FEB. 9 2015 (The Conway Bulletin) — Italian oil service company Saipem has won a $1.8b contract to replace leaky pipes at the Kashagan oil field in the Kazakh sector of the Caspian Sea, media reported. It said the new pipes would be in place by the end of 2016, allowing oil to flow from Kashagan by the start of 2017.
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(News report from Issue No. 218, published on Feb. 11 2015)
>>Fall in oil price has hit Azerbaijan hard
JAN. 29 2015 (The Conway Bulletin) — Azerbaijan’s government has cancelled a $100m project to provide rural communities with vastly improved and faster internet, media reported.
The fall in the price of oil prices has hit Azerbaijan hard. It is very much a petro-dollar economy and has had to adjust its budget to account for falling revenues.
The project was supposed to be funded by the state budget but it was, instead, one of the first to be cut when the budget was re-organised earlier this year.
And the project was supposed to be a major stepping stone to build a more integrated, connected society. Research in 2013 showed that only 500 of Azerbaijan’s 4,000 villages had access to the internet, a figure the government’s programme was supposed to improve.
Another project that the government has apparently reduced funding for is the Star refinery that it was building in Turkey. Instead, media reported, the Star oil refinery will be funded by foreign-backed debt.
Oil prices are critical to Azerbaijan. Last week BP, the biggest foreign investor in Azerbaijan, said that it was making 8% of its local workforce redundant.
The next few months are going to be important. While prices remain low, there could be more project cancellations to come.
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(News report from Issue No. 217, published on Feb. 4 2015)
JAN. 30 2015 (The Conway Bulletin) — The ratings agency Standard & Poor’s downgraded Azerbaijan’s debt rating to negative from stable because of the fall in oil prices. It said 44% of Azerbaijan’s GDP and 95% of its exports were linked to the energy industry. Despite calls from various foreign institutions, Azerbaijan has failed to diversify.
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(News report from Issue No. 217, published on Feb. 4 2015)
MO’YNOQ/Uzbekistan, FEB. 4 2015 (The Conway Bulletin) — Sagynbai Murzayev is a strong and gentle Soviet-made man in his 70s. He used to be a fisherman in windswept Mo’ynoq, a town in Karakalpakstan which lies on the remote western fringe of Uzbekistan. Now he works several jobs and witnesses the Chinese influx.
Mo’ynoq once lay on the shores of the Aral Sea. This sea, though, shrunk rapidly because a Soviet irrigation system siphoned off its tributaries’ waters to feed giant cotton fields.
Left behind is a lunar desert of white dunes that locals call Aralkum (Aral’s Sands).
Murzayev works at the local museum of natural history and has witnessed the retreat from the beginning. His father was also a fisherman, his mother worked in a fishery. He now gathers most of his earnings by driving foreign guests to the sea shores. Most of the visitors are Chinese.
Since 2006 an energy consortium led by China National Petroleum Corporation (CNPC) has been exploring oil and gas deposits below the former seabed.
Although national Uzbek publications boast about Karakalpakstan’s growth as an energy-rich region, operations in the Ustyurt Plateau seem, to Murzayev at least, to proceed at a slow pace. The few Chinese workers camping on the shoreline are mainly after a rather different and rather unusual resource for Central Asia — shrimps.
Unexcited, Murzayev looked at a Chinese trawler coming ashore.
“The indiscriminate pillage of natural resources has already been proved to be detrimental for us,” he said. “We need to bring the sea back to life and not to scavenge its dead body.”
In the distance, the town’s crumbling homes are a symbol of the small economic advantages that this uncertain oil and gas bonanza can bring to the region. And all the while the fading memories of the local fisherman who used to work on the lake grow thinner and thinner.
>>By Gianluca Pardelli
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(News report from Issue No. 217, published on Feb. 4 2015)
JAN. 27 2015 (The Conway Bulletin) — BP said it had cut 255 jobs from its operations in Azerbaijan as a result of the sharp drop in oil prices over the past six months. The 255 jobs represents 8% of its total workforce in Azerbaijan. The redundancies highlighted the impact of the oil price drop on the country.
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(News report from Issue No. 216, published on Jan. 28 2015)
JAN. 21 2015 (The Conway Bulletin) — London-based energy company Dragon Oil said it would reduce its capital expenditure in Turkmenistan by 26% this year because of the decrease in oil global price, media reported. Dragon Oil’s slashing of its capital expenditure budget in Turkmenistan highlights the pressures that energy-focused economies are under.
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(News report from Issue No. 216, published on Jan. 28 2015)
>>Stats show increase in wages but illnesses also rise>>
JAN. 22 2015 (The Conway Bulletin) — It’s a double-edged sword living in the west Kazakh region of Mangistau, according to the Kazakh stats office at least.
Mangistau, the main oil producing region of the country, has been enjoying a salary boom that other regions of Kazakhstan can only dream of. Last year the average workers’ salary in Mangistau rose by 22% to over $1,000/month. This is around 50% more than average salaries in other rural areas of the country.
Of course Mangistau’s fortunes are closely linked to the fortunes of the energy industry which has been enjoying something of a boom over the past few years. With falling oil prices, though, that could be about to change.
The stats don’t all show good news, though. Various statistics said Mangistau has the highest rate of several diseases in the country. Some environmentalists have said that people breathe and drink the by-products of uranium mining projects and the decommissioning of the old nuclear power plant in Aktau.
Worker disputes in the region also affect the region. In 2011, the town of Zhanaozen was the centre of clashes between protesters and police. At least 15 people died.
It’s a trade-off then. The salaries may be higher in Mangistau but the work pressures and the health risks are too.
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(News report from Issue No. 216, published on Jan. 28 2015)
JAN. 16 2015 (The Conway Bulletin) — Oil production at the BP-led Azeri, Chirag and Guneshli oil fields (ACG) continued to fall last year despite pledges that the drop would drop, Reuters quoted a source at Azerbaijan’s national statistics office as saying. ACG is Azerbaijan’s largest oil field.
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(News report from Issue No. 215, published on Jan. 21 2015)
JAN. 13 2015 (The Conway Bulletin) — Russia’s Gazprom has given up searching for oil in two of its four exploration blocks in Tajikistan, media reported. Interfax, a Russian news agency, said that Gazprom had been working since 2003 on the projects. It still plans to explore its two remaining blocks. Tajikistan has said that it hopes a major oil and gas discovery will boost its economic prospects.
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(News report from Issue No. 214, published on Jan. 14 2015)
>>Sackings come shortly after currency devaluation>>
JAN. 11 2015 (The Conway Bulletin) — It’s been a busy start to 2015 for Turkmen president Kurbanguly Berdymukhamedov. He ordered the devaluation by 20% of the manat on Jan. 1 and now he has sacked both the head of the state gas company Turkmengaz and the head of the Central Bank.
Mr Berdymukhamedov appears frustrated at the relative sluggish nature of recent growth in the Turkmen economy. Much of this can be attributed to the 50% fall in energy prices and the drop in the value of the Russian rouble, so important for the economies of Central Asia.
But Mr Berdymukhamedov said that Turkmengaz head Kakageldy Abdullayev was to blame.
“We could have raised production and exports of liquefied gas and other products which are in great demand on world markets,” Reuters quoted him telling a government meeting.
Mr Berdymukhamedov is fond of culling his top officials. Mr Abdullayev had only been in the job for a year. His replacement was named as Charymuhammed Hommadov.
The day before, Mr Berdymukhamedov had also sacked the head of the Central Bank, the head of the state-run Prezidentbank and also the agriculture bank Daikhanbank.
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(News report from Issue No. 214, published on Jan. 14 2015)