Tag Archives: business

Trans-Anatolian Natural Gas Pipeline opens

BAKU/Nov. 30 (The Bulletin) –Azerbaijani President Ilham Aliyev and Turkish President Recep Tayyip Erdogan officially marked the completion of the Trans-Anatolian Natural Gas Pipeline (TANAP) which will pump gas from the South Caucasus across Turkey to Europe.

TANAP is the longest section of the 3,500km-long $38b Southern Gas Corridor. The first section connecting the BP-operated Shah Deniz II gas field in the Caspian Sea to Erdine, in eastern Turkey has already been open and next year the final section, the Trans-Adriatic Pipeline, running across Greece and the Balkans to Italy, will open.

In a speech in Ipsala, on the Turkey-Greece border, Mr Aliyev said that the project, which will give Azerbaijan’s economy a major boost through gas sales, was more than just a gas transit pipeline.

“This project leads to cooperation, stability, long-term mutual understanding, and it would be wrong to consider these projects simply as energy projects,” he said according to a statement on his website.

Construction of the pipeline, one of the world’s longest energy pipeline was started four years ago and has had the financial backing of European countries, the EU and various financial institutions such as the EBRD.

European countries want an alternative energy source to Russia, which has been their primary provider of gas.

When the Southern Gas Corridor does open next year it will pump an estimated 10b cubic metres of gas to Europe, enough power for up to 10m households.
TANAP’s shareholders are Azeri state energy company Socar with a 51% stake, Turkish pipeline operator BOTAS with a 30% stake, BP with 12% and Socar Turkey with 7%.
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— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019

Major Kazakh grain exporter fails to pay bond coupon

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NOV. 27 (The Bulletin) — Kazexportastyk, one of Kazakhstan’s biggest grain exporters, said that it had started talks with the Kazakh government after it failed to pay a bond coupon payment to investors under a debt restructuring deal. Russia’s Sberbank indirectly bought a stake in Kazexportastyk when it loaned the company $78m last year as part of a restructuring deal. Kazexportastyk missing a coupon payment may deter investors from other Kazakh companies.
ENDS

— This story was first published in issue 430 of the weekly Bulletin.

Russia’s Tatneft will partner Uzbekneftegas

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NOV. 27 (The Bulletin) — Russian oil producer Tatneft will partner Uzbekneftegas, the Uzbek state oil and gas company, to produce oil from three fields in the east of the country. The fields, Andijan, Palvantash and West Palvantash, all hold what are called “hard-to-recover” reserves.
ENDS

— This story was first published in issue 430 of the weekly Bulletin.

Wyndam to open new hotels across the region

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NOV. 27 (The Bulletin) — Wyndam Hotels, one of the world’s biggest hotel franchises, plans to open new sites in Georgia, Uzbekistan, Armenia and Kyrgyzstan over the next couple of years, media reported. In total, Wyndam wants to add 35 hotels with 5,700 bedrooms to its portfolio with Georgia being the focus of this growth. It said that it will build seven new hotels with 1,300 bedrooms in Georgia.
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— This story was first published in issue 430 of the weekly Bulletin.

Switzerland’s Stadler seals 115m euro deal with Azerbaijan

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NOV. 27 (The Bulletin) — Swiss train-maker Stadler said that it had agreed to sell 10 five-carriage Flirt units to Azerbaijan’s national railway operator for 115m euros. The Flirt series are Stadlers inter-city trains. Stadler has previously sold sleeping carriages to Azerbaijan in 2014 for its international services and in 2015 and 2018 it signed deals for its double-decker Kiss carriages.
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— This story was first published in issue 430 of the weekly Bulletin.

Uzbekistan wants cement manufacturers to pollute less

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NOV. 27 (The Bulletin) — Uzbekistan’s government is considering introducing a law that would force cement producers to measure and monitor their air pollution. The move is an indication that governments in the region may start to take more seriously the issue of worsening air quality. Other the past few years, Central Asia’s cities have become choked with car exhaust fumes and factory smog. Feeding demand from a booming construction industry, Uzbekistan’s cement sector is one of its fastest-growing industries.
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— This story was first published in issue 430 of the weekly Bulletin.

Kazakhstan rejects $1.1b offer to settle Karachaganak row

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ALMATY/NOV. 26 (The Bulletin) — Kazakhstan told the consortium of energy companies developing the Karachaganak gas field in the north of the country that their $1.1b offer to settle a dispute was insufficient.

The dispute has been festering for more than four years, undermining Kazakhstan’s reputation as a place to do business and frustrating the consortium led by Royal Dutch Shell which is developing Karachaganak, one of Kazakhstan’s most high-profile energy projects.

A resolution to the dispute had been announced in October last year, although it now appears to have fallen through.

Media quoted Kazakhstan’s first deputy energy minister Makhambet Dosmukhambetov saying that the government wasn’t happy with the $1.1b offer. He didn’t elaborate as to why the government had pulled back from accepting the payment but he did hint that more negotiations were needed to find a solution to the row.

“New circumstances have been uncovered,” he said.
None of the partners developing Karachaganak — Shell, Lukoil, Chevron and Kazmunaigas — have commented.

Kazakhstan originally filed a $1.6b claim against the consortium developing the Karachaganak consortium in 2015 because it said that it hadn’t been receiving a fair share of the profits.

Over the past few years, Kazakhstan has been trying to gain bigger stakes in energy projects that have been dominated by foreign companies. It has said that when many of the deals were made to develop gas and oil fields in the chaotic post-Soviet 1990s, the Kazakh government was in an unfairly weak position.

Karachaganak, near Aktobe in the north of Kazakhstan, is one of the country’s most important oil and gas projects. It generates around 50% of Kazakhstan’s gas and 18% of the country’s oil.

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— This story was first published in issue 430 of the weekly Bulletin.

Unplanned repairs hit Kashagan output

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ALMATY/NOV. 26 (The Bulletin) –Unplanned maintenance work at the Kashagan oil field in the Kazakh sector of the Caspian Sea has hit output more sharply than expected, Reuters reported by quoting two sources.

The sources said that production at the end of November was around 184,000 barrels of oil per day (bpd), down from 400,000bpd at the start of the month. Kazakh officials had previously said that production was down to around 270,000bpd.

Kashagan, which is being developed by Eni, ExxonMobil, CNPC, Royal Dutch Shell, Total, Inpex and Kazakh state energy firm Kazmunaigas, has been beset by problems. It opened late and billions of dollars over budget.

There have also been a series of technical problems that have slowed its production. Kashagan is one of Kazakhstan’s biggest oil fields.

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— This story was first published in issue 430 of the weekly Bulletin.

Azerbaijan’s Bakcell buys Vodafone Ukraine

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BAKU/NOV. 25 (The Bulletin) — Azerbaijani telecoms operator Bakcell finalised a deal to buy Vodafone Ukraine from Russia’s MTS Group for $734m, its first major overseas purchase.

Yusif Jabbarov, Bakcell CEO, said that the purchase of Vodafone Ukraine was only the first of a series of foreign purchases that the company was planning.

“With the acquisition of Vodafone Ukraine, the second telecommunications operator in the Ukrainian market, we continue the strategy of expanding the international presence and entering the new markets by the companies belonging to the NEQSOL Holding group,” he said.

NEQSOL Holding group is a conglomeration owned by Hasib Hasanov, an Azerbaijani businessman reportedly close to Azerbaijan’s President Ilham Aliyev. It also owns Nobel Oil which wins contracts from the Azerbaijani government in the Caspian Sea.

MTS had owned Vodafone Ukraine, which has no links to the British company, through its Dutch subsidiary Preludium but with a deadlock in the east of Ukraine in a war between government forces and Russia-backed rebels it had become harder for Russian companies to own businesses in Ukraine.

Analysts said the $734m price tag for Bakcell was a discounted price.
MTS has also said that its new strategy is focused on building growth inside Russia. It sold its businesses in Turkmenistan in 2017 and in Uzbekistan in 2016 although it still owns telecoms companies in Belarus and Armenia.

Last year, profits at Vodafone Ukraine fell 18% to 1.8b hryvnia ($72.5m) because of the cost of building new 4G networks.

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— This story was first published in issue 430 of the weekly Bulletin.

Kazakhstan delays IPOs again

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NOV. 25 (The Bulletin) — Hoping for high valuations, Kazakhstan will delay by a year plans to sell off stakes in Air Astana, Kazakhtelecom and energy company Kazmunaigas, media reported by quoting Kazakh finance minister Alikhan Smailov. Stakes in nuclear company Kazatomprom were sold off last year on the London Stock Exchange but the IPOs of other companies have been delayed several times.
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— This story was first published in issue 430 of the weekly Bulletin.