MAY 23 2016 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned oil company, said it will build a new oil refinery in Kulevi, on Georgia’s Black Sea coast, near its existing oil terminal. SOCAR said it has agreed with Georgian authorties to build the plant by the end of 2019. The refinery will cost $120m to build and will have a capacity of 2m tonnes/year.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 282, published on May 27 2016)
ALMATY, MAY 6 2016, (The Conway Bulletin) – Prosecutors in Romania ordered the seizure of the Petromidia refinery part-owned by a subsidiary of Kazakhstan’s Kazmunaigas as they re-opened an investigation into its privatisation in the 2000s.
The seizure of the refinery comes only a few days after China’s CEFC China Energy Company Limited completed a $680m deal to buy a 51% stake in KMG International, the Kazmunaigas subsidiary that owns the Petromidia refinery. Kazmunaigas has been looking to sell off assets and raise cash to help it through a sustained economic downturn.
Rompetrol was renamed KMG International in 2014, although the Rompetrol brand still lingers.
Romanian investigators have been focused on recovering cash they say is owed to it after a deal by the late Dinu Patriciu to buy the Petromidia refinery in 2003 from the state for $760m through Rompetrol, which he owned. He bought the Petromidia refinery from the government not with cash but with a bond.
In 2007, Patriciu sold Rompetrol and its daughter companies to Kazmunaigas for $1.6b.
When in 2010 Rompetrol’s bonds reached maturity, Kazmunaigas refused to pay the government the $600m coupon. Instead it gave the Romanian government a 45% stake in Rompetrol. This was reduced to 18% in 2014 after the Romanian government agreed to sell Kazakhstan a 27% stake for $200m.
KMG International said it had not been involved in any wrongdoing and that this legal case could damage its business plans in Romania.
“These are new developments which may have significant negative impact on KMG’s strategic objectives and development plans in Romania,” the press service said in a statement.
The company later also said it is also ready to take legal action.
“We will analyse the facts about the charges and to what extent such deeds justify the seizure of company assets. If we find that the seizure is not justified, we will challenge those seizures,” Gheorghe Albu, a lawyer for KMG International lawyer, said.
Petromidia is Romania’s largest refinery and is situated near Năvodari on the Black Sea coast.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 280, published on May 13 2016)
APRIL 26 2016 (The Conway Bulletin) – London-based energy service company Amec Foster Wheeler signed a contract for so-called frontend engineering design at Azerbaijan’s Heydar Aliyev Oil Refinery in Bak. SOCAR, Azerbaijan’s state-owned energy company, awarded the contract. Amec will complete the work by in Q1 2017.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 278, published on April 29 2016)
APRIL 15 2016 (The Conway Bulletin) – Kazakhstan plans to complete the modernisation of the Shymkent oil refinery by the end of 2017. The Shymkent refinery, which has a capacity of 5m tonnes, makes up 30% of Kazakhstan’s domestic production of petroleum derivatives. It currently operates below capacity and is often closed for maintenance.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
MARCH 25 2016 (The Conway Bulletin) – A new refinery opened in Tajikistan’s northern town of Kanibadam, a major boost to the country’s oil products output. Naftrasom, a private company owned by Nosir Usmonov, built the plant with a $3.5m investment. The refinery will have a capacity of 70,000 tonnes. As confirmed by Tajik President Emomali Rakhmon, who attended the inauguration, Tajikistan will import raw materials for the plant, mostly from Kazakhstan.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 274, published on April 1 2016)
MARCH 18 2016 (The Conway Bulletin) – The Turkmenbashi refinery complex plans to produce 340,000 tonnes of compressed natural gas (CNG) this year, a 13% increase compared to 2015. The majority of the production is booked for exports to Georgia, Iran, Tajikistan, Afghanistan and Pakistan. Turkmenistan also uses CNG domestically as fuel.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 273, published on March 25 2016)
MARCH 7 2016 (The Conway Bulletin) – US-based engineering company KBR said its joint venture in Azerbaijan had won a project management consulting contract for the Heydar Aliyev oil refinery near Baku. SOCAR, Azerbaijan’s state owned energy company, is a partner in the joint venture with KBR. The companies did not disclose the value of the contract.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
MARCH 9 2016 (The Conway Bulletin) – Due to sustained low oil prices, South Africa’s Sasol is considering dropping its gas-to-liquids project in Uzbekistan. In Uzbekistan, Sasol operates jointly with Malaysia’s Petronas and state-owned Uzbekneftegaz. The project cost stands at around $5.6b. Sasol said it will make a final decision on the project in the first half of the year.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
FEB. 24 2016 (The Conway Bulletin) — KMG EP, Kazmunaigas’ subsidiary dedicated to exploration and production, said in a statement it obtained a price increase for oil it ships to refineries at Atyrau and Pavlodar. KMG RM, another Kazmunaigas subsidiary which manages the refineries, will now pay 74% more for shipments of oil to its refinery at Aktau and 16% more for shipments to its refinery at Pavlodar than it did in 2015.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 269, published on Feb. 26 2016)
FEB. 19 2016 (The Conway Bulletin) — Dealings at Kazakhstan’s state-owned energy company Kazmunaigas can give a deep insight into the country’s oil sector.
Last week, KMG EP, Kazmunaigas’ subsidiary dedicated to exploration and production, said in a statement it obtained a price increase for the oil it shipped in 2015 to the refineries of Atyrau and Pavlodar.
KMG RM, another Kazmunaigas subsidiary which manages the refineries, will now pay 37,000 tenge (around $105) per tonne of oil delivered to both refineries in 2015. This represents an increase of 74% in the case of the Atyrau refinery and 16% for Pavlodar, compared to an earlier agreement, which had not been approved by KMG EP’s independent directors.
KMG EP, which produces around 12m tonnes/year, sends around 2m tonnes to the Atyrau and Pavlodar refineries annually.
But the picture seems much less rosy for 2016. KMG EP said it will receive only 17,100 tenge/tonne ($48) from Atyrau and 31,923 tenge/tonne ($91) from Pavlodar this year, a steep fall from 2015’s revised prices. Although the company said these figures are not yet approved by its independent directors, this foreshadows another set of lengthy negotiations to bring the price back up.
The internal battle for profit margins within Kazmunaigas in this era of low oil prices looks like a battle for scraps. And in 2016, Kazakhstan forecasts a fall in production and lower prices for crude oil to be refined.
This may dent the budget of KMG EP, although it will be bolstered, overall, by a devaluation in the tenge. It earns cash in US dollars and pays most of its workers in tenge.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 269, published on Feb. 26 2016)