Tag Archives: Azerbaijan

Georgia talks to Iran about gas

JAN. 4 2016, TBILISI (The Conway Bulletin) — Georgia started negotiations with Iran to buy gas and electricity, apparently strengthening its intention to diversify away from Azerbaijan as the main source for gas imports.

Energy minister Kakha Kaladze told local press negotiations could start soon.

“We will start start talking over gas as well as electricity. Iran is rich in resources and we should benefit from its resources as much as possible,” Mr Kaladze had said earlier in December.

Iran confirmed the negotiations and said it would be able to deliver between 8 and 15b cubic metres of gas to the Armenian border, from where it would be shipped north to Georgia.

Officials at Azerbaijan’s state energy company SOCAR put a brave face on news of Georgia’s negotiations, but the talks would have irritated them. When Georgia opened talks with Russia to increase gas supplies last year, Azerbaijan released a testy diplomatic note reminding Tbilisi of its contractual obligations.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Azerbaijani court jails journalist

DEC. 28 2016 (The Conway Bulletin) – A court in Azerbaijan sentenced journalist Rauf Mirkadirov to six years in prison for spying for Armenia. Mirkadirov denies the charges. His supporters said that the jail sentence is more evidence of Azerbaijan’s crackdown on dissent and free speech. Azerbaijan has jailed several journalists over the past few years.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Currencies: US dollar, Kazakh tenge

JAN. 7 2016 (The Conway Bulletin) — The New Year did not change the fortunes of currencies in the South Caucasus and Central Asia. All currencies are still suffering against a strong US dollar and Central Banks are intervening to prop them up.

Undoubtedly, the most notable decision came just before the holidays when Azerbaijan ditched its currency peg to the dollar and let the manat slide. After a 48% fall, the currency found its equilibrium at 1.55/$1. It is now trading at 1.57/$1.

In Kazakhstan, the tenge recovered towards the end of December, but it slid to 345/$1 in January.

Tajikistan witnessed the worst start of the year, with its somoni currency falling 2.5% in the first week of January, trading at 7.17/$1. Notably, exchange points have been charging a premium of 8-10% on currency transactions in the past few weeks.

In Kyrgyzstan the Central Bank has kept the som stable at 75.9/$1 by intervening several times.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Editorial: Currency controls in Kazakhstan and Azerbaijan

JAN. 8 2016 (The Conway Bulletin) – Both Kazakhstan and Azerbaijan ditched their currencies’ peg to the US dollar in 2015, triggering sudden and sustained depreciation of their currencies.

These were tough, but necessary calls by their Central Banks as these currencies were over-valued compared to oil and the Russian rouble.

What happens next differentiates Azerbaijan and Kazakhstan.

Kazakhstan has allowed, with the odd intervention, its currency to devalue. The Azerbaijani Central Bank, by contrast and very much in keeping with the tight way that the country is run, appears determined to anchor the manat more-or-less at its current rate against the US dollar. The rhetoric may be of liberalisation but the actions are of a conservative and uptight Central Bank.

And this comes across in other ways too. A couple of weeks after the devaluation, Azerbaijan imposed a rule that only people presenting their official ID could change more than $500 into foreign currencies. This could be the first of many exchange controls.

ENDS

(Editorial from Issue No. 262, published on Jan. 8 2016)

Azerbaijan closes overseas embassies

DEC. 31 2015 (The Conway Bulletin) – Azerbaijan is considering closing several of its overseas embassies as it looks for ways to cut costs during a period of sustained low oil and gas prices, media reported quoting a foreign ministry spokesman. Azerbaijan has expanded its diplomatic missions over the past few years in line with burgeoning revenues from oil and gas sales. Profit from those sales has now collapsed.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Football-linked trial starts in Azerbaijan

JAN. 5 2016 (The Conway Bulletin) – The trial of five men accused of killing journalist Rasim Aliyev in August has opened. Aliyev was beaten on the streets of a provincial Azerbaijani town and died in hospital. Before he died, he said supporters of international footballer Cavid Huseynov who he had criticised in a match report has attacked him. Mr Huseynov is not among the men standing trial for killing Aliyev.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Business comment: 2015: The year of currency woes

JAN. 7 2016 (The Conway Bulletin) — After Azerbaijan abandoned its currency peg to the US dollar, leading to a second sharp depreciation of the manat in 10 months, confidence in South Caucasus and Central Asian currencies reached a new low.

2015 was a tough year, which began with Turkmenistan slashing 19% off the value of its manat currency on Jan. 1, hinting that oil and gas exporting countries were facing bad times.

The following February, Azerbaijan devalued its currency and later in August Kazakhstan stopped pegging the tenge to the US

dollar, a decision that triggered a sharp depreciation. But although this trend is closely linked to the fall in oil prices since the summer of 2014, that’s not the whole story.

After the rouble collapsed at the end of 2014, it was only a matter of time for countries that enjoyed high trade volumes with Russia. They had to follow suit and devalue their currencies to remain competitive.

In addition, devaluing and unpegging a currency may also serve as a way to give stability to the domestic budget.

Kazakhstan’s Central Banker Daniyar Akishev said the tenge will follow the price of oil. That way energy-exporting firms will have a chance of balancing their books.

But countries with unpegged currencies need to keep an eye on speculation. Azerbaijan now requires a valid ID for currency exchange of more than $500 in value. Tajikistan put in place limits to ATM withdrawals of $400 and could reduce the number of licences for exchange points.

And interventions are unlikely to cease. Kyrgyzstan and Georgia’s Central Banks have already marked the first week of 2016 with purchases in the currency market.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Azerbaijan shakes up security

DEC. 14 2015 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev signed a decree to create two new security agencies, the State Security Service and the Foreign Intelligence Service, and disband the National Security Ministry. Earlier this year, Mr Aliyev sacked Eldar Mahmudov as national security minister. The next day police arrested several ministry officials.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Iran hints at increasing stake in the Azerbaijani Shah Deniz

DEC. 15 2015 (The Conway Bulletin) — Iran has said it is interested in increasing its stake in the Shah Deniz offshore gas exploration project in Azerbaijan, a move that would extend Iran’s influence over a project that is becoming increasingly important in Europe’s future energy plans.

Iran’s deputy minister Hossein Zamani Nia said Iran wanted to increase its stake in several international projects. “Several fields and projects in some countries are being examined,” Mr Zamani Nia told the IRNA news agency.

“Shah Deniz is one of those fields but a final decision has not yet been made.”

Through the subsidiary Naftiran Intertrade, state-owned National Iranian Oil Company (NIOC) owns a 10% stake in Shah Deniz, off the coast of Azerbaijan in the Caspian Sea.

BP is the project leader at Shah Deniz with a 28.8% share in the consortium. Turkey’s TPAO owns 19%, Azerbaijan’s SOCAR owns 16.7%, Malaysia’s Petronas controls 15.5% and Lukoil owns the remaining 10%.

The consortium is working on a second development phase of the project, which will more than double the field’s output.

The additional volumes will fill new westward pipelines, such as TANAP, which will pump gas to Turkey and Europe.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Turkey/Azerbaijan/Georgia defence ministers meet

DEC. 17 2015 (The Conway Bulletin) – Defence ministers from Turkey, Azerbaijan and Georgia met up in Istanbul for their regular twice yearly meeting. Although no policy statements were made the meeting is significant for its timing. Turkey is looking for allies to bolster it in its row with Russia, triggered when one of its warplanes shot down a Russian fighter-jet over Syria last month.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)