NOV. 13 2015 (The Conway Bulletin) — KAZ Minerals, the Kazakh copper producer, plans to build two hydro- metallurgical processing plants in Zhezkazgan, central Kazakhstan, to extract more copper from low value, media reported. The combined project will cost around $30m. KAZ Minerals is one of Kazakhstan’s most important companies and has been linked to the elite.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 13 2015 (The Conway Bulletin) – Kazakhstan does not have a complaint against the Karachaganak Petroleum Operating (KPO), which operates the oil and gas field, and does not intend to levy a fine against it, energy minister Vladimir Shkolnik said. His intervention was intended to smack down a report by Bloomberg that the energy ministry was preparing a £2b fine against KPO.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 20 2015 (The Conway Bulletin) — US fast food company Wendy’s opened a new restaurant in central Tbilisi, the largest in the world. Spread over three floors, the restaurant is part of a new strategy by Wendy’s to develop a concentrated presence in a handful of countries rather than spread too thinly across several different countries. In Georgia, Wissol Group own the Wendy’s franchise.Fast-food brands have earmarked Georgia as a growth market.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) – Kazakhstan’s economy grew by only 1% in the first 10 months of the year, economy minister Yerbolat Dosayev told a government meeting, far below even the more pessimistic estimates of a year ago. Mr Dosayev said industry had contracted by 2.2%.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) – In a potentially important move for regional trade links, Azerbaijan invited Iran to use its transport hub in the Kazakh port city of Aktau as a launch-pad to send its products across Central Asia. Iran is looking to bolster trade links across the region.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 19 2015 (The Conway Bulletin) – Media in Tajikistan reported that the Russian military had started to pull out of its base in Kulyab, near the border with Afghanistan, a potentially destabilising move in a fragile border region.
There was no explanation as to why the Russian military would pull out of Kulyab but relations have become increasingly strained with locals.
Russian soldiers have been accused of getting drunk and fighting with locals as well as not paying local workers their full salaries, an accusation the Russian base has refuted.
Still, whatever the underlying reason for the withdrawal, Kulyab is one of three bases that Russia uses in Tajikistan and quitting it will change the dynamics.
Russia has 7,000 soldiers stationed in Tajikistan, its largest deployment outside Russia.
It has warned that Taliban activity in northern Afghanistan could threaten Central Asia and encouraged the region’s governments to strengthen their militaries.
The Kremlin, though, has ruled out taking back responsibility for patrolling Central Asia’s borders.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 16 2015 (The Conway Bulletin) – Remittances to Georgia in October were 27% lower, at $90m, than during the same month in 2014, the Central Bank reported, an indication of the regional economic malaise. Remittances from Russia had nearly halved.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 13 2015 (The Conway Bulletin) – Kazakhstan’s trade turnover with member states of the Eurasian Economic Union – that’s Russia, Belarus, Armenia and Kyrgyzstan – has dropped by nearly 26% to $12.1b in the first nine months of this year compared to the same period in 2014, its statistics agency said.
The data is more evidence of the sharp downturn in the region’s economy. It is particularly jarring for Kazakh president Nursultan Nazarbayev who has been one of the main architects and biggest supporters of the Eurasian Economic Union. It was hoped that the trade bloc would stimulate trade but instead, by anchoring outlying economies to Russia, it has hampered it.
A sharp drop in oil prices and Western-imposed sanctions have tipped Russia into a recession and forced its rouble currency to drop in value.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 12 2015 (The Conway Bulletin) – On a trip that also took in neighbouring Uzbekistan, Pakistani PM Nawaz Sharif visited Dushanbe for a meeting with Tajik president Emomali Rakhmon that would have focused on the CASA-1000 energy project. CASA-1000 aims to turn Tajikistan and Kyrgyzstan into power exporters, sending electricity to Pakistan and Afghanistan.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) — Azerbaijan and Kazakhstan are having to brace themselves for a tough 2016. Oil prices are expected to stay low and output is likely to drop too.
Oil exports from Azerbaijan were down by 0.4% in Jan.-Oct. 2015 compared to last year, due to a decline in oil production, according to a source quoted by Reuters, a continuation of steady trend at its major oil field ACG.
BP is under pressure to stem the drop, and has said that it is on target to achieve this. Now an estimate from the US-based Energy
Information Administration appears to back this up. It said Azerbaijan is likely to maintain this year’s average of 870,000 barrels/day, or even more, in the first half of 2016.
But OPEC, a club of oil exporting countries that does not include Azerbaijan, disagrees.
It predicted oil output of 820,000 barrels/day for 2016, a 6% drop compared to 2015.
“Lower prices are likely to accelerate declines in Azerbaijan’s production in 2016 compared to 2015,” OPEC said in a report.
And Kazakhstan is also sending worrying signals.
Yerbolat Dossayev, minister of economy, said the government cut Kazakhstan’s oil output projection for 2015 by 1.5m tonnes to 79m tonnes, a 2.3% fall. OPEC agreed.
“With no new project startups lined up for next year, declining rates are likely to step up in 2016,” it said in its monthly report.
Analysts expect Azerbaijan and Kazakhstan, which cannot influence oil prices, to produce and export at maximum capacity, while cutting down on investment. Earning hard currency from exports is top of the agenda for Central Asia and South Caucasus countries.
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(News report from Issue No. 257, published on Nov. 20 2015)