Category Archives: Uncategorised

Tax authorities in Kazakhstan investigate Karachaganak

NOV. 24 2016 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev said the tax authorities are investigating the consortium operating the Karachaganak gas and condensate field in the north of the country for unpaid taxes and that the government will seek a new profit sharing scheme. Anglo-Dutch energy company Shell and Italy’s Eni are the field’s operators and largest shareholders with a 29.25% stake each. US-based Chevron (18%), Russia’s Lukoil (13.5%) and state-owned Kazmunaigas (10%) own the rest.

ENDS

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

Chemical plant in Armenia declares bankruptcy

NOV. 30 2016 (The Conway Bulletin) — A court in Armenia declared the Nairit chemical plant bankrupt after it failed to pay back its $2.5m electricity bill to Electricity Networks of Armenia, the national distributor. Nairit halted operations in 2010, as its rubber and latex plant became unprofitable. A recent audit said that a $300m investment would be necessary to resume operations and the World Bank recommended the plant be declared bankrupt. British- registered Rhinoville Properties has owned 90% of the plant since 2006. The Armenian government owns 10%.

ENDS

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

Trump and Kazakh President share telephone call

ALMATY, NOV. 30 2016 (The Conway Bulletin) — In a telephone conversation with Kazakh president Nursultan Nazarbayev, US President-elect Donald Trump described Kazakhstan as a “fantastic success” and a “miracle”.

A briefing of the telephone conversation released by Kazakh president Nursultan Nazarbayev’s press service said that the two leaders had also agreed to meet up shortly.

“D.Trump stressed that under the leadership of Nursultan Nazarbayev our country over the years of Independence had achieved fantastic success that can be called a ‘miracle’,” the Akorda press release said.

US media later reported that Mr Nazarbayev was the 44th national leader that Mr Trump had spoken to since winning the US election in November. He is also the only leader in the South Caucasus/Central Asia region that he has spoken to.

Importantly for the region, the Akorda press service quoted Mr Trump as saying that he was confident that US-Russia relations can be improved.

“US President-elect underscored that taking into account the results of a telephone conversation with the Russian President Vladimir Putin, he is very optimistic about the prospects of developing cooperation between Washington and Moscow,” the press release said.

Russia is the main economic driver for the region and poor US- Russia relations have been one of the factors that has stumped low regional economic growth, pushing Kazakhstan towards a recession.

ENDS

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

Azerbaijan’s SOCAR walks away from deal to buy Greek gas pipeline network

DEC. 1 2016 (The Conway Bulletin) — Azerbaijan’s state-owned SOCAR and Italy’s Snam pulled out of a deal to buy a major stake in Greek gas distributor DESFA after a row about the price, ending three years of on-off negotiations.

The failure of the deal scuppers SOCAR’s ambitions to own a major gas pipeline network inside the EU that would also have acted as the final section of the so-called Southern Gas Corridor, a network of gas pipelines that it has built to pump gas from the Caspian Sea to Europe.

Greece’s energy ministry announced the collapse of the deal.

“In the last months, the government has been in ongoing talks with representatives of the companies SOCAR and Snam for the sale of 66% of DESFA. The atmosphere in the talks was constructive,” it said in a statement.

“Nevertheless, the offer submitted on the part of the prospective buyers regarding the reduction of the sale price (repayment in instalments) was legally impossible and would have invalidated the tender.”

Neither SOCAR nor Snam have commented.

The deal was originally hailed as a landmark agreement in 2013 when SOCAR agreed to pay €400m for a 66% stake in DESFA.

The EU, though, stepped in to block the deal because it failed to comply with its market competition laws. This bans companies that own upstream elements of an energy supply chain from owning more than 49% of downstream elements.

In July this year Stergios Pitsiorlas, chairman of the state Hellenic Republic Asset Development Fund, said that SOCAR had found a partner in Italy’s Snam. They would, he said, split the stake. SOCAR would buy 49% and Snam 17%.

This air of success, though, has soured over the last few months when SOCAR and Snam tried to renegotiate the price. They said a 50% collapsed in energy prices since 2014 meant that the original €400m price tag was over-inflated.

Now the deal has been declared dead with Greece officials apparently refusing to budge on the price.

Despite the failure of SOCAR to buy DESFA, the Southern Gas Corridor should still be delivering gas to Europe by 2019/2020.

ENDS

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

PepsiCo plans expansion in Kyrgyzstan

NOV. 29 2016 (The Conway Bulletin) — US giant food, snacks and beverage manufacturer PepsiCo will expand its production line to produce 2.5 tonnes of cottage cheese annually at its factory in Bishkek. PepsiCo entered the Kyrgyz market in 2010, after buying a 66% stake in Russian dairy producer Wimm-Bill- Dann for $3.8b. It produces its cottage cheese under the Merry Milkman brand.

ENDS

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

Stock market: Georgian lari and Azerbaijani manat

DEC. 2 2016 (The Conway Bulletin) — Currencies in the South Caucasus have declined sharply over the past few weeks after a slew of poor economic data and a strengthening US dollar.

The Georgian lari hit an all-time low on Tuesday, when it traded at 2.53/$1. A year ago it traded at 1.84/$1. In the past two months, it has fallen by 8%.

The government in Tbilisi said the slide was due to a negative trade balance and the strengthening US dollar. In what could have been a spiral effect, demand for US dollars within Georgia soared, as people feared a sharper depreciation of the national currency.

Macroeconomic statistics have shown that Georgia’s GDP growth has slowed in the past months, disappointing observers.

The Azerbaijani manat, the world’s worst-performing currency in 2015, has also depreciated against the US dollar, down 6.5% in the last 60 days. It traded at 1.73 on Thursday, down almost 40% compared to last year.

Azerbaijan’s banks also stopped selling US dollars due to shortages.

ENDS

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

Uzbekistan seals military deal with Russia

NOV. 29 2016 (The Conway Bulletin) — Russia and Uzbekistan have signed a deal that will improve their military cooperation, media reported quoting the Russian defence ministry. It said that one of the main aims of the agreement was to update Uzbekistan’s military with modern Russian-made equipment. The deal highlights both the more open nature of Uzbekistan since Islam Karimov, president since 1991, died in September and the influence that Russia has over the region.

ENDS

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

Economic growth halves in Georgia

NOV. 30 2016 (The Conway Bulletin) — Georgia’s year-on-year growth for the 12 months to the end of October more than halved to 1.3%, the Georgian statistics agency said. Georgia’s exports have fallen and its currency has weakened heavily in a regional economic downturn that has stunted growth and worried governments. For the 12 months to the end of October 2015, Georgia recorded GDP growth of 3%. Georgia, though, is faring better than its South Caucasus neighbours. Both Azerbaijan and Armenia’s economies have shrunk.

ENDS

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

Flights resume between Tajikistan and Uzbekistan

NOV. 30 2016 (The Conway Bulletin) — Commercial aeroplanes will fly between Tajikistan and Uzbekistan from January 2017, for the first time in 25 years, media reported quoting civil aviation officials from both countries. Relations between Tajikistan and Uzbekistan have been poor for years as the countries have rowed, mainly about water supplies. Under acting- president Shavkat Mirziyoyev, though, Uzbekistan has worked to improve relations with its neighbours.

ENDS

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

Azerbaijan’s SOCAR Trading eyes China

NOV. 30 2016 (The Conway Bulletin) — SOCAR Trading, the Geneva-based subsidiary of Azerbaijan’s state- owned energy company, said it will look to boost sales to China after two experienced Chinese oil traders joined the company in November. In an interview with Reuters, SOCAR Trading CEO Arzu Azimov said that the company plans to enter the Asian markets.

ENDS

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