Tag Archives: oil

Oil shipments from Batumi, Georgia, drop

JAN. 5 2015, (The Conway Bulletin) — Crude oil and oil product shipments from the Georgian port of Batumi fell by around 22% in 2014 compared to 2013 because of lower than expected exports from Kazakhstan and re-routing through pipelines, a port official told Reuters. Batumi oil terminal is controlled by Kazakh state energy company KazMunaiGas.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Azerbaijan may struggle with oil price drop

JAN. 4 2015, (The Conway Bulletin) — Azerbaijan may have serious problems making its national budget work with oil prices dropping below $50/barrel, media reported (Jan. 4). The government’s budget estimates are calculated at oil costing $90/barrel. Oil revenues directly contribute over half the government’s revenue.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

IMF cuts Kazakhstan economy growth

DEC. 9 2014 (The Conway Bulletin) – The IMF cut Kazakhstan’s growth rate for 2014 to 4.3% from 4.6% because of a slump in oil prices and the downturn in Russia’s sanction-hit economy. It also said Kazakhstan needed to cut more of its non-performing loans (NPLs) from its banking sector. Kazakhstan has one of the highest proportions of NPLs in the world.

ENDS

(News report from Issue No. 212, published on Dec. 10 2014)

Kazakh oil and gas site denies poisonous gas leak

DEC. 5 2014 (The Conway Bulletin) – The consortium developing the Karachaganak oil and gas site (KPO) in west Kazakhstan denied that a gas leak at its plant poisoned 20 children and three teachers at a school in a nearby village.

Ambulances rushed the children and teachers to hospital after they suddenly fainted on Nov. 28.

KPO made the statement after Kazakh media widely quoted the Prosecutor-General for Kazakhstan’s western region, Serik Karamanov, saying that there had been a brief gas leak the day before the mass fainting at the Karachaganak site only a few kilometres away from the village.

The KPO statement said: “A mobile environmental monitoring station has also been despatched to Berezovka village and has reported no exceedances above the official Maximum Permissible Concentration limits.”

Whether the Kazakh authorities agree, remains to be seen.

Mr Karamanov was clear about what he thought may have been the cause of the poisoning.

“It has been established that at 14:19 on November 27 at the gas-processing complex of KPO, there occurred a discharge of condensate for a period of two minutes,” he said according to local media reports.

The incident is a reminder of the tension at local levels between the foreign-led projects in the energy sector and local communities who accuse them of not doing enough to protect their environment.

Karachaganak is important to Kazakhstan. It is considered one of the country’s most successful projects, and produces around 40% of Kazakhstan’s gas and 13% of its oil. Britain’s BG Group and Italy’s ENI own a 29.5% stake each, Chevron owns 18%, Russia’s Lukoil owns 13.5% and the Kazakh state oil and gas company, KazMunaiGas owns 10%.

ENDS

(News report from Issue No. 212, published on Dec. 10 2014)

BP completes Azerbaijani ACG repairs

NOV. 28 2014 (The Conway Bulletin) – BP said it had completed one-month long planned maintenance work on its Azeri, Chirag and Guneshli (ACG) on time. Azerbaijan has been pressuring BP to improve output at its ACG fields. ACG has been the main source of its oil revenues although this has flagged.

ENDS

(News report from Issue No. 211, published on Dec. 3 2014)

Russia wants Kazakhstan’s pipeline oil

NOV. 12 2014 (The Conway Bulletin) – Looking to reduce the threat of sabotage, Russia’s energy ministry asked Kazakhstan to use a pipeline through Ukraine to export its crude oil.

The offer was first made in September, but was only reported by Reuters this month when the state-owned energy transport company, KazTransOil, called for local companies to participate in the bid. Although volumes have not yet been agreed, the agreement should allow Kazakh oil to run through the Druzhba (friendship) pipeline, built in 1964, whose Southern branch terminates in Hungary and the Czech Republic.

By agreeing to help fill the Druzhba pipeline, Kazakhstan is stepping directly into the ongoing civil war in Ukraine and the surrounding proxy conflict between the West and Russia.

For Russia, the benefits are fairly obvious. It wants to retain some use for the major Druzhba pipeline and would be able to charge Kazakhstan rent for using it. Russia would also reduce its risk exposure to the pipeline.

For Kazakhstan, the benefits are less obvious. Taking on the route is a major geopolitical headache.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Fatal off-shore accident occurred in Azerbaijan’s Caspian Sea

NOV. 10 2014 (The Conway Bulletin) – An oil rig partially collapsed in the Azerbaijani sector of the Caspian Sea, killing at least one worker. This was the second fatal accident on Azerbaijan’s off-shore energy sector in less than a month, throwing up general safety concerns.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Kazakhstan’s Kashagan bill costs $3b

NOV. 5 2014 (The Conway Bulletin) – Replacing leaky pipes at the Kashagan oil field in the Kazakh sector of the Caspian Sea will cost around $3b, Reuters reported quoting a senior Kazakh official. Kashagan was to be the project that propelled Kazakhstan into the top tier of global energy suppliers instead it has run hugely over budget and time.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Oil price fall was wake-up call for Kazakhstan

NOV. 10 2014 (The Conway Bulletin) – The sharp fall in the price of oil has acted as a wake-up call for Kazakhstan, economy minister Kairat Kelimbetov said in an interview with the FT.

Virtually admitting that Kazakhstan had been caught off guard by the decline by roughly a third in the price of oil since June, Mr Kelimbetovsaid that the government was the economy and to make it planning measures to shore up more attractive to investors.

“Next month the government will be ready to announce some counter cyclical fiscal policy, with big plans in infrastructure,” he said in the interview in Almaty.

Economists have warned that a devaluing rouble and falling oil prices will combined to knock Kazakhstan’s growth rate.

And the falling economy is also knocking investor confidence. Energy analyst Sergei Smirnov said that with Brent oil prices falling to a four year low of $82/barrel it makes projects such as Kashagan unprofitable.

“Offshore oil production is always much more expensive than onshore production,” he said according to media.

Kazakh officials who have staked their credibility and the country’s economic prosperity on Kasahgan but the project is already behind schedule and running over budget.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Kazakh President unveils economic plan

NOV. 11 2014 (The Conway Bulletin) – In a speech to the nation, Kazakh president Nursultan Nazarbayev ordered Kazakhstan’s government to spend more money on infrastructure projects to counter the drag caused by a slowing Russian economy and falling oil prices.

The hastily arranged policy speech caught observers by surprise. Mr Nazarbayev usually waits until his state-of- the-nation speech in January to unveil new policy.

“The tough times for which we prepared ourselves with the National Oil Fund have come. It’s time to use these reserves,” he said during his combative address.

Kazakhstan has amassed a sovereign wealth fund of roughly $77b to counter downturns in commodity prices — the economy is mainly reliant on oil and gas exports — as well as to defend the tenge currency when it is under pressure from a falling rouble.

And Mr Nazarbayev is acutely aware that economic progress is a cornerstone of his popularity.

Mr Nazarbayev pledged to inject $3b every year into Kazakhstan’s economy, during 2015/17. He also said that inter-governmental banks have pledged to match this cash injection.

“The investment from the National Fund must be necessarily accompanied by structural reforms,” he said. “This money will be channelled to develop transport, energy, industrial and social infrastructure.”

ENDS

(News report from Issue No. 208, published on Nov.12 2014)