MARCH 27 2015 (The Conway Bulletin) – On a trip to Beijing, Kazakh PM Karim Massimov signed deals with his Chinese counterpart, Li Keqiang, worth $23.6b. The deals covered a range of industries from steel and glass production to oil refining and hydropower. China and Kazakhstan have increased cooperation in the past few years.
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(News report from Issue No. 225, published on April 12015)
MARCH 13 2015 (The Bulletin) – Kazakhstan may delay modernisation work at its three refineries until 2016 because a cut in the price of rival Russian oil products has knocked their profitability, Yerlan Koibagarov, down-stream director at Kazakh state energy company KazMunaiGaz, was quoted by media as saying.
Upgrade work to the refineries is considered essential in the long run to boost output and guarantee the quality of Kazakhstan’s domestically produced oil products. Demand for oil has soared over the last few years, while output hasn’t been able to keep up.
“If this trend continues I really don’t know if we will have enough monetary funds for the modernisation or not,” the government-owned Astana Times newspaper quoted Mr Koibagarov as saying. “Maybe we will have to prolong the term.”
At the beginning of this month, Kazakhstan slapped a 45 day ban on the import of oil products from Russia. The problem is that the value of the rouble has dropped by around half over the past six months, while the Kazakh Central Bank has tried to maintain the value of the tenge. Global oil prices have also plunged.
Refineries and oil products are an important issue in Kazakhstan.
To head off general discontent about the lack of petrol, the Kazakh government has made self-sufficiency for oil products a major plank of their policies.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 26 2014 (The Conway Bulletin) — Turkish energy company Turcas is considering selling most of its 18.5% stake in the Star oil refinery operated by Azerbaijan’s state energy company SOCAR, media reported. The Star refinery is one of SOCAR’s biggest overseas projects. It is currently being built in Izmir on the Mediterranean coast.
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(News report from Issue No. 178, published on April 2 2014)
MARCH 24 2014 (The Conway Bulletin) — When Tajik President Emomali Rakhmon headed to his home province of Khatlon to celebrate the Nowruz spring holiday he found time to, possibly at least, take part in an important part of Tajikistan’s modern history.
He joined Fan Xianrong, China’s ambassador in Dushanbe, at the official opening ceremony to build Tajikistan’s first oil refinery.
The facility could process up to 1.2m tonnes of crude annually, mirroring the potential of a similar Chinese-built plant in neighbouring Kyrgyzstan.
The Kyrgyz refinery is ready to begin production but has faced persistent protests and inflated compensation claims from locals concerned about the environmental impact. On March 24, Kyrgyzstan’s environmental agency finally ruled the refinery was not in breach of domestic environmental laws.
When they are up and running these refineries may help break the Russian energy grip over Tajikistan and Kyrgyzstan and produce enough supply to feed domestic demand.
The crude oil for the Kyrgyz refinery could be sourced via a spur from the China-Kazakhstan pipeline, while Beijing’s CNPC is working on upstream oil projects in Tajikistan.
For China, building a refinery and controlling crude oil supplies is an effective way of securing influence over regional governments.
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(News report from Issue No. 177, published on March 26 2014)
JAN. 13 2014 (The Conway Bulletin) — Kazakhstan will increase the amount of oil it sends to refineries in western China for processing into oil-based products, media reported quoting the Kazakh energy ministry. Kazakhstan has three refineries, not enough to meet the growing demand for oil-based products. Sending oil to Chinese refineries increases Kazakhstan’s reliance on China.
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(News report from Issue No. 167, published on Jan. 15 2014)
NOV. 11 2013 (The Conway Bulletin) — Shymkent refinery re-started fuel production after a month-long planned shut-down for maintenance work, official Kazakh media reported, easing pressure on petrol supplies. Re-starting the Shymkent refinery, one of only three in Kazakhstan, on schedule was important after reports of petrol shortages and price rises.
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(News report from Issue No. 160, published on Nov. 13 2013)
NOV. 7 2013 (The Conway Bulletin) — Fuel shortages and a power struggle in Uzbekistan appear to have claimed another major scalp in Shavkat Majidov, the long-serving first deputy chief of Uzbekneftegaz. Although no official information has been made available, media reported Uzbek President Islam Karimov sacked Mr Majidov over continued fuel supply problems.
Mr Majidov was a powerful man, in charge of oil-related affairs in Uzbekistan and closely linked with Gulnara Karimova, Mr Karimov’s elder daughter.
Ms Karimova had once been considered a potential presidential successor but more recently she has come under pressure from rivals. Prosecutors in Europe and Uzbekistan have opened investigations into her business affairs; her supporters are being targeted.
Mr Majidov’s removal, according to a media report, is linked to an investigation into shortages at the Ferghana Oil Refinery. Ms Karimova’s ally Akbarali Abdullayev had controlled the refinery until police arrested him in October. This arrest, it appears, left Mr Majidov vulnerable. It has also allowed outsiders another glimpse of the interwoven world of politics and business in Uzbekistan.
Sultan Alisher, a member of parliament loyal to Mr Karimov, and director of the Shurtangaz chemical plant, has taken over as deputy head of Uzbekneftegaz. He’s a safe pair of hands that Mr Karimov can rely on as the power game in Uzbekistan unfolds.
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(News report from Issue No. 160, published on Nov. 13 2013)
OCT. 24 2013 (The Conway Bulletin) — Kazakhstan increased its state-imposed cap on fuel prices by 7 tenge to 117 tenge ($0.76) per litre of 92-octane petrol. Prices for the lower grade 80-octane petrol and diesel were left unchanged.
The closure of the refinery in Shymkent for scheduled repairs has triggered localised fuel shortages in the weeks prior to the price hike, scheduled for November.
In Southern Kazakhstan fuel was sold only through coupons and in limited quantities. Lines of cars queued at petrol stations that quickly ran out of 92-octane fuel and supplied only the 80-octane version.
Fuel price rises hurt consumers and tension is brewing in Kazakhstan.
According to the Kazakhstan Fuel Association (KFA), a fuel industry lobby group, routine repairs at the Shymkent refinery caused the shortage. It is only one of three refineries in Kazakhstan.
The government has instead blamed a general global increase in oil for the rise on the petrol price cap.
Ordinary drivers are even more frustrated. They blame owners of petrol stations for holding back supplies until the fuel price cap had been raised.
They’ve also had to stomach a higher price increase than originally flagged up.
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(News report from Issue No. 158, published on Oct. 30 2013)
OCT. 8 2013 (The Conway Bulletin) — Shymkent refinery, one of three in Kazakhstan, has closed for a month for planned upgrade work, PetroKazakhstan, the plant owner, said. Kazakhstan has been experiencing increasing pressure on petrol supplies throughout the country this year. The government plans to build a new refinery.
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(News report from Issue No. 155, published on Oct. 9 2013)
JULY 20 2013 (The Conway Bulletin) — Tajik President Emomali Rakhmon has officially opened the first oil refinery in Tajikistan. The refinery has the capacity to process around 100,000 tonnes of oil a year. Russia, which had supplied Tajikistan with most of its oil products, will supply oil to the new refinery.
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(News report from Issue No. 144, published on July 22 2013)
