Category Archives: Uncategorised

Litigation case will not affect sale, says Kazakh energy company

MAY 30 2016 (The Conway Bulletin) — Kazmunaigas, Kazakhstan’s state- owned energy company, said that a litigation case in Romania involving one of its subsidiaries will not affect the sale of the unit to China’s CEFC. Last December, CEFC agreed to buy a 51% stake in KMG International, formerly Rompetrol. Romanian prosecutors seized KMG International’s refinery earlier in May during an investigation into its privatisation and subsequent sale to to Kazmunaigas.

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(News report from Issue No. 283, published on June 3 2016)

Exchange rate stabilises in Kazakhstan

MAY 30 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank said tenge-denominated deposits had grown steadily in Q1 2016, due to the stabilisation of the exchange rate with the US-dollar after five months of high volatility. Commercial banks increased interest rates on deposits in an effort to attract customers. The C.Bank’s decision to lower interest rates earlier in May could now depress deposits and increase spending.

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(News report from Issue No. 283, published on June 3 2016)

Kazakhstan lifts ban on potato import from Kyrgyzstan

JUNE 1 2016 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev lifted a ban on the import of potatoes from Kyrgyzstan after meeting with his Kyrgyz counterpart Almazbek Atambayev in Astana. Kazakh authorities had banned Kyrgyz potatoes in early May due to an outbreak of Globod- era rostochiensis, a pest. The Kazakh regulatory agency said it will continue to monitor the presence of the pest in the following months.

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(News report from Issue No. 283, published on June 3 2016)

Azerbaijan’s energy company to make agreement with India

MAY 30 2016 (The Conway Bulletin) — India’s state-owned ONGC Videsh said it had entered into a preliminary agreement with SOCAR Trading, the Geneva-based branch of Azerbaijan’s state-owned energy company SOCAR, to jointly sell oil it produces in Azerbaijan. Since 2013, ONGC Videsh has owned a 2.7% stake in the Azeri Chirag-Guneshli offshore oil project in Azerbaijan.

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(News report from Issue No. 283, published on June 3 2016)

Tajikistan completes construction of power line

MAY 31 2016 (The Conway Bulletin) — Tajikistan completed the construction of a power line that will link two Afghan villages to the Tajik grid, bringing electricity to around 3,000 Afghans for the first time. The US Embassy in Dushanbe and the Aga Khan Foundation jointly funded the $1.5m project. The power line will bring electricity from Tajikistan’s Gorno– Badakhshan Autonomous Oblast across the Panj river which marks the boundary with Afghanistan.

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(News report from Issue No. 283, published on June 3 2016)

Kyrgyzstan’s interior minister resigns

BISHKEK, MAY 30 2016 (The Conway Bulletin) — Melis Turganbayev, considered a major power broker in Kyrgyzstan, quit as interior minister saying that he needed a break.

The move, though, surprised observers who said that Mr Turganbayev may already be plotting a return to frontline politics, possibly at next year’s presidential election.

In an interview with the Kremlin- backed Sputnik news after his resignation, Mr Turganbayev said that there were no political reasons for his resignation and backed his nominated successor, Kashkar Junushaliev, previously the Bishkek police chief.

“He is an experienced officer and a good guy, who will continue my work on reforms in interior affairs,” he said.

Mr Turganbayev had been interior minister since October 2014.

Mars Sariyev, a political scientist in Bishkek, said President Atambayev may be manoeuvring his ministers to balance power and it may have suited him to remove Mr Turganbayev who had built up a large powerbase.

“I think that this step has been taken in favour of certain political groups ahead of the presidential elections,” he said.

The interior ministry is one of the most powerful institutions in Kyrgyzstan. It is essentially responsible for stability in the country and controls several of Kyrgyzstan’s armed forces.

On the streets of Bishkek, there was both pleasure at Mr Turganbayev’s resignation and apathy.

Sergei, 47, said that Mr Turganbayev’s resignation was of little consequence.“Unfortunately, new politicians here do not really bring any positive changes,” he said. “It does not really affect our lives.”

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(News report from Issue No. 283, published on June 3 2016)

Kyrgyzstan to pay high price for electricity

JUNE 1 2016 (The Conway Bulletin) — The Kyrgyz government is under pressure to justify paying relatively high prices to Kazakhstan for electricity. Dastan Dzhumabekov, an MP in the ruling government coalition, asked Alibek Kaliyev, head of the National Energy Holding, to clarify why Kyrgyzstan accepted paying 9 tenge ($0.026) per kWh to Kazakhstan, while Kazakhstan charges Russia only 5 tenge ($0.014) per kWh. Mr Kaliyev was unable to give a clear answer which MPs said was illogical given Kyrgyzstan’s membership of the Eurasian Economic Union.

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(News report from Issue No. 283, published on June 3 2016)

Azerbaijani President to bail out mining company

MAY 27 2016 (The Conway Bulletin) — Azerbaijan’s President Ilham Aliyev said that the state was ready to buy the Aimroc mining company, which is alleged to be linked to his family. The company closed in 2014, as it ran into financial difficulties exploiting the Chovdar mine in western Azerbaijan. Aimroc’s name appeared in numerous investigations that linked its opaque offshore business to the presidential family. By presidential decree state-owned Azerigold will take over Aimroc.

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(News report from Issue No. 283, published on June 3 2016)

SOCAR’s finances falter

JUNE 3 2016 (The Conway Bulletin) — In 2016, Azerbaijan found itself in the midst of a crisis that it had tried to ignore for months. Low oil prices hit both revenues and investment opportunities for SOCAR, the state-owned energy company.

It is now trying to cut expenditures and raise cash through bonds and loans for its main projects. In Turkey, SOCAR’s subsidiary is divesting from a large petrochemical complex and readying for an IPO, in an effort to go full-steam into the Southern Gas Corridor business.

And Turkey is a key partner in the pipeline game, as it will become the gateway for Azerbaijani gas to Europe.

Now, though, SOCAR faces a problem. It can either diversify its portfolio, cut investments and wait for sunnier days or go ahead and pour cash — borrowed cash — into the US and Europe’s pet pipeline project.

Little does it matter that US President Barack Obama and British PM David Cameron both sent kind words to Azerbaijan’s international energy conference this week. SOCAR still has a problem.

But if it invests disproportionately into infrastructure, it might not have enough to ensure that production upstream is steady enough to fill the pipelines, which would be a repeat, though a much faster one, of the fate of the BTC oil pipeline, now constantly used below capacity.

The incessant movements, even marginal, in foreign markets in the past few months reveal how shaky SOCAR’s position is. Last week it closed representative offices in three countries to save money. But that won’t be enough to pay back the gamble it has taken with all the outstanding loans and bonds to build the West’s dream pipeline.

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(News report from Issue No. 283, published on June 3 2016)

GM Uzbekistan to produce new model car

MAY 30 2016 (The Conway Bulletin) — Car manufacturer GM Uzbekistan will produce a new model of Chevrolet Aveo cars for both the domestic market and exports to Russia, state-owned Uzavtoprom said. GM Uzbekistan, 75% owned by Uzavtoprom and 25% owned by US- based GM, said production of the new model will cost around $100m and its Uzbek plant will manufacture 73,600 cars/year. GM Uzbekistan is an important part of the Uzbek economy as it is one of its biggest JVs outside oil and gas.

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(News report from Issue No. 283, published on June 3 2016)