OCT. 19 2015 (The Conway Bulletin) — Russian airline company Transaero cancelled all flights from Moscow to destinations in Kazakhstan and Armenia after it declared bankruptcy. Russia’s Aeroflot will take over these flights. Transaero filed for bankruptcy on Oct. 1.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 19 2015 (The Conway Bulletin) — Canadian miner Centerra Gold said its operations at Kyrgyzstan’s Kumtor mine will produce up to 17% less gold in 2015 compared to 2014. The company forecasts production of 13.3 to 14.7 tonnes of gold this year. Last year, it produced 16.1 tonnes of gold. Kumtor is vital to Kyrgyzstan’s economy and news of a drop in output will hit the country’s economic forecasts. It accounts for around 10% of GDP.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 17 2015 (The Conway Bulletin) — Iran and China are ready to help build Kazakhstan’s fourth oil refinery, Raymbek Amirzhanov, vice governor of the Mangistau region in north- western Kazakhstan, told media. Kazakhstan has repeatedly said it needs a fourth refinery to end its dependence on Russian petroleum products. Iran and China have said they will buy more oil from Kazakhstan through a swap system.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 21 2015 (The Conway Bulletin) — Perhaps it’s the Eurasian Economic Union effect. Prices of Mars chocolate bars in Armenia have fallen by around 20%, the Haykakan Zhamanak newspaper reported. Shopkeepers said a cut in customs duties have contributed to the price deflation. Armenia imports most Mars-branded chocolate bars from Russia. Armenia, Russia, Kazakhstan, Belarus and Kyrgyzstan are members of the Eurasian Economic Union.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 23 2015 (The Conway Bulletin) — Oil companies suffered from a fall in oil prices this week. The Brent index closed at $48/barrel on Friday, down 5% this week.
Nostrum Oil & Gas lost around 9% this week, recovering on Friday to end at 475p per share in London. Nostrum’s summer objective Tethys Petroleum continued its slump, reaching the lowest level in 2015 on Oct. 22, trading at 0.06 Canadian dollars per share in Toronto on Thursday, rebounding slightly to 0.07 Canadian dollars on Friday. Kazakhstan-focused Roxi Petroleum gained 2%, after it issued new shares earlier in October. Roxi closed at 9.63p on Friday.
Last week, the price of copper fell by 2% before recovering to $2.40 per lb. Britain-based miner KAZ Minerals was hit by the market crunch this week and recorded a 7% loss, closing at 127p in London on Friday.
The upside was represented by Centerra Gold, whose shares gained almost 9% despite slower gold production in Kyrgyzstan. The final price in Toronto was 8.28 Canadian dollars.
In the banking sector, Bank of Georgia rose by almost 7% this week to 214p. The stability of the lari currency kept the market optimistic.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 23 2015 (The Conway Bulletin) – Uz-Kor Gas, a joint venture between South Korean and Uzbek companies, has completed a $3.9b natural gas processing plant.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 20 2015, BISHKEK (The Conway Bulletin) — Kyrgyzstan’s real estate market has slowed, media reported quoting a land registry report, more evidence that the overall Kyrgyz economy is stalling.
Analysts from the department of land registry said that the number of house sales this year had dropped by around 42% and the market for apartments was down by 34%.
The official position was the housing market had cooled off because prices were simply too high but a construction company in Bishkek said that the real reason activity in the housing market had fallen was the drop in the value of the Kyrgyz som against the US dollar.
“Sanctions on Russian economy definitely affect the purchasing power of our citizens because the US dollar is the currency for real estate transactions,” a construction company manager who wanted to remain anonymous told the Bulletin.
Roughly in line with other currencies in the region, the som has lost around 33% of its value over the past 12 months and is now trading at around 69/$1.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 21 2015 (The Conway Bulletin) — Sumitomo Corporation, a Japanese holding focusing on industrial production, said it will build a $330m thermal power plant in the north- western part of Turkmenistan. Mitsubishi Hitachi Power Systems, another Japanese company, will provide the gas turbine for the new 400 megawatt plant. Japanese PM Shinzo Abe will visit Turkmenistan at the end of October to attend the signing of the deal.
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(News report from Issue No. 253, published on Oct. 23 2015)
ALMATY, OCT. 20 2015 (The Conway Bulletin) — Ratings agency Standard & Poor’s said it would exclude Kashagan, Kazakhstan’s biggest oil field, from its Kazakh economic forecasts because its start-up date was unclear.
The news is a setback for NCOC, the consortium developing the Caspian sea field, which includes Eni, Shell, ExxonMobil, Total, CNPC, Inpex and Kazakhstan’s state-owned company Kazmunaigas.
Karen Vartapetov, S&P’s associate director, explained.
“The project has been repeatedly delayed. We are no longer taking this oilfield into account in the rating procedures,” she said.
Operations at Kashagan begun, briefly, in September 2013, eight years behind schedule. Two weeks later a leaky pipe was discovered and operations were stopped.
The delay has been costly for NCOC, adding an estimated $4b to the current $50b cost of the project.
The Kazakh government and NCOC say commercial production at
Kashagan will resume in the second half of 2016. S&P has forecast a start date no earlier than 2018.
Rich with oil and gas reserves, Kashagan was poised to become the gem of Kazakhstan’s resource-based economy. But technical problems and low oil prices have meant this glittering prize has been delayed.
Over the past few years, international oil companies have quit the project. Now S&P’s decision not to include it in Kazakh econ forecasts further undermines its status .
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 20 2015 (The Conway Bulletin) — Eurasian Bank, a private lender in Kazakhstan linked to members of the elite, said it had bought a 100% stake in BankPozitiv, a Kazakh subsidiary of a Turkish bank. Michael Eggleton, Eurasia Bank’s CEO said the deal will not exceed $32m. In anticipation of tighter capital requirements and in an effort to cut costs, foreign banks have been selling their assets in Kazakhstan.
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(News report from Issue No. 253, published on Oct. 23 2015)