OCT. 3 2015 (The Conway Bulletin) – The Turkmen state-owned natural gas company Turkmengaz terminated an engineering contract with Orgregionproyekt, a Russian company, signed in 2011, local media reported. It’s unclear if the cancelled contract was linked to the economy or not.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 4 2015, YEREVAN (The Conway Bulletin) — At a meeting in Tehran, the Iranian and Armenian energy ministers said they will increase the volume of their gas-for-electricity swap deal, deepening relations between the two neighbours.
Alireza Kameli, managing director of the National Iranian Gas Export Company, told local media that Iran is ready to supply as much as 2.3b cubic metres of natural gas yearly to Armenia through the existing 140km long pipeline. According to Armenian government figures, Armenia currently imports less than 400m cubic metres of gas every year from Iran. By comparison, Armenia imports roughly five times as much gas from Russia as it does from Iran every year.
“Armenia is currently unable to take full advantage of the capacity of the pipeline because of the lack of necessary infrastructure,” Mr Kameli said alluding to the lack of electricity infrastructure in Armenia.
Still the the two sides are working together on extending Armenia’s electricity transmission network. Armenia is building a third high-voltage transmission line, part-funded by Iran. According to the Armenian ministry of energy, the country currently exports 1.8b kWh of electricity to Iran every year, a volume that can be increased up to 6.9b kWh.
Electricity is one of their biggest exports for Armenia. It’s also become highly political. This year thousands of people protested in Yerevan against proposed price rises. The government eventually agreed to subsidise the price rises.
And this month, the government agreed the sale of the electricity distribution network by Russia’s Inter RAO to an Armenian billionaire.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 6 2015 (The Conway Bulletin) — London-listed Graphene Nanochem secured a service supply contract with Malaysia’s Scomi Oiltools, for $384,000 to help drill oil wells in Turkmenistan. Graphene Nanochem has been working in Turkmenistan for a few years.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 8 2015 (The Conway Bulletin) — BP said it had temporarily stopped planned maintenance work at one of its platforms operating in Azerbaijan’s Azeri-Chirag-Guneshli (ACG) offshore oil field. BP, which operates ACG and holds a 35.8% share in the consortium, had said that its planned maintenance work at the Chirag platform which would shut the platform for 20 days from Sept. 17. It is unclear if the maintenance work has been completed.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 8 2015 (The Conway Bulletin) — Oil flows through the Baku-Tbilisi- Ceyhan pipeline fell by 1% in the first nine months of 2015 compared to the same period last year, an unnamed source at Azerbaijan’s state-owned energy company SOCAR told Reuters. Oil output in Azerbaijan has been falling over the past few years.
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(News report from Issue No. 251, published on Oct. 9 2015)
ALMATY, OCT. 7 2015 (The Conway Bulletin) — London-listed Nostrum Oil & Gas withdrew its offer to buy Tethys Petroleum, ending hopes of a merger between the two Kazakhstan- focused companies.
Shortly after Nostrum announced it had scrapped its bid, Kazakhstan- based AGR Energy submitted an offer to buy a large chunk of equity in Tethys for a premium. The AGR offer, helped Tethys shares rebound by 12% on the Canadian stock market.
Earlier the final word on the long- running Nostrum bid came from Tethys’ largest shareholder, Pope Asset Manager. It said it did not support the latest offer of 0.147 Canadian dollars per share that would have valued the company at $49.5m.
Nostrum had tried to buy Tethys’ shares for two months but a deal slipped away as the sustained oil price collapse ate into the value of energy companies in general and Tethys shares in particular.
Both companies have their main operations in Kazakhstan. The value of their assets has decreased due to the weakening Kazakh tenge against the US dollar.
Nostrum’s withdrawal was an opportunity for AGR, a company linked to the Assaubayev family. It put in an offer of $20m for a large portion of Tethys’ equity, valuing shares at 0.165 Canadian dollars. In addition, AGR also proposed a $5m loan to support short-term liquidity and the option of buying more shares.
Earlier in August, Tethys failed to conclude a $47.7m refinancing deal with AGR, which would have granted the Kazakh company a controlling stake in Tethys.
The Assaubayev family was involved in Kazakhstan’s gold sector but has since switched its focus to oil. In August 2014, it invested $62.5m into British company Max Petroleum becoming a 51% shareholder.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 1 2015 (The Conway Bulletin) — In the past few months of tumbling oil prices, analysts have discussed Azerbaijan and Kazakhstan and debated whether they could keep oil production steady.
The PRIX index, a young and fully independent barometer of the 20 major oil exporting countries, forecasts a fall in oil exports in Q4 2015 for both Azerbaijan and Kazakhstan, a stark change after a positive forecast in Q3 2015.
PRIX’s methodology is simple, as it collects forecasts on oil exports from around 300 analysts around the world. It has rapidly gained credibility due to the volume of data it generates.
John Friedman, analytical advisor at PRIX, said: “We’re still in a bear market for oil.”
He noted that exporters do not yet want to give in and cut exports despite low oil prices.
Indra Overland, project director at PRIX, said the situation in Azerbaijan was particularly worrisome.
“Oil production in Azerbaijan is clearly falling. This is due to resource depletion, though one could also argue that it is indirectly due to the unattractive climate for exploration and investment,” Mr Overland said.
Importantly, the PRIX index also highlights the agreement, or lack thereof, between the surveyed analysts. It is interesting to note that disagreement among analysts covering Azerbaijan and Kazakhstan has risen significantly, as oil prices and export data keep falling.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 25 2015 (The Conway Bulletin) — Finnish-based Wärtsilä won a tender to build a 40MW combined heat and power (CHP) plant near the Caspian port of Aktau, in west Kazakhstan. The Kazakh company KazAzot will manage the plant, which Wärtsilä plans to complete in late 2016. The plant will power the city of Aktau and its industrial hub.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 29 2015 (The Conway Bulletin) – Georgia energy minister Kakhaber Kaladze met up with Gazprom chairman Alexei Miller in Brussels to discuss Georgia’s role as a client and transit country for Russian gas. Media didn’t give details of the meeting but it did speculate that Georgia may be looking for help from the Kremlin to fill its energy deficit.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 29 2015 (The Conway Bulletin) — Russian state-owned company Gazprom started supplying natural gas to Azerbaijan. Initial volumes stand at 6m cubic metres per day, the contract between the two parties envisages a maximum yearly supply of 2b cubic metres. Azerbaijan said the contract was struck because of economic growth and an increase in domestic consumption.
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(News report from Issue No. 250, published on Oct. 2 2015)
