Tag Archives: hydrocarbons

Azerbaijani energy company nears deal to buy Greek gas network

MAY 17 2016 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned energy company, could be close to securing a deal with Italy’s Snam to unlock its stalled purchase of the Greek gas distributor DESFA.

Greece’s state development fund said that Snam, the Italian gas distribution company, will buy a 17% stake in DESFA, a deal that would allow SOCAR to own 49% of the Greek distributor.

“We expect completion of the process of the sale of a stake in DESFA to Azerbaijan’s SOCAR. 17% out of the SOCAR package will be acquired by Snam,” Stergios Pitsiorlas, head of the Hellenic Republic Asset Development Fund (HRADF) told Greek media.

Snam did not comment.

Media also said Rahman Mustafayev, Azerbaijan’s ambassador to Greece, said Snam will partner with SOCAR. In March, Belgium’s Fluxys pulled out of a deal to partner with SOCAR to buy a 66% stake in DESFA.

It’s been a long-running affair. In 2013, SOCAR won a tender to buy 66% of DESFA for €400m ($450m), but the deal was frozen by the European Commission, which said that, according to a 2009 regulation, SOCAR could only buy a 49% stake.

DESFA is important to Azerbaijan because Greece will play a major role hosting part of a pipeline network that will pump gas from the Caspian Sea to Europe. The EU considers this an important new gas project

ENDS

(News report from Issue No. 281, published on May 20 2016)

Azerbaijani SOCAR announces gas deal with Russia

MAY 11 2016 (The Conway Bulletin) – The head of SOCAR, Azerbaijan’s state energy company, Rovnag Abdullayev, announced that the company would buy from Russia’s Gazprom 5b cubic metres annually. SOCAR needs the gas to hit growing demand and also to inject into oil wells to expand production. Relations between Russia and Azerbaijan have been improving.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Russia says it needs to approve Turkmen-Azeri trans-Caspian pipeline

MAY 12 2016 (The Conway Bulletin) – Russia’s ambassador-at-large for Caspian affairs, Igor Bratchikov said that the Kremlin will not allow the construction of any projects across the Caspian Sea that are not sanctioned by all littoral states. “Unilateral action on construction of Trans-Caspian pipelines is inadmissible,” Mr Bratchikov said. Azerbaijan and Turkmenistan have discussed for years the possibility of building a trans-Caspian gas pipeline.

ENDS

(News report from Issue No. 280, published on May 13 2016)

ADB lines up $1.5b loan for Azerbaijan’s Shah Deniz

MAY 6 2016 (The Conway Bulletin) – The Manila-based Asian Development Bank (ADB) said it is considering a series of loans worth a total of $1.5b to fund the second phase of Azerbaijan’s Shah Deniz offshore gas project, local media reported.

In March, the ADB had said it was considering lending $450m to Shah Deniz, which will be the main supplier for the so-called Southern Gas Corridor network of pipelines designed to pump gas from the Caspian Sea to Europe.

“The proposed investment plan will support the Azerbaijani government’s efforts to finance Shah Deniz- 2 project,” the bank said in a statement. “The investment plan is expected to be approved on August 22 by ADB’s board of directors.”

A consortium led by BP and SOCAR, Azerbaijan’s state-owned energy company, which will be the beneficiary of ADB’s loans.

The ADB said it will reach a final decision on the amount of the loans after a site visit in June.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Azerbaijan’s oil production drops

MAY 12 2016 (The Conway Bulletin) – Azerbaijan’s oil production fell by 1.6% to 13.9m tonnes in Jan.-April 2016 compared to the same period last year, Reuters quoted an anonymous government source as saying. Azerbaijan’s oil production has been slowing for years, despite the government putting BP under increased pressure to stop the slow- down. Oil is the mainstay of the Azerbaijani economy and a drop in production means that government revenues fall.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Danish company wins Kazakhstan’s oil contract

MAY 12 2016 (The Conway Bulletin) – Denmark’s oil service company Blue Water Shipping said it had won a contract worth around $350m to build 15 new module carrying vessels for Kazakhstan’s main oil producer, Tengizchevroil. Norway’s VARD and Dubai-registered Topaz Energy & Marine will be part of the Blue Water-led consortium, which will deliver the 15 vessels by the end of 2021.

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(News report from Issue No. 280, published on May 13 2016)

Kazakhstan announces plans on green energy

MAY 10 2016 (The Conway Bulletin) – In a statement to the UN, Kazakhstan announced plans to generate 50% of its electricity from alternative energy sources by 2050. This is an ambitious target. In 2014, renewable sources accounted for just 0.5% of production. The Kazakh government often lays out grandiose plans for its economic development. Green energy is the dominant theme of EXPO 2017, a major exhibition scheduled for next year in Astana.

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(News report from Issue No. 280, published on May 13 2016)

Romania seizes Kazakhstan’s Kazmunaigas refinery

ALMATY, MAY 6 2016, (The Conway Bulletin) – Prosecutors in Romania ordered the seizure of the Petromidia refinery part-owned by a subsidiary of Kazakhstan’s Kazmunaigas as they re-opened an investigation into its privatisation in the 2000s.

The seizure of the refinery comes only a few days after China’s CEFC China Energy Company Limited completed a $680m deal to buy a 51% stake in KMG International, the Kazmunaigas subsidiary that owns the Petromidia refinery. Kazmunaigas has been looking to sell off assets and raise cash to help it through a sustained economic downturn.

Rompetrol was renamed KMG International in 2014, although the Rompetrol brand still lingers.

Romanian investigators have been focused on recovering cash they say is owed to it after a deal by the late Dinu Patriciu to buy the Petromidia refinery in 2003 from the state for $760m through Rompetrol, which he owned. He bought the Petromidia refinery from the government not with cash but with a bond.

In 2007, Patriciu sold Rompetrol and its daughter companies to Kazmunaigas for $1.6b.

When in 2010 Rompetrol’s bonds reached maturity, Kazmunaigas refused to pay the government the $600m coupon. Instead it gave the Romanian government a 45% stake in Rompetrol. This was reduced to 18% in 2014 after the Romanian government agreed to sell Kazakhstan a 27% stake for $200m.

KMG International said it had not been involved in any wrongdoing and that this legal case could damage its business plans in Romania.

“These are new developments which may have significant negative impact on KMG’s strategic objectives and development plans in Romania,” the press service said in a statement.

The company later also said it is also ready to take legal action.

“We will analyse the facts about the charges and to what extent such deeds justify the seizure of company assets. If we find that the seizure is not justified, we will challenge those seizures,” Gheorghe Albu, a lawyer for KMG International lawyer, said.

Petromidia is Romania’s largest refinery and is situated near Năvodari on the Black Sea coast.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Iran swaps oil plans with Kazakhstan and Turkmenistan

MAY 9 2016 (The Conway Bulletin) – Iran’s deputy oil minister, Amir Hossein Zamaninia said his country plans to swap oil and gas with Russia, Kazakhstan and Turkmenistan. Currently, Iran relies solely on Turkmen supplies for its northern provinces. In the past few years, Iran has signed short-term swaps with Kazakhstan and Russia. The new plan aims to turn these short-term deals into long-term agreements. Central Asian states, especially Kazakhstan, have been keen to pull Iran into their sphere of economic influence since most sanctions were lifted earlier this year.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Italy’s Saipem wins $1.5b Azerbaijan’s Shah Deniz contract

MAY 3 2016 (The Conway Bulletin) – A consortium led by Italian oil and gas service company Saipem won a $1.5b contract to transport and install a deepwater subsea production system for the second phase development of the Shah Deniz offshore gas field in Azerbaijan.

Shah Deniz, operated by BP, is central to Azerbaijan’s gas production. Once its second phase comes online, it will be the cornerstone of the so-called Southern Gas Corridor, a network of pipelines that will feed gas to Europe from the Caspian Sea.

Saipem’s management said the company will receive a fee of $1.3b from the overall deal.

“This award further strengthens Saipem’s key role in the construction of the Southern Gas Corridor where the company has a total of four contracts, in the upstream segment and in gas transportation infrastructure both onshore and offshore,” Stefano Cao, Saipem CEO, said in a statement.

Saipem, 30% owned by Eni, owns stakes in the other two companies in the consortium that won the contract – BOS Shelf and Star Gulf.

SOCAR, the Azerbaijani state energy company, owns 96% of BOS Shelf. Star Gulf owns the remaining 4%. Saipem owns 100% of Star Gulf.

ENDS

(News report from Issue No. 279, published on May 6 2016)