Tag Archives: Kazakhstan

Stock market: Nostrum Oil & Gas

APRIL 29 2016 (The Conway Bulletin) – Nostrum Oil & Gas shares jumped 6% on Wednesday to 295.25p after the company announced quarterly results, its highest price for over three months.

Investors were happy with the company’s performance although Nostrum said a scheduled maintenance and low oil prices had hindered its performance in Q1 2016.

“It has been a steady start to the first quarter with production broadly in line with expectations taking into account the first part of the annual maintenance,” Kai-Uwe Kessel, Nostrum’s CEO said.

Investors also appreciated Nostrum’s position that cost-cutting remained a top priority.

“We continue to focus on reducing our operating costs internally and I am pleased with the progress we are making,” Mr Kessel said.

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(News report from Issue No. 278, published on April 29 2016)

Business comment: BTC fails to live up to hype

APRIL 29 2016 (The Conway Bulletin) – In the early 2000s, the Baku-Tbilisi- Ceyhan (BTC) oil pipeline was hailed as a key component of the New Silk Road, designed by the West for the West. The dream might now be over.

Western oil producers wanted a pipeline that would pump Caspian oil to world markets without having to pass through Russia.

Everyone in Washington DC was excited. “Happiness is multiple pipelines” was the slogan that could be heard espoused by US diplomats and oil companies. It was even seen on bumper stickers around the US capital.

The 1b barrels/day dream pipeline was inaugurated in 2005 and relied on Azerbaijan’s largest oil fields as well as on Kazakh and Turkmen trans-Caspian shipments.

The decade-long excitement, however, seems to have hit a wall as Kazakh oil shipments have now faded away.

Experts don’t believe shipments will resume anytime soon. Tengizchevroil appears to have let its contract with BTC lapse. Kazakhstan’s Aktau port management has said it doesn’t foresee oil shipments from Tengiz resuming.

At a time of low oil prices and rising extraction prices, cutting expenditure on shipments of oil across the Caspian Sea was the obvious move for Kazakh producers.

Tengiz, and Kashagan whenever it comes online, will use the expanded Caspian Pipeline Consortium for future exports.

This choice will isolate Azerbaijan at a time when it is under the spotlight to become Europe’s new gas provider. The take-home from this story is that corporate interest, in the long run, overrides diplomatic objectives.

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(News report from Issue No. 278, published on April 29 2016)

Kashagan to resume production, says Kazakh energy minister

APRIL 22 2016 (The Conway Bulletin) – Kazakhstan’s energy minister Kanat Bozumbayev said he expects production at the Kashagan offshore field to resume by the end of 2016. Mr Buzumbayev’s statement sounded like a rebuttal to an earlier comment by CNPC, which said it saw Kashagan production resuming in mid-2017.

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(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s Kazinvest shareholders sell shares

APRIL 26 2016 (The Conway Bulletin) – Kazakhstan’s minister of economy Yerbolat Dossayev and businessmen Yuri Pak and Berik Kaniyev sold their shares in Kazinvestbank, a mid-ranking bank in Kazakhstan, for an undisclosed amount. Gaukhar Kapparova, who received 11.3% of the bank’s shares after her husband died last year, is the only shareholder left from the previous structure.

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(News report from Issue No. 278, published on April 29 2016)

Kazakh President signs castration law

APRIL 22 2016 (The Conway Bulletin) – Kazakh President Nursultan Nazrabayev has signed into law chemical castration for paedophiles, media reported. The law was passed by parliament earlier this year and immediately attracted criticism from human rights campaigners who said that is was barbaric.

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(News report from Issue No. 278, published on April 29 2016)

Kazakhstan announces high speed train

APRIL 27 2016 (The Conway Bulletin) – The Kazakh railway authority announced the launch of a new high-speed connection between Astana and Kostanai, which will be operated by Tulpar-Talgo trains. Tulpar-Talgo is a joint venture between a subsidiary of state-owned Kazakhstan Temir Zholy and Spain’s Talgo.

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(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s Kazmunaigas denies KMG EP’s buyout

APRIL 21 2016 (The Conway Bulletin) – Kazakhstan’s state-owned oil and gas company Kazmunaigas denied it had plans to issue new debt to raise cash to finance the buyout of minority shareholders in KMG EP, its subsidiary whose GDRs are listed in London. Ardak Kassymbek, one of Kazmunaigas’ managing directors, had earlier told Reuters that the company could borrow about $1b for the buyout.

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(News report from Issue No. 278, published on April 29 2016)

Kazakh oil producers ditch BTC pipeline export route

ALMATY, APRIL 26 2016, (The Conway Bulletin) — Kazakh oil producers have stopped exporting via the Baku- Tbilisi-Ceyhan (BTC) pipeline as they become increasingly cost-conscious during this period of low global oil prices, a shift that will damage Azerbaijan’s reputation as an energy transit route from Asia to Europe

Data from BTC showed that Kazakhstan’s latest contribution to the pipeline was in January. This is the first time in years that Kazakh producers have suspended shipments for more than a month.

This confirms the marginalisation of BTC as an export route for Kazakh producers, most predominantly Chevron-led Tengizchevroil (TCO).

Analysts said the ditching of BTC as an export route for Kazakh oil, a route once heralded as the region’s saviour, was linked to both contractual and market constraints.

“The contract between TCO and BTC for shipments recently ended, and with the CPC pipeline expansion adding new export capacity, there is capacity to export more TCO oil via CPC, which is a more economical option for TCO at low oil prices,” said Andrew Neff, senior petroleum analyst at IHS.

The CPC, Caspian Pipeline Consortium, is an oil pipeline that sweeps around the northern Kazakh shore of the Caspian Sea and ends at the Russian Black Sea port of Novorossiysk. It was designed in the 1990s to ship oil from TCO, Kazakhstan’s largest producer. It’s been gradually expanded and shipped 1.1m barrels/day in March, nearly double its rate of 10 years ago. BTC’s capacity is 1m barrels/day but in March 2016, it transported 721,500 barrels/day.

CPC is a cheaper export route because, to ship oil to the start of BTC, Kazakh producers needs to transport oil across the Caspian Sea.

Mr Neff, the IHS oil analyst, said that as well as hitting BTC’s earnings, dropping Kazakh oil from its mix will also reduce the quality of BTC exports.

“It will change BTC’s overall blend and lower its quality, as Turkmen crude is heavier, plus it will reduce oil transit revenues for Azerbaijan,” he said.

BTC’s main shareholders are BP with a 30% stake and Azerbaijan’s state-owned SOCAR with a 25% stake.

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(News report from Issue No. 278, published on April 29 2016)

Kazakh businessman takes KazKom

APRIL 28 2016 (The Conway Bulletin) – Kazakh businessman Kenes Rakishev was made chairman of Kazkommertsbank, the company said in a statement. KazKom is the country’s largest bank by assets. Marc Holtzman, who previously served as chairman, will now be the CEO. This completes a takeover process that lasted for two years and involved KazKom’s acquisition of debt-ridden BTA Bank. KazKom’s former majority owner Nurzhan Subkhanberdin resigned as chairman last year.

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(News report from Issue No. 278, published on April 29 2016)

EBRD invests in Kazakh trucks

APRIL 27 2016 (The Conway Bulletin) – The EBRD paid €3.3m ($3.8) to become a shareholder in Globaltruck Kazakhstan, a truck operating group. Globaltruck is registered in Cyprus and owns Longrun Asia a start-up trucking company in Kazakhstan. Longrun Asia will use Globaltruck’s equity funds of €10m ($11.4m) to buy up to 300 trucks and trailers.

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(News report from Issue No. 278, published on April 29 2016)