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Editorial: Currency controls in Kazakhstan and Azerbaijan

JAN. 8 2016 (The Conway Bulletin) – Both Kazakhstan and Azerbaijan ditched their currencies’ peg to the US dollar in 2015, triggering sudden and sustained depreciation of their currencies.

These were tough, but necessary calls by their Central Banks as these currencies were over-valued compared to oil and the Russian rouble.

What happens next differentiates Azerbaijan and Kazakhstan.

Kazakhstan has allowed, with the odd intervention, its currency to devalue. The Azerbaijani Central Bank, by contrast and very much in keeping with the tight way that the country is run, appears determined to anchor the manat more-or-less at its current rate against the US dollar. The rhetoric may be of liberalisation but the actions are of a conservative and uptight Central Bank.

And this comes across in other ways too. A couple of weeks after the devaluation, Azerbaijan imposed a rule that only people presenting their official ID could change more than $500 into foreign currencies. This could be the first of many exchange controls.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(Editorial from Issue No. 262, published on Jan. 8 2016)

New pharma factory to open in Georgia

DEC. 25 2016 (The Conway Bulletin) — The Georgian government and Austrian company Humanity Holding will team up to build a $130m pharmaceutical factory in Tbilisi. Humanity established a daughter company, Humanity Georgia, to run the project. The factory will produce 800 pharmaceutical products. Humanity Georgia will also import pharmaceutical products from abroad. Georgia’s state-owned Partnership Fund will co-fund the project.

ENDS

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(News report from Issue No. 262, published on Jan. 8 2016)

Frontera to give assessment for Georgian gas complex

DEC. 23 2016 (The Conway Bulletin) — US-based Frontera Resources said its final geological assessment of the South Kakheti gas complex it operates in Georgia will be completed in the first quarter of 2016. Frontera said it also plans to shortly start production, which will initially amount to 77m cubic metres of gas annually.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

Kazakh President’s nephew quits Nur Otan

DEC. 19 2015 (The Conway Bulletin) – Kairat Satybaldy, the 45-year-old nephew of Kazakh President Nursultan Nazarbayev, quit as secretary of the Nur Otan party, one of the most high profile and influential political jobs in the country. Nur Otan is Mr Nazarbayev’s political party. Mr Satybaldy had been secretary of Nur Otan for six years. Some analysts have said he is a potential successor to Mr Nazarbayev.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

 

Kyrgyzstan expels Scottish worker after he insults horse-meat sausages

JAN. 5 2016, BISHKEK (The Conway Bulletin) — Kyrgyzstan deported a Scottish welder working at the country’s biggest gold mine after he jokingly described a horse-meat sausage delicacy as a horse’s penis, an incident that highlights Kyrgyz sensitivities over their national identity.

Michael Mcfeat wrote next to a photo on his Facebook account of workers lining up at a canteen at the Kumtor gold mine on New Year’s Eve: “The Kyrgyz people queuing out the door for there special delicacy the horses penis!!” (sic).

He was poking fun at the chu- chuk, a sausage made up of horse meat and fat which is boiled and served sliced up before festive meals. Local staff, though, at the gold mine, run by Toronto-listed Centerra Gold, were outraged and called a strike.

Mr Mcfeat, 39, tried to leave the country but was detained at Bishkek airport. Media suggested that he could have been prosecuted for racial hatred but instead he was deported for visa infringements.

Mr Mcfeat did not work directly for Centerra Gold but instead for a sub- contractor.

Still, it has aggravated relations between Centerra Gold and Kyrgyzstan. The two sides are locked in a dispute over ownership.

Adil Turdukulov, a Bishkek-based analyst, said relations between foreign and local staff at Kyrgyzstan’s various mining projects are strained over unequal pay and conditions.

“Tense relations between local and foreign employees of Kumtor have been growing, and this is just an effect,” he said.

Kyrgyzstan has been independent since 1991 and, like other Central Asian states, is sensitive about its identity.

And on the streets of Bishkek, most people thought that Mr Mcfeat had gotten off lightly.

Roza, 62, said that he should think before poking fun at Kyrgyzstan as some of Scotland’s own delicacies sounded foul.

“The Scots also eat sheep’s stomach stuffed with heart, oatmeal, guts and fat,” she said referring to haggis, a Scottish national dish.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

 

Azerbaijan closes overseas embassies

DEC. 31 2015 (The Conway Bulletin) – Azerbaijan is considering closing several of its overseas embassies as it looks for ways to cut costs during a period of sustained low oil and gas prices, media reported quoting a foreign ministry spokesman. Azerbaijan has expanded its diplomatic missions over the past few years in line with burgeoning revenues from oil and gas sales. Profit from those sales has now collapsed.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

 

China strikes Tajik gold

JAN. 6 2016 (The Conway Bulletin) — London-listed and Tajikistan-focused China Nonferrous Gold ltd said it produced its first gold from the Pakrut mine. Tajikistan had granted the company a licence to explore the Pakrut mine in 2004.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

Lukoil says sanctions hit exploration in Kazakh section of Caspian Sea

ALMATY, JAN. 3 2016 (The Conway Bulletin) — Russian energy company Lukoil said Western sanctions have damaged its ability to carry out exploration work in the Kazakh section of the Caspian Sea, just as Kazakhstan’s government said it wanted to intensify the search for oil and gas.

Amid an ongoing economic downturn, Kazakhstan’s state-owned energy company Kazmunaigas is looking to boost revenues through new oil and gas projects. In the northern section of the Caspian Sea, Russia’s Rosneft and Lukoil are its main partners.

But Lukoil said Western sanctions had hit its operations.

“We don’t have free available drilling rigs and we cannot import them because of Western sanctions,” Vagit Alekperov, Lukoil’s CEO told Russia-24 in an interview.

Kazakh-Russian consortia explored several fields for oil and gas in the early 2000s but failed to make any major discoveries. Although there were some promising indications that fields held decent reserves, most of the projects were suspended as costs mounted.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

UN court dismisses British gold mining Uzbek expropriation case

DEC. 23 2016 (The Conway Bulletin) — A UN court dismissed a $400m claim by British mining company Oxus Gold against Uzbekistan after the Uzbek government took control of its stake in a gold mine in 2011, a blow to the company’s ambition of recovering cash from its former asset.

The UN Commission on International Trade Law (UNCITRAL) instead awarded $10.2m in damages to Oxus for what it said was a breach of a UK-Uzbekistan Bilateral Investment Treaty on tax issues.

Oxus chairman Richard Shead said that he was disappointed that the UN court had failed to uphold its claim of $400 for what he described as the expropriation of its assets at the Amantaytau Gold Fields (AGF) and the Khandiza deposits.

“I’m devastated by the decision of the arbitration award in relation to Oxus Gold and will continue to work with the company’s lawyers to extract as much value as possible for shareholders of the company,” Mr Shead said.

The UN court has not made clear why it turned down Oxus Gold’s application for damages. Uzbekistan has not commented.

Ozux had owned a 50% stake in the Amantaytau Goldfields JV in the Kyzylkum desert. It lost control of this stake in 2011 after the government ran an audit of the mine and accused Oxus of environmental damage, failing to pay enough tax and not meeting its investment obligations.

Eric McGlinchey, professor at George Mason University who focuses on litigation of Central Asian property, said that Oxus may turn to another court to look for another, more favourable, verdict.

“The $10m the tribunal awarded for Uzbekistan’s violation of fair treatment standards may allow Oxus to tread water a little longer in the hope of receiving a more favourable verdict from a different court,” Mr McGlinchey told The Bulletin.

Western firms have been disparaging of the investment climate in Uzbekistan and will be dismayed by the UN court’s decision against Oxus.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)

Russia eases visa rules for Georgia

DEC. 22 2015 (The Conway Bulletin) – Russia said that it would ease visa regulations on Georgians, another sign that ties between the two neighbours are normalising after years of strained relations. Georgia and Russia fought a brief war in 2008 but relations have improved since Mikheil Saakashvili quit as Georgian president in 2013. The Russian foreign ministry said it may even lift visa rules for Georgians altogether.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 262, published on Jan. 8 2016)