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Uzbek-Chinese JV plans to start production

MARCH 11 2016 (The Conway Bulletin) – Uzbek-Chinese joint venture New Silk Road Oil & Gas Company Ltd plans to start production at the Karakul gas condensate fields in Uzbekistan’s Bukhara region by the end of the year. The leadership of the Uzbekneftegaz National Holding Company, which is a co-founder of the joint venture told Trend it will award drilling tenders in late April-early May 2016.

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(News report from Issue No. 272, published on March 18 2016)

Uzbekistan raises gas prices

MARCH 17 2016 (The Conway Bulletin) – Uzbekistan has approved gas price increases of 8.2% for its population from April 1, the second price rise in six months.

Utility prices across the region have been increasing over the past couple of years as local currencies have devalued and overall inflation has accelerated.

But they are still sensitive, emotive issues.

Gas and electricity have always been subsidised in the former Soviet Union, so people generally resent increases.

In October, the authorities raised gas prices by 7.2%. This time, other utilities will also rise in Uzbekistan, the government said.

The price of cold water will rise by 5.7%, central heating and hot water by 9% and electricity by 8.9%. Last year in Armenia, proposed electricity price rises triggered street demonstrations that forced the government to back down from increasing prices.

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(News report from Issue No. 272, published on March 18 2016)

Editorial: Banking in Tajikistan

MARCH 18 2016 (The Conway Bulletin) – There are two kinds of banking crises. One is when the financial sector struggles to stay healthy, as toxic assets mar the books of commercial banks, as seen most notably in Kazakhstan in 2011-2013.

The other one is a crisis of trust, when citizens start doubting the ability of their banks to provide cash and protect their savings.

This second type of crisis is now happening in Tajikistan. Our correspondent listened to angry voices from the long queues forming outside Tojiksodirotbank, Tajikistan’s third-largest lender.

A regional economic downturn has hit Tajikistan hard, especially because of the sharp drop in the value of worker remittances from Russia.

The government has put the blame on external and private factors. Notably, the Central Bank blamed exchange offices for the imbalance in the exchange rates.

Now responsibility seems to be shifting to commercial lenders, which are a channel for remittances and an increasingly popular method for paying wages among businesses.

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Editorial from Issue No. 272, published on March 18 2016)

Stock market: Roxi Petroleum, KAZ Minerals, Centerra

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan-focused oil company Roxi Petroleum hit the headlines with a daily increase in its share price of over 10%, although the company did not publish updates regarding its operations at the BNG contract area in Western Kazakhstan.

Still rallying on positive results and an uptake in commodity prices, KAZ Minerals also fared well. The Motley Fool financial website said that, together with Glencore and Fresnillo, KAZ Minerals “could be a great long- term play on a mining sector recovery.”

Centerra Gold, a Kyrgyzstan-based Canadian miner, performed poorly again, and the company blames it on the uncertainty regarding negotiations the ownership structure with the Kyrgyz government.

“The uncertainty about renegotiating the future ownership profile of the Kumtor mine with the Kyrgyz government weighed heavily on the stock,” Mining Weekly quoted CEO Scott Perry as saying.

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(News report from Issue No. 272, published on March 18 2016)

Kazakhstan reveals Q4 GDP growth

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan’s economy grew by 1.2% in Q4 2015, the same rate as in Q3, official data showed. Like the rest of the region, Kazakhstan’s economy has been under increasing pressure from a worsening economic outlook. Last year Q1 GDP growth measured 2.3% and Q2 1.7%. This year the government has predicted growth of just 0.5%.

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(News report from Issue No. 272, published on March 18 2016)

Kyrgyzstan’s GDP drops

MARCH 11 2016 (The Conway Bulletin) – Kyrgyzstan’s GDP was 7.8% lower in the first two months of 2016 compared to the same period in 2015, the country’s statistics agency said. The drop was linked to a sharp fall in gold exports which make up the bulk of Kyrgyzstan’s exports. Gold and silver production was down over 50%, it said. The data shows just how vulnerable Kyrgyzstan is to fluctuations in its core export.

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(News report from Issue No. 272, published on March 18 2016)

Azerbaijan’s president praises TANAP

MARCH 15 2016 (The Conway Bulletin) – At a meeting with Azerbaijani President Ilham Aliyev in Ankara, Turkish President Recep Tayyip Erdogan said that the TANAP gas pipeline project running from the Turkey-Georgia border to the Turkey-Greece border was one of the country’s most important projects. TANAP forms the middle section of the so-called Southern Gas Corridor that will pump gas from the Caspian Sea to Europe. The TANAP shareholders are Azerbaijan’s SOCAR (58%), Turkey’s BOTAS (30%) and BP (12%).

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(News report from Issue No. 272, published on March 18 2016)

Kazakhstan could take back uranium assets

MARCH 15 2016 (The Conway Bulletin) – Kazatomprom, Kazakhstan’s state- owned uranium miner, could take back assets from joint-ventures with some of its foreign partners because they are under performing, Kazakh President Nursultan Nazarbayev said. Kazatomprom’s main partners in the nuclear energy supply chain include France’s Areva, Canada’s Cameco and Japan’s Sumitomo.

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(News report from Issue No. 272, published on March 18 2016)

Atambayev sacks head of Kyrgyz- Russian Development Fund

MARCH 14 2016, BISHKEK (The Conway Bulletin) — Kyrgyzstan’s President Almazbek Atambayev fired Nursulu Akhmetova, one of the most prominent women in Kyrgyz finance, as head of the Kyrgyz-Russian Development Fund barely a year after she took the job.

The $500m Kyrgyz-Russian Development Fund was set up last February to smooth Kyrgyzstan’s entry into the Eurasian Economic Union.

It was supposed to hand out grants and cheap loans to businesses to help them make the transition. Instead, in the seven months since Kyrgyzstan became a Eurasian Economic Union member, the Kyrgyz- Russian Fund has become a source for frustration for Kyrgyz businesses.

News reports quoted Mr Atambayev saying at her sacking: “I’ve spoken about this a few times with the Prime Minister. The Fund has not developed well, and the Government did not make it to work well.”

Kyrgyz businesses have accused the fund of changing the rules and making cash available only to large companies rather than small businesses.

Under Ms Akhmetova, the Fund had insisted that to qualify for loans or grants, businesses had to take out a minimum loan of $3m, contributing 20% itself.

For Mr Atambayev, the sacking is a personal disappointment. Before getting the job, on a three year contract, Ms Akhmetova had been head of the analytical department of the Presidential Administration. She was also its deputy director. Mr Atambayev would have worked with Ms Akhemetova personally.

Her replacement was named as Kubanychbek Kulmatov, a former mayor of Bishkek.

Analyst Emil Juraev said that the Fund still had a role to play if it can regain credibility under new leadership.

“The Russian-Kyrgyz Development Fund, if used well, can certainly have a significant positive effect on economic development of Kyrgyzstan,” he said. “However, so far there have been many reasons for concern about the ability of Kyrgyzstan to effectively and freely manage the funds.”

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(News report from Issue No. 272, published on March 18 2016)

Georgian students protest

MARCH 11 2016 (The Conway Bulletin) – Hundreds of students at Tbilisi State University staged a sit-in to protest at what they said was the non transparent way the university decides on its management structure. The protest attracted nationwide attention, and even forced the intervention of PM Giorgi Kvirikashvili. Some analysts said that the protest could spread.

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(News report from Issue No. 272, published on March 18 2016)