Tag Archives: oil

Tethys shareholders reject Kazakh companies’ final buy-out offer

ALMATY, OCT. 7 2015 (The Conway Bulletin) — London-listed Nostrum Oil & Gas withdrew its offer to buy Tethys Petroleum, ending hopes of a merger between the two Kazakhstan- focused companies.

Shortly after Nostrum announced it had scrapped its bid, Kazakhstan- based AGR Energy submitted an offer to buy a large chunk of equity in Tethys for a premium. The AGR offer, helped Tethys shares rebound by 12% on the Canadian stock market.

Earlier the final word on the long- running Nostrum bid came from Tethys’ largest shareholder, Pope Asset Manager. It said it did not support the latest offer of 0.147 Canadian dollars per share that would have valued the company at $49.5m.

Nostrum had tried to buy Tethys’ shares for two months but a deal slipped away as the sustained oil price collapse ate into the value of energy companies in general and Tethys shares in particular.

Both companies have their main operations in Kazakhstan. The value of their assets has decreased due to the weakening Kazakh tenge against the US dollar.

Nostrum’s withdrawal was an opportunity for AGR, a company linked to the Assaubayev family. It put in an offer of $20m for a large portion of Tethys’ equity, valuing shares at 0.165 Canadian dollars. In addition, AGR also proposed a $5m loan to support short-term liquidity and the option of buying more shares.

Earlier in August, Tethys failed to conclude a $47.7m refinancing deal with AGR, which would have granted the Kazakh company a controlling stake in Tethys.

The Assaubayev family was involved in Kazakhstan’s gold sector but has since switched its focus to oil. In August 2014, it invested $62.5m into British company Max Petroleum becoming a 51% shareholder.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Business comment: Analysts see oil output drop

OCT. 1 2015 (The Conway Bulletin) — In the past few months of tumbling oil prices, analysts have discussed Azerbaijan and Kazakhstan and debated whether they could keep oil production steady.

The PRIX index, a young and fully independent barometer of the 20 major oil exporting countries, forecasts a fall in oil exports in Q4 2015 for both Azerbaijan and Kazakhstan, a stark change after a positive forecast in Q3 2015.

PRIX’s methodology is simple, as it collects forecasts on oil exports from around 300 analysts around the world. It has rapidly gained credibility due to the volume of data it generates.

John Friedman, analytical advisor at PRIX, said: “We’re still in a bear market for oil.”

He noted that exporters do not yet want to give in and cut exports despite low oil prices.

Indra Overland, project director at PRIX, said the situation in Azerbaijan was particularly worrisome.

“Oil production in Azerbaijan is clearly falling. This is due to resource depletion, though one could also argue that it is indirectly due to the unattractive climate for exploration and investment,” Mr Overland said.

Importantly, the PRIX index also highlights the agreement, or lack thereof, between the surveyed analysts. It is interesting to note that disagreement among analysts covering Azerbaijan and Kazakhstan has risen significantly, as oil prices and export data keep falling.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Despite promises, oil output falls in Azerbaijan

SEPT. 30 2015 (The Conway Bulletin) – Azerbaijan’s oil production fell by 3.1% between January and August this year compared to the same period in 2014, a source at the state’s Statistics Committee told Reuters, more bad news for the government as it tries to work out a strategy to deal with a regional economic downturn.

Oil exports are the mainstay of the Azerbaijan economy, and a collapse in oil prices over the past year has hit it hard.

It has cut government projects, slashed the value of its currency by a third and warned of low growth rates for the next couple of years.

Alongside the decline in revenue earned from exports, Azerbaijan is also dealing with a drop in production. This drop is mainly linked to a slowdown in production at the Azeri-Chirag-Guneshli (ACG) fields which are operated by BP.

The source told Reuters that Azerbaijan had produced 22.1m tonnes of oil in the first eight months of the year compared to 22.8m tonnes in 2014.

BP has tried to increase outflows from ACG over the past couple of years but without success, drawing criticism from Azerbaijani President Ilham Aliyev.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

OPEC asks Kazakhstan for oil cut

SEPT. 30 2015 (The Conway Bulletin) – Vladimir Shkolnik, the Kazakh energy minister, said OPEC members asked Kazakhstan to cut its oil production in a coordinated attempt to increase oil prices. Kazakhstan has said oil production would be slightly lower this year.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Kazakhstan to cut in tax for oil producers

SEPT. 29 2015 (The Conway Bulletin) – The Kazakh government has said it is considering cutting taxes for oil producers to encourage them to raise output. Some energy companies operating in Kazakhstan, especially the smaller ones, have said they will not produce oil until prices recover. Kazakhstan has cut its projected oil production in 2015 by 1m tonnes to 79.5m tonnes.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

FM highlights Azerbaijan’s global energy role

SEPT. 30 2015 (The Conway Bulletin) – Highlighting Azerbaijan’s enhanced role in the global energy system, foreign minister Elmar Mammadyarov said in a speech at the UN General Assembly in New York that the country had become a “crucial player” in the system. Europe wants to increase imports of gas from Azerbaijan.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Stock market: KAZ Minerals, Central Asia Metals

OCT. 2 2015 (The Conway Bulletin) — Mining companies dominated the news this week from stock markets selling shares in Central Asian and South Caucasian companies.

London-listed KAZ Minerals lost 30% in one week before rising slightly to 91p. What was striking, though, was that the trade volume surpassed 25m shares, a weekly turnaround that was only seen during a surge in August and during another sharp fall in mid-January.

Central Asia Metals was essentially stable this week in London at around 155-158p.

Toronto-listed Centerra Gold fell again. This week, the Kyrgyzstan- focused mining company lost around 6% to end the week at 7.29 Canadian dollars.

Central Asia-focused oil companies showed mixed results. Nostrum Oil & Gas shares lost around 4% this week, down to 462p. This fall was linked to the ongoing saga with Tethys Petroleum on the takeover.

Kazakhstan-focused Roxi Petroleum performed well this wekek, as it climbed back to 10p, an 18% surge in seven days, triggered by the positive interim results for H1 2015 it published on Sept. 29.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Oil field in Kazakhstan to stop expansion

SEPT. 29 2015 (The Conway Bulletin) — Kazakhstan’s deputy energy minister Uzakbai Karabalin said Tengizchevroil (TCO) could freeze its expansion project due to low oil prices. TCO is the consortium, lead by the US’ Chevroil, developing the Tengiz oil field in West Kazakhstan. TCO accounts for roughly one-third of Kazakhstan’s oil production. Freezing the upgrade project may have a significantly negative effect on Kazakhstan’s oil output.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

BP and Azerbaijan start renegotiating ‘deal of the century’

SEPT. 18 2015 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned oil and gas company, said it is negotiating the renewal of the so called ‘contract of the century’ it signed with BP over 20 years ago.

The contract concerns the most important set of oil fields in Azerbaijan, Azeri-Chirag-Guneshli — also known as ACG — which is managed through a consortium in which BP has the largest share (35.8%) and SOCAR owns 11.6%.

“We are in talks,” said Rovnag Abdullayev, SOCAR’s chairman, when reporters asked him about the negotiations over the licence.

“Until 2024, BP is the operator at ACG. BP is likely to remain the operation in the future as well.”

BP has not commented but its management of the project is important both for the company and Azerbaijan, which is reliant on oil exports for its earnings.

It may be early to start negotiating an extension to the 30-year Production Sharing Agreement signed in 1994 but BP and Azerbaijan need to cement their fickle relationship.

An economic crisis, triggered by a steep fall in the value of oil over the past year, has hit Azerbaijan, forcing its manat currency to devalue by a third in February.

It has also cut its government budget and spent millions of dollars propping up its ailing currency.

Data from the oil rigs also makes for a dispiriting read. In the first eight months of 2015 oil production decreased by 2.5% compared to the same period in 2014.

ACG is the primary oilfield for Azerbaijan and in 2012 Azerbaijan’s president Ilham Aliyev accused BP of having committing “grave mistakes” in its management of the project. In Jan.-Aug. 2015, production at ACG was down by 2.2%, compared to 2014. BP has tried to maintain production by replacing staff and increasing investment in the fields but it has been unable to stop ACG’s decline.

Last week, BP suspended operations at Chirag for 20 days due to maintenance work which will hit output again.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Turkmenistan builds oil terminal

SEPT. 18 2015 (The Conway Bulletin) — Construction work at a new oil terminal in Turkmenistan’s Lebap region, near the border with Afghanistan, is close to completion, the Ministry of Petroleum said. The terminal will have a capacity of 540,000 tonnes of oil and will boost Turkmen export options.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)