Tag Archives: business

Kazakhstan halves Karachaganak cost expansion

JUNE 16 2017 (The Bulletin) — Kazakh officials said that the cost of extending production at the Karachagank gas condensate field had halved. Murat Zhurebekov, chief executive of PSA LLC, a unit of state energy firm Kazmunaigas, said that the cost of boosting production at Karachagank had halved from an earlier estimate of $9b. He didn’t explain why this estimate had been reduced, although he did say that it was linked to low oil prices. Eni and Royal Dutch Shell each own 29.25% of Karachaganak. Kazmunaigas owns 10%, Chevron 18% and Lukoil 13.5%.

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(News report from Issue No. 333, published on June 19 2017)

Uzbek President approves French investment

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JUNE 14 2017 (The Bulletin) — Uzbek president Shavkat Mirziyoyev signed a decree that formalises an investment by French carmaker PSA, owner of the Peugeot and Citron brands. PSA plans to produce around 16,000 vans every year in Uzbekistan. The Uzbek car-making sector is important domestically as it is one of the few outside the oil and gas sector with foreign investors. US’ GM is a 25% stake holder in a joint-venture with Uzbekistan’s Uzavtosanoat.

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(News report from Issue No. 333, published on June 19 2017)

Kazakhstan does not receive special treatment over IBA debt

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JUNE 13 2017 (The Bulletin) — Kazakhstan’s Central Bank will not receive preferential treatment from Azerbaijan’s majority state-owned IBA bank when it restructures its debt, a source close to the negotiations told Reuters. Kazakhstan’s state pension fund bought $250m worth of IBA debt in 2014 just as the oil price started to fall. Earlier this year it said that it was having to restructure debt totaling $3.3b. Most creditors face losing 20% of their investments.

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(News report from Issue No. 333, published on June 19 2017)

Kazakhstan signs deal with DP World

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JUNE 16 2017 (The Bulletin) — Dubai’s DP World signed a deal with the Kazakh government to help develop a communication system between, and within, its various ports, a plan aimed at improving efficiency, media reported. No value was put on the deal and its exact specifics are not known but reports said the system is tried and tested and should help free up time and procedures at customs points. Kazakhstan is upgrading its trade infrastructure ahead of an expected increase in trade linked to China’s “One Belt, One Road” strategy.

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(News report from Issue No. 333, published on June 19 2017)

Tajikistan cancels licences for international courier agencies

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DUSHANBE, JUNE 19 2017 (The Bulletin) — International courier companies DHL, TNT, UPS and Pony Express are still waiting to be granted operating licences, nearly two weeks after the government suddenly ordered them to stop work.

The authorities told four of the world’s biggest courier companies that they needed to apply for a new licence to continue operations on June 7, but despite consultations and attempts to talk to the authorities none of the companies have yet been able to re-start work.

“We have no idea why this happened so suddenly. We have been working in the country since 1995, and never faced such an issue,” said an employee of UPS in Dushanbe. “We still have not heard anything from the communication services. Most probably the government is trying to popularise Pochtai Tojik [the Tajik Post Office], and remove competition.”

The row is a reminder of the fragile nature of doing business in Tajikistan. At the beginning of the year the government slapped a back-tax fine on mobile operator Tcell just as Sweden’s Telia was trying to sell its 60% stake in the company. Telia accused it of trying to interfere and profit from the sales process.

On the courier companies, the state-run news agency Khovar said that the companies would be able to apply for a new licence if they wanted to return to work.

“The law must be respected. If the above-named companies appeal to the Liaison Service for registration of their license, after a positive decision they will be reopened,” Khovar quoted an unnamed government source as saying.

But an employee of TNT said that getting a new licence wasn’t quite as simple as the Tajik authorities appeared to make out.

“Work in our office has stopped since June 7 and no comments are even made at these days,” she said.

“We applied for the license but there has been no result on that.”

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(News report from Issue No. 333, published on June 19 2017)

China’s AIIB lends to Tajikistan

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JUNE 17 2017 (The Bulletin) — The Beijing-based Asian Infrastructure Bank (AIIB) approved a $60m loan to Tajikistan to part finance the refurbishment of the Nurek Hydropower station and a $114m loan to part-finance a road bypass around Batumi. The AIIB is a new institutional bank that its critics have said is designed to spread Chinese influence. The United States has declined to become a member.

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(News report from Issue No. 333, published on June 19 2017)

Georgia starts processing law to ban foreigners from owning land

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TBILISI, JUNE 14 2017 (The Bulletin) — Georgia’s parliament started processing a law that will forbid foreigners from owning farmland, despite warnings from experts that the ban will stunt the growth of the agriculture sector.

The Georgian Dream government dominates parliament and has said that it is bringing in the law because of the pressure on farmland, although opponents have said that its main aim is to roll back another key policy of former president Mikheil Saakashvili.

Levan Davitashvili, the minister of agriculture, said that under the new legislation foreigners would only be allowed to own land if they inherited it, if they married into it or if they already had a permanent residence or an investment permit.

“Land is a particularly limited resource and, with the population growth, land resources are becoming more significant and valuable,” media quoted him as saying. “It is crucial that agricultural land has to be for Georgian citizens and they have to have the property rights.”

When he was in power between 2003 and 2013, Mr Saakahvili had courted Afrikaans to move to Georgia from South Africa, promising them access to good farmland. He followed this up with campaigns to persuade Indian farmers to also move to Georgia too. Essentially he wanted the expertise and investment potential the foreign farmers would bring.

But alongside the expertise, the farmers from South Africa and India generated resentment and frustration from locals, something that the Georgian Dream picked up on and campaigned to change.

After winning a majority of MPs in Parliament in 2012, the Georgian Dream brought in a moratorium to suspend the sale of farmland to foreigners. This moratorium was declared unconstitutional in Dec. 2014 and revoked.

Earlier this month, with the Georgian Dream now dominating Parliament, constitutional amendments were passed banning land sales to foreigners. The new law being discussed, though, will come into play before constitutional amendments.

Phatima Mamardashvili, head of the Agricultural Policy Research Centre, said the ban was negative.

“Our agriculture is so unproductive. We should welcome any investment,” she told The Bulletin. “Foreign investor bring knowledge, capital, new technology. These new limitations are negative. foreign investment flow will be reduced. Georgia will be a less attractive market.”

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(News report from Issue No. 333, published on June 19 2017)

Kazakhstan’s KMG readies for IPO

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JUNE 12 2017 (The Bulletin) — Kazakhstan’s state-owned oil and gas company Kazmunaigas is in advanced stages of its preparations for an IPO next year, the FT quoted its CFO Dauren Karabayev as saying. The Kazakh sovereign wealth fund Samruk Kazyna owns 90% of the company and the Central Bank owns the other 10%. Kazmunaigas will list alongside Air Astana and Kazatomprom next year on the new Astana Stock Exchange. There is also likely to be a secondary foreign listing but it is currently unclear where this will be, although analysts have said that London is a favoured option.

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(News report from Issue No. 333, published on June 19 2017)

Rosatom to update Armenia nuclear plant

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YEREVAN, JUNE 13 2017 (The Bulletin) — Russian energy company Rosatom said it was going to start repair works on Armenia’s nuclear power station, Metsamor, next year.

The repair works, which Rosatom has said will extend the lifespan of the nuclear plant to 2026, are controversial because both the European Union and the United States have called on the plant to be decommissioned as it is built in an earthquake-prone area.

Several years ago, the European Union offered Armenia $300m to close down the plant, an offer that the Armenian government, possibly under pressure from Russia, declined.

After meeting Armenian PM Karen Karapetyan, Rosatom director- general said: “Armenia’s nuclear facilities will in fact be thoroughly upgraded. Our common goal today is to move clearly on the agreed schedule, observing the unequivocal priority of quality work and safety requirements.”

For Armenia, the Soviet-built nuclear plant is a vital part of its power generation system, producing around 40% of the country’s electricity.

The deal for the maintenance work to extend the lifespan of Metsamor was agreed in 2014, with Russian finance for the project and Rosatom’s role finalised the following year. Russia agreed to lend Armenia $230m to fund the modernisation scheme and also added a $30m grant.

Rosatom has said that the main focus of their work is the modernisation of the plant’s cooling towers, its turbine unit and control and safety systems.

The original plan for the maintenance work was to schedule it for 2017, closing the plant for six months.

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(News report from Issue No. 333, published on June 19 2017)

Kazakh CB to use Bitcoin

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JUNE 12 2017 (The Bulletin) — Kazakhstan’s Central Bank said that it was road testing a Bitcoin application for selling short-term notes. Bitcoin is a controversial technology as it has been associated with money laundering and other crimes. It’s technology, though, has been acclaimed for allowing multiple small trades at a low cost. The Kazakh Central Bank said it was looking at using the technology for selling 100 tenge notes (around a third of a US dollar).

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(News report from Issue No. 333, published on June 19 2017)