MARCH 19 2015 (The Conway Bulletin) – SOCAR, Azerbaijan’s state energy company, said that it had issued $750m worth of 15-year Eurobonds. It had earlier said that it would issue debt but didn’t specify how much. SOCAR said the debt issue was linked to the fall in oil prices.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 17 2015 (The Bulletin) – Azerbaijani president Ilham Aliyev flew to Kars in Turkey to launch construction of the $10b Trans-Anatolian Pipeline (TANAP) which will pump gas from the Caspian to Europe. Also present were Turkish president Tayyip Erdogan and Georgian president Giorgi Margvelashvili.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 17 2015 (The Bulletin) – In a statement on its global oil and gas output, Russia’s Lukoil said although there were pressures on its downstream production sites, its projects in Uzbekistan were on target. Lukoil is a major investor in Uzbekistan.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 13 2015 (The Bulletin) – Pakistan wants to increase energy cooperation with Uzbekistan, media reported, a potential boost for the Uzbek oil and gas sector.
Western energy companies such as London-listed Tethys Petroleum are gradually exiting Uzbekistan because of a worsening business environment.
Pakistan is also lobbying for Uzbekistan to participate in the TAPI pipeline project that would bring Turkmen gas to India, passing through Afghanistan and Pakistan.
Uzbekneftegaz, the national oil and gas company in Uzbekistan, annually produces 63b cubic metres (bcm) of gas mostly for domestic consumption.
The government has a plan to increase both production and exports and to reduce wasteful use by 2020. The aim to export up to 16bcm by 2020 is well short of Uzbekistan’s regional commitments.
Notwithstanding the declining demand in Russia for Uzbek gas, China is asking for 10bcm and Pakistan’s demands might just be impossible to meet.
Furthermore, the TAPI project has proved to be a difficult one to realise and the timeline for its completion in 2017 is still under review.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 14 2015 (The Bulletin) – Pakistan’s president Mamnoon Hussein hailed talks with President Ilham Aliyev in Baku as a milestone in relations between the two countries.
Importantly for Azerbaijan, Mr Hussein underlined Pakistan’s support for Azerbaijan’s stance over the disputed region of Nagorno-Karabakh. Armenian-backed rebels have controlled the region since a UN-brokered 1994 ceasefire.
“We’ve always supported Azerbaijan’s stance, which we think is the right one,” he said.
Increasing support for its drive to win back the region of Nagorno-Karabakh is a key foreign policy plank for Azerbaijan.
Trade and diplomatic relations between Azerbaijan and Pakistan are currently light and Pakistan’s main interest is probably in securing much needed energy supplies.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 13 2015 (The Bulletin) – Kashagan, the giant oil field in the Kazakh sector of the Caspian Sea which was supposed to lift Kazakhstan into the top tier of global energy producers, may not resume output until 2017, the Shell energy company said.
This is, effectively, a six month delay to the schedule Kazakh officials have been promoting. Kazakh officials had talked up 2016 as the re-start date.
“Replacement activities are ongoing, with production expected to restart in 2017,” Shell said in its annual report.
Shell owns a 16.8% stake in Kashagan.
It has reliable information on how essential maintenance is progressing.
Kashagan has turned into one of the biggest white elephants in global energy history. It was supposed to be operational by 2013 but leaky pipes were discovered shortly after output started at the multi-billion-dollar project.
Other Kashagan shareholders include Italy’s ENI, the US’ Exxon, France’s Total, China’s CNPC, and Kazakhstan’s KazMunaiGaz.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 13 2015 (The Bulletin) – Kazakhstan may delay modernisation work at its three refineries until 2016 because a cut in the price of rival Russian oil products has knocked their profitability, Yerlan Koibagarov, down-stream director at Kazakh state energy company KazMunaiGaz, was quoted by media as saying.
Upgrade work to the refineries is considered essential in the long run to boost output and guarantee the quality of Kazakhstan’s domestically produced oil products. Demand for oil has soared over the last few years, while output hasn’t been able to keep up.
“If this trend continues I really don’t know if we will have enough monetary funds for the modernisation or not,” the government-owned Astana Times newspaper quoted Mr Koibagarov as saying. “Maybe we will have to prolong the term.”
At the beginning of this month, Kazakhstan slapped a 45 day ban on the import of oil products from Russia. The problem is that the value of the rouble has dropped by around half over the past six months, while the Kazakh Central Bank has tried to maintain the value of the tenge. Global oil prices have also plunged.
Refineries and oil products are an important issue in Kazakhstan.
To head off general discontent about the lack of petrol, the Kazakh government has made self-sufficiency for oil products a major plank of their policies.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 4 2015 (The Bulletin) – Kazakhstan banned the import of light oil products from Russia for 45 days from March 5 . The measure was brought in to stem the flow of Russian oil products, made cheaper by the fall in the value of the rouble, and to protect jobs and business at Kazakh refineries.
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(News report from Issue No. 222, published on March 11 2015)
MARCH 10 2015 (The Bulletin) – China is preparing to begin work on building the first oil refinery in Tajikistan, media reported. China says that work is about to begin and that it should be operational by the end of the year. The refinery is important because it will reduce Tajikistan’s reliance on Russian oil products.
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(News report from Issue No. 222, published on March 11 2015)
MARCH 11 2015 (The Bulletin) – Gas production in Turkmenistan, critical for the country’s economic welfare, jumped by 5.2% during the first two months of the year, media reported quoting the Turkmen energy ministry. Turkmenistan has the fourth largest gas reserves in the world. Turkmen president Kurbanguly Berdymukhamedov has said that he wants to boost gas production to offset the impact of a growing financial crisis.
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(News report from Issue No. 222, published on March 11 2015)