Tag Archives: hydrocarbons

Editorial: Russian visit to Turkmenistan

JAN. 29 2016 (The Conway Bulletin) – The visit by Sergei Lavrov to Ashgabat could be dismissed as a pre-scheduled annual trip by Russia’s foreign minister to one of the former Soviet Union’s outlying countries.

But that would be a mistake. His meeting with Turkmen leader Kurbanguly Berdymukhamedov was an important one, especially in the context of a more powerful, more determined Taliban resurgence in northern Afghanistan.

Russia-Turkmenistan relations have been worsening over the past few years, a deterioration mainly caused by rows over gas contracts and prices and also an argument over one of Russia’s mobile providers.

It’s important for Turkmenistan, and the wider Central Asia region, that Russia-Turkmenistan relations are mended.

Ashgabat may need the Kremlin’s help with organising its defences against the Taliban. If the Taliban show any real determination to break into Central Asia, the governments of Tajikistan, Uzbekistan and Turkmenistan may well need Russian backup to repel them.

ENDS

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

Tethys looks for a new partner as debts mount up in Kazakhstan

ALMATY, JAN. 22 2016 (The Conway Bulletin) — Guernsey-based Tethys Petroleum said it will seek alternative funding after Kazakhstan-based Olisol missed a payment on a share deal agreed last year.

In a press statement, Tethys said it had received just $5m of the $15m promised by Olisol. According to Tethys, privately-owned Olisol missed the Jan. 22 deadline to send a $2m tranche of its commitment to secure a stake in the company.

Olisol has said the delay was due to currency controls in Kazakhstan linked to the sharp depreciation of the Kazakh tenge over the few past months.

And Tethys is still hopeful that it will receive Olisol’s funding.

“Should the overdue funds under the interim facility arrive in a timely manner however, Tethys will continue to work with Olisol to close the wider transaction,” Tethys, which is involved in oil and gas projects across Georgia and Central Asia, said.

Tethys needs cash to meet its debt deadlines. Last year it missed a couple of consecutive cash calls at its project in Tajikistan, the Bokhtar exploration block. Its partners in the project, China’s CNPC and France’s Total, have called on it to drop out. The Tajik government has also said it would be interested in taking a stake in Bokhtar.

ENDS

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

Kyrgyzstan’s tax police raids Chinese refinery

JAN. 20 2016, BISHKEK (The Conway Bulletin) — Kyrgyz police raided the China-run Junda oil refinery in the north of the country and accused it of evading 54.5m som ($716,000) in taxes, charges that will strain Kyrgyzstan-China relations.

During the raid, police detained the company’s deputy director Lin Yu-shan and placed its accountant, Lyudmila Marchenko, under house arrest.

Baktybek Ashirov, head of the Kyrgyz state service for combating economic crimes, told Parliament that the Junda refinery had paid 30m som ($400,000) in taxes but that was far below what it should have paid.

“The inspections showed that they should have paid twice as much, that is, there was hiding of information and an underestimation of production,” he was quoted as saying by local media.

Junda hasn’t commented.

For foreign investors in Kyrgyzstan, the charges are a worry. They have previously complained that local elite and the authorities have colluded to pressure various businesses into paying more tax, fines or giving up equity stakes in projects.

And the Junda refinery, built by the China Petrol Company for $430m, has seemingly had to deal with a large dose of misfortune since opening in January 2014.

First, protests by locals complaining of poor air quality forced it to stop production, then crude oil supplies dropped so low that it had to limit output.

The authorities said that despite the raid and the arrests, the Junda oil refinery, one of two in Kyrgyzstan, was operating as normal.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Editorial: Iran’s return

JAN. 22 2016 (The Conway Bulletin) – There is much excitement in our region over the emergence of Iran after over a decade of US-imposed sanctions.

New flight connections, new pipelines, new transmission lines and more is what a sanctions-free Iran could bring to the South Caucasus and Central Asia.

Iran has struck a deal with Air Astana to open the Almaty-Tehran air route. It has also revived talks with Turkmenistan about gas fields and pipelines around the Caspian.

Potentially, a new network to the east of the Caspian Sea could facilitate the European Union’s plans to import gas from the region. Azerbaijan may well be interested in such deals as well. In addition, Iran could become an important supplier of gas to both Armenia and Georgia.

On the flip side, Iran’s accession to the global oil market will undoubtedly drive the price of oil further down, it has huge oil reserves and production capacity, increasing the pressure on the budgets of oil-exporting economies in the region.

ENDS

Editorial from Issue No. 264, published on Jan. 22 2016)

Stock market: Tethys, KAZ Minerals, Centerra

JAN. 21 2016 (The Conway Bulletin) — Tethys shares dropped to their lowest price since listing in 2011, falling 18% over the last week to 1.75p. Our graph shows its fall since the start of December.

Problems at its operations in Tajikistan may have dented investors’ confidence. China’s CNPC and France’s Total, its partners in the Bokhtar oil project, have said they want Tethys to exit the venture.

Last week, also, the Tajik government joined the fray and said it might expropriate 25% of the licensed area, as production hasn’t started yet.

Commodities prices were stable, after months of depreciation against the US dollar. But this has not helped all miners in the region. In fact, Centerra shares fell, due to the ongoing controversy with its Mongolian operations. On the upside, KAZ Minerals continued its upward trend, thanks to the continued depreciation of the Kazakh tenge. Its costs are in tenge. Its earnings in US dollars.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Armenia asks for gas price help

JAN. 21 2016 (The Conway Bulletin) – Armenia asked Gazprom to lower the prices of gas imports by 21% to $130 per thousand cubic metres to help it weather a fierce economic storm that has hit the region.

Media reported that Armenian gas consumers currently pay an excessive price for gas. Russia reduced the cost of gas sold to Armenia last year but the government didn’t pass that saving on to consumers. It now says that it’s time to give Armenian consumers a discount.

Last year, Armenians protested at a proposed increase in the price of electricity, giving the authorities a sharp reminder of their reputation for street-level politics.

In that instance the government backed down and avoided the price rises.

Armenia is a key Russian ally in the South Caucasus. The Russian military maintains a major base in Armenia.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Georgia holds Russia gas import talks

JAN. 20 2016 (The Conway Bulletin) – Georgian Energy Minister Kakha Kaladze said that he wanted to increase the amount of gas imported from Russia to 20% of Georgia’s total consumption, up from 11%, as he prepared to meet Gazprom executives for more talks. Plans to boost gas imports from Russia have irritated many Georgians. Georgia and Russia fought a war in 2008.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Lavrov to visit Turkmen capital

JAN. 21 2016 (The Conway Bulletin) – Russian foreign minister Sergei Lavrov has scheduled a visit Ashgabat to open a new embassy on Jan. 27/28, media reported, just as relations between the two countries appear to bottom out over a row about gas supplies. Earlier this year Russian gas monopoly confirmed that it would stop buying gas from Turkmenistan and instead buy from neighbouring Uzbekistan.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

BP invests in pipeline, Georgian gov. says

JAN. 21 2016 (The Conway Bulletin) — British oil company BP will invest $150m in the renovation of the Baku-Supsa oil pipeline, the Georgian government said. BP did not give further details on the pipeline upgrade. The pipeline runs from the Caspian Sea to the Black Sea. Last year, rebels from the Georgian breakaway region of South Ossetia grabbed a portion of the pipeline.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Gazprom Kyrgyzstan pays debt

JAN. 18 2016 (The Conway Bulletin) – Gazprom Kyrgyzstan, a fully-owned subsidiary of Russia’s Gazprom, paid off a $41.6m debt that the Kyrgyz company has owed to its Kazakh counterparts since 2004. Gazprom bought Kyrgyzgas for $1 in 2014, promising to pay off its debts. This deal appears to underline Gazprom’s drive to make good on this promise.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)