JULY 3 2013 (The Conway Bulletin) — Kazakhstan disappointed India’s government by triggering its option to buy an 8.4% stake in the Caspian Sea oil field Kashagan. US energy major ConocoPhillips said last year that it was selling its stake to Indian state energy company ONGC Videsh for $5.5b. Kazakhstan, though, held the option to block this deal.
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(News report from Issue No. 142, published on July 8 2013)
JULY 3 2013 (The Conway Bulletin) — The Kazakh government has a decent poker face, at least when it comes to bluffing its intentions on energy deals.
For months Kazakh officials had said that they would not use their pre-emptive right to block a deal between ConocoPhillips, a US energy firm, and India’s ONGC Videsh.
ConocoPhillips had decided that it wanted to cash in its 8.4% stake in the Kashagan oil field in the Kazakh sector of the Caspian Sea. In November last year it announced a deal to sell this stake to ONGC Videsh for $5.5b.
Kazakhstan holds the right to buy stakes in its energy fields if a foreign company wants to exit, but earlier this year government officials said they would not buy the ConocoPhillips stake. Instead, they said, they would decide between allowing India into Kashagan or letting China, an increasingly close economic partner, into the project.
China’s apparent interest now looks like a decoy.
On July 3, Lyazzat Kiinov, chairman of Kazakh state energy company Kazmunaigas, said the company would buy the 8.4% stake in Kashagan.
The deal is important for two main reasons.
It’s perhaps a coming of age for Kazakhstan which wants to retain more ownership over its energy resources. It’s also a blow for India’s energy policy. India had staked a lot on expanding into the Caspian Sea and securing a major foothold in Central Asia’s energy sector. It now has to look elsewhere.
Kazakhstan wants to become a top energy producer.
Before the sale of ConocoPhillip’s stake, the consortium developing Kashagan consisted of ENI (Italy), Total (France), ExxonMobil (US), Shell (Britain) and Kazmunaigas all with a 16.81% stake. Inpex (Japan) also owns a 7.56% stake.
After this deal, Kazakhstan will be the main shareholder.
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(News report from Issue No. 142, published on July 8 2013)
JUNE 24 2013 (The Conway Bulletin) — Highlighting Turkmenistan’s increasing importance as an energy supplier, Israel sent its first ambassador to Ashgabat, media reported. The arrival of Ruevan Daniel, a former agent of the Israeli intelligence services Mossad, as Israel’s ambassador may also sour Turkmenistan’s relations with neighbour Iran.
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(News report from Issue No. 141, published on July 1 2013)
JUNE 28 2013 (The Conway Bulletin) — What has felt like a titanic battle between two competing proposals to link a gas transit route from the Caspian Sea to Europe is finally over.
At a press conference on June 28, the consortium of energy companies developing the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea said they had chosen the Trans-Adriatic Pipeline (TAP) to send their gas to Europe.
TAP route will carry the gas across Turkey, Greece and Albania and then under the Adriatic Sea to Italy. It is headed by Norway’s Statoil, Switzerland’s AXPO and E.ON Ruhrgas of Germany.
TAP’s victory means defeat for Nabucco West, its main rival headed by Austria’s OMV.
The decision, though, was hardly a surprise. While Nabucco West’s bid has slowly lost momentum its fate was sealed earlier this month when SOCAR, the Azerbaijani energy company, bought a 66% stake in DESFA, Greece’s natural gas distributor.
Now TAP has to be built. It will run for 520km and cost $2.2b. Once it’s up and running, Europe’s reliance on Russia for gas supplies will be reduced and Azerbaijan’s importance to Europe will be increased,
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(News report from Issue No. 141, published on July 1 2013)
JUNE 27 2013 (The Conway Bulletin) — Romanian PM Victor Ponta visited his Kazakh counterpart Serik Akhmetov in Astana to discuss the countries’ growing economic cooperation. Kazakh state energy company Kazmunaigas owns Rompetrol which controls an oil terminal on the Black Sea. Romania wants Kazakhstan to increase its use of the oil terminal.
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(News report from Issue No. 141, published on July 1 2013)
JUNE 18 2013 (The Conway Bulletin) — Azerbaijan’s energy company SOCAR has agreed to buy a 66% stake in Greek gas distributor DESFA for $540m, media reported. The deal highlights cash-rich Azerbaijan’s appetite for foreign assets and should also make the Trans-Adriatic Pipeline, part of a gas route from the Caspian Sea to Europe, more viable.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 18 2013 (The Conway Bulletin) — China National Petroleum Company (CNPC) and France’s Total agreed a deal with London and Toronto-listed Tethys Petroleum to develop an oil and gas site in Tajikistan. The deal gives each company a third stake in the Bokhtar project. Developing Bokhtar successfully could transform Tajikistan’s economic future.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 17 2013 (The Conway Bulletin) — Russia’s Gazprom has said it wants to buy a 20% stake in Armenia’s ArmRosGazprom that it doesn’t yet own. Armenia’s government currently owns the outstanding 20% stake in ArmRosGazprom. ArmRosGazprom is Armenia’s monopoly gas distributor and the move would give Russia control over Armenian energy consumption.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 17 2013 (The Conway Bulletin) — The figures in the BP Statistical Review of World Energy can be dry but the stories behind the figures are important.
The 2013 edition is an important barometer for the energy-centric economies in Central Asia and the South Caucasus. The most telling figure for the region in this year’s edition of the review was that oil consumption in Kazakhstan grew by over 10% in 2012.
This is a large jump. In the countries covered in the review only Israel’s oil consumption increased at a higher rate. The global rise in oil consumption in 2012 was 0.9%.
The increase reflects Kazakhstan’s emergence from a sharp economic retraction triggered by the global crisis of 2008/9 when oil consumption fell.
Last year Kazakhstan, with a population of 17m, consumed 265,000 barrels of oil per day. By comparison, Uzbekistan, population 29.5m, consumed 82,000 barrels/day and Turkmenistan, population 5m, consumed 100,000 barrels/day.
Across the Caspian Sea, BP reported that Azerbaijan, population 9.3m, consumed 93,000 barrels of oil per day, a jump of 5.4%. This rise in Azerbaijan’s oil consumption, although not as big as Kazakhstan’s leap, still shows an increase in economic activity.
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(News report from Issue No. 139, published on June 17 2013)
MAY 30 2013 (The Conway Bulletin) — On a trip to Ashgabat, Turkish President Abdullah Gul signed a framework deal with his Turkmen counterpart Kurbanguly Berdymukhamedov to transport gas from Turkmenistan to Europe. Turkmenistan is looking for additional transport routes to pump gas to clients in Europe, China and the Middle East.
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(News report from Issue No. 137, published on June 3 2013)
