Tag Archives: gas

Total signs deal to produce gas at Azerbaijan’s Abershon

NOV. 21 2016 (The Conway Bulletin) — French energy company Total signed an agreement to develop the first phase of the Absheron gas and condensate field in Azerbaijan, a major boost for the country’s oil and gas sector, although it also said that production levels would be far lower than originally projected.

Total discovered Absheron in 2011 and owns a 40% stake in the project. Other shareholders include state- owned SOCAR (40%) and ENGIE, a French utility company (20%).

The company had said the field, off the Absheron peninsula, around 60km from Baku, would produce 5b cubic metres (bcm) of gas annually in the first stages and between 7 and 8 bcm at a later stage. But Total’s latest press release told a different story.

“The development involves the drilling of one well at a water depth of 450 meters. Production from this high pressure field will be around 35 thousand barrels of oil equivalent per day, including a significant portion of condensate,” Total said.

This means that yearly production volume would be around 2.1 bcm, 60% smaller than originally planned.

Analysts said that the Azerbaijani government has pressured Total into producing at Abershon ahead of the original target start date, possibly forcing it to cut output targets.

“If they previously planned to produce first gas in 2022, now they talk about the beginning of 2020,” Ilham Shaban, head of the Caspian Barrel research outfit, told the Vestnik Kavkaza website.

Absheron’s gas will compensate for declining domestic production in Azerbaijan, according to Total.

“The produced gas will supply Azerbaijan’s domestic market,” the company said.

Azerbaijan’s gas production has flatlined in recent years to around 19bcm and it is poised to decline this year.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Turkmenistan makes a deal with EU

NOV. 11 2016 (The Conway Bulletin) — At a meeting in Brussels, Turkmen and EU energy officials confirmed their commitment to making the so-called Caspian Development Corporation, which aims to send gas from Turkmenistan to Europe, become a reality. The Caspian Development Corporation is a concept that has been talked of and worked towards since at least 2010. One of the projects Caspian Development Corporation is exploring is building a pipeline across the Caspian seabed.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Azerbaijan’s SOCAR to build terminal in Benin

NOV. 15 2016 (The Conway Bulletin) — During an official visit, a delegation from SOCAR, Azerbaijan’s state owned energy company, said it was interested in building an oil terminal in Cotonou, the capital of Benin. The SOCAR officials didn’t say why they were interested in building an oil terminal in Benin. Azerbaijan’s energy minister Natig Aliyev also visited Burkina Faso’s PM Paul Kaba Thieba and discussed potential cooperation between SOCAR and SONABHY, the coun- try’s state energy company.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

KMG EP revenue rises in Kazakhstan

NOV. 17 2016 (The Conway Bulletin) — London-traded KMG EP, a subsidiary of Kazakhstan’s state-owned energy company Kazmunaigas, posted a 47% increase in tenge-denominated revenue in the first nine months of 2016, compared to the same period last year, mostly due to the weaker tenge/US dollar exchange rate. Production fell by 1.2%, mainly because of a 6% drop at its PetroKazakhstan subsidiary, which operates in the central Kyzylorda region.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Stock market: Tethys Petroleum,Olisol

NOV. 18 2016 (The Conway Bulletin) — After hovering at around 1.5p for several months, Tethys Petroleum’s share price reached rock bottom at around 0.9p in early November, following increasingly worse news coming from its operations in Kazakhstan.

Its prospective local partner, Olisol, first missed a payment of 9.8m Canadian dollars ($7.3m) and later cancelled Tethys’ gas sales contract in Kazakhstan. It then pulled out completely from its initial offer to become a major shareholder in Tethys.

In addition, Tethys’ local subsidiaries were raided by the Kazakh police and their asset frozen.

The stock price picked up again this week after new potential investors came forward and a Kazakh court dropped the charges against the local subsidiaries. But with much work still to be done before a financing agreement is reached and with a pending legal dispute in Tajikistan, Tethys is far from having found a safe harbour.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Russneft adds assets in Azerbaijan

NOV. 15 2016 (The Conway Bulletin) — Ahead of a planned IPO in Moscow, Russian energy company Russneft said it will add oil and gas assets in Azerbaijan to its balance sheet in 2017. The 15b cubic metres of gas and 11.2m tonnes of oil holdings in Azerbaijan were owned by Global Energy Azerbaijan. Russian billionaire Mikhail Gutseriev owns a majority share in Russneft and owned Global Energy Azerbaijan before it was bought by Russneft in 2014. Oil trading giant Glencore owns a minority stake in Russneft.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Georgia begins East-West pipeline construction

NOV. 16 2016 (The Conway Bulletin) — Georgian Oil and Gas Corporation said it started construction on a section of the East-West gas pipeline, from Tsiteli Khidi on the border with Azerbaijan to Gardabani. The company said it will invest 4.5m lari ($1.4m) to complete the 20km section. Georgia ordered a general overhaul of the 450km Soviet-era pipeline from the border with Azerbaijan to the Black Sea port of Poti. State-owned Partnership Fund is the only shareholder.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Western banks agree $500m loan for Lukoil subsidiary working in Uzbekistan

NOV. 15 2016 (The Conway Bulletin) — An Uzbek subsidiary of Russian energy company Lukoil received a loan of $500m from various European and Japanese financial institutions to develop the Gissar gas and condensate field in Uzbekistan.

A consortium of banks — Italy’s Unicredit and Intesa Sanpaolo, Russia’s VTB, Dutch lender ING, Japan’s Mizuho Bank, France’s Natixis and Austria’s Raiffeisenbank — has agreed to give the loan to Soyuzneftegaz Vostok, Lukoil’s subsidiary in Uzbekistan.

This is important because, by providing Soyuzneftegaz Vostok with a loan, Western banks are indirectly investing in Uzbekistan and, also, lending Lukoil funds. Lukoil is under US sanctions but not European sanctions.

The five-year loan will help Lukoil expand the Gissar project, which has produced around 1.3b cubic metres/year since 2011. The company plans to grow production to 4.8b cubic metres/year by 2017 and build a gas treatment complex near the field. Earlier this year, Lukoil said it was looking to obtain a loan from South Korean lenders and that it needed a $1b cash injection to com- plete the upgrade.

Sanctions were imposed on Russian companies after Russia’s annexation of the Crimea in 2014.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Tethys says Kazakh police raided its offices

ALMATY, NOV. 6 2016 (The Conway Bulletin) — Guernsey-registered Tethys Petroleum accused Kazakh police of raiding the offices of its subsidiaries in Kazakhstan days after a financing deal with Kazakhstan- based Olisol collapsed.

Tethys also said it had sacked Alexander Abramov, a principal at Olisol and director at Tethys, the day after the police raids . It accused Mr Abramov and Olisol of triggering the raids.

“We understand that the case was initiated by Mr Abramov. On November 2, 2016 the investigation division of the Internal Affairs Department of Almaty conducted searches of the Company’s offices,” Tethys said. Mr Abramov and Olisol have not commented.

Tethys, which operates oil and gas fields near the Aral Sea, also accused Olisol of other underhand business tactics.

The company said that its two main gas supply contracts were terminated shortly before a deadline for Olisol to pay its proposed investment. This allowed Olisol to back out of the agreement.

Essentially Tethys accused Olisol of deliberately scuppering its finance plans. Tethys had been relying on investment of $10m from Olisol, in return for equity, to push through a tough period for the energy industry.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Turkmenistan settles row with Gazprom

NOV. 7 2016 (The Conway Bulletin) — Turkmenistan’s Turkmengaz and Russia’s Gazprom settled a row over gas pricing after a meeting between Turkmen President Kurbanguly Berdymukhamedov and his Russian counterpart Vladimir Putin last week, media reported. Earlier this year, Gazprom filed an arbitration case against Turkmengaz in a Stockholm court alleging that it had been over-charged for gas. Turkmengaz had previously accused Gazprom of not paying its debts.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)