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Business comment: Opec, Kazakhstan and Azerbaijan

OCT. 23 2015 (The Conway Bulletin) — When OPEC calls, Kazakhstan and Azerbaijan are unlikely to answer.

OPEC, an organisation for oil exporting countries, is seeking to coordinate a cut in production with non-OPEC countries to lift oil prices.

Acting as a cartel, OPEC can determine production levels in order to control global oil prices. It has done so repeatedly over the past decades.

Strapped for cash and reliant on oil exports, Kazakhstan and Azerbaijan are not OPEC members and do not enjoy the same market power as Saudi Arabia or Russia.

Because their action would have little effect on oil prices they are unlikely to play OPEC’s game, according to Daniel Yergin, vice- chairman of the IHS consulting company and one of the most authoritative voices on Caspian energy issues.

“I think they will not cooperate. They (Azerbaijan and Kazakhstan) are typical non-OPEC countries who simply produce at a maximum they can,” Mr Yergin told Reuters.

Lower oil prices and ageing fields have pushed production numbers down in Kazakhstan and Azerbaijan (minus 2% and 3% respectively) and they simply cannot afford to arbitrarily cut back production in concert with OPEC.

The economies of these two Caspian countries are heavily reliant on hard currency revenues from oil exports. They’ll want to keep oil production at a maximum.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

After seven year delay, Georgia restarts skyscraper project

TBILISI, OCT. 20 2015 (The Conway Bulletin) — Construction work on two twisting skyscrapers that will dominate the Tbilisi skyline restarted after a seven year lull, a symbolic act of confidence in Georgia’s economic revival since a 2008 war with Russia.

At 41-storeys , the Axis Towers will become Tbilisi’s tallest – and one of its most iconic – buildings when they are completed in 2017.

Opening the start of construction for the towers, Georgia’s President Irakli Garibashvili said the project will help boost the tourism industry in Georgia.

“The Axis Towers is a completely Georgian project,” Garibashvili added.

One of the two towers will be a five-star hotel operated by the French company Pullman, and the other tower will host residential apartments. The British company Arup would be involved in building the towers.

In February, the Georgian government and the Axis property company agreed to re-start the $83m project that was derailed by economic stagnation in Georgia after the 2008 war.

The project is funded through a joint venture between Axis and the state-owned Georgian Co-Investment Fund.

“About 1,000 people will be employed in the Axis Towers in the (construction) stage,” Mr Garibashvili according to comments on his website.

“Once it’s built several hundred people will have steady employment here.”

Georgia is witnessing a surge in prestige building projects, including the Tbilisi Sea New City development and various projects planned for the Black Sea resort of Batumi.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Kazakhstan’s space agency enters join venture

OCT. 21 2015 (The Conway Bulletin) — Meyrbek Moldabekov, deputy head of Kazakhstan’s space agency KazCosmos, said it has entered a joint venture with French aircraft manufacturer Airbus to build satellites. Airbus owns 27.5% of the venture and will be jointly responsible for operations at an assembly plant to be built in Kazakhstan by 2017.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Kazakh PM dies from cancer

OCT. 16 2015 (The Conway Bulletin) – Several high-profile personalities attended the funeral in Atyrau, west Kazakhstan, of former Kazakh PM Nurlan Balgimbayev, who died on Oct. 14 aged 67 from cancer. PM Karim Massimov read a message from Pres. Nursultan Nazarbayev.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Aerbaijan’s imprisoned oppo leader complains

OCT. 19 2015 (The Conway Bulletin) – The lawyer for imprisoned Azerbaijani opposition leader Ilgar Mammadov said he had been beaten by guards in prison. The accusation piles more pressure on Azerbaijan’s human rights record. It has denied entry to researchers from Amnesty International and arrested journalists and opposition activists. Mammadov was sent to prison in 2014 for inciting riots.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Turkmenistan opens Tbilisi shop

OCT. 21 2015 (The Conway Bulletin) – Perhaps with potential gas supplies to Europe in mind, Turkmenistan opened a shop in Tbilisi selling various national produce. Turkmenistan is exploring the potential of supplying the EU with gas. Georgia hosts a gas pipeline running west from the Caspian Sea.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Azerbaijani President sacks long-serving Security Minister

OCT. 18/20 2015 (The Conway Bulletin) – Azerbaijani president Ilham Aliyev sacked National Security Minister Eldar Mahmudov two days before police arrested seven other senior officials and accused them of abuse of office.

The move surprised analysts of Azerbaijan’s murky political scene as Mr Mahmudov had been considered a close ally of Mr Aliyev.

He had held the position as the powerful National Security Minister for 11 years and no reason was given for his dismissal. Mr Aliyev had handed him the position of National Security Minister within a year of taking over as president from his father.

Although Mr Mahmudov has not been arrested, the Azerbaijani Prosecutor-General opened criminal cases into his seven officials for abuse of office.

“Investigative operations have raised suspicions about a group of ministry officials abusing service powers, illegally intervening in the activities of entrepreneurs in violation of the law on entrepreneurship, and violating the judicially and legally protected interests of different individuals,” it said in a statement.

Human rights groups and opposition activists have previously accused Mr Aliyev of undermining his opponents by accusing them of corruption.

The arrests and the sacking of Mr Mahmudov, whether they are linked to corruption or not, add a degree of instability to Azerbaijan, already rocked by the imprisonment of journalists and opposition activists.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Armenian genocide denial is a right

OCT. 15 2015 (The Conway Bulletin) – In a landmark ruling that will irritate the Armenian government, the European Court of Human Rights (ECRH) decreed that Dogu Perincek, chairman of Turkey’s Patriotic Party, should never have been convicted in 2007 by a Swiss court for denying an alleged genocide by Ottoman Turks of thousands of Armenians in 1915. The ECRH said the conviction was an infringement of Mr Perincek’s free speech. Armenia has been campaigning for denial of the genocide to be a crime.

ENDS

(News report from Issue No. 253, published on Oct.16 2015)

Georgia talks with Russia’s Gazprom

OCT. 10 2015 (The Conway Bulletin) – Georgia is in talks with Russia’s Gazprom to import gas, Georgian energy minister Kakha Kaladze told media, highlighting the improved relations between the two neighbours. Georgia currently exports nearly all its gas from Azerbaijan although it hosts a pipeline pumping gas from Russia to Armenia.

ENDS

(News report from Issue No. 253, published on Oct.16 2015)

Kazakhstan and Russia agree to explore north Caspian for oil

OCT. 15 2015 (The Conway Bulletin) – Russian President Vladimir Putin flew to Astana where he signed a deal with Kazakh leader Nursultan Nazarbayev to jointly explore and develop the north Caspian Sea for hydrocarbon reserves.

The deal, signed before a meeting of leaders from the former Soviet Union, came roughly a week after Kazakhstan also hosted Ukrainian president Petro Poroshenko. He signed deals with Mr Nazarbayev to increase cooperation in energy and aerospace. The timings of the two leaders’ visits to Astana highlights just how pressured the diplomatic space that Kazakhstan has to operate in is. It needs to keep relations with both Ukraine and Russia, who are locked in a proxy war in eastern Ukraine, sweet.

“We have big plans on joint oil production in the Caspian Sea,” Mr Putin said after signing the deal.

Kazakhstan and Russia also signed a deal for the Russian military to test missiles that would spread debris over a patch of Kazakhstan.

A week earlier, Mr Poroshenko had been in town talking up ties with Kazakhstan. This week, Kazakhstan’s ministry of defence said that it had signed a deal with Ukraine to boost cooperation in aviation.

Mr Nazarbayev has previously touted Kazakhstan as the ideal place for trying to thrash out a peace deal between Russia and Ukraine. There has been no formal move to hand this role to Kazakhstan but but leaders do apparently appear relaxed about flying to Astana in quick succession.

ENDS

(News report from Issue No. 253, published on Oct.16 2015)