Tag Archives: business

British Airways cuts flight to Azerbaijani capital, its final link with region

MARCH 17 2016 (The Conway Bulletin) – British Airways will cut a 21-year-old route when it drops its six-times-a- week service to Baku from London.

It said that poor demand, linked to the sharp economic downturn that has engulfed the region in the past 18 months, has made the route unprofitable.

“We have taken the decision to suspend the London Heathrow to Baku route as it is no longer commercially viable,” a statement read.

“The final service from Heathrow will be on April 29, 2016 and the final service departing Baku will be on the same day.”

The London-Baku route is the last remaining BA flight into Central Asia and the South Caucasus.

It has slowly dropped the region’s capitals as destinations.

Yerevan and Bishkek were dropped in 2012, Tbilisi in 2013 and Almaty in 2014.

But symbolically, dropping Baku is more serious than any of the others. Baku is the centre of BP’s operations in the region which has always driven demand.

It was also a route that BA first flew in 1995, four years after the break up of the Soviet Union. It handed over to British Mediterranean Airways in 2003 before BMI took it on in 2007. BA then reclaimed the route in 2012.

As BA has dropped routes to Central Asia and the South Caucasus, though, regional airlines have stepped in. Air Astana now boasts it is the only airline that flies directly between London and Almaty/Astana.

Soon, Azerbaijan Airlines will be able to give the same boast on flights to Baku.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Uzbek-Chinese JV plans to start production

MARCH 11 2016 (The Conway Bulletin) – Uzbek-Chinese joint venture New Silk Road Oil & Gas Company Ltd plans to start production at the Karakul gas condensate fields in Uzbekistan’s Bukhara region by the end of the year. The leadership of the Uzbekneftegaz National Holding Company, which is a co-founder of the joint venture told Trend it will award drilling tenders in late April-early May 2016.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Editorial: Banking in Tajikistan

MARCH 18 2016 (The Conway Bulletin) – There are two kinds of banking crises. One is when the financial sector struggles to stay healthy, as toxic assets mar the books of commercial banks, as seen most notably in Kazakhstan in 2011-2013.

The other one is a crisis of trust, when citizens start doubting the ability of their banks to provide cash and protect their savings.

This second type of crisis is now happening in Tajikistan. Our correspondent listened to angry voices from the long queues forming outside Tojiksodirotbank, Tajikistan’s third-largest lender.

A regional economic downturn has hit Tajikistan hard, especially because of the sharp drop in the value of worker remittances from Russia.

The government has put the blame on external and private factors. Notably, the Central Bank blamed exchange offices for the imbalance in the exchange rates.

Now responsibility seems to be shifting to commercial lenders, which are a channel for remittances and an increasingly popular method for paying wages among businesses.

ENDS

Editorial from Issue No. 272, published on March 18 2016)

Stock market: Roxi Petroleum, KAZ Minerals, Centerra

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan-focused oil company Roxi Petroleum hit the headlines with a daily increase in its share price of over 10%, although the company did not publish updates regarding its operations at the BNG contract area in Western Kazakhstan.

Still rallying on positive results and an uptake in commodity prices, KAZ Minerals also fared well. The Motley Fool financial website said that, together with Glencore and Fresnillo, KAZ Minerals “could be a great long- term play on a mining sector recovery.”

Centerra Gold, a Kyrgyzstan-based Canadian miner, performed poorly again, and the company blames it on the uncertainty regarding negotiations the ownership structure with the Kyrgyz government.

“The uncertainty about renegotiating the future ownership profile of the Kumtor mine with the Kyrgyz government weighed heavily on the stock,” Mining Weekly quoted CEO Scott Perry as saying.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Azerbaijan’s president praises TANAP

MARCH 15 2016 (The Conway Bulletin) – At a meeting with Azerbaijani President Ilham Aliyev in Ankara, Turkish President Recep Tayyip Erdogan said that the TANAP gas pipeline project running from the Turkey-Georgia border to the Turkey-Greece border was one of the country’s most important projects. TANAP forms the middle section of the so-called Southern Gas Corridor that will pump gas from the Caspian Sea to Europe. The TANAP shareholders are Azerbaijan’s SOCAR (58%), Turkey’s BOTAS (30%) and BP (12%).

ENDS

(News report from Issue No. 272, published on March 18 2016)

Kazakhstan could take back uranium assets

MARCH 15 2016 (The Conway Bulletin) – Kazatomprom, Kazakhstan’s state- owned uranium miner, could take back assets from joint-ventures with some of its foreign partners because they are under performing, Kazakh President Nursultan Nazarbayev said. Kazatomprom’s main partners in the nuclear energy supply chain include France’s Areva, Canada’s Cameco and Japan’s Sumitomo.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Tajik banking system wobbles as rumours grow of a collapse

MARCH 17 2016, DUSHANBE (The Conway Bulletin) — People in Tajikistan appear to be losing faith in their banking system, triggering a run on one of the country’s biggest banks.

This week crowds of around 100 people have been gathering at the head office of Tojiksodirotbank in Dushanbe, the only place the bank’s customers can withdraw money.

Nuriniso, a 30-year-old street-cleaner, was queuing to withdraw her salary. “Yesterday, I was at the bank until 9pm to get my money. They gave me 700 somoni (around $90) and told me to come another day for some more,” she told a Conway Bulletin correspondent.

An older woman standing next to Nuriniso explained.

“Don’t you understand that the bank is bankrupt?” she said of rumours fuelling what could, effectively be a run on the bank. “The bank will close from the first of April and money can only be withdrawn from other ATMs at 25% (commission).”

This is important for the entire Central Asia and South Caucasus region which has been hit by a worsening economic crisis. If withdrawals from Tojiksodirotbank did accelerate and it did become a run on the bank, it would be the first instance of an unplanned banking failure linked to the current economic downturn.

Tojiksodirotbank, which holds the majority of accounts for the country’s lower and middle classes such as doctors, teachers and government officials, has not commented on the queues forming outside their branches. Instead it said via its website that a technical problem was slowing down transactions.

And Tojiddin Pirzoda, the bank’s chairman has denied rumours of its impending bankruptcy. “Tojiksodirotbank holds a leading and a strong position in the banking system,” Tajik state news agency Khovar quoted him as saying in February.

But Nuriniso, the street cleaner who earns 640 somoni a month (around $80), said she had now lost confidence in Tajik banks.

“I will never keep my money in banks. My workplace has created this headache (by paying my salary into Tojiksodirotbank) ,” she said.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Uzbekistan to produce new Chevrolet

MARCH 11 2016 (The Conway Bulletin) – Uzavtosanoat, part-owner of the GM Uzbekistan joint venture, said the company will start production of Chevrolet Aveo in May. GM Uzbekistan, formerly UzDaewooAuto, produces several models of cars for the US manufacturer GM. The company said the Aveo will help its market share in the former Soviet Union and, possibly, open new export avenues in the Middle East and Africa.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Kazakhstan restarts Russian power exports

MARCH 17 2016, ALMATY (The Conway Bulletin) — Kazakhstan’s state-owned electricity company Samruk Energo said it resumed deliveries of electricity to Russia after cross-border trade was suspended in November 2014 due to the sharp depreciation of the rouble against the tenge.

Over the past six months the tenge has lost around 50% of its value, bringing it into equilibrium with the rouble and making cross-border trade viable again. Kazakhstan had stubbornly stuck to a US dollar peg despite a fall in global oil prices and a recession in Russia. It ditched this peg in August.

These electricity trades are important as they are more evidence of a normalisation of trade ties between Kazakhstan and Russia after a series of rows last year which, at their root, were triggered by the currency imbalance. Power supply contracts between Samruk Energo and Inter RAO are denominated in roubles which hit their value for Samruk Energo when the rouble fell heavily against the tenge.

Samruk Energo said it wants to export 1.8b kWh to Russia in 2016, slightly less than it exported in 2014. In 2013 power exports to Russia had been around 2.5b kWh.

The two power stations at Ekibas- tuz, in north-eastern Kazakhstan, will provide the electricity and Samruk Energo said the second unit at Eki- bastuz was also put into operation.

“Free capacity at Ekibastuz GRES- 1 and GRES-2 was allocated to export deliveries,” Almassadam Satkaliyev, Samruk Energo chairman, said in a statement.

The first unit is owned by Samruk Energo and Ekibastuz Holding, controlled by Kazakhmys.

GRES-2, the second unit at Eki- bastuz, is jointly owned by Samruk Energo and Russia’s Inter RAO.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Qatar oil meetings miss Kazakhstan

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan has not been invited to a meeting in Qatar set for April 17 where major world oil suppliers are due to discuss freezing output levels at their current rates, energy minister Vladimir Shkolnik said. The apparent snub for the FSU’s second biggest oil producer underlines its role as an oil price taker rather than an oil price maker. Oil producing nations are trying to coordinate a response to drag oil prices off record lows.

ENDS

(News report from Issue No. 272, published on March 18 2016)