev said that Russia would have to quit its air base at Kant near Bishkek. He didn’t elaborate or give any details but he did say that he wanted all foreign military to quit Kyrgyzstan. Russia has signed a deal with Kyrgyzstan to operate from Kant until 2032. It started operations at Kant in 2003. The US quit its airbase outside Bishkek in 2014.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)