MARCH 1 2016 (The Conway Bulletin) – Assets held by SOFAZ, Azerbaijan’s state oil fund dropped by 9.5% in 2015 to $33.6b. SOFAZ earns cash from oil and gas sales and transit fees. It spends on various social projects and has also been buying up manat to support it against the US dollar. The drop in SOFAZ’s net worth reflects the economic downturn and slump in global oil prices.
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(News report from Issue No. 270, published on March 4 2016)
MARCH 2 2016 (The Conway Bulletin) – Output at BP’s Azeri-Chirag-Gunehsli (ACG) dropped in 2015 to 31.3m tonnes of oil, down from 31.5m tonnes of oil in 2014. The ACG field is Azerbaijan’s largest field and the bedrock of its oil output. Azerbaijan has been pressuring BP to maintain ACG output.
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(News report from Issue No. 270, published on March 4 2016)
MARCH 4 2016 (The Conway Bulletin) – Green spaces in cities across Central Asia and the South Caucasus are rare and under threat.
This is the case in Kyrgyzstan, where developers are eyeing up the, admittedly dysfunctional and overgrown Botanical Gardens. Conservationists, however, scored a major victory this week with the visit of PM Temir Sariyev to the Gardens. He spoke about renovating the Gardens and giving the structure a modern look, effectively saying the government wants the Gardens to stay where it is.
This is good and should be applauded. While Bishkek needs more space to build houses for people heading to the city for work, it can find this in other places. The Bishkek Botanical Garden should be left alone.
There is less hope for the surrounding hills of Tbilisi’s Old Town, where former PM Bidzina Ivanishvili wants to build a series of hotels. Locals took to the streets this week to protest against the plan.
Careful consideration needs to be given between creating jobs and attracting business over residents’ access to outdoor areas.
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(Editorial from Issue No. 270, published on March 4 2016)
MARCH 3 2016 (The Conway Bulletin) – Azerbaijan’s foreign ministry denied that the country was helping Turkey to dodge sanctions imposed by Russia by exporting its tomatoes to Russian cities. Russia had previously said that it was suspicious that the amount of tomatoes heading to Russian had increased by 350% this year. It threatened to retaliate if it proved the tomatoes had originated in Turkey.
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(News report from Issue No. 270, published on March 4 2016)
ALMATY, MARCH 2 2016, (The Conway Bulletin) — Guernsey-based Tethys Petroleum said it had now sealed a life-saving financing agreement with Kazakhstan-based Olisol for around $32m, after months of doubt regarding the company’s ability to pay debts and continue its Kazakh and Tajik operations.
The two companies initially reached the deal on Feb. 22 and signed it on March 2, giving Tethys shares on the Toronto Stock Exchange a boost.
Under the deal, Tethys will receive $1m of finance and convert the remaining $5.25m debt facility into ordinary shares. If the Toronto Stock Exchange approves Tethys’ issue of 500m new shares, Olisol will then buy around 181m of these, and own a 42% stake in Tethys.
John Bell, Tethys chairman, said: “Tethys now has a strong in-country strategic partner which has committed to becoming a minority share- holder and who will help the company in its objective to supply the growing energy demand in China.”
Mr Bell and three other board members will step down upon completion of the deal.
“We leave the board having steered Tethys into a company focused on capital efficiency and cost discipline, well placed to become a strong platform for future growth,” he said.
Tethys had been in talks with Nostrum Oil & Gas for a takeover last summer. It later rejected the offer and turned to Kazakhstan’s Olisol.
In January, however, Olisol missed a payment scheduled in an earlier agreement putting the deal in jeopardy. The latest deal confirms that Olisol will in fact go ahead with the purchase and become a minority stakeholder in Tethys.
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(News report from Issue No. 270, published on March 4 2016)
FEB. 26 2016 (The Conway Bulletin) – Iran and Azerbaijan will resume oil swaps after a five year break, Iran’s official Fars news agency reported quoting Iranian deputy oil minister Rokneddin Javadi. Azerbaijan will deliver oil to Iran’s Caspian Sea port of Neka to supply refineries in the north of the country. In return Iran will give Azerbaijan the equivalent amount of oil at its Persian Gulf ports.
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(News report from Issue No. 270, published on March 4 2016)
FEB 26 2016 (The Conway Bulletin) – Azeri energy minister Natig Aliyev said construction works will start later this month on the Trans-Adriatic Pipeline (TAP), the final section of the so-called Southern Gas Corridor that will pump gas from Azerbaijan to Europe.
According to Mr Aliyev, TAP is also expecting to secure financing by the end of April.
“The issues of TAP financing will be completely solved on April 28,” he said.
TAP, a 10b cubic metres pipeline which runs across Greece, Albania and the Adriatic Sea to Italy will link up with the 16b cubic metres Trans- Anatolian Pipeline at the border with Turkey.
BP, Azerbaijan’s state-owned SOCAR, Snam, Fluxys, Enagas and Axpo are all shareholders in TAP.
European customers see the Southern Gas Corridor an alternative to Russian gas supplies and the European Commission has lobbied intensely to ensure that the project is completed by the 2019 deadline.
This week a delegation of the European Commission participated in the second meeting of the Southern Gas Corridor Advisory Council.
Federica Mogherini, vice president of the European Commission, emphasised just how much weight the EU put on the project.
“The Southern Gas Corridor is an essential element in the EU’s Energy Security Strategy,” she said.
“We strongly support the Southern Gas Corridor, and we are determined – and me personally – to do our part to ensure that it is completed on time.”
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(News report from Issue No. 270, published on March 4 2016)
FEB. 29 2016 (The Conway Bulletin) – On a trip to Baku, Federica Mogherini, a European Commission vice-president in charge of external affairs, said the European Union and Azerbaijan need to work hard to improve relations which have soured over the past few years.
Ms Mogherini made the comments during a two-day trip to Baku and to Armenia’s capital Yerevan.
“It is time for a new chapter in the relations between the EU and Azerbaijan. We need an all-round strategic partnership between us,” she said during a speech to the Southern Gas Corridor Advisory Council.
“We have not always seen eye to eye in all matters, and we know that differences will remain between us in some areas. This is normal in international relations and often in European and even national politics.”
Europe has been vocal over what it has said is a systematic crackdown by the Azerbaijani authorities against civil society and the media. The Azerbaijani government has responded by accusing Europe and the United States of meddling in affairs which aren’t theirs and of trying to stir a revolution.
The result has been a drift by Azerbaijan towards Russia.
Still, Europe and Azerbaijan have been working together on a pipeline network running from the Caspian Sea to central Europe.
Europe wants to reduce its reliance on Russia for gas and its sees Azerbaijan as the solution. The pipeline network is dubbed the Southern Gas Corridor.
Ms Mogherini was careful to avoid direct mention of human rights and media freedom in her speech but the underlying message would have been clear and her speech was an important step towards, tentatively, mending Azerbaijan-EU relations.
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(News report from Issue No. 270, published on March 4 2016)
FEB. 24 2016 (The Conway Bulletin) — The Kyrgyz government said it is ready to sell off a 49% stake in Air Kyrgyzstan, the national carrier, as part of the state privatisation programme. The government owns Air Kyrgyzstan through the state-owned Fund of State Property Management.
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(News report from Issue No. 269, published on Feb. 26 2016)
FEB. 24 2016, TBILISI (The Conway Bulletin) — Part of a group of 1,500 striking Georgian miners stormed an office belonging to Georgian Industrial Group (GIG) who they accuse of paying salaries far below the market rate and of presiding over poor working conditions at its coal mine at Tkibuli.
The miners have now been on strike for 12 days. The scale of the strike, both its length and the number of strikers, makes it one of the most serious in recent Georgian history.
A video showed miners wearing heavy leather jackets climbing over a compound fence and then pushing in a gate to the GIG office in Tkibuli, central Georgia. Clearly angry and distressed, miners said that they earned $200 a month which, they said, was barely sufficient to survive on.
They want a 40% pay rise and an improvement in the mine’s health and safety record. Media said that 15 miners have died in separate accidents at the mine since 2009.
GIG has said that while it sympathises with some of the workers’ demands, it simply can’t afford to increase their salaries by as much as they want because of falling prices and demand for coal.
“Saknakhshiri GIG as a company of high responsibility will not issue unrealistic promises and will not make populist statements on the immediate increase of the salaries at this stage,” the company said in a statement after meeting the miners.
For the government, the strike piles more pressure on its various economic policies ahead of a parliamentary election later this year. A recession in Russia and a fall in its own currency has hit Georgia’s economy. Growth rates have been reduced, inflation is rising.
And the Tkibuli miners are not the only group of workers striking in Georgia. Media reported that workers at a glass factor in Ksani have also gone on strike.
Other companies, especially in the mining sector, have been laying off workers.
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(News report from Issue No. 269, published on Feb. 26 2016)