MAY 13 2015 (The Conway Bulletin) – In Vienna, Austrian president Heinz Fischer told Turkmen President Kurbanguly Berdymukhamedov that Austria wanted to buy Turkmen gas. Europe is trying to persuade Turkmenistan to send its gas west to Europe. Turkmenistan is looking for more clients for its gas.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) holds its 24th annual meeting and business forum in Tbilisi May 14-15, placing Georgia firmly at the centre of the region’s attention.
Georgia is the first country in the Caucasus to host the annual EBRD meeting. Uzbekistan hosted the event in 2003. The Bank is a major player in Georgia, and has invested a total of $3b over the last 22 years.
This meeting is strategically important for Georgia to demonstrate its economic development, especially now, when the country is mired in a currency crisis. The lari has lost around 32% of its value since November.
Deputy minister of finance Davit Lezhava said the meeting was a perfect opportunity to spread information about Georgia to the outside world.
“I hope that the meeting will result in more investment, greater integration with the democratic world and in more political support,” Mr Lezhava told the Bulletin.
Over $7.2m was spent in preparing the EBRD annual meeting by the private sponsors and the government, media reported.
Mr Lezhava said that he didn’t know how much came from the state’s budget.
“But whatever the governmentcontribution was, it is not a waste of money because we will have great benefits from this event,” he said.
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(News report from Issue No. 231, published on May 13 2015)
MAY 8 2015 (The Conway Bulletin) – Turkmenistan exported 6.5% more gas in the first quarter of this year than it did in the same period of 2014, media reported quoting government figures. It also produced around 5% more gas.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – Turkmenistan has finished building a pipeline that crosses the country from east to west, Turkmen president Kurbanguly Berdymukhamedov said on a trip to Vienna.
The pipeline connects Shatlyk, near the giant gas field of Galkynysh, to Belek, a few kilometres south of Turkmenbashi, on the Caspian Sea coast.
The east-west flow of the pipeline shows that Turkmenistan is poised, eager even, to send gas to Europe. Mr Berdymukhamedov hinted, strongly, at a similar reason for the pipeline.
“The construction of this pipeline, which is capable in the long term, if necessary, to transport large volumes of Turkmen energy resources in the right direction, will provide additional guarantees for their reliable and stable export,” he said.
Europe wants to import gas from Turkmenistan. Turkmenistan, wants to broaden its client base away from China.
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(News report from Issue No. 231, published on May 13 2015)
MAY 12 2015 (The Conway Bulletin) – Around 140 people working for the oil services company KazStroyService have gone on strike in west Kazakhstan demanding an increase in wages, media reported. Kazakhstan is sensitive to strikes. In 2011, 16 people died during fighting between protesters and police at a strike in west Kazakhstan.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – Azerbaijan will start producing AI-95 grade petrol from 2018 to meet higher demand, said the vice president of the state- owned energy company SOCAR, David Mammadov. Azerbaijan currently produces AI-92, a lower grade of fuel. The government has been pushing people to buy more modern cars.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – The Kazakh Central Bank has created a $700m fund to help people pay their mortgages, a move designed to ease Kazakhstan’s mountain of bad consumer debt.
Banks in Kazakhstan have one of the highest ratios of non-performing loans in the world, a legacy of the 2008/9financial crisis. Now, with a new financial crisis linked to the drop in global energy prices and a sharp fall in the performance of the Russian economy, also hitting Kazakhstan’s mortgage holders, policy makers have been looking for ways to ease the burden.
Low-income households are the principal target of the measure, according to official sources. Families at risk will be able to access new credit at advantageous rates, in order to pay off their outstanding bill.
Around 20,000 loans obtained between 2004 and 2009 should be affected by this measure. The largest contribution will go to Kazkommertsbank, which will receive $205m and refinance the debt of 12,500 borrowers.
The rationale is simple. Policymakers have argued that people taking out mortgages between 2004-9 were relatively uneducated in the practise and may have been mis-sold a product or taken out debt that they could not finance.
Most mortgages during this period were also taken out in US dollars. The
Kazakh tenge has dropped markedly against the US dollar since then, making the loans harder to service.
Some analysts, though, have questioned the spirit of the measure.
Quoted on Forbes.kz, financial analyst Murat Temirkhanov said: “The word ‘refinancing’ has little to do with this measure. It should be described as a restructuring, i.e. an exchange of bad loans for cheap money from the state.”
Still, the new measure has the potential to revive the financial market in Kazakhstan.
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(News report from Issue No. 231, published on May 13 2015)
TBILISI/GEORGIA, MAY 13 2015 (The Conway Bulletin) — The second Saturday of May is an important date in Tbilisi’s calendar, as the New Wine Festival and its rivers of free wine kick off the capital’s summer party season.
But, although there were a record number of participants, this year’s festival was set against the backdrop of falling Georgian wine exports.
The 6th annual New Wine festival, organized by the Wine Club of Georgia, attracted thousands of visitors to sample 72 different types of local wine produced by more than 100 different companies and small family wineries.
“It is a great place to introduce people to different wines and to attract future customers,” Alex Rodzianko, an American who started his own winery in Georgia a couple of years ago and participated in the wine festival for the first time, said as he poured full glasses of amber wine to a circle of Georgians.
But life is less rosy for bigger companies, which target foreign markets. Last week the National Wine Agency released a report, which said that Georgian wine exports dropped by 58% in the first quarter of 2015 compared to the same period in 2014.
In total, in 2015 Georgia exported over 6m litres of wine worth $23m to 26 countries but the two biggest markets, Russia and Ukraine, reduced their Georgian wine consumption by 76% and 57% accordingly. Blame war in Ukraine and an economic recession in Russia.
Teliani Valley, one of the better-known Georgian winemakers, exports 80% of its produce. However their export sales are dwindling. Media representative Nutsa Avalishvili said that the company is now trying to expand into other countries such as Poland, Kazakhstan, China and the US to compensate for losses.
“The main reason for dropping sales in Ukraine is the political situation and crisis in that country,” she said.
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(News report from Issue No. 231, published on May 13 2015)
MAY 8 2015 (The Conway Bulletin) – In what could be a potential game-changer for Uzbekistan, President Islam Karimov has ordered the government to sell stakes in 68 large companies to strategic foreign investors.
Media quoted a presidential decree which said that stakes in companies such
as Navoiazot, a cement maker, and Turonbank would be up for sale.
“It is time to carry out a full-scale critical analysis of the availability and effectiveness of the presence of state shares in the economy, in other words, ‘the state’s presence in the economy’, and on this basis, to define our actions for a significant increase in the private sector’s presence in the economy,” media quoted Mr Karimov as saying.
It’s unclear from the decree and the media coverage who this apparent relaxation of state controls over Uzbek industry and commerce is actually aimed at.
Western business has generally had a strained relationship with Uzbekistan. There have been a number of instances where Western companies — generally metals companies — have accused Uzbekistan of grabbing their assets.
Instead, Uzbekistan may be thinking of Chinese companies, which have been making in-roads over the past few years, or even businesses from South Korea and India.
Uzbekistan’s economy, like other countries in the region has been struggling to cope with a downturn in global energy prices and a sharp fall in the performance of the Russian economy. Remittances from Russia have dropped considerably.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – Oil produced by BP’s Azeri- Chirag-Guneshli (ACG) fields in the first quarter of the year inched up to average of 661,000 barrels per day from 645,800 barrels per day during the same period last year, BP-Azerbaijan said.
This increase, although small, is important. BP has been under increasing pressure from Azerbaijan to reverse a decline in output at ACG, the principal driver of Azerbaijani oil production.
For the past couple of years BP has spent millions and replaced various management teams trying to stem the decline in output at ACG.
It now appears to be working, and overall Azerbaijani oil production is rising as a consequence.
Earlier this month BP also said that it was going to suspend operations at one of the ACG platforms for repairs. This should dent ACG output in the short term.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 231, published on May 13 2015)