Tag Archives: business

Editorial: Iranian oil for Tajikistan

FEB. 5 2016 (The Conway Bulletin) – Iran is emerging from its economic exile with force and its impact is being felt across Central Asia and the South Caucasus.

The new petrol export deal with Tajikistan, together with recent deals with Kazakhstan’s Air Astana and the negotiations with Armenia and Georgia over gas supplies, is a testimony of the importance that countries in the region give to Iran as a trade partner.

Iran is still a net importer of gasoline but it is now close to opening a new 18m tonnes refinery on the Persian Gulf coast, which officials say “will change the gasoline balance in Iran” and could possibly turn the country into a net exporter.

For countries like Tajikistan this is good news as it means that Iran could become a supplier of oil for both Central Asia and the South Caucasus.

Tajikistan has previously bought all its refined petrol from Russia. With Iran’s re-emergence onto the scene this over-reliance on its former colonial master is reduced, giving Tajikistan a genuine choice on where to buys its petrol.

ENDS

(Editorial from Issue No. 266, published on Feb. 5 2016)

Azerbaijan revokes another banking licence

FEB. 2 2016 (The Conway Bulletin) — Azerbaijan’s Central Bank revoked the licence of Texnikabank, one of the country’s largest lenders, and handed back a licence to NBCBank after it said it was looking at a possible merger with a bigger rival.

The moves are part of a wider plan by the Azerbaijani Central Bank to tighten and strengthen Azerbaijan’s commercial banking sector.

The Central Bank said Texnikabank, one of Azerbaijan’s 10 largest banks by assets, did not comply with the minimum capital requirement of 50m manat ($31.3) and the capital adequacy ratio. Texnikabank became the seventh bank in Azerbaijan to lose its licence in the past few weeks.

It later handed NBCBank back its licence after it said that it had entered into negotiations with KredoBank and ParaBank about a possible merger.

Another commercial bank, Caucasus Development Bank, said it intends to merge with Gunay Bank and Atrabank.

Azerbaijan is trying to deal with the fallout from a sharp drop in the price of oil, its main export. This has hit its economy and its currency, the manat, putting increasing pressure on the banking sector.

There are currently 37 commercial banks operating in Azerbaijan.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Grange builds plant in Armenia

FEB. 4 2016 (The Conway Bulletin) — Pakistani firm Grange Power agreed a deal with Armenia over the construction of a 234 MW gas-fired power station near Vanadzor in northern Armenia.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

ArcelorMittal cancels second pay rise for Kazakh workers

ALMATY, FEB. 1 2016 (The Conway Bulletin) — ArcelorMittal’s steel factory in Kazakhstan scrapped plans to raise workers’ salaries in June because of worries about continued weak market conditions for its products.

In January, ArcelorMittal increased salaries for its 14,000 workers at its steel plant in Temirtau, central Kazakhstan, by 6.8% and had promised another pay rise of 6.8% six months later, but in a letter to employees Vijay Mahadevan, the factory’s CEO, said that this was not now going to happen.

“Unfortunately, we have not fulfilled our plans for 2015, and therefore will not be able to pay the remainder of the wage increase this year,” he said.

“I know that this news will disappoint you, but no-one would benefit from a salary increase which will only put additional pressure on our company.”

A 50% drop in the value of the tenge and rise in inflation has hit workers’ real wages in Kazakhstan and forced many employers to raise salaries.

ArcelorMittal Temirtau is one of the biggest employers in Kazakhstan. It has had, though, tempestuous relations with its workers over salaries in the past few years and had to make thousands of staff redundant. The factory has added symbolic importance as President Nursultan Nazarbayev worked there before moving into politics.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

China expresses interest in Kazakh Mangistau

FEB. 2 2016 (The Conway Bulletin) – Alik Aidarbayev, head of the Mangistau region of western Kazakhstan, said that only China has expressed serious interest in paying for the construction of a new oil refinery. The Mangistau region has been working on plans to build Kazakhstan’s fourth refinery for years. Mr Aidarbayev’s comments are important because they show both the financial power of China and the relative weakness of Russia. Kazakhstan has been looking to boost its refinery capacity for some time. It currently has three refineries.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

IMF draws funding plan for Tajik Rogun

FEB. 4 2016 (The Conway Bulletin) – IMF representatives met with Tajik government officials in Dushanbe to draw up funding plans for the $2b Rogun hydropower plant. The IMF has said that the World Bank-backed Rogun project, strengthening its banking sector and diversifying the economy are priorities for Tajikistan. Down- stream Uzbekistan has lobbied hard against the Rogun dam.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Exxon bets on Kazakh oil field

FEB. 2 2016 (The Conway Bulletin) — US oil company ExxonMobil said that it still thinks the giant Kashagan oil field in the Kazakh sector of the Caspian Sea will re-start production by the end of the year. ExxonMobil also said Kashagan will be one of its four key start-up projects for 2016. Other estimates forecast that repairs to essential pipeline infrastructure could drag on until 2017. ExxonMobil owns 16.81% in the international venture that operates Kashagan.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Chaarat finds gold in Kyrgyzstan

FEB. 3 2016 (The Conway Bulletin) — British Virgin Island-registered Chaarat Gold completed a feasibility study for a gold mine it is exploring in north-west Kyrgyzstan. The mine is Chaarat’s only asset. Dekel Golan, Chaarat’s CEO, said in an interview that the study revealed low production costs (around $650/troy ounce, including the government tax), which means the company will go ahead with the project.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Business comment: Central Bank intrigue in Kazakhstan

FEB. 5 2016 (The Conway Bulletin) — In Kazakhstan, the Central Bank resumed its work as the country’s financial regulator after a three-month hiatus, increasing interest rates by 1 percentage point to 17%.

Daniyar Akishev, the Central Banker, is at the helm again, it seems. He even ordered a handful of interventions in the currency market in January, something he had ruled out since his appointment last November.

Now, Kazakhstan watchers expect monetary policy to become more stable and predictable in the coming months. The next policy meeting will be held in six weeks, one week before a parliamentary election on March 20.

Still, many don’t see Mr Akishev’s position as an independent one. He is a seasoned Central Bank employee, but it is clear that he is not as free as many Western Central Bankers are.

A recent symbolic move could corroborate this view. This week, Kazakhstan’s President Nursultan Nazarbayev signed a decree that makes the Central Banker’s signature on the back of banknotes redundant.

Only eagles, monuments and the President’s handprint will continue to feature in Kazakhstan’s colourful currency.

The Central Banker’s signature is a convention that most countries in the world adopt.

Kazakhstan will now join a handful of countries that don’t feature their Central Banker’s signature on banknotes. This group includes China, Japan and Uzbekistan.

This might be, essentially, a final step by the Kazakh government to strip the Central Bank of the independence it gained under former governor Grigory Marchenko who left in 2013.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakh government wins case v Mongolia

FEB. 4 2016 (The Conway Bulletin) — The Kazakh government defeated a law suit filed against it by Erdenet Mining, a Mongolian company, in a London commercial court over the bankruptcy of a mining company in the 1990s. Although Balkhashmys, the mining company, was private, the Mongolian company still said Kazakhstan had responsibility for its losses. The court in London said that it had no jurisdiction over the case and threw out the Mongolian claims.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)