Tag Archives: business

Uzbek President meets Korea bank

SEPT. 23 2015 (The Conway Bulletin) – Uzbek president Islam Karimov met with Lee Duk-hoon, President of the Korean state-owned Eximbank in Tashkent to discuss Korean investments in the country. After the negotiations, Mr Lee brokered the signing of an inter-banking agreement with Asaka Bank, opening a credit line of $160m for Uzbekistan. Korean Eximbank is a key partner for Uzbekistan’s infrastructure and banking projects.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

BP and Azerbaijan start renegotiating ‘deal of the century’

SEPT. 18 2015 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned oil and gas company, said it is negotiating the renewal of the so called ‘contract of the century’ it signed with BP over 20 years ago.

The contract concerns the most important set of oil fields in Azerbaijan, Azeri-Chirag-Guneshli — also known as ACG — which is managed through a consortium in which BP has the largest share (35.8%) and SOCAR owns 11.6%.

“We are in talks,” said Rovnag Abdullayev, SOCAR’s chairman, when reporters asked him about the negotiations over the licence.

“Until 2024, BP is the operator at ACG. BP is likely to remain the operation in the future as well.”

BP has not commented but its management of the project is important both for the company and Azerbaijan, which is reliant on oil exports for its earnings.

It may be early to start negotiating an extension to the 30-year Production Sharing Agreement signed in 1994 but BP and Azerbaijan need to cement their fickle relationship.

An economic crisis, triggered by a steep fall in the value of oil over the past year, has hit Azerbaijan, forcing its manat currency to devalue by a third in February.

It has also cut its government budget and spent millions of dollars propping up its ailing currency.

Data from the oil rigs also makes for a dispiriting read. In the first eight months of 2015 oil production decreased by 2.5% compared to the same period in 2014.

ACG is the primary oilfield for Azerbaijan and in 2012 Azerbaijan’s president Ilham Aliyev accused BP of having committing “grave mistakes” in its management of the project. In Jan.-Aug. 2015, production at ACG was down by 2.2%, compared to 2014. BP has tried to maintain production by replacing staff and increasing investment in the fields but it has been unable to stop ACG’s decline.

Last week, BP suspended operations at Chirag for 20 days due to maintenance work which will hit output again.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Kazmunaigas to boost petrol market

SEPT. 18 2015 (The Conway Bulletin) — Kazmunaigas Processing and Marketing (KMG P&M), a branch of the state-owned oil and gas company Kazmunaigas, said it wants to increase its brand’s share of the petrol retail market in Kazakhstan to around 33%. KMG P&M currently owns 324 petrol stations across the country representing 12% of the total. The company is selling 146 stations to private investors to reduce costs. The new owners will keep the Kazmunaigas brand. KMG P&M will then buy more stations to increase the number of petrol stations carrying its brand.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Turkmenistan builds oil terminal

SEPT. 18 2015 (The Conway Bulletin) — Construction work at a new oil terminal in Turkmenistan’s Lebap region, near the border with Afghanistan, is close to completion, the Ministry of Petroleum said. The terminal will have a capacity of 540,000 tonnes of oil and will boost Turkmen export options.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Fire breaks out near Zhanaozen, Kazakhstan

SEPT. 18 2015 (The Conway Bulletin) – A fire broke out at an oil pit outside Zhanaozen in western Kazakhstan. High winds spread the fire over a 5 square km area. Media said the fire injured 2 people.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Armenia wants to boost electricity sales to Iran

SEPT. 23 2015, YEREVAN (The Conway Bulletin) — Armenia wants to increase by four-fold electricity exports to Iran, a senior government official said, highlighting the important regional economic position that the Iranian government will hold once international sanctions are lifted, as expected, later this year or next.

At a policy meeting in Yerevan, Areg Galstyan, the Armenian deputy minister for energy and natural resources said a third electricity transmission line to Iran was being built that would increase exports.

“Now in a year we export 1.8b kilowatt hours of energy to Iran and the capacity can be increased to 6.9b. kWh per year,” he said at a press conference. “We hope that the construction of a third Armenia-Iran high voltage electricity transmission line will be finished in 2018.”

The growing trade and diplomatic relationship between Armenia and Iran has become increasingly important for the government in Yerevan. It is short of regional allies. Armenia and Azerbaijan are still officially at war over the disputed province of Nagorno-Karabakh and its ties with Turkey have been broken over allegations of a genocide 100 years ago, meaning that it has turned to Iran as partner.

And with Iran on the brink of being accepted back into the international community after a deal with the United States and others over its nuclear weapons programme, relation – trade, diplomatic and cultural – are set to grow.

Armenia sees itself as a growing regional electricity exporter. As well as increasing exports to Iran it also wants to increase them to Georgia.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Samsung suspends building work at essential Kazakh power plant

ALMATY, SEPT. 23 2015 (The Conway Bulletin) — Korea-based Samsung Engineering said it was suspending construction work at a 1,320 megawatt coal-fired power plant near Lake Balkhash in Kazakhstan due to financing issues, throwing into doubt the feasibility of the $2.2b project that the Kazakh government has said is vital to meet growing demand for electricity.

Alluding to the impact of an economic downturn that has hit the economies and currencies of Central Asia, Samsung Engineering said it was worried that Kazakhstan couldn’t guarantee it would buy the power that the plant was due to generate.

“Samsung Engineering has been forced to temporarily halt the operation of the project because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project,” the company’s CEO Park Jung-heum told The Korea Times. He didn’t say when the project might resume.

The Kazakh government has not commented.

A consortium led by Samsung Engineering and Korean Electric Power Corp. won the project tender in 2009. The project was due to be completed in 2020 and would have supplied 9% of Kazakhstan’s total electricity demand.

The power plant was due to cost $2.2b to build. Korean Eximbank and Korea Trade Insurance Corp. pledged additional loans of around $3.5b.

In August, Samsung also said it was worried about the strength of Kazakhstan’s banking sector which is saddled with a large amount of bad debt, a legacy of the 2008/9 Global Financial Crisis.

Kazakhstan needs to increase its electricity generation capacity to power its export-oriented industrial sector and to feed its increasingly energy hungry population or face the prospect of black-outs. World Bank data showed that in 2014, Kazakhstan consumed around 88b kilowatt hours of electricity. In 2000, it consumed 48b kilowatt hours, figures that highlight the growth in demand.

Samsung’s decision to halt its big project at Balkhash is a serious setback for Kazakhstan’s energy plans.

It is also a litmus test for Kazakhstan’s ability to follow through with major infrastructure projects it planned during a period of high oil prices and steady export revenues.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

BP extends DNV GL deal in Azerbaijan

SEPT. 22 2015 (The Conway Bulletin) — BP said it would extend DNV GL’s contract in Azerbaijan’s leading natural gas field for the second stage of operations. Oslo-based DNV GL provides marine warranty and consulting for oil and gas fields globally. The second phase of Shah Deniz sets it up for a massive expansion that will eventually mean more gas being sent to Europe.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Azerbaijan begins TANAP work

SEPT. 18 2015 (The Conway Bulletin) – Azerbaijan has begun work on the Trans Anatolian Pipeline (TANAP) project, part of the route that will carry gas from the Caspian Sea to Europe, local media quoted Rovnag Abdullayev, the chairman of Azerbaijan’s state-owned energy company SOCAR, as saying. Mr Abdullayev said that 400km of pipes had been delivered to TANAP.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Russia blocks fish to Kyrgyzstan

SEPT. 23 2015 (The Conway Bulletin) — Rosselkhoznadzor, Russia’s food safety agency, seized 48.5 tonnes of Chinese canned fish being transported via railway to Kyrgyzstan from Estonia. The cargo was sent back to Estonia because its certificates did not comply with Eurasian Economic Union (EEU) rules. Canned fish from China is shipped to Estonia before being sent to Central Asia. The seizure highlights just how complicated transporting products across the EEU has become.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)