Tag Archives: hydrocarbons

Vitol will start exporting Turkmen diesal fuel this month

DEC. 2 (The Bulletin) — Switzerland-based Vitol, the world’s biggest oil trader, will start exporting fuel and diesel from Turkmenistan this month, Reuters reported by quoting five unnamed traders. They said that Vitol had outbid Azerbaijan’s Socar for the contracts and that the oil products would be loaded onto ships at the Caspian Sea port of Turkmenbashi, then offloaded at Makhachkala in Russia before being sent by rail to the Russian Black Sea port of Novorossiisk. Vitol already exports oil products from Kazakhstan. Turkmenistan wants to increase oil product exports.
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— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019

Trans-Anatolian Natural Gas Pipeline opens

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BAKU/Nov. 30 (The Bulletin) –Azerbaijani President Ilham Aliyev and Turkish President Recep Tayyip Erdogan officially marked the completion of the Trans-Anatolian Natural Gas Pipeline (TANAP) which will pump gas from the South Caucasus across Turkey to Europe.

TANAP is the longest section of the 3,500km-long $38b Southern Gas Corridor. The first section connecting the BP-operated Shah Deniz II gas field in the Caspian Sea to Erdine, in eastern Turkey has already been open and next year the final section, the Trans-Adriatic Pipeline, running across Greece and the Balkans to Italy, will open.

In a speech in Ipsala, on the Turkey-Greece border, Mr Aliyev said that the project, which will give Azerbaijan’s economy a major boost through gas sales, was more than just a gas transit pipeline.

“This project leads to cooperation, stability, long-term mutual understanding, and it would be wrong to consider these projects simply as energy projects,” he said according to a statement on his website.

Construction of the pipeline, one of the world’s longest energy pipeline was started four years ago and has had the financial backing of European countries, the EU and various financial institutions such as the EBRD.

European countries want an alternative energy source to Russia, which has been their primary provider of gas.

When the Southern Gas Corridor does open next year it will pump an estimated 10b cubic metres of gas to Europe, enough power for up to 10m households.
TANAP’s shareholders are Azeri state energy company Socar with a 51% stake, Turkish pipeline operator BOTAS with a 30% stake, BP with 12% and Socar Turkey with 7%.
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— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019

Russia’s Tatneft will partner Uzbekneftegas

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NOV. 27 (The Bulletin) — Russian oil producer Tatneft will partner Uzbekneftegas, the Uzbek state oil and gas company, to produce oil from three fields in the east of the country. The fields, Andijan, Palvantash and West Palvantash, all hold what are called “hard-to-recover” reserves.
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— This story was first published in issue 430 of the weekly Bulletin.

Aliyev delivers anti-Europe speech

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NOV. 27 (The Bulletin) — In a speech at a university in Baku, Azerbaijani president Ilham Aliyev said that he wasn’t seeking closer integration with Europe because it didn’t respect Islamic values, Bloomberg News reported. Relations between Azerbaijan and Europe have been strained for the past few years with European politicians accusing Azerbaijan of cracking down on civil liberties and promoting corruption. Next year Azerbaijan is dues to supply central Europe with gas from its Caspian Sea fields.
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— This story was first published in issue 430 of the weekly Bulletin.

Kazakhstan rejects $1.1b offer to settle Karachaganak row

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ALMATY/NOV. 26 (The Bulletin) — Kazakhstan told the consortium of energy companies developing the Karachaganak gas field in the north of the country that their $1.1b offer to settle a dispute was insufficient.

The dispute has been festering for more than four years, undermining Kazakhstan’s reputation as a place to do business and frustrating the consortium led by Royal Dutch Shell which is developing Karachaganak, one of Kazakhstan’s most high-profile energy projects.

A resolution to the dispute had been announced in October last year, although it now appears to have fallen through.

Media quoted Kazakhstan’s first deputy energy minister Makhambet Dosmukhambetov saying that the government wasn’t happy with the $1.1b offer. He didn’t elaborate as to why the government had pulled back from accepting the payment but he did hint that more negotiations were needed to find a solution to the row.

“New circumstances have been uncovered,” he said.
None of the partners developing Karachaganak — Shell, Lukoil, Chevron and Kazmunaigas — have commented.

Kazakhstan originally filed a $1.6b claim against the consortium developing the Karachaganak consortium in 2015 because it said that it hadn’t been receiving a fair share of the profits.

Over the past few years, Kazakhstan has been trying to gain bigger stakes in energy projects that have been dominated by foreign companies. It has said that when many of the deals were made to develop gas and oil fields in the chaotic post-Soviet 1990s, the Kazakh government was in an unfairly weak position.

Karachaganak, near Aktobe in the north of Kazakhstan, is one of the country’s most important oil and gas projects. It generates around 50% of Kazakhstan’s gas and 18% of the country’s oil.

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— This story was first published in issue 430 of the weekly Bulletin.

Unplanned repairs hit Kashagan output

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ALMATY/NOV. 26 (The Bulletin) –Unplanned maintenance work at the Kashagan oil field in the Kazakh sector of the Caspian Sea has hit output more sharply than expected, Reuters reported by quoting two sources.

The sources said that production at the end of November was around 184,000 barrels of oil per day (bpd), down from 400,000bpd at the start of the month. Kazakh officials had previously said that production was down to around 270,000bpd.

Kashagan, which is being developed by Eni, ExxonMobil, CNPC, Royal Dutch Shell, Total, Inpex and Kazakh state energy firm Kazmunaigas, has been beset by problems. It opened late and billions of dollars over budget.

There have also been a series of technical problems that have slowed its production. Kashagan is one of Kazakhstan’s biggest oil fields.

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— This story was first published in issue 430 of the weekly Bulletin.

Kazakhstan delays IPOs again

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NOV. 25 (The Bulletin) — Hoping for high valuations, Kazakhstan will delay by a year plans to sell off stakes in Air Astana, Kazakhtelecom and energy company Kazmunaigas, media reported by quoting Kazakh finance minister Alikhan Smailov. Stakes in nuclear company Kazatomprom were sold off last year on the London Stock Exchange but the IPOs of other companies have been delayed several times.
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— This story was first published in issue 430 of the weekly Bulletin.

Kazakhstan wants to join Russian gas pipeline to China project

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ALMATY/NOV. 25 (The Bulletin) –Kazakhstan wants to join a Russian project to increase gas supplies to China through a new pipeline, media reported by quoting Kazakh PM Askar Mamin.

China has become the biggest buyer of gas from Central Asia. It already buys most of Turkmenistan’s gas and Kazakhstan has been selling increasingly large volumes to China. Russia is due to start pumping gas through a new pipeline called The Power of Siberia to China on Dec. 2 and has already said that it is looking at options to build more gas pipelines running to China.

In comments to media, Mr Mamin said that Kazakhstan wanted The Power of Siberia-2 to run through its territory.

“Based on the environmental situation in the region, we are also considering the option of joining the future Power of Siberia-2 project,” he said. “Currently, gas prices are negotiated. We have offered Russia that (the pipeline) goes through Kazakhstan with an exit to the Chinese market.”

Gazprom signed a $400b deal in 2014 with China to supply 38b cubic metres of gas every year to China over the next 30 years.

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— This story was first published in issue 430 of the weekly Bulletin.

Kazakhstan criticises budget for Tengiz upgrade

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NOV. 6 (The Bulletin) — Kazakh energy minister Kanat Bozumbayev said that the budget for expanding the Tengiz oil field was too high, a declaration that sets Kazakhstan’s government at odds with Tengiz’s Western investors. The Tengiz project, which is led by Chevron, is Kazakhstan’s biggest producing oil field. Reports have appeared which have said that it will cost $45.2b to expand Tengiz, up from an initial cost estimate of $36.8b.

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— This story was first published in issue 428 of the weekly Bulletin.

Chevron completes sale of Azerbaijani assets

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BAKU/NOV. 4 (The Bulletin) — Chevron finalised a deal to sell out of major stakes it owned in Azerbaijan’s oil and gas sector, a reflection of the reduced US corporate interest in the region.

In the deal, Chevron sold its 9.57% stake in the Caspian Sea oil field Azeri-Chirag-Guneshli (ACG), Azerbaijan’s biggest oil producing project, and its 8.9% stake in the Baku-Tbilisi Ceyhan (BTC) oil pipeline for a total of $1.57b to Hungary’s MOL.

The California-based Chevron said in December it wanted to sell its assets in Azerbaijan. ExxonMobil has also said that it wants to sell off its smaller stakes in ACG and BTC.

For MOL, the deal gives it a bigger tie-in with Azerbaijan’s oil and gas sector, less than 12 months before Azerbaijan is due to start pumping gas to central Europe along a network of pipelines stretching from the Caspian Sea via the South Caucasus, Turkey and the Balkans.

“This transaction is an excellent fit to MOL’s current portfolio and the transaction contributes to the further transformation of MOL’s upstream segment into an international business by developing the company’s footprint in its core CIS region,” MOL said in a statement.

The deal is one of the biggest in MOL’s history and will add 20,000 barrels of oil per day to its production ACG has been producing oil since 1997, when the so-called ‘Deal of the century’ was signed between a consortium of Western partners led by BP and the Azerbaijani government.

Over the last eight years or so, its production has been declining, though, frustrating Azerbaijan’s government which has demanded increased investment by the partners.

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— This story was first published in issue 428 of the weekly Bulletin.