MARCH 26 2015 (The Conway Bulletin) – Geo-Jade Petroleum, a Chinese energy company, said it will buy KoZhan, a Kazakh energy company, for around $350m, media reported. KoZhan is owned by the so-called Eurasian Trio of Kazakh oligarchs.
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(News report from Issue No. 225, published on April 12015)
MARCH 30 2015 (The Conway Bulletin) – Azerbaijan has appointed the British subsidy of Fluor Corp., a US engineering company, to manage the $16.5b construction of a new oil, gas and petrochemical processing plant outside Baku, media reported.
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(News report from Issue No. 225, published on April 12015)
MARCH 19 2015 (The Conway Bulletin) – SOCAR, Azerbaijan’s state energy company, said it will ask the Central Bank for a 1b manat ($925m) loan to build an oil, gas and petrochemicals plant. This is important because last year SOCAR delayed construction of the $16.5b plant because its funds had dried up.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 24 2015 (The Conway Bulletin) – Malaysia-based Cliq Energy said it would buy stakes in two oil fields in Kazakhstan for $117.3m through a 51% purchase of Phsytech Firm. The fields are located in the North Karazhanbas region of Mangistau, west Kazakhstan, and have proven reserves of 39.5m barrels of oil.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 19 2015 (The Conway Bulletin) – SOCAR, Azerbaijan’s state energy company, said that it had issued $750m worth of 15-year Eurobonds. It had earlier said that it would issue debt but didn’t specify how much. SOCAR said the debt issue was linked to the fall in oil prices.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 16 2015 (The Conway Bulletin) – Canada-based Condor Petroleum halted oil production at its Shoba oil field in west Kazakhstan because the oversupply of cheaper Russian oil products has dented domestic production.
A fall in oil prices and the imbalanced between the Russian rouble and the Kazakh tenge are hurting foreign energy companies in Kazakhstan. “Kazakhstan is experiencing an oversupply of refined oil products, including diesel, which is causing downward pricings pressures on domestically produced diesel and on crude oil,” Condor Petroleum said in a statement.
“Currently, Kazakhstan refineries are either not operating or the offering prices are below the Company’s cost of operations.”
This is, in effect, a criticism of the Kazakh government’s determination to defend the tenge despite the imbalance with the rouble.
Earlier this month a Kazakh official said important upgrade work to Kazakh refineries would have to be postponed because Russian oil products had destroyed their profitability.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 17 2015 (The Bulletin) – In a statement on its global oil and gas output, Russia’s Lukoil said although there were pressures on its downstream production sites, its projects in Uzbekistan were on target. Lukoil is a major investor in Uzbekistan.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 14 2015 (The Bulletin) – Pakistan’s president Mamnoon Hussein hailed talks with President Ilham Aliyev in Baku as a milestone in relations between the two countries.
Importantly for Azerbaijan, Mr Hussein underlined Pakistan’s support for Azerbaijan’s stance over the disputed region of Nagorno-Karabakh. Armenian-backed rebels have controlled the region since a UN-brokered 1994 ceasefire.
“We’ve always supported Azerbaijan’s stance, which we think is the right one,” he said.
Increasing support for its drive to win back the region of Nagorno-Karabakh is a key foreign policy plank for Azerbaijan.
Trade and diplomatic relations between Azerbaijan and Pakistan are currently light and Pakistan’s main interest is probably in securing much needed energy supplies.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 13 2015 (The Bulletin) – Kashagan, the giant oil field in the Kazakh sector of the Caspian Sea which was supposed to lift Kazakhstan into the top tier of global energy producers, may not resume output until 2017, the Shell energy company said.
This is, effectively, a six month delay to the schedule Kazakh officials have been promoting. Kazakh officials had talked up 2016 as the re-start date.
“Replacement activities are ongoing, with production expected to restart in 2017,” Shell said in its annual report.
Shell owns a 16.8% stake in Kashagan.
It has reliable information on how essential maintenance is progressing.
Kashagan has turned into one of the biggest white elephants in global energy history. It was supposed to be operational by 2013 but leaky pipes were discovered shortly after output started at the multi-billion-dollar project.
Other Kashagan shareholders include Italy’s ENI, the US’ Exxon, France’s Total, China’s CNPC, and Kazakhstan’s KazMunaiGaz.
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(News report from Issue No. 223, published on March 18 2015)
MARCH 13 2015 (The Bulletin) – Kazakhstan may delay modernisation work at its three refineries until 2016 because a cut in the price of rival Russian oil products has knocked their profitability, Yerlan Koibagarov, down-stream director at Kazakh state energy company KazMunaiGaz, was quoted by media as saying.
Upgrade work to the refineries is considered essential in the long run to boost output and guarantee the quality of Kazakhstan’s domestically produced oil products. Demand for oil has soared over the last few years, while output hasn’t been able to keep up.
“If this trend continues I really don’t know if we will have enough monetary funds for the modernisation or not,” the government-owned Astana Times newspaper quoted Mr Koibagarov as saying. “Maybe we will have to prolong the term.”
At the beginning of this month, Kazakhstan slapped a 45 day ban on the import of oil products from Russia. The problem is that the value of the rouble has dropped by around half over the past six months, while the Kazakh Central Bank has tried to maintain the value of the tenge. Global oil prices have also plunged.
Refineries and oil products are an important issue in Kazakhstan.
To head off general discontent about the lack of petrol, the Kazakh government has made self-sufficiency for oil products a major plank of their policies.
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(News report from Issue No. 223, published on March 18 2015)