MARCH 14 2016 (The Conway Bulletin) – As planned after the announcement of the deal with Olisol, two executives at Guernsey-based Tethys Petroleum will step down. John Bell and Alexander Abramov will now be co-non-executive chairmen. Mr Bell and three other directors said they will not seek re-election at the next general meeting at the end of May.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 17 2016 (The Conway Bulletin) – The EBRD said it extended a $39.5m credit line to Majid Al Futtaim, the regional franchisee of French retailer Carrefour, to extend its presence in Georgia. Carrefour already has three stores in Georgia and said it wants to open new ones. Carrefour is also present in Armenia, where it owns one store, Tajikistan and also in Kazakhstan.
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(News report from Issue No. 272, published on March 18 2016)
ALMATY, MARCH 11 2016 (The Conway Bulletin) – In a thinly veiled warning, an official from the Mangistau government in west Kazakhstan said that Ozenmunaigas, a subsidiary of Kazakhstan’s state-owned Kazmunaigas, could start cutting jobs to maintain profitability during the current economic downturn.
Elubai Abilov, representative of the local government, said that the company had not hired new staff since 2014 because it cannot afford to employ new workers.
He then said: “Ozenmunaigas will try to protect every job for its employees.”
Local analysts immediately read these comments as jobs being under threat, although there was no word from Ozenmunaigas itself.
In February, Maksat Ibagarov, Ozenmunaigas’ general director, had said: “We are not planning downsizing or wage cuts, but we are in a difficult situation. To be a profitable company, it is necessary to cut costs and increase oil production.”
Ozenmunaigas operates oil fields near Zhanaozen where riots killed at least 14 people in 2011. Employment is a highly sensitive matter at the company.
Last year, Kazmunaigas wrote off its Ozenmunaigas assets.
Kazmunaigas also said that during the first three quarters of last year Ozenmunaigas operated at a loss, as its average costs were around $65/barrel, while oil prices averaged $55/barrel.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 18 2016 (The Conway Bulletin) – In less than two months, Brent oil prices shot up by around 40%, giving oil companies a boost after months of downward pressure.
According to industry specialists, oil prices should remain within the current corridor of $35-$40/barrel until the end of the year, with an upward outlook (see chart above).
An Asian energy markets expert told The Conway Bulletin confidentially that he believes oil prices might grow back up to three figures by 2020, a long-term bullish statement.
But in the meantime, oil- dependent economies in the South
Caucasus and Central Asia will continue to suffer.
Despite the rebound in oil prices, most of the fields in Azerbaijan and Kazakhstan will operate at a loss this year as well. And there is only a slim chance that the two Central Banks in Baku and Almaty will decide to weaken their currencies further in order to favour the export-oriented sectors of their economy.
Tengizchevroil, the consortium in charge of the Tengiz oil field in Western Kazakhstan has delayed a final investment decision on its expansion project. BP has said its fields in Azerbaijan will not show an increase in production in 2016.
The gas sector will also be impacted by oil prices in the medium term, as gas prices will also shrink, albeit moderately, for Azerbaijan, Turkmenistan and Uzbekistan.
The decline of oil and gas prices has now almost reached its two- year anniversary and exporters will feel an increasingly stronger pressure from importers to give them subsidies and discounts, given the regional economic downturn that is affecting all countries in the region.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 14 2016 (The Conway Bulletin) – Kazakh lender Halyk Bank said it might not pay dividends for 2015 as the company expects a sharp decline in earnings this year. “The board is considering paying no dividend this year,” Dauren Karabayev, deputy CEO at the bank, was quoted by the FT as saying. Mr Karabayev was also not confident regarding the coming year for Kazakhstan’s economy. “2016 will not be a strong year,” he said. Halyk Bank is controlled by Kazakh President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev, one of the country’s most high-profile businessmen.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 14 2016 (The Conway Bulletin) – The Azeri and Kazakh subsidiaries of Russian bank VTB changed their directors. In Azerbaijan, Vugar Ismayilov left his post of deputy chairman after seven years. In Kazakhstan, Mikhail Oseyevski substituted Mikhail Yakunin as chairman after Mr Yakunin left the bank to join the Russian National Commercial Bank, formerly owned by the government of Crimea, now property of the Russian government.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 17 2016 (The Conway Bulletin) – Kazakhs prepared to vote in a parliamentary election on Sunday, brought forward by a year after parliament said it had achieved its remit early. The election is expected to be a straightforward affair with the ruling Nur Otan party, which won 82% of the vote at the last election in 2012, winning easily again.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 9 2016 (The Conway Bulletin) – Austrian logistics company Gebrueder Weiss said it had bought two subsidiaries of Germany’s Brockmueller Spedition in Almaty, entering the Kazakh market for the first time. The company said its new operations in southern Kazakhstan will serve as a transport hub between China and Europe.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 11 2016 (The Conway Bulletin) – Kazakhstan-based Central Asia Metals has performed well in the past weeks, after its stock price dipped to 124p on January 20, its lowest level since August 2013.
The stock had suffered from poor market conditions for commodities, but it picked up since it published an upbeat outlook for 2016, after it received government approval at the end of 2015 for the expansion of its Kounrad project in central Kazakhstan.
Analysts, however, remain cautious on the performance of the stock.
Peter Mallin-Jones, mining analyst at Peel Hunt which is a London based brokerage focused on small and medium sized companies, told The Bulletin that his downgraded share target price still held.
“The upward trend is in line with the general moves in the mining sector. KAZ Minerals is also showing a similar trend in the London Stock Exchange,” he said.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 6 2016 (The Conway Bulletin) – Kazakh mobile operator Tele2 signed an agreement for a long-term credit line with Kazkommertsbank, one of the country’s largest commercial banks. The company will use the funds to upgrade its network. Tele2 Kazakhstan and Altel completed their merger on March 1. Before the market was liberalised earlier this year, Altel, a subsidiary of state owned Kazakhtelecom, was the only company to own a 4G licence in Kazakhstan.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)