Tag Archives: business

Greece says Azerbaijan’s SOCAR deal to buy gas pipelines will happen in September

JULY 22 2016 (The Conway Bulletin) — Italy’s Snam could make an offer to buy 17% of Greek gas distributor DESFA by the end of September, salvaging plans by Azerbaijan’s SOCAR to buy Greece’s pipeline network.

Earlier this month, SOCAR officials had suggested the deal, which is considered vital for Azerbaijani aspirations to supply gas to Europe, was off because a lower-than-expected

price rise by the Greece government for consumers had undermined its value.

But Stergios Pitsiorlas, chairman of the state Hellenic Republic Asset Development Fund, told Bloomberg that the Snam-SOCAR tandem will buy a 66% share in DESFA.

Snam declined to comment.

SOCAR officials flew into Athens this week to discuss the deal. News reports from both Greece and Azerbaijan have called the negotiations ‘tense’.

In 2013, SOCAR won a bid to buy 66% of DESFA, Greece’s gas distributor.

The deal was later frozen by the European Commission, citing 2009 regulation which stops integration between gas suppliers and distributors.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Dispute threatens Kazakh refinery company’s sale of Romanian refinery

JULY 27 2016 (The Conway Bulletin) — A legal battle between Kazakhstan’s KMG International and the Roma- nian government risks stalling a $680m deal to sell a majority stake in the Kazakh company’s refinery to China’s CEFC.

KMG International, formerly known as Rompetrol, is preparing to lodge a lawsuit against the Romanian government over the seizure in May of its assets, according to the FT.

The Romanian government has said the Petromidia refinery, the largest in the country, was illegally privatised in the early 2000s before Kazmunaigas bought Rompetrol.

KMG International has now submitted a legal note to the Romanian government that will escalate the dispute.

“Romania is using its governmental power to undermine that transaction and re-nationalise the assets,” the FT quoted KMG International as saying in a letter to the government.

KMG International had to delay finalising the deal with CEFC, which in December agreed a $680m fee to buy 51% of the refinery.

Robert Cutler, Senior Researcher at the Institute of European Studies at Carleton University, Montreal, said that Romania was looking to block the sale.

“Kazakhstan is about to find out what it is like to be on the receiving end of ‘resource nationalism’, which it [Kazakhstan] has successfully used against foreign investors over the last decade,” he told The Conway Bulletin.

This delay and the asset freeze has angered officials at both KMG International and Kazmunaigas, its parent company.

Senior company officials have said that they will take legal action if the refinery sale is delayed.

Romanian investigators have focused on recovering cash from an allegedly illegal privatisation of the refinery in 2003, when the late Dinu Patriciu bought Petromidia for $760m. In 2007, Patriciu sold Rompetrol, which controlled Petromidia, to Kazmunaigas for $1.6b.

In the following years, the government acquired an 18% stake in the refinery.

Now, analysts say, the government might be looking to renationalise the refinery, an important and lucrative asset for Romania.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

PetroKazakhstan’s production shrinks in H1

JULY 28 2016 (The Conway Bulletin) — London-traded upstream oil company KMG EP said its H1 2016 production shrank by 0.7% to 6.1m tonnes of oil. In particular, the company said that production slowed significantly at PetroKazakhstan’s operations in central Kazakhstan. KMG EP owns a 33% stake in PetroKazakhstan, while China’s CNPC owns the rest. KMG EP is a subsidiary of state-owned energy company Kazmunaigas.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

EBRD considers stake rise in Azerbaijan

JULY 22 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) said it will postpone its decision to increase its stake in Holcim Azerbaijan, a cement company. The EBRD already owns a 10% stake in the company. Switzerland-based LafargeHolcim (66%), Germany’s Holcim (10%) and other private investors (14%) own the rest of the company. The EBRD said it will wait until September to take a decision.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Kyrgyzstan to challenge Centerra share issue

BISHKEK, JULY 26 2016 (The Conway Bulletin) — The board of Kyrgyz miner Kyrgyzaltyn will dispute Centerra Gold’s issue of new shares to buy US-based Thompson Creek because it reduces its own overall stake in the company, which owns its biggest gold mine – Kumtor.

This month, the Canadian miner, 32% owned by Kyrgyzaltyn, said that it would buy Thompson Creek for the equivalent of $1.1b, in cash and new shares.

Kyrgyzaltyn had already said it disagreed with the transaction and that it voted against it during the Centerra board meeting.

As part of the financing for the acquisition of Thompson Creek, Centerra Gold issued new shares which analysts said will reduce Kyrgyzaltyn’s 32% stake in Centerra to approximately 28.8%.

Now the local language service of US-funded Radio Free Europe/Radio Liberty has reported that senior Kyrgyz government officials are considering how to dispute the move, setting the scene for more disagreements between the Toronto-based company and Kyrgyzstan.

The two have been locked in a protracted row for years.

Kyrgyzsan wants to increase its direct ownership of the Kumtor mine, the country’s largest economic asset.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Kazakh miner’s production grows

JULY 22-28 1 2016 (The Conway Bulletin) — Kazakhstan miner KAZ Minerals posted a 43% growth in output in H1 2016, compared to the same period last year, to 52,600 tonnes of copper cathode. KAZ Minerals also said it cut costs for the development of its Aktogay project by 4.4% to $2.2b. Together with Bozshakol in northern Kazakhstan, the Aktogay project, located in eastern Kazakhstan, is KAZ Mineral’s main copper asset.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Yandex taxi to expand in Georgia and Kazakhstan

JULY 27 2016 (The Conway Bulletin) — Internet taxi service Yandex Taxi said it plans to enter the Georgian market and expand its presence across Kazakhstan from its base in Almaty. Yandex Taxi entered the Armenian market in July, triggering complaints of price dumping from the traditional taxi association in Yerevan. In June, mobile-based Uber started operations in Astana.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Georgia sign gas deal with Iran

JULY 26 2016 (The Conway Bulletin) — Iran signed an agreement with Georgia to export gas via Armenia, Iranian official media reported. In February, Georgia had said that gas supplies from Iran would only be considered in the long term, as Azerbaijan was able to export enough gas to meet Georgia’s growing demands. With Azerbaijan’s production declining and Iran’s export to Armenia due to increase, Georgia could now find another supplier in Iran.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Uzbekistan extends Beeline licence

JULY 25 2016 (The Conway Bulletin) — The Uzbek government extended the telecoms licence for Beeline Uzbekistan until 2031. Beeline Uzbekistan said the extension of the licence was a key step for one of the company’s most important markets. Beeline Uzbekistan is a subsidiary of Amsterdam-based Russian telecoms company VimpelCom. In the past few months, VimpelCom has been fined millions of dollars for paying bribes to enter the Uzbek mobile market.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Turkish police arrests CEO of Azerbaijan’s state energy company for links to Gulen movement

AUG 1 2016 (The Conway Bulletin) — Turkish authorities have arrested Sadettin Korkut, former CEO of Petkim, an Azerbaijan-owned refinery on Turkey’s Mediterranean coast, in what media said was part of a purge of people linked to exiled cleric Fethullah Gulen (July 28).

Azerbaijan’s state-owned energy company SOCAR dismissed the claim, saying that the arrest was linked to a spat with another employee of SOCAR Turkey Enerji, its Turkish subsidiary.

Mr Korkut had resigned as CEO, a position he had held for four years, the day before he was arrested. Twenty-seven other employees of SOCAR’s Turkish subsidiary, which operates the Petkim refinery, were also sacked at the same time.

Turkish media immediately linked the arrest and the sackings to the Gulenist movement, which they dub a terrorist network.

“Around 200 workers from Petkim and related companies were sacked due to their alleged ties to the Gulenist Terror Organisation (FETO),” the Turkish state-run Anadolu Agency reported.

Around 60,000 public sector employees and dozens of journalists and businessmen were arrested in Turkey in the aftermath of an attempted military coup on July 15. Turkish President Recep Tayyip Erdogan accused Mr Gulen of masterminding the coup from his exile in the US.

Azerbaijan is one of Turkey’s strongest allies. It backed the arrest.

“SOCAR’s management believes that Turkey will become stronger after these difficult days. We will continue to operate and invest in Turkey with all of our energy,” Vagif Aliyev, CEO of SOCAR Turkey Enerji said in a statement.

SOCAR Turkey Enerji and SOCAR Turkey Petrokimiya own a majority stake in Petkim.

Anar Mammadov, head of SOCAR’s Greek subsidiary, has been appointed new CEO of Petkim.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)