DEC. 11 2015 (The Conway Bulletin) – KazTransGas, Kazakhstan’s gas distributor, named Rustam Suleymanov as its new CEO. Mr Suleymanov has worked at KazTransGas for 15 years. Former CEO Kairat Sharipbayev was named chairman of the board.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 15 2015 (The Conway Bulletin) — The Georgian government said the development of the Gudauri ski area will cost around $150m to build, the first time that a price tag has been put on plans to give the country what officials say will be a world-class winter sports resort. Canadian mountain resort developers Ecosign and consulting firm Ernst&Young have drawn up plans to develop infrastructure at Gudauri, a ski resort around 120km north of Tbilisi. The government’s Partnership Fund is set to be one of the biggest investors in the project.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 17 2015 (The Conway Bulletin) — Commodities prices keep declining and the industry continues to worry and use caution. This is reflected in the markets, which show the poor performance of Central Asia and South Caucasus focused firms.
Tethys Petroleum (-6% in the past week), Nostrum Oil & Gas (-5.8%) and Roxi Petroleum (-4%) were hit by oil prices plummeting to around $37/barrel.
Industrial and judicial news affected the performance of several miners in the region.
KAZ Minerals closed at 88.5p on Thursday a 7.7% fall in share prices compared to last week. Centerra Gold lost 11% on the Toronto Stock Exchange, closing at 7.07 Canadian dollars on Thursday.
Generally stable Tengri Resources also fell after it announced it was not going to mine the Taldybulak gold and copper project in Kyrgyzstan. It lost 17.4% in one day to close at 3p per share on Thursday.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 20 2015 (The Conway Bulletin) — He must thinks we’re fools.
“We did all we could to keep oil prices high by cutting oil production domestically, now it’s time for other countries to do the same,” Kazakhstan’s minister of energy Vladimir Shkolnik told the press in Astana.
He attributed this year’s 1.5m tonnes production cut in Kazakhstan’s oil output to a deliberate decision to help keep oil out of the market to try to raise prices. If this was the intention, it clearly hasn’t worked, because prices are down to a seven-year low, at around $37/barrel.
But, incidentally, this was not the intention.
As several experts have told the Bulletin throughout the year, Kazakhstan only produces around 2% of the world’s total oil output and does not have a seat at price- setting assemblies such as OPEC.
This makes it a price taker, one that cannot, even by freezing completely oil exports, bring back oil prices above $100/barrel.
A 1.5m tonne cut represents roughly a 2% cut in Kazakhstan’s yearly production and is entirely attributable to aging oil fields and delays in the start of new projects.
The re-start of production at the Kashagan oil field in the Caspian Sea is now looming on the horizon, but at the ministry of energy its production forecast is lower than previously assessed.
Tengizchevroil, the consortium operating Kazakhstan’s largest field, finally said it would go ahead with its expansion project in H1 2016, two years behind schedule and with a $15b cost overrun.
So please, Mr Shkolnik, don’t say you cut production on purpose. The main reason that Kazakh output has dropped is because low oil prices have discouraged production.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 15 2015 (The Conway Bulletin) — GM-Uzbekistan, General Motors car-making venture in Uzbekistan, increased retail prices across its product line by up to 30%, the podrobno.uz news agency reported. Like the rest of the region, Uzbekistan has been facing a devaluation in its sum currency while inflation has increased.
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(News report from Issue No. 261, published on Dec. 20 2015)
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.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 15 2015 (The Conway Bulletin) — China’s CEFC energy company will buy a controlling stake in KMG Inter- national, a subsidiary of Kazmunaigas, in a deal that helps Kazakhstan raise cash but also rids Western investors of one of the more interesting companies previously offered up by Kazakh officials as a potential IPO target.
The deal, which will give CEFC a 51% share in the Netherlands-based company, is valued at between $500m and $1b, sources told Reuters.
KMG International, formerly called Rompetrol, owns the Petromidia Navodari refinery and hundreds of petrol stations in Romania, Georgia, Bulgaria and Moldova.
It is affiliated with Switzerland- based KMG Trading, which secured a $3b deal in December with Vitol as the buyer of future oil shipments from Kazmunaigas’ 20% share of the Tengizchevroil consortium.
Neither KMG International nor KMG Trading could be reached for comment.
Kazmunaigas has unsuccessfully tried to sell off Rompetrol-owned assets over the past few years.
Samruk-Kazyna, Kazakhstan’s sovereign wealth fund which owns Kazmunaigas, had said it wanted to sell KMG International in a round of privatisation set for 2016. Now, the privatisation of KMG International seems to have fallen out of this IPO bucket list.
Kazakhstan has said it wants to sell off state-owned companies involved in midstream and downstream operations in an effort to raise much-needed cash to restore financial stability during what has become a sustained downturn in oil prices.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 17 2015 (The Conway Bulletin) – The authorities in Azerbaijan said they had finally extinguished the fire at Platform No. 10 of the Guneshli shallow water oil rig off the coast of Baku, nearly two weeks after a storm smashed into it causing an explosion in a gas pipe.
Emergency crews also said they had received permission to search for the bodies of 26 missing oil workers from other littoral states bordering the Caspian Sea.
Three workers from the Oil Rocks platform and 23 workers from the Guneshli platform are still listed as missing.
Rescue teams have already found the bodies of seven workers killed in the fire on Dec. 4.
A final death toll of 33 would make it the worst offshore oil platform accident since the Piper Alpha disaster in 1988 when 167 people were killed.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 17 2015 (The Conway Bulletin) — British services company KCA Deutag won two contracts with BP worth up to $1b for operations, maintenance and engineering work in Azerbaijan. The Aberdeen-based company will work on seven oil and gas platforms operated by BP off the coast of Azerbaijan, including those exploiting the Azeri-Chirag-Guneshli oil field and the Shah Deniz gas field, two of Azerbaijan’s most important energy projects. KCA Deutag has worked in Azerbaijan for 20 years, mostly with BP. Rune Lorentzen, president of Offshore at KCA Deutag, said: “These major contract awards build on KCA Deutag’s long standing relationship with BP, and recognise our efforts to deliver both continuous improvement and value to our client.”
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 17 2015 (The Conway Bulletin) — Swiss railway manufacturer Stadler will deliver two high-speed electric trains to Azerbaijan in the next two months, Javid Gurbanov, head of Azerbaijani Railways, told reporters. Both trains will be used on the 30km Baku-Sumgayit route. In May, Stadler said it had also won a €70m contract to deliver five double decker carriages to Azerbaijan.
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(News report from Issue No. 261, published on Dec. 20 2015)
