Tag Archives: Kazakhstan

Kazakhstan operating Tengiz drops Caspian Sea export route in favour of CPC

NOV. 26 2015 (The Conway Bulletin) — Tengizchevroil (TCO), the consortium producing oil at the Tengiz field near Atyrau in west Kazakhstan, has stopped oil shipments via tanker from the Caspian port of Aktau because of high Eurasian Economic Union (EEU) export tariffs, a port official told Astana TV.

TCO declined to deny the story. Instead it confirmed that it was now exporting more of its oil through the CPC pipeline which pumps oil from Tengiz around the top of the Caspian Sea to Novorossiysk in Russia.

In an interview with Astana TV, a channel owned by the ruling Nur Otan party, Marat Ormanov, director at KazMorTransFlot, the shipping subsidiary of Kazmunaigas, said TCO shipment for crude oil had dropped to zero.

“TCO left in July, re-routing its entire output through the Caspian Pipeline Consortium. Other companies have followed suit and now there is almost no one left in Aktau,” Mr Ormanov said.

A news reporter for Astana TV then quoted him as saying that part of the reason that TCO had quit the Caspian Sea route was because of increased export tariffs imposed by the EEU. The EEU is the Kremlin-led trade bloc that includes Kazakhstan, Belarus, Kyrgyzstan and Armenia.

In December 2013, tankers shipped over 77,000 tonnes of oil every week from Aktau across the Caspian Sea. This year, KazMorTransFlot had planned to send a similar amount to both Makhachkala and Baku. Oil production in Kazakhstan has dropped off this year because of a slump in prices. Companies have also been looking for cheaper ways to export it.

This has coincided with the introduction of EEU rules and tariffs which many businesses have complained add a layer of bureaucracy and complicate business.

The Tengiz field is important to Kazakhstan. It is its biggest and, arguably, most successful oil project. The partners in the project are Chevron, ExxonMobil, Kazmunaigas and LukArco.

In response to the Astana TV interview, TCO told The Bulletin that it was moving away from exporting oil via Aktau.

“TCO has maximised transportation through the Caspian Pipeline Consortium system so as to take advantage of this more cost-effective route,” said Yerlan Kassym, public affairs adviser.

“As a result, transportation through other routes, including the more expensive southern route via the Aktau port, have been minimised.”

TCO declined to comment on EEU tariffs and duties. The Caspian Pipeline Consortium (CPC) is exempt from EEU tariffs because it is classified as an international pipeline.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Tire to build plant in Kazakhstan

NOV. 25 2015 (The Conway Bulletin) — Chinese Doublestar Tire will build a $110m tyre plant in the city of Oksemen (Ust-Kamenogorsk) in north-east Kazakhstan. Local company Kazindustriservis will be Doublestar’s partner and will own 72.5% of the joint venture. The plant will become Doublestar’s manufacturing hub for exports to other former Soviet Union countries.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kazakh parliament approves budget cuts

NOV. 23 2015 (The Conway Bulletin) – Kazakhstan’s parliament approved a budget designed to both limit spending during a period of low oil prices and target a national deficit that has crept up to a 10-year-high.

Perhaps with this in mind, the sovereign wealth fund Samruk-Ka- zyna announced plans to cap pay and close 33 of its 36 overseas offices and the Central Bank said that it would slow work on building a state-of-the- art data centre in Astana.

The government’s budget for 2016-18 acknowledged that economic growth had stalled and would measure only 1.2% this year, its lowest rate since 2009 — the height of the Global Financial Crisis.

It also specifically wanted to target a deficit which has grown to around 3% of GDP, its highest in the past decade.

Presenting the government’s budget, PM Karim Massimov acknowledged the severity of the economic challenge.

“On December 8, the government will adopt an anti-crisis programme for the next three years. We will unite all previous economic programmes under a new umbrella,” Mr Massimov told the Senate.

President Nursultan Nazarbayev later confirmed he will address the nation on Nov. 30 on plans to tackle to the growing economic malaise.

The new budget forecasts oil prices to remain within the $40- 50/barrel range and the tenge to remain stable at around 300/$1.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Business comment: Eurasian Bank Council

NOV. 27 2015 (The Conway Bulletin) — Central Banks in the South Caucasus and Central Asia have had a rough year. Keeping up with the strengthening dollar and the falling rouble while monitoring inflation has been a tough test.

In an attempt to stick together during the economic downturn, some of the central bankers appear to have decided to use old infrastructure to continue their meetings and coordinate policies.

Confusion, however, clouds the various structures that are still in place.

The new body which met in Almaty this week was renamed the Eurasian Council of Central Bank Chiefs and is a spin-off of the now- defunct Eurasian Economic Community (EurAsEC).

It doesn’t overlap with the Eurasian Economic Union (EEU) because Armenia is not in it and is no longer representative of the old EurAsEC, which officially closed down last year, as Uzbekistan is not a member.

And this says a lot about just how confusing economic integration has been in the region.

Since the EurAsEC was disbanded, the Eurasian Economic Union (EEU) has become the integrationist body. Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia are part of the EEU.

So why brand it as EurAsEC? Why is Armenia out of the picture?

“Pressing economic questions” are the rationale behind this new body, according to Kazakhstan’s Central Bank.

The countries that form the new body are all in the midst of an economic crisis, but so are other countries that were not invited to the Eurasian banking council.

With the EEU in place and Tajikistan lined up to become a member, the decision to revive such a strange body, rather than another, is difficult to understand.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kazakhstan’s KMG invests in Romania

NOV. 20 2015 (The Conway Bulletin) — KMG International, a subsidiary of Kazakhstan’s state-owned energy company Kazmunaigas, will invest $6m in the modernisation of the Petromidia Navodari refinery in Romania. KMG International owns Rompetrol. The Petromidia refinery has a capacity of 5m tonnes/year and is located just north of Constanta, Romania’s main Black Sea port. The upgrade will be completed by 2018.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kazakhstan looks to Islamic finance

NOV. 15 2015 (The Conway Bulletin) – Looking to boost finances, Kazakhstan said that it would launch its first sovereign Islamic bond, a sukuk, next year. Last week a source at the Central Bank said that Kazakhstan would probably aim to raise $1b through the sukuk. In 2012, the state-owned Kazakhstan Development Bank issued a $73m sukuk.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Blair flies to Georgia for ‘working dinner’ with PM

NOV. 18 2015 (The Conway Bulletin) – Has Tony Blair, the former British PM, found himself a new client? Speculation that he was now advising the Georgian Dream coalition government spiked after he flew to Tbilisi for dinner with Georgian PM Irakli Garibashvili.

Mr Blair’s business outfit, Tony Blair Associates, declined to comment but the Georgians were more keen to show off their much-feted visitor.

The PM’s website hosted a 1.58 minute long video showing Mr Blair and Mr Garibashvili enjoying the view, and a glass of wine, from a restaurant above Tbilisi before taking a funicular ride back down to the city.

The Georgian PM’s office described the meeting as a “working dinner”.

“Georgia’s democratic reforms, the situation in the world and the region, were the main topics of the meeting,” the PM’s office said without giving any more information. Perhaps the emphasis should be on “working dinner”. It’s likely that Mr Garibashvili would have paid for Mr Blair’s advice. Plenty of other leaders, including Kazakh President Nursultan Nazarbayev, have.

And Mr Blair’s wife, a lawyer, is also involved in Georgia. Her company, Omnia Strategy, has been advising the Georgian justice system. It’s unclear exactly what advice, Mr Blair imparted. Although influential, his reputation is generally accepted to have been stained by the 2003 war in Iraq that he pursued with US President George W. Bush. Still, Georgia is an avowed fan of Mr Bush. It has named a street after him, and was one of his biggest allies during the wars in Iraq and Afghanistan.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

TeliaSonera’s appoints Tajik Tcell’s head as Eurasia VP

NOV. 17 2015 (The Conway Bulletin) — Swedish mobile provider TeliaSonera appointed the former head ofTcell, Tajikistan’s biggest mobile network provider, Mansur Khamidov to be a vice-president in charge of the Eurasia region. TeliaSonera is currently restructuring its operations and has said that it wants to sell its Eurasia companies, partly because of corruption allegations alleged against its Uzbek subsidiary. As well as Tajikistan, TeliaSonera owns mobile operations in Kazakhstan, Uzbekistan, Azerbaijan and Georgia.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Demand for crop monitoring kit rises in Kazakhstan

NOV. 18 2015 (The Conway Bulletin) — Cyprus-registered New Science Technologies, which sells satellite crop monitoring equipment, said that demand for its products is growing in Kazakhstan and that it has had to build new capacity. Kazakhstan has increased its grain harvest considerably over the past few years. Kazakhstan’s wheat fields are vast and need satellite technology to monitor.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Kazakhstan’s Halyk Bank files Q3 results

NOV. 17 2015 (The Conway Bulletin) — Halyk Bank, one of Kazakhstan’s largest retail banks, reported increased net income in the third quarter of 2015 of 36b tenge, roughly a third larger than the third quarter of 2014. In US dollar terms, taking into account the devaluation of the tenge, Q3 2015 and Q3 2014 are roughly the same. Operating expenses grew by 12.7% in the first 9 months of 2015 compared to the same period in 2014 because of wage inflation linked to the devaluation of the tenge.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)