NOV. 17 2015 (The Conway Bulletin) – Despite pledging to maintain oil and gas production this year, both have fallen in Azerbaijan. Oil production, vital for the economy, fell 2% to 35m tonnes in the first 10 months of the year, a government source told Reuters, and the national statistics office said gas production dropped 2.7% in same period.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) – Official media in Uzbekistan reported that President Islam Karimov has signed a resolution to begin a $16.6 investment programme running in 2016 and 2017. The main focus of the programme is to upgrade and modernise the country’s technology and energy sectors. Projects include part of a gas pipeline to China and the construction of both a petro-chemical plant and a thermal power station.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 13 2015 (The Conway Bulletin) — Toronto-based Condor Petroleum said in its third quarter results that it had had to abandon an exploration well it had drilled in the Zharkamys West field in western Kazakhstan after it was found to be dry. Condor suspended production in Kazakhstan earlier this year because oil prices were too low to turn a profit.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 13 2015 (The Conway Bulletin) – Kazakhstan does not have a complaint against the Karachaganak Petroleum Operating (KPO), which operates the oil and gas field, and does not intend to levy a fine against it, energy minister Vladimir Shkolnik said. His intervention was intended to smack down a report by Bloomberg that the energy ministry was preparing a £2b fine against KPO.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) — Azerbaijan and Kazakhstan are having to brace themselves for a tough 2016. Oil prices are expected to stay low and output is likely to drop too.
Oil exports from Azerbaijan were down by 0.4% in Jan.-Oct. 2015 compared to last year, due to a decline in oil production, according to a source quoted by Reuters, a continuation of steady trend at its major oil field ACG.
BP is under pressure to stem the drop, and has said that it is on target to achieve this. Now an estimate from the US-based Energy
Information Administration appears to back this up. It said Azerbaijan is likely to maintain this year’s average of 870,000 barrels/day, or even more, in the first half of 2016.
But OPEC, a club of oil exporting countries that does not include Azerbaijan, disagrees.
It predicted oil output of 820,000 barrels/day for 2016, a 6% drop compared to 2015.
“Lower prices are likely to accelerate declines in Azerbaijan’s production in 2016 compared to 2015,” OPEC said in a report.
And Kazakhstan is also sending worrying signals.
Yerbolat Dossayev, minister of economy, said the government cut Kazakhstan’s oil output projection for 2015 by 1.5m tonnes to 79m tonnes, a 2.3% fall. OPEC agreed.
“With no new project startups lined up for next year, declining rates are likely to step up in 2016,” it said in its monthly report.
Analysts expect Azerbaijan and Kazakhstan, which cannot influence oil prices, to produce and export at maximum capacity, while cutting down on investment. Earning hard currency from exports is top of the agenda for Central Asia and South Caucasus countries.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) – Turkmenistan will expand its giant Galkynysh gas field by around 50% over the next few years, media reported quoting Ashirguly Begliyev, head of Turkmengas, giving gas projects to India and the EU a major boost.
Galkynysh forms the core of Turkmenistan’s gas production. Its main client is China although it wants to diversify its client base. The EU has been negotiating with Turkmenistan to try and organise for gas supplies to be sent west across the Caspian Sea, through the South Caucasus, Turkey and onto Europe.
India, likewise, has been working on a project that could see gas pumped from Turkmenistan across Afghanistan to Pakistan and finally to Indian consumers.
First, though, Turkmenistan needs to boost output at Galkynysh. Almost all of its current 60bcm of gas goes to China. A proportion of the next phase of Galkynysh’s development will also travel to China, but spare capacity is being built in.
“We are in talks with a consortium of Japanese companies and have also received proposals from Korean firms and from Petrofac company,” Reuters quoted Mr Begliyev as saying on which companies may be involved with the third phase development of Galkynysh.
Importantly, too, Galkynysh is vital for Turkmenistan’s own self image. It sees itself as an increasingly important regional energy player and has been looking to pull in more clients.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 6 2015 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev flew to Tbilisi for a meeting with Georgia’s President Giorgi Margvelashvili. Officially, the clearly good-natured meeting only yielded promises of a deeper relationship but energy links were likely to have been discussed. Georgia is an important transit country for Azerbaijani gas en route to Turkey and Europe.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 10 2015 (The Conway Bulletin) — BP said it expects to maintain last year’s production levels at Azeri Chirag-Guneshli (ACG), the largest oil field complex in Azerbaijan, despite analysts’ predictions that output would fall.
BP, which owns a 35.8% stake in ACG, has been under pressure to ensure that Azerbaijan’s most important oil project doesn’t reduce its output any further.
“We expect that the production on the results of 2015 at the block will not be lower than last year. Current production figures are ahead of the forecasted ones,” Gordon Birrell, BP regional director, told reporters .
Analysts had predicted a drop of 3% in Azerbaijan’s country-wide oil output in 2015 compared to 2014.
In H1 2015, production at ACG declined by 2.3% to 641,000 barrels/day compared to the same period in 2014.
This means that the third quarter report, due in the next few weeks, will have to show an increase in production to cancel out the Q1 drop.
Maintenance work halted operations at West Azeri in May and at Chirag in September. BP said it would carry out further work at Chirag on Nov. 10 for 25 days.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 7 2015 (The Conway Bulletin) – Turkmenistan will host the official groundbreaking ceremony for the TAPI pipeline, which will pump gas from fields in the east of the country to consumers in India, via Afghanistan and Pakistan, on Dec. 13. This is important because TAPI has been spoken of for decades.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 10 2015 (The Conway Bulletin) — South Korean Samsung Engineering signed an agreement with Uzbekneftegaz to build a petrochemical plant in Uzbekistan. Samsung said the new aromatics plant is still at its conceptual design phase and did not say when it would be built. Uzbekneftegaz, Uzbekistan’s state-owned oil and gas company, has already collaborated with Samsung on a $700m polymer plan.
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(News report from Issue No. 256, published on Nov. 13 2015)