Tag Archives: hydrocarbons

Gazprom wants to increase price of gas for Armenia’s poorest

YEREVAN/April 1 (The Bulletin) — Gazprom Armenia has applied to the country’s Public Services Regulatory Commission to increase the price of gas that it supplies to the poorest sections of Armenian society from August, media reported (April 1).

Any move by Gazprom Armenia to increase the price it charges Armenian households for gas will be difficult to pull off. The impact of the coronavirus has undermined households’ ability to pay higher prices and Armenian society has a reputation for resisting utility price rises. In 2015 a proposed electricity price rise in Armenia led to major protests in Yerevan and an eventual climbdown.

Reports said that from Aug. 1, Gazprom Armenia wants to charge households on social benefits 36% more for their gas and to slightly reduce the price paid by other households. The overall effect would be to equal out pricing. There is no publicly available data on the number of low-income households on social benefits.

Armenian officials lined up to criticise the proposed price increase, calling it inappropriate given the probable economic impact of the spread of the coronavirus.

“Given the current situation in the global energy market, we consider it appropriate to start new negotiations on reducing the price of thousand cubic meters of gas on the Armenian-Georgian border,” Armenia’s deputy PM Mher Grigoryan wrote in a letter to the chairman of Gazprom, Alexei Miller.

The Russian side has not responded but negotiations are expected to be fraught. When Russia has previously increased the price it charges Armenia for gas, the Armenian government has said that it will switch to buying gas from its neighbour Iran with which it has built up friendly relations over the past decade.

Media also reported that Armenian PM Nikol Pashinyan had spoken to Russian President Vladimir Putin about the proposed gas price rises. He said that gas should be priced in roubles, which has fallen in value over the past month because of a slump in oil prices and the impact of the spread of the coronavirus.

“We believe that it will be more correct and logical to pay for gas in roubles,” Mr Pashinayn was quoted as saying.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Azerbaijan’s Socar confirms major Caspian Sea oil field find

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BAKU/March 19 (The Bulletin) — Azerbaijan’s state oil company Socar confirmed that it had found a major oil field in the Caspian Sea.

Announcing the find, Socar chairman Rovnag Abdullayev said that this was the first significant oil discovery in Azerbaijan’s territory since independence from the Soviet Union in 1991.

“Its oil reserves estimated more than 60m tonnes,” he said. “Development of the Karabagh field will significantly contribute to Azerbaijan’s oil incomes.”

Roughly, 60m tonnes of oil equals 440m barrels, although Mr Abdullayev did not say how much of this was recoverable. This is important as recoverable barrels of oil can be a small proportion of the actual reserves. The Azeri-Chirag-Guneshli oil field, the bedrock of Azerbaijan’s economy, by comparison has around 4b barrels of recoverable reserves and the Kashagan field in the Kazakh sector of the Caspian Sea, which Kazakhstan started operating in 2016, has an estimated 9-13b barrels of recoverable oil reserves.

Azerbaijan is still reliant on oil and gas to power its economy. This year it is turning on gas supplies to central Europe pumped from the BP-led Shah Deniz 2 project via a series pipelines known as the South Gas Corridor.

Socar’s partner in the exploration of the Karabagh field is Equinor, the majority state-owned Norwegian energy company that was formerly called Statoil. Equinor owns a 7.27% stake in the ACG project and an 8.71% stake in the Baku-Tbilisi-Ceyhan oil pipeline that pumps gas from the Caspian Sea to Turkey. It has not commented on exploration of the Karabagh field.

The Karabagh field, which lies 120km east of Baku, was first discovered by Soviet geologists in the 1950 but was never developed. In the mid-1990s.

Nick Coleman, senior editor at S&P Global Platts, told The Bulletin that although not the biggest oil find, the Karabagh field will still be useful for Azerbaijan.

“You have all the infrastructure there already so it should be relatively low-cost to develop,” he said. “And it is still a pretty decent size. If you’d found that in the North Sea you’d have done very well.”

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Socar opens more petrol stations in Azerbaijan

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MARCH 19 (The Bulletin) — Socar, the Azerbaijani state oil and gas company, said that it had opened its 31st petrol station in Azerbaijan. Trading under the Socar Petroleum brand, the petrol station will offer Euro-95 and A-92 quality fuels. Socar has been building up its network of petrol stations for some time. Socar Petroleum started operations in 2008.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan cuts oil exports via Russia because of contamination

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FEB. 28 2020 (The Bulletin) — Kazakh officials said that they were cutting oil exports via the Russian Baltic Sea port of Ust-Luga next month because of continued contamination issues with its own oil production. Reuters reported that Kazakhstan had planned to send 800,000 tonnes of oil through Ust-Luga in March but that this has been cut back to 600,000 tonnes. It also said that CNPC Aktobemunaigas, a subsidiary of China’s CNPC, has detected high levels of organic chloride in its oil.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazmunaigas looking at London IPO later this year

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FEB. 25 2020 (The Bulletin) — The deputy CEO of Kazakhstan’s state-owned oil and gas company, Kazmunaigas, Zhakyp Marabayev, said that it would be looking to list on the London Stock Exchange in October or November. Kazakhstan has talked up the sale of shares in Kazmunaigas for years as part of its “People’s IPO” but has constantly delayed going ahead with it, often saying that market conditions were not right.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Turkmen diesel fuel reaches Russia, again

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DEC. 25 2019 (The Bulletin) — Diesel fuel produced by Turkmenistan was delivered to the Russian Caspian Sea port of Makhachkala for the first time since 2014, media reported. The consignment of 6,000 tonnes of fuel, which was unloaded and sent to customers via Russia’s railway network, is expected to be the start of a steady flow of diesel to Russia from Turkmenistan. Officials said that shipments were stopped in 2014 because of “technical” difficulties.

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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

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New domestic gas pipeline opens in Kazakhstan

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DEC. 27 2019 (The Bulletin) — Kazakhstan completed construction of the Saryarka gas pipeline that will run from the Kyzylorda region to Nur Sultan. The pipeline is important as it will pump extra gas to Nur Sultan and other cities along the route, including Karaganda, Temirtau and Zhezkazgan. The project to build the 1,061km pipeline was launched to improve Kazakhstan’s energy infrastructure.

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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

— Copyright owned by the Central Asia & South Caucasus Bulletin

Petrofac and Socar JV win BP deal in Azerbaijan

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DEC. 16 2019 (The Bulletin) — Jersey-registered oil and gas services company Petrofac said that it had won a contract, alongside its joint-venture partner, the Azerbaijani state oil and gas company SOCAR, to work with BP at its Azeri-Chirag-Guneshli oil field, in the Caspian Sea, and the Baku-Tbilisi-Ceyhan oil pipeline. Petrofac did not put a value on the deal but did say that it would run for three years.
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— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019

Romania drops fraud investigation into Kazmunaigas

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DEC. 11 2019 (The Bulletin) — Prosecutors in Romania told the AFP news agency that they had dropped an investigation into potential tax fraud by Kazakh state oil and gas company Kazmunaigas linked to its purchase of the oil refinery Petromidia from Rompetrol in 2007. In 2016, Romanian investigators briefly seized control of the refinery before Kazmunaigas threatened international arbitration.
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— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019

Italian company signs deal to give Turkmenistan technical support on gas pipeline

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DEC. 5 (The Bulletin) — Turkmenistan’s national oil and gas company Turkmengas signed a deal worth around $13m, with Italy’s RINA to provide technical support for the construction of a planned gas pipeline that will run 214km across the country. Italy has been courting Turkmenistan for projects and, last month, Turkmen President Kurbanguly Berdymukhamedov made a rare visit to the EU to meet with Italian leaders.
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— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019