Tag Archives: oil

BP-Exxon row slows development at Azerbaijani field

JULY 1 2016 (The Conway Bulletin) — A row between BP and Exxon Mobil risks delaying an agreement between members of a consortium developing Azerbaijan’s largest oil field, Azeri-Chirag-Guneshli (ACG), sources told Reuters news agency.

Any delay in developing the field will be a major embarrassment for BP, the lead operator of the project, and a disappointment to Azerbaijan which is looking to boost oil production.

“BP and Azerbaijan agree to the new terms but Exxon keeps rejecting them time and time again,” Reuters reported quoting an anonymous source with knowledge of the sector and the companies.

“It has been going on for almost two years, with Exxon insisting on better terms.”

In May, the Azerbaijani government said it had submitted its proposal for a new contract to all consortium members. No details of the contract, or its sticking points, have been released.

ACG was dubbed the “contract of the century” when it was first signed in September 1994.

The consortium shareholders are BP (35.8%), Exxon (8%), SOCAR (11.6%), Chevron (11.3%), Japan’s INPEX (11%), Statoil (8.6%), Turkey’s TPAO (6.8%), Japan’s ITOCHU (4.3%) and India’s ONGC (2.7%).

ENDS

(News report from Issue No. 288, published on July 8 2016)

Kazakhstan’s trade turnover sinks

JULY 5 2016 (The Conway Bulletin) — Hit by a sharp drop in commodity prices, Kazakhstan’s foreign trade turnover shrank by 30% in Jan.-April compared to the same period last year, the Statistics Committee said. Exports fell by 31% in the first four months of the year to $11b while imports fell by 29% to $7.2b. The global drop in oil and commodity prices has exposed Kazakhstan’s over reliance on its extractive industry.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Putin ratifies oil supply deal with Tajikistan

JULY 3 2016 (The Conway Bulletin) — Russian President Vladimir Putin ratified an oil supply agreement with Tajikistan signed in 2013. The deal will allow Tajikistan to import oil under a duty-free scheme. Tajikistan, however, cannot re-export the oil supplied by Russia. Russia is one of the main suppliers of oil for Tajikistan. The deal increases Russia’s influence over Tajikistan.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Azerbaijan’s SOCAR reports loss

JULY 1 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR posted a loss of 1.8b manat ($1.2b) in 2015 because of low oil prices, its first loss for over a decade. SOCAR said it will potentially turn a profit this year because of a sharp depreciation of the manat in December 2015, when the Central Bank ditched the peg to the US-dollar.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Blast at an oil storage kills seven in Turkmenistan

JUNE 29 2016 (The Conway Bulletin) — A blast at an oil storage facility in Turkmenbashi in western Turkmenistan killed seven people, local media reported. A government official later denied the report but it would be unusual for a report of this nature to be erroneous. If it is confirmed, the incident will be a blow to the reputation of Turkmenistan’s main Caspian Sea port.

ENDS

(News report from Issue No. 287, published on July 1 2016)

Oilmen strike in western Kazakhstan

JULY 28 2016 (The Conway Bulletin) — Around 700 oil workers staged a two-hour strike, protesting against alleged pay cuts and job losses at the Burgylau oil service company in Zhanaozen, western Kazakhstan, the US-funded RFE/RL reported. Burgylau is linked to businessman Yakov Tskhai, who owns a majority stake in its parent company KazPet- roDrilling. In 2011, around 15 people died in Zhanaozen during clashes between striking oilmen and police.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

inApril makes deal with Kazakhstan-based Geo Energy

JUNE 30 2016 (The Conway Bulletin) – inApril, a Norwegian oil and gas service company, said it had reached a deal with Kazakhstan-based Geo Energy Group to supply it with a seismic acquisition system. The deal, worth up to $30m, according to inApril, will improve the technological footprint of Geo Energy Group, which provides seismic assessments of oil and gas basins in offshore sections of the Caspian Sea.

ENDS

(News report from Issue No. 287, published on July 1 2016)

Kazakhstan and Iran to build refinery

JUNE 27 2016 (The Conway Bulletin) — Kazakhstan and Iran will build a new refinery in the Iranian Caspian Sea port of Amirabad, Golestan,specifically to process Kazakh oil for export. It is unclear how much the refinery is going to cost to build and when it will be operational but it is probably the biggest single joint venture between the two countries since many Western sanctions on Iran were lifted in January.

ENDS

(News report from Issue No. 287, published on July 1 2016)

Georgia is the best route, says Iran

JUNE 28 2016 (The Conway Bulletin) — Iran’s oil refining and distribution company said that it views Georgia as the best route to send its various petroleum products to Europe. Iran and Georgia have developed increasingly close economic and business relations over the past few years and there is now relatively high number of Iranian businesses and nationals living in Tbilisi. They had viewed Georgia as a potential route around sanctions.

ENDS

(News report from Issue No. 287, published on July 1 2016)

Business comment: Big Projects

JUNE 29 2016 (The Conway Bulletin) – Azerbaijan may resume its dream of building a mega petrochemical processing complex in an effort to revive its oil and gas sector. This alone is good news for the economy of Azerbaijan, which is poised to see its GDP shrink this year for the first time in two decades.

The intent of SOCAR, the state-owned energy company, is to salvage the project, which it had effectively abandoned in February, after its initial investors had either pulled out or stalled financing.

This is the effect of sustained low oil prices. Besides shying away from upstream exploration and production for costly fields, oil and gas companies have also been forced to rethink their plans for downstream processing facilities.

The project initially included an oil refinery, for a total cost of $16.5b. After scrapping parts of the complex, including the refinery, and downsizing the gas processing facility, the project’s price tag fell to around $4b, a cost that Chinese and Russo- Italian ventures, the new potential investors, now deem feasible.

This is a common problem. Big projects have had to face both the doubts of investors in a low oil price era and the protests of locals, who would rather see resources allocated to combating the enduring crisis.

In January, South Korea’s LG pulled out of a project to build a $4.2b petrochemical plant in Kazakhstan, Russia fled an investment to build a $2b hydropower project in Kyrgyzstan, and Azerbaijan seemed to have abandoned hopes for its project.

As oil prices timidly pick up again, Azerbaijan’s announcement that the project might still see the light could potentially lure investors, who had kept themselves at arm’s length from the rather toxic market it had become in the past two years.

ENDS

(News report from Issue No. 287, published on July 1 2016)