Tag Archives: business

Bad loans drop in Azerbaijan

JULY 16 2013 (The Conway Bulletin) — The proportion of bad loans in Azerbaijan will drop to 11% from 14% within the next 12 – 18 months, the ratings agency Moody’s said in a new report on the Azerbaijani banking sector. Moody’s regarded bad loans as those overdue by more than 90 days. It gave an upbeat assessment of Azerbaijan’s banking sector and said that real GDP would rise by 3.5% this year.

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(News report from Issue No. 144, published on July 22 2013)

Azerbaijan’s oil output drops at a slower rate

JULY 19 2013 (The Conway Bulletin) — Azerbaijan produced 21.8m tonnes of oil in the first half of 2013, a 1.8% drop compared to the same period in 2012, media reported quoting official statistics.

Despite the drop, this is actually a reasonable success. The fall between Jan.-June 2012 and Jan.-June 2011 was 7.2%. This output drop had become a major problem not only to Azerbaijan’s economy, which is reliant on energy sales, but also to the country’s prestige. So much so, in fact, that Azerbaijani President Ilham Aliyev stepped in.

Last year Mr Aliyev publicly criticised British energy company BP for not producing enough oil from the Azeri-Chirag-Guneshli (ACG) field in the Caspian Sea. This is Azerbaijan’s largest oil producing project and central to its future earnings.

BP now seems to have made good on their pledge to halt ACG’s output decline. Its production in the first half of the year stabilised and averaged 666,000 barrels per day, media quoted BP’s regional manager Gordon Birrell as saying. This is around 70% of Azerbaijan’s daily total.

The oil boom years for Azerbaijan are, if not waning, slightly diminishing. After Russia and Kazakhstan, Azerbaijan is the largest oil producer in the former Soviet Union but total production has slipped nearly 16% from 51m tonnes in 2010 to 43m tonnes last year. There is still plenty of oil for Azerbaijan to produce but gas is seen as the next big thing.

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(News report from Issue No. 144, published on July 22 2013)

Kazakhstan’s Kcell posts results

JULY 17 2013 (The Conway Bulletin) — Kcell, the largest mobile phone operator in Kazakhstan, posted higher revenues in the first half of the year compared to a year earlier but slightly lower profit. Revenue for Kcell, a subsidiary of Swedish telecoms giant TeliaSonera, rose just over 4% to about $580m highlighting growth in the Kazakh mobile market.

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(News report from Issue No. 144, published on July 22 2013)

Kazakhstan’s giant oil field to start in 2013

JULY 18 2013 (The Conway Bulletin) — Kashagan, the giant oil field in the Kazakh sector of the Caspian Sea, will produce its first oil by end of 2013, said the consortium developing the field, the North Caspian Operating Company. Kazakhstan has staked its future on the successful completion of Kashagan and has become frustrated over delays.

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(News report from Issue No. 144, published on July 22 2013)

Turkmenistan to update investment law

JULY 20 2013 (The Conway Bulletin) — Turkmen President Kurbanguly Berdymukhamedov has said he wants to update Turkmenistan’s foreign investment laws, media reported. Media reports didn’t give specific details of his proposed changes but they did say that the changes would be designed to attract more foreign investment.

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(News report from Issue No. 144, published on July 22 2013)

Virgin to enter Kazakh market

JULY 22 2013 (The Conway Bulletin) — Two of the key core strengths of Britain’s Virgin Group and its founder Sir Richard Branson are self-publicity and business acumen. It may be bringing both of these strengths to the Kazakh telecoms market.

Virgin Group spans a handful of sectors including trains, aviation, banking, travel, health clubs and telecoms. In 2011, according to its website, Virgin Group employed 50,000 people across the world and earned revenues of about $21b.

Perhaps its biggest assets, though, are the Virgin brand and a sense of flair. Sir Richard set up Virgin in 1970 and its slanted, hand-written logo is now recognisable around the world.

Virgin Mobile Central and Eastern Europe was one of the British companies that signed deals with Kazakh businesses during a trip to Kazakhstan by British PM David Cameron earlier this month.

Launched in 2012, Virgin Mobile Central and Eastern Europe is currently only offering a mobile phone service in Poland. This, though, could change.

It may just have been a so-called memorandum of understanding with Kazakh Telecom but this is still significant as it could mean a Virgin branded broadband and telecoms business offering services to people in Kazakhstan. As an indication of Kazakhstan’s development, Virgin’s potential entry is interesting and, possibly, significant.

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(News report from Issue No. 144, published on July 22 2013)

Japan hunts for uranium in Uzbekistan

JULY 12 2013 (The Conway Bulletin) — Japan Oil, Gas and Metal National Corp. (JOGMEC), a state-run company, has signed a deal with Uzbekistan to search for uranium deposits, media reported. The deal underlines Central Asia’s appeal to energy hungry countries in Asia. JOGMEC will search for uranium in the Navoi region, central Uzbekistan.

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(News report from Issue No. 143, published on July 15 2013)

Oil workers go on strike in western Kazakhstan

JULY 8 2013 (The Conway Bulletin) — More than 200 workers at a subcontractor for oil fields service company Cape International Plc and Manpower Ltd in Atyrau, west Kazakhstan, went on strike for two days over job losses, media quoted the local prosecutor-general’s office as saying. The workers are employed on the Kashagan oil project in the Caspian Sea.

(News report from Issue No. 143, published on July 15 2013)

International donors pledge $1.7b to Kyrgyzstan

JULY 10 2013 (The Conway Bulletin) — Kyrgyzstan’s economy yo-yos. Last year, it shrank by nearly 1%; this year estimates predict that it will grow by 7%.

The yo-yo effect depends on political stability, Kyrgyzstan has suffered two violent revolutions since 2005, as well as the health of its biggest industrial project, the Kumtor gold mine. Last year Kumtor, owned by Toronto-listed Centerra Gold, had a poor year and dragged down the entire national economy (it accounts for about 12% of Kyrgyzstan’s GDP).

And mitigating this yo-yo effect is one of the main reasons that international donors have pledged $1.7b in grants and loans to Kyrgyzstan over the next five years.

Earlier this year, the Kyrgyz government, led by President Almazbek Atambayev unveiled an ambitious $13b growth plan. Much of this, the government said at the time, relied on the financial might of Western donors and investors underpinning this ambition.

At a conference in Bishkek on July 10, the World Bank, the IMF and others matched this ambition, giving Kyrgyzstan the chance to stabilise and grow its economy. This should improve the investment environment for foreign companies looking for a foothold in Central Asia too.

The alternative for Kyrgyzstan is more economic, and political, instability

(News report from Issue No. 143, published on July 15 2013)

Statoil to restart project in Azerbaijan

JULY 9 2013 (The Conway Bulletin) — Norwegian energy company Statoil wants to re-start exploration at the Zafar-Mashal oil and gas bloc in the Azerbaijani sector of the Caspian Sea, media reported. The Zafar-Mashal bloc has been mothballed since the mid-2000s when ExxonMobil and ConocoPhillips withdrew from the field because it was commercially unviable.

(News report from Issue No. 143, published on July 15 2013)