Tag Archives: hydrocarbons

Georgia talks to Iran about gas

JAN. 4 2016, TBILISI (The Conway Bulletin) — Georgia started negotiations with Iran to buy gas and electricity, apparently strengthening its intention to diversify away from Azerbaijan as the main source for gas imports.

Energy minister Kakha Kaladze told local press negotiations could start soon.

“We will start start talking over gas as well as electricity. Iran is rich in resources and we should benefit from its resources as much as possible,” Mr Kaladze had said earlier in December.

Iran confirmed the negotiations and said it would be able to deliver between 8 and 15b cubic metres of gas to the Armenian border, from where it would be shipped north to Georgia.

Officials at Azerbaijan’s state energy company SOCAR put a brave face on news of Georgia’s negotiations, but the talks would have irritated them. When Georgia opened talks with Russia to increase gas supplies last year, Azerbaijan released a testy diplomatic note reminding Tbilisi of its contractual obligations.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Stock market: Nostrum Oil & Gas, Roxi Petroleum

JAN. 8 2016 (The Conway Bulletin) — The winter break has not been too kind to stock prices of oil and gas companies focusing on the South Caucasus and Central Asia. The continued fall in oil prices, now at around $33/barrel, has not stopped yet, which keeps investors worried.

After a rough third week of December, when they lost between 4-6%, Nostrum Oil & Gas and Roxi Petroleum shares picked up again, only to fall back to mid-December levels.

Nostrum’s 15% spike on Dec. 23 was reabsorbed in the first week of January. Roxi shares grew 60% in two days from Dec. 28, but it is now trading back at 8.25p. Tethys Petroleum suf- fered most, as its shares lost 28% .

The two Georgian companies listed in London, Bank of Georgia and Georgia Healthcare Group were hit too. Bank of Georgia lost 8.2% in the past three weeks, closing at £17.87. Georgia Healthcare Group lost 4%, closing at £1.56.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Frontera to give assessment for Georgian gas complex

DEC. 23 2016 (The Conway Bulletin) — US-based Frontera Resources said its final geological assessment of the South Kakheti gas complex it operates in Georgia will be completed in the first quarter of 2016. Frontera said it also plans to shortly start production, which will initially amount to 77m cubic metres of gas annually.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Lukoil says sanctions hit exploration in Kazakh section of Caspian Sea

ALMATY, JAN. 3 2016 (The Conway Bulletin) — Russian energy company Lukoil said Western sanctions have damaged its ability to carry out exploration work in the Kazakh section of the Caspian Sea, just as Kazakhstan’s government said it wanted to intensify the search for oil and gas.

Amid an ongoing economic downturn, Kazakhstan’s state-owned energy company Kazmunaigas is looking to boost revenues through new oil and gas projects. In the northern section of the Caspian Sea, Russia’s Rosneft and Lukoil are its main partners.

But Lukoil said Western sanctions had hit its operations.

“We don’t have free available drilling rigs and we cannot import them because of Western sanctions,” Vagit Alekperov, Lukoil’s CEO told Russia-24 in an interview.

Kazakh-Russian consortia explored several fields for oil and gas in the early 2000s but failed to make any major discoveries. Although there were some promising indications that fields held decent reserves, most of the projects were suspended as costs mounted.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Kyrgyzstan to construct pipeline to China

JAN. 12 2016 (The Conway Bulletin) – Kyrgyzstan will begin construction work on a new gas pipeline running to China in March, media reported quoting Deputy Economy Minister Aibek Kaliev. The pipeline, which will take several years to build, will complete a route running from gas fields in east Turkmenistan through Uzbekistan and Tajikistan and on to Kyrgyzstan and China.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Kazakh TransGas names new CEO

DEC. 11 2015 (The Conway Bulletin) – KazTransGas, Kazakhstan’s gas distributor, named Rustam Suleymanov as its new CEO. Mr Suleymanov has worked at KazTransGas for 15 years. Former CEO Kairat Sharipbayev was named chairman of the board.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Stock market: Tethys, Nostrum, Tengri

DEC. 17 2015 (The Conway Bulletin) — Commodities prices keep declining and the industry continues to worry and use caution. This is reflected in the markets, which show the poor performance of Central Asia and South Caucasus focused firms.

Tethys Petroleum (-6% in the past week), Nostrum Oil & Gas (-5.8%) and Roxi Petroleum (-4%) were hit by oil prices plummeting to around $37/barrel.

Industrial and judicial news affected the performance of several miners in the region.

KAZ Minerals closed at 88.5p on Thursday a 7.7% fall in share prices compared to last week. Centerra Gold lost 11% on the Toronto Stock Exchange, closing at 7.07 Canadian dollars on Thursday.

Generally stable Tengri Resources also fell after it announced it was not going to mine the Taldybulak gold and copper project in Kyrgyzstan. It lost 17.4% in one day to close at 3p per share on Thursday.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Business comment: Kazakhstan’s Oil Production

DEC. 20 2015 (The Conway Bulletin) — He must thinks we’re fools.

“We did all we could to keep oil prices high by cutting oil production domestically, now it’s time for other countries to do the same,” Kazakhstan’s minister of energy Vladimir Shkolnik told the press in Astana.

He attributed this year’s 1.5m tonnes production cut in Kazakhstan’s oil output to a deliberate decision to help keep oil out of the market to try to raise prices. If this was the intention, it clearly hasn’t worked, because prices are down to a seven-year low, at around $37/barrel.

But, incidentally, this was not the intention.

As several experts have told the Bulletin throughout the year, Kazakhstan only produces around 2% of the world’s total oil output and does not have a seat at price- setting assemblies such as OPEC.

This makes it a price taker, one that cannot, even by freezing completely oil exports, bring back oil prices above $100/barrel.

A 1.5m tonne cut represents roughly a 2% cut in Kazakhstan’s yearly production and is entirely attributable to aging oil fields and delays in the start of new projects.

The re-start of production at the Kashagan oil field in the Caspian Sea is now looming on the horizon, but at the ministry of energy its production forecast is lower than previously assessed.

Tengizchevroil, the consortium operating Kazakhstan’s largest field, finally said it would go ahead with its expansion project in H1 2016, two years behind schedule and with a $15b cost overrun.

So please, Mr Shkolnik, don’t say you cut production on purpose. The main reason that Kazakh output has dropped is because low oil prices have discouraged production.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Iran hints at increasing stake in the Azerbaijani Shah Deniz

DEC. 15 2015 (The Conway Bulletin) — Iran has said it is interested in increasing its stake in the Shah Deniz offshore gas exploration project in Azerbaijan, a move that would extend Iran’s influence over a project that is becoming increasingly important in Europe’s future energy plans.

Iran’s deputy minister Hossein Zamani Nia said Iran wanted to increase its stake in several international projects. “Several fields and projects in some countries are being examined,” Mr Zamani Nia told the IRNA news agency.

“Shah Deniz is one of those fields but a final decision has not yet been made.”

Through the subsidiary Naftiran Intertrade, state-owned National Iranian Oil Company (NIOC) owns a 10% stake in Shah Deniz, off the coast of Azerbaijan in the Caspian Sea.

BP is the project leader at Shah Deniz with a 28.8% share in the consortium. Turkey’s TPAO owns 19%, Azerbaijan’s SOCAR owns 16.7%, Malaysia’s Petronas controls 15.5% and Lukoil owns the remaining 10%.

The consortium is working on a second development phase of the project, which will more than double the field’s output.

The additional volumes will fill new westward pipelines, such as TANAP, which will pump gas to Turkey and Europe.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

China buys controlling stake in major Kazmunaigas subsidiary

DEC. 15 2015 (The Conway Bulletin) — China’s CEFC energy company will buy a controlling stake in KMG Inter- national, a subsidiary of Kazmunaigas, in a deal that helps Kazakhstan raise cash but also rids Western investors of one of the more interesting companies previously offered up by Kazakh officials as a potential IPO target.

The deal, which will give CEFC a 51% share in the Netherlands-based company, is valued at between $500m and $1b, sources told Reuters.

KMG International, formerly called Rompetrol, owns the Petromidia Navodari refinery and hundreds of petrol stations in Romania, Georgia, Bulgaria and Moldova.

It is affiliated with Switzerland- based KMG Trading, which secured a $3b deal in December with Vitol as the buyer of future oil shipments from Kazmunaigas’ 20% share of the Tengizchevroil consortium.

Neither KMG International nor KMG Trading could be reached for comment.

Kazmunaigas has unsuccessfully tried to sell off Rompetrol-owned assets over the past few years.

Samruk-Kazyna, Kazakhstan’s sovereign wealth fund which owns Kazmunaigas, had said it wanted to sell KMG International in a round of privatisation set for 2016. Now, the privatisation of KMG International seems to have fallen out of this IPO bucket list.

Kazakhstan has said it wants to sell off state-owned companies involved in midstream and downstream operations in an effort to raise much-needed cash to restore financial stability during what has become a sustained downturn in oil prices.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)