Tag Archives: business

Business comment: Opec, Kazakhstan and Azerbaijan

OCT. 23 2015 (The Conway Bulletin) — When OPEC calls, Kazakhstan and Azerbaijan are unlikely to answer.

OPEC, an organisation for oil exporting countries, is seeking to coordinate a cut in production with non-OPEC countries to lift oil prices.

Acting as a cartel, OPEC can determine production levels in order to control global oil prices. It has done so repeatedly over the past decades.

Strapped for cash and reliant on oil exports, Kazakhstan and Azerbaijan are not OPEC members and do not enjoy the same market power as Saudi Arabia or Russia.

Because their action would have little effect on oil prices they are unlikely to play OPEC’s game, according to Daniel Yergin, vice- chairman of the IHS consulting company and one of the most authoritative voices on Caspian energy issues.

“I think they will not cooperate. They (Azerbaijan and Kazakhstan) are typical non-OPEC countries who simply produce at a maximum they can,” Mr Yergin told Reuters.

Lower oil prices and ageing fields have pushed production numbers down in Kazakhstan and Azerbaijan (minus 2% and 3% respectively) and they simply cannot afford to arbitrarily cut back production in concert with OPEC.

The economies of these two Caspian countries are heavily reliant on hard currency revenues from oil exports. They’ll want to keep oil production at a maximum.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

VimpelCom sells kit in Kazakhstan, Armenia

OCT. 21 2015 (The Conway Bulletin) — Russian telecoms company VimpelCom said it is selling 50,000 phone towers across the former Soviet Union for $5b. VimpelCom, headquartered in the Netherlands, hired several banks to broker the deal. Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan are among the countries involved in the deal.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

After seven year delay, Georgia restarts skyscraper project

TBILISI, OCT. 20 2015 (The Conway Bulletin) — Construction work on two twisting skyscrapers that will dominate the Tbilisi skyline restarted after a seven year lull, a symbolic act of confidence in Georgia’s economic revival since a 2008 war with Russia.

At 41-storeys , the Axis Towers will become Tbilisi’s tallest – and one of its most iconic – buildings when they are completed in 2017.

Opening the start of construction for the towers, Georgia’s President Irakli Garibashvili said the project will help boost the tourism industry in Georgia.

“The Axis Towers is a completely Georgian project,” Garibashvili added.

One of the two towers will be a five-star hotel operated by the French company Pullman, and the other tower will host residential apartments. The British company Arup would be involved in building the towers.

In February, the Georgian government and the Axis property company agreed to re-start the $83m project that was derailed by economic stagnation in Georgia after the 2008 war.

The project is funded through a joint venture between Axis and the state-owned Georgian Co-Investment Fund.

“About 1,000 people will be employed in the Axis Towers in the (construction) stage,” Mr Garibashvili according to comments on his website.

“Once it’s built several hundred people will have steady employment here.”

Georgia is witnessing a surge in prestige building projects, including the Tbilisi Sea New City development and various projects planned for the Black Sea resort of Batumi.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Kazakhstan’s space agency enters join venture

OCT. 21 2015 (The Conway Bulletin) — Meyrbek Moldabekov, deputy head of Kazakhstan’s space agency KazCosmos, said it has entered a joint venture with French aircraft manufacturer Airbus to build satellites. Airbus owns 27.5% of the venture and will be jointly responsible for operations at an assembly plant to be built in Kazakhstan by 2017.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Turkmenistan opens Tbilisi shop

OCT. 21 2015 (The Conway Bulletin) – Perhaps with potential gas supplies to Europe in mind, Turkmenistan opened a shop in Tbilisi selling various national produce. Turkmenistan is exploring the potential of supplying the EU with gas. Georgia hosts a gas pipeline running west from the Caspian Sea.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Georgia talks with Russia’s Gazprom

OCT. 10 2015 (The Conway Bulletin) – Georgia is in talks with Russia’s Gazprom to import gas, Georgian energy minister Kakha Kaladze told media, highlighting the improved relations between the two neighbours. Georgia currently exports nearly all its gas from Azerbaijan although it hosts a pipeline pumping gas from Russia to Armenia.

ENDS

(News report from Issue No. 253, published on Oct.16 2015)

Kazakhstan and Russia agree to explore north Caspian for oil

OCT. 15 2015 (The Conway Bulletin) – Russian President Vladimir Putin flew to Astana where he signed a deal with Kazakh leader Nursultan Nazarbayev to jointly explore and develop the north Caspian Sea for hydrocarbon reserves.

The deal, signed before a meeting of leaders from the former Soviet Union, came roughly a week after Kazakhstan also hosted Ukrainian president Petro Poroshenko. He signed deals with Mr Nazarbayev to increase cooperation in energy and aerospace. The timings of the two leaders’ visits to Astana highlights just how pressured the diplomatic space that Kazakhstan has to operate in is. It needs to keep relations with both Ukraine and Russia, who are locked in a proxy war in eastern Ukraine, sweet.

“We have big plans on joint oil production in the Caspian Sea,” Mr Putin said after signing the deal.

Kazakhstan and Russia also signed a deal for the Russian military to test missiles that would spread debris over a patch of Kazakhstan.

A week earlier, Mr Poroshenko had been in town talking up ties with Kazakhstan. This week, Kazakhstan’s ministry of defence said that it had signed a deal with Ukraine to boost cooperation in aviation.

Mr Nazarbayev has previously touted Kazakhstan as the ideal place for trying to thrash out a peace deal between Russia and Ukraine. There has been no formal move to hand this role to Kazakhstan but but leaders do apparently appear relaxed about flying to Astana in quick succession.

ENDS

(News report from Issue No. 253, published on Oct.16 2015)

KazTransGas talks with Georgia

OCT. 6 2015 (The Conway Bulletin) — KazTransGas, Kazakhstan’s state owned gas distributor, warned Georgia it might take their dispute over its subsidiary to international arbitration if Georgia failed to restart negotiations. KazTransGas is looking for compensation for the $130m it spent on its subsidiary KazTransGas-Tbilisi in 2006-09 before the Georgian government took control of the company.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Stock market: KAZ Minerals, Nostrum, KEGOC

OCT. 9 2015 (The Conway Bulletin) — The biggest mover in the stock markets for Central Asia and the South Caucasus was London-listed KAZ Minerals, which gained a staggering 65% since the beginning of October at 145p on Friday. Its performance was in line with most commodity producers which were hit by the Glencore slump last week.

Kazakhstan-focused Nostrum Oil & Gas was stable this week at around 524 pence, after rebounding from a sharp drop last week. Its failed takeover offer for Tethys Petroleum affected its performance in the market.

Polyus Gold continued its roller- coaster to end the week at 198 pence. Polyus has shown a volatility of +/- 3% over the past three weeks.

In local markets, KEGOC, Kazakhstan’s state-owned electricity company became one of the strongest players in KASE, gaining over 25% in the past three weeks. However, because its stocks are denominated in tenge, the value of its assets has not fared as well as it seems. Speculative moves behind the multi-million dollar transactions of the past weeks have turned KEGOC into an appealing investment in a market marred with worsening assets.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Wood Group to supply facilities at Kazakh oil field

OCT. 7 2015 (The Conway Bulletin) — Scotland-based Wood Group won a service contract to supply an automated system for crude storage facilities at the Tengiz oil field in Western Kazakhstan. It said the automated system would increase storage capacity. Bechtel, a US-based engineering company, signed the multimillion dollar deal with Wood Group.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)