Tag Archives: hydrocarbons

Fuel demand in Kazakhstan is outstripping supply

APRIL 19 2024 (The Bulletin) — Demand for refined fuel products in Kazakhstan is rising faster than production, the Kazakh energy ministry said. It said that consumption of petrol rose 4% over the past year as living standards rose and more cars used Kazakhstan’s roads. Kazakhstan has three refineries and the Kazakh energy ministry has said that it aims to increase production at them all.

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— This story was published in issue 565 of the Central Asia & South Caucasus Bulletin, on April 23 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

Kazakhstan increases arbitration claim against international oil companies

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ALMATY/APRIL 17 2024 (The Bulletin) — Kazakhstan has increased an arbitration claim initially lodged last year against international energy companies to more than $150b, sources told Reuters.

The claims, focused on the Kashagan and Karachaganak oil and gas fields, are based on alleged lost income by Kazakhstan. The increase from $16.5b makes the arbitration claim one of the world’s biggest.

Reuters quoted a “source with knowledge” of the case as saying that the new litigation claim “reflected the calculation of the value of oil production that was promised to the government but not delivered by the field developers”.

Kazakh officials and Western oil companies have not commented on the new figure, although they confirmed that they are involved with unspecified attribution proceedings.

Kashagan and Karachaganak are two of Kazakhstan’s biggest oil and gas fields. Both have been the focus of legal disputes with the Kazakh government previously. Kazakh officials have said they were unfairly dealt with in the 1990s when oil companies were making deals to exploit fields in newly independent former Soviet states.

In 2020, the Karachaganak partners paid out $1.9b to settle an arbitration dispute with Kazakhstan. Kazmunaigas, the Kazakh state oil and gas company, is now a shareholder in both projects.

Analysts have said that arbitration claims are part of the risk of doing business in Kazakhstan and that international companies factor this risk into their costs.

The specifics of the current dispute have not been disclosed, although Kazakh officials have said that it is a purely commercial dispute that will be settled through the courts.

“The sides are going to resolve it within the arbitration framework,” the Kazakh energy ministry said.

Italy’s Eni is the main developer at Kashagan and also at Karachaganak, alongside Shell.

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— This story was published in issue 565 of the Central Asia & South Caucasus Bulletin, on April 23 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

BP opens new oil platform in Azerbaijani sector of Caspian Sea

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BAKU/APRIL 16 2024 (The Bulletin) — BP started oil production at a new platform at its main oil field in the Azerbaijani sector of the Caspian Sea, its first in 16 years.

The Azeri Central East platform (ACE) is the seventh in the Azer-Chirag-Gunashli field (ACG) which has been the mainstay of Azerbaijan’s oil production since 1997.

“ACE is increasing Azerbaijan’s oil production and helping to make the most of a maturing field. It’s giving both BP and Azerbaijan the opportunity to get more value from existing fields and assets,” said Ruhali Imanov, the commissioning superintendent on the platform.

Ilham Aliyev, Azerbaijan’s president, has pressured BP for years to reverse declining production rates at ACG.

Its output is expected to increase by 24,000 barrels per day this year to around 430,000 barrels per day as two more wells come on stream. Peak production at ACG was around 1m barrels per day in 2010.

BP said that the new ACE platform would produce 100,000 barrels of oil per day at its peak.

“One of its exciting features is the location of the control room onshore rather than on the platform, a first for both the region and for BP,” said BP.

In 2019, the ACG shareholders pledged to boost production with a $6b development plan.

The first oil from ACG was produced in 1997.

BP is the biggest shareholder in ACG with a stake of 30.4%, followed by Azerbaijani state oil company Socar with a 25% stake.

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— This story was published in issue 565 of the Central Asia & South Caucasus Bulletin, on April 23 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

CPC pipeline reopens after shut down

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APRIL 11 2024 (The Bulletin) — The 1,511km CPC oil pipeline resumed exports after a scheduled two-day shutdown at its export harbour at the Russian port of Novorossiysk in the Black Sea. CPC is vital for Western oil supplies and is exempt from international sanctions even though it travels across Russia from West Kazakhstan. CPC plans to export 70m tonnes of oil this year, up from 63m tonnes last year.

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— This story was published in issue 564 of the Central Asia & South Caucasus Bulletin, on April 15 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

Azerbaijan says wants to boost gas supplies to the EU

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APRIL 9 2024 (The Bulletin) — Azerbaijan aims to increase gas supplies to the EU by 17% by 2026, said Socar, the Azerbaijani state energy company. Azerbaijan has been boosting supplies to the EU since Europe cut relations with Russia after it invaded Ukraine in 2022.

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— This story was published in issue 564 of the Central Asia & South Caucasus Bulletin, on April 15 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

Kazakhstan denies that the Kremlin has asked for emergency fuel supplies

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APRIL 9 2024 (The Bulletin) — Kazakhstan’s energy ministry denied a Reuters report that the Russian government had asked it to supply 100,000 tonnes of fuel to make up a shortfall triggered by Ukrainian drone attacks on refineries. Kazakhstan has imposed its own fuel export ban to meet growing domestic demand. This has forced up fuel price inflation in Tajikistan.

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— This story was published in issue 564 of the Central Asia & South Caucasus Bulletin, on April 15 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

Aliyev hosts president of Republic of the Congo

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BAKU/APRIL 4 2024 (The Bulletin) — Ilham Aliyev, Azerbaijan’s president, hosted Denis Sassou Nguesso, president of the Republic of the Congo, in what analysts said was part of Azerbaijan’s pre-COP29 diplomatic push.

Although no major deals were signed, both leaders said that their meeting in Baku had laid the foundation for more bilateral cooperation, especially in the energy sector.

“We have had a wide exchange of views with you today on cooperation in energy and agriculture sectors, and still there is no difference of opinion,” said Mr Aliyev. “We look forward to working together on COP29 and thank you for your support.”

The visit by Mr Nguesso was a rare one by an African leader to Baku and highlights Mr Aliyev’s growing status and also how Azerbaijan’s low key but expansive diplomatic push is paying off.

In Africa, Azerbaijan has opened embassies in Algeria, Egypt, Ethiopia, Kenya, Morocco and South Africa.

In power since 2003, analysts have said that Mr Aliyev has impressed other hardman leaders with his longevity and his defeat of ethnic Armenian forces over disputed land. Azerbaijan’s closeness with the Kremlin and gas trades with the EU, as well as its chairmanship of the COP29 environmental summit, have also given it kudos in certain circles.

“We have huge potential in the field of renewable energy, we have the sun all year round, and we can take advantage of Azerbaijan’s rich experience in this field,” said Mr Nguesso.

Mr Aliyev has been trying to woo African states for some time, carefully building relations.

He chaired the Non-Aligned Movement (NAM) in 2019-2022, a Cold War-era talking shop that was favoured by African countries looking to balance the US and the USSR.

During his tenure as NAM chairman, Mr Aliyev criticised France’s “neo-colonialism in Africa”, a dig linked to Paris’ support for Armenia.

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— This story was published in issue 564 of the Central Asia & South Caucasus Bulletin, on April 15 2024

— Copyright the Central Asia & South Caucasus Bulletin 2024

Energy ministers agree to build hydropower plant in Kyrgyzstan

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JAN. 6 2023 (The Bulletin) — The energy ministers of Kyrgyzstan, Uzbekistan and Kazakhstan signed a deal to develop a major hydropower station in Kyrgyzstan which they hope will help to ease pressure on the region’s power production capacity. Plans to build Kambarata HPP-1 in Kyrgyzstan’s Jalalabad region have been on the drawing board for years and signing the deal is considered a major regional diplomatic success. Construction is scheduled to take up to 10 years. Central Asia’s power grid systems are interconnected.

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— This story was published in issue 532 of the Central Asia & South Caucasus Bulletin, on Jan. 16 2023

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Azerbjainan’s energy fund SOFAz denies it plans to buy Latvian gas firm

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JAN. 5 2023 (The Bulletin) — Azerbaijan’s energy wealth fund SOFAZ was forced to deny that it intended to buy Latvia’s biggest gas trading company Lavija Gaze after some news agencies reported that it would shortly become the biggest shareholder. SOFAZ’s cash pile has been swelled by huge inflows from oil and gas sales this year and analysts have said that it is looking to buy assets, especially in Europe.

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— This story was published in issue 532 of the Central Asia & South Caucasus Bulletin, on Jan. 16 2023

— Copyright the Central Asia & South Caucasus Bulletin 2023

Turkmen foreign minister flies to Kabul for Taliban meeting

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OCT. 27 2021 (The Bulletin) — Turkmen officials were preparing to fly to Kabul after the Taliban government said that it supported its moves to build a gas pipeline, dubbed TAPI, across the country.

The project is important to Turkmen leader Kurbanguly Berdymukhamedov because he wants to diversify Turkmenistan’s gas clients away from an over-reliance on China. The Western-backed government in Afghanistan had supported the TAPI plans but there were some concerns that the Taliban, which took control of Afghanistan in August, might ditch it.

Turkmen officials, though, have taken a comparatively soft line towards the Taliban since they took power, opening up lines of communications and sending aid. Now, it seems, the Taliban have decided to back TAPI.

In a statement, the acting Taliban minister for mines and petroleum, Mohammed Issa Akhund, said that the project would now go ahead, although he didn’t give dates.

“We have been working hard for some time and we are ready to take pride in starting work on the TAPI project,” he said.

The pipeline is slated to carry 33b cubic metres of gas across Afghanistan to Pakistan and India from Turkmenistan’s giant Galkynysh field once it is completed, an ambitious plan by Turkmenistan to turn itself into the region’s main gas exporter.

Under the current plans, Afghanistan would keep about 5% of the gas supplies and also earn hundreds of millions of dollars in transit fees.

Separately, the Taliban government also said that it will pay Uzbekistan millions of dollars in fees it owes for electricity purchases. Like Turkmenistan, Uzbekistan has looked to engage with the Taliban government in Afghanistan since it took control of the country, hosting its officials in Termez and sending envoys to Kabul.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021