SEPT. 7 2013 (The Conway Bulletin) — On a tour of Central Asia, Chinese President Xi Jinping met with Kazakh President Nursultan Nazarbayev in Astana. Alongside other deals, they finalised a deal for China to buy an 8.33% stake in Kashagan, a Caspian Sea oil project, for $5b. China beat India for the stake in Kazakhstan’s biggest energy project.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 10 2013 (The Conway Bulletin) — Xi Jinping, China’s president, toured Central Asia’s capitals meeting leaders and sealing business deals. In Turkmenistan Mr Xi inaugurated the start of production at Galkynysh, the world’s second biggest gas field, and in Kazakhstan he confirmed a $5b deal to buy an 8.33% share in the Kashagan oil field.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 6 2013 (The Conway Bulletin) — A drop in savings held in Kazakh tenge in July showed people were losing confidence in Kazakhstan’s currency, the respected kapital.kz said. Central Bank data showed 350b tenge was withdrawn from bank accounts in July, reducing the proportion of savings held in tenge to about 61%, down from 66%.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 4 2013 (The Conway Bulletin) — During a trip by Afghan officials to Baku, the Azerbaijani energy minister, Natik Aliyev, said that Azerbaijan may help build a series of small oil refineries in Afghanistan. Azerbaijan officials have been talking up the prospect of investing more heavily in Afghanistan’s energy sector.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 3 2013 (The Conway Bulletin) — Corruption and a poorly educated workforce are the biggest problems to doing business in Kazakhstan, according to executives interviewed in the World Economic Forum’s Global Competitive Index. The index ranked Kazakhstan at 50th position, up one place from last year, out of 148 countries.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 10 2013 (The Conway Bulletin) — After days of talks, Toronto-listed Centerra Gold said it had agreed a non-binding deal with the Kyrgyz government over ownership of the Kumtor gold mine. Under the deal, Kyrgyzstan would swap its 32.7% stake in Centerra Gold for a 50% stake directly in a company that would own Kumtor. It would also pay Centerra Gold $100m.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 3 2013 (The Conway Bulletin) — President Ilham Aliyev’s team have been highlighting Azerbaijan’s jump up the ranks of the World Economic Forum’s Global Competitiveness annual report.
It’s an election year, after all, in Azerbaijan and the WEF report is significant.
In an interview, Elnur Aslanov, head of the Mr Aliyev’s information centre, said Azerbaijan had moved to 39th position in the rankings from 48 last year because of the social and economic policies of the president.
It’s an impressive statistic. Azerbaijan has jumped from 55th position in 2011 and now lies above several EU states.
But it’s also worth looking at the detail.
The reason Azerbaijan ranks so highly in the WEF index is its high score for macroeconomic stability. Azerbaijan’s energy wealth gives it a healthy government debt ratio, a decent government budget balance and strong gross national savings. Azerbaijan also has relatively low inflation, another positive.
The report, though, also details serious shortcomings. These were mainly in the health and education sectors. Notably amongst these was the ranking for school management — 133rd in the world, out of 148 countries.
Significantly, too, of the business executives interviewed for the report nearly a quarter said corruption was still the biggest problem for doing business in Azerbaijan.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 10 2013 (The Conway Bulletin) –Just as first oil from the giant Kashagan field in Kazakhstan’s sector of the Caspian Sea draws tantalisingly close, a partner in one of its main export routes has warned of a delay to planned capacity expansion.
In an interview with Reuters, Mikhail Barkov, vice-president at Russian pipeline monopoly Transneft, said work to expand the Caspian Pipeline Consortium (CPC) pipeline that runs from Atyrau in west Kazakhstan to the Russian Black Sea port of Novorossiik had been delayed by 6-12 months.
He didn’t give any reason for the delay.
Transneft is the largest shareholder in CPC, followed by Kazmunaigas and US oil major Chevron. There are several other smaller shareholders. The pipeline started operations in 2001 and has been an important export route for Kazakh oil, mainly from the Chevron-led Tengizchevroil project.
The plan had been to roughly double the capacity of CPC to about 1.3m barrels of oil a day by 2015, partly to cope with extra supplies from the Kashagan oil field.
News of the CPC delay is likely to frustrate Kazakh oil exporters, particularly as they were set to soon celebrate the first oil from Kashagan after years of delays and cost overruns.
On Sept. 7, Sauat Mynbayev, head of Kazmunaigas, said that Kashagan would start production within a month.
An expanded CPC has been touted as one of the primary export routes for oil from Kashagan. The expansion delay is likely to push oil from Kashagan — operated by a consortium of ENI, ExxonMobil, Total, Kazmunaigas, Shell, Inpex and now China’s CNPC — onto other export routes wholly owned by Russia.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 5 2013 (The Conway Bulletin) — Maybe, just maybe, the Nabucco pipeline project is not dead yet. That was the message given out by Natik Aliyev, Azerbaijan’s oil and gas minister, on Sept. 5.
Nabucco was the ambitious project backed by Central European countries to pump gas from Azerbaijan’s sector of the Caspian Sea.
After years of planning and negotiations it lost out on the lucrative contract earlier this year to a rival bid, the Trans-Adriatic Pipeline (TAP). TAP will pump Azerbaijani gas to Europe through the Balkans and under the Adriatic Sea to Italy.
And that looked like that for Nabucco.
Except that now Mr Aliyev has opened up the possibility of building another pipeline to carry gas to Europe.
“Nabucco is not dead,” he said, according to media reports. “It depends on our resources and I think that we have enough resources to increase production.”
Azerbaijan and Europe have become increasingly dependent on each other over the past few years. Europe has been desperately trying to reduce its dependency on gas from Russia, seen as an unreliable partner. Azerbaijan has also been keen to diversify its client base away from Russia.
When the Caspian Sea gas field Shah Deniz II starts production in 2019/2020 it will transform Azerbaijan’s energy outlook. It may also need more pipelines snaking from the Caspian Sea towards Europe.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 11 2013 (The Conway Bulletin) — Serzh Sargsyan, the Armenian president, sent shock waves across the South Caucasus and Europe when he signed Armenia up for Russia’s Customs Union.
The Kremlin set up the Customs Union in 2011 to ease trade between its partners and to draw them in closer. Commentators have dubbed it a Eurasian Union to counter the European Union.
Until Armenia moved into the Customs Union, only Kazakhstan and Belarus had joined. Kyrgyzstan has said it will join and Tajikistan has also been eyeing up membership.
Few though predicted Armenia’s jump towards Russia.
Mr Sargsyan’s decision to move into the Customs Union was a snub for European diplomats.
It’s not, perhaps, that surprising though. Armenia has been casting around for friends to provide a bulwark against Azerbaijan and Turkey. Armenia is still officially at war with Azerbaijan over the disputed region of Nagorno-Karabakh. Turkey is a key Azerbaijan ally.
Russia has given financial and military support to Armenia and maintains a large army base in Armenia. Gazprom, the Russian gas monopoly, also owns 80% of Armenia’s gas distributor and has been trying to buy the outstanding 20%.
Even so, Armenia’s move into the Customs Union will be felt across the region for years.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 151, published on Sept. 11 2013)