Tag Archives: economy

Kazakhstan’s Kashagan delivers its first oil

SEPT. 11 2013 (The Conway Bulletin) — When Kazakh President Nursultan Nazarbayev announced the Kashagan oil field discovery in 2000 he described a future for Kazakhstan as one of the great oil producing nations.

Exploiting Kasahagan, he said, would mean Kazakhstan becoming one of the top five oil exporters in the world.

Now, after a decade of delays and a five-fold rise in the cost of the project to $50b because of complex technical problems and squabbling between the partners, Kashagan has finally delivered its first oil.

But that doesn’t mean Kazakhstan has now propelled itself into the Premier League of global oil exporters.

Kashagan may have estimated recoverable reserves of 13b barrels of oil and be touted as the largest oil find in 30 years but production, initially at least, will be modest before rising to 350,000 barrels per day.

This will rise to a mightier 1.5m barrels per day but it is still down on the 3m that was touted at first.

Even so, despite the problems, Kashagan will shape oil production in Kazakhstan for years.

The consortium developing Kashagan is made up of ENI, Shell, Total, ExxonMobil, Kazmunaigas (all owning 16.8% stakes), CNPC (8.4%) and Inpex (7.6%).

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(News report from Issue No. 152, published on Sept. 18 2013)

Energy exports still lead Azerbaijan’s foreign trade

SEPT. 13 2013 (The Conway Bulletin) — Azerbaijan’s government has been talking up efforts to boost its non-oil sector, but energy exports have still accounted for 95% of the value of all its exports so far this year, media quoted Azerbaijan’s Central Bank as saying. Analysts have said Azerbaijan needs to diversify its economy.

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(News report from Issue No. 152, published on Sept. 18 2013)

People in Kazakhstan lose confidence in the tenge

SEPT. 6 2013 (The Conway Bulletin) — A drop in savings held in Kazakh tenge in July showed people were losing confidence in Kazakhstan’s currency, the respected kapital.kz said. Central Bank data showed 350b tenge was withdrawn from bank accounts in July, reducing the proportion of savings held in tenge to about 61%, down from 66%.

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(News report from Issue No. 151, published on Sept. 11 2013)

Azerbaijan says no to Customs Union

SEPT. 9 2013 (The Conway Bulletin) — There was never much doubt but, eager to clarify after Armenia’s earlier announcement, local media quoted an unnamed source close to the Azerbaijani government as saying that Azerbaijan does not plan on joining Russia’s Customs Union. Armenia said it will join Russia, Belarus and Kazakhstan in the Customs Union.

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(News report from Issue No. 151, published on Sept. 11 2013)

Azerbaijan’s GDP set to grow in 2014

SEPT. 6 2013 (The Conway Bulletin) — An increase in business outside Azerbaijan’s dominant energy-sector will boost overall GDP growth rates next year, Azerbaijani economy minister Shahin Mustafayev said. The economy will grow by 6.7% in 2014, Mr Mustafayev said, up from a predicted 5% this year and 2.2% in 2012.

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(News report from Issue No. 151, published on Sept. 11 2013)

Azerbaijan scores well in Global Competitiveness report

SEPT. 3 2013 (The Conway Bulletin) — President Ilham Aliyev’s team have been highlighting Azerbaijan’s jump up the ranks of the World Economic Forum’s Global Competitiveness annual report.

It’s an election year, after all, in Azerbaijan and the WEF report is significant.

In an interview, Elnur Aslanov, head of the Mr Aliyev’s information centre, said Azerbaijan had moved to 39th position in the rankings from 48 last year because of the social and economic policies of the president.

It’s an impressive statistic. Azerbaijan has jumped from 55th position in 2011 and now lies above several EU states.

But it’s also worth looking at the detail.

The reason Azerbaijan ranks so highly in the WEF index is its high score for macroeconomic stability. Azerbaijan’s energy wealth gives it a healthy government debt ratio, a decent government budget balance and strong gross national savings. Azerbaijan also has relatively low inflation, another positive.

The report, though, also details serious shortcomings. These were mainly in the health and education sectors. Notably amongst these was the ranking for school management — 133rd in the world, out of 148 countries.

Significantly, too, of the business executives interviewed for the report nearly a quarter said corruption was still the biggest problem for doing business in Azerbaijan.

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(News report from Issue No. 151, published on Sept. 11 2013)

Inflation rises in Armenia

SEPT. 2 2013 (The Conway Bulletin) — Inflation in Armenia continues to rise, bucking the Central Bank’s prediction it would fall after a 0.5% interest rate rise last month, media reported. For the year to the end of August, inflation in Armenia measured 9.3%, up from 8.5% in July. Last month, the Central Bank raised interest rates to 8.5%.

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(News report from Issue No. 151, published on Sept. 11 2013)

Pension fund investment in Kazakhstan

SEPT. 5 2013 (The Conway Bulletin) — Kazakhstan’s Central Bank will invest 20% of a $120m state-managed pension fund in foreign stock markets over the next five years, Grigory Marchenko, head of the Central Bank, told Reuters in an interview. Kazakhstan aims to create the pension fund through the enforced merger of 10 private funds by the end of 2013.

(News report from Issue No. 151, published on Sept. 11 2013)

Armenia chooses Russia and joins Customs Union

SEPT. 11 2013 (The Conway Bulletin) — Serzh Sargsyan, the Armenian president, sent shock waves across the South Caucasus and Europe when he signed Armenia up for Russia’s Customs Union.

The Kremlin set up the Customs Union in 2011 to ease trade between its partners and to draw them in closer. Commentators have dubbed it a Eurasian Union to counter the European Union.

Until Armenia moved into the Customs Union, only Kazakhstan and Belarus had joined. Kyrgyzstan has said it will join and Tajikistan has also been eyeing up membership.

Few though predicted Armenia’s jump towards Russia.

Mr Sargsyan’s decision to move into the Customs Union was a snub for European diplomats.

It’s not, perhaps, that surprising though. Armenia has been casting around for friends to provide a bulwark against Azerbaijan and Turkey. Armenia is still officially at war with Azerbaijan over the disputed region of Nagorno-Karabakh. Turkey is a key Azerbaijan ally.

Russia has given financial and military support to Armenia and maintains a large army base in Armenia. Gazprom, the Russian gas monopoly, also owns 80% of Armenia’s gas distributor and has been trying to buy the outstanding 20%.

Even so, Armenia’s move into the Customs Union will be felt across the region for years.

(News report from Issue No. 151, published on Sept. 11 2013)

Azerbaijan continues to buy gold

AUG. 27 2013 (The Conway Bulletin) — Azerbaijan continued to buy gold in July, news agencies quoted the IMF as saying, part of its stated plan to increase its bullion reserves. As well as buying gold, Azerbaijan has also said that it wants to increase its portfolio of property and currencies.

(News report from Issue No. 150, published on Sept. 2 2013)