Tag Archives: business

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)

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)

Azerbaijan’s SOCAR buys in Ivory Coast

NOV. 25 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR said it bought a 26% stake in an LNG terminal in Ivory Coast, expanding its investment in West Africa. The CI-GNL terminal is operated by France’s Total. Earlier in November, SOCAR pledged investments in Benin and Burkina Faso.

ENDS

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

Georgia sends wine to China

NOV. 28 2016 (The Conway Bulletin) — Georgian wine company Badagoni said it will sell 5m bottles of wine to China in a landmark agreement with the Asian country’s distributor Wenzhou Bydoway. The company did not specify the timeframe of the contract, but the volume agreed represents around 12% of Georgia’s annual wine exports, which have grown significantly in the past two years. The deal was made possible through a free trade agreement signed with China in September.

ENDS

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

EBRD wants to increase investments in Kazakhstan

NOV. 30 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) pledged to increase its investment plans in Kazakhstan to $1b in 2017. So far in 2016, the EBRD has invested around $900m. At a meeting in Shymkent in Southern Kazakhstan, EBRD country director Janet Heckman also pledged increased investment in the utility sector.

ENDS

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

Rostelmash to open plant in Uzbekistan

NOV. 29 2016 (The Conway Bulletin) — Rostselmash, a Russian manufacturer of agricultural equipment, said it plans to establish a plant in Uzbekistan. The Rostov-on-Don company plans to occupy the site that it operated during Soviet times in the township of Chirchiq, in the outskirts of Tashkent. Rostselmash had opened the Chirchiq factory and three other plants in Tashkent in the 1940s.

ENDS

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

Kazakhstan’s Samruk-Kazyna fails to obtain a review

NOV. 28 2016 (The Conway Bulletin) — Kazakhstan’s sovereign wealth fund Samruk-Kazyna failed to obtain a review of a US court case that deemed the fund liable for the misrepresentation of BTA Bank bonds sold abroad in 2010-2012. The US court said in February that the Kazakh fund had concealed information regarding dealings with BTA that led to the bank’s default in 2012. The decision was significant because it marked an exception to the Foreign Sovereign Immunities Act which protects activities by sovereign wealth funds.

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

Georgia may sell 25% stake in energy company in IPO

TBILISI, NOV. 29 2016 (The Conway Bulletin) — The Georgian government is considering selling a 25% stake in Georgian Oil and Gas Corporation (GOGC) on the London Stock Exchange next year, a move that would give foreign investors another chance to buy into Georgia.

GOGC is Georgia’s state-owned energy company, administering its oil and gas contracts and also refurbishing and building power stations to generate electricity. Selling a 25% stake GOGC is likely to generate high levels of investor interest.

Georgia’s finance minister Dmitry Kumsishvili said: “The corporation’s 25% stake will be placed on one of the exchanges abroad, in London or Shanghai.”

Georgia’s BGEO Group, which controls Bank of Georgia, and its subsidiary Georgian Healthcare Group are already listed in London.

GOGC controls the North-South pipeline used by Russia to export gas to Armenia and is building the 450km-long East-West pipeline network, that will link its southern border with Azerbaijan to the Black Sea port of Poti. It also owns a 51% stake in the $230m Gardabani power plant, one of the biggest in Georgia, which was opened last year.

Azerbaijan’s state-owned energy company SOCAR, which supplies gas to Georgia, has also said that it is interested in buying a 25% stake in GOGC, according to the Trend news agency.

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