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CAML to expand in Kazakhstan

NOV. 23 2015 (The Conway Bulletin) — Copper producer Central Asia Metals said it received government approval for the expansion of its Kounrad project in central Kazakhstan. The company said construction works will start in March 2016 and the expansion will cost $19.5m. Central Asia Metals also said it is set to meet its production target of 12,000 tonnes in 2015, which would represent a 7.7% increase compared to 2014.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Tethys Petroleum extends Kazakhstan’s Olisol deadline

NOV. 25 2015 (The Conway Bulletin) — Canada-based Tethys Petroleum extended an exclusivity period by 14 days for Kazakhstan’s Olisol to submit final details of its $35m buyout offer to Dec. 7. Tethys has also now appointed Alexander Abramov and William Wells to its board meeting, a pre-condition of the offer.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Russia-Turkey row splits Central Asia + S.Caucasus

DEC. 3 2015 (The Conway Bulletin) – Russia is piling pressure on its partners in the Eurasian Economic Union (EEU) to join it in blocking Turkish trade across the region, a move that could fracture regional alliances.

After a Turkish fighter-jet shot down a Russian fighter-jet over Syria last month, Russian President Vladimir Putin promised revenge. This included a ban on Turkish exports to Russia.

To tighten the ban, Mr Putin needs his allies in the EEU — Armenia, Belarus, Kyrgyzstan and Kazakhstan — to stop Turkish goods transiting through their territories into Russia. But it’s a clarion call which is likely to prove divisive for Central Asia and the South Caucasus where Turkey has strong cultural, trade and diplomatic links.

Of the EEU members, Belarus is a natural ally of Russia and will support Moscow. As will Armenia, which has strained relations with Turkey.

For Kazakhstan and Kyrgyzstan the issue is more complicated. They have good relations with both Turkey and Russia and will likely try to appease both sides as Kazakh foreign minister Yerlan Idrissov has said.

“Emotions are running high, but my president, knowing Mr Putin very well personally and knowing his great potential to be constructive and knowing personally (Turkish) President Erdogan, believes and hopes they will think strategically in this very difficult situation,” he told Reuters in an interview.

Outside the EEU, Turkey is likely to find more supporters. Turkmenistan sees Turkey as a natural ally and has been building up a rapport with Ankara while its relations with Moscow have worsened. It wants to pump gas to Europe and this means crossingTurkey.

With its 2008 war with Russia still fresh in the memories, Georgia naturally leans towards Turkey.

Azerbaijan, though, is Turkey’s biggest ally in the region. The countries are close culturally, politically and economically. Their militaries also often train together.

Although relations with Russia have improved over the past couple of years, it didn’t take long for Azerbaijan to rally to Turkey’s cause.

Azerbaijan cut by 20% cargo tariffs for Turkish trucks travelling from Baku across the Caspian to Kazakhstan and Turkmenistan, a move that will irritate the Kremlin and exacerbate regional tension.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Azerbaijan’s Sofaz to diversify portfolio

NOV. 25 2015 (The Conway Bulletin) – Without giving specific detail, Israfil Mammadov, the deputy executive director of Azerbaijan’s sovereign wealth fund Sofaz told Bloomberg News that the fund would be diversifying its investment portfolio next year. Sofaz has already diversified into real estate, gold and equities. Earlier this year, Sofaz bought a landmark shop on one of Tokyo’s most well-known retail streets.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Stock market: Tethys, Nostrum, GHG

NOV. 27 2015 (The Conway Bulletin) — Oil producers suffered in the London stock market this week, due to mixed industrial announcements.

Tethys Petroleum shares lost 13% in one week closing at 4.25p on Friday. Nostrum Oil & Gas was on track to a similar fall after it lost 9% on Monday, recovering later in the week after it showed its investment plans for a new gas treatment facility. On Friday, Nostrum closed at 376p, down 3.5%. Roxi Petroleum shares closed at 7.75p on Friday, down 5% from last week.

Central Asia Metals lost 2.2% this week to close at 161.5p on Friday, while the other major miner in Kazakhstan, KAZ Minerals, gained 7.8% to 99.8p.

Newly-listed Georgia Healthcare Group lost around 2% this week to close at 177p on Friday.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Currencies: Kyrgyzstan’s som, Georgia’s lari

NOV. 27 2015 (The Conway Bulletin) — The only currency that moved substantially this week was the Kyrgyz som, which lost 2.3%, closing at 74/$1 on Friday.

The Kyrgyz Central Bank intervened heavily this week to prop up its currency, which looked like it was losing traction and could have spiralled downwards. During the day on Nov. 26, the exchange rate had surged to 77-79 som/dollar, which prompted the Central Bank to sell $7m in the currency market and enabled the currency to recover somewhat and move back to 74/$1.

Tolkunbek Abdygulov, the Central Bank chief, said this week the exchange rate was influenced by speculators.

All other currencies were stable.

In the South Caucasus, the Georgian lari maintained its level of 2.40/$1 and the Armenian dram was also stable at 480.8/$1.

In Central Asia, the Kazakh tenge floated at around 307/$1 throughout

the week. The Tajik somoni continued its gentle depreciation, and now trades at 6.7/$1.

The dollaruz.com website which monitored the Black Market rate for the Uzbek sum, appears to have closed.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

EBRD gives airport loan to Tajikistan

NOV. 26 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) has given Khujand airport in north Tajikistan, a loan of $900,000 to modernise its runway and buy other essential kit, media reported. The EBRD is a major lender to infrastructure projects in Tajikistan.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Cigarette/Alcohol tax rise in Georgia

NOV. 25 2015 (The Conway Bulletin) – Georgia’s government unveiled plans to boost excise tax on cigarettes and alcohol by up to 50% to raise 90m lari ($37.5m). The tax rises have been triggered by a drop in receipts linked to an economic downturn.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Georgia makes bottle caps

NOV. 26 2015 (The Conway Bulletin) — In an attempt to revive old Soviet factories and boost industrial production, the Georgian government invested 4m lari ($1.7m) into a new company that will manufacture bottle caps. Geocap, set up under the Produce in Georgia state programme, opened its first factory this week. The government has invested over 350m ($146m) lari in industrial enterprises since the programme started in June 2014. Georgia’s drinks industry is growing and is becoming a major employer.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kazakhstan operating Tengiz drops Caspian Sea export route in favour of CPC

NOV. 26 2015 (The Conway Bulletin) — Tengizchevroil (TCO), the consortium producing oil at the Tengiz field near Atyrau in west Kazakhstan, has stopped oil shipments via tanker from the Caspian port of Aktau because of high Eurasian Economic Union (EEU) export tariffs, a port official told Astana TV.

TCO declined to deny the story. Instead it confirmed that it was now exporting more of its oil through the CPC pipeline which pumps oil from Tengiz around the top of the Caspian Sea to Novorossiysk in Russia.

In an interview with Astana TV, a channel owned by the ruling Nur Otan party, Marat Ormanov, director at KazMorTransFlot, the shipping subsidiary of Kazmunaigas, said TCO shipment for crude oil had dropped to zero.

“TCO left in July, re-routing its entire output through the Caspian Pipeline Consortium. Other companies have followed suit and now there is almost no one left in Aktau,” Mr Ormanov said.

A news reporter for Astana TV then quoted him as saying that part of the reason that TCO had quit the Caspian Sea route was because of increased export tariffs imposed by the EEU. The EEU is the Kremlin-led trade bloc that includes Kazakhstan, Belarus, Kyrgyzstan and Armenia.

In December 2013, tankers shipped over 77,000 tonnes of oil every week from Aktau across the Caspian Sea. This year, KazMorTransFlot had planned to send a similar amount to both Makhachkala and Baku. Oil production in Kazakhstan has dropped off this year because of a slump in prices. Companies have also been looking for cheaper ways to export it.

This has coincided with the introduction of EEU rules and tariffs which many businesses have complained add a layer of bureaucracy and complicate business.

The Tengiz field is important to Kazakhstan. It is its biggest and, arguably, most successful oil project. The partners in the project are Chevron, ExxonMobil, Kazmunaigas and LukArco.

In response to the Astana TV interview, TCO told The Bulletin that it was moving away from exporting oil via Aktau.

“TCO has maximised transportation through the Caspian Pipeline Consortium system so as to take advantage of this more cost-effective route,” said Yerlan Kassym, public affairs adviser.

“As a result, transportation through other routes, including the more expensive southern route via the Aktau port, have been minimised.”

TCO declined to comment on EEU tariffs and duties. The Caspian Pipeline Consortium (CPC) is exempt from EEU tariffs because it is classified as an international pipeline.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)