Tag Archives: hydrocarbons

China expresses interest in Kazakh Mangistau

FEB. 2 2016 (The Conway Bulletin) – Alik Aidarbayev, head of the Mangistau region of western Kazakhstan, said that only China has expressed serious interest in paying for the construction of a new oil refinery. The Mangistau region has been working on plans to build Kazakhstan’s fourth refinery for years. Mr Aidarbayev’s comments are important because they show both the financial power of China and the relative weakness of Russia. Kazakhstan has been looking to boost its refinery capacity for some time. It currently has three refineries.

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(News report from Issue No. 266, published on Feb. 5 2016)

Exxon bets on Kazakh oil field

FEB. 2 2016 (The Conway Bulletin) — US oil company ExxonMobil said that it still thinks the giant Kashagan oil field in the Kazakh sector of the Caspian Sea will re-start production by the end of the year. ExxonMobil also said Kashagan will be one of its four key start-up projects for 2016. Other estimates forecast that repairs to essential pipeline infrastructure could drag on until 2017. ExxonMobil owns 16.81% in the international venture that operates Kashagan.

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(News report from Issue No. 266, published on Feb. 5 2016)

Sumatec delays start of operations at Kazakhstan’s Buzachi field

FEB. 2 2016 (The Conway Bulletin) — Malaysian oil company Sumatec said that it hadn’t yet started operations at its Buzachi field in the Mangistau region, western Kazakhstan, that it bought last year for $290m from Borneo Energy. It has delayed a $105m payment to different creditors until Buzachi starts production.

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(News report from Issue No. 266, published on Feb. 5 2016)

Cliq says has sorted deal with oil field in Kazakhstan

FEB. 5 2016 (The Conway Bulletin) — Malaysian oil company Cliq Energy said it still hadn’t obtained permission to buy an oil field in Kazakhstan from the Malaysian authorities. The Securities Commission of Malaysia previously turned down Cliq’s request to go ahead with the deal. Last year, Cliq paid $110m for two blocks at the Karazhanbas North oil field. It needs to finalise the deal by a April 9 deadline.

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(News report from Issue No. 266, published on Feb. 5 2016)

Technip quits Azerbaijan

JAN. 22 2016 (The Conway Bulletin) — French oil service company Technip Maritime Overseas quit Azerbaijan. It didn’t give an explanation about why it had quit Azerbaijan but the collapse in global oil prices could well be the root cause. The company, which has operated in Azerbaijan since 1993, maintains regional headquarters in Turkmenistan and Kazakhstan. Last year it won a consulting contract with TAP, a gas pipeline that will bring gas from Azerbaijan to Italy.

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(News report from Issue No. 265, published on Jan. 29 2016)

Zenith ramps up exploration in Azerbaijan

JAN. 27 2016 (The Conway Bulletin) — Toronto-listed Zenith Energy created a subsidiary called Zenith Aran Oil to explore three fields in central Azerbaijan. Current production is low, 350 barrels/day, but the company says the fields have a larger potential. Zenith said the decision to form a subsidiary is “indicative of both Zenith’s long term commitment to Azerbaijan and plans to exclusively focus on the recently acquired fields.”

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(News report from Issue No. 265, published on Jan. 29 2016)

IMF flies to Azerbaijan for talks on $4b loan

JAN. 27 2016, BAKU (The Conway Bulletin) — An IMF delegation flew to Baku for meetings with Azerbaijan’s government over a potential loan to buffer it against a financial storm that now threatens to seriously damage its economy.

The FT newspaper reported that the the loan could hit $4b, although an IMF statement later dodged giving specific numbers.

“An IMF team will be in Baku during Jan. 28 – Feb. 4 for a fact- finding staff visit at the authorities’ request. The team will discuss areas for technical assistance and assess possible financing needs,” it said in a statement.

Azerbaijan’s finance minister, Samir Sharifov, though, played down reports of a loan.

He instead said that Azerbaijan was going to raise $2b by selling debt for the Southern Caucasus Gas Corridor Company, which manages various pipelines, and pipeline projects, running from the Caspian Sea to Europe.

“There is no urgent need for a loan, but we can raise loans to support the economy amid low oil prices,” Mr Sharifov told journalists in Baku of talks with the IMF.

If Azerbaijan did take an IMF loan it would be the first emergency loan given to a sovereign state during this current financial downturn. Taking an IMF loan would also dent Azerbaijan’s pride. Fuelled by high oil prices its economy has boomed over the past 15 years. The government has invested heavily in promoting its reputation as a bridge between the East and West, building grandiose towers and sponsoring major sports events.

But the government has failed to shift Azerbaijan from a petro-econ- omy to a more dynamic economy with several income streams. Instead, Azerbaijan still receives around 95% of its export revenue from oil sales.

And with oil prices at around 12- year-lows this has begun to hurt.

The government has slashed spending, inflation is soaring and jobs are melting away. The manat currency has dropped a third in value in the past month and frustrated ordinary people are beginning to speak out and protest against the government.

A Conway Bulletin correspondent in Baku said people in the streets were increasingly referring to the current economic downturn as a “crisis”.

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(News report from Issue No. 265, published on Jan. 29 2016)

LG Group scraps project in Kazakh city

JAN. 26 2016 (The Conway Bulletin) – South Korea’s LG Group dropped a $4.2b project to build a petrochemical plant near Atyrau in western Kazakhstan because of continued low oil prices. The cancellation is perhaps the biggest project to be ditched during the current economic slowdown.

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(News report from Issue No. 265, published on Jan. 29 2016)

Lavrov meets Turkmen President in Ashgabat

JAN. 28 2016 (The Conway Bulletin) – Russia’s foreign minister Sergei Lavrov flew to Ashgabat to meet with Turkmen President Kurbanguly Berdymukhamedov, at a time when relations between two countries are considered to be near a post-Soviet Union low.

During his trip Mr Lavrov offered Turkmenistan help in defending its borders against potential incursion from Taliban fighters, a threat that Turkmen authorities have said has become more acute over the past year.

The Russian foreign minister quoted Mr Lavrov as saying: “If Russia’s assistance is needed with respect to these endeavours, it goes without saying that it will be in our interests to provide it. Let me reiterate that today our Turkmen friends provided us with a detailed insight into their efforts to reliably protect the border with Afghanistan.”

Local media said Mr Berdymukhamedov declined this offer.

Relations between Turkmenistan and Russia have dipped to a new low over rows about gas contracts. This year, Russia confirmed it was scrapping gas imports from Turkmenistan and buying more from Uzbekistan. Analysts said this was a slight against Turkmenistan for discussing gas routes to Europe via Azerbaijan and the S.Caucasus, a rival route to Russia’s gas supplies to Europe.

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(News report from Issue No. 265, published on Jan. 29 2016)

Editorial: Taliban threat for Uzbekistan

JAN. 29 2016 (The Conway Bulletin) – For policy makers involved in pushing the CASA-1000 and TAPI projects, reports from Afghanistan that the Taliban have attacked and badly damaged part of a power line sending electricity to Kabul from southern Uzbekistan is the stuff their nightmares are made of.

CASA-1000 is the World Bank-backed $1.1b project that will supply Pakistan with power from hydro-stations in Kyrgyzstan and Tajikistan. TAPI is the name of a pipeline that will pump gas from Turkmenistan to India.

Both projects will transit across Afghanistan and form part of a loose north-south Silk Road that US officials have been touting for the past decade. The rub is that they require a stable Afghanistan and that, it appears, is exactly what they don’t have.

If the Taliban are attacking power lines running from Uzbekistan to Kabul then what would stop them attacking a power line running to neighbouring Pakistan or a pipeline running to India?

For each project, the leaders now have to inspect their security systems once again. Costs and doubts about both projects will be rising.

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(Editorial from Issue No. 265, published on Jan. 29 2016)