Tag Archives: business

GM Uzbekistan appoints new head

JULY 25 2016 (The Conway Bulletin) — Car manufacturer GM Uzbekistan appointed Rustam Razhabov as the new CEO, after months of uncertainty over the top position at the Uzbek-US joint venture. The government-linked Novosti Uzbekistana confirmed the appointment. In June, unofficial reports had said that Mr Razhabov had been detained in May in relation to a criminal scheme that brought down his predecessor, Tokhirzhon Zhalilov. State-owned Uzavtoprom owns 75% of GM Uzbekistan, US-based GM owns the rest.

ENDS

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

Briefing: Gulenist links in Central Asia & S.Caucasus

AUG 1 2016 (The Conway Bulletin) — >>So, we know that the Gulen movement was big in Turkey but in Central Asia? Really? How deep is it and what does it do?

>> The movement, created by cleric Fethullah Gulen, is a social and religious group that has said it wants to integrate moderate Islam into the secular Turkish state and to replicate the model in other Muslim countries. The movement counts millions of followers. As it puts great emphasis on education and upward social mobility, the movement established a network of schools around the world, including in Central Asia and the South Caucasus.

>>OK, but who is Gulen? Wasn’t he an ally of Erdogan?

>> Turkish President Recep Tayyip Erdogan found in Gulen a strong ally when he came to power in 2003, a bulwark against a possible military backlash, something that had dogged Turkish leaders for half a century. Gulen and Erdogan, though, fell out in 2013, when a corruption scandal targeting members of Mr Erdogan’s ruling AKP party emerged. Mr Erdogan and others in his party alleged that the Gulenist members of the judiciary had orchestrated the scandal. Since then the government has cracked down on Gulenists in Turkey. Mr Gulen has lived in the United States since 1999 in a self-imposed exile. Now, after a failed coup in Turkey last month blamed on Gulen, Turkey has said it could ask the US government for the extradition of Gulen. Since the coup, Turkish police have detained over 60,000 state employees and dozens of journalists and businessmen allegedly linked to the Gulen movement.

>>Quiete a full-on assault. Will Turkey now force a crackdown on Gulen- linked institutions in Central Asia and South Caucasus?

>> In short, this bureau and the analysts we contacted all agree that Turkey will not go as far as to sever relations with countries that don’t respond to the request to shut down Gulen-linked schools. Apart from Azerbaijan, all other countries are loosely linked with Turkey. Plus, as shown in our story on page 3, these schools are a relative island of quality and reliability in the South Caucasus and Central Asia’s messy educational system. Both Kyrgyzstan and Kazakhstan have shrugged off Turkey’s requests to shut down Gulen- linked schools. Georgia appears also to have pretty much ignored Turkey’s request. Only Azerbaijan, Turkey’s super-tight ally, has gone along with Turkey’s request and closed down a TV station that had planned to run an interview with Gulen and brought under government control a university linked to the Gulen movement.

>>OK, but what about the businesses linked to Gulen?

>> The closest business link between Gulenists and the South Caucasus seems to have been uprooted immediately, with the sacking of Sadettin Korkut, chief of Petkim, a petrochemical complex in Izmir, owned by Azerbaijan’s state-owned SOCAR (See the front page of the Business News). It appears that SOCAR was also keeping a list of Gulen-linked people among its ranks. Together with Korkut, who was later arrested, around 200 other employees of SOCAR-linked companies were sacked. This, however, appears to be a one-off act of loyalty from Azerbaijan’s government to Ankara.

ENDS

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

Kazakhstan-focused Nostrum drops in H1

JULY 27 2016 (The Conway Bulletin) — Kazakhstan-focused Nostrum Oil & Gas posted a 41% drop in revenues in H1 2016, compared to last year because of continued low oil prices. Production in H1 fell by 12% to an average of 38,993 barrels of oil equivalent per day. The company said that the full-year production forecast remained at an average of 40,000 barrels of oil equivalent per day.

ENDS

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

Oil output falls in Kazakhstan

JULY 28 2016 (The Conway Bulletin) — Due to sustained low oil prices, Kazakhstan’s oil production could shrink further this year, according to Asset Magauov, deputy energy minister. Mr Magauov said that a majority of the companies operating in the country reported a decline in production in 2015. The official forecast for 2016 is 75.5m tonnes, a 5% reduction compared to last year. In March, then-energy minister Vladimir Shkolnik had projected a production target of 77m tonnes for 2016.

ENDS

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

Tajikistan turns down Kyrgyz request for extra power

DUSHANBE, JULY 26 2016 (The Conway Bulletin) — Tajikistan’s minister of energy, Usmonali Usmonzoda, said he had turned down a request from Kyrgyzstan for extra electricity because the Tajik power generating system did not have any spare capacity.

The inability of Tajikistan to send power to Kyrgyzstan shows just how interdependent countries in Central Asia are. It also comes at a time when extra scrutiny is being placed on the power generation systems in Tajikistan and Kyrgyzstan as they build up to powering the World Bank-backed $1.2b CASA-1000 power system to Pakistan.

At a press conference in Dushanbe, Mr Usmonzoda said that, due to rising industrial activity, Tajikistan does not have spare capacity.

“Kyrgyzstan asked for 2.5b kWh of electricity at 2.5 cents/kWh,” he told reporters. “This is a large volume and, because of the emergence of new domestic energy consumers, we decided to refrain from the supply.”

Last year, Tajikistan signed a short term supply agreement with Kyrgyzstan to export 146m kWh over the winter for 2.5 cent/kWh.

Now, though, Tajikistan may be looking for a better price.

Independent Bishkek-based energy expert Rasul Umbetaliyev told the KyrTAG news agency: “The minister diplomatically avoided answering directly, but the price for electricity exports from Tajikistan is currently 3.5 – 7 cents/kWh.”

Tajikistan is investing heavily in its power generating systems. It has approved a $3.9b project to build the Rogun hydropower system.

But with its economy stalling and industrial production lying stagnant rather than rising, production problems and not excessive demand could be holding back Tajikistan’s power exports.

Its electricity distributor, Barqi Tojik, has piled up $1.5b in debt. It hasn’t paid for the electricity it bought from power stations and it is still waiting to be paid by its largest customers.

The government is planning to split Barqi Tojik and bail it out.

ENDS

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

EBRD considers Azerbaijani gas

JULY 26 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) said it is negotiating financing TAP, a trans-Adriatic gas pipeline which forms part of the so-called Southern Gas Corridor network that will pump Azerbaijani gas to Europe. In an interview with AP, the EBRD said it is looking to invest €500m ($550m) in the project. Azerbaijan’s state-owned SOCAR (20%), BP (20%), Italy’s Snam (20%), Belgium’s Fluxys (19%), Spain’s Enagas (16%), and Switzerland’s Axpo (5%) own TAP.

ENDS

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

Tajikistan to open railway to the south

DUSHANBE, JULY 25 2016 (The Conway Bulletin) — Tajikistan has finished building a new railway connecting the capital city with the south, that avoids the headache of passing through Uzbekistan.

The Dushanbe- Kurgan Tyube-Kulob route effectively lifts its southern region out of economic isolation and removes Uzbekistan’s ability to close the route at will and use it as a bargaining tool. The Soviet Union had built Tajikistan’s railway through parts of Uzbekistan to avoid the more challenging Pamiri terrain.

Usmon Kalandarov, deputy director of the Tajik Railways company, said that the railway, which will be opened on Aug. 24, was built with the financial support of Chinese Eximbank.

“The construction of five bridges and three tunnels on this road has been financed by the Chinese bank Eximbank with a loan of 72m somoni ($9.2m),” he said at a press conference.

In 2011, in retaliation for plans to build a dam that would divert water away from its cotton crops, Uzbekistan cut the original railway line. Other than a dangerous and unreliable single road that weaved its way through the Pamir mountains, this effectively cut off the south of the country.

Sardor, a 52-years-old local trader, told The Conway Bulletin correspondent in Dushanbe that he has been waiting for the railway to be finished.

“I bring fruits and vegetables from southern towns to Dushanbe and vice-versa. It is inefficient for me to use trucks, they are expensive and take a long time,” Sardor said as he sold melons. “I think the new railway will be good for me because I will pay less to transport goods, which will not have to go through Uzbekistan and be in trouble like before.”

ENDS

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

Stock market: Nostrum Oil and Gas

AUG 1 2016 (The Conway Bulletin) — Amsterdam-based Nostrum Oil & Gas has posted lower revenues and production in H1 2016, but its share price continued to hold at around 300p because of bullish forward forecasts.

The company’s CEO Kai-Uwe Kessel said that in an era of low oil prices, cost-cutting is paramount. He also said that the company was focusing on building a small pipeline that would reduce its transport costs in 2017.

By focusing on cutting costs, however, the company seems to have been unable to regain either its production or its revenue stream from last year. Both were down by 12% and 41% respectively in H1 2016.

In the company’s statement, Mr Kessel remained confident that Nostrum’s production target will be met by the end of the year.

“We look forward to increasing production throughout the second half of the year to achieve our target 2016 production of 40,000 boepd,” he said.

ENDS

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

China pursues Tajik gold

JULY 22 2016 (The Conway Bulletin) — Chinese power engineering company TBEA received a licence to develop the Eastern Duoba and Upper Kumarg gold mines. The company, which won a tender to build a thermal power plant in Dushanbe in 2014, completed exploration works at the two mines in June. Chinese investment in Tajikistan has grown significantly in the past decade.

ENDS

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

Chinese and European investors to buy Tajik fertiliser

JULY 28 2016 (The Conway Bulletin) — The Tajik government said that Chinese and European investors have shown interest in buying TojikAzot, a debt-ridden fertiliser plant in the southern province of Khatlon. TojikAzot stopped operations in 2008 when it halted gas imports from Uzbekistan. The company was privatised in 2002, when Ukrainian businessman Dmytro Firtash bought a 75% share in the company. Mr Firtash was later accused of illegally buying the plant and a local court invalidated the privatisation in 2014.

ENDS

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