Tag Archives: oil

Business comment: Kazakhstan & The Oil Markets

SEPT. 23 2015 (The Conway Bulletin) — Low oil prices hit Kazakhstan again, as it revised downwards oil production numbers.

Iran’s re-emergence into the global markets will keep prices low according to a spokesperson from the Ministry of Energy in Astana and this means the Kazakhstan will lower production.

“Oil output is expected to reach 79.5m tonnes in 2015,” the spokesperson told Reuters. This is

1m tonnes less than earlier predicted and almost 2% less than in 2014. And it could get worse, as the government has not ruled out a further reduction in production, should prices continue to fall.

This has an adverse effect on Kazakhstan’s economy.

First, foreign investors reduce their financial positions because their assets lose value, either because of low oil prices or due to the devaluation of the local currency. Foreign investors have already started to leave Kazakhstan,

as TeliaSonera, Samsung, Honda, have shown in the past fortnight.

Second, the country’s financial position weakens further. It has to spend foreign reserves to protect its currency from falling further.

Third, the domestic oil sector marks some projects, which have been labelled uneconomic, as on- hold until oil prices rise. This, in turn, means lower revenues.

When it comes to oil, Kazakhstan is a price-taker. Its fate will depend on how it manages to survive what could be a long period of cheap oil.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Stock market: KAZ Minerals, Nostrum Oil & Gas

SEPT. 18-24 2015 (The Conway Bulletin) — KAZ Minerals shares, now trading at 101 pence, lost over 30% in one week, a fall sharper than the one it suffered last January, when it dropped by more than 25% in one day. Questions on China’s demand

for copper worried investors. Credit Suisse and BNP Paribas downgraded KAZ Minerals and reviewed downwards its target price. Goldman Sachs said there could be a potential upside on Friday and next week.

Nostrum Oil & Gas dropped a further 4% to 481 pence (Sept. 25), although an agreement with Tethys Petroleum seems closer after a company statement said the latest Nostrum offer priced each Tethys share at 0.147 Canadian dollars (Sept. 23).

Azerbaijan-based miner Anglo- Asian Mining gained 13% to 5.38 pence this week, after it published a promising H1 2015 report.

Kazakhstan-focused Roxi Petroleum continued its oil price linked slump, dropping by 4.3% to 8.5 pence this week in London.

In the GDR markets, Kazmunaigas E&P lost almost 20% this week, trading at $6.47 onFriday, almost certainly linked to Kazakhstan’s weak prospects in terms of oil production. Kcell fell by 13.4% finishing the week at $5.35 after TeliaSonera announced last week it would leave its Eurasian markets. TeliaSonera owns 62% of Kcell.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Stock market: Centerra Gold, KAZ Minerals

SEPT. 11-18 2015 (The Conway Bulletin) — Canadian mining company Centerra Gold saw its stock price on the Toronto Stock Exchange jump over 16% to 7.34 Canadian dollars, after having slumped in the past three weeks, due to the signing of a new exploration licence in British Columbia. Centerra’s main asset, the Kumtor gold mine, is located in Kyrgyzstan. London listed KAZ Minerals, was down 6% to 152 pence due to low copper prices. Kazakhstan-focused Roxi Petroleum gained 4.4% this week, to 8.75 pence.

Kcell, one of Kazakhstan’s largest telecoms, lost 2% on Sept. 17 after its mother company TeliaSonera said it would leave Eurasian markets.

London-listed Bank of Georgia surged 3.9% this week to 1,907 pence. The GDR stock of Georgia’s TBC Bank lost 6.5% this week in London, down to $9.25 per share, though it had fallen to $9.11 on Sept. 14.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Azerbaijan’s SOCAR revenues to drop

SEPT. 14 2015 (The Conway Bulletin) – Azerbaijan’s state oil and gas company SOCAR said it would transfer less cash to the national budget this year because a fall in oil prices had dented its revenues. This is a blow to Azerbaijan which is heavily reliant on revenues from oil and gas for its income.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

BP suspends Azerbaijan’s oil platform

SEPT. 17 2015 (The Conway Bulletin) — BP said it will suspend operations at the Chirag oil platform, in Azerbaijan’s sector of the Caspian Sea because of planned maintainence work. BP didn’t specify when Chirag would resume operations. Chirag, together with Azeri and Guneshli, is one of the most important oil fields in Azerbaijan.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kazmunaigas profit to drop

SEPT. 17 2015 (The Conway Bulletin) — If oil prices remain steady at roughly $50/barrel, Kazakhstan’s state oil and gas company, Kazmunaigas will post a profit of 75b tenge ($279m) in 2015, Sauat Mynbayev, the company chairman, told the Interfax news agency. In 2014, the company posted a profit of nearly 200b tenge ($743m at the current rate). Mr Mynbayev said the government’s decision to let the tenge float free against the dollar has helped contain losses.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Azerbaijan’s oil output falls in Jan.-Aug. by 2.8%

SEPT. 15 2015 (The Conway Bulletin) – Azerbaijan’s oil production has fallen by 2.8% in the first eight months of the year, a source at the statistics committee told Reuters.

The data is more economic bad news for Azerbaijan. Oil underpins the economy and a drop in production means a drop in revenue. A regional economic decline has already hit Azerbaijan hard, forcing it to cut government budgets and to devalue its manat currency this year.

The source told Reuters that a decline in output from BP’s Azeri, Chirag and Guneshli (ACG) oilfields in the Azerbaijani sector of the Caspian Sea had pulled its overall output down.

Azerbaijani president Ilham Aliyev stepped in and ordered BP to stop the output decline at ACG. BP has had sporadic success at stopping the drop in output at ACG, although it has now restarted its slow, steady decline.

Daily oil output at the ACG fell to an average 641,000 barrels/day (bpd) in the first half of 2015 from 656,000 bpd in the same period in 2014 and 661,000 bpd in the first quarter of this year, BP said. ACG makes up most of Azerbaijan’s oil production.

Output at ACG slowed during Q2 when BP closed the West Azeri platform for maintenance. It has now closed the Chirag platform for maintenance. A BP spokesperson said operations at the Chirag oil platform would be suspended from sometime in the autumn. It was not clear when Chirag would re-start operations.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Nostrum pressures Tethys

SEPT. 15 2015 (The Conway Bulletin) — London-listed Nostrum Oil & Gas said in a statement that a proposed $37.5m takeover offer of Tethys Petroleum, a Central Asia-focused oil company, has not yet been accepted. Nostrum said some of Tethys’ Board expectations were unrealistic as “the underlying financial position of Tethys has continued to deteriorate.”

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Xodus wins Kazakh contracts

SEPT. 15 2015 (The Conway Bulletin) — The Tengizchevroil consortium developing oil fields in west Kazakhstan awarded a “significant” contract to Scotland-based engineering company Xodus. Xodus tests the strength of rigs and other upstream oil structures using sound waves.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Azerbaijan’s company signs deal with Gazprom

SEPT. 11 2015 (The Conway Bulletin) — Azerbaijan Methanol Company (AzMeCo) signed a deal with Russia’s state-owned energy giant Gazprom for the supply of 2b cubic metres of gas to its methanol production plant. Under the agreement, Gazprom will supply 100% of AzMeCo’s needs at the plant in Garadagh, a district just outside Baku.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)