Category Archives: Uncategorised

Azerbaijan’s gas corridor to be funded

JULY 20 2016 (The Conway Bulletin) — Azerbaijan’s finance minister Samir Sharifov said that his country is in talks with several international financial institutions to raise funds to pay for the construction of the so-called Southern Gas Corridor, a network of pipelines that will pump gas from the Caspian Sea to Europe. Mr Sharifov told the FT that the World Bank, the European Bank for Reconstruction and Development and the Asian Development Bank are all considering supporting the project.

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(News report from Issue No. 290, published on July 22 2016)

Azerbaijan’s ministry of finance closes banks

JULY 21 2016 (The Conway Bulletin) — Azerbaijan’s ministry of finance and the Central Bank stripped four local lenders of their banking licence, a sign that the banking crisis in the country is far from resolved. Rufat Aslanli, chief of the Financial Market Supervisory Body, said that Dekabank, Kredobank, Parabank and Zaminbank, all small-sized banks, will be shut or reorganised and that their creditors will be refunded.

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(News report from Issue No. 290, published on July 22 2016)

Turkey is a vital transit route for the region

JULY 22 2016 (The Conway Bulletin) — The brief closure of the Bosphorus Strait to oil tankers for a few hours on July 15/16 during a failed coup attempt was a reminder of just how critical a stable, reliable and open Turkey is for trade flows into and out of Central Asia and the South Caucasus.

The Bosphorus Strait connects the Black Sea with the Aegean Sea and the Mediterranean Sea. If it is closed, Georgia’s Black Sea ports of Poti and Batumi are cut off – key gateways for the region for a variety of goods.

It’s an essential corridor too for oil shipments from the Chevron-lead Tengizchevroil project in western Kazakhstan which sends oil via a pipeline around the Caspian Sea to the Russian Black Sea port of Novorossiysk where it is loaded onto tankers and sent out to the rest of the world via the Bosphorus Strait.

But it’s not just the Bosphorus Strait which makes Turkey a vital transit route for Central Asia and the South Caucasus. Turkey also hosts a series of oil and gas pipelines which will link the Caspian Sea to Europe, set to become an increasingly important market.

Samuel Lussac, Caspian research manager at Wood Mackenzie, said international conventions should prevent Turkey from closing the straits but, if it did, it would have major repercussions.

“This would have a massive impact, as you have more than 1 million barrels per day of Kazakh and Russian crude shipped from Novorossiysk,” he said.

He also said the BTC oil pipeline that runs from Baku to Ceyhan on Turkey’s Mediterranean coast was an important route.

“From a transit perspective, Turkey is critical for Azerbaijan. Most of Azerbaijan’s crude is transported via BTC which goes via Turkey,” he said.

And the region’s reliance on Turkey as a transit partner is growing. New gas pipelines connecting the Caspian Sea to Europe are currently being built, underscoring the importance of Turkish stability.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Turkmen President promotes his son

JULY 19 2016 (The Conway Bulletin) — Serdar Berdymukhamedov, son of Turkmenistan’s President Kurbanguly Berdymukhamedov, was appointed to an unspecified post in the country’s foreign ministry, the opposition website Alternative News Turkmenistan reported. According to the report, Serdar Berdymukhamedov previously worked in the now-dismissed state agency responsible for hydrocarbon resources.

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(News report from Issue No. 290, published on July 22 2016)

Imports fell in Georgia

JULY 19 2016 (The Conway Bulletin) — Georgia’s Statistics Committee said that trade turnover had shrunk by 11% in H1 2016, compared to the same period last year, dragged down by dwindling imports. Overall, the fall in both exports and imports resulted in a smaller trade deficit of $2.3b. Turkey, Russia and China are Georgia’s main trading partners.

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(News report from Issue No. 290, published on July 22 2016)

Kazmunaigas and KMG EP

JULY 22 2016 (The Conway Bulletin) — Kazakhstan’s oil and gas sector seems to be in a muddle with the corporate battle between Kazmunaigas, owned by the country’s sovereign wealth fund Samruk-Kazyna (90%) and the Central Bank (10%), and its London-traded upstream subsidiary, KMG EP.

The power struggle between the two seems complicated, but it’s not. Kazmunaigas’ covert intention is to increase its 57% stake in KMG EP because it wants to take more control of its profitable upstream business, especially now that oil prices are low.

KMG EP’s independent directors, on the other hand, want other minority shareholders to resist Kazmunaigas’ pressure. The alternative, according to them, will be a de-listing from the London Stock Exchange, as independence would not be guaranteed.

Kazmunaigas has always said that its primary intention is not to buy out its subsidiary, but to change the terms through which the two companies interact, to smooth bureaucracy and make the businesses more agile.

But that’s not its real goal. If it was, it would have not have raised its initial offer to minority shareholders of $7.88/GDR to $9/GDR. And it would have not have made concessions on its corporate governance plans immediately after the first negative reaction from KMG EP’s independent directors.

If Kazmunaigas gets its way and buys out most of the minority shareholders, it may force independent directors to resign and the company to de-list from London’s GDR market.

For investors looking for a transparent sector to bet on, this won’t be good news.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Tajikistan confiscates Iranian products

DUSHANBE, JULY 15 2016 (The Conway Bulletin) — The authorities in Tajikistan have banned the import of dozens of Iranian products, an apparent retaliation for a visit made by Tajik opposition leader Muhiddin Kabiri to Tehran last year.

Mr Kabiri is the exiled leader of the Islamic Renaissance Party of Tajikistan which had once been the biggest opposition party in the country. It was hounded and broken up last year with most of its leadership imprisoned.

Tajk President Emomali Rakhmon has said that that he wants Mr Kabiri extradited from Europe, where he now lives. Instead, Iran’s leadership invited him to a theology conference last year in Tehran where he met with Iranian religious leader Ayatollah Ali Homanai.

Now, in a possible retaliation, Tajikistan’s government standards agency has said that many Iranian imports do not meet their health standards and don’t carry product descriptions in Tajik. They have been banned.

In Dushanbe, the Tajik Agency for standardisation, metrology, and certification said it had seized 664 tonnes of good from Iran this year.

Ibodullo Kubodiyon, the head of the agency, said at a news briefing that some Iranian companies have stopped importing products to Tajikistan.

“Food products imported by these companies did not meet the established TajikStandart requirements, the products also did not have proper labelling. In particular, there was no description of the goods in Tajik language,” he said.

Tajikistan and Iran have generally made awkward allies. They share cultural and linguistic similarities but their approach to religion differs.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kyrgyzstan-operated Centerra finalises investments

JULY 20 2016 (The Conway Bulletin) — Canadian miner Centerra Gold said it finalised a financing deal with three investment banks to partially fund its takeover of Thompson Creek, a US-based miner. Centerra will receive 185m Canadian dollars ($142) from BMO Capital Markets, Credit Suisse Securities Canada and Scotiabank. Centerra Gold’s main asset is the Kumtor gold mine in Kyrgyzstan.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Amsterdam court orders seizure of assets linked to Uzbek President’s daughter

JULY 20 2016 (The Conway Bulletin) — A court in Amsterdam ordered the seizure of €123m ($135m) of assets linked to Gulnara Karimova, the eldest daughter of Uzbek president Islam Karimov, as part of an ongoing global investigation into bribes paid by major telecoms firms looking to enter the Uzbek market.

Gibraltar-registered Takilant, the company linked to Ms Karimova that took bribes to award telecoms licences in Uzbekistan, had its assets frozen in Sweden in 2012/13 in a related court case but this is the first time a Western court has directly confiscated them.

The Dutch ruling targeted cash that Amsterdam-based Russian telecoms operator VimpelCom and Sweden’s Telia Company paid Takilant between 2004 and 2013.

In its decision, the court said that Takilant demonstrated “a way of doing business that is socially extremely destabilising.”

The latest ruling aggravates a corruption scandal that has sunk Uzbekistan’s already weak reputation as a place for Western businesses to operate.

It also deals another blow to Ms Karimova’s profile in Uzbekistan, where the self-styled fashion designer and diplomat was once touted as a potential president. She has been under house arrest in Tashkent for two years and her associates are in prison for various financial crimes.

With the confiscation of Takilant’s assets, the courts start to close in on reclaiming some of the millions of dollars paid to Ms Karimova. Previously, courts had only managed to fine European telecoms companies for their illegal practices.

In February, a US court ruled that VimpelCom, listed on the New York Stock Exchange, was guilty of bribing Takilant and fined it $795m. Another US prosecutor is currently trying to freeze $550m of Takilant’s assets.

Sweden’s Telia has also said at it has put aside millions of dollars to pay fines linked to bribery charges.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kazakh court jails IS activist

JULY 19 2016 (The Conway Bulletin) — A court in Petropavlovsk, in northern Kazakhstan, sentenced a man to seven years in prison for joining the IS extremist group. According to the court, the man travelled to Syria in 2012. Warning of a growing IS recruitment drive, Kazakhstan’s security services have said they will intensify their clampdown on Islamic extremism.

ENDS

(News report from Issue No. 290, published on July 22 2016)