SEPT. 30 2016 (The Conway Bulletin) – Azerbaijan’s parliament approved a deal to build the TANAP pipeline across Turkey, a long-overdue step in the development of the project to pump gas from the Caspian Sea to Europe. An initial agreement on TANAP, a $10b gas pipeline, was signed in May 2014.
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(News report from Issue No. 299, published on Oct. 7 2016)
SEPT. 27 2016 (The Conway Bulletin) – The EBRD said it may withhold funds for a pipeline linking gas fields in the Caspian Sea to consumers in Europe until Azerbaijan agreed to provide more transparency into its state linked energy companies.
Taking a tough stance, the EBRD, a London-based intra-governmental bank set up during the collapse of the Soviet Union to fund business and infrastructure projects, said unless Azerbaijan complied with the Extrac- tive Industry Transparency Initiative (EITI), it would withhold $1.5b ear- marked for the TANAP pipeline.
The EBRD’s stance casts fresh doubts over the Azerbaijani leadership’s commitment to transparency into its business dealings.
Riccardo Puliti, the EBRD’s managing director for energy, said that EITI, considered a global benchmark for transparency in the extractive sectors, would consider whether Azerbaijan had made progress at its next meeting in Kazakhstan in October.
“In the case of TANAP, it is important that this progress takes place. If there is no progress it will be quite difficult to justify a large amount of financing,” he told Turkish media.
Last year, the EITI downgraded Azerbaijan from ‘compliant’ to ‘candidate’ country and criticised it for a lack of transparency.
TANAP will link Azerbaijan’s pipe- line network to Greece via Turkey, forming part of the Southern Gas Corridor. SOCAR, Azerbaijan’s state- owned energy company, owns a 58% stake in TANAP, Turkey’s Botas (30%) and BP (12%) own the rest. TANAP will link with TAP which will pump the gas to Italy.
Azerbaijan has yet to react to the EBRD’s statement.
Aliya Tskhay, a researcher focus- ing on Azerbaijan at the University of St Andrews said that the EBRD may have been trying to encourage Azerbaijan to engage more closely with the EITI.
“The EBRD request seems to be an encouragement for Azerbaijan’s government to still be part of the EITI, despite a status downgrade last year,” she said.
TANAP will cost $10b to build, while TAP has a price tag of around $5b.
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(News report from Issue No. 298, published on Sept. 30 2016)
TBILISI, SEPT. 29 2016 (The Conway Bulletin) — Georgian-Iranian company GEOPARS signed a deal with the Georgian government to build an oil refinery in Supsa on the Black Sea coast, the first to be built in Georgia for 80 years.
According to local media, the government licensed the land to GEOPARS for free. GEOPARS said it would need to make an investment of $1.5b to build the refinery, a petro- chemical plant and a logistical centre.
PM Giorgi Kvirikashvili attended the signing ceremony and hailed its impact on Georgia’s industrial sector.
“We will see a project that once again accentuates and reinforces Georgia’s regional role as the shortest route to Europe for Near East and Asian countries. This is a project that puts Georgia on a map by highlighting not only its transit function, but its industrial role as well,” local media quoted him as saying.
Caution is needed, though. Georgia has negotiated building an oil refinery in Supsa or Poti several times previously with Azerbaijani, Kazakh and Russian investors but the deals eventually fell through.
SOCAR Georgia Investments, a subsidiary of Azerbaijan’s state owned energy company SOCAR, had proposed building a refinery in Supsa in May, but failed to commit funds.
This is the first refinery deal in Georgia made with Iran, which has played an increasingly active role in the South Caucasus over the past few years. If the project does go ahead, it will give Iran an important foothold in Georgia, a close US ally.
The only major oil refinery previously built in Georgia was at Batumi in the 1930s. The Batumi refinery was downgraded in the 1990s and sold to Kazakh investors. It later became an oil terminal.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 27 2016 (The Conway Bulletin) – SOCAR, Azerbaijan’s state-owned energy company, postponed by one month the deadline for its purchase of a 66% stake in Greek gas distributor DESFA. The purchase guarantee, by which SOCAR would have to buy 49% of DESFA if it finds a partner to buy a 17% stake, was due to expire at the end of September. The EU froze the €400m ($446m) deal, signed in 2013, due to regulations on market competition.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 26 2016 (The Conway Bulletin) – US-based Frontera Resources said it has made progress at the South Kakheti gas complex it operates in Georgia, announcing a new drilling campaign for October. Frontera also said it will go forward with a financing deal it reached with YA II PN, part of the Yorkville Advisors financial group. Frontera will raise around $686,000 through a share issue in London.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 26 2016 (The Conway Bulletin) — A gas leak caused an explosion at an oil platform in the Guneshli oil field, off the coast of Baku.
Although nobody was injured or killed, the fire at Platform 19, will once again raise concerns about safety at oil platforms in Azerbaijan’s Caspian Sea, less than a year after at least 31 rig workers were killed at two other rigs in a storm.
SOCAR, Azerbaijan’s state-owned oil and gas company operated the platform.
It said that the fire had burned for a full day before it was brought under control by fire-fighters.
SOCAR said that all 49 workers were evacuated during the fire.
Azerbaijan’s oil industry is still trying to recover its credibility after the rig fire in December, the deadliest since the Piper Alpha fire in the North Sea killed at least 167 people in 1988.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 29 2016 (The Conway Bulletin) – Kazakhstan’s government appeared confused over when the giant Kashagan oil project in the Caspian Sea would re-start production after a three year hiatus to repairs leaky pipes. It first said that Kashagan would restart on Oct. 23, surprising analysts, before correcting themselves by announcing a year-end re-start date. Analysts have been expecting a year-end re-start.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 28 2016 (The Conway Bulletin) – Kazakhstan-focused oil company Roxi Petroleum posted revenues of $896,000 in the first half of 2016, 7.6% lower than in the same period last year. After tax, the company posted a loss of $2.5m, compared to a profit of $13.2m last year when Roxi sold the Galaz oil field. In a statement, chairman Clive Carver stressed the importance of the company’s success in reducing operating costs.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 29 2016 (The Conway Bulletin) – Bozhidar Lukarski, Bulgaria’s minister of economy, will hold talks with an Azerbaijani delegation to explore the possibility of buying 1b cubic metres of gas. SOCAR and Bulgargaz, the two state-owned companies, signed a supply agreement in 2014. So far, however, the Interconnector Greece-Bulgaria, the pipeline through which Azerbaijan’s gas will be pumped, has not been built. Azerbaijan sees exports to Europe as key to growing its client base.
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(News report from Issue No. 298, published on Sept. 30 2016)
SEPT. 27 2016 (The Conway Bulletin) – Azerbaijan exported to Turkey 2.9% less gas in Jan.-July 2016, compared to the same period last year, the Turkish energy regulator said. Azerbaijan’s exports in the first seven months of the year stood at 3.8b cubic metres, mostly originating from the Shah Deniz gas field. Azerbaijan’s supplies to Turkey make up around 20% of Turkish gas imports through pipelines. Oil and gas exports are vital to Azerbaijan’s economy.
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(News report from Issue No. 298, published on Sept. 30 2016)
