Tag Archives: business

Tajikistan’s Airline receives safety certificate

MAY 25 2016 (The Conway Bulletin) — Tajikistan’s airline company Somon Air received a safety certificate (Operational Safety Audit, IOSA) from the International Air Transport Association (IATA), the first Tajik carrier to comply with industry standards. Contacted by The Bulletin, IATA said that Somon Air has not yet applied for membership. Kazakhstan’s Air Astana and Uzbekistan Airways are the only two Central Asian IATA members.

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(News report from Issue No. 282, published on May 27 2016)

Azerbaijan may receive funding for pipeline from EBRD

MAY 25 2016 (The Conway Bulletin) — During a trip to Azerbaijan, EBRD President, Sir Suma Chakrabarti, confirmed that the Bank is considering a €1.5b ($1.7b) loan to the Trans-Adriatic Pipeline (TAP), part of the Southern Gas Corridor network that will pump gas from Azerbaijan’s Caspian Sea fields to Europe (May 25). Sir Suma also said the Bank is considering co-financing the TANAP pipeline, which will run from Azerbaijan through Turkey to Greece, where it will joint TAP.

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(News report from Issue No. 282, published on May 27 2016)

Georgian authorities inaugurate construction work

MAY 23 2016 (The Conway Bulletin) — The Georgian authorities inaugurated construction work in Tbilisi at what will become the fifth-largest technological institute in the world. The Cartu Foundation, supported by Georgia’s richest man Bidzina Ivanishvili, will cover the costs, which will run to several million euros, according to the government. It is still unclear when the Georgia’s Technological Institute will be completed. Georgia is trying to position itself as a tech hub for the region.

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(News report from Issue No. 282, published on May 27 2016)

Stock market: Nostrum Oil & Gas and KTO pipeline

MAY 27 2016 (The Conway Bulletin) — Amsterdam-based Nostrum Oil & Gas posted poor results for Q1 2016, but the company’s promising outlook encouraged investors, sending its share up by 1% when the results were published on May 25 before falling on May 26.

The share price has grown steadily since the beginning of April, as the company successfully completed maintenance work the month before.

The management is confident that new agreements and infrastructure would boost the company’s profile “We look forward to completing negotiations to open up the possibility of transporting our crude oil through the KTO pipeline, thereby further reducing our crude oil transport costs,” CEO Kai-Uwe Kessel said in a statement. The KTO pipeline is the network operated by the Kazakh pipeline company KazTransOil.

Mr Kessel also said that the company plans to ramp up production by 2.5 times to 100,000 barrels of oil per day in 2017.

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(News report from Issue No. 282, published on May 27 2016)

End Game at Kazkom

MAY 27 2016 (The Conway Bulletin) — For the past six months, Kazkommertsbank, Kazakhstan’s largest lender, has been hogging the news flow.

Every week, board members have been changed, shares were bought and sold and agreements were signed.

Now it has become clear that by the end of the year, Kenes Rakishev will seize full ownership of the bank. He has already accrued a 71% stake over the past few weeks and has proposed to buying out the remaining minority shareholders.

One of them, importantly, is Samruk-Kazyna, Kazakhstan’s sovereign wealth fund.

In early 2009, as the fallout of the Global Financial Crisis sank Kazakhstan’s banking sector, Samruk-Kazyna paid around $1b to boost KazKom’s capital and refinance corporate loans. The bailout resulted in Samruk-Kazyna owning a 21% stake in the bank.

Samruk-Kazyna gradually reduced its stake in the second half of 2014 and said it is now ready to sell its remaining 10.72% stake to Mr Rakishev. This will likely be the end of a saga that has seen KazKom take over the beleaguered BTA Bank and drop its founding chairman Nurzhan Subkhanberdin.

Now it’s time for Mr Rakishev, son-in-law of defence minister Imangali Tasmagambetov, to be at the helm and use KazKom for his business interests.

Many, however, believe Mr Rakishev will serve the interest of the highest echelons in Astana.

In essence, this means ownership of the two largest banks in Kazakhstan – KazKom and Halyk Bank – are concentrated in the hands of people close to the top of the Kazakh elite. Mr Rakishev owns KazKom, Timur Kulibayev and his wife, Pres. Nazarbayev’s daughter, own Halyk Bank.

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(News report from Issue No. 282, published on May 27 2016)

Concern grows over Kyrgyz power generating capacity

BISHKEK, MAY 20 2016 (The Conway Bulletin) — A senior analyst questioned whether Kyrgyzstan will be able to hit its obligations for the CASA-1000 project that aims to supply Pakistan and Afghanistan with electricity generated by Tajik and Kyrgyz hydropower stations.

Most of the electricity needed for the CASA-1000 project is set to be produced by Tajikistan but Kyrgyzstan still has an important role to play. The problem is that its infrastructure and ability to ramp up output appears increasingly fragile.

Alexander Knyazev, political scientist, member of Russian Geographical Society and expert on Central Asia was downbeat about Kyrgyzstan’s prospects of playing a significant role in CASA-1000.

“Even in the long-term, this project has no prospects to me as it is not based on Kyrgyzstan’s and Tajikistan’s real capacities. The refurbishment and modernisation of Bishkek and Toktogul power plants require funds, which Kyrgyzstan does not have,” he told the Bulletin.

“Moreover, Pakistan is insisting on year-round delivery, whereas exports can only be seasonal.”

Mr Knyazev’s warning will worry international policymakers. The World Bank is funding most of the $1.2b cost of the project which the US has said is a major part of its north- south new Silk Road.

At the end of last year Kyrgyzstan’s biggest hyrdopower station at Toktogul broke down and a few weeks later Russia pulled out of a $2b project to build a new dam and hydropower station because a recession linked to the collapse in oil prices have heavily dented its spending power.

Construction on the CASA-1000 project was officially started this month.

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(News report from Issue No. 282, published on May 27 2016)

Kyrgyz environmental court fines Centerra

BISHKEK, MAY 25 2016 (The Conway Bulletin) — A Kyrgyz court fined the Kumtor Gold Company, a subsidiary of Canada’s Centerra Gold, 6.7b som ($98m) for environmental damage, in a move that will strain relations between the government and the mining company.

The fine follows an earlier penalty of $10,000 the court levied at Kumtor on May 23. Centerra, has denied any wrongdoing.

“Centerra and Kumtor strongly dispute the claims and will appeal both decisions to the Bishkek City Court and, if necessary, to the Supreme Court. Centerra and Kumtor have expressly reserved their rights to refer such disputes to international arbitration,” John Pearson, VP of investor relations at Centerra, said. Although strictly unrelated to the ongoing spat between Centerra

and the Kyrgyz government, the latest series of fines are a sign that relations are worsening. The Kyrgyz government wants to own a direct share in Kumtor Gold.

Last month, Kyrgyz police raided a Centerra-owned office in Bishkek looking for evidence linked to allegations Centerra had received an illegal dividend in 2013 from Kumtor Gold.

Centerra has denied the allegations.

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(News report from Issue No. 282, published on May 27 2016)

Kazakhstan-focused company posts revenue fall

MAY 25 2016 (The Conway Bulletin) — Hit by sustained low oil prices, Kazakhstan-focused energy company Nostrum Oil & Gas posted a 27% fall in revenues in Q1 2016, compared to the previous year. Importantly, average daily production fell by 15% compared to last year, to 38,754 barrels of oil per day.

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(News report from Issue No. 282, published on May 27 2016)

Kazakhstan to receive loan from World Bank

MAY 26 2016 (The Conway Bulletin) — Kazakhstan’s Parliament ratified an agreement to receive a $1b loan from the World Bank’s International Bank for Reconstruction and Development, a cash injection that the government will use to pay for expenses in 2016. Kazakhstan’s finance ministry and the IBRD had agreed on the loan on May 11.

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(News report from Issue No. 282, published on May 27 2016)

Kazakh minister says Tengiz expansion will be delayed

MAY 25 2016 (The Conway Bulletin) — Kazakhstan’s energy minister Kanat Bozumbayev said that investment into the expansion of Tengizchevroil, the Chevron-led consortium exploiting the Tengiz oilfield in the west of the country, will be delayed until next year. Mr Bozumbayev said that costs for the so-called Future Growth Project would be $37b, up from an earlier estimate of $34b. The project has been delayed because of the low oil prices.

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(News report from Issue No. 282, published on May 27 2016)