Tag Archives: business

Stock market: KAZ Minerals, Centerra Gold

NOV. 20 2015 (The Conway Bulletin) — On the stock markets, KAZ Minerals, formerly called Kazakhmys, was one of the biggest movers.

Its share price rose from 80p to 92p — a two-week high, apparently off the back of news that it will restructure some of its costs.

On the Canada stock market, shares in Centerra Gold recovered from a six-month low of 6.95 Canadian dollars after its core asset, the Kumtor gold mine in Kyrgyzstan announced better-than-expected results.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Business comment: The outlook for oil

NOV. 18 2015 (The Conway Bulletin) — Azerbaijan and Kazakhstan are having to brace themselves for a tough 2016. Oil prices are expected to stay low and output is likely to drop too.

Oil exports from Azerbaijan were down by 0.4% in Jan.-Oct. 2015 compared to last year, due to a decline in oil production, according to a source quoted by Reuters, a continuation of steady trend at its major oil field ACG.

BP is under pressure to stem the drop, and has said that it is on target to achieve this. Now an estimate from the US-based Energy

Information Administration appears to back this up. It said Azerbaijan is likely to maintain this year’s average of 870,000 barrels/day, or even more, in the first half of 2016.

But OPEC, a club of oil exporting countries that does not include Azerbaijan, disagrees.

It predicted oil output of 820,000 barrels/day for 2016, a 6% drop compared to 2015.

“Lower prices are likely to accelerate declines in Azerbaijan’s production in 2016 compared to 2015,” OPEC said in a report.

And Kazakhstan is also sending worrying signals.

Yerbolat Dossayev, minister of economy, said the government cut Kazakhstan’s oil output projection for 2015 by 1.5m tonnes to 79m tonnes, a 2.3% fall. OPEC agreed.

“With no new project startups lined up for next year, declining rates are likely to step up in 2016,” it said in its monthly report.

Analysts expect Azerbaijan and Kazakhstan, which cannot influence oil prices, to produce and export at maximum capacity, while cutting down on investment. Earning hard currency from exports is top of the agenda for Central Asia and South Caucasus countries.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Turkmenistan begins expanding giant gas field

NOV. 18 2015 (The Conway Bulletin) – Turkmenistan will expand its giant Galkynysh gas field by around 50% over the next few years, media reported quoting Ashirguly Begliyev, head of Turkmengas, giving gas projects to India and the EU a major boost.

Galkynysh forms the core of Turkmenistan’s gas production. Its main client is China although it wants to diversify its client base. The EU has been negotiating with Turkmenistan to try and organise for gas supplies to be sent west across the Caspian Sea, through the South Caucasus, Turkey and onto Europe.

India, likewise, has been working on a project that could see gas pumped from Turkmenistan across Afghanistan to Pakistan and finally to Indian consumers.

First, though, Turkmenistan needs to boost output at Galkynysh. Almost all of its current 60bcm of gas goes to China. A proportion of the next phase of Galkynysh’s development will also travel to China, but spare capacity is being built in.

“We are in talks with a consortium of Japanese companies and have also received proposals from Korean firms and from Petrofac company,” Reuters quoted Mr Begliyev as saying on which companies may be involved with the third phase development of Galkynysh.

Importantly, too, Galkynysh is vital for Turkmenistan’s own self image. It sees itself as an increasingly important regional energy player and has been looking to pull in more clients.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

The Azerbaijan Caspian Shipping Company expands

NOV. 18 2015 (The Conway Bulletin) — The Azerbaijan Caspian Shipping Company said it had opened a subsidiary company, called Caspian Marine Service, in Russia’s Astrakhan to take advantage of the area’s economic free zone. Trade around the Caspian Sea has generally increased over the past few years. Azerbaijan, Kazakhstan and Turkmenistan have all increased their ports’ capacities.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Uzbek wine industry attracts foreign investors

NOV. 13 2015 (The Conway Bulletin) — Uzvinprom, an Uzbek state holding company, said that two investors from Germany and Bulgaria were interested in buying stakes in Uzbek wine producers. The two investors, which Uzbek media named as Bever and Vinogradez Vine House, have signed a memorandum of understanding. There were no more details on the deal.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Polymetal raises Kazakh gold reserves and buys in Armenia

NOV. 13/16 2015 (The Conway Bulletin) — The Russian miner Polymetal upgraded gold reserve estimates at its Kyzyl mine in eastern Kazakhstan and said it had bought a 75% stake in Armenian diamond mine Lichkvaz that it didn’t already own.

Both the reserve upgrade at Kyzyl and the buyout of Lichkvaz will give the mining industries in Armenia and Kazakhstan a major boost.

At the Bakyrchik mine at its Kyzyl project, Polymetal said that a feasibility study had upgraded the size of gold reserves there by 8% to 29.2m tonnes.

Polymetal will run further exploration works until the end of 2016 and expects to reach full output capacity at the mine in 2019. Polymetal said it is ready to invest $328m for the next phase of the project.

Polymetal CEO Vitaly Nesis said in a statement: “With significantly reduced capital expenditure, compelling high-grade reserves and straight- forward execution plan, Kyzyl is set to become a significant free cash flow contributor for Polymetal.”

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Aliyev visits Georgia

NOV. 6 2015 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev flew to Tbilisi for a meeting with Georgia’s President Giorgi Margvelashvili. Officially, the clearly good-natured meeting only yielded promises of a deeper relationship but energy links were likely to have been discussed. Georgia is an important transit country for Azerbaijani gas en route to Turkey and Europe.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Dal Engineering signs memorandum to build cement plant in Uzbekistan

NOV. 10 2015 (The Conway Bulletin) — Turkish construction company Dal Engineering signed a memorandum to start building a new $225m cement plant in Uzbekistan. Dal Engineering will partner with state- owned Almalyk Mining and Metallurgical Combine to build a 1.5m tonnes/year plant in the southern region of Surkhandariya by 2017. Slow foreign investment has delayed the project. Once built, the new plant will increase cement production capacity in Uzbekistan by 20%.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

BP says it is confident Azerbaijan’s ACG oil output will be strong

NOV. 10 2015 (The Conway Bulletin) — BP said it expects to maintain last year’s production levels at Azeri Chirag-Guneshli (ACG), the largest oil field complex in Azerbaijan, despite analysts’ predictions that output would fall.

BP, which owns a 35.8% stake in ACG, has been under pressure to ensure that Azerbaijan’s most important oil project doesn’t reduce its output any further.

“We expect that the production on the results of 2015 at the block will not be lower than last year. Current production figures are ahead of the forecasted ones,” Gordon Birrell, BP regional director, told reporters .

Analysts had predicted a drop of 3% in Azerbaijan’s country-wide oil output in 2015 compared to 2014.

In H1 2015, production at ACG declined by 2.3% to 641,000 barrels/day compared to the same period in 2014.

This means that the third quarter report, due in the next few weeks, will have to show an increase in production to cancel out the Q1 drop.

Maintenance work halted operations at West Azeri in May and at Chirag in September. BP said it would carry out further work at Chirag on Nov. 10 for 25 days.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Uzbekistan looks to European companies for rail upgrade

NOV. 10 2015 (The Conway Bulletin) — Uzbekistan wants to upgrade its railway system and it has turned to European companies for the technology and the know-how.

Temir Yollari, Uzbekistan’s state-owned railway company, signed a €38m ($41m) deal with Spanish train manufacturer Talgo to buy two high-speed electric trains.

The new AVE 250 trains will be delivered in 2017. Temir Yollari is already using two Talgo trains, purchased in 2009, for its Tashkent-Samarkand route, opened in 2011.

The Uzbek government is spending around $400m to complete the rail link by 2016 — a potential windfall for European and other western companies looking for deals in the region.

Once completed, the railway line will half the travel time from Tashkent to Bukhara to around 3-1/2 hours.

In another deal struck this week, Temir Yollari signed a memorandum with French company Alstom to establish a production line for asynchronous traction motors, an advanced electric train engine, which Uzbekistan intends to use on new locomotives.

The asynchronous traction technology has not yet been introduced in the former Soviet Union.

“We appreciate the opportunity to work in Uzbekistan’s attractive investment environment and see this project as mutually beneficial for the parties [and] as the first step in the

development of Alstom’s long partnership with the country,” said Martin Vaujour, VP for Alstom CIS.

On paper, Uzbekistan is improving its legislation. The latest World Bank “Doing Business” ranking praised Uzbekistan for its reforms in the past two years. But it is still regarded as a difficult place. Corruption, bureaucracy and asset grabs by the state have all scarred investors.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)