Tag Archives: hydrocarbons

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.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

(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.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

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

ENDS
Copyright ©The Conway Bulletin — all rights reserved

(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.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

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

Turkmenistan to send gas to Afghanistan

JULY 9 2013 (The Conway Bulletin) — In Ashgabat, Turkmen officials agreed a deal to sell gas to Afghanistan. The deal is an important step for the planned TAPI pipeline which will feed gas from Turkmenistan across Afghanistan to Pakistan and India. Successful completion of TAPI would cement Turkmenistan’s place as a major global gas supplier.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

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

Russia and Azerbaijan restart a pipeline

JULY 8 2013 (The Conway Bulletin) — Azerbaijan state energy company SOCAR and Russian pipeline monopoly Transneft are negotiating on re-starting oil shipments along the Baku-Novorossiysk pipeline, media reported.

This is probably more significant for Azerbaijan-Russia relations than to energy supplies.

With construction finished in 1997, the Baku- Novorossiysk pipeline was one of the early post-Soviet Union pipelines. It runs 1,330km from Baku to the Black Sea port of Novorossiysk. From there the oil is shipped on to Europe. Volumes along the route, though, have been declining as Azerbaijan has worked to open up alternative routes to Europe, including the Baku-Tbilisi-Ceyhan pipeline.

Last year, the Baku-Novorossiysk oil pipeline pumped only about 8% of Azerbaijan’s oil to its export markets.

In May 2013, throughput along the Baku-Novorossiysk pipeline stopped altogether. Both sides were losing money on the deal. There wasn’t enough volume for the Russians and the price for its oil was too low for the Azerbaijanis.

It may be economically more efficient for the pipeline to stay idle but politically it needs to re-open.

Russia has approved a major arms deal with Azerbaijan, executives from Rosneft, the Russian state energy company, have visited Baku and senior Russian politicians have talked about a strategic deal between the two countries.

Re-starting an oil pipeline between the two countries may fit the pattern of increasingly close cooperation.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

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

Kazakhstan signs deals with the UK

JULY 3 2013 (The Conway Bulletin) — British companies signed deals in Kazakhstan worth $1b during PM David Cameron’s two-day trip, local media reported. This was the first trip to Kazakhstan by a serving British PM. Most of the deals agreed were in the energy and mining sectors.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 142, published on July 8 2013)

Kazakh energy minister sacked

JULY 3 2013 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev sacked his energy minister, reportedly because of continued delays to the Kashagan oil project, Kazakhstan’s flagship energy development. Sauat Mynbayev had been energy minister since 2007. He moves to head Kazmunaigas, the Kazakh state energy company. Uzakbai Karabalin, a technocrat, becomes the new energy minister.

ENDS
Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 142, published on July 8 2013)

Kazakhstan blocks Indian bid for Kashagan stake

JULY 3 2013 (The Conway Bulletin) — Kazakhstan disappointed India’s government by triggering its option to buy an 8.4% stake in the Caspian Sea oil field Kashagan. US energy major ConocoPhillips said last year that it was selling its stake to Indian state energy company ONGC Videsh for $5.5b. Kazakhstan, though, held the option to block this deal.

(News report from Issue No. 142, published on July 8 2013)

Kazakhstan blocks India’s purchase of Kashagan

JULY 3 2013 (The Conway Bulletin) — The Kazakh government has a decent poker face, at least when it comes to bluffing its intentions on energy deals.

For months Kazakh officials had said that they would not use their pre-emptive right to block a deal between ConocoPhillips, a US energy firm, and India’s ONGC Videsh.

ConocoPhillips had decided that it wanted to cash in its 8.4% stake in the Kashagan oil field in the Kazakh sector of the Caspian Sea. In November last year it announced a deal to sell this stake to ONGC Videsh for $5.5b.

Kazakhstan holds the right to buy stakes in its energy fields if a foreign company wants to exit, but earlier this year government officials said they would not buy the ConocoPhillips stake. Instead, they said, they would decide between allowing India into Kashagan or letting China, an increasingly close economic partner, into the project.

China’s apparent interest now looks like a decoy.

On July 3, Lyazzat Kiinov, chairman of Kazakh state energy company Kazmunaigas, said the company would buy the 8.4% stake in Kashagan.

The deal is important for two main reasons.

It’s perhaps a coming of age for Kazakhstan which wants to retain more ownership over its energy resources. It’s also a blow for India’s energy policy. India had staked a lot on expanding into the Caspian Sea and securing a major foothold in Central Asia’s energy sector. It now has to look elsewhere.

Kazakhstan wants to become a top energy producer.

Before the sale of ConocoPhillip’s stake, the consortium developing Kashagan consisted of ENI (Italy), Total (France), ExxonMobil (US), Shell (Britain) and Kazmunaigas all with a 16.81% stake. Inpex (Japan) also owns a 7.56% stake.

After this deal, Kazakhstan will be the main shareholder.

(News report from Issue No. 142, published on July 8 2013)