JULY 3 2013 (The Conway Bulletin) — Kazakhstan disappointed India’s government by triggering its option to buy an 8.4% stake in the Caspian Sea oil field Kashagan. US energy major ConocoPhillips said last year that it was selling its stake to Indian state energy company ONGC Videsh for $5.5b. Kazakhstan, though, held the option to block this deal.
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(News report from Issue No. 142, published on July 8 2013)
JULY 3 2013 (The Conway Bulletin) — The Kazakh government has a decent poker face, at least when it comes to bluffing its intentions on energy deals.
For months Kazakh officials had said that they would not use their pre-emptive right to block a deal between ConocoPhillips, a US energy firm, and India’s ONGC Videsh.
ConocoPhillips had decided that it wanted to cash in its 8.4% stake in the Kashagan oil field in the Kazakh sector of the Caspian Sea. In November last year it announced a deal to sell this stake to ONGC Videsh for $5.5b.
Kazakhstan holds the right to buy stakes in its energy fields if a foreign company wants to exit, but earlier this year government officials said they would not buy the ConocoPhillips stake. Instead, they said, they would decide between allowing India into Kashagan or letting China, an increasingly close economic partner, into the project.
China’s apparent interest now looks like a decoy.
On July 3, Lyazzat Kiinov, chairman of Kazakh state energy company Kazmunaigas, said the company would buy the 8.4% stake in Kashagan.
The deal is important for two main reasons.
It’s perhaps a coming of age for Kazakhstan which wants to retain more ownership over its energy resources. It’s also a blow for India’s energy policy. India had staked a lot on expanding into the Caspian Sea and securing a major foothold in Central Asia’s energy sector. It now has to look elsewhere.
Kazakhstan wants to become a top energy producer.
Before the sale of ConocoPhillip’s stake, the consortium developing Kashagan consisted of ENI (Italy), Total (France), ExxonMobil (US), Shell (Britain) and Kazmunaigas all with a 16.81% stake. Inpex (Japan) also owns a 7.56% stake.
After this deal, Kazakhstan will be the main shareholder.
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(News report from Issue No. 142, published on July 8 2013)
JUNE 27 2013 (The Conway Bulletin) — Romanian PM Victor Ponta visited his Kazakh counterpart Serik Akhmetov in Astana to discuss the countries’ growing economic cooperation. Kazakh state energy company Kazmunaigas owns Rompetrol which controls an oil terminal on the Black Sea. Romania wants Kazakhstan to increase its use of the oil terminal.
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(News report from Issue No. 141, published on July 1 2013)
JUNE 18 2013 (The Conway Bulletin) — China National Petroleum Company (CNPC) and France’s Total agreed a deal with London and Toronto-listed Tethys Petroleum to develop an oil and gas site in Tajikistan. The deal gives each company a third stake in the Bokhtar project. Developing Bokhtar successfully could transform Tajikistan’s economic future.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 17 2013 (The Conway Bulletin) — The figures in the BP Statistical Review of World Energy can be dry but the stories behind the figures are important.
The 2013 edition is an important barometer for the energy-centric economies in Central Asia and the South Caucasus. The most telling figure for the region in this year’s edition of the review was that oil consumption in Kazakhstan grew by over 10% in 2012.
This is a large jump. In the countries covered in the review only Israel’s oil consumption increased at a higher rate. The global rise in oil consumption in 2012 was 0.9%.
The increase reflects Kazakhstan’s emergence from a sharp economic retraction triggered by the global crisis of 2008/9 when oil consumption fell.
Last year Kazakhstan, with a population of 17m, consumed 265,000 barrels of oil per day. By comparison, Uzbekistan, population 29.5m, consumed 82,000 barrels/day and Turkmenistan, population 5m, consumed 100,000 barrels/day.
Across the Caspian Sea, BP reported that Azerbaijan, population 9.3m, consumed 93,000 barrels of oil per day, a jump of 5.4%. This rise in Azerbaijan’s oil consumption, although not as big as Kazakhstan’s leap, still shows an increase in economic activity.
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(News report from Issue No. 139, published on June 17 2013)
BRADFORD/England, JUNE 10 2013 (The Conway Bulletin) — As gritty as ever, Azerbaijani photographer Reni Effendi uses a series of photos on three different subjects to highlight the fragility of life on the fringes.
The “Liquid Land: Legacies of oil and power” exhibition at the Impressions Gallery in Bradford, northern England, starts with portraits of elderly women eking out life in their radiation-stained homes near the Chernobyl nuclear power station in Ukraine. A nuclear reactor at the plant exploded on April 26 1986 throwing radiation over the surrounding countryside.
But this is just the warm-up, for you feel the point that Ms Effendi really wants to make is about her native country, Azerbaijan.
The second half of the exhibition displays portraits of refugees in Azerbaijan. Children pose as they go to school, a man relaxes in the bath. They are ordinary poses of a marginalised people struggling through everyday life.
Dotted between the portraits of the refugees are photographs taken from her father’s old collection of pictures of butterflies. Ms Effendi chose photographs of butterflies which are either on the brink of extinction or have been killed off altogether.
More insight into the refugees and their plight would have helped the social commentary, but the symbolism is powerful and does work.
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(News report from Issue No. 138, published on June 10 2013)
MAY 22 2013 (The Conway Bulletin) — The Kazakh government will make a final decision on whether to buy the 8.2% stake in the Kashagan Caspian Sea oil field by July 2, energy minister Sauat Mynbayev said. ConocoPhillips, the US oil company, is selling the stake which could fetch up to $5b. Both India and China have expressed interest in a deal.
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(News report from Issue No. 136, published on May 27 2013)
MAY 23 2013 (The Conway Bulletin) — Kazmunaigas, the Kazakh state oil and gas company, will increase output at its Uzen oil field in the west of the country, keeping to a pledge made after deadly riots in 2011, the company’s deputy CEO, Daniyar Berlibayev, told Reuters. Falling production at Uzen and job losses were partly blamed for the 2011 riot.
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(News report from Issue No. 136, published on May 27 2013)
MAY 17 2013 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned energy company, said it would borrow $4b to part-finance an ambitious new oil refinery in Turkey, only 10 days after figures showed slowing output at its most important oil field.
The refinery, to be built in western Turkey, will be operational by 2016 and produce 10m tonnes of oil a year. The $4b loan will cover around two-thirds of the construction costs.
SOCAR will fund the rest of the project itself.
Azerbaijan’s wealth is anchored to its energy industry and the refinery plan projects both a confidence about the future and an understanding of its most important market — Europe.
The importance of Europe as Azerbaijan’s main market was underlined when the European Commission approved plans to build a pipeline to pump gas from Azerbaijan across the Adriatic to Italy, on May 17.
A few days earlier, though, on May 7, BP announced that production at the main oil field in the Azeri sector of the Caspian Sea, Azeri-Chirag-Guneshli (ACG), was still falling. Bloomberg reported that production at ACG, which produces three-quarters of the country’s oil, had dropped to 662,000 barrels per day in Q1, a fall of 8.4% from a year earlier.
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(News report from Issue No. 135, published on May 20 2013)
APRIL 29 2013 (The Conway Bulletin) — Kazakhstan will not buy ConocoPhillips’ 8.4% stake in the Caspian Sea Kashagan oil project, local media quoted Kazmunaigas’ chairman, Lyazzat Kiinov, as saying. Although ConocoPhillips had agreed a deal with India’s national energy company, ONGC, to buy the stake for $5b, Kazakhstan has the right to buy the stake first.
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(News report from Issue No. 134, published on May 6 2013)
