ARMENIA

Arthur Baghdasaryan Received Iran Delegation

The Secretary of National Security Council of Armenia Arthur Baghdasaryan received the Vice Foreign Minister of Iran Alizera Sheikhattar and the delegation leaded by him. According to the President’s Administration the Ambassador of Iran in Armenia and the Ambassador of Armenia in Iran have also been present at the meeting.

The Vice Foreign Minister handed the invitation of the secretary of National Security Service of Iran to visit Iran and the proposal of the council to start bilateral political consultations with the Security Service of Armenia.

 During the meeting the sides have discussed Armenian-Iranian cooperation aspect and affairs of regional security. Vice Foreign Minister signified the role of Armenia in the regional countries and said that they treat Armenia as an important colleague and are eager to develop cooperation. The sides have discussed a few questions on security, transport and energy.

09.07.2008 - PANORAMA.AM

Azerbaijani Economic Development Minister discusses "World Energy 2008" report with BP representative

Azerbaijan Economic Development Minister Heydar Babayev received senior economist of BP company on CIS states Vladimir Drebentsov, said the press service for the Ministry.

The meeting, also attended by BP macro economy specialist Tit Erken, heard the "World Energy 2008" report, prepared by the company.

Babayev said Azerbaijan is a world hydrocarbon supplier. Along with the oil sector, the country is also developing the non-oil sector.

Oil revenues are used to improve the social welfare of the citizens and develop human capital.  Building further activity on the basis of forecasts and reports is important for the country for development of world economy, in particular, energy. BP company's analysis in the sphere of energy are positive in this case.
In turn, Drebentsov highly evaluated the dynamic development of Azerbaijan's economy. He presented information about the "World Energy 2008" report.

AzerEnergy: Sales of land under high-voltage power lines halted

After reporting to law- enforcement bodies, AzerEnergy has achieved a ban imposed on construction works under high-voltage power lines.

The company said in a statement that it repeatedly appealed to the district executive authorities, local municipalities and other relevant bodies about the issue. The sale of land under high-voltage power lines was stopped after joint measures by AzerEnergy and the Ministry for Emergency Situations. All the ongoing constructions will soon be stopped across the country. AzerEnergy also added that some houses with official permit for construction were built under power lines 10-20 years ago. 

Feasibility study of Eurasian export corridor to be discussed in Baku

Full report on feasibility study of Eurasian oil export corridor will be presented at the fourth energy summit to be held in Baku in October, Viktor Yushenko, Ukrainian President, said during his working visit to Azerbaijan.

There is no doubt that this document will be positive because discussions on this issue held in May showed high economic level of the project, Yushenko said.

It is planned to solve issues on general tariff and transit policy among Azerbaijan, Georgia, Ukraine, Poland and other partner countries within the framework of this project.

The issue to create official juridical person, who will supervise the process on transportation and delivery of oil from the Baltic Sea to the Black and Caspian Sea within the framework of the ‘Viking’ project, is also under consideration. The ‘Viking’ project is of regional character and Azerbaijan is one of its main participants, Yushenko said.

Gazprom and Azerbaijan have agreed to start talks on Azerbaijani natural gas sales to the Russian energy giant, the company's chief executive said Thursday.

"Azerbaijan could become one of the countries selling natural gas to Gazprom, even though the country bought gas until recently," Gazprom CEO Alexei Miller said, adding that the company was seeking to buy the largest possible volumes of gas at market prices.

Gazprom proposed buying gas from the ex-Soviet state in June. The company has forecasted that the average European price for gas could hit $400 per 1,000 cubic meters by the end of 2008.

Miller said Thursday the forecast had been raised. "By the end of 2008, gas in Europe will cost $500 per 1,000 cu m," he said.

He added that should oil prices go past $250 per barrel, the natural gas price would exceed $1,000 per 1,000 cu m.

He said such high prices would not be an unnatural phenomenon for the market, as some individual Gazprom contracts had at certain times already exceeded the figure.

Rovnag Abdullayev, president of the State Oil Company of Azerbaijan, said earlier that the South Caucasus republic was studying Gazprom's offer to buy Azerbaijani gas at market prices along with proposals to supply natural gas for the Nabucco and Trans-Adriatic gas pipeline projects.

Azerbaijan is considered as a potential natural gas supplier for the Western-backed Nabucco project designed to bypass Russia and pump up to 30 billion cubic meters of natural gas annually from Central Asia to Europe via Azerbaijan, Turkey, Bulgaria, Romania, Hungary and Austria.

The Trans-Adriatic project is for a natural gas pipeline from the Caspian Sea to Italy through Greece and Albania and under the Adriatic Sea. The Swiss firm EGL-AXPO, the project's operator, plans to involve Azerbaijan as a natural gas supplier for the pipeline.

Natural gas to converge with oil price

Natural gas, trading at a 40 percent discount to crude, may rise to reach the record price of oil as demand for cleaner-burning fuels increases, according to energy ministers from Qatar, Algeria and Ira, Bloomberg reports.
Qatar holds 895 trillion cubic feet of gas reserves, the world’s third- largest, after Russia and Iran.
“Gas prices will follow oil prices; they will converge,’” said Algerian Energy Minister Chakib Khelil. The country is scaling back oil production growth to concentrate on gas.
“Our efforts are really focused on gas,’’ he said. Exports will rise 37 percent by 2012 to 8.5 billion cubic feet a day, said Khelil, who is also the president of the Organization of Petroleum Exporting Countries. Al-Attiyah and Khelil were also among energy officials attending the congress in Madrid.
“We will need some time to see the convergence of oil and gas,’’ said Fatih Birol, the chief economist of the International Energy Agency.

Rising global energy demand, environmental restrictions and slower progress in expanding nuclear power and wind farms are increasing demand for gas. Liquefied natural gas may become more expensive than crude oil as demand from Asia and Europe rises faster than supply, Sanford C. Bernstein & Co. said in a report last month. Natural-gas use worldwide rose 3.1 percent last year, almost three times faster than the 1.1 percent increase in oil, according to figures compiled by BP Plc. Gas is cleaner-burning than oil and creates half as much carbon dioxide as coal when used to generate power, helping ease the buildup of greenhouse gases blamed for climate change.

Azerbaijan, Baku, 4 July / “Palmali group of companies has acquired two new large-capacity tankers with the deadweight of 105,000tons,” Palmali Baku Office reported. The deal cost $160mln. Former Harmony and Champion now will be named Azerbaijan and Baku.

Tankers with the length of 237.74m and width of 43m were manufactured in Japan. They will transport the oil, which is pumped to the Mediterranean Sea via the Baku-Tbilisi-Ceyhan pipe, to world’s different ports.

04.07.2008 – TRENDAZ.COM

The State Oil Company of Azerbaijan will shutdown Baku oil refineries after launching a new oil refining and chemical complex in Sangachal, said SOCAR representative.

He noted that these enterprises and their facilities are too old. "Naturally, we will not install new facilities on the said plants due to the aforementioned facts", said he.

As for Azerkimya's plants, their fate will be defined by the government.

The SOCAR representative announced that the complex is expected to be completed in 2018. Primarily, complexes on deep gas processing, chemical production and thermal electric power plants will be constructed and launched in 2012. The second stage envisions construction of oil refining and petrochemical complexes, planned to be completed in 2018.

According to the company representative, investments into the construction of the whole complex may total EUR 20-22 bln.

The capacity of the oil refining complex will be 10,000,000 at the initial stage with possible expansion. It will refine all kinds of oil except for Azeri Light.

Gas processing capacity will make 20 bln cubic meters at the initial stage with possible expansion to 40 bln cubic meters.

04.07.2008 – TODAY.AZ

Russia eyes gas agreement with Baku after Medvedev trip

As Russian President Dmitry Medvedev wrapped up his first official trip to Baku last week a Gazprom official reiterated that Russia is looking to purchase large amounts of Azerbaijani natural gas.
Medvedev and his Azerbaijani counterpart Ilham Aliyev signed a declaration of friendship on July 3 and agreed to begin talks on energy issues. “There’s a good chance for new agreements on trading hydrocarbons,” Medvedev said. Gazprom senior official Alexei Miller, who accompanied Medvedev on the trip, said the company was hoping to buy Azerbaijani gas.

The transit possibilities of Azerbaijan are opened, the Republic is prepared to, on the basis of agreements, export hydrocarbons to the world markets from other countries and regions, Artur Rasizade, Prime Minister of Azerbaijan, said during the meeting with the Prime Minister of Hungary, Ferenc Gyurcsany, in Baku on 7 July.

“We have powerful infrastructure for the transit operations,” said Rasizade.Hungarian company MOL Natural Gas Transmission Company Ltd. participates as shareholder of the Nabucco Gas Pipeline Company. In several years Azerbaijan expects to begin export of its own gas via Nabucco pipeline and also act as a transit country for transportation of gas from Central Asia through this route.

Increasing gas export up to the peak capacity of pipeline Nabucco pipeline will take place in several stages. “Over this time, Azerbaijan is going to increase volumes of gas export,” said Prime Minister.The Head of Government of Hungary said that realizing Nabucco project was impossible without participation of Azerbaijan.

Nabucco is a projected main gas pipeline with a length of 3,300km beyond Russia from Central Asia to the EU countries, first of all to Austria and Germany. Design capacity is 26-32bln cu.m of gas per year. Construction is planned to complete by 2013.

The consortium on construction of the pipeline is attended by: OMV Gas GmbH ( Austria), Botas ( Turkey), Bulgargaz ( Bulgaria), S.N.T.G.N. Transgaz S.A. ( Romania), MOL Natural Gas Transmission Company Ltd. (Hungary), RWE ( Germany).

The project is expected to supply gas from Azerbaijan and Central Asia to EU countries.

Baku-Supsa Pipeline Might be Commissioned in 1-2 Months: Azerbaijan President

Azerbaijan, Baku, 8 July /Trend Capital/ Oil export via the western oil export pipeline Baku-Supsa will be restored within one-two months, the President of Azerbaijan, Ilham Aliyev, said while addressing the third meeting of the heads of Azerbaijani diplomatic services in foreign countries held in Baku.  

“The Baku-Supsa pipeline, which is being repaired, will be more probably commissioned in one-two months,” Azerbaijan President said.

Oil pumping via the Baku-Supsa pipeline was ceased at the end of 2006 due to repair work. The cost of construction and repair work on the pipeline is $55mln. Currently BP company carries out work to fulfill the pipeline with crude. BP is the operator of Azerbaijan International Operating Company (AIOC), which also operates Baku-Supsa pipeline.

The German company MLG concluded the construction of the bypass section of the Baku-Supsa oil pipeline in Zestafoni, Georgia. BP Azerbaijan monitored the soil movement in a section of the pipeline in the Georgian village of Zestafoni. An inconsiderable slide was observed, necessitating the construction of a bypass section of the pipeline.

During the work, one passage of the pipeline via the Kur River was once more constructed in the territory of Azerbaijan. Work was also carried out in the pipeline section, built in the territory of Georgia during the Soviet period.

Until the cessation of operations, the Baku-Supsa oil pipeline transported the light oil produced by the AIOC from the Azeri-Chirag-Gunashli fields.

With four export pipelines Azerbaijan transports gas in any direction and volume: President Aliyev

Azerbaijan, Baku, 8 July /Trend Capital/ At present Azerbaijan possesses four export gas pipelines, enabling to export its gas in any desirable directions, said the President of Azerbaijan, Ilham Aliyev, addressing the third meeting of the heads of Azerbaijani diplomatic services in foreign countries held in Baku. “These four pipelines makes possible to transport our gas in any direction and in any volume,” said the President.

Presently, Azerbaijan exports its gas from the Shah Deniz gas field to Georgia and Turkey via South Caucasus Pipeline (Baku-Tbilisi-Erzurum) with the discharge capacity of 20bln cu.m of gas per year. Azerbaijan and Georgia are connected by another gas pipeline, which is currently being repaired. The State Oil Company of Azerbaijan Republic (SOCAR) supplies to Georgia nearly 1.5mln cu.m of gas a day via this pipeline to cover this country’s domestic demand.

Azerbaijan and Iran are also connected by a gas pipeline, which is currently implementing ‘swap’ gas deliveries. Azerbaijan delivers gas to Iran, which in its turn, supplies gas to Nakhchivan Autonomous Republic, which is located in blockade of Armenia. Another gas pipeline connects Azerbaijan and Russia. Azerbaijan has bought gas from Russia via this pipeline by the beginning of 2007. However, Azerbaijan refused to import gas following an increase of own production and beginning of gas lifting from Shah Deniz field.

Azerbaijan offers Pakistan to cooperate in oil/gas exploration

Azerbaijan’s Minister of Industry and Energy Natig Aliyev met with a delegation headed by Chairman of Pakistan’s Senate Foreign Relations Committee Mushahid Hussain. The Ministry of Industry and Energy said in a statement that Azeri minister underlined the rapid development of relations between the two countries.
According to him, there is good potential for further expanded cooperation in fuel and energy sectors.
Natig Aliyev said Azerbaijan predicts to produce 65 million tons of oil and 27 billion cubic meters of gas next year. He said Azerbaijan has good cooperation with European countries in oil and gas sectors and pursues an active policy of delivery routes diversification. According to him, the exchange of expertise with Pakistan in oil/gas deposits development would be of great importance. Mushahid Hussain added that cooperation with Azerbaijan in any sectors of the economy is of great interest for his country and pledged to convey Azerbaijan’s proposal on oil/gas cooperation to the relevant government agencies in Pakistan.

An international summit will take place in Budapest on the initiative of Hungarian government to give new momentum to the slow-moving Nabucco pipeline project, which will deliver gas to Europe bypassing Russia.
Hungarian Prime Minister Ferenc Gyurcsany during his visit to Azerbaijan called for a summit for countries involved in the Nabucco pipeline project and others who could potentially supply gas to Europe through the pipeline. Energy officials from Azerbaijan, Turkey, Turkmenistan, Austria, Hungary, Bulgaria, Germany, the USA and the European Commission are expected to attend the summit that will take place in November or December this year. The meeting will focus on the acceleration of the project work and finance and supply issues. Experts say Russian President Medvedev’s tour to Azerbaijan and Central Asia might undermine the prospects of the Nabucco pipeline project after Russia offered “European prices at home” to buy and re-export gas from these countries.

Russian Presidential Aide Sergei Prikhodko said after the visit that Turkmenistan is not going to take part in the Nabucco project.

Bloomberg reports that moves by Russia’s state-run Gazprom to buy African energy assets threaten to thwart U.S. efforts to limit Moscow’s use of oil and gas as political weapons.
Gazprom, the world’s largest natural gas producer, on July 9 offered to buy all of Libya’s spare oil and gas exports, after opening its first African office in Algeria a month earlier. It also is seeking to buy exploration licenses in Nigeria and to build a gas pipeline from there to Algeria, said Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow.

President of state oil company of Azerbaijan attends Petkim board meeting

Baku. Rashad Suleymanov - APA-Economics. Rovnag Abdullayev, President of State Oil Company of Azerbaijan (SOCAR) led a delegation to attend the board meeting of Petkim Holding, the largest petrochemical firm in Turkey. The meeting heard reports of the company managers and discussed the ways of expansion, said SOCAR. The issue of welfare of local people living in Aliagha, Izmir was also raised at the meeting.

Rovnag Abdullayev unveiled the intention to open a vocational college named after Heydar Aliyev in Aliagha Province. According to him, the school will qualify human resources for Turkish industry and the graduates will be employed by Petkim. Also, the issues of water problem in Aliagha and Gozelhisar will be solved.

Turcas’s President said that Petkim will sponsor Aliagha basketball team in Turkish championship.
SOCAR&Turcas/Injaz consortium owns a 51% controlling stake in Petkim after privatization.

Azerbaijan Minister of Industry and Energy met with senior U.S. State Department adviser on Eurasia

Azerbaijan’s Minister of Industry and Energy Natig Aliyev has met with U.S. Department of State Senior Advisor for Eurasia Steven Mann in Baku. The Ministry of Industry and Energy said in a statement that the issues of energy security, as well as cooperation in the transportation of Caspian energy resources to world markets, recent uptrend in oil and gas markets and other matters were discussed at the meeting.
Natig Aliyev talked about the problems that might arise from the sharp rise in oil prices on world stock markets.
He noted that Azerbaijan continues efforts to prevent this trend and to create optimum mechanisms of price formation. Steven Mann said that Washington is seeking to intensify negotiations on transportation of hydrocarbons from Central Asia to Europe through the territory of Azerbaijan.

Azerbaijan to build an underground gasholder in Nakhchivan AR

Geology, geophysics and drilling specialists of the State Oil Company of Azerbaijan (SOCAR) have had exploration and research on Nakhchivan Gasholder Project.

The company said parametric wells will be drilled in Boyukduz and Givrag.
The company’s drilling unit has launched work in the allotted area. The design depth of the well is 1 400 meters. In accordance with the results of the first well, the gasholder infrastructure will be established in the area.

Azerbaijan oil and gas will reach Israel, India and China

For the first time, Azerbaijan will get an opportunity to deliver its oil and gas through a network of pipelines to the Far East over Israel, India and China.

Turkey and Israel have intensified efforts to effectuate a multipurpose five-lane pipeline that is slated to carry water, natural gas, oil, electricity and fiber optics from Turkey.

Energy and Natural Resources Minister Hilmi Güler, speaking after a meeting with Israeli Infrastructure Minister Binyamin Ben-Eliezer, said the €8 million feasibility study on the project will be completed within 10 months and that the construction is slated to take three years.

The original purpose is to bring Russian or Caspian resources first to Israel and then transfer them to India, China and even Taiwan from Israel’s Askhelon port using the country’s existing pipelines.
The oil and gas segment of the network will be an extension of Baku-Tbilisi-Ceyhan, Samsun-Ceyhan and Russia-Turkey gas and oil pipelines.

Israel will buy water from Turkey via this system.  “I have visited both Azerbaijan and Russia in order to seek resources for the project. We are very close to signing an agreement with Russia, one is a memorandum of understanding and the other is commercial. Azerbaijan is also very keen to the project and they especially want to use the oil pipeline,” he added. Turkish Minister said this route will be a shortcut to reach the Far East. “Carrying oil to India, Taiwan and the Far East using the current detour of Gibraltar and Cape of Good Hope takes 39-49 days. Our project will reduce it to 19 days,” he added.

Azerbaijan is predicted to achieve a 13% rise in electricity generation within 5 years to 25 billion kilowatts, said Marlen Asgarov, Vice-President of AzerEnerji. He added that the country produced 22 billion kilowatts of electricity in 2007. “Several power plants, including 750MW Power Plant in Shirvan, 104MW Power Plant in Guba and 50 MW Power Plant in Fuzuli are being constructed. The 300MWe power plant in Sangachal and Sumgait Power Plant will be launched this year. Besides, it is planned to build a 380MW plant in Tovuz, a 150MW plant on the Girdimanchay River and about 500 hydropower plants across the country. We are also undertaking new projects to upgrade the network so as to minimize power loss. 5 multi-fuelled power plants of 450 MW have been commissioned in Azerbaijan within one year and a half. Azerbaijan managed to eliminate electricity shortage and dependence on Russia,” he added. He also noted that a 45MW hydropower plant will be built in Ordubad, Nakhchivan.

An atomic power plant may be built in Azerbaijan after 2015, said Marlen Asgarov, Vice-President of AzerEnerji. He added that discussions with the International Atomic Energy Agency (IAEA) are underway on the issue.  “Atomic power plants are the future of Azerbaijan. Energy consumption is continuing to increase and we should find new sources to meet the needs,” he added. According to him, he idea of constructing an atomic power plant in Azerbaijan was first suggested in 1980s but works were suspended after Chernobyl disaster.

At present Azerbaijan’s total generation capacity is 5 500 MW.

Azerbaijan is returning 300 000 to 400 000 kilowatts of electricity a day to Turkey from Nakhchivan Autonomous Republic, said Marlen Asgarov, Vice-President of AzerEnerji.
He added that Nakhchivan owes Turkey 3.2 billion kilowatts of electricity or $157 million which was accrued since 1992. According to him, the switch of 87 MW and 50 MW power plants to run on gas allowed Nakhchivan to stop importing electricity from Turkey.

Azerbaijan will completely cover its electricity debt to Iran by October, said Marlen Asgarov, Vice-President of AzerEnerji.Iran supplied electricity to Nakhchivan Autonomous Republic in winter.
He added that Nakhchivan has been supplying 1.2 million to 1.4 million kilowatts of electricity since April to Iran a day so as to pay off its debt. “The debt is 140 million kilowatts now. We plan to fully “pay” off this debt by October,” he added.

The debt reached 258 million kilowatts in April.

Azerbaijan is drafting a program for the development of power energy sources and networks, said Marlen Asgarov, Vice-President of AzerEnerji. He added that the program for 2009-2015 will include the development of low and high-voltage power networks and other measures.

The final draft of the program will soon be sent to the Government for approval.

Azerbaijan’s Shirvan Thermal Power Plant generated 2.1 billion kilowatts of electricity in June, down 11% from June, 2007. AzerEnerji said the production was slashed after metering process and gas supply improved in the area. Shirvan Thermal Power Plant has been in operation since 1962.

Agenda of conference on oil & gas potential of Azerbaijan and Turkmenistan made public

The conference “Oil & gas potential of Azerbaijan and Turkmenistan: energy, economy, ecology and strategic cooperation” will be held in Baku on September 9-10 this year.

The agenda of the conference has been publicized. Spokesman for Azerbaijan’s Ministry of Industry and Energy Azer Mensimli told APA-ECONOMICS that First Deputy Prime Minister of Azerbaijan Yagub Eyyubov and Deputy Prime Minister of Turkmenistan Tachberdi Tagiyev will co-chair the conference. Azerbaijan’s Minister of Industry and Energy Natig Aliyev, Minister of Oil & Gas Industry and Mineral Resources of Turkmenistan Baymyrat Hojamuhammedow, director of Strategic Planning and Economic Development Institute of Turkmenistan, head of Turkmengaz State Concern and others are expected to address the conference. The conference will continue in sections “Global tendencies and development of world energy”, “Assessment of oil & gas resources of Azerbaijan and Turkmenistan, “Regional cooperation and development of oil & gas complexes. International and regional investment projects”, “Application of new technologies: economy, ecology, science and education”.
Representatives of foreign companies operating in Azerbaijan and Turkmenistan, international financial institutes and corporations will also participate in the event.

U.S. Coordinator for Eurasian Energy Diplomacy Steven Mann is also expected to attend the conference.

Azerbaijani specialists invent new device for purification of oil-polluted lands

MS-1, the new device for purification of oil-polluted lands invented by Director General of Ekol Engineering Services CJSC Soltan Aliyev and teacher of Azerbaijan Oil Academy Alimustafa Mustafayev, has been tested, Ekol Engineering Services CJSC told APA-ECONOMICS. The scheme and documents of the device were submitted to the State Agency for Standardization, Metrology and Patents for registration in December last year and decision was made about the invention. The agency presented patent certificate for invention # I 2008 0145 to Soltan Aliyev and Alimustafa Mustafayev.

BELARUS

Russia, Kazakhstan, Belarus need to negotiate energy transportation tariffs

Russia, Kazakhstan and Belarus should agree the energy transportation tariffs, Ambassador Extraordinary and Plenipotentiary of Kazakhstan to Belarus Bolat Iskakov told a press conference in Minsk on July 2 on the occasion of the 10th anniversary of Astana.

Bolat Iskakov said: “The issue concerning gas and oil transportation tariffs is pressing. Every year, starting from 2005, Kazakhstan pumps around five million tonnes of oil through Belarus. We can pump even more considering the capacity of the pipelines, including the Belarusian leg. If we, Russia, Kazakhstan and Belarus, agree the tariffs, then there will be no problems. Kazakh businessmen are interested in the markets, including in energy transit via Belarus. But they have to address the issue which is to negotiate with Russia where our pipelines go through.” According to the Ambassador, Belarusian and Russian partners can discuss transport logistics issues within the framework of the Union State.

Bolat Iskakov also said that Ukraine is considering pumping oil through the pipeline Odessa-Brody-Plock-Gdansk. Belarus can take part in this project. It is aimed at diversifying energy sources and routes which combine the basins of he Caspian and Black Seas and the Baltic Sea region.

02.07.2008 – TRENDAZ.COM

Belarus plans to double oil extraction in Venezuela to reach two million tonnes in 2009, First Vice-Premier of Belarus Vladimir Semashko said at a reception dedicated to the Independence Day of Venezuela in the Palace of Republic on July 8.

Vladimir Semashko noted that the Belarusian-Venezuelan relations are developing very rapidly. Over the two years, they made a significant move forward. According to the First Vice-Premier, the visit of President of Venezuela Hugo Chavez to Belarus in 2006 laid the foundation for the bilateral cooperation. In 2007, the Venezuelan leader came to Belarus for the second time. These visits fostered a vigorous dialogue between the states in all areas. But the turning point in the bilateral relations occurred when President of Belarus Alexander Lukashenko paid a visit to Caracas in December 2007. During this visit significant bilateral agreements were signed and what is most important, a joint enterprise on oil extraction was established.

“This joint venture is working ahead of schedule which attests to the successful implementation of this project on two oil wells. At present, we are planning to expand the extraction of oil in Venezuela,” Vladimir Semashko underlined.

09.07.2008 – TRENDAZ.COM

Russia’s Gazprom has warned Belarus it might go to court if Minsk fails to perform its obligations and pay for Russian gas.

Gazprom’s Board Deputy Chairman Alexander Ananenkov met with Beltransgaz Director General Vladimir Mayorov on Wednesday to discuss the situation.

The discussed “the performance of the contract for the supply and transit of gas in 2007-2011, focusing on the need to full payment for current Russian gas supplies to Belarus in strict compliance with the terms of the contract,” Gazprom said.

Under the contract, the price of gas for the republic since the beginning of the year has been calculated by the formula that is most comfortable for Gazprom’s gas supplies to the CIS and Baltic countries.

“During the meeting, Alexander Ananenkov said that if the Belarusian side continues to default on its obligations to pay for Russian gas in full, Gazprom reserves the right to appeal to court,” the company said.

16.07.2008 – ITAR-TASS.COM

 Azerbaijan’s President Ilham Aliyev and Georgia’s Mikheil Saakashvili participated in the ceremony of natural gas pumping to Batumi (Ajara).

Ilham Aliyev said the event, which he visited in Batumi today on the initiative if his Georgian counterpart, demonstrated current relations between Georgia and Azerbaijan.

Presidents visited the house of Sioridzes in Batumi, to which natural gas was first supplied.

Gasification of Ajara is expected to be completed today. Gas will be supplied by the State Oil Company of Azerbaijan (SOCAR).

“We implemented such an important project in a very short period and that proves our friendship. We are to supply gas to Georgia’s all remaining regions. We are expanding supply of Azerbaijan’s gas to Georgia,” said Aliyev. Saakashvili said gas and water supply to Batumi is the key priority for Georgia’s Government.

Hydroelectric Power Station to be Constructed on Kur River

Energy & Infrastructure of Caucasus company will construct a hydroelectric power station capable of 10 MWt on the Kur River. The agreement was signed between Energy & Infrastructure of Caucasus and Georgia’s Energy Ministry.

The station will be located 20 km of Tbilisi, its annual production to comprise 55mln KWt/hour.

After completion of construction, the company will be able to sell energy at its own discretion. It will also have right to independently set tariffs for its power.

Kazakhstan negotiates with Azerbaijan and Georgia to construct new oil pipeline

Kazakhstan has began talks with Azerbaijan and Georgia on the construction of new oil pipeline from Baku to Batumi port of the Black Sea, Timur Kulibayev, chairman of KazEnergy Association said to the special correspondent of TrendCapital in Astana. “Azerbaijan and Georgia support the project of construction new oil pipeline from Baku to Batumi,” Kulibayev said.

According to Kulibayev, some 10mln tons of Kazakh oil and oil from Tangiz field operated by the American ChevronTexaco are expected to be transported a year in the first stage.

Today Kazakhstan is studying the possibility of using the capacity of Baku-Supsa oil pipeline operated by the Azerbaijani International Operation Company led by BP, he said.

The light oil of Azerbaijan produced from Azeri-Chirag-Guneshli field (operated by BP) was transported through Baku-Suspa pipe until autumn of 2006. The oil transportation through the pipe was suspended in autumn 2006 because of repairs. The repairs on the pipe have already ended. At present, Baku-Supsa pumps Azerli Light Oil.

The length of Baku-Supsa makes up 827km with capacity of over 6mln tons a year.

Khudoni Hydropower Project

The study proposed Khudoni Hydropower Project (HPP) is underway with financing from the Government of Georgia and the International Development Association (IDA Grant No: H4204-GE).

Studies for the proposed project include: a technical and economic feasibility study of the  Khudoni HPP being carried out by a Swiss company Colenco Power Engineering/Stucky; the environmental and social impact assessment of Khudoni HPP is being carried out by a French-Italian Consortium BRL Ingenierie/ARS Progetti; and a strategic environmental impact assessment is being carried out by a Serbian company SEEC.

The Ministry of Energy of Georgia has received the Phase I screening report on environmental and social impact assessment of the Khudoni HPP from BRL Ingenierie/ARS Progetti, which is the report prior to developing the full environmental impact assessment and the resettlement action plan that would be needed should a decision be made to build the hydropower plant. Furthermore, the Ministry has received the strategic environmental impact assessment of Khudoni HPP from SEEC, a report that places Khudoni in the context of other power supply alternatives.

The Ministry of Energy of Georgia publicized the above mentioned reports through posting on the Ministry's web page on July 1, 2008, and invited public opinion on them.

The Ministry of Energy of Georgia will hold public consultations on the studies for the proposed Khudoni HPP project on July 28-31, 2008, with the population of Samegrelo - Zemo Svaneti region and other interested parties, according to the following schedule:

-Tbilisi - Thursday, July 31 at 16:00, Ministry of Energy of Georgia.

Paper copies of the reports are available for viewing at the Ministry of Energy (2, Baratashvili Street, V Floor) and at the locations specified above for the upcoming public consultations. Electronic versions are posted on the Ministry's official web page: http://www.minenergy.gov.ge/.  The Ministry welcomes comments from the public by August 8, 2008.

For additional information please contact Mr. Givi Kiknadze at the Ministry of Energy of Georgia at telephone: 91 92 81 or via e-mail at: "Givi Kiknadze" givi.kiknadze@minenergy.gov.ge.

JSC ENERGO-PRO Georgia successfully completed individual re-metering project

Shida Kartli Branch of JSC ENERGO-PRO Georgia completed individual re-metering in Gori and Khashuri. European standard modern meters were installed to 21600 customers of the company.

JSC ENERGO-PRO Georgia successfully completed individual re-metering project. In frames of the project company individually re-metered 126 099 customers. Project investment amounted GEL 32 mln.

29% of the total number of EPG customers can exploit modern European standard meters. In frames of re-metering project ENERGO-PRO Georgia re-metered cities: Jvari, Gori, Akhaltsikhe, Lanchkhuti, Chiatura, Tskaltubo, Poti, Kutaisi, Kobuleti, Dusheti, Tkibuli.

Metered customers will be able to monitor and control their electricity consumption as well as consumed electricity costs. Re-metered customers are placed into billing database and are billed corresponding to their individual meter readings.

In the end of 2007 after the completion of 1st and 2nd stages of individual metering project total of 120566 customers had been re-metered in cities:  Zugdidi - 14714, Tsalenjikha - 2514, Poti - 10927, Ozurgeti - 6840, Kutaisi - 38741, Samtredia - 10528, Zestaponi - 9829, Sachkhere - 2148, Mtskheta - 2724, Zahesi - 2071, Digomi - 2283, Zhinvali - 1095, Bolnisi - 3321, Borjomi - 5483, Akhalkalaki - 3104, Gori - 2063, Khashuri - 277 and Terdjola – 1904.

Re-metering process was preceded by intensive grid rehabilitation activities; transformer points were repaired, old wooden poles were replaced with reinforced concrete ones, underground cable system was renewed and repaired, new transmission lines stretched.

At present JSC ENERGO-PRO Georgia is drafting next individual re-metering project, pursuant to which additionally 60 000 customers will be individually re-metered in 2008-2009.

15.07.2008 – ENERGO-PRO GEORGIA

Kazakhstan has joined the World Petroleum Council (WPC), Interfax reported July 1 with reference to KazEnergy association of oil, gas and energy companies of Kazakhstan.

The membership in WPC provides the maximum access to update information on the latest worldwide research, technological discoveries and achievements in the gas and oil field as well as to the current data related to production, technology and economy, KazEnergy announced in the statement.
Joining WPC will boost the status of oil industry of Kazakhstan, secure new agreements on the international cooperation and could be regarded as another move towards improving the country’s image worldwide, KazEnergy specified. Kazakhstan has joined WPC during the World Petroleum Congress that is currently held in Madrid and that will last until July 3.

Victoria Oil & Gas Plc announces an update concerning its West Medvezhye ("West Med") gas and gas condensate field in Western Siberia, Russia and Kemerkol oil project in the Atyrau Oblast of Kazakhstan.
The Company has received a certificate from the Russian Ministry of Natural Resources confirming registration of a discovery at the West Med field for Well 103. This certificate completes the requirements for conversion of the West Med exploration licence into its 20 year production phase.
Exploration around the location of the next target, Well 105, is continuing with a reinterpretation of the existing seismic and the new data obtained from the drilling of Well 103 being undertaken by local geological institute SibNats. A geochemical survey has also been completed to evaluate further potential target areas around the location of Well 103. This new exploratory data will be combined with a Geospectra IPDS passive seismic survey to be attempted by GeoDynamics Research when the conditions allow. Commenting today, Chairman Kevin Foo said, "This official certification confirms the recognition of Victoria’s successful fulfilment of its exploration licence obligations for West Med by the Russian authorities. The initial work by the local geological institute has revealed some intriguing new potential close to Well 103 and so we look forward to GeoDynamics’ further appraisal."

Victoria’s Kazakh subsidiary, Victoria Energy Central Asia LLP ("VECA"), has temporarily suspended production from Kemerkol pending resolution of the legal claim against VECA, which was reported in the Company’s announcement on 25 April 2008. An initial hearing at the local economic court upheld the claim against VECA. The Company and its Kazakh legal advisors believe that this decision contravened several precepts of Kazakh legal and procedural practice. The appeal courts in the Atyrau Oblast have declined to revisit the claim against VECA and the appeal will therefore now be taken to the Supreme Court of the Republic of Kazakhstan.

MangistauMunaiGas more than doubled its Q1 profit

MangistauMunaiGas generated a net profit of 52.655 billion tenge ($440 million) in the first three months of 2008, the company said in a press release published on the website of the Kazakhstan Stock Exchange (KASE). In the same period last year, the company earned 23.99 billion tenge (200 million).

The revenue earned in the first three months was 160.799 billion tenge ($1.34 billion) compared 110.808 billion tenge ($0.92 billion) in the same period last year, while the costs were 74.752 billion tenge ($640 million) and 64.519 billion tenge ($540 million), respectively.

MangistauMunaiGas is a large oil producing company in Kazakhstan incorporated in 1995. In June 1996 the company received licenses from the Kazakh government to produce hydrocarbons at the Asar, Burmasha, Kalamkas, East Zhetybai, Alatobe, North Asar, Zhetybai, Oimasha and South Zhetybai fields.
As at October 1, 2007 the majority of ordinary shares of MangistauMunaiGas were owned by Central Asia Petroleum Ltd, a Jakarta, Indonesia registered company. On December 2005, KazMunaiGas, the Kazakh national oil company signed an agreement with MangistauMunaiGas to acquire a majority stake in the company.

Kazakhstan urged a Chevron-led oil venture on Wednesday to work out a way to lock up its vast open-air sulphur stocks in an indoor facility by 2010.

The authorities have long accused the Tengiz oilfield project of making slow progress in removing open air sulphur stocks. A court slapped a 74 billion tenge ($609 million) fine on Tengizchevroil last year but the fine was later halved.

Raushan Sarmurzina, a senior Energy Ministry official, told reporters the ministry had put forward its demands "in a strict manner".

"By 2010 all the sulphur must be stored in a storage facility if it's not sold by then," she said. "It's our goal and we've put forward this question in a strict manner."

The oil from Tengiz contains toxic hydrogen sulphide which is processed into huge piles of inert yellow sulphur and stored near the oil wells before the crude is transported by pipeline.

The Tengiz venture also includes Exxon Mobil LUKOIL and Kazakh energy firm KazMunaiGas [KMG.UL]. The venture has challenged Kazakh accusations, saying it was not violating ecological legislation.

"First of all we think that at the moment we are storing the sulphur in a proper way," Murat Mynbayev, a Tengizchevroil official, told reporters. "As for 2010, we have no information about that."

He added his company was working on various ways of storing sulphur indoors and planned to cut stocks significantly by 2017.

Kazakhstan takes much interest in the oil transportation via the Baku-Supsa oil pipeline, running through the territory of Azerbaijan and Georgia to the Black Sea terminal in Supsa, Latif Gandilov, the Azerbaijani ambassador to Kazakhstan state in Baku.

The light oil of Azerbaijan produced from Azeri-Chirag-Guneshli field (operated by BP) was transported through Baku-Suspa pipe until autumn of 2006. The oil transportation through the pipe was suspended in autumn 2006 because of repairs. The repairs on the pipe have already ended. At present, Baku-Supsa pumps Azerli Light Oil.

The length of Baku-Supsa makes up 827km with capacity of over 6mln tons a year.

According to Gandilov, Kazakhstan is also considering the construction of a new oil pipeline from Baku to Batumi port in the Black Sea.

Earlier, Timur Kulibayev, chairman of KazEnergy Association made similar statement in talks with the special correspondent of TrendCapital in Astana. Some 10mln tons of Kazakh oil and oil from Tangiz field operated by the American ChevronTexaco are expected to be transported a year in the first stage.

KazMunaiGas to buy stake in Kazakh oil firm

Kazakh state oil firm KazMunaiGas [KMG.UL] said on Wednesday it would buy a controlling stake in local oil company MangistauMunaiGas (MMG).

"KazMunaiGas has reached an agreement with Central Asia Petroleum (MMG shareholder) ... to buy a controlling stake in MangistauMunaiGas," KazMunaiGas said in a statement.

KazMunaiGas's London-listed subsidiary KazMunaiGas E&P has previously said it would be interested in eventually acquiring the company.

MangistauMunaiGas, owned by Indonesia-based Central Asia Petroleum, is based in the Kazakh oil town of Aktau. Its residual oil reserves are 812 million tonnes, including 194 million tonnes of extractable reserves.

Petrolinvest halves 2008 extraction target-paper

Polish oil company Petrolinvest PROL.WA nearly halved this year's oil extraction target due to delays in drilling operations, its chief executive was quoted as saying on Friday.

Pawel Gricuk told Parkiet daily the company will be able to extract 2,000-3,000 barrels of oil daily by the year end, down from 5,600 promised earlier.

Petrolinvest, controlled by Polish tycoon Ryszard Krauze, is searching for oil in a series of potentially lucrative Kazakh oil fields. It is awaiting the completion of a deal to expand its presence in Kazakhstan.

Despite record-high oil prices exceeding $140 per barrel Petrolinvest shares have lost over 43 percent since beginning of 2008 and closed on Thursday at 185.00 zltoys.

The Federation Council has ratified a Russian-Kazakh intergovernmental agreement signed on October 3, 2006, which provides for cooperation in the creation of a joint venture between Gazprom and KazMunayGas. The new company is to be established on the basis of the Orenburg gas processing plant. The joint venture is expected to buy raw gas produced in Kazakhstan's Karachaganak gas condensate field, process it at the Orenburg plant, and sell it on the Kazakh market, as well as export it through Gazprom.

On working meeting between Alexey Miller and Serik Burkitbayev

The Gazprom Headquarters hosted today the first working meeting between Alexey Miller, the Chairman of the Gazprom Management Committee and Serik Burkitbayev, the new President of the KazMunaiGaz National Company.

The parties emphasized the efficiency of cooperation between Gazprom and the KazMunaiGaz National Company and expressed theit confidence in further strengthening of the bilateral relations.

The meeting underlined the importance of the joint projects implementation along the entire value chain. The parties discussed the progress in creating a joint venture based on the Orenburg Gas Processing Plant.

The special attention was paid to conducting a joint marketing policy through the united export channel provided by the Russian-Kazakhstan joint venture KazRosGaz. The performance of KazRosGaz was evaluated positively, the requirement was declared to further develop the company.

The meeting also addressed a set of measures aimed at expansion and modernization of the Central Asia – Center gas trunkline system.

Chevron says Kazakhstan exempted venture from oil export duty

Chevron Corp.'s venture in Kazakhstan said the government granted it an exemption to a new duty on oil exports more than a month before the tax came into effect.

TengizChevroil LLP has the right to ``freely export its crude oil and other hydrocarbon products including sulfur'' under its original 1993 production-sharing contract, the Atyrau- based venture said in an e-mailed statement today.

``Accordingly, the government excluded TengizChevroil from the recently introduced export duty in its resolution 328 dated 8 April 2008,'' the company said, adding that it ``appreciates Kazakhstan's commitment to respecting the sanctity of contracts.''

The government's export tax of $109.91 a metric ton of oil, or about $15 a barrel, was extended to 38 producers when it came into force on May 17. The Central Asian country, which has 3.2 percent of the world's proven crude reserves according to BP Plc, is seeking a greater share of profit from high commodity prices by imposing new taxes on output and export.

Deputy Finance Minister Daulet Ergozhin said yesterday that the government is considering imposing the crude export tax on TengizChevroil. Karachaganak Petroleum Operating BV, the Kazakh oil venture of BG Group Plc and Eni SpA, paid 10 billion tenge ($83 million) in export taxes, he said.

Ministry of Energy advises increased oil deliveries to home market to reduce prices of oil

The Ministry of Energy and Mineral Resources considers it necessary to increase oil deliveries to home market to reduce prices of mineral oil. The Minister of Energy and Mineral Resources, Sauat Mynbayev, informed at the government session.

“On Thursday we will gather all subsoil users and before autumn-field works we will try to increase oil deliveries to home market,” S. Mynbayev said in reply to a question of Kazakhstan Prime Minister, Karim Masimov, what measures the department plans to undertake in connection with price increase of mineral oil. During the meeting with subsoil users price parameters of black oil will be coordinated. “Preparation for a cold season has begun. Price for black oil has grown significantly and has come nearer to the export prices, Russian prices,” the Minister explained.

Abu Dhabi government-owned International Petroleum Investment Company (IPIC) and Kazakhstan have agreed to launch a $1 billion fund to invest in energy and other sectors, the company said on Monday.

“The fund, named Al Falah Fund, will mainly see the financing of investments in oil and gas and the energy sector, as well as other sectors, including infrastructure,” Mohamed Al Khaja, IPIC manager of research and development told Dow Jones Newswires.

IPIC and Kazakhstan will each provide $500 million for the fund, which would have a broad array of investments.

The Abu Dhabi-based company already has been in the running to partner with Kazakhstan in developing a $5 billion petrochemical project near Atyrau.

IPIC said last year it planned to increase its investment portfolio to $20 billion from $11 billion over five years and was eyeing deals in the Caspian Sea region.

“The Falah Fund investment positions Ipic at the core of the CIS, with partners who already know the territories and the opportunities in this resource-rich, relatively undeveloped region,” Ipic said yesterday.

Earlier this year, Kazakhstan’s Kazyna Capital Management, a government sponsored private equity institution announced the formation of a $1 billion Kazyna CIS Energy Fund together with Ithmaar Bank, a Bahrain-based investment bank. This fund is also expected to target Kazakhstan’s and the CIS’s burgeoning energy sector.

Agip KCO plans to conduct on July 22 in Atyrau a public hearing on earth plot presentation for the next phase of exploring Kashagan, which comes after its experimental-industrial deploy (EID). A full scale phase of development (FPD) - is the third one after exploration and EID.

By 2015, when in Kashagan the EID will be completing, operational company is intended to get up to 21 million tons/year of commercial oil, 44,4 million of cubic meters of gas a day, out of which 29,6 million will be pumped in immediately backwards into the stratus, and 14,8 million tons a day on the networks of underwater pipelines will be delivered to "Bolashak" at Karabatan.

Principles of FDP: Document titled Preliminary Assessment of Environment Impact (PAEI) is attached to the worked out on this issue Declaration on intentions. It is a huge pile of documents. So let's discuss the main parts of it.

"Agip KCO expects from FPD, that maximum sustainable level of oil extraction will make up for 56-70 million tons of oil a year (1.2-1.5 million barrels/day)". And it is in case of the simultaneous effective mutual usage of other assets of the Northern Caspian project - operations of oilfields Kairan, Aktoty and Kalamkas-sea. Company on sea block of the FPD, suggests that the scheme will not change principally during the FPD: also as by EID, on not big artificial islands autonomous systems for oil collection will be located, from which received fluids (oil, water, hydrogen sulphide etc.) will be pumped on small pipelines for bigger sea exploitation-technological complexes (ETC).

At ETC fluids are separated, the received oil is stabilized and then pumped over to a shore for the further on separation."

There is one more interesting line: "Alternative technological concepts may reduce the volumes of gas and sulfur." But there are no details for this line.

As for sulfur concerned Agip KCO plans that, under the level of extraction of 56-70 million tons oil/year "under the worst scenario" the level of sulfur production will make up 5700 tons a day, that is over a year at Karabatan about 2 million tons sulfur could be produced.

On terms with Kazakhstan Agip KCO has a right to store up to 4 million tons, and later on sulfur will be stored "under the adequate system at the relevant area beyond the ground of "Bolashak."

However, a location for sulfur storage at the territory of the country is not identified. The company pledges vaguely, that "variants for increase of domestic demand for sulfur are examined, namely, in the construction and agriculture fields."

The Italian company Eni has its own up-to-date know-how or patent on sulfur, which the company intends to use actively.

Kazakhstan may impose an oil export duty on a Chevron-led oil venture in the Central Asian state, a government source said on Wednesday. Kazakhstan introduced the duty, set at $109.91 per tonne at the current global price level, in mid-May in a first such measure since Kazakhstan gained independence in 1991, but said it would not apply to major projects.

This month a group developing the Karachaganak gas field became the first Western entity to fall under the rule.

On Wednesday, the source told Reuters the government now wanted to apply the duty to Chevron's Tengizchevroil venture developing the huge Tengiz oilfield in the Caspian Sea.

"At the moment lawyers are examining legislation over whether or not we can impose the duty," he source said.

"We have not decided on Tengiz yet. ... At the moment the lawyers do not have a clear vision on this. We do not just impose something, we look at the law first."

The government said originally the duty would not affect big groups such as Karachaganak or Tengiz because of the legal nature of their contracts with the government.

But later officials hinted that Kazakhstan wanted a universal duty for all producers to broaden budget revenues.

Energy Companies of Central Asia Developing Methods to Improve Power Transmission in Region

Representatives from energy companies of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan assembled in Almaty on 30 and 31 July to discuss a regional model of power transmission, the US Agency for International Development (USAID) Regional Office said.

“The meeting was organized by the USAID Project on creation of regional model of power transmission network (CARTRANS), which is realized by the US Energy Association for planning and improvement of power flows over the region,” the press release reported.

Creation of computer model of Central Asia’s high-voltage network, which is being developed with the assistance of USAID, will enable the countries of the region to plan and manage more efficiently the power flows among participant-countries. The model will be launched in October 2008.

The Central Asian system of power transmission includes national energy systems of Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan, as well as, the south of Kazakhstan. This system, which was established in the Soviet period, assumes dependence of the countries on one another and requires joint planning of energy flows.

“The joint model of the regional energy network will inform on capacities of power transmission at each sector of the system, Sergey Yelkin, a USAID power engineering specialist, said. It will enable the national planning organizations to optimize the quantity of transmitted energy and to reduce the number of electricity cutoffs, especially in Kazakhstan, Kyrgyzstan and Tajikistan.

Similar regional models on planning of energy transmission have been established with the assistance of the USAID in the Black Sea region, including Armenia, Bulgaria, Georgia, Moldova, Rumania, Turkey and Ukraine.

“This model assists the participant-countries to determine priority investment in energy system. For example, Georgia plans to expand electricity transmission network for transit of excess electricity from Azerbaijan to Turkey. Expansion of the network will give birth to a new income source for Georgia and ensure its access to electricity during power shortages in the country,” Will Polen, the manager of the USAID project, said.

CARTRANS is one of numerous projects of the USAID in the Central Asia, which have been possible because of the American nation’s aid. The US people have allocated more than $1.5bln through the USAID to the program on development of democratic institutions, health, education and economy in the region since 1992.

Public debates on hydropower sector management intensify in Kyrgyzstan

As inflation for food and energy is rising by the month, public debates about the government’s ability to handle the worsening economy are becoming ever more common in Kyrgyzstan. Local civil society groups and journalists voice concerns over the course of privatization of the country’s key hydropower sites. Newspapers publish their ideas about how the national government could alleviate the situation, while the political opposition accuses the ruling regime of distancing itself from the population’s needs. Concern about the rapidly rising costs can be heard across the country.

Electricity rates increased by 13 percent yet again in June, now reaching 0.7 soms per kWh (roughly 2 cents) and will continue to rise in the coming months to 0.94 soms (2.6 cents). In July monthly tariffs increased to 500 soms ($14) per gigacalorie (Delo nomer, June 4). In total, together with other utility costs, a family of four people will have to pay roughly 1,400-1,500 soms ($14) during the winter months. Although by regional comparison electricity tariffs are relatively low in Kyrgyzstan, the cumulative sum for energy consumption is high by local standards and is almost 30 percent higher than last year.

The continuing public debate has, however, not yet led to greater transparency in the privatization process or allowed the political opposition to take part in public debates. There is, in fact, little or almost no debate even in parliament. Furthermore, professional opinions about the processes in the hydropower sector are rarely made public. The public is still unaware whether and how the government will privatize Kambarata-1 and Kambarata-2 hydropower plants. It is still unclear whether the Kyrgyz government will retain its control share in these two sites or turn them over fully to foreign investors.

The Kyrgyz government defines the Kambarata projects as strategically important for the national development but fails to disclose details of the costs for their construction, potential investment risks, costs for production, and, finally, the projected impact on the national economy.

The increase in energy rates will be felt most acutely in the fall when the population will need to bear both inflation for food prices and energy costs. The government, in turn, is expecting social tension and mass demonstrations. Kyrgyz President Kurmanbek Bakiyev has already cushioned himself against political tension by appointing his brother Zhanysh Bakiyev to head the National Guard and by substantially increasing pay to interior armed forces.

Kyrgyz electric power is to be exported to Kazakhstan since July 15, Kazinform reports. It will cost 4.5 US cents for 1 Kwt/h without VAT and be exported until August this year.
According to "Electricheskiye stantsii" JSC ("Electric power stations") press service, the export volume will be minimal of 500 mln kWt/h due to water deficiency this year. Kyrgyzstan could not refuse to sell electricity because it’s the main source of income to purchase fuel for the Bishkek power station.
The export has started for the irrigations in neighboring countries as well as the repair of high-voltage lines between south and north of Kazakhstan. The electric power will be exported under the contracts between the Kyrgyz and Kazakh power companies for the two countries could achieve neither bilateral nor quadrilateral agreements on this issue.

Kyrgyz President warns of fuel shortage, winter power cuts

President Kurmanbek Bakiyev visited the Alemedin hydroelectric power station No. 5 today. He arrived there to see for himself that the station was operating successfully. Four years have passed since it became a private company.

Even though small hydroelectric power stations do not resolve all the problems of Kyrgyzstan's power generation sector, they will anyway facilitate the tasks of large power stations, such as Kambar-Ata 1 and Kambar-Ata 2. The president's confidence in this has become stronger today after visiting one of the small hydroelectric stations. The Alamedin hydroelectric power station used to generate electricity that was enough to supply whole Chuy Region during the Soviet times. Today the station is unable to supply with electricity even Bishkek because population has increased too much. In connection with the huge consumption of electricity, it was decided to sell hydroelectric power station No. 5 to private ownership in the hope that the station would work better in this case. This has come true today.

Small hydroelectric power stations have shown their efficiency in practice. They are supplying with electricity reliably and without interruption. Why have we opted to support small hydroelectric power stations? Life itself is forcing us to opt for this. Kambar-Ata 1 and Kambar-Ata 2 and so and so forth, which we are building, are certainly large hydroelectric power stations. However, if we apply our potential to small and medium-size hydroelectric power stations along with large hydroelectric power stations, this will yield good results. We should opt for this. Why should not we use it, insofar as they need little spending and their efficiency is very high? The fact that private investors are coming there should not cause fear. It is competition and a market. Moreover, in any case the government has a certain portion of control there. In other words, we must bring about our country's energy self-sufficiency and to ensure its energy security. This is a global problem today.

The president said that cold winter made itself felt this year. There was the unprecedented lowest temperature in January and as a result, the highest electricity consumption. Equipment at all energy facilities operated at full capacity.

It is necessary to lay in coal supplies. Schools should be switched to using coal because I do not guarantee that electricity will be enough to supply everybody. It is necessary to begin making preparations right now. If someone thinks that the winter will be the same as last year, one will be mistaken. This winter will be very difficult. There will be electricity cuts.

Termocom has no resources for run-up for heating season

Chisinau. The Termocom’s readiness for the heating season is the poorest for the last ten years, Director General of this enterprise Antocel said at a sitting of a respective Government Commission on Tuesday.
He remarked that 48% of pipes were replaced. The Director explains this fact with the illegal decrease of the tariff from 540 lei to 436 lei per 1 gica-calorie by the Chisinau municipality and the Chisinau Municipal Council.
In his words, the Government did not allowed using for the repair of pipes the financial resources, designed for settlement of payments with TPS-1, TPS-2, Moldovagaz, in order not to create a situation, which would be dangerous for the country’s energy system on the whole.
The Termocom’s current indebtedness to the energy enterprises constitutes  250 million lei, whereas the municipality owes 217 million lei to Termocom in the form of subventions.
Antocel thinks that the final judicial decision on Termocom’s conflict with the Chisinau municipality will be taken only by September-October. He considers that it is possible to settle a dispute with the municipality with the help of a mediator and the World Bank (WB) supports this proposal by the Termocom Administrator and the Council of Creditors on selecting an independent expert in the search of a compromise variant for all the sides.

01.07.2008 – WWW. INFOTAG.MD

Voronin: Moldova to stay in GUAM

Moldova is not entertaining the idea of leaving the Georgia, Ukraine, Azerbaijan, Moldova (GUAM) regional organization Moldovan President Vladimir Voronin said on July 8. “Just the opposite, we want GUAM to operate more efficiently to solve social ans economic issues within its framework and continue our work in that direction,” the newspaper Kommersant quoted Voronin as saying.
The Moldovan president also said that the organization “doesn’t have a reliable economic component,” and criticized its decision to form a peacekeeping capacity. Voronin did not attend the recent GUAM summit in Batumi, sending the Moldovan Interior Minister instead. He has repeatedly expressed doubt over the direction the organization is heading, prompting speculation that Moldova may soon withdraw its membership.

E.ON Russia power appoints new chief executive officer

Sergei A. Tazin (46) will be the new Chief Executive Officer of E.ON Russia Power, thus completing the management team of E.ON’s new market unit in Russia. Together with Bernd Dubberstein, Sebastian Eisenberg and Frank Siebert, Mr. Tazin will be responsible for integrating the OGK-4 power station network into the E.ON Group. Mr. Tazin studied electric power engineering in the United States. He has long-standing management experience in the energy industry. After starting his career at General Electric Power Systems, he assumed various managerial posts in the energy industry in Russia, Kazakhstan and Ukraine. For instance, from 2005 to 2007 he was Chief Executive Officer of LLC EuroSibEnergo, a branch of Russia’s largest independent energy supplier entrusted with managing the power station capacities. Mr. Tazin’s last post from July 2007 onwards was that of Executive Managing Director and Deputy CEO of the Russian energy company OJSC OGK-3. E.ON Russia Power GmbH was set up in 2007 for the purpose of expanding E.ON AG’s business activities in Russia. In September 2007, E.ON Russia Power acquired a 76.1 % stake in the Russian electricity supplier OGK-4. This stake was later increased to 76.6 %. OGK-4 covers about 6 % of total electricity sendout in Russia.

Transmeridian exploration acquires additional interests in Russia

Transmeridian Exploration Incorporated (AMEX:TMY) today announced that it has strengthened its position in Russia's Dagestan region with its acquisition of both a second field and an undrilled anticline in trend with its Gasha Field. The company has concluded negotiations with its partners in DNK LLC ("DNK") on the joint operations of its properties in the region and signed a joint operating agreement. The agreement calls for an initial work program which includes a 200 square km 3D seismic program as well as re-entry of four wells and drilling of two new evaluation wells. The company, through a wholly owned subsidiary, owns a 50% interest in DNK, which has acquired the 125 sq km Selli License containing both the Selli Field and the Ullu Chai anticline. The License is immediately adjacent to DNK's Gasha License, both of which are located onshore in the Republic of Dagestan, an autonomous region within Russia located along the northwestern Caspian shoreline. Gasha and Selli Fields are part of a prolific oil and gas trend of anticlinal fractured carbonate structures discovered in the 1950s and developed to the extent that the technology of that era allowed under Soviet field development practices.

The Gasha and Selli Fields were active during the Soviet era from 1957-1976 and are located close to existing oil and gas pipeline infrastructure and transportation networks, which should allow for low cost access to internal and export markets for the gas and light sweet oil produced from the fields. The complexity and difficult drilling conditions presented by the geological formations encountered in the area discouraged the Soviets' interest in these fields. In spite of the limited drilling and technical tools available, the Gasha and Selli Fields each produced about 3 million barrels of oil and 4.4 BCF of gas, from 8 wells and 17 wells, respectively. Oil and gas shows were encountered in the overlying Mycop section during drilling of both fields, with limited testing resulting in oil flows, but no development works were made in these shallower intervals, nor were any resource values recorded in the field reserves for these intervals.

Lundin Petroleum announces major oil discovery in Russian Caspian Sea

Lundin Petroleum AB announces that its Morskaya-1 exploration well in the Lagansky block, situated in the northern Caspian Sea has encountered a major oil accumulation in the Aptian and Neocomian sandstone reservoirs. Minor amounts of gas were encountered in the overlying Albian reservoir. Morskaya-1 has been drilled to a depth of 2082 metres in a water depth of less than two metres. A significant amount of cores, wireline logs and reservoir fluid samples have been acquired. The forward program this month involves the testing of at least two of the hydrocarbon bearing reservoirs.
The Morskaya structure straddles the licence boundary of the Lagansky block and the adjoining acreage controlled by the Caspian Oil Consortium and is on trend with several major oil and gas discoveries made by Lukoil in the Russian sector of the Caspian Sea.

The Lagansky block contains significant additional prospectivity and following the testing of the Morskaya-1 well the Marine Drilling Complex (MDC) will be transported to the Laganskaya-1 well location, where drilling is expected to commence at the end of September.

Lundin Petroleum plans to drill another two wells in 2009. Petrovskaya-1 will be targeting a large anticline to the north-west and on trend with the Morskaya discovery. The second well will most likely be an appraisal well of the Morskaya discovery. Lundin Petroleum currently has a 70 percent interest in the Lagansky block. Gazprom has a call option to acquire a 50 percent plus one share in the Lagansky block. Lundin Petroleum has a cal l option to acquire an additional 30 percent from minority shareholders. If both options are exercised Lundin Petroleum will retain 50 percent minus one share in the Lagansky block and Gazprom will hold a 50 percent plus one share in the Lagansky block.

Oil giant BP says it is suing Russian partners in TNK-BP

British oil giant BP is suing its Russian partners in TNK-BP, it confirmed Sunday, amid growing rifts in the joint venture, the AFP reported.

A company spokesman confirmed to AFP that the action against Russian shareholders AAR over an alleged debt worth around 370 million dollars (236 million euros) would be heard at the High Court in London. He declined to comment further but in Moscow, AAR's chief executive Stan Polovets said in a statement: "We are very surprised that, instead of trying to resolve this matter through dialogue, BP has turned to the British courts with a claim that is grossly inflated."

Polovets also charged that BP was unwilling to treat AAR, which consists of Alfa Group, Access Industries and Renova, as an equal partner and accused it of mismanagement. BP is battling AAR over control of the venture -- Russia's third-largest oil producer -- and relations between the two have hit serious problems in recent months.

Last week, Russian newspapers reported that foreign managers at BP could be forced to leave the country within days due to problems renewing their visas. And in June, AAR said the election of a new board of nine directors -- four appointed by AAR and five by BP -- was "illegal".

The dispute is being closely watched as an indicator of how foreign investors will fare in President Dmitry Medvedev's Russia. It is also playing out against a backdrop of cool relations between Britain and Russia over issues including the 2006 death by poisoning in London of ex-spy Alexander Litvinenko and Russia's refusal to extradite the man wanted by British authorities over the case.

Russian gas export monopoly Gazprom will start buying Libyan oil and gas and invest in the construction of a pipeline to and from the country to Europe, CEO Alexei Miller said on Wednesday.

"The Libyan side has positively appraised Gazprom's offers for the purchase in the long term of all volumes of oil, gas and hydrocarbons intended for export from Libya, at competitive prices," Miller said after meetings with Libyan President Moamer Gaddafi, the dpa reported.

Gazprom also agreed to set up a joint refining venture with Libya's National Oil Corporation.

Former President Vladimir Putin was believed to have laid the groundwork for the deal in a visit to Libya in April.

RIA Novosti: Gazprom is raising prices... for everybody!

On July 8, Gazprom CEO Alexei Miller reported his company's plans to Prime Minister Vladimir Putin. He spoke about a steady, long-term growth of gas prices for all consumers, be it in Western Europe, next-door neighbors, or at home, reported RIA Novosti.

Miller specified that by the end of this year, the average European price for gas will exceed $500 per 1,000 cubic meters compared with the current price of US $410. Gas will become more expensive for Gazprom as well. The Russian gas monopoly is buying large amounts of gas in Central Asia (Turkmenistan, Kazakhstan, and Uzbekistan), and then reselling it at a profit, mostly to Ukraine. This year, its main Central Asian supplier, Turkmenistan, is selling gas to Gazprom at an average price of US $140 per 1,000 cubic meters, while Gazprom is reselling it to Ukraine for US $179.5 per the same amount.
But starting with next year, the Central Asian countries will want to at least double their prices to Gazprom, which will bring them closer to European prices. Next year, Gazprom may have to pay US $280-$300 per 1,000 cubic meters of Turkmen gas. Gazprom's CEO told Putin that he considers this position justified. He said that it is important for Russia to keep its Central Asian partners interested in selling gas to it in order to prevent the implementation of alternative gas supply projects which could bypass Russia, like the Trans-Caspian or Nabucco gas pipelines. Miller said that Gazprom is planning to buy gas from Azerbaijan, and in the future, even from Iran with a view to reselling it elsewhere.
If Gazprom comes to terms with its Central Asian partners on average European prices, it will resell it to Ukraine for much more than it does now, maybe for US$400 or even more per 1,000 cubic meters. Ukraine is still hoping for a gradual price increase to the European level over the next four years, but this is not likely to happen. Having told the prime minister about successes at home, Miller switched to Gazprom's favorite subject of equal revenues from domestic and foreign gas supplies. Today the domestic gas prices for industrial consumers in Russia are five times less than in Europe. The government wanted to increase these prices by 25% a year in 2008-2010. The state-regulated price was supposed to reach the "equal-netback" level on January 1, 2011. In other words, Gazprom's profits from domestic industrial consumers were supposed to match those produced from sales at average European prices.
But last spring, the Ministry of Economic Development was shocked to realize that gas prices at home would double in 2011 over 2010, if the "equal-netback" principle is applied. Therefore, last April the government ruled that gas prices in 2011 may grow by only 40% over 2010.
But during this meeting with the prime minister, Miller said, without batting an eye, that the "equal-netback" principle will operate from January 1, 2011. When gas prices were discussed in April, Putin was president and could not correct Miller on this point. But he emphasized right away that gas price regulation for the population will be preserved indefinitely after 2011 as well. Regardless, it is clear that prices will only be going up.

UAE's Dolphin shortlists 3 firms for gas pipeline

The United Arab Emirates Dolphin Energy has shortlisted three companies for the construction contract for a gas pipeline to link the capital Abu Dhabi with the east coast emirate of Fujairah, Dolphin said on Sunday, Reuters reported.

Greece's Consolidated Contractors International Co, Russia's Stroytransgaz and Italy's oilfield company Saipem were the three companies left in the running for the contract, Dolphin said in a statement. Six companies bid for the contract, it added. Dolphin said it expected to award the contract by Aug. 1. Dolphin imports gas to the UAE from Qatar. The Taweelah-Fujairah pipeline will allow it to pump some of the gas to a new power plant on the east coast.

Mubadala Development Co, run by the government of the emirate of Abu Dhabi, owns 51 percent of Dolphin. France's Total and US Occidental Petroleum each have a 24.5 percent stake.

Dolphin awarded in December the contract to supply steel for the pipeline to Germany's Salzgitter.

Gazprom considers gas sales to UK households

State-controlled Russian gas giant Gazprom is examining a possible entry into the UK retail gas market, a spokesman for the company's UK unit said on Sunday, Reutersreported.

The world's largest gas producer already has a small wholesale business which provides gas to businesses, and Philip Dewhurst said the company was now looking at supplying homes.

"We're looking at the possibility. We're doing an internal feasibility study," he said.

Traditionally an exporter of gas to large European utilities, Gazprom is now keen to control the value chain all the way down to the consumer.

European politicians fear the company may use control of European pipelines and distribution networks to do the Kremlin's bidding.

Gazprom denies this and says previous threats to cut off gas to neighbours, such as Ukraine, were due to business rather than political disputes.

Led by Alexey Miller, the Management Committee Chairman, a Gazprom delegation paid a working visit to the Islamic Republic of Iran.

Within the visit the delegation met with Gholamhossein Nozari, Iranian Oil Minister and Seifullah Jashnsaz, Managing Director of the National Iranian Oil Company.

The parties discussed the top-priority steps towards cooperation deepening in the oil and gas area including the creation of a joint venture to implement oil and gas fields exploration and development projects, the construction of oil and gas processing and transport facilities in Iran. The meeting members also agreed to set up a joint venture dealing with oil and gas projects in Iran, Russia and third countries. A possible execution of swap transactions was also under discussion. The Iranian party raised an issue concerning Russian gas supplies to northern Iran based on long-term agreements.

Following the negotiations results, a Memorandum of Understanding was signed between Gazprom and the National Iranian Oil Company. To implement the Memorandum provisions a joint working group will be formed.

A working meeting between Alexey Miller and Mahmoud Ahmadinejad, the President of the Islamic Republic of Iran was held. During the meeting the parties exchanged their opinions in relation to the possible development of the mutually beneficial long-term partnership between Gazprom and Iran.

The parties discussed the interaction within the preparation for the next meeting of the Gas Exporting Countries Forum. The development of the global gas balance was named as a major challenge of the Forum. A requirement to further develop the Forum as a standing international organization was emphasized.

Technical reasons behind Russian oil supply cuts to Czechs

Technical problems were behind Russian oil supply cuts to the Czech Republic that coincided with the signing of a Czech-US missile shield deal, the Czech Industry and Trade Ministry said Monday after a meeting with a Russian official, the dpa reported.

Moscow's commercial representative in Prague Grigory Sarishvili told Czech officials that "production problems and unspecified changes in Russian supply firms" have caused the cuts, said ministry spokesman Tomas Bartovsky. "It was clearly stated that politics play no role," Bartovsky said.

Earlier reports said the cuts could be linked to a scramble among Russia's oil dealers over export rights following the shift of power in the Kremlin.

Russia began reducing oil deliveries to the Czech Republic on July 4, but slashed supply significantly after the top US and Czech diplomats, Condoleeza Rice and Karel Schwarzenberg, signed a missile defence treaty on July 8.

The cuts of oil flowing to the country via the Druzhba pipeline have amounted to 70,000 tons by Monday from 520,000 tons contracted for July, Bartovsky said.

The United States would like to place radar and 10 interceptor missiles as part of its missile shield in former Soviet satellites, the Czech Republic and Poland respectively, a plan fiercely opposed by Russia.

Moscow says the system could be used to spy on Russia instead of protecting Europe against potential long-range missiles from so- called rogue states such as Iran.

Russia has in the past reduced energy supplies to the West for both political and economic reasons. The Czech Republic imports 75 per cent of its gas and 70 per cent of its oil from Russia.

Russia doesn’t tie up gas supplies to Eastern Europe and the U.S. plans to station the third position site of the national missile defense shield there, RF Deputy Foreign Minister Sergei Kislyak announced July 14. Kislyak said he knows nothing about Russia’s intention to trim gas supplies to the Czech Republic after it signed the treaty with the United States to host its radar station.
“I don’t know whether or not we intend to cut down these supplies, as it is the commercial issue and isn’t the question under discussion at the Foreign Ministry,” Kislyak specified.

Gazprom’s Management Committee approves updated draft Gazprom investment program and budget for 2008

The Management Committee has approved the updated draft investment program and budget (financial plan) of Gazprom for 2008. The said draft documents are pending endorsement by the Board of Directors.

Pursuant to the draft investment program, the total amount of developed investments will come to RUB 821.66 bln, which is RUB 111.53 bln up compared the investment program, which was approved in December 2007. At the same time, the capital investments will account for RUB 531.2 bln (RUB 51.78 bln more as compared to the investment program approved in December 2007), long-term financial investments – RUB 290.46 bln (RUB 59.75 bln more as compared to the investment program approved in December 2007).

According to the draft budget, the overall cash income & revenues will equal RUB 3.236 trln, which is RUB 311 bln more as compared to the budget approved in December 2007. The total amount of cash liabilities, expenditures and investments will increase by RUB 366 bln and come to RUB 3.38 trln. The amount of financial borrowings will remain unchanged at RUB 90 bln. The net surplus will total RUB 1.7 bln. The investment program update is driven, in particular, by the adjustment of investment projects list and the volume of investments for 2008, which was performed taking into account the following aspects: Gazprom’s operating results for 2007; adjustment of the implementation terms of a number of new projects in Eastern Siberia and the Far East including the pilot commissioning of the Chikanskoye gas and condensate field, gas delivery to the Kamchatka Peninsula and Vladivostok; boosting of the Bovanenkovskoye field development and the new Obskaya-Bovanenkovo railroad construction.

The requirement to update the investment program is also conditioned by the share acquisition in some energy companies, investments into the Shtokman field development and the Nord Stream gas pipeline construction projects as well as by Gazprom’s participation in the Sakhalin II project. Additionally, the update is explained by acquisition of the license for the Chayandinskoye field development.

The budget profiles adjustment is conditioned by a change in quantitive and pricing indicators of gas selling as well as in macroeconomic indicators.

Gazprom has signed a memorandum on cooperation in production and transportation of oil and natural gas with the National Iranian Oil Co. The Iranian company, which all other oil companies in the world refuse to work with, is promising Gazprom “a full package of projects.” The memorandum was signed by Gazprom CEO Alexey Miller, Iranian Oil Minister Gholam Hossein Nozari and NIOC managing director Seifollah Jashnsaz. Gazprom will thus have the chance to strengthen its position in the countries with the world’s second largest gas reserves (proven reserves of 28.13 trillion cu. m.).

The memorandum envisages the formation of a joint venture to implement geological exploration and development projects, construction of refineries and transportation of Iranian gas. Nozari also mentioned transportation of oil from the Caspian Sea to the Gulf of Oman to the Iranian official IRNA information agency. A Gazprom sources also says that an Iran-Pakistan-India gas pipeline has been discussed.
Deliveries of Russian gas to northern regions of Iran on a long-term basis are also being discussed. Gazprom plans to deliver the gas in exchange for shipping oil by tanker or delivery of gas to the Turkish border. The construction of a gas distribution network is also under discussion. It would connect the industrialized north of Iran with the gas-rich south of the country. Northern Iran is now dependent on gas supplied from Turkmenistan, which turned off the gas just before New Year, leaving the Iranian region without fuel.

NIOC produced 115 billion cu. m. of gas in 2007. It sold 107 billion cu. m. on the domestic market, imported 8 billion cu. m. from Turkey and exported 8 billion cu. m. from Turkmenistan. It also produces 195-200 million tons of oil per year. Last autumn, Shell and Repsol left Iran, and Total left last week, leaving NIOC without foreign partners. Observers wonder whether the Russian-Iranian agreement will be implemented in the current political atmosphere.

Gazprom and Wintershall begin test production from Urengoi Gas Field

The joint venture of Gazprom and Wintershall Holding AG – ZAO Achimgaz has launched test production at section 1À of Achimovskoe formations at Urengoi gas and oil condensate field in Yamal-Nenets autonomous district. At present a complex gas treatment facility and three gas condensate wells are operating at the section providing daily gas production of 2.3 million cubic meters. It is planned to produce by the end of 2008 531 million cubic meters of gas and 188.7 thousand tons of condensate.

Gazprom to pump gas of other nations to Spain

Britain’s division of Gazprom, Gazprom Marketing & Trading, and Spain’s Gas Natural SDG have clinched a deal for the LNG supplies to Spain. People in Gazprom said this move will help build up a flexible system for supplying the gas acquired, for instance, in Libya or Azerbaijan.

GM&T and Gas Natural SDG inked July 2 a framework agreement on the terms for LNG supplies to Spain, GM&T reported in its press release yesterday. According to Frederic Barnaud, GM&T's LNG director, the project is a good chance to widen the LNG sales before the launch of Shtokman in April 2013. The plans are that the Shtokman gas will be delivered via pipelines and by tankers to the United States and the EU. The framework agreement also promotes the strategic cooperation in part of the energy sales and quotas on greenhouse gas. In GM&T, they didn’t specify the exact amount of deliveries yesterday.
Of interest is that so far, the laws of Spain had prevented Gazprom from entering the country’s market on fears of the price collision with Algerian Sonatrack. Under the EuroGas report, Spain consumed 37.7 billion cu meters of gas in 2007, and LNG covered two thirds of it. Algeria (37 percent) is the key supplier of gas to Spain.

But unlike Sonatrack, Gas Natural SDG is the main division of Spain’s Gas Natural. The biggest holders of GN are La Caixa Bank (35.5 percent in the company) and Repsol YPF (30.5 percent).

Gazprom Neft is ready to propose to the U.S. Chevron another field in Western Siberia for joint development, Gazprom Neft President Alexander Dyukov told the reporters, PRIME-TASS announced Wednesday. Dyukov didn’t specify what field he was referring to, but pointed out that it would be the last offer to Chevron.

Media reported earlier that Dyukov had spoken of potential extension of cooperation with that company of the United States. The matter at stake was a field in Western Siberia, which development wouldn’t be easy in technological terms and, therefore, it would be reasonable to attract a western partner.
Besides, the company is interested in studying the refining technology of Chevron. Gazprom Neft specialists will go to the United States in the third quarter of this year to amass experience at one of the refineries of this U.S. company.

BP has withdrawn from Russia all experts employed at TNK-BP till March, 148 people overall. The cancellation of their contracts is one of demands of Russia’s holders of the venture – each of technical specialists cost $1 million a year to TNK-BP.

BP announced yesterday it is withdrawing 60 remaining technical specialists from Russia that had worked at TNK-BP till March. There had been 148 experts overall, but the better part of them had left the country already to be redeployed in the global business of BP, for instance, in Azerbaijan, in the Middle East or in the Gulf of Mexico. The technical specialists had worked in TNK-BP as secondees. BP recalled most of them in March in the wake of the visa claims presented by the RF Federal Migration Service. The secondees were granted business visas instead of the labor ones. What’s more, some Tetlis Co filed a suit to Tyumen Arbitration Court in May and the latter banned employment of secondees at TNK-BP as security.
Of interest is that Tetlis had become a holder of TNK-BP not long before going to law, its managers had previously worked for the firms of Alfa Group, the member of AAR Consortium that has 50 percent in TNK-BP. Alfa Group denied any involvement in Tetlis suit.

One of TNK-BP co-owners and its executive director Viktor Vekselberg told Kommersant in June that they would join the Tetlis suit but do it in Stockholm. AAR hasn’t presented the suit yet, its representatives said yesterday, pointing out they haven’t abandoned the intention. According to sources with AAR, they urged BP to step up the strength of the foreign staff, but use specialists as employees rather than secondees, each of whom is said to cost roughly $1 million a year to the venture.

The court hasn’t decided on Tetlis action yet, but the ban on foreign expert employment was lifted past week. Regardless, BP preferred not to summon their secondees back to Russia. The trial is very slow and will hardly end in the nearest future.

Russia's deal to buy Oman stake in Caspian oil pipe under threat

Russia's deal to buy Oman's 7% stake in the Caspian Pipeline Consortium may be delayed or fail altogether, business daily Kommersant reported on Thursday.

The Caspian Pipeline Consortium (CPC), designed to carry Kazakh and Russian crude to a terminal on the Black Sea, was commissioned in October 2001. Its capacity currently stands at around 30 million metric tons of oil per year and is expected to be doubled by 2012.

A source close to the Russian government told Kommersant that Kazakhstan, another shareholder in the consortium, wants to buy Oman's shares. The Central Asian country has already adopted amendments to its legislation making it more difficult for Russia to carry the deal through, Kommersant said.

Oman decided to quit the CPC back in March, sending an offer to sell its shares to the consortium's two other state shareholders - Russia (which holds 24%) and Kazakhstan (19%).

Russian state oil pipeline operator Transneft, the owner of Russia's stake in the consortium, announced at the time that it had accepted an offer to buy the shares for $701 million. Sources close to the CPC explained that if both countries were to accept the offer, they would have to divide the shares in proportion with their interests, meaning 3.9% for Russia and 3.1% for Kazakhstan.

"The stake of 3.1% is not enough for Kazakhstan because in this case it would fail to gain a blocking interest in the CPC," Kommersant cited sources close to the CPC as saying.

If both state shareholders refuse, the stake will be offered to private shareholders.

The consortium also includes private companies Chevron Caspian Pipeline Consortium Company (15.0%), LUKARCO B.V. (12.5%), Rosneft-Shell Caspian Ventures Limited (7.5%), Mobil Caspian Pipeline Company (7.5%), BG Overseas Holding Limited (2.0%), Agip International (N.A.) N.V. (2.0%), Kazakhstan Pipeline Ventures LLC (1.75%), and Oryx Caspian Pipeline LLC (1.75%).

Russian President Dmitry Medvedev has signed into law a cooperation treaty between Russia and Kazakhstan to set up a joint venture based on the Orenburg Gas Processing Plant, announced Medvedev’s press service on Thursday.

The treaty was originally drafted in Uralsk in October 2006. It envisages long-term economic cooperation in the natural gas sector between the two countries. An objective of the document is to launch new facilities based at the existing Orenburg plant to process hydrocarbons produced by Gazprom and other companies in Russia and by the Karachaganak field in western Kazakhstan.

Medvedev signs law on settlement of Tajikistan’s debt

President Dmitry Medvedev on Monday signed a law on the settlement of Tajikistan’s debt to Russia by way of transferring the Nurek optical-electronic space control centre to Moscow and on investments in the Sangtudin hydropower plant, Itar-Tass reported.

Medvedev signed the law on the ratification of the inter-governmental agreement on the settlement of Tajikistan’s debt to Russia for state credits and the addendum to the agreement of December 9, 2002.
The agreement and the addendum provide for an early repayment of the debt by transferring control over the Nurek centre to Russia and investing the remaining part of the debt in the construction of Sangtudin Hydro Power Plant-1 in Tajikistan.

Power unit No. 2 at Sangtudin HPP-1, which is being built on the river Vakhsh with the participation of Russia, will begin generating electricity by the end of this, construction deputy chief Alexander Aldanov told Itar-Tass earlier, adding that a test start of the power unit was successfully carried out on Sunday.
The official commissioning of the second phase of the plant with the participation of the republic’s leadership is to be held approximately on July 2. Unified Energy System of Russia Board Chairman Anatoly Chubais, who was among those who launched this joint Russian-Tajik project, is also expected to attend the ceremony.

Aldanov recalled that power unit No. 1 was put into operation in January of this year, and the last, fourth, one is to be commissioned in early 2009. In his words, the builders may complete the construction in December, but there are problems with the supply of equipment.
The designed capacity of Sangtudin HPP-1 is 670 megawatt. Its four power units will be able to generate 1.2 billion kilowatt/hours annually.

The agreement was signed in Moscow on December 9, 2002. The addendum was signed on October 16, 2004. The documents implement the agreement reached in July 2004, under which Tajikistan pledged to transfer the ownership of Nurek to Russia and invest 50 million U.S. dollars against Russia’s stake in the Sangtudin HPP-1 project.

Tajikistan’s overall debt as of July 15, 2004 was 305,730,000 U.S. dollars. It will be repaid both by way of direct principal and interest payments and in the form of property by transferring the ownership of Nurek to Russia and 75 percent of shares in HPP-1 minus one.

Energy Companies of Central Asia Developing Methods to Improve Power Transmission in Region

Representatives from energy companies of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan assembled in Almaty on 30 and 31 July to discuss a regional model of power transmission, the US Agency for International Development (USAID) Regional Office said.

“The meeting was organized by the USAID Project on creation of regional model of power transmission network (CARTRANS), which is realized by the US Energy Association for planning and improvement of power flows over the region,” the press release reported.

Creation of computer model of Central Asia’s high-voltage network, which is being developed with the assistance of USAID, will enable the countries of the region to plan and manage more efficiently the power flows among participant-countries. The model will be launched in October 2008.

The Central Asian system of power transmission includes national energy systems of Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan, as well as, the south of Kazakhstan. This system, which was established in the Soviet period, assumes dependence of the countries on one another and requires joint planning of energy flows.

“The joint model of the regional energy network will inform on capacities of power transmission at each sector of the system, Sergey Yelkin, a USAID power engineering specialist, said. It will enable the national planning organizations to optimize the quantity of transmitted energy and to reduce the number of electricity cutoffs, especially in Kazakhstan, Kyrgyzstan and Tajikistan.

Similar regional models on planning of energy transmission have been established with the assistance of the USAID in the Black Sea region, including Armenia, Bulgaria, Georgia, Moldova, Rumania, Turkey and Ukraine.

“This model assists the participant-countries to determine priority investment in energy system. For example, Georgia plans to expand electricity transmission network for transit of excess electricity from Azerbaijan to Turkey. Expansion of the network will give birth to a new income source for Georgia and ensure its access to electricity during power shortages in the country,” Will Polen, the manager of the USAID project, said.

CARTRANS is one of numerous projects of the USAID in the Central Asia, which have been possible because of the American nation’s aid. The US people have allocated more than $1.5bln through the USAID to the program on development of democratic institutions, health, education and economy in the region since 1992.

30.07.2008 – TREND CAPITAL

Turkey