JAN. 8 2014 (The Conway Bulletin) — The consortium of companies developing the Kashagan oil field in the Caspian Sea said it was working on restarting production but declined to give a date. A gas leak shut down production at Kashagan, Kazakhstan’s most high-profile energy project, in October around a month after the project officially opened.
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(News report from Issue No. 167, published on Jan. 15 2014)
JAN. 13 2014 (The Conway Bulletin) — Kazakhstan will increase the amount of oil it sends to refineries in western China for processing into oil-based products, media reported quoting the Kazakh energy ministry. Kazakhstan has three refineries, not enough to meet the growing demand for oil-based products. Sending oil to Chinese refineries increases Kazakhstan’s reliance on China.
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(News report from Issue No. 167, published on Jan. 15 2014)
JAN. 2 2014 (The Conway Bulletin) — In another blow to Uzbekistan’s image as a place to do business, London-listed Tethys Petroleum said that it is pulling out of the country.
In a statement circulated on Jan. 2, the company said it had pulled out of Uzbekistan “due to recent changes in the business climate and political environment”.
It expects that disengaging from its only project in Uzbekistan, the North Urtabulak oilfield in central Uzbekistan, will take three months.
Last month, Uzbek authorities arrested the head of Tethys Petroleum in Uzbekistan and accused the company of stealing oil worth $30m to $40m.
Tethys’ decision may also be linked to the ongoing political instability in Uzbekistan. Gulnara Karimova, the eldest daughter of President Islam Karimov, is currently fighting to maintain control of her assets and influence. Observers have said that political instability may embroil Uzbekistan for some time.
But Tethys’ withdrawal does highlight the problems for foreign companies of doing business in Uzbekistan.
They complain of interference from the authorities, random tax bills and police visits.
Last year Russian telecoms company MTS pulled out of Uzbekistan after a long-running and very public row with the tax authorities. Oxus Gold, a British gold mining company, quit Uzbekistan in 2011 also after a run-in with the authorities.
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(News report from Issue No. 166, published on Jan. 8 2014)
JAN. 2 2014 (The Conway Bulletin) — London-listed energy company Tethys Petroleum said it will quit Uzbekistan because of a change in its political and business environment. Last month, Uzbek authorities accused Tethys of stealing oil. Tethys operates throughout Central Asia and the South Caucasus.
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(News report from Issue No. 166, published on Jan. 8 2014)
DEC. 16 2013 (The Conway Bulletin) — Italian officials are investigating whether the Kazakh government pressured energy company ENI to influence ministers in Italy into deporting the wife and daughter of fugitive opposition leader Mukhtar Ablyazov in May, media reported. An Italian TV interview with an anonymous ENI manager triggered the investigation.
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(News report from Issue No. 165, published on Dec. 18 2013)
DEC. 10 2013 (The Conway Bulletin) — Global Witness, the anti-corruption lobby group, published a report that alleged widespread use of offshore accounts and shell companies to move cash out of state-owned energy company SOCAR. Azerbaijan denied any wrongdoing.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 4 2013 (The Conway Bulletin) — The Uzbek authorities have launched an investigation into the alleged theft of oil by Guernsey-based Tethys Petroleum, media reported. Tethys Petroleum, which operates across Central Asia, denied any wrongdoing. Complaining of pressure from the authorities, foreign investors have been leaving Uzbekistan.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 6 2013 (The Conway Bulletin) — Lukoil, the Russian energy company, plans to invest $5b in Uzbekistan over the next five years, making it the Central Asian state’s biggest single foreign investor, media reported. Lukoil is investing in three major gas producing projects in Uzbekistan.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 5 2013 (The Conway Bulletin) — Azerbaijan will halt all its oil exports via Russia in February, an official for the Azerbaijani state energy company SOCAR told Reuters. Azerbaijani-Russian relations have become increasingly strained and over the past few years Azerbaijan has shift most of its oil exports to Europe via the Baku-Tbilisi-Ceyhan pipeline.
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(News report from Issue No. 164, published on Dec. 11 2013)
DEC. 10 2013 (The Conway Bulletin) — Profits from SOCAR, Azerbaijan’s state-owned energy company, are disappearing offshore through a network of faceless companies controlled by one mysterious man.
That’s the short version of how Azerbaijan’s energy sector is run according to the London-based anti-corruption lobby group Global Witness in their new report entitled “Azerbaijan Anonymous”.
“While SOCAR and its partners may well have acted within the law, the lack of transparency about SOCAR’s partners and how they came to be involved in the Azerbaijani oil industry raises questions over potential conflicts of interest, preferential treatment, and the risk of corruption,” Global Witness wrote.
SOCAR has denied that it has done anything illegal and said in response: “The Republic of Azerbaijan is a founding member of the Extractive Industry Transparency Initiative (EITI) task force subjecting the reviews of SOCAR to thorough examination and auditing.”
The EITI is a group set up to monitor whether resource-rich countries spend their revenues responsibly. Global Witness’s report criticised EITI too and said it was a weak institution with little genuine influence.
On Azerbaijan, the Global witness report said that Anar Aliyev, the mysterious owner of several companies linked to SOCAR, was virtually unknown and that he was working on behalf of several higher profile individuals. It said that Mr Aliyev was formally responsible for dozens of companies which have generated $375m profit over five years.
Aliyev is a common surname in Azerbaijan and Anar Aliyev has no family connection with Ilham Aliyev, Azerbaijan’s president.
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(News report from Issue No. 164, published on Dec. 11 2013)