Tag Archives: Azerbaijan

Worst fighting erupts between Armenia and Azerbaijan over N-K

APRIL 2 2016 (The Conway Bulletin) – Serious fighting broke out between Azerbaijani forces and Armenian backed forces around the disputed region of Nagorno-Karabakh, smashing a tense ceasefire that had been in place for 22 years.

Casualty numbers were difficult to gauge but at least several dozen people were killed in the fighting, mainly soldiers. Video footage showed both sides firing rockets and pounding well dug-in positions with heavy artillery, as well as deploying tanks and helicopters.

Alarmed that the fighting could escalate, world leaders urged both sides to sue for peace.

From Washington, John Kerry, US secretary of state, said: “The United States condemns in the strongest terms the large-scale ceasefire violations along the Nagorno-Karabakh Line of Contact, which have resulted in a number of reported casualties, including civilians.”

Russian President Vladimir Putin dispatched Dmitri Medevedev to talk to both Armenian President Serzh Sargsyan in Yerevan and Azerbaijani President Ilham Aliyev in Baku.

As the Bulletin went to press a two-day-old ceasefire held, although there were reports of sporadic fighting.

When the Soviet Union fractured in the late 1980s and early 1990s, localised ethnic tension started to explode into pockets of fighting. Nagorno- Karabakh, a region that belonged to Azerbaijan was one of these region. It was populated mainly by ethnic Armenians who wanted to break away.

After years of fighting that killed 30,000 people the UN negotiated a ceasefire in 1994 that left Armenia- backed rebels running the region.

Thomas de Waal, one of the foremost commentators on the South Caucasus, wrote in the New York Times that the conflict could spread.

“A new all-out Nagorno-Karabakh conflict is the stuff of nightmares. Given the sophisticated weaponry both sides now possess, tens of thousands of young men would most likely lose their lives,” he said.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Panama papers reveal Kazakh, Azerbaijani, Georgian offshore accounts

APRIL 3 2016 (The Conway Bulletin) – A massive leak of documents from the Mossack Fonseca law firm based in Panama showed that government leaders and businessmen around the world have been using offshore tax havens to shelter assets and cash. Included in this list were Azerbaijani President Ilham Aliyev’s family, Georgia’s former PM Bidzina Ivanishvili and the grandson of Kazakh President Nursultan Nazarbayev.

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(News report from Issue No. 275, published on April 8 2016)

Azerbaijan’s SOCAR sells Petkim shares

MARCH 29 2016 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR said it sold part of its stake in the Petkim petrochemical project in Turkey. SOCAR’s subsidiary Socar Turkey Enerji, which controls its Turkish operations, said it sold a 2.75% stake for 147mn liras ($51mn). Socar Turkey Enerji still retains a 56.32% stake in Petkim. SOCAR has been looking to raise cash recently.

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(News report from Issue No. 274, published on April 1 2016)

Business comment: SOCAR & The EU

APRIL 1 2016 (The Conway Bulletin) – SOCAR said it hopes to solve the DESFA affair by the end of the year, but should Fluxys’ shareholders officially decide to back out of an earlier plan to buy part of the Greek company, Azerbaijan’s state-owned company will find it hard to comply with EU regulations.

The so-called Third Energy Package is a set of regulations the EU adopted in 2009 with the objective of liberalising its energy market, chiefly by separating the ownership of upstream, midstream and downstream operations, a process known as “unbundling” in Brussels.

According to these rules, SOCAR cannot buy, as it wished, a majority stake in DESFA, the Greek gas distributor.

That would effectively mean that the gas supplier would own the distributor as well.

SOCAR also owns a majority stake in TANAP, a pipeline running across Turkey. SOCAR is allowed to keep its 58% share in TANAP because it lies outside EU jurisdiction.

But when in 2013 it agreed a deal to buy 66% of the debt-ridden Greek company for €400m ($454m), the European Commission stepped in and froze the purchase. It said that SOCAR could own 49% of DESF but no more.

For a year now, SOCAR has tried to find buyers for part of the 66% stake it agreed to buy. If Fluxys flakes, Italian Snam Rete Gas and Dutch Gasunie could be next in line.

Even though SOCAR has become a good friend of the EU for its key role in the completion of the Southern Gas Corridor project, seen by Europe as a viable alternative to gas from Russia, it apparently cannot escape the severe hand of the EU’s army of regulators.

ENDS

(News report from Issue No. 274, published on April 1 2016)

“World’s biggest bribe scandal” involves Kazakhstan and Azerbaijan

ALMATY, MARCH 29 2016, (The Conway Bulletin) — Unaoil, a consultancy based in Monaco, channelled millions of dollars of bribes to Emerging Market governments and their companies, including in Azerbaijan and Kazakhstan, on behalf of major Western firms, an investigation by Australia’s The Age and The Huffington Post said.

The report used data from a massive cache of leaked emails and corporate documents from 2001-2012 to unveil what it described as “the world’s biggest bribe scandal.”

The Ahsani family, Monaco millionaires Ata and his sons Cyrus and Saman, ran Unaoil as a sort of lobbying intermediary. They denied allegations of bribe paying.

“What we do is integrate Western technology with local capability,” Ata Ahsani told the investigation team.

Effectively, the report said of Unaoil: “Its operatives bribe officials in oil-producing nations to help these clients win government-funded projects. The corrupt officials might rig a tender committee. Or leak inside information. Or ensure a contract is awarded without a competitive tender.”

One of Unaoil’s biggest client was US engineering giant Kellogg Brown & Root (KBR), a former subsidiary of Halliburton, which operates in Azerbaijan and Kazakhstan.

In both Azerbaijan and Kazakhstan, KBR allegedly used Unaoil’s services to reach preferential deals and licences, mostly through personal connections and bribes to public officials.

KBR has not commented.

In Kazakhstan, leaked emails showed that Unaoil allegedly liaised with both Eni (codenamed “the spaghetti house”) and Kazmunaigas officials (codenamed “shashlik”) to secure tenders for KBR at the Kashagan offshore oil project.

Italian oil major Eni has not commented.

In Azerbaijan, both KBR and Swiss ABB allegedly won offshore oil contracts through insider information leaked by an in-country lead who had been bribed by Unaoil.

Swiss ABB has not commented.

After the report was published, police in Monaco raided the head- quarters of Unaoil. The FBI, the British Serious Fraud Office and the Australian Federal Police all launched major bribery investigations linked to the case.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Kerry wants Azerbaijan-Armenia conflict resolution

MARCH 30 2016 (The Conway Bulletin) – US secretary of state John Kerry said he wanted to see “an ultimate resolution” on the conflict between Azerbaijan and Armenia over the disputed region of Nagorno-Karabakh. Mr Kerry was meeting with Azerbaijan’s President Ilham Aliyev in Washington when he made the comments. Just days earlier, Azerbaijan said two of its soldiers were killed in clashes with the Armenian army.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Azerbaijani SOCAR’s deal to buy Greek gas distributor put into doubt

MARCH 28 2016 (The Conway Bulletin) – Belgian gas distributor Fluxys has pulled back from buying a 17% stake in Greece’s gas pipeline operator DESFA, media reported, potentially derailing a deal by Azerbaijani energy company SOCAR to buy 49% of the Greek company.

Azerbaijan’s SOCAR had initially agreed to buy a 66% stake in the Greek distributor in 2013 for €400m ($454m) but the European Commission stepped in and said that a 2009 regulation meant it could only buy a 49% stake. This effectively froze the deal until SOCAR found a company to agree to buy the 17% stake.

The pressure is now on SOCAR, which has until the end of 2016 to comply with EU regulations and find another purchaser.

In the current low-priced market, though, this will not be easy and SOCAR admitted as much.

“Currently we are in the process of reducing the stake of DESFA through sales to potential buyers in Europe and this process is expected to be completed in late 2016,” the Natural Gas Europe website quoted an unnamed source at SOCAR as saying.

For SOCAR, buying a stake in DESFA is important. It is due to play an important technical back-up role in Greece for the final section of a pipeline pumping gas to Europe from Azerbaijan.

The Greek newspaper Ekathi- merini quoted unnamed sources as saying that the deal with Fluxys was off. When reached by phone, though, Fluxys declined to confirm one way or the other.

A Fluxys spokesman said: “Since the beginning, we have not been involved directly as a company. It is a matter that Fluxys shareholders need to address.”

Neither Belgium’s Publigas, which owns 77.7% in Fluxys, nor Canada’s Caisse de depot et placement du Quebec, which owns 20% in Fluxys, could be reached for a comment.

Fluxys had looked like a good fit to buy DESFA because it owns a 19% stake in the Trans-Adriatic Pipeline (TAP), the planned final section of a network of pipelines stretching from the Caspian Sea to Europe.

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(News report from Issue No. 274, published on April 1 2016)

Architect who added curves to Azerbaijan’s skyline dies

MARCH 31 2016 (The Conway Bulletin) – Zaha Hadid, known for designing some of the world’s most cutting edge buildings, including the Heydar Aliyev Centre in Baku, died in Miami of a heart attack aged 65.

Hadid had been admitted to hospital for bronchitis when she suffered the heart attack, her publicist said.

Tributes poured in from around the world for Hadid, a British citizen of Iraqi descent, who pushed the boundaries of building design throughout her career.

Her buildings were typically full of curves and melted into the surrounding landscape, urban and natural. She is probably, globally, best known for designing the swimming arena for the London 2012 Olympic Games and the Phaeno Science Park in Wolfsburg, Germany.

But Hadid also left her mark in the Central Asia/South Caucasus region by designing a museum in Baku named after Heydar Aliyev, Azerbaijan’s former president and the father of current president Ilham Aliyev.

The Heydar Aliyev Centre opened in 2012 to international acclaim. In 2014, London’s Design Museum gave Hadid its design of the year award.

“Located in a part of the world associated with flying carpets and magic lanterns, the levitating soft white peaks of Zaha Hadid’s Heydar Aliyev Cultural Centre feel indigenous,” the Design Museum said. “Hadid has made a topologist’s dream into a practical reality shaped by hypnotically fluid forms. A masterwork of invention and execution.”

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(News report from Issue No. 274, published on April 1 2016)

Russian tourism to Azerbaijan to rise

MARCH 28 2016 (The Conway Bulletin) – The number of Russian tourists going to Azerbaijan for holidays will increase by 50% according to calculations by Russian financial newspaper Kommersant. Due to diplomatic sanctions against Turkey, the Russian government banned Turkey as a holiday destination for its citizens.

ENDS

(News report from Issue No. 274, published on April 1 2016)

Azerbaijan’s SOCAR applies to ADB for Shah Deniz loan

MARCH 28 2016 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR said it applied for a $450m loan from the Asian Development Bank (ADB) to help pay for the expansion of its Shah Deniz gas project.

The loan, according to both ADB and SOCAR, is aimed at financing the second phase of the project, which the company plans to bring online by 2018. Shah Deniz is core to Azerbaijan’s future gas plans.

BP, which develops the field together with SOCAR, said the expansion of the Shah Deniz project will cost around $28b and will add 16b cubic metres annually to the current production of around 10b cubic metres.

Gas produced at Shah Deniz 2 is already booked for export to Georgia and Turkey in 2018 and further on to Europe by 2019, with the completion of the Southern Gas Corridor.

Unnamed ADB sources told Natural Gas Europe: “It is in the processing stage. Once approved, the loan will be provided under the state guarantees.”

There was no information on the timeline of the loan.

SOCAR, hit by sustained low oil prices, has applied to various sources for financing and has sought to divest from some of its unprofitable ventures to raise cash for its core projects.

ENDS

(News report from Issue No. 274, published on April 1 2016)