Tag Archives: oil

BP cuts stuff number in Azerbaijan

FEB. 29 2016 (The Conway Bulletin) – British oil company BP laid off 8.5% of its staff in Azerbaijan in 2015, according to a report. The company said it employed 2,992 workers at the end of 2014. In 2015, this number shrunk by 257 people. BP has been hit by the fall in oil prices and is looking to reduce the cost of its operations overseas. Azerbaijan is one of its biggest areas of operations.

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(News report from Issue No. 270, published on March 4 2016)

FDI drops in Kazakhstan

MARCH 2 2016 (The Conway Bulletin) – Foreign direct investment (FDI) in Kazakhstan’s oil and gas sector dropped by 72% to $1.9b last year compared to 2014, data from the Central Bank showed. The data shows just how heavily Kazakhstan’s oil and gas sector has been hit by the economic downturn. Proportionally, FDI to Kazakhstan’s oil and gas sector was harder hit than any other part of its economy.

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(News report from Issue No. 270, published on March 4 2016)

Kazakh KMG EP revenues collapse by 37% in 2015

ALMATY, FEB. 26 2016, (The Conway Bulletin) — KMG EP posted a 37% fall in revenues in 2015 to 530b tenge ($2.4m), its lowest since 2009, because of depressed oil prices.

KMG EP is the exploration and production branch of Kazakhstan’s state-owned energy company Kazmunaigas. The collapse in KMG EP’s revenues mirrors the rest of Kazakhstan’s oil and gas sector.

But, although it posted a drop in revenue, KMG EP also boasted a 400% rise in net profit to $1.1b.

This was linked to the depreciation of the Kazakh tenge. KMG EP’s income is mainly in US dollars and its costs are in tenge.

Lower taxes and the write-down of its Ozenmunaigas field in western Kazakhstan also helped KMG EP’s profit. Ozenmunaigas had become a drain on the company, pulling in investment and extra salaries after rioting by workers in 2011.

But it was the depreciation of the tenge that drove most of KMG EP’s profit. KMG EP “recognised a foreign exchange gain of 449b tenge ($2b), as over 93% of cash and financial assets were denominated in foreign currencies at the time of the currency devaluation,” the company said in its annual report.

This boost, though, essentially disguised what would have been a loss in 2015, as analysts pointed out.

“The FX gain is a one off profit and will not affect the future operating profit of the company,” Gulmariya Zhapakova, analyst at Halyk Finance, said in a report.

KMG EP’s yearly report also said that salary inflation would hit it in 2016. It is under pressure from workers and their unions to raise salaries after the tenge lost half its value over the past year.

Production in 2015 was flat. KMG EP and its subsidiaries extracted 12.4m tonnes of oil.

ENDS

(News report from Issue No. 270, published on March 4 2016)

BP and Topaz make Azerbaijan deal

MARCH 3 2016 (The Conway Bulletin) – Dubai-based oil service company Topaz Marine signed a deal with BP to supply 14 offshore vessels for its operations in Azerbaijan. The companies did not disclose the value of the deal, but Reuters calculated it to be worth around $541m.

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(News report from Issue No. 270, published on March 4 2016)

Azerbaijan’s SOFAZ drops 10%

MARCH 1 2016 (The Conway Bulletin) – Assets held by SOFAZ, Azerbaijan’s state oil fund dropped by 9.5% in 2015 to $33.6b. SOFAZ earns cash from oil and gas sales and transit fees. It spends on various social projects and has also been buying up manat to support it against the US dollar. The drop in SOFAZ’s net worth reflects the economic downturn and slump in global oil prices.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Azerbaijan’s ACG output drops

MARCH 2 2016 (The Conway Bulletin) – Output at BP’s Azeri-Chirag-Gunehsli (ACG) dropped in 2015 to 31.3m tonnes of oil, down from 31.5m tonnes of oil in 2014. The ACG field is Azerbaijan’s largest field and the bedrock of its oil output. Azerbaijan has been pressuring BP to maintain ACG output.

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(News report from Issue No. 270, published on March 4 2016)

Tethys seals deal with Kazakhstan’s Oilisol

ALMATY, MARCH 2 2016, (The Conway Bulletin) — Guernsey-based Tethys Petroleum said it had now sealed a life-saving financing agreement with Kazakhstan-based Olisol for around $32m, after months of doubt regarding the company’s ability to pay debts and continue its Kazakh and Tajik operations.

The two companies initially reached the deal on Feb. 22 and signed it on March 2, giving Tethys shares on the Toronto Stock Exchange a boost.

Under the deal, Tethys will receive $1m of finance and convert the remaining $5.25m debt facility into ordinary shares. If the Toronto Stock Exchange approves Tethys’ issue of 500m new shares, Olisol will then buy around 181m of these, and own a 42% stake in Tethys.

John Bell, Tethys chairman, said: “Tethys now has a strong in-country strategic partner which has committed to becoming a minority share- holder and who will help the company in its objective to supply the growing energy demand in China.”

Mr Bell and three other board members will step down upon completion of the deal.

“We leave the board having steered Tethys into a company focused on capital efficiency and cost discipline, well placed to become a strong platform for future growth,” he said.

Tethys had been in talks with Nostrum Oil & Gas for a takeover last summer. It later rejected the offer and turned to Kazakhstan’s Olisol.

In January, however, Olisol missed a payment scheduled in an earlier agreement putting the deal in jeopardy. The latest deal confirms that Olisol will in fact go ahead with the purchase and become a minority stakeholder in Tethys.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Iran and Azerbaijan swap oil

FEB. 26 2016 (The Conway Bulletin) – Iran and Azerbaijan will resume oil swaps after a five year break, Iran’s official Fars news agency reported quoting Iranian deputy oil minister Rokneddin Javadi. Azerbaijan will deliver oil to Iran’s Caspian Sea port of Neka to supply refineries in the north of the country. In return Iran will give Azerbaijan the equivalent amount of oil at its Persian Gulf ports.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Construction work on TAP to start, says Azeri energy ministry

FEB 26 2016 (The Conway Bulletin) – Azeri energy minister Natig Aliyev said construction works will start later this month on the Trans-Adriatic Pipeline (TAP), the final section of the so-called Southern Gas Corridor that will pump gas from Azerbaijan to Europe.

According to Mr Aliyev, TAP is also expecting to secure financing by the end of April.

“The issues of TAP financing will be completely solved on April 28,” he said.

TAP, a 10b cubic metres pipeline which runs across Greece, Albania and the Adriatic Sea to Italy will link up with the 16b cubic metres Trans- Anatolian Pipeline at the border with Turkey.

BP, Azerbaijan’s state-owned SOCAR, Snam, Fluxys, Enagas and Axpo are all shareholders in TAP.

European customers see the Southern Gas Corridor an alternative to Russian gas supplies and the European Commission has lobbied intensely to ensure that the project is completed by the 2019 deadline.

This week a delegation of the European Commission participated in the second meeting of the Southern Gas Corridor Advisory Council.

Federica Mogherini, vice president of the European Commission, emphasised just how much weight the EU put on the project.

“The Southern Gas Corridor is an essential element in the EU’s Energy Security Strategy,” she said.

“We strongly support the Southern Gas Corridor, and we are determined – and me personally – to do our part to ensure that it is completed on time.”

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(News report from Issue No. 270, published on March 4 2016)

EU wants improved ties with Azerbaijan

FEB. 29 2016 (The Conway Bulletin) – On a trip to Baku, Federica Mogherini, a European Commission vice-president in charge of external affairs, said the European Union and Azerbaijan need to work hard to improve relations which have soured over the past few years.

Ms Mogherini made the comments during a two-day trip to Baku and to Armenia’s capital Yerevan.

“It is time for a new chapter in the relations between the EU and Azerbaijan. We need an all-round strategic partnership between us,” she said during a speech to the Southern Gas Corridor Advisory Council.

“We have not always seen eye to eye in all matters, and we know that differences will remain between us in some areas. This is normal in international relations and often in European and even national politics.”

Europe has been vocal over what it has said is a systematic crackdown by the Azerbaijani authorities against civil society and the media. The Azerbaijani government has responded by accusing Europe and the United States of meddling in affairs which aren’t theirs and of trying to stir a revolution.

The result has been a drift by Azerbaijan towards Russia.

Still, Europe and Azerbaijan have been working together on a pipeline network running from the Caspian Sea to central Europe.

Europe wants to reduce its reliance on Russia for gas and its sees Azerbaijan as the solution. The pipeline network is dubbed the Southern Gas Corridor.

Ms Mogherini was careful to avoid direct mention of human rights and media freedom in her speech but the underlying message would have been clear and her speech was an important step towards, tentatively, mending Azerbaijan-EU relations.

ENDS

(News report from Issue No. 270, published on March 4 2016)