Tag Archives: gas

Kazakh energy company spat worsens

JULY 19 2016 (The Conway Bulletin) — In an increasingly vicious argument, Kazakhstan’s state-owned energy company Kazmunaigas accused independent directors of its London-traded upstream subsidiary KMG EP, of misrepresenting its position over a buy-out scheme it was trying to promote. Kazmunaigas’ letter, published by Kazakhstan’s stock exchange, said that its purchase offer for KMG EP’s GDRs still stands and that the independent directors had overesti- mated KMG EP’s operational performance.

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(News report from Issue No. 290, published on July 22 2016)

Turkmenistan reorganises its oil and gas ministry

JULY 15 2016 (The Conway Bulletin) — In a move that took observers by surprise, Turkmenistan abolished its oil and gas ministry which had, officially, run the most profitable economic sector in the country, part of a wider structural reform of the government.

At a cabinet meeting, President Kurbanguly Berdymukhamedov justified the move as an effort to improve management and governance systems n the energy sector.

Turkmenistan is considered an important stakeholder in the world’s energy nexus, and the move shook analysts. It holds the fourth-largest gas reserves in the world and exports gas mostly to China via pipeline. For over a decade, European and US lobby groups have pushed for a Trans-Caspian Pipeline to pump Turkmen gas to Europe. Turkmenistan is also building TAPI, a gas pipeline to export gas to India, via Afghanistan and Pakistan.

Simon Pirani, senior research fellow at the Oxford Institute for Energy Studies, said that aside from internal causes, which are hard to guess, a range of external factors could have played in Turkmenistan’s decision to reorganise its hydrocarbon sector.

“The continuing relationship with China, despite lower off-take of gas than Turkmen officials had hoped, the improved ties with Iran and the quite bad relationship with Russia could all be relevant factors,” he told The Conway Bulletin.

The change, however, is unlikely to shift the way that Turkmenistan does business, a system that revolves around the whims and decisions of President Berdymukhamedov.

“Companies and international organisations are aware that Turkmenistan is a centralised system,” Mr Pirani said.

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(News report from Issue No. 290, published on July 22 2016)

Skyland says finds gas in Georgia

JULY 8 2016 (The Conway Bulletin) — Australia’s Skyland Petroleum said it started production at Block XIG, a gas field 10km south of Tbilisi. Skyland owns 20% of the project, Georgia Oil and Gas (GOG) owns 60% and state-owned Georgian Oil and Gas holds the rest. Last month, Skyland said it started operations at its first well at the Kyzyl-Tumshuk oil and gas field in southern Tajikistan.

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(News report from Issue No. 289, published on July 15 2016)

Boardroom battle for control of Kazakhstan’s KMG EP heats up

ALMATY, JULY 14 2016 (The Conway Bulletin) — Intensifying its fight for more control over its London-traded subsidiary KMG EP, Kazakhstan’s state-owned energy company Kazmunaigas increased by 14% its earlier buyout offer to minority shareholders and retracted demands to cut the company’s independence.

Under pressure to boost income from oil and gas sales, Kazmunaigas wants to increase its 58% stake in KMG EP. KMG EP’s assets are more profitable than the assets owned by Kazmunaigas.

The problem for Kazmunaigas, though, is that its initial buyout offer of $7.88/GDR met with strong resistance from independent shareholders at KMG EP last month. The increase to $9/GDR, which Kazmunaigas issued without an explicit explanation, also appeared to attract a withering response.

“An increase in the price of the Purchase Offer would not be consistent with the prior statements made by Kazmunaigas that it ‘is not seeking to acquire any significant additional holdings in KMG EP through this offer’,” the independent directors said in a note.

They accused Kazmunaigas of underhand tactics to try to force more control over KMG EP. Specifically, the minority shareholders rallied against a new corporate governance structure proposed by Kazmunaigas that would reduce independent control of KMG EP. Kazmunaigas wanted to impose a veto against the appointment of independent directors but has now dropped these demands.

The ongoing saga within the most powerful industrial structure in Kazakhstan acts as a rare window on Kazakhstan’s corporate governance culture after a series of high profile scandals ahead of planned new IPOs, including Kazakhtelecom, the state- owned telecoms company.

KMG EP’s GDRs have traded at between $6 to $9 in the past 12 months.

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(News report from Issue No. 289, published on July 15 2016)

Gazprom drills gas well in Tajikistan

JULY 12 2016 (The Conway Bulletin) — Russian gas company Gazprom said it drilled a second well at its Sarikamysh gas and condensate field in western Tajikistan, eight years after winning the licence. In 2013, Gazprom drilled at Sarikamysh the deepest well in Central Asia at 6,540m. Murod Jumazoda, head of the government’s Geology Department, said the project is still some way off producing gas.

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(News report from Issue No. 289, published on July 15 2016)

Gazprom seeks compensation from Turkmenistan

JULY 6 2016 (The Conway Bulletin) — Russia’s state-owned gas company Gazprom will seek $5b in compensation at the international arbitration court in Stockholm from Turkmenistan for what it has said was the illegal and unilateral termination of a gas supply contract, sources told the Kommersant newspaper. Turkmenistan and Gazprom rowed in 2014 and 2015 over prices for Turkmen gas imports to Russia.

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(News report from Issue No. 288, published on July 8 2016)

Kazakhstan is ready to supply gas to China, president says

JULY 4 2016 (The Conway Bulletin) – President Nursultan Nazarbayev said Kazakhstan is ready to supply gas to China, a move that would further improve the two countries’ energy ties. Mr Nazarbayev met with Wang Yilin, chairman of China’s state-owned energy company CNPC, in Astana. Mr Nazarbayev hailed CNPC’s role in boosting Kazakhstan’s energy sector with its multi-billion dollar investments over the past two decades. Kazakhstan currently hosts a gas pipeline that pumps Turkmen gas to China.

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(News report from Issue No. 288, published on July 8 2016)

Azerbaijan’s SOCAR reports loss

JULY 1 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR posted a loss of 1.8b manat ($1.2b) in 2015 because of low oil prices, its first loss for over a decade. SOCAR said it will potentially turn a profit this year because of a sharp depreciation of the manat in December 2015, when the Central Bank ditched the peg to the US-dollar.

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(News report from Issue No. 288, published on July 8 2016)

Turkmenistan agrees barter deal with Iran

JUNE 30 2016 (The Conway Bulletin) — Iran and Turkmenistan have agreed a barter deal which significantly boosts their cooperation, media reported. According to Iranian media reports, Turkmenistan will export around $30b worth of gas to north Iran over the next 10 years in exchange for $30b of technical assistance. The two neighbours have been developing their cooperation over the past few years, often through barter agreements.

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(News report from Issue No. 287, published on July 1 2016)

Azerbaijan invests in pipelines

JUNE 29 2016 (The Conway Bulletin) – The total cost of the new pipelines that will form the so-called Southern Gas Corridor amounts to $6.1b, according to Vagif Aliyev, head of investment at SOCAR, Azerbaijan’s state-owned energy company. TANAP, which will run through Turkey, will cost $4.9b, out of which Azerbaijani companies will contribute $820m, according to Mr Aliyev. The Trans-Adriatic Pipeline (TAP), which will connect Turkey to Italy, has a price tag of $1.2b, and will be completed in the next three years.

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(News report from Issue No. 287, published on July 1 2016)