Tag Archives: oil

Stock market: Roxi Petrolium

APRIL 15 2016 (The Conway Bulletin) – Roxi Petroleum shares have lost 28% of their value in the past three weeks, as investors grow wary of the company’s performance in Kazakhstan, its core focus.

The company operates the BNG contract area, not far from Tengiz in the Mangistau region.

Despite positive news coming from its deep wells, Roxi posted a decline in daily output from its shallow wells.

In January, the company had boasted the renewal of its licence to operate at BNG, which allowed Roxi to plan its investment strategy for the project.

But a 19% decline in output, probably due to technical issues linked to the expansion of the operations, has discouraged investors.

The market’s lukewarm reaction to both operational updates and share issues has increased the stock price volatility. After a sharp decline at the end of March, the stock appears to have stabilised at 9p/share.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Azerbaijan’s SOFAZ invests abroad

APRIL 13 2016 (The Conway Bulletin) – SOFAZ, Azerbaijan’s state oil fund, said it wants to diversify its investment portfolio and increase its investment in equities. According to the latest investment policy, it plans to raise to 15% from 10% the share of the Fund it invests in equities. According to the Fund’s report, it allocated just 6.5% of its portfolio into equity investments in 2014. Equities are considered riskier than fixed-income securities, real estate and gold, SOFAZ’s preferred investment destinations.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Kazakhstan oil company’s wells dry up

APRIL 11 2016 (The Conway Bulletin) – Kazakhstan-focused oil company Roxi Petroleum said its shallow wells produced 865 barrels of oil per day in March, 19% lower than the level reported in January. Contacted by The Bulletin, Roxi declined to comment. It also didn’t post production data for February.

ENDS

(News report from Issue No. 276, published on April 15 2016)

WorleyParsons wins contract in Georgia and Azerbaijan

APRIL 11 2016 (The Conway Bulletin) – Australia-based WorleyParsons said it won a five-year Engineering, Procurement, Construction Management contract with BP for its operations in Azerbaijan and Georgia. The company will service the BP-operated Sangachal Terminal and pipelines in Azerbaijan, Georgia and Turkey. It didn’t say how much the contract was worth.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Azerbaijan to support oil freeze

APRIL 14 2016 (The Conway Bulletin) – Azerbaijan will participate in a meeting of oil producers in Doha and will support the proposal to freeze production at Jan. 2016 levels, Russian media quoted an Azerbaijani government source as saying. The Doha meeting is an opportunity for producers to agree on measures to drive up oil prices. In February, Russia, Saudi Arabia and Venezuela agreed to freeze production at Jan. 2016 levels.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Kazakh oil production to drop

APRIL 13 2016 (The Conway Bulletin) – OPEC, a club of oil exporting countries, and the US Energy Information Administration (EIA) said Kazakhstan’s oil output will decline this year. OPEC said Kazakh production will slow by 3.2% to 1.55m barrels/day. The EIA, which uses different parameters in its calculations, said it would fall 1.2% to 1.71m barrels/day.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Azerbaijani SOCAR to borrow from IBA

APRIL 5 2016 (The Conway Bulletin) – Azerbaijan’s state-owned energy company SOCAR will receive a loan of around $260m from the International Bank of Azerbaijan this year for the modernisation of the Heydar Aliyev oil refinery near Baku, Suleyman Gasimov, SOCAR’s vice president told local media. Last October, SOCAR and IBA agreed to a $1.6b loan that IBA would extend in several periodical tranches.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Kazakhstan hits Karachaganak consortium with $2 billion fine

ALMATY, APRIL 4 2016 (The Conway Bulletin) — The Kazakh government has filed a $1.6b fine against the consortium that operates the Karachaganak gas condensate field in northern Kazakhstan, Russian energy company Lukoil said, sparking fears about corporate governance and contract sanctity.

If the fine was enforced it would be, by far, the largest-ever penalty imposed on an energy consortium in Kazakhstan

Lukoil said that the lawsuit concerned changes to the profit scheme of Karachaganak’s production sharing agreement contract.

“Lukoil is involved, along with other Karachaganak consortium members, in a dispute with the Republic of Kazakhstan regarding the calculation of both cost recovery and an equity index in accordance with the Karachaganak production sharing agreement. The share of the total fine Lukoil will have to pay is $214m (15.6b roubles),” the company said in a statement.

Essentially, the fine focuses on when exactly the partners at Karachaganak have earned back their initial investments and how the equity stakes are divided. Once Karachaganak has paid back the initial start-up investment it shifts onto a higher tax regime. The Kazakh government wants this to happen soon, especially as it is trying to battle its way through a sharp economic downturn.

None of the other consortium members have commented. They are Eni (29.25% stake), Shell (29.25% through BG), Chevron (18%), Lukoil (13.5%) and state-owned Kazmunaigas (10%).

Analysts say the fine was consist- ent with the government’s practice of pressuring business ventures.

“Kazakhstan’s government has repeatedly tried to exert pressure on and expand its presence in Karachaganak, which is a profitable project. This fine is in line with the government’s strategy of increasing state shares in profitable projects,” said Nygmet Ibadildin, professor of energy policy at KIMEP University.

In 2012, Kazmunaigas bought its 10% stake in Karachaganak for an undisclosed amount. Shortly after this deal, Kazakhstan dropped a two year long $1.2b tax-back claim against the consortium. Many analysts linked the two issues.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Kashagan opening gives impetus to Kazakhstan

APRIL 5 2016 (The Conway Bulletin) – The Caspian Pipeline Consortium (CPC) which operates a pipeline that pumps oil around the northern shore of the Caspian Sea said it will ship oil from Kashagan in the fourth quarter of the year. The CPC statement gives extra impetus to the Kazakh government assessment that the Kashagan project will be operational by the end of 2016. Kashagan, which was supposed to propel Kazakhstan into the Premier League of oil producers was closed in 2013 for repairs.

ENDS

(News report from Issue No. 275, published on April 8 2016)

KazTransOil revenues grow in Kazakhstan

APRIL 1 2016 (The Conway Bulletin) – KazTransOil, Kazakhstan’s state owned pipeline distributor, said its revenue grew 3.2% to 213b tenge ($617m) in 2015. In US dollar terms, however, the company’s revenues shrank by around 30% due to the sharp depreciation of the tenge last summer. Analysts forecast a decline in sales for KazTransOil in 2016, but the company hopes to boost its revenues in 2017 with the giant Kashagan project coming online.

ENDS

(News report from Issue No. 275, published on April 8 2016)