Tag Archives: business

EBRD threatens pipeline funds if Azerbaijan fails to improve transparency

SEPT. 27 2016 (The Conway Bulletin) – The EBRD said it may withhold funds for a pipeline linking gas fields in the Caspian Sea to consumers in Europe until Azerbaijan agreed to provide more transparency into its state linked energy companies.

Taking a tough stance, the EBRD, a London-based intra-governmental bank set up during the collapse of the Soviet Union to fund business and infrastructure projects, said unless Azerbaijan complied with the Extrac- tive Industry Transparency Initiative (EITI), it would withhold $1.5b ear- marked for the TANAP pipeline.

The EBRD’s stance casts fresh doubts over the Azerbaijani leadership’s commitment to transparency into its business dealings.

Riccardo Puliti, the EBRD’s managing director for energy, said that EITI, considered a global benchmark for transparency in the extractive sectors, would consider whether Azerbaijan had made progress at its next meeting in Kazakhstan in October.

“In the case of TANAP, it is important that this progress takes place. If there is no progress it will be quite difficult to justify a large amount of financing,” he told Turkish media.

Last year, the EITI downgraded Azerbaijan from ‘compliant’ to ‘candidate’ country and criticised it for a lack of transparency.

TANAP will link Azerbaijan’s pipe- line network to Greece via Turkey, forming part of the Southern Gas Corridor. SOCAR, Azerbaijan’s state- owned energy company, owns a 58% stake in TANAP, Turkey’s Botas (30%) and BP (12%) own the rest. TANAP will link with TAP which will pump the gas to Italy.

Azerbaijan has yet to react to the EBRD’s statement.

Aliya Tskhay, a researcher focus- ing on Azerbaijan at the University of St Andrews said that the EBRD may have been trying to encourage Azerbaijan to engage more closely with the EITI.

“The EBRD request seems to be an encouragement for Azerbaijan’s government to still be part of the EITI, despite a status downgrade last year,” she said.

TANAP will cost $10b to build, while TAP has a price tag of around $5b.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kazakh telecom profits grow

SEPT. 27 2016 (The Conway Bulletin) – Kazakhstan’s national telecoms operator Kazakhtelecom said in a financial statement that its operating profit grew 13.2% in H1 2016, compared to the same period last year. Revenues increased by 4.9%, mainly due to higher prices for its telecoms networks that it rents out to other companies. The merger of Altel, part of Kazakhtelecom, and Tele2 helped overall profits, which more than doubled in the first six months of the year.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Georgia signs deal with Iran to build new oil refinery

TBILISI, SEPT. 29 2016 (The Conway Bulletin) — Georgian-Iranian company GEOPARS signed a deal with the Georgian government to build an oil refinery in Supsa on the Black Sea coast, the first to be built in Georgia for 80 years.

According to local media, the government licensed the land to GEOPARS for free. GEOPARS said it would need to make an investment of $1.5b to build the refinery, a petro- chemical plant and a logistical centre.

PM Giorgi Kvirikashvili attended the signing ceremony and hailed its impact on Georgia’s industrial sector.

“We will see a project that once again accentuates and reinforces Georgia’s regional role as the shortest route to Europe for Near East and Asian countries. This is a project that puts Georgia on a map by highlighting not only its transit function, but its industrial role as well,” local media quoted him as saying.

Caution is needed, though. Georgia has negotiated building an oil refinery in Supsa or Poti several times previously with Azerbaijani, Kazakh and Russian investors but the deals eventually fell through.

SOCAR Georgia Investments, a subsidiary of Azerbaijan’s state owned energy company SOCAR, had proposed building a refinery in Supsa in May, but failed to commit funds.

This is the first refinery deal in Georgia made with Iran, which has played an increasingly active role in the South Caucasus over the past few years. If the project does go ahead, it will give Iran an important foothold in Georgia, a close US ally.

The only major oil refinery previously built in Georgia was at Batumi in the 1930s. The Batumi refinery was downgraded in the 1990s and sold to Kazakh investors. It later became an oil terminal.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Azerbaijan’s SOCAR postbones DESFA deal

SEPT. 27 2016 (The Conway Bulletin) – SOCAR, Azerbaijan’s state-owned energy company, postponed by one month the deadline for its purchase of a 66% stake in Greek gas distributor DESFA. The purchase guarantee, by which SOCAR would have to buy 49% of DESFA if it finds a partner to buy a 17% stake, was due to expire at the end of September. The EU froze the €400m ($446m) deal, signed in 2013, due to regulations on market competition.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kyrgyzstan’s reservoir water level increases

SEPT. 26 2016 (The Conway Bulletin) – Water levels at Toktogul, a key reservoir in Kyrgyzstan, have increased to a four year-high, prompting the government to reassure people about winter electricity supplies. Tagzhana Aidaraliyeva, a spokesperson for the company managing Toktogul said water levels have reached 17.4b cubic metres in mid-September. In 2014, water levels had fallen to 11.9b cubic metres, forcing Kyrgyzstan to increase electricity imports and ration its distribution.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kazakh ministry requires solution from ArcelorMittal

SEPT. 27 2016 (The Conway Bulletin) – Kazakhstan’s ministry of investments and development said that steelmaker ArcelorMittal Temirtau needs to present a viable timetable to fix its financial problems or it could face legal prosecution. Albert Rau, the minister, told official media that the company could be using seasonal stoppages at its plant in central Kazakhstan to avoid finishing the year with a profit.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

HeidelbergCement to invest in Georgia

SEPT. 28 2016 (The Conway Bulletin) – Germany’s HeidelbergCement said it will invest $100m into expanding its cement and concrete plant in Kaspi, a small town 50km outside of Tbilisi in northern Georgia. HeidelbergCement has operated in Georgia for 10 years.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Cartu Foundation to invest in Georgia

SEPT. 27 2016 (The Conway Bulletin) – The Cartu Foundation and the Georgian Co-Investment Fund, both supported by Georgia’s richest man Bidzina Ivanishvili, have invested $80m in the construction of a new hotel and a botanical garden in the town of Ganmukhuri, on the unofficial border with Abkhazia. Abkhazia is a breakaway region that declared its independence from Georgia after a brief war in 2008.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

US-based company makes progress in Georgia

SEPT. 26 2016 (The Conway Bulletin) – US-based Frontera Resources said it has made progress at the South Kakheti gas complex it operates in Georgia, announcing a new drilling campaign for October. Frontera also said it will go forward with a financing deal it reached with YA II PN, part of the Yorkville Advisors financial group. Frontera will raise around $686,000 through a share issue in London.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kyrgyzstan-gold miner raises cash

SEPT. 28 2016 (The Conway Bulletin) – Kyrgyzstan-focused miner Chaarat Gold said it raised £4.1m ($5.3m) by issuing 78.8m new shares in London. Labro Investments, which previously held a 25.6% stake in the company, will raise its ownership to 31.7%. Last week, Martin Andersson, owner of Labro Investments, was named non-executive chairman of the British Virgin Islands-registered company.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)