Tag Archives: oil

Tajikistan plans new energy legislation

MARCH 3 2014 (The Conway Bulletin) — Lawmakers in Tajikistan’s lower house discussed the draft of a new law that investors hope will help them to do business in its emerging energy sector.

Tajikistan, dependent on fuel imports from Russia and unfriendly neighbour Uzbekistan, is desperate to unlock its own significant hydrocarbons potential. It hopes to both achieve energy security and earn much-needed revenue.

The problem is that the legislation appears unreformed and Byzantine even.

Although details of the law under discussion haven’t been released, it is understood that it is aimed at addressing these problems.

Russia’s Gazprom, Channel Islands-registered Tethys, France’s Total and China’s CNPC are all prospecting in Tajikistan, the latter trio joining forces to exploit the Bokhtar license area in the south-west of the republic which may hold over 3 trillion cubic metres of gas.

Neighbouring China will be the primary customer when — or perhaps at this stage that should still be an ‘if’ — Bokhtar starts gas production.

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(News report from Issue No. 174, published on March 5 2014)

Turkmenistan boosts oil output

MARCH 1 2014 (The Conway Bulletin) — Turkmennebit, the Turkmen state-owned energy company, plans to increase exploration in the Caspian Sea after hitting oil in a handful of test wells, media reported. Over the past decade Turkmenistan has turned itself into a regional energy powerhouse.

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(News report from Issue No. 174, published on March 5 2014)

Russia offers Azerbaijan a discount for oil transit

FEB. 24 2014 (The Conway Bulletin) — Looking to boost the flow of oil through its Soviet-era Baku-Novorossiisk pipeline, Russian pipeline monopoly Transneft has offered Azerbaijan a reduced price for using the route, media reported.

Azerbaijan and Russia have been arguing about the price of oil shipments through the Baku-Novorossiisk pipeline over the past few years. Last year, as the row intensified, Russia said it would close the pipeline altogether.

The root cause of the problem is that Azerbaijan has increased the number of export routes it has serving its energy producing fields in and around the Caspian Sea.

Under a 2013 deal Azerbaijan was supposed to pump 5m tonnes of oil through the 1,330km Baku-Novorossiisk pipeline every year at a cost of just under $16/tonne. This volume never happened and the through-flow of oil from Baku to Novorossiisk dropped to about 1.75m tonnes.

At this volume, Transneft had said it would charge $21/tonne of oil, a price the Azerbaijanis quickly rejected.

The row over oil deliveries from Baku to Novorossiisk has strained relations between the two countries. Azerbaijan has still to respond to Russia’s new offer.

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(News report from Issue No. 173, published on Feb. 26 2014)

Oil output falls in Azerbaijan

FEB. 13 2014 (The Conway Bulletin) — A chastised BP said oil output at the Azeri-Chirag-Guneshli (ACG) oil fields in the Azerbaijani sector of the Caspian Sea fell last year by nearly 2%. ACG has been vital to Azerbaijan’s energy-powered boom and BP has been under pressure to reverse the decline.

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(News report from Issue No. 172, published on Feb. 19 2014)

Oil output in Azerbaijan continues to fall

FEB. 13 2014 (The Conway Bulletin) — Azerbaijan’s key oil field complex, Azeri-Chirag-Guneshli (ACG), produced nearly 2% less oil in 2013 than in 2012, BP said.

ACG forms the backbone of Azerbaijan’s oil output and, although gas is becoming increasingly important, it is still vital to the national economy. In other words, BP’s figures are bad news.

It said that output at ACG dropped to 32.2m tonnes last year from 32.9m tonnes in 2012. In 2010, ACG had produced 40.6m tonnes of oil — nearly 25% more than it did in 2013.

This is doubly galling because Azerbaijani president Ilham Aliyev had personally told BP to stop the output drop. In response BP committed millions on updating infrastructure and also said that they would replace management.

This had appeared to have made the difference and BP even said that the decline had been stemmed. That, though, now appears premature. There is a slight plus side, though. BP said that although overall oil production at ACG fell last year, total oil and condensate production rose 0.4% to 43.5m tonnes. Condensate is a mixture of hydrocarbons.

BP also said that exports of barrels of oil had also actually risen from ACG to 286.2m from 283.9m, mostly through the Baku-Tbilisi-Ceyhan pipeline.

While Azerbaijan ramps up gas production, oil exports from ACG remain its main cash earner. With this in mind, BP has committed to spending another $2.1b on ACG this year.

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(News report from Issue No. 172, published on Feb. 19 2014)

Japan gives out a loan to Uzbekistan

JAN. 29 2014 (The Conway Bulletin) — Uzbekistan is looking to secure a $650m loan from the Japan International Development Agency (JICA) to build a thermal power plant in the Ferghana Valley, media reported. Japan has been looking to boost its influence in Central Asia over the past few years.

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(News report from Issue No. 170, published on Feb. 5 2014)

ENI meets with Turkmen president

FEB. 4 2014 (The Conway Bulletin) — The CEO of Italian energy company ENI, Paolo Scaroni, flew to Ashgabat to meet with Turkmen president Kurbanguly Berdymukhamedov. Mr Scaroni talked up the prospects of ENI exploring for oil and gas in the Turkmen sector of the Caspian Sea. Most of Turkmenistan’s main gas projects are currently onshore.

(News report from Issue No. 170, published on Feb. 5 2014)

Tengizchevroil output grows in Kazakhstan

JAN. 27 2014 (The Conway Bulletin) — Output from the Chevron-led oil project Tengizchevroil rose to 27.1m tonnes in 2013 from 24.2m tonnes in 2012, media reported. The Tengiz oil field is one of the biggest in Kazakhstan and, with the giant Caspian Sea Kashagan oil project stalling, the figures are good news for the Kazakh economy.

(News report from Issue No. 169, published on Jan. 29 2014)

Kazakhstan auctions off energy fields

JAN. 16 2014 (The Conway Bulletin) — As part of its stated strategy to boost energy production, Kazakhstan intends to auction the right to explore eight or nine oil and gas fields this year, media reported quoting energy minister Uzakbay Karabalin. In 2013, Kazakhstan auctioned off three exploration blocks after a moratorium lasting a few years.

(News report from Issue No. 168, published on Jan. 22 2014)

Trade slows down at Kazakh Caspian port

JAN. 10 2014 (The Conway Bulletin) — In 2013 the port of Aktau, on Kazakhstan’s Caspian Sea coast, handled 8% less trade compared to 2012.

This is significant because Aktau is one of the biggest trading posts into and out of Kazakhstan. Unsurprisingly oil and oil-based products form 60% of Aktau Port’s trade volumes. Last year oil shipments through Aktau dropped by 20%, a significant drop and one that needs to be analysed.

The drop is probably down to a shift in the direction that oil has been travelling. Previously, Kazakhstan had sent most of its oil West across the Caspian Sea to Europe via Azerbaijan or north through Russia’s pipeline network. This has changed significantly over the past few years and Kazakh oil is now flowing east to China.

The drop in trade at Aktau is important as it is probably a byproduct of increased Chinese demand for Kazakh energy.

Of course, as Kazakhstan’s economy grows, so should all trade volumes at Aktau — especially, and importantly, non-oil trade volumes.

(News report from Issue No. 167, published on Jan. 15 2014)