Tag Archives: business

Uzbekistan to produce new Chevrolet

MARCH 11 2016 (The Conway Bulletin) – Uzavtosanoat, part-owner of the GM Uzbekistan joint venture, said the company will start production of Chevrolet Aveo in May. GM Uzbekistan, formerly UzDaewooAuto, produces several models of cars for the US manufacturer GM. The company said the Aveo will help its market share in the former Soviet Union and, possibly, open new export avenues in the Middle East and Africa.

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(News report from Issue No. 272, published on March 18 2016)

Kazakhstan restarts Russian power exports

MARCH 17 2016, ALMATY (The Conway Bulletin) — Kazakhstan’s state-owned electricity company Samruk Energo said it resumed deliveries of electricity to Russia after cross-border trade was suspended in November 2014 due to the sharp depreciation of the rouble against the tenge.

Over the past six months the tenge has lost around 50% of its value, bringing it into equilibrium with the rouble and making cross-border trade viable again. Kazakhstan had stubbornly stuck to a US dollar peg despite a fall in global oil prices and a recession in Russia. It ditched this peg in August.

These electricity trades are important as they are more evidence of a normalisation of trade ties between Kazakhstan and Russia after a series of rows last year which, at their root, were triggered by the currency imbalance. Power supply contracts between Samruk Energo and Inter RAO are denominated in roubles which hit their value for Samruk Energo when the rouble fell heavily against the tenge.

Samruk Energo said it wants to export 1.8b kWh to Russia in 2016, slightly less than it exported in 2014. In 2013 power exports to Russia had been around 2.5b kWh.

The two power stations at Ekibas- tuz, in north-eastern Kazakhstan, will provide the electricity and Samruk Energo said the second unit at Eki- bastuz was also put into operation.

“Free capacity at Ekibastuz GRES- 1 and GRES-2 was allocated to export deliveries,” Almassadam Satkaliyev, Samruk Energo chairman, said in a statement.

The first unit is owned by Samruk Energo and Ekibastuz Holding, controlled by Kazakhmys.

GRES-2, the second unit at Eki- bastuz, is jointly owned by Samruk Energo and Russia’s Inter RAO.

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(News report from Issue No. 272, published on March 18 2016)

Qatar oil meetings miss Kazakhstan

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan has not been invited to a meeting in Qatar set for April 17 where major world oil suppliers are due to discuss freezing output levels at their current rates, energy minister Vladimir Shkolnik said. The apparent snub for the FSU’s second biggest oil producer underlines its role as an oil price taker rather than an oil price maker. Oil producing nations are trying to coordinate a response to drag oil prices off record lows.

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(News report from Issue No. 272, published on March 18 2016)

Editorial: British Airways and Azerbaijan

MARCH 18 2016 (The Conway Bulletin) -The economic downturn continues to hit Central Asia and the South Caucasus with British Airways now cancelling its London-Baku service.

But whether BA needs to quit the route altogether is questionable. Airlines keep a diversified portfolio of route because it is near impossible to second guess which routes will be profitable in a few year’s time.

The decision took many by surprise because of the strong presence of British business in Azerbaijan, most notably BP.

As oil prices fell dramatically in the past 20 months, airline companies have rallied on cheap fuel, but have also struggled to maintain links to countries negatively affected by the crisis.

In 2012, British Airways cut its route to Yerevan, the following year it cancelled regular flights to Bishkek and Tbilisi. Last October, the company quit its London-Almaty route.

The crisis, aside from hitting government budgets and people’s wallets, has contributed to cutting off further the region from the West.

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Editorial from Issue No. 272, published on March 18 2016)

Azerbaijan’s IBA rebrands

MARCH 14 2016 (The Conway Bulletin) – The International Bank of Azerbaijan, the country’s largest lender, changed its logotype, colour and slogan in an effort to boost its domestic and international image. The IBA posted poor financial results last year. Its former CEO Jahangir Hajiyev was arrested in December.

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(News report from Issue No. 272, published on March 18 2016)

Turkmenistan wins lawsuit against Turkish construction company

MARCH 11 2016 (The Conway Bulletin) – A World Bank tribunal rejected a $567m claim by Turkish firm Ickale Insaat against Turkmenistan that the government had deliberately derailed several construction projects, a rare victory for a Central Asian government against private companies.

The International Centre for Settlement of Investment Disputes (ICSID) said the claim was not substantiated by concrete cases of interference.

“There is no basis for the claims in the BIT [a 1992 Turkey-Turkmenistan bilateral treaty to protect investments], which does not create any cause of action under general principles of international law,” the ICSID wrote in its 175-page analysis of the case, specifying that the Turkish company will also have to pay $1.7m, or 20% of Turkmenistan’s total legal fees.

Ickale claimed that Turkmenistan had breached a dozen construction contracts signed in March-November 2007 to supply mainly consulting services on a series on projects.

The Turkmen side denied the accusations and instead said that Ickale failed to deliver on its promises to complete its works by 2009.

Ickale was supposed to deliver machinery and service construction works at two luxury hotels, four schools, one cinema in Ashgabat, and several other projects.

Ickale listed at least eight of these projects as “completed” on its website. Earlier in January, a Stockholm arbitration court had ruled against the Kazakh government in a case

brought by Estonian firm Windoor for reneging on a building deal in Astana.

Relations between Turkish firms and the Turkmen government might be worsening as the opposition newspaper Alternative News Turkmenistan alleged that another construction company Ilk Insaat had planned to sack around 1,200 workers in March-April.

When contacted by The Conway Bulletin, Ilk Insaat’s parent company declined to comment.

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(News report from Issue No. 272, published on March 18 2016)

Kyrgyzstan makes hydropower plan

MARCH 17 2016 (The Conway Bulletin) – Kyrgyz PM Temir Sariyev said that 16 new hydropower stations would be built for a total of $160m, adding 188MW of power to the national grid. This is important as Kyrgyzstan is committed to boosting its power output to hit domestic demand and also to feed the CASA-1000 project which will send electricity to Pakistan via Tajikistan and Afghanistan.

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(News report from Issue No. 272, published on March 18 2016)

Zenith signs agreement with Azerbaijan’s SOCAR

MARCH 17 2016 (The Conway Bulletin) – A subsidiary of Canadian oil company Zenith Energy signed a production sharing agreement with Azerbaijan’s state-owned energy company SOCAR to develop three onshore oil fields. Zenith Aran Oil and SOCAR had started negotiations last year. Zenith will have an 80% share in the Muradkhanli, Jafarli and Zardab fields for the next 25 years. SOCAR will retain the remaining 20%.

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(News report from Issue No. 272, published on March 18 2016)

Azerbaijan’s oil exports drop

MARCH 17 2016 (The Conway Bulletin) – Azerbaijan exported 5.2m tonnes of oil in January and February, down from 5.5m tonnes in the same period last year, official customs data reported. Azerbaijan is reliant on oil exports to fund its budget. The drop in oil prices has hit its economy hard, forcing the government to cut budgets. The problem for Azerbaijan is that a lot of its oil fields are aging.

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(News report from Issue No. 272, published on March 18 2016)

Directors of Tethys in Kazakhstan leave

MARCH 14 2016 (The Conway Bulletin) – As planned after the announcement of the deal with Olisol, two executives at Guernsey-based Tethys Petroleum will step down. John Bell and Alexander Abramov will now be co-non-executive chairmen. Mr Bell and three other directors said they will not seek re-election at the next general meeting at the end of May.

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(News report from Issue No. 272, published on March 18 2016)