NOV. 1 2016 (The Conway Bulletin) — The Kazakhstan/Russia-led Eurasian Development Bank sent a 7.7b tenge ($23m) loan to KazTransGas- Aimak, the largest gas distributor in Kazakhstan, to upgrade the network in the northern Aktobe region. One of the key objectives of the overhaul is to expand the network to isolated villages that are cut off from the grid.
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 31 2016 (The Conway Bulletin) — Turkmenistan sold 23b cubic metres of gas to China in the first nine months of 2016 at a price of $185/1,000 cubic metres, according to official statistics published by China’s Border Administration. Supplies from Turkmenistan to China increased by 13% in the considered period, but Turkmenistan is the cheapest gas that China imports. The price that China pays is tied to loans and grants it sent to Turkmenistan over the years to develop its giant gas fields in the south of the country.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 4 2016 (The Conway Bulletin) — On a mild slide since mid-August, Roxi Petroleum’s stock price received a bump after the company published encouraging results for its new oil wells on Oct. 28.
The London-based company, which operates the BNG Contract Area in western Kazakhstan near Tengiz, said it has almost completed the initial drilling operations at its new Deep Well 6.
The news, technical in nature, was accompanied by a high volume of trading on the stock market, sending Roxi to 10.5p, a 9% jump on the day of the announcement.
The company now needs to assess the commercial feasibility of the field at different depths. Clive Carver, the company’s chairman, said that the preliminary results at Deep Well 6 were even more encouraging than Roxi’s previously drilled deep wells.
A trio of high-ranking Kazakhs owns Roxi.
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 30 2016 (The Conway Bulletin) — Israeli PM Benjamin Netanyahu will visit Kazakhstan and Azerbaijan over the next three months, the Israeli government said. Mr Netanyahu has visited Azerbaijan previously during a term as PM in 1997. No Israeli PM has ever visited Kazakhstan. Both Azerbaijan and Kazakhstan are Israel’s biggest oil suppliers.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 1 2016 (The Conway Bulletin) — Azerbaijan sent 84,700 tonnes of oil to Belarus, the country’s first commercial energy exports to Belarus since short-lived swaps in 2010/11. Belneftekhim, the Belarusian buyer, will use Azerbaijani crude at its Mozyr refinery. Belarus is actively seeking alternative suppliers of oil as Russian shipments have failed to meet domestic demand. Azerbaijan’s oil was sent through Georgia’s Supsa port to Odessa in Ukraine and then on to Belarus.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 1 2016 (The Conway Bulletin) — British-Dutch oil company Shell said it will cut costs across the board, a move that is poised to impact the company’s expenditure in Kazakhstan. In Kazakhstan, Shell operates a handful of offshore fields, most notably the giant Kashagan, and is also involved in the Karachaganak gas and condensate field. Sustained low oil prices have hit energy companies’ ability to spend on their upstream projects.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 1 2016 (The Conway Bulletin) — The Caspian Pipeline Consortium, an oil transit route along the northern coast of the Caspian Sea from Kazakhstan’s oil fields to the Russian port of Novorossiysk, said it increased exports in October to around 4m tonnes, a 24% rise compared to last year. For the first 10 months of 2016, exports have reached 35.3m tonnes. If growth projections continue for the next two months, the Consortium, led by US-based Chevron, Russia’s Transneft and Kazakhstan’s Kazmunaigas, will register a record export year in 2016.
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 28 2016 (The Conway Bulletin) — Hiding behind timid smiles, officials from Central Asia and the South Caucasus oil and gas producing countries continue to say that the worst may be over for the region’s economic slump.
In the medium term, Kazakhstan will constantly boast about the restart of the giant Kashagan offshore project and Azerbaijan will try everything it can to attract investments for the Southern Gas Corridor, the pipeline network that will pump gas from the Caspian Sea to Europe.
Production, however, will continue to disappoint. Output will be flat in Kazakhstan, given a lift by Kashagan finally coming back on-stream after a three year delay, and decline in Azerbaijan.
Both countries have, on different occasions, praised the decision by OPEC, the oil producers’ lobby group, to freeze production to help push prices up again.
But behind the propaganda, lies a problem, which the IMF highlighted in its latest report: these countries will face higher fiscal breakeven oil prices in the next few years, piling pressure on their economies.
In April, the IMF said that the breakeven prices that Azerbaijan, Kazakhstan and Turkmenistan would need to balance their government budgets in 2016 were $47, $88 and $42.7/barrel respectively.
In a report this week, the IMF said breakeven prices for Azerbaijan and Turkmenistan had grown to $71 and $50.4/barrel respectively.
For 2016, oil prices are unlikely to average above $50/barrel, which means that the three major energy exporters in the region will have to use their reserves to prop up their economies. Officials may be happier now than in January budget issues are far from sorted.
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(News report from Issue No. 302, published on Oct. 28 2016)
OCT. 24 2016 (The Conway Bulletin) — Uzbekistan increased the price of petrol by nearly 35%, underscoring the inflationary pressure built into its economy. State energy company Uzbekneftegaz said it was rising the price of a litre of AI-80 petrol to 2,800 soum from 2,075 soum. Other grades of petrol were given a similar price rise. Uzbekistan has been steadily increasingly the price of key items such as gas, electricity and petrol as the value of its soum currency falls, angering and frustrating ordinary people.
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(News report from Issue No. 302, published on Oct. 28 2016)
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)
