JULY 5 2016 (The Conway Bulletin) — Tengizchevroil (TCO), a Chevron- led consortium, approved a $36.8b expansion project for the Tengiz oil field in west Kazakhstan. The consortium said the expansion will boost production by 45% to around 39m tonnes/year by 2022. Tengiz is Kazakhstan’s most profitable oil field.
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(News report from Issue No. 288, published on July 8 2016)
ALMATY, JULY 5 2016 (The Conway Bulletin) — After prevaricating for three years, Tengizchevroil (TCO), a Chevron-led consortium, approved the $36.8b expansion of the Tengiz oil field in west Kazakhstan.
Low oil prices had thrown the Tengiz expansion plans into doubt, so the decision will be a huge relief to the Kazakh government which has been looking for ways to stimulate output to beat slowing GDP growth.
The so-called Future Growth Project will boost production at TCO by 45% to 39m tonnes/year by 2022.
Government officials and company representatives lauded the deal, the largest private investment in the world’s oil industry for a decade.
“This decision made by major international companies re-affirms that the Republic of Kazakhstan is a country with favourable business climate where long-term investments can be made with confidence,” the Kazakh minister of energy Kanat Bozumbayev said in a press release.
Through its state-owned energy company Kazmunaigas, Kazakhstan owns 20% of TCO. The other shareholders are Chevron (50%), Exxon (25%) and Lukoil’s subsidiary LukArco (5%).
The development of the Tengiz oil field near Atyrau has been one of the West’s success stories in the former Soviet Union. It is Kazakhstan’s largest oil producer, pumping out a third of its total output, and exports via the CPC pipeline that sweeps through Russia, north of the Caspian Sea to Novorossiysk on the Black Sea.
This compares to the Kashagan oil project in the Caspian Sea which is years behind schedule and billions of dollars over budget.
Analysts said that TCO had decided that oil prices were steadily moving back up and that low steel prices and cheap labour made the timing right for expansion.
The consortium said the expansion will generate as many as 20,000 jobs during the peak construction phase.
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(News report from Issue No. 288, published on July 8 2016)
JULY 1 2016 (The Conway Bulletin) — A row between BP and Exxon Mobil risks delaying an agreement between members of a consortium developing Azerbaijan’s largest oil field, Azeri-Chirag-Guneshli (ACG), sources told Reuters news agency.
Any delay in developing the field will be a major embarrassment for BP, the lead operator of the project, and a disappointment to Azerbaijan which is looking to boost oil production.
“BP and Azerbaijan agree to the new terms but Exxon keeps rejecting them time and time again,” Reuters reported quoting an anonymous source with knowledge of the sector and the companies.
“It has been going on for almost two years, with Exxon insisting on better terms.”
In May, the Azerbaijani government said it had submitted its proposal for a new contract to all consortium members. No details of the contract, or its sticking points, have been released.
ACG was dubbed the “contract of the century” when it was first signed in September 1994.
The consortium shareholders are BP (35.8%), Exxon (8%), SOCAR (11.6%), Chevron (11.3%), Japan’s INPEX (11%), Statoil (8.6%), Turkey’s TPAO (6.8%), Japan’s ITOCHU (4.3%) and India’s ONGC (2.7%).
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(News report from Issue No. 288, published on July 8 2016)
JULY 5 2016 (The Conway Bulletin) — Hit by a sharp drop in commodity prices, Kazakhstan’s foreign trade turnover shrank by 30% in Jan.-April compared to the same period last year, the Statistics Committee said. Exports fell by 31% in the first four months of the year to $11b while imports fell by 29% to $7.2b. The global drop in oil and commodity prices has exposed Kazakhstan’s over reliance on its extractive industry.
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(News report from Issue No. 288, published on July 8 2016)
JULY 3 2016 (The Conway Bulletin) — Russian President Vladimir Putin ratified an oil supply agreement with Tajikistan signed in 2013. The deal will allow Tajikistan to import oil under a duty-free scheme. Tajikistan, however, cannot re-export the oil supplied by Russia. Russia is one of the main suppliers of oil for Tajikistan. The deal increases Russia’s influence over Tajikistan.
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(News report from Issue No. 288, published on July 8 2016)
JULY 1 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR posted a loss of 1.8b manat ($1.2b) in 2015 because of low oil prices, its first loss for over a decade. SOCAR said it will potentially turn a profit this year because of a sharp depreciation of the manat in December 2015, when the Central Bank ditched the peg to the US-dollar.
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(News report from Issue No. 288, published on July 8 2016)
JUNE 29 2016 (The Conway Bulletin) — A blast at an oil storage facility in Turkmenbashi in western Turkmenistan killed seven people, local media reported. A government official later denied the report but it would be unusual for a report of this nature to be erroneous. If it is confirmed, the incident will be a blow to the reputation of Turkmenistan’s main Caspian Sea port.
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(News report from Issue No. 287, published on July 1 2016)
JULY 28 2016 (The Conway Bulletin) — Around 700 oil workers staged a two-hour strike, protesting against alleged pay cuts and job losses at the Burgylau oil service company in Zhanaozen, western Kazakhstan, the US-funded RFE/RL reported. Burgylau is linked to businessman Yakov Tskhai, who owns a majority stake in its parent company KazPet- roDrilling. In 2011, around 15 people died in Zhanaozen during clashes between striking oilmen and police.
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(News report from Issue No. 291, published on Aug. 1 2016)
JUNE 30 2016 (The Conway Bulletin) – inApril, a Norwegian oil and gas service company, said it had reached a deal with Kazakhstan-based Geo Energy Group to supply it with a seismic acquisition system. The deal, worth up to $30m, according to inApril, will improve the technological footprint of Geo Energy Group, which provides seismic assessments of oil and gas basins in offshore sections of the Caspian Sea.
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(News report from Issue No. 287, published on July 1 2016)
JUNE 27 2016 (The Conway Bulletin) — Kazakhstan and Iran will build a new refinery in the Iranian Caspian Sea port of Amirabad, Golestan,specifically to process Kazakh oil for export. It is unclear how much the refinery is going to cost to build and when it will be operational but it is probably the biggest single joint venture between the two countries since many Western sanctions on Iran were lifted in January.
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(News report from Issue No. 287, published on July 1 2016)