DEC. 8 2015 (The Conway Bulletin) — The oil terminal at the port of Batumi, on Georgia’s Black Sea coast, will be among the companies that Kazakhstan sells off to investors during a privatisation round in 2016 and 2017. In 2008, KazTransOil, a subsidiary of state-owned Kazmunaigas, bought the Batumi oil terminal. Kazakhstan needs to sell off state-owned assets to raise cash.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 4 2015 (The Conway Bulletin) – At least eight rig workers died when a storm smashed into an oil and gas platform in the Azerbaijani sector of the Caspian Sea and triggered a gas explosion.
Another 23 people are still missing from Platform No. 10 of the shallow- water Guneshli field, operated by Azerbaijan’s state-owned SOCAR. Three others are also missing from another platform in the Oil Rocks field after being swept overboard.
Rescue workers said there was little chance of finding any survivors. This means that the final death toll will probably hit 34 — the worst dis- aster in the history of Caspian Sea oil and gas production and the deadliest offshore platform accident since 167 people died in the Piper Alpha acci- dent in the North Sea in 1988.
At a press conference in Baku on Wednesday a downcast Khalig Mamedov, SOCAR vice-president , said: “Despite all the efforts, regrettably, no-one has been found. This is the biggest tragedy in SOCAR’s history.”
Media reported that most of the oil workers who died on Platform No.10 were killed in a botched attempt to abandon the platform in one of the lifeboats. Two dozen workers were successfully rescued from the plat- form, though.
As of Thursday, the blaze on Platform No. 10 was still burning.
The accident stunned people in Azerbaijan. Football matches across the country held a minute’s silence. Along the seafront in Baku people silently laid down bunches of roses. Others sobbed, looking out to sea.
The gas explosion at Platform No. 10 cut production at all 28 wells, 24 oil wells and four gas wells, of the shallow-water Guneshli field. Daily output at Guneshli was around 6,500 barrels/day of oil and 400m cubic metres of natural gas per year, Reuters reported.
Importantly for Azerbaijan’s overall oil production, BP said that output at the Azeri-Chirag-Guneshli oil field complex that it manages was untouched by the accident.
Azerbaijan has been struggling to maintain oil output this year. This accident will dent both its safety record and oil production levels.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 8 2015 (The Conway Bulletin) – Kazakh economy minister Yerbolat Dossayev said Kashagan would restart production by end-2016. His statement reinforces previous statements from the Kazakh government which have been more optimistic on the Caspian Sea oil field’s start date than Western companies.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 9 2015 (The Conway Bulletin) – Alexei Miller, the chairman of Russia’s Gazprom, said he is in talks with Iran and Armenia over a gas swap deal. The deal would see Iran receive Russian oil in the north via Azerbaijan. In return Iran would supply Armenia with gas. Armenia currently receives Russian gas via Georgia.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 3 2015 (The Conway Bulletin) — As the diplomatic row between Russia and Turkey intensifies, some analysts believe it could spill over into a gas war similar to the Russia- Ukraine crises of the past decade.
When Turkish PM Ahmet Davutoglu visited Baku last week, his statement on the acceleration of construction works for the TANAP pipeline rebounded all over the press.
Mr Davutoglu said he had reached an agreement with Azerbaijan’s President Ilham Aliyev to inaugurate the new gas pipeline from Azerbaijan to Turkey ahead of schedule. That is, before 2018.
Some, including myself, read this as a poke in the eye to Russia, which had imposed a food and travel embargo and suspended work on another pipeline, Turkish Stream, that would have connected Russia and Turkey via the Black Sea.
Turkey wanted to show Russia that it had options and where better to go to prove this than its erstwhile ally Azerbaijan – also a former Soviet state?
But there is also another important point that should not be overlooked. What gas would a TANAP pipeline completed early actually carry?
Supply for TANAP will come from the expanded Shah Deniz gas field (Shah Deniz-2) off the coast of Baku in the Caspian Sea.
But Shah Deniz-2 will only come online with its first gas in 2018. It simply can’t be brought forward.
So the question remains as to what gas Azerbaijan will use to fill the 16bn cubic metres it promised to its western customers if TANAP is built early.
In short, the acceleration of construction works at TANAP is meaningless before the gas is also ready to be shipped.
It is political hot air.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 11 2015 (The Conway Bulletin) — Oil prices fell by almost 10% to under $40/barrel this week — its lowest price since 2009. This hit several of the region’s energy companies who were already dealing with a sharp slump in their share prices.
Tethys Petroleum closed at 4.38p on Thursday, down 2.7% in one week. Roxi Petroleum continued to decline, closing at 6.38p on Thursday, down 8.9% on the week. Nostrum Oil & Gas shares lost 3% to close at 369.5p.
Commodity companies were hit by the general downturn in the market and the news of giant miner Anglo American scaling down operations dramatically. Gold prices fell again by 2% this week, hitting $1,067/ounce.
This affected Kazakhstan-focused mining companies such as Central Asia Metals and KAZ Minerals, which lost 8.9% and 3.8% respectively this week. Kyrgyzstan-focused miner Centerra Gold surged 4%in the Toronto Stock Exchange to 7.94 Canadian dollars, against the trend of other companies, perhaps rallying on its positive results in the first three-quarters of the year.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 8 2015 (The Conway Bulletin) – Georgia’s energy minister Kakha Kaladze met with Alexei Miller, the chairman of Russia’s Gazprom, in Luxembourg to discuss increasing imports of Russian gas. No deal has been signed although even the talks have stirred controversy in Georgia where memories of the 2008 war against Russia are still very fresh.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 8 2015 (The Conway Bulletin) — Seemingly determined to be the bearer of positive news, Kazakh minister of economy Yerbolat Dossayev said construction on expanding the Tengiz oil project would start next April and that the Kashagan oil field would finally begin production in December 2016.
These dates confirm earlier plans to speed up the much-delayed Kashagan oil field in the Caspian Sea and expand the Chevron-led Tengiz oil- field sooner rather than later.
But some of the numbers are lower than the government had hoped for.
Deputy energy minister Magzum Mirzagaliyev said the Kashagan oil- field will reach an output of 13m tonnes/year by 2020, the equivalent of 250,000 barrels of oil/day. In June, NCOC ex-director Stephane de Mahieu said Kashagan would reach 370,000 barrels/day by the end of 2017. The NCOC consortium includes Eni, Kazmunaigas, Shell, ExxonMobil, Total, CNPC and Inpex.
Tengizchevroil – which includes Chevron, ExxonMobil, Kazmunaigas and LukArco – delayed their expansion plan to Tengiz this year because of a drop in oil prices. It has not commented on an April expansion date.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 1 2015 (The Conway Bulletin) — Norwegian oil and gas company Statoil completed its retreat from the South Caucasus gas industry with its sale of a 20% stake in the Trans-Adriatic Pipeline (TAP), part of a pipeline network that will pump gas from Azerbaijan to Europe.
Italian pipeline company Snam bought Statoil’s TAP stake for €208m ($227m), increasing Italy’s commitment in the Southern Gas Corridor, running from Azerbaijan, through Turkey and Greece, to Italy.
Over the past two years, Statoil has quit Azerbaijan,’s gas sector selling its 25% stake in the giant Shah Deniz field and its 15.5% stake in the South Caucasus Pipeline, which transports gas from Shah Deniz to Georgia and Turkey.
Statoil hailed its sale of its stake in TAP as generating value for share- holders but the final price of €208m is lower than the €400m that industry analysts had forecasted over the summer.
Statoil still owns an 8.56% stake in the Azeri-Chirag-Guneshli field and a 8.71% share in the Baku-Tbilisi-Ceyhan pipeline.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 3 2015 (The Conway Bulletin) – If Turkmenistan wants to realise its potential and become one of the world’s top energy exporters it should improve its foreign investment climate, Reuters quoted Daniel Rosenblum, deputy assistant secretary for Central Asia at the U.S. Department of State, as saying on a trip to Ashgabat.
Western companies have found it difficult to enter the Turkmen energy sector despite an apparent abundance of hydrocarbon wealth. It is estimated that Turkmenistan holds the world’s four largest gas reserves.
Turkmenistan only offers Western companies service contracts on its various gas projects and not the production sharing agreements that many want. And this, Mr Rosenblum said, would hold back Turkmenistan’s development as a gas exporter.
“A critical element of success is to create the right mix of incentives,” he said according to the Reuters report.
Most of Turkmenistan’s gas flows to China through a network of pipelines that cross Central Asia but Turkmen officials have said they want to widen the client base. This includes pumping gas to Europe and India.
Turkmenistan will officially begin work on the TAPI pipeline that will, it hopes, eventually pump gas directly to consumers in India. Its an ambitious project and one that Western companies had previously expressed interest in.
The lack of a production sharing agreement, though, coupled with a poor record for corruption and the sheer ambition of building a 1,700km pipeline across unstable Afghanistan, with all its security concerns, has deterred potential suitors.
In a thinly veiled criticism of Turkmenistan, Mr Rosenblum told a conference: “Land-locked countries with potentially large resources, such as Turkmenistan, need to move expeditiously to capture market opportunities since their competitors are not idle.”
Although he wasn’t specific, Mr Rosenblum appeared to be saying that Western companies with their expertise and know-how would be able to help Turkmenistan speed up development of its hydro-carbon sector.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 259, published on Dec. 4 2015)
