OCT. 24 2016 (The Conway Bulletin) — Gazprom Armenia, a subsidiary of Russia’s gas giant Gazprom, appointed former deputy director Hrant Tadevosyan as its new CEO. Gazprom’s CEO Alexei Miller formally introduced Mr Tadevosyan during a visit to Yerevan. His predecessor, Vardan Harutyunyan, was appointed to head the state revenues committee earlier in October.
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(News report from Issue No. 302, published on Oct. 28 2016)
OCT. 26 2016 (The Conway Bulletin) — Kazakhstan-focused energy company Nostrum Oil & Gas posted a 12% fall in oil output in the first nine months of 2016, compared to the daily average it maintained in the same period last year. Lower production and sustained low oil prices meant that revenues in Jan.-Sept. 2016 fell by 35%, compared to last year.
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(News report from Issue No. 302, published on Oct. 28 2016)
OCT. 28 2016 (The Conway Bulletin) — Amsterdam-based Nostrum Oil & Gas continues to navigate through the troubled waters of low oil prices. Its stock has rallied heavily in recent weeks.
The positive trend in the London stock market could be tied to the promises of a better 2017, when the company aims to complete an expansion and boost production.
CEO Kai-Uwe Kessel is confident production will more than double in just two years. “Our main focus continues to be the completion of GTU3, which is on track to be delivered on budget in 2017, and which will more than double our production capacity,” Mr Kessel said in a statement.
In the first part of 2016, however, average daily production fell to around 36,000 barrels. Now the company says that it expects to boost output to 40,000 barrels/day by year end. Sustained low oil prices, together with production and sales hiccups, have hit revenues, down 35% in the first nine months of 2016 to $240m, compared to the same period last year.
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(News report from Issue No. 302, published on Oct. 28 2016)
OCT. 19 2016 (The Conway Bulletin) – Roxi Petroleum, a Kazakhstan-based oil and gas company, said it had successfully drilled new wells at its BNG Contract Area, a group of oil fields in western Kazakhstan. Roxi said the drilling of the A6 deep well had been challenging, but that the expansion of the field was continuing as planned. On the day of the announcement, its stock price increased by 18% to 10.5p in London.
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(News report from Issue No. 301, published on Oct. 21 2016)
OCT. 14 2016 (The Conway Bulletin) – Turkmenistan and the Islamic Development Bank (IDB) signed a $700m loan deal for the construction of the so-called TAPI gas pipeline that will pump Turkmen gas to India via Afghanistan and Pakistan.
This is an important deal, not just because of its size, but also because it brings a second major international institution into the project. Turkmenistan has been powering the project, kicking off construction in December, but, up until now, Western companies and financial institutions, other than the Manila- based Asian Development Bank, have steered away from joining it.
Now, though, after months of negotiations, the normally publicity shy Turkmen Bank for Foreign Economic Activities met up with the IDB in Washington DC to agree the loan.
Through its official news website, Turkmenistan lauded the deal.
“The construction of the transnational gas pipeline will ensure the long-term supply of energy in the countries of Southeast Asia and will ensure further economic development in the region,” it said.
For months, Turkmenistan has negotiated with IDB and other international financial institutions for loans and grants. The Asian Development Bank, adviser to the project, agreed a $200m loan in April, when it also said the project was ‘doable’.
Others have been less impressed, calling the project, literally, a pipe- dream that couldn’t be done.
And it is certainly a challenge. The plan is to build a 1,800km pipeline from Turkmenistan across Afghanistan to Pakistan and India. The cost of the pipeline is estimated at $10b.
The IDB, which is headquartered in Jeddah, has not commented on the $700m loan for TAPI.
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(News report from Issue No. 301, published on Oct. 21 2016)
OCT. 20 2016 (The Conway Bulletin) – A court in Kazakhstan slapped a 2.1b tenge ($6.23m) fine on Ural Oil and Gas, a small energy company, for environmental damage. According to the prosecutor, the company had illegally disposed of its drilling waste at its operations in the Fedorovsky Bloc in Western Kazakhstan. State-owned Kazmunaigas (50%) and Hungary’s MOL (27.5%) are the two largest shareholders in Ural.
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(News report from Issue No. 301, published on Oct. 21 2016)
OCT. 10 2016 (The Conway Bulletin) — Armenian President Serzh Sargsyan appointed the CEO of Gazprom Armenia, Vardan Harutyunyan, as head of the state revenue committee, a move that confirms the growing influence of Russia’s Gazprom in the government.
In September Mr Sargsyan appointed Karen Karapetyan as PM. Mr Karapetyan had been the mayor of Yerevan and previously, also, CEO of Gazprom Armenia.
Mr Harutyunyan had worked at Gazprom since 2009 and was named CEO in 2010, after Mr Karapetyan’s departure.
After his appointment as PM, Mr Karapetyan also nominated Gazprom’s express secretary, Shushan Sardaryan, as his adviser.
Gazprom Armenia is a fully owned subsidiary of Gazprom, the Russian gas giant. Russia is one of Armenia’s biggest allies, maintaining a large military base in the country.
Mr Harutyunyan’s new position puts him in charge of collecting taxes and administering government revenues.
Heading Gazprom Armenia is one of the most important jobs in the country. Gazprom supplies most of Armenia’s gas, via Georgia, although the government is trying to secure more imports from Iran. Media in Armenia suggested that Tigran Karapetyan, the PM’s 29- year-old son, may be given the job.
Russia has previously been accused of using Gazprom to pressure and influence foreign governments.
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(News report from Issue No. 300, published on Oct. 14 2016)
OCT. 7 2016 (The Conway Bulletin) – As shown in our charts this week, markets were upbeat, especially due to a steady increase in oil prices over the past two weeks, following a landmark agreement among the world’s top oil exporters.
OPEC, the exporters’ lobby group, decided to cut oil output by around 1.5% in an effort to put pressure on the US dollar and send oil prices higher.
This is OPEC’s first production cut in eight years, since the 2008 Global Financial Crisis. And the decision is an important one.
It marks a formal agreement between Saudi Arabia and Iran, whose diplomatic spats had been at the core of OPEC’s inability to decide in the past year.
It also has an important effect on countries around the Caspian Sea.
Azerbaijan has quickly eroded its reserve base, pumping its oil money into the budget to contain its currency crisis. This could have not lasted much longer. Now, if oil prices continue to float around $50/barrel, a good 20% higher than two months ago, transfers from the oil fund can slow down and the leadership can breathe.
Perhaps out of excitement from the impending re-start of Kashagan in the Caspian Sea, Kazakhstan is also rallying on higher oil prices, cutting interest rates and transfers from its oil fund into the budget.
Two caveats, however, are needed for Azerbaijan and Kazakhstan. First, don’t believe in any proposal from these two non- OPEC countries on freezing or cutting production. If their output falls it is because of economics.
Second, you need to wait until their mega projects, from Kashagan to Shah Deniz II, come online before making long-term assumptions on the energy might held by Kazakhstan and Azerbaijan.
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(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 4 2016 (The Conway Bulletin) – Russian oil company Bashneft said it will explore the possibility of buying into the petrol station market in Kazakhstan. Bashneft already operates in Kazakhstan, where it produces around 500,000 tonnes of petroleum products. Sales representative Kirill Kasterin said the company now wants to sell petrol under its own brand. Bashneft owns around 70 filling stations in Russia.
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(News report from Issue No. 299, published on Oct. 7 2016)
SEPT. 30 2016 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR could soon enter the Bulgarian gas storage market, a potential bridgehead for its plans to construct a pipeline that will pump gas from the Caspian Sea to European consumers.
Bulgarian officials said that SOCAR has expressed interest in participating in the expansion of the Chiren storage facility. The government plans a €200m investment to double its capacity to 1b cubic metres. The underground gas storage facility at Chiren links up with Bulgaria’s network, making it a potentially valuable asset for SOCAR, which agreed to send 1b cubic metres of gas to Bulgaria by 2020. Azerbaijan wants to pump gas to
Europe via the so-called Southern Gas Corridor, a network of pipelines from Azerbaijan through Turkey, Greece and Albania to Italy.
Bulgaria hopes to receive Azerba- ijani gas through the construction of the Interconnector Greece-Bulgaria which will feed off the TANAP pipe- line that will form the backbone of the Southern Gas Corridor stretching from Azerbaijan to Italy.
Azerbaijan views Europe as an important next client for its gas.
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(News report from Issue No. 299, published on Oct. 7 2016)
