NOV. 6 2016 (The Conway Bulletin) — The directors of the National Iranian Gas Exports Company (NIGEC) and the Georgian International Energy Corporation (GIEC) met to define terms of a supply deal they made in July. NIGEC agreed to sell 40m cubic metres of gas to GIEC in the second half of 2016. GIEC is a subsidiary of Georgian Industrial Group.
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(News report from Issue No. 304, published on Nov. 11 2016)
BISHKEK, NOV. 7 2016 (The Conway Bulletin) — Canadian mining company Centerra Gold, owner of the Kumtor mine in Kyrgyzstan, reported a profitable Q3 for the first time in five years because it had cut costs and processed higher grade, and more valuable, gold but said it is still unable to access cash held in the company’s bank account.
Also, in the first nine months of 2016 the company turned a profit of $87.9m, compared to $44.5m in the same period last year. Centerra also revised upwards by 7% its yearly production guidance to 520,000 – 560,000 ounces. This is important because Kumtor is the single biggest economic asset in Kyrgyzstan, delivering around 10% of its total GDP.
But Centerra, which is 32% owned by the Kyrgyz government, also said that Bishkek’s Supreme Court rejected its appeal in October against a freeze of Kumtor’s bank account. Importantly, the Supreme Court’s decision came just one day after Centerra finalised the buyout of Canada’s Thompson Creek, which Kyrgyz lawmakers had fiercely opposed.
A Bishkek Court has frozen Kumtor’s bank accounts since June because of an unpaid environmental fine. Centerra has said the fine is politically motivated. The two sides have been locked in a row over ownership of the Kumtor gold mine.
CEO Scott Perry said the ongoing spat meant Centerra could not pay a dividend this quarter and hinted it may have to raise external finance.
“Absent access to cash held by KGC (Kumtor), the Company expects that it will be required to raise financing in order to fund construction and development expenditures on its development properties or to defer such expenditures,” he said in Centerra’s statement. The Kyrgyz government has not commented.
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(News report from Issue No. 304, published on Nov. 11 2016)
NOV. 5 2016 (The Conway Bulletin) — Tajik President Emomali Rakhmon inaugurated a new steel plant in the city of Hisor, in western Tajikistan. The plant, which cost 250m somoni ($31.8m) to build, will produce between 100,000 and 200,000 tonnes of steel and other metals. Faroz, a construction company, will be the plant’s main customer.
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(News report from Issue No. 304, published on Nov. 11 2016)
NOV. 2 2016 (The Conway Bulletin) — Kazakhstan’s Parliament approved a law to establish an International Atomic Energy Agency-sponsored low-enriched uranium fuel bank in the country. For years, Kazakhstan lobbied the Agency to establish a nuclear fuel bank in its territory, as a testimony of the country’s efforts to combat nuclear proliferation. Kazakhstan is the world’s largest producer of uranium.
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 28 2016 (The Conway Bulletin) — Kazakhstan-focused copper miner KAZ Minerals posted a strong Q3 operational report, more than tripling production compared to the same period last year, mainly due to the coming online of the Aktogay and Bozshakol projects.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 3 2016 (The Conway Bulletin) — Russia could suspend flight connections with Tajikistan next week, if the countries fail to reach an agreement on flights originating from the new Zhukovsky airport in Moscow, TASS quoted unnamed Russian government sources as saying. Tajikistan’s Aviation Committee had refused to grant permission to companies that operated out of Zhukovsky. Delegations from both governments met in Kyrgyzstan to negotiate a deal, but failed to reach an agreement.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 1 2016 (The Conway Bulletin) — The newly-established Armenia carrier said it is ready to compete with the low-cost Russian company Pobeda, which started flights linking Armenia to Moscow and Rostov-on-Don. Armenia’s CEO, Robert Hovhannisyan, said that his company will fly from the more central Yerevan airport, which will give the local carrier a competitive advantage on Pobeda, which flies to and from Gyumri, Armenia’s second city. Pobeda is a low-cost subsidiary of Russia’s Aeroflot.
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 29 2016 (The Conway Bulletin) — Uzbekistan’s three special economic zones will be ruled under a single, unified legal and tax regime, a presidential decree said. Uzbekistan’s government is trying to improve its business climate and this involves providing more transparent and consistent rules for special economic zones in Navoi, Angren and Jizzakh. It sees the SEZs as critical for attracting foreign investment. Korean Air has a transport hub, for example, at the Navoi SEZ.
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(News report from Issue No. 303, published on Nov. 4 2016)
ALMATY, OCT. 27 2016 (The Conway Bulletin) — Guernsey-based oil company Tethys Petroleum said Kazakhstan-based investment group Olisol had failed to pay a final 9.8m Canadian dollars ($7.3m) instalment that it had promised in return for a stake in the company.
Olisol had been viewed as saviour by Tethys, which had been short of cash because of the collapse in oil prices since 2014 which has destroyed profits at energy companies, but failing to pay up on time effectively crushes the deal.
In a harsh statement, Tethys complained that despite its readiness to move forward, Olisol missed the payment deadline, jeopardising the deal.
“Olisol failed to provide Tethys with any of the C$9.8 million purchase price required to purchase the subscription shares under the Investment Agreement,” the company said, referring to the agreement the parties had signed in December 2015 and updated in April.
“Therefore, Tethys considers Olisol to be in breach of the Investment Agreement and reserves all of its legal rights.”
Tethys also said that Olisol also claimed to be entitled to a full refund of the $5.7m it had already invested in the company, because of mutated conditions.
Olisol could not be reached for a comment.
After a takeover offer from London-listed Nostrum Oil & Gas fell through in the summer of 2015, Tethys had placed all its hopes on Olisol, and its mystery backers, to inject enough money to settle its debts.
The battle for survival in Kazakhstan has become increasingly tough for Tethys, which is also involved in legal battles with its partners in Tajikistan, its other main focus in Central Asia.
Days before it announced that its deal with Olisol had fallen through, Tethys said that it had received a notice from Eurasia Gas Group, a local company which had worked with a Tethys subsidiary in Kazakhstan since 2012. Eurasia Gas said that it was suing Tethys Aral Gas for $2.6m for failing to deliver oil supplies.
This is part of a bigger row. Last month, Tethys Aral Gas had threatened to sue Eurasia Gas for $1.3m in unpaid oil supplies.
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 31 2016 (The Conway Bulletin) — Turkmenistan sold 23b cubic metres of gas to China in the first nine months of 2016 at a price of $185/1,000 cubic metres, according to official statistics published by China’s Border Administration. Supplies from Turkmenistan to China increased by 13% in the considered period, but Turkmenistan is the cheapest gas that China imports. The price that China pays is tied to loans and grants it sent to Turkmenistan over the years to develop its giant gas fields in the south of the country.
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(News report from Issue No. 303, published on Nov. 4 2016)