OCT. 30 2015 (The Conway Bulletin) — Net profits at Kazakhstan’s Eurasia Bank fell to 2.6b tenge ($9.1b) in the first nine months of the year, a fall of 67% from the same period in 2014. The bank, owned by businessmen Alexander Mashkevich, Alijan Ibragimov and Patokh Chodiev, declined to disclose further details of the results. In 2014, net profit fell by 13% compared to 2013.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 5 2015 (The Conway Bulletin) – Iran’s oil minister, Bijan Namdar Zanganeh, said trade between Iran and Turkmenistan would boom as the country opened up and made more deals with its neighbours in Central Asia. Local media quoted him as saying that Turkmen- Iranian trade measured $4b last year. He said bilateral trade worth $60b was possible within a decade.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 3 2015 (The Conway Bulletin) – A Tajik registered Antonov-12 cargo plane crashed in south Sudan, killing 40 people. The plane had been owned by a Tajik company called Asia Airways but operated by an Armenian company called Ala International. (See page 8 for more)
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 5 2015 (The Conway Bulletin) – Photographs and anecdotal evidence from Uzbekistan showed that queues for petrol at service stations are growing longer and longer. A collapse in the value of the Uzbek sum has hit the Uzbek economy hard. Uzbekistan also has a shortage of refining shortages.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 5 2015 (The Conway Bulletin) — London-traded KMG EP said sustained low oil prices had halved revenues in the first nine months of the year compared to the same period in 2014, a heavy warning for Kazakhstan that the near-term outlook for its economy is poor.
KMG EP saw its revenues fall, in US dollar terms, by 54% to 349b tenge ($1.8b), mirroring a 48% fall in Brent oil prices. Net profit dropped to 138b tenge ($703m), a fall of 49% in US dollar terms.
And it said that oil prices would remain weak.
“There is a risk that prices for the domestic market supplies for October to December 2015 will be significantly lower than the prices set in September 2015,” KMG EP said in the report.
KMG EP is among the top three producers of oil in Kazakhstan and participates in several international oil and gas projects.
It’s one of the Kazakh government’s main cash earning companies and its financial performance acts as a barometer on Kazakhstan’s economy. If Kazmunaigas, and KMG EP, is doing well, the Kazakh economy is generally doing well too.
KMG EP also said that in tenge terms, its salary costs have increased by 22%.
“This was largely due to an indexation of salary for production personnel by 7% in January 2015, the introduction of a Unified System of Wages for production employees from April 2014 onwards, a 10% increase in wages related to the devaluation of the Tenge from April 2014 onwards, and an increase in production bonuses from 25% to 33% for supporting production personnel from September 2014 onwards,” KMG EP said.
The Kazakh Central Bank stripped the tenge of its peg to the US dollar in August, effectively allowing the currency to devalue by 25%,a second devaluation in two years which has halved the tenge’s value. Businesses have had to promise employees salary increases to compensate for the fall in the value of the tenge, pushing up inflation across the country.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 5 2015 (The Conway Bulletin) – Keen to boost its imports of gas, Georgian energy minister Kakha Kaladze said that Georgia could buy Iranian gas through either Azerbaijan or Armenia. Mr Kaladze is due in Tehran later this month. Last month he started talking to Russia’s Gazprom about buying more gas, sparking anger from many ordinary Georgians. Georgia and Russia fought a brief war in 2008.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 3 2015 (The Conway Bulletin) — US-based UOP signed a contract to provide technology and licensing for new units to be built at the Heydar Aliyev oil refinery near Baku. UOP is a subsidiary of Honeywell International. SOCAR, Azerbaijan’s state-owned energy company, has been looking for partners to modernise the country’s most important refinery. Azerbaijan needs to produce more petrol to hit growing demand.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 5 2015 (The Conway Bulletin) — Russian oil and gas company Lukoil completed the construction of two electric substations at a major gas field in Uzbekistan. Lukoil is the operating company at the Gissar gas field in the south of the country.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 4 2015 (The Conway Bulletin) — Azerbaijan said it wants BP to remain as the operator in Shah Deniz, the country’s largest gas field. A senior official at SOCAR, Azerbaijan’s state-owned energy company, told Reuters that SOCAR and BP will continue cooperation for Phase 3 of the project.
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(News report from Issue No. 255, published on Nov. 6 2015)
NOV. 2 2015 (The Conway Bulletin) – Daniyar Akishev’s promotion to head the Kazakh Central Bank may have taken observers by surprise but to those who know the 39-year-old, it is a job he has been groomed for.
Mr Akishev is a veteran of the Central Bank, where he worked in various positions from 1996 to 2014 before moving to the Akorda as economic adviser to President Nursultan Nazarbayev.
In 2007 Mr Akishev was rumoured to be in pole-position for taking on the role of new chief of the financial regulator.
Instead has was named deputy head of the Central Bank, a position he held for seven years, under three different bosses.
In particular, Central Bank insiders said he achieved professional maturity under Grigori Marchenko, a respected liberal economist, who often clashed with Mr Nazarbayev on economic policies.
There have been wobbles, though, in Mr Akishev’s rise to the top. In December 2008, ominously, he said the economic situation was ideal for Kazakhstan.
“The Central Bank has no problems with the exchange rate of the tenge, quite the contrary,” he told RIA Novosti in an interview.
Two months later, the Bank devalued the tenge by 19%.
Media quoted some local analysts as saying that Mr Akishev lacks independence because of his young age and his lack of political authority. But Mr Akishev is the same age as Mr Marchenko was when he was named head of the Central Bank for the first time in 1999 and is five years older than Oraz Dzhandosov was, when he became Central Bank chief in 1996.
Mr Akishev’s predecessor, Kairat Kelimbetov, who held the job for two years during which the tenge lost half its value, had a different profile and no background at the Central Bank.
Mr Akishev might have accepted possibly the toughest job in Kazakhstan, but he is also one of the few people in the country with the experience and background to take it on.
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(News report from Issue No. 255, published on Nov. 6 2015)