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Azerbaijan’s Socar confirms major Caspian Sea oil field find

BAKU/March 19 (The Bulletin) — Azerbaijan’s state oil company Socar confirmed that it had found a major oil field in the Caspian Sea.

Announcing the find, Socar chairman Rovnag Abdullayev said that this was the first significant oil discovery in Azerbaijan’s territory since independence from the Soviet Union in 1991.

“Its oil reserves estimated more than 60m tonnes,” he said. “Development of the Karabagh field will significantly contribute to Azerbaijan’s oil incomes.”

Roughly, 60m tonnes of oil equals 440m barrels, although Mr Abdullayev did not say how much of this was recoverable. This is important as recoverable barrels of oil can be a small proportion of the actual reserves. The Azeri-Chirag-Guneshli oil field, the bedrock of Azerbaijan’s economy, by comparison has around 4b barrels of recoverable reserves and the Kashagan field in the Kazakh sector of the Caspian Sea, which Kazakhstan started operating in 2016, has an estimated 9-13b barrels of recoverable oil reserves.

Azerbaijan is still reliant on oil and gas to power its economy. This year it is turning on gas supplies to central Europe pumped from the BP-led Shah Deniz 2 project via a series pipelines known as the South Gas Corridor.

Socar’s partner in the exploration of the Karabagh field is Equinor, the majority state-owned Norwegian energy company that was formerly called Statoil. Equinor owns a 7.27% stake in the ACG project and an 8.71% stake in the Baku-Tbilisi-Ceyhan oil pipeline that pumps gas from the Caspian Sea to Turkey. It has not commented on exploration of the Karabagh field.

The Karabagh field, which lies 120km east of Baku, was first discovered by Soviet geologists in the 1950 but was never developed. In the mid-1990s.

Nick Coleman, senior editor at S&P Global Platts, told The Bulletin that although not the biggest oil find, the Karabagh field will still be useful for Azerbaijan.

“You have all the infrastructure there already so it should be relatively low-cost to develop,” he said. “And it is still a pretty decent size. If you’d found that in the North Sea you’d have done very well.”

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Coronavirus worries spark panic buying in Tajikistan

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MARCH 26 (The Bulletin) — Tajikistan has still not recorded any cases of the coronavirus but analysts have said that concerns about health safety have still triggered panic buying and food price spikes. Reports from Tajikistan said that staple goods, such as potatoes and meat have increased by around 60% in price.

Thousands of migrant Tajik workers in Russia have also been stranded in Moscow airports after airlines cancelled flights to Tajikistan. An impending recession in Russia, linked to the collapse in oil prices and the coronavirus, will have a knock-on effect on the Tajik economy. It is heavily reliant on remittances sent back from Russia by its migrant workers.

Rather like President Emomali Rakhmon apparently ignoring the spread of the coronavirus, the Tajik Central Bank has not issued any statement on it and on March 20 instead congratulated Tajiks on the Nowruz festival.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Coronavirus smashes in the region’s currencies

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TBILISI/March 26 (The Bulletin) — Currencies plunged across Central Asia and the South Caucasus because of the combined impact of the Covid-19 virus, a collapse in oil prices and a surge in the value of the US dollar.

Central Banks raced to pump money into their systems and sell off foreign currency assets to prop up the value of their currencies as the impact of the pandemic on business and economies across the globe became apparent.

In the past couple of weeks the region’s two most-traded currencies, the Kazakh tenge and the Georgian lari, have lost around 20% of their value.

Airlines have stopped flying into the region, land borders have closed and projects and foreign direct investment that had been pledged have been put on hold.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Coronavirus forces Georgia’s tourist industry to close

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TBILISI/March 26 (The Bulletin) — The spread of the coronavirus has forced Georgia’s tourism industry, a source of pride and economic strength over the past half a decade, to shut down. Businesses linked to the sector said that it may take years to rebuild.

Irakli Areshidze, a bar owner in Tbilisi, told a correspondent for The Bulletin that he had had to leave debts unpaid and abandon his business for now.

“It’s a very difficult situation,” he said. “We had to pay for the February expenses with the March income, but the March income was so low we needed to use the savings.”

The Georgian tourism sector has been marketed heavily in Europe and the Middle East. For Arabs it is an escape from the heat, for Europeans it is an exotic bridge towards the former Soviet Union.

Lika Jguburia has been working as a guide. He said that all the tour reservations until October have been cancelled.

“To lose a job and a major source of income is simply awful,” he said. “And it has happened so quickly.”

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Socar opens more petrol stations in Azerbaijan

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MARCH 19 (The Bulletin) — Socar, the Azerbaijani state oil and gas company, said that it had opened its 31st petrol station in Azerbaijan. Trading under the Socar Petroleum brand, the petrol station will offer Euro-95 and A-92 quality fuels. Socar has been building up its network of petrol stations for some time. Socar Petroleum started operations in 2008.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

India wins $40m deal to supply Armenia with military radars

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MARCH 18 (The Bulletin) — India has won a $40m military supply deal to sell radars to Armenia, media reported. Media in India reported that the deal was signed on March 1 and boosts India’s military status in the region, normally considered Russia’s sphere of influence. India has been trying to boost its influence in the Central Asia and South Caucasus.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

SamsungPay starts operations in Kazakhstan

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MARCH 17 (The Bulletin) — Samsung Pay, the contactless smartphone payment system, is now available in Kazakhstan, Korean electronics-maker Samsung said in a statement. It said that Kazakhstan was added to its list of countries able to use the payment system on March 5 after six weeks of testing. It is now available in 26 countries around the world.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Korea’s Hyundai signs deal to supply buses to Turkmenistan

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MARCH 15 (The Bulletin) — Korea’s Hyundai signed a $60m deal to supply Turkmenistan with buses. The deal for an unspecified number of buses follows on from previous deals between Hyundai and Turkmenistan. In 2016 it signed a $66m deal to supply 500 buses. The new buses will be supplied by Dec. 12.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Azerbaijan buys London taxi cabs

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MARCH 11 (The Bulletin) — Azerbaijan agreed to buy 100 more London-style taxis from British electric vehicle manufacturer LEVC for an undisclosed amount. A government press release said that President Ilham Aliyev had personally decided that the new fleet will be painted ‘Tupelo Red’. In 2012, Azerbaijan bought 1,000 taxis from LEVC. These were painted purple.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

COMMENT: Kazakh government on defensive after activist dies

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>> Concessions are likely from the Kazakh government as it works hard to contain the fallout from the death in police custody of an opposition activist, writes James Kilner.

MARCH 3 2020 (The Bulletin) — As The Bulletin was going to press, a court in the northeastern Kazakh city of Semey ordered the release of Mukhtar Dzhakishev, perhaps the country’s most high-profile political prisoner.

Dzhakishev has been in prison since 2009, sent down because of various financial crimes. He had been a high flyer within the Kazakh elite, at the time of his arrest he was head of the nuclear agency Kazatomptom, although the government of Nursultan Nazarbayev always doubted his loyalty.

Many people, including foreign governments, suspected that the real reason that Dzhakishev had been imprisoned was because he was close to Mukhtar Ablyazov, the billionaire owner of BTA Bank who fled to Moscow and then London in 2009 and set himself up as an opposition leader.

The theory goes that Nazarbayev couldn’t get to Ablyazov, and still hasn’t, but he could take out some of his key Kazakhstan-based associates, including Dzhakishev.

So why release Dzhakishev now? Afterall, Ablyazov is still acting as an opposition leader from his base in Paris and only last year a court rejected Dzhakishev’s appeal for his early release on health grounds.

The answer could well lie with the death in police custody of opposition activist Dulat Agadil. In life, Agadil had not been a particularly serious threat to the government but in death, he had become a powerful force for the government’s opponents to rally around. He died in police custody on Feb. 25 in murky circumstances. The government was quick to rush out a statement saying that Agadil had died of an underlying heart condition and not from police mistreatment. Not many ordinary people believe the government and the opposition had been quick to start organising demonstrations. The one on Saturday was snuffed out by the security forces but more were promised.

Perhaps the release of Dzhakishev was a carrot that Kazakh President Kassym-Jomart Tokayev believed was needed to pacify opposition momentum. It has allowed him to show himself as a moderate and even-handed president.

It may also only be the beginning of the concessions that the Kazakh government is prepared to give out to contain the fallout from the death of Agadil. Whether it works or not, The Bulletin will be there to report and analyse in full.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin