SEPT. 29 2015 (The Conway Bulletin) – The Kazakh government has said it is considering cutting taxes for oil producers to encourage them to raise output. Some energy companies operating in Kazakhstan, especially the smaller ones, have said they will not produce oil until prices recover. Kazakhstan has cut its projected oil production in 2015 by 1m tonnes to 79.5m tonnes.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 30 2015 (The Conway Bulletin) – Highlighting Azerbaijan’s enhanced role in the global energy system, foreign minister Elmar Mammadyarov said in a speech at the UN General Assembly in New York that the country had become a “crucial player” in the system. Europe wants to increase imports of gas from Azerbaijan.
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(News report from Issue No. 250, published on Oct. 2 2015)
OCT. 2 2015 (The Conway Bulletin) — Mining companies dominated the news this week from stock markets selling shares in Central Asian and South Caucasian companies.
London-listed KAZ Minerals lost 30% in one week before rising slightly to 91p. What was striking, though, was that the trade volume surpassed 25m shares, a weekly turnaround that was only seen during a surge in August and during another sharp fall in mid-January.
Central Asia Metals was essentially stable this week in London at around 155-158p.
Toronto-listed Centerra Gold fell again. This week, the Kyrgyzstan- focused mining company lost around 6% to end the week at 7.29 Canadian dollars.
Central Asia-focused oil companies showed mixed results. Nostrum Oil & Gas shares lost around 4% this week, down to 462p. This fall was linked to the ongoing saga with Tethys Petroleum on the takeover.
Kazakhstan-focused Roxi Petroleum performed well this wekek, as it climbed back to 10p, an 18% surge in seven days, triggered by the positive interim results for H1 2015 it published on Sept. 29.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 29 2015 (The Conway Bulletin) — Kazakhstan’s deputy energy minister Uzakbai Karabalin said Tengizchevroil (TCO) could freeze its expansion project due to low oil prices. TCO is the consortium, lead by the US’ Chevroil, developing the Tengiz oil field in West Kazakhstan. TCO accounts for roughly one-third of Kazakhstan’s oil production. Freezing the upgrade project may have a significantly negative effect on Kazakhstan’s oil output.
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(News report from Issue No. 250, published on Oct. 2 2015)
ALMATY, SEPT. 25 2015 (The Conway Bulletin) — In an effort to re-invigorate itself, London-traded KMG EP appointed the tech-savvy Kurmangazy Iskaziyev as its new CEO.
KMG EP is the upstream branch of Kazakhstan’s state-owned energy company Kazmunaigas. The company’s earnings have dropped because of low oil prices and a decline in production. Some upstream operations have been suspended.
Mr Iskaziyev replaces Abat Nurseitov, who was CEO when the company needed to generate cash quickly. It sold its stake in the Kashagan oil project and issued Eurobonds to raise capital.
Christopher Hopkinson, KMG EP’s chairman, said Mr Iskaziyev was a veteran of the company, having served as the CEO of Embamunaigas.
“Mr Iskaziyev has extensive experience in applying new technologies and increasing production efficiency,” Mr Hopkinson said.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 18 2015 (The Conway Bulletin) — Kazmunaigas Processing and Marketing (KMG P&M), a branch of the state-owned oil and gas company Kazmunaigas, said it wants to increase its brand’s share of the petrol retail market in Kazakhstan to around 33%. KMG P&M currently owns 324 petrol stations across the country representing 12% of the total. The company is selling 146 stations to private investors to reduce costs. The new owners will keep the Kazmunaigas brand. KMG P&M will then buy more stations to increase the number of petrol stations carrying its brand.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 18 2015 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned oil and gas company, said it is negotiating the renewal of the so called ‘contract of the century’ it signed with BP over 20 years ago.
The contract concerns the most important set of oil fields in Azerbaijan, Azeri-Chirag-Guneshli — also known as ACG — which is managed through a consortium in which BP has the largest share (35.8%) and SOCAR owns 11.6%.
“We are in talks,” said Rovnag Abdullayev, SOCAR’s chairman, when reporters asked him about the negotiations over the licence.
“Until 2024, BP is the operator at ACG. BP is likely to remain the operation in the future as well.”
BP has not commented but its management of the project is important both for the company and Azerbaijan, which is reliant on oil exports for its earnings.
It may be early to start negotiating an extension to the 30-year Production Sharing Agreement signed in 1994 but BP and Azerbaijan need to cement their fickle relationship.
An economic crisis, triggered by a steep fall in the value of oil over the past year, has hit Azerbaijan, forcing its manat currency to devalue by a third in February.
It has also cut its government budget and spent millions of dollars propping up its ailing currency.
Data from the oil rigs also makes for a dispiriting read. In the first eight months of 2015 oil production decreased by 2.5% compared to the same period in 2014.
ACG is the primary oilfield for Azerbaijan and in 2012 Azerbaijan’s president Ilham Aliyev accused BP of having committing “grave mistakes” in its management of the project. In Jan.-Aug. 2015, production at ACG was down by 2.2%, compared to 2014. BP has tried to maintain production by replacing staff and increasing investment in the fields but it has been unable to stop ACG’s decline.
Last week, BP suspended operations at Chirag for 20 days due to maintenance work which will hit output again.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 18 2015 (The Conway Bulletin) — Construction work at a new oil terminal in Turkmenistan’s Lebap region, near the border with Afghanistan, is close to completion, the Ministry of Petroleum said. The terminal will have a capacity of 540,000 tonnes of oil and will boost Turkmen export options.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 18 2015 (The Conway Bulletin) – A fire broke out at an oil pit outside Zhanaozen in western Kazakhstan. High winds spread the fire over a 5 square km area. Media said the fire injured 2 people.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 22 2015 (The Conway Bulletin) — BP said it would extend DNV GL’s contract in Azerbaijan’s leading natural gas field for the second stage of operations. Oslo-based DNV GL provides marine warranty and consulting for oil and gas fields globally. The second phase of Shah Deniz sets it up for a massive expansion that will eventually mean more gas being sent to Europe.
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(News report from Issue No. 249, published on Sept. 25 2015)