Tag Archives: oil

Kazakh minister says Tengiz expansion will be delayed

MAY 25 2016 (The Conway Bulletin) — Kazakhstan’s energy minister Kanat Bozumbayev said that investment into the expansion of Tengizchevroil, the Chevron-led consortium exploiting the Tengiz oilfield in the west of the country, will be delayed until next year. Mr Bozumbayev said that costs for the so-called Future Growth Project would be $37b, up from an earlier estimate of $34b. The project has been delayed because of the low oil prices.

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(News report from Issue No. 282, published on May 27 2016)

Lukoil improves ties with Uzbekistan

MAY 23 2016 (The Conway Bulletin) — Russian energy company Lukoil said it had reached an agreement with the Uzbek government to improve the terms of its production sharing agreement (PSA) for the development of its oil fields at Kandym, Khauzak, Shady and Kungrad. Details of the new PSA were kept confidential. Lukoil had said that sustained low oil prices had made these projects more costly.

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(News report from Issue No. 282, published on May 27 2016)

BP agrees Caspian Sea exploration deal with Azerbaijani company

MAY 25 2016 (The Conway Bulletin) — BP and Azerbaijan’s state-owned SOCAR signed a deal to jointly explore for oil in a new block at the offshore North Absheron Basin in the Caspian Sea, a sign that BP is taking a long-term approach to Azerbaijan despite the low global oil prices.

The North Absheron Basin is an oil field located just north of Baku. It should not be confused with the Absheron gas field located 100 km south of Baku and currently exploited by France’s Total and GDF Suez together with SOCAR. Absheron is the name of the peninsula where Baku is located.

SOCAR CEO Rovnag Abdullayev and BP’s regional representative Gordon Birrell said they were satisfied.

“Today we are signing a new memorandum of understanding which will lay the foundation of a new off- shore project. This will become another opportunity underpinning our long-term relationship with BP,” Mr Abdullayev said before Mr Birrell echoed his remarks.

Details on the deal are scant. Block D230 in the North Absheron Basin has a reservoir depth of 3,000-5,000 metres. It is still unclear just how much hydrocarbon resources it holds and how much both companies will have to invest to make it profitable.

The deal is also important in other respects. It allows SOCAR to reinforce its ties with BP, sharply criticised in the last few months by President Ilham Aliyev for failing to maintain oil and gas production.

The latest data showed that BP’s oil output was flat in the first quarter of 2016, compared to last year, while gas production grew by 3.8% to 2.7b cubic metres in the same period.

Sustained low oil prices over the past two years have taken a toll on SOCAR, which has embarked on a campaign to cut costs and sell off assets. SOCAR, though, appears ready to commit to new exploration ventures. Earlier this month it also agreed a deal with Uzbekistan.

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(News report from Issue No. 282, published on May 27 2016)

Azerbaijan and Uzbekistan sign energy deal

MAY 18 2016 (The Conway Bulletin) – Azerbaijani and Uzbek state-owned energy companies signed a memorandum of understanding to explore and exploit oil and gas fields in Uzbekistan. SOCAR’s president Rovnag Abdullayev and Uzbekneftegaz’s chairman Alisher Sultanov met in Tashkent on the sidelines of an international oil and gas conference to sign the deal. It is perhaps telling that with oil prices so low, the Azerbaijani and Uzbek governments are having to fund development of their oil and gas sectors themselves.

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(News report from Issue No. 281, published on May 20 2016)

Uzbek and Bulgarian oil companies open recycling plant

MAY 17 2016 (The Conway Bulletin) — Bulgarian oil company Prista and Uzbekistan’s Uzneftprodukt opened a new oil recycling plant in Angren, eastern Uzbekistan. The new plant will process 43,000 tonnes of used oil and produce 30,000 tonnes of fuel per year. The venture spent around $15m building the plant. Bulgarian PM Boyko Borisov travelled to Tashkent to take part in the inauguration ceremony.

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(News report from Issue No. 281, published on May 20 2016)

Azerbaijan’s oil production drops

MAY 12 2016 (The Conway Bulletin) – Azerbaijan’s oil production fell by 1.6% to 13.9m tonnes in Jan.-April 2016 compared to the same period last year, Reuters quoted an anonymous government source as saying. Azerbaijan’s oil production has been slowing for years, despite the government putting BP under increased pressure to stop the slow- down. Oil is the mainstay of the Azerbaijani economy and a drop in production means that government revenues fall.

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(News report from Issue No. 280, published on May 13 2016)

Danish company wins Kazakhstan’s oil contract

MAY 12 2016 (The Conway Bulletin) – Denmark’s oil service company Blue Water Shipping said it had won a contract worth around $350m to build 15 new module carrying vessels for Kazakhstan’s main oil producer, Tengizchevroil. Norway’s VARD and Dubai-registered Topaz Energy & Marine will be part of the Blue Water-led consortium, which will deliver the 15 vessels by the end of 2021.

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(News report from Issue No. 280, published on May 13 2016)

Kazakhstan announces plans on green energy

MAY 10 2016 (The Conway Bulletin) – In a statement to the UN, Kazakhstan announced plans to generate 50% of its electricity from alternative energy sources by 2050. This is an ambitious target. In 2014, renewable sources accounted for just 0.5% of production. The Kazakh government often lays out grandiose plans for its economic development. Green energy is the dominant theme of EXPO 2017, a major exhibition scheduled for next year in Astana.

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(News report from Issue No. 280, published on May 13 2016)

Romania seizes Kazakhstan’s Kazmunaigas refinery

ALMATY, MAY 6 2016, (The Conway Bulletin) – Prosecutors in Romania ordered the seizure of the Petromidia refinery part-owned by a subsidiary of Kazakhstan’s Kazmunaigas as they re-opened an investigation into its privatisation in the 2000s.

The seizure of the refinery comes only a few days after China’s CEFC China Energy Company Limited completed a $680m deal to buy a 51% stake in KMG International, the Kazmunaigas subsidiary that owns the Petromidia refinery. Kazmunaigas has been looking to sell off assets and raise cash to help it through a sustained economic downturn.

Rompetrol was renamed KMG International in 2014, although the Rompetrol brand still lingers.

Romanian investigators have been focused on recovering cash they say is owed to it after a deal by the late Dinu Patriciu to buy the Petromidia refinery in 2003 from the state for $760m through Rompetrol, which he owned. He bought the Petromidia refinery from the government not with cash but with a bond.

In 2007, Patriciu sold Rompetrol and its daughter companies to Kazmunaigas for $1.6b.

When in 2010 Rompetrol’s bonds reached maturity, Kazmunaigas refused to pay the government the $600m coupon. Instead it gave the Romanian government a 45% stake in Rompetrol. This was reduced to 18% in 2014 after the Romanian government agreed to sell Kazakhstan a 27% stake for $200m.

KMG International said it had not been involved in any wrongdoing and that this legal case could damage its business plans in Romania.

“These are new developments which may have significant negative impact on KMG’s strategic objectives and development plans in Romania,” the press service said in a statement.

The company later also said it is also ready to take legal action.

“We will analyse the facts about the charges and to what extent such deeds justify the seizure of company assets. If we find that the seizure is not justified, we will challenge those seizures,” Gheorghe Albu, a lawyer for KMG International lawyer, said.

Petromidia is Romania’s largest refinery and is situated near Năvodari on the Black Sea coast.

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(News report from Issue No. 280, published on May 13 2016)

Iran swaps oil plans with Kazakhstan and Turkmenistan

MAY 9 2016 (The Conway Bulletin) – Iran’s deputy oil minister, Amir Hossein Zamaninia said his country plans to swap oil and gas with Russia, Kazakhstan and Turkmenistan. Currently, Iran relies solely on Turkmen supplies for its northern provinces. In the past few years, Iran has signed short-term swaps with Kazakhstan and Russia. The new plan aims to turn these short-term deals into long-term agreements. Central Asian states, especially Kazakhstan, have been keen to pull Iran into their sphere of economic influence since most sanctions were lifted earlier this year.

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(News report from Issue No. 280, published on May 13 2016)