Tag Archives: business

Azerbaijan and Russia resume oil flow

FEB. 25 2016 (The Conway Bulletin) – Azerbaijan and Russia agreed to resume shipments of oil through the Baku-Novorossiysk pipeline on March 1. The agreement ends weeks of negotiations over the restart of oil supplies. Oil flows along the the pipeline give a decent insight into the state of Azerbaijani- Russian relations. Over the past few years, oil flows have been a stop start affair but now appear to have steadied, much like bilateral relations, at around 1.4m tonnes per year.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

OBI store to open in Kazakh city

FEB. 25 2016 (The Conway Bulletin) — German DIY kit retailer OBI will build its first store in Almaty, Baurzhan Baibek, the city’s mayor told local media. Construction works will start in May and the new store will open in 2017. Kazakhstan’s DIY market is growing as more and more people follow the European trend for renovating their homes. Although an economic downturn has battered Kazakhstan it is still considered a decent market for well- known European brands open up in. Earlier this month, French retailer Auchan opened its first store.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Locals in Kyrgyzstan’s region complain on Jerooy

FEB. 22 2016 (The Conway Bulletin) — Local residents of the Talas region in Kyrgyzstan asked the government to halt the development of the Jerooy gold mine because of concerns it was damaging the environment. Last May, Russian miner Vostok-geolodobycha bought the licence to exploit the mine for $100m. Russian businessman Musa Bazhaev owns Vostok-geolodobycha. Analysts have previously said that local grievances over the environment have been exploited to leverage payment from companies developing mines.

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(News report from Issue No. 269, published on Feb. 26 2016)

Kazakhstan says it does not have right to buy Karachaganak stake

ALMATY, FEB. 23 2016 (The Conway Bulletin) — Kazakhstan’s government said it will not try to buy a 29.25% stake in the Karachaganak gas field that Shell inherited from BG Group after it completed a takeover earlier this month.

Previously, Kazakh officials had said the government might use its preemptive rights to buy out BG Group’s share in the field, one of the most prolific in independent Kazakhstan’s history.

Kazakhstan has now said it does not have any preemptive rights to buy the stake because the Shell-BG deal was not directly linked to the Karachaganak contract. Shell, which completed its $53b takeover of BG on Feb. 15, has not commented.

A direct change in the structure of the contract would have given the Kazakh government the right to move first and buy stakes on sale at market prices. The government used this mechanism when ConocoPhillips wanted out of the contract for Kashagan, a giant oil field in the Caspian Sea, in 2013. At the time, Kazakhstan matched a $5.4b offer by India’s ONGC Videsh and later sold the stake to China’s CNPC for the same price.

Now, the government has decided it has no right to do so.

Of course, Kazakhstan’s economic position has changed considerably since 2013. Then it was awash with spare cash. Now it is counting its coppers and flogging off chunks of previously sacrosanct state companies to pull through a deepening economic crisis.

And, for Kazakhstan, shying away from the Shell/BG stake in Karachaganak makes it look good and pro- Western business, especially important in this tight economic climate.

Karachaganak’s shareholders are Shell with a 29.25% stake, ENI with 29.25%, Chevron with 8%, Lukoil with 13.5% and Kazmunaigas with 10%.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Georgia and China discusses free trade deal

FEB. 22/23 2016 (The Conway Bulletin) – Georgian and Chinese officials met in Tbilisi for the first round of talks aimed at negotiating a free trade agreement between the two countries. China has become an increasingly important trade partner for Georgia. Media said that China is now Georgia’s fourth largest trading partner.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Azerbaijan and Iran look to resolve Caspian oil field row

FEB. 23 2016 (The Conway Bulletin) — Iran and Azerbaijan have started negotiations on how to develop the disputed Araz-Alov-Sharg oil project in the Caspian Sea that has lain undeveloped for 18 years.

The talks, part of a visit by Azerbaijani president Ilham Aliyev to Tehran to boost relations, also high- light Iran’s potential to be an important partner in the region now that most international sanctions have been lifted.

The oil and gas website Natural Gas Europe (NGE), quoted two sources close to Azerbaijan-Iran negotiations on talks over the Araz-Alov- Sharg project, which Iran calls Alborz.

It quoted a source close to negotiations as saying that they had “already reached a primary agreement to develop the block jointly, but they had not finalised the details”.

For Western companies any deal between Azerbaijan and Iran to develop the site would create problems.

The SOCAR website still shows off a production sharing agreement for the field signed in 1998 by several Western oil and gas companies including BP, Statoil and Exxon.

That PSA may turn out to be worthless and, if Azerbaijan and Iran can agree on the field’s ownership, may be torn up in favour of a bilateral Azerbaijani-Iranian deal.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Editorial: Uzbekistan’s railway

FEB. 26 2016 (The Conway Bulletin) – At 19.2km, the Kamchik Pass railway tunnel may be the longest in Central Asia and might also be a great engineering achievement, but it is also a sign of Uzbekistan’s further isolation from world politics and markets.

Uzbekistan said it completed a World Bank and China-backed railway bypass in the Ferghana Valley that will allow its trains to run to the east of the country without having to transit through Tajikistan.

The World Bank support is important because it shows international endorsement for a mega project that Uzbekistan was eager to achieve despite the economic downturn rolling through Central Asia.

Chinese money and workers were key to the success of the project, as China has growing interest in building infrastructure in Central Asia to support its ambitious project to connect with Europe via rail and road.

Tajikistan is the main loser in this game. It will no longer receive the in- kind payment of $25m worth of gas shipments from Uzbekistan in exchange for the railway transit. And it also lost an important diplomatic chip in its endless row with Tashkent.

ENDS

(Editorial from Issue No. 269, published on Feb. 26 2016)

Tax commitments drop in Armenian telecoms

FEB. 24 2016 (The Conway Bulletin) — Armenia’s three-largest telecoms operators paid 24.2% less taxes in 2015 compared to 2014, as an economic downturn worsened and increased competition hit their revenue stream. K-Telecom, owned by Russia’s MTS, is Armenia’s third-largest taxpayer. Its contribution to the budget declined by 36% to 18.6b drams ($38m). Russia’s VimpelCom-owned ArmenTel, one of the top ten taxpayers in Armenia, said its tax contributions fell by 6.2% to 15.5b drams ($31.5m).

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

KAZ Minerals grows production in Kazakhstan

FEB. 25 2016 (The Conway Bulletin) — KAZ Minerals said it will grow production of copper cathode by around 70% in 2016 as new deposits of Bozshakol and Aktogay come online this year. The company plans to produce up to 155,000 tonnes of copper cathode in 2016. KAZ Minerals’ revenues fell by 21% last year compared to 2014. The company received a boost when Kazakhstan decided to abandon the tenge’s peg to the US dollar, leading to a sudden depreciation of the local currency.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Kazakhstan’s KMG makes refining deal

FEB. 24 2016 (The Conway Bulletin) — KMG EP, Kazmunaigas’ subsidiary dedicated to exploration and production, said in a statement it obtained a price increase for oil it ships to refineries at Atyrau and Pavlodar. KMG RM, another Kazmunaigas subsidiary which manages the refineries, will now pay 74% more for shipments of oil to its refinery at Aktau and 16% more for shipments to its refinery at Pavlodar than it did in 2015.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)