Tag Archives: gas

Azerbaijan’s SOCAR postbones DESFA deal

SEPT. 27 2016 (The Conway Bulletin) – SOCAR, Azerbaijan’s state-owned energy company, postponed by one month the deadline for its purchase of a 66% stake in Greek gas distributor DESFA. The purchase guarantee, by which SOCAR would have to buy 49% of DESFA if it finds a partner to buy a 17% stake, was due to expire at the end of September. The EU froze the €400m ($446m) deal, signed in 2013, due to regulations on market competition.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

US-based company makes progress in Georgia

SEPT. 26 2016 (The Conway Bulletin) – US-based Frontera Resources said it has made progress at the South Kakheti gas complex it operates in Georgia, announcing a new drilling campaign for October. Frontera also said it will go forward with a financing deal it reached with YA II PN, part of the Yorkville Advisors financial group. Frontera will raise around $686,000 through a share issue in London.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Azerbaijan to have talks with Bulgaria on exports

SEPT. 29 2016 (The Conway Bulletin) – Bozhidar Lukarski, Bulgaria’s minister of economy, will hold talks with an Azerbaijani delegation to explore the possibility of buying 1b cubic metres of gas. SOCAR and Bulgargaz, the two state-owned companies, signed a supply agreement in 2014. So far, however, the Interconnector Greece-Bulgaria, the pipeline through which Azerbaijan’s gas will be pumped, has not been built. Azerbaijan sees exports to Europe as key to growing its client base.

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(News report from Issue No. 298, published on Sept. 30 2016)

Azerbaijan’s export to Turkey declines

SEPT. 27 2016 (The Conway Bulletin) – Azerbaijan exported to Turkey 2.9% less gas in Jan.-July 2016, compared to the same period last year, the Turkish energy regulator said. Azerbaijan’s exports in the first seven months of the year stood at 3.8b cubic metres, mostly originating from the Shah Deniz gas field. Azerbaijan’s supplies to Turkey make up around 20% of Turkish gas imports through pipelines. Oil and gas exports are vital to Azerbaijan’s economy.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kazakh state-owned company creates subsidiary

SEPT. 27 2016 (The Conway Bulletin) – Kazmunaigas, Kazakhstan’s state-owned energy company, created a new subsidiary, KMG-Eurasia to exploit a joint Kazakh-Russian project in the Caspian Sea. The Kazakh government said total investment in the Eurasia field could reach $1.5b over the next decade. Last year, Baltabek Kuandykov, the project manager, said Kazmunaigas was due to create a subsidiary for the project in the first few months of 2016.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Tethys accuses Kazakhstan’s Olisol of dragging on deal

ALMATY, SEPT. 16 2016 (The Conway Bulletin) — Guernsey-based oil company Tethys Petroleum is still waiting for its Kazakh partner, Olisol, to pay in its pledged investment, it said in a press release, a financial injection considered vital to keeping the company running.

Tethys, which has oil and gas assets in Kazakhstan, Tajikistan and Georgia, said it had only received a portion of the 9.8m Canadian dollars ($7.4m) that Kazakh oil company Olisol pledged to prop up the operations of the London and Toronto- listed company earlier this year.

“On Sept. 9, Olisol provided $2.94m working capital funds to (us) in addition to the previously announced $452,000,” Tethys said in a statement in a strong-armed tactic to force Olisol to pay more quickly.

Earlier in September, Tethys had used more belligerent language.

“[Tethys] considers Olisol to be in breach of the Investment Agreement,” it said in a note on Sept. 2.

Olisol has played down the late payment and said that it will finance the rest of the deal by pardoning part of a loan it previously gave out to Tethys.

Tethys itself said that Olisol currently owns just under 15% of the company and will own 42% once the full payment has been made.

Olisol emerged last year as a white knight for Tethys which has been in trouble since oil prices collapsed in 2014. The real beneficiaries of Olisol have not been made public but they are believed to be members of the Kazakh elite.

Tethys is also involved in legal cases that have hurt its reputation. Its stock price, though, on Thursday was up 20% at 1.5p for the week.

A court in Kazakhstan has restricted the company’s bank accounts in Kazakhstan over an unexplained case, until an appeal later this month.

In Tajikistan, where it jointly owns the Bokhtar oil field with France’s Total and China’s CNPC, Tethys is entangled in an arbitration with its partners over missed cash calls in 2015.

In August, CNPC and Total had submitted a claim for over $9m. Days later, Tethys submitted a counterclaim for $10m.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Exxon used Bahamas-based accounts for companies operating in the Kazakhstan and Azerbaijan

SEPT. 22 2016 (The Conway Bulletin) – The International Consortium of Investigative Journalists (ICIJ) released previously confidential documents detailing companies linked to offshore accounts in the Bahamas, an update to the so-called Panama Papers.

The documents, obtained from the secretive Bahamas business registry, show connections between companies and intermediaries set up in the Bahamas tax haven in the Caribbean.

“There is much evidence to suggest that where you have secrecy in the offshore world you have the potential for wrongdoing” Gerard Ryle, the director of ICIJ, said in a statement.

Among South Caucasus and Central Asia-focused companies, ExxonMobil made extensive use of Bahamas-based companies for its operations in Kazakhstan, Azerbaijan, Uzbekistan and Turkmenistan. The law firm Harry B. Sands, Lobosky & Co., based in Nassau, was the main intermediary for these accounts.

A company called Borjomi was also listed among Harry B. Sands, Lobosky & Co.’s customers. It is unclear if this company has connections with the Georgian water producer.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kazakh energy company appoints new head

SEPT. 22 2016 (The Conway Bulletin) – KMG EP, the upstream branch of Kazakhstan’s state-owned oil and gas company Kazmunaigas, elected Igor Goncharov as its new chairman. Christopher Hopkinson, who had served as chairman since last year, resigned for family reasons. Like Mr Hopkinson, Mr Goncharov had long served in the ranks of Kazmunaigas. KMG EP has GDRs traded in London. Earlier this year, Kazmunaigas failed in its bid to take over more of the company.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Italian Snam to join Azerbaijan in DESFA purchase

SEPT. 21 2016 (The Conway Bulletin) – Italian gas distributor Snam will participate in the purchase of a 66% stake in the Greek gas network DESFA only if Azerbaijan’s state owned energy company SOCAR remains in the deal, industry sources told the Greek newspaper Energypress. Snam did not comment. SOCAR offered to buy 66% of DESFA for €400m ($446m) in 2013, but the European Commission blocked the deal, citing its regulations on market competition.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kazakhstan gives Ozenmunaigas a tax break

ALMATY, SEPT. 16 2016 (The Conway Bulletin) — Ozenmunaigas, a loss- making subsidiary of Kazakhstan’s state-owned energy company KMG EP, was given a discount on the mineral extraction tax (MET), an important lifeline for a firm that employs over 14,000 workers in the oil-dependent west of the country.

In 2016, Ozenmunaigas will pay MET at a rate of 9%, compared to the 13% it paid last year at its Uzen and Karamandybas oil fields.

The company has lobbied the government hard for a tax break, saying that it couldn’t continue operations without what effectively amounts to state support. In 2011, a strike at Ozenmunaigas lasted months and eventually triggered clashes between police and demonstrators which killed at least 16 people. Since then, the government has prioritised keeping Ozenmunaigas in business in order to maintain social harmony.

The fields that Ozenmunaigas operates were established during the Soviet Union. Previously, company officials have said that they can only make a profit if oil prices are above $65/barrel.

This year, prices have rarely been higher than $45/barrel.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)