Tag Archives: business

Kazakh energy company spat worsens

JULY 19 2016 (The Conway Bulletin) — In an increasingly vicious argument, Kazakhstan’s state-owned energy company Kazmunaigas accused independent directors of its London-traded upstream subsidiary KMG EP, of misrepresenting its position over a buy-out scheme it was trying to promote. Kazmunaigas’ letter, published by Kazakhstan’s stock exchange, said that its purchase offer for KMG EP’s GDRs still stands and that the independent directors had overesti- mated KMG EP’s operational performance.

ENDS

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

Turkmenistan reorganises its oil and gas ministry

JULY 15 2016 (The Conway Bulletin) — In a move that took observers by surprise, Turkmenistan abolished its oil and gas ministry which had, officially, run the most profitable economic sector in the country, part of a wider structural reform of the government.

At a cabinet meeting, President Kurbanguly Berdymukhamedov justified the move as an effort to improve management and governance systems n the energy sector.

Turkmenistan is considered an important stakeholder in the world’s energy nexus, and the move shook analysts. It holds the fourth-largest gas reserves in the world and exports gas mostly to China via pipeline. For over a decade, European and US lobby groups have pushed for a Trans-Caspian Pipeline to pump Turkmen gas to Europe. Turkmenistan is also building TAPI, a gas pipeline to export gas to India, via Afghanistan and Pakistan.

Simon Pirani, senior research fellow at the Oxford Institute for Energy Studies, said that aside from internal causes, which are hard to guess, a range of external factors could have played in Turkmenistan’s decision to reorganise its hydrocarbon sector.

“The continuing relationship with China, despite lower off-take of gas than Turkmen officials had hoped, the improved ties with Iran and the quite bad relationship with Russia could all be relevant factors,” he told The Conway Bulletin.

The change, however, is unlikely to shift the way that Turkmenistan does business, a system that revolves around the whims and decisions of President Berdymukhamedov.

“Companies and international organisations are aware that Turkmenistan is a centralised system,” Mr Pirani said.

ENDS

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

Armenia’s power company to invest in rebuilding

JULY 21 2016 (The Conway Bulletin) — Armenia’s power generation company Hydro Corporation said it will invest 8.9b drams ($4.2) to rebuild its small hydropower station on the Argichi river in the east of the country. The hydropower station was built in 2013 and financed through a loan from Germany’s development bank KfW.

ENDS

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

Loans in Kazakh banks shrink

JULY 18 2016 (The Conway Bulletin) — The proportion of overdue loans held by Kazakh banks in their combined portfolio shrank from 22.8% to 8.6% at the end of May 2016, compared to a year earlier, Central Bank data showed. The main reason behind the sharp decrease, though, is that Kazkommertsbank, Kazakhstan’s biggest lender, wrote off most of its bad debt.

ENDS

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

Kazakhstan’s Air Astana reports loss

JULY 20 2016 (The Conway Bulletin) — Kazakhstan’s flagship company Air Astana reported a loss of $6.6m in H1 2016, compared to a $8.3m profit in the same period last year. Importantly, passenger numbers decreased by 7% to 1.7m. Kazakhstan’s sovereign wealth fund Samruk-Kazyna (51%) and Britain’s BAE Systems (49%) own Air Astana.

ENDS

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

Kazakh minister of economy receives new roles

JULY 11 2016 (The Conway Bulletin) — In his capacity as head of the Baiterek state holding, Yerbolat Dossayev, former Kazakh minister of economy, was named chairman of Zhilstroisberbank, a top-15 bank in Kazakhstan and subsidiary of Baiterek. A few days later Mr Dossayev was also named head of KazExportGarant, an export credit agency, and chairman of Kazakhstan’s Investment Fund, which are both managed by Baiterek.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Uzbekistan to double fruit and vegetable production

JULY 12 2016 (The Conway Bulletin) — Uzbek PM Shavkat Mirziyoyev said that Uzbekistan aims to double production of fruits and vegetables by the end of 2020. Mr Mirziyoyev said that the country currently produces around 16m tonnes of produce and the government aims to boost output to at least 32m tonnes in the next three years. A word of caution, however. Statistics in Uzbekistan can be easily manipulated for political reasons.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Azerbaijani miner’s production shrinks by 5.9%

JULY 14 2016 (The Conway Bulletin) — Azerbaijani miner Anglo Asian said production shrank by 5.9% to 33,837 ounces in the first half of 2016, compared to the same period last year. The company, listed in London, said it will keep its production target at 73,000/77,000 ounces for 2016 as it expects a boost in the second half.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Stock market: Anglo Asian Mining

JULY 14 2016 (The Conway Bulletin) — Helped by the Brexit impact, shares in Azerbaijan’s Anglo Asian Mining soared at the end of June. A positive outlook has now sent them up again. Its shares closed at 19.5p on Thursday, up 5.4% in one week.

At the end of June, Anglo Asian said it would sell the remainder of its 2016 production as futures, which gave a bullish message to investors, as the company tried to raise cash to pay out some of its debt.

Despite posting a production cut in H1 2016, the company was upbeat because the second quarter outperformed the first.

“The second half of the year has historically been our best performing half due to the seasonally better weather and our production will also benefit from the second SAG mill which is due to start operating next month,” CEO Reza Vaziri said in a statement.

Overall it was a positive week for most Central Asia and South Caucasus-linked stocks, lifted by increased stability in oil and gold prices.

ENDS

(News report from Issue No. 289, published on July 15 2016)

ADB sends loan to upgrade Azerbaijan’s electricity

JULY 15 2016 (The Conway Bulletin) — After lengthy negotiations, the Asian Development Bank (ADB) decided to loan $750m to Azerbaijan, to co-fund improvements to the country’s power distribution sector.

The aim is to connect peripheral regions outside Baku, which suffer from chronic system losses, to the main grid and reduce inefficiency and waste. But with electricity generation falling, Azerbaijan needs to put more attention and effort towards its upstream power sector, rather than the downstream.

It’s true that Azerbaijan is self- sufficient and produces all the electricity it consumes domestically, as the ADB also said.

The worry is rather on the shrinking margin of extra production allocated to exports.

In 2015 electricity exports halved compared to the previous year according to Azerbaijan’s customs agency. Azerbaijan exported 276.8m kWh of electricity in 2015 against 588.3m kWh in 2014.

And the problems continued this year.

In the first half of 2016, electricity generation at Azerlight, the country’s main producer, fell by 6%, compared to the same period last year, to 10.8b kWh. Consumption, on the other hand, continued to grow exponentially at annual rates of 5-9% since 2010.

For quite some time Azerbaijan has said it wants to export more electricity to its neighbours Turkey and Iran, a power export target that seems in vogue across the region currently.

Now this option seems to be falling off the priority list as the government has become increasingly worried that Azerbaijan could soon need external help to fulfil its domestic demand.

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(News report from Issue No. 289, published on July 15 2016)