Tag Archives: oil

Tethys accuses Kazakhstan’s Olisol of dragging on deal

ALMATY, SEPT. 16 2016 (The Conway Bulletin) — Guernsey-based oil company Tethys Petroleum is still waiting for its Kazakh partner, Olisol, to pay in its pledged investment, it said in a press release, a financial injection considered vital to keeping the company running.

Tethys, which has oil and gas assets in Kazakhstan, Tajikistan and Georgia, said it had only received a portion of the 9.8m Canadian dollars ($7.4m) that Kazakh oil company Olisol pledged to prop up the operations of the London and Toronto- listed company earlier this year.

“On Sept. 9, Olisol provided $2.94m working capital funds to (us) in addition to the previously announced $452,000,” Tethys said in a statement in a strong-armed tactic to force Olisol to pay more quickly.

Earlier in September, Tethys had used more belligerent language.

“[Tethys] considers Olisol to be in breach of the Investment Agreement,” it said in a note on Sept. 2.

Olisol has played down the late payment and said that it will finance the rest of the deal by pardoning part of a loan it previously gave out to Tethys.

Tethys itself said that Olisol currently owns just under 15% of the company and will own 42% once the full payment has been made.

Olisol emerged last year as a white knight for Tethys which has been in trouble since oil prices collapsed in 2014. The real beneficiaries of Olisol have not been made public but they are believed to be members of the Kazakh elite.

Tethys is also involved in legal cases that have hurt its reputation. Its stock price, though, on Thursday was up 20% at 1.5p for the week.

A court in Kazakhstan has restricted the company’s bank accounts in Kazakhstan over an unexplained case, until an appeal later this month.

In Tajikistan, where it jointly owns the Bokhtar oil field with France’s Total and China’s CNPC, Tethys is entangled in an arbitration with its partners over missed cash calls in 2015.

In August, CNPC and Total had submitted a claim for over $9m. Days later, Tethys submitted a counterclaim for $10m.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Exxon used Bahamas-based accounts for companies operating in the Kazakhstan and Azerbaijan

SEPT. 22 2016 (The Conway Bulletin) – The International Consortium of Investigative Journalists (ICIJ) released previously confidential documents detailing companies linked to offshore accounts in the Bahamas, an update to the so-called Panama Papers.

The documents, obtained from the secretive Bahamas business registry, show connections between companies and intermediaries set up in the Bahamas tax haven in the Caribbean.

“There is much evidence to suggest that where you have secrecy in the offshore world you have the potential for wrongdoing” Gerard Ryle, the director of ICIJ, said in a statement.

Among South Caucasus and Central Asia-focused companies, ExxonMobil made extensive use of Bahamas-based companies for its operations in Kazakhstan, Azerbaijan, Uzbekistan and Turkmenistan. The law firm Harry B. Sands, Lobosky & Co., based in Nassau, was the main intermediary for these accounts.

A company called Borjomi was also listed among Harry B. Sands, Lobosky & Co.’s customers. It is unclear if this company has connections with the Georgian water producer.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kazakhstan sends Jupiter licence extension

SEPT. 19 2016 (The Conway Bulletin) – Australia-based Jupiter Energy said it received an extension from the Kazakh government for its exploration licence for Block 31, in the Mangistau region. Jupiter Energy, majority-owned by Australian finance services company Computershare Clearing, bought a licence for Block 31 from local company Zher Munai in 2008 for around $9m. The renewed licence will expire at the end of 2019.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kazakh energy company appoints new head

SEPT. 22 2016 (The Conway Bulletin) – KMG EP, the upstream branch of Kazakhstan’s state-owned oil and gas company Kazmunaigas, elected Igor Goncharov as its new chairman. Christopher Hopkinson, who had served as chairman since last year, resigned for family reasons. Like Mr Hopkinson, Mr Goncharov had long served in the ranks of Kazmunaigas. KMG EP has GDRs traded in London. Earlier this year, Kazmunaigas failed in its bid to take over more of the company.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Italian Snam to join Azerbaijan in DESFA purchase

SEPT. 21 2016 (The Conway Bulletin) – Italian gas distributor Snam will participate in the purchase of a 66% stake in the Greek gas network DESFA only if Azerbaijan’s state owned energy company SOCAR remains in the deal, industry sources told the Greek newspaper Energypress. Snam did not comment. SOCAR offered to buy 66% of DESFA for €400m ($446m) in 2013, but the European Commission blocked the deal, citing its regulations on market competition.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kazakhstan gives Ozenmunaigas a tax break

ALMATY, SEPT. 16 2016 (The Conway Bulletin) — Ozenmunaigas, a loss- making subsidiary of Kazakhstan’s state-owned energy company KMG EP, was given a discount on the mineral extraction tax (MET), an important lifeline for a firm that employs over 14,000 workers in the oil-dependent west of the country.

In 2016, Ozenmunaigas will pay MET at a rate of 9%, compared to the 13% it paid last year at its Uzen and Karamandybas oil fields.

The company has lobbied the government hard for a tax break, saying that it couldn’t continue operations without what effectively amounts to state support. In 2011, a strike at Ozenmunaigas lasted months and eventually triggered clashes between police and demonstrators which killed at least 16 people. Since then, the government has prioritised keeping Ozenmunaigas in business in order to maintain social harmony.

The fields that Ozenmunaigas operates were established during the Soviet Union. Previously, company officials have said that they can only make a profit if oil prices are above $65/barrel.

This year, prices have rarely been higher than $45/barrel.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Petronas deals with Azerbaijan

SEPT. 19 2016 (The Conway Bulletin) – Malaysia’s oil and gas company Petronas signed a memorandum with Azerbaijan’s state-owned energy company SOCAR to develop the Goshadash offshore block. Goshadash is located in the Absheron archipelago in the Caspian Sea. Petronas is already active in Azerbaijan’s oil and gas sector, as it owns a 15.5% stake in the Shah Deniz gas field.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Azerbaijan’s energy exports drop

SEPT. 20/21 2016 (The Conway Bulletin) – Azerbaijan’s oil and gas exports have fallen this year, according to government sources. Gas exports for the first seven months of 2016 amounted to 4.6b cubic metres, 8.6% lower than in the same period last year, Interfax reported. Oil exports in Jan.-Aug. fell to 33.3m tonnes, down 4.2% compared to last year, government sources told Reuters. Oil exports in particular are vital for the Azerbaijani economy. With both the value and volume of oil exports dropping, government revenues have dried up.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Business comment: Tethys Woes

SEPT. 23 2016 (The Conway Bulletin) – Guernsey-based oil company Tethys Petroleum never seems to catch a break.

This time last year it had just turned down a takeover offer from Amsterdam-based Nostrum Oil & Gas, also focused on Central Asia. But its financial outlook remained uncertain and it was still on the market for investors.

In the last months of 2015, the obscure Kazakh oil company Olisol came forward with a proposal to buy a large share of Tethys in exchange for much-needed cash.

This appeared to be the salvation that Tethys, buffeted by the slump in oil prices, needed. Tethys saluted the prospective deal as a life-saving opportunity.

But then hiccups in Kazakhstan and legal disputes with its partners in Tajikistan began churning up Tethys’ road to stability.

Now it faces legal prosecution in Kazakhstan and an arbitration in Tajikistan, which could turn ugly.

Plus repeated delays in securing funding from Olisol have put investors and managers under severe stress. This can easily be spotted by looking at the company’s stock price, which jumps and falls at every update.

In mid-August, its stock price nearly doubled in one day, reaching a four-month high, after Tethys announced that it had cleared an important regulatory hurdle in its recapitalisation efforts.

Now, Tethys’ stock price has settled back at 1.5p/share, an average it has kept in the second half of 2016, quite far down from the 64p it traded at in March 2012.

But those were the days of high oil prices and big spending. It’s a very different picture now.

With oil prices still hovering at around $45/barrel, the future looks as uncertain as ever for Tethys.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Kazakhstan’s Kashagan close to opening

SEPT. 13 2016 (The Conway Bulletin) – Kazakhstan’s energy minister, Kanat Bozumbayev, said that production at the offshore oil field of Kashagan will resume on October 23, three years after its sudden interruption due to leaky pipes. Kashagan, discovered in 2000, is one of the largest finds in the oil industry’s recent history. Its reopening has been touted as crucial to give the Kazakh energy sector the boost it needs to move into the World’s premier division of producers.

ENDS

(News report from Issue No. 296, published on Sept. 16 2016)