Tag Archives: oil

Azerbaijan’s oil exports drop

MARCH 17 2016 (The Conway Bulletin) – Azerbaijan exported 5.2m tonnes of oil in January and February, down from 5.5m tonnes in the same period last year, official customs data reported. Azerbaijan is reliant on oil exports to fund its budget. The drop in oil prices has hit its economy hard, forcing the government to cut budgets. The problem for Azerbaijan is that a lot of its oil fields are aging.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Directors of Tethys in Kazakhstan leave

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.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Kazakhstan’s Ozenmunaigas hints at job losses

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.

ENDS

(News report from Issue No. 272, published on March 18 2016)

Business comment: Oil Rebounds

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.

ENDS

(News report from Issue No. 272, published on March 18 2016)

BP plans platform closures in Azerbaijan

MARCH 10 2016 (The Conway Bulletin) – BP plans to close oil production at the West Azeri and Guneshli platforms later this year for routine maintenance work, media reported quoting the company’s head in Azerbaijan. The platforms are part of the Azeri-Chirag-Guneshli complex which forms the mainstay of Azerbaijan’s oil output. Closing production at the two platforms will dent output.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Italy charges company with corruption at Kazakhstan’s Kashagan

MARCH 4 2016 (The Conway Bulletin) – Italian prosecutors charged Dinamo, an energy consortium registered near Milan, with paying millions of euros in bribes to Kazakh officials for a contract to service the giant Kashagan oil field.

The bribes, the prosecutors said, are part of a deep-rooted system of corruption used to win contracts in the oil services sector around the world. So far, ENI, Italy’s biggest energy firm, has not been involved in the legal proceedings, but analysts argue that the investigation might inevitably reach the former operator of Kashagan.

ENI holds a 16.8% stake in the Kashagan consortium of which Kazmunaigas, Exxon Mobil, Shell, Total, CNPC and Inpex are all part.

Italy is one of Kazakhstan’s main trade partners. Kashagan is supposed to start commercial oil production later this year after a three year delay.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Oil workers strike in Kazakhstan

MARCH 4 2016 (The Conway Bulletin) – About 200 people working for the oil services company Techno Trading, which is a sub-contractor for Mangistaumunaigas went on strike. They complained that the company had not paid them their quarterly bonuses. Industrial action is a sensitive issue in western Kazakhstan where police and demonstrators clashed in 2011, killing at least 14 people. Inflation is rising and the value of the tenge has dropped in Kazakhstan, straining worker-employer relations.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Malaysia buys up field in Kazakhstan

MARCH 7 2016 (The Conway Bulletin) – Malaysia’s Reach Energy Berhad said it offered $154.9m for a 60% stake in Palaeontol B.V., a Dutch-registered company that operates an onshore block in the Mangistau oblast in Western Kazakhstan. The fields in the block are known as Emir Oil. China’s MIE Holdings Corp owns Palaeontol. According to Reach Energy, the fields holds oil reserves of 10m tonnes.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Greenfields buys field in Azerbaijan

MARCH 6 2016 (The Conway Bulletin) – In a $57.6m deal, Houston-based Greenfields Petroleum agreed to buy the 66% of Bahar Energy, an energy company exploiting the offshore Bahar oilfield, that it didn’t already own from Azerbaijan’s Baghlan Group. Bahar Energy, registered in Dubai, operates the field with Azerbaijan’s state-owned energy company SOCAR. Upon the completion of the $57.6m deal, Greenfields Petroleum will own 100% of Bahar Energy.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Georgia and Gazprom agree deal

MARCH 7 2016, TBILISI (The Conway Bulletin) — Russia’s state-owned gas company Gazprom reached an agreement with the government of Georgia to supply gas via Armenia, renewing a deal that has bound the two countries together.

The deal had been in jeopardy after negotiations over additional gas supplies to Georgia from Russia were frozen. But both the Kremlin and Tbilisi see the Armenia gas supply arrangement as a useful dialogue forum and forced it through.

After last-minute negotiations, Kakha Kaladze, Georgia’s minister of energy, confirmed a deal.

“We have reached an agreement with Gazprom, now we just have to sign it,” he told media.

The deal, Mr Kaladze said was similar to the earlier one, with Georgia receiving 10% of the total gas Gazprom sent to Armenia. Georgia, which has been transforming itself into a transit hub for the South Caucasus, had wanted cash instead of gas for the arrangement but Russia refused to budge.

The renewed deal between Georgia and Gazprom will also be a relief to Armenia, which is reliant on supplies from Russia. It has struck deals with Iran but Russia remains its most important partner.

Until the first quarter of 2016, Armenia will continue paying s discounted rate of $165/thousand cubic metres, which Gazprom cut by 12.% last September.

Armenia and Gazprom will have to negotiate a new price for gas for the rest of the year.

Earlier, on March 4, Georgia signed a deal with Azerbaijan to receive an extra 500,000 cubic metres of gas. It had been in negotiations with Azerbaijan, Iran and Russia for months to seal the deal.

ENDS

(News report from Issue No. 271, published on March 11 2016)