Tag Archives: business

Kazakh oil company finalises agreement with Vitol

APRIL 4 2016 (The Conway Bulletin) – Kazakhstan’s state-owned oil company, Kazmunaigas, said it finalised an agreement it signed in December with Switzerland-based oil trader Vitol. The deal will allow Vitol to buy oil from Kazmunaigas for an advance payment of up to $3b. The press service of Samruk Kazyna, the sovereign wealth fund that owns Kazmunaigas, said the deal will last for four years.

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

Inter RAO considers selling its Georgian unit

TBILISI, APRIL 1 2016 (The Conway Bulletin) — Russian state-owned power company Inter RAO wants to sell a portion of its electricity generation assets in Georgia, a move that would confirm its retreat from the South Caucasus.

Sources told RIA Novosti that Inter RAO is looking for a buyer for its subsidiary Mtkvari Energy, which operates the 600 MW Mtkvari thermal power plant.

The Mtkvari plant — located near Gardabani, 40km south-east of Tbilisi — is the largest gas-fired thermal power station in Georgia. Inter RAO has been hit hard by an economic malaise in Russia and is looking to raise cash by selling non-core assets.

“At the moment, we cannot confirm that such a deal has taken place,” the company’s press service told media.

Last October, Inter RAO sold Electricity Networks of Armenia JSC, the grid operator in Armenia, to Tashir Group, a Russian real estate company.

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

Gazprom cuts gas price for Kyrgyztan

APRIL 1 2016 (The Conway Bulletin) – Russian gas company Gazprom cut the price of gas it sells to Kyrgyzstan by 9% to $150 per 1,000 cubic metres. Kyrgyz President Almazbek Atambayev had been lobbying for this for some time, saying that a fall in global prices should mean a price reduction for consumers in Krygyzstan. Gazprom bought the Kyrgyz gas distributor in 2014 for a symbolic $1, promising to clear its debt and invest in infrastructure.

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

Oil export ban is illogical, says ex-Kyrgyz official

APRIL 1 2016 (The Conway Bulletin) – For the past six years, there has been an informal ban on petroleum exports from Kazakhstan to Kyrgyzstan, former president of Kyrgyzstan’s Oil Traders Association, Zhumakadyr Akeneyev, said at a conference in Bishkek. According to him this practice is illogical within the framework of the Eurasian Economic Union and it has caused a rise in illegal trading. Kyrgyzstan imports almost all its petroleum products from Russia.

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

Kazakh businessman to chair KazKom

APRIL 1 2016 (The Conway Bulletin) – Kenes Rakishev, a businessman favoured by the Kazakh political elite to front companies they are linked with, was nominated to become chairman of Kazkommerts- bank. Mr Rakishev, 36, has steadily increased his stake in Kaz- kommertsbank over the past couple of years. He led the merger between Kazkommertsbank and BTA Bank which was riddled with debt. Analysts said that the merger of Kaz- kommertsbank with BTA Bank was driven as much by politics as it was by business motives.

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

Kazakhstan’s KMG EP ditches dividend payout for the first time

ALMATY, MARCH 31 2016, (The Conway Bulletin) — KMG EP, a subsidiary of Kazakhstan’s state-owned Kazmunaigas, said it will not pay dividends this year for the first time in a decade, reflecting the impact of low oil prices on the company.

KMG EP had paid dividends each year since its IPO on the London Stock Exchange in 2006.

“The board of directors has recommended not to pay dividends on ordinary shares,” the company said in a statement.

“The decision not to pay dividends is caused by a sharp decline in oil prices since the end of 2014, as a result of which the company’s cash flow and operating profit turned negative.”

The board decided to override an earlier recommendation from the company’s independent directors to pay out dividends this year.

KMG EP’s revenues collapsed by 37% in 2015. Oil prices have fallen from around $120/barrel in June 2014 to around $40/barrel now. Earlier this year oil cost less than $30/barrel.

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

Petronas to start drilling in Turkmen Caspian Sea

MARCH 31 2016 (The Conway Bulletin) – Petronas Carigali, a subsidiary of Malaysia’s largest energy company, said it is ready to start drilling at the Garagol Deniz West field in the Turkmen section of the Caspian Sea. The company is also about to complete a pipeline connection from the field to the onshore processing facility. Petronas is an active player in Turkmenistan’s gas sector.

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

BPC Engineering and Kazakh gov. make turbine deal

MARCH 29 2016 (The Conway Bulletin) – BPC Engineering, the Russian distributor of California-based Capstone Turbine, said it reached an agreement with the Kazakh government to supply seven micro-turbines for the Beineu-Shymkent gas pipeline. Around 50 micro-turbines are needed in the pipeline, part of a $3.5b project to pump gas from west to south Kazakhstan.

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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.

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