Energy

The U.S. Won’t Issue Additional Reduction Exceptions to Existing Importers of Iranian Oil The United States won’t issue additional reduction exceptions to existing importers of Iranian oil, according to the U.S. State Department. “Today we are announcing the United States will not issue any additional Significant Reduction Exceptions to existing importers of Iranian oil. The Trump Administration has taken Iran’s oil exports to historic lows, and we are dramatically accelerating our pressure campaign in a calibrated way that meets our national security objectives while maintaining well-supplied global oil markets. We stand by our allies and partners as they transition away from Iranian crude to other alternatives. We have had extensive and productive discussions with Saudi Arabia, the United Arab Emirates, and other major producers to ease this transition and ensure sufficient supply. This, in addition to increasing U.S. production, underscores our confidence that energy markets will remain well supplied,” reads the message. Fourth SOCAR International Forum Underway in Baku The 4th SOCAR International Caspian and Central Asia Downstream Forum on Trading, Logistics, Refining and Petrochemicals was underway in Baku on April 22, 2019. The event is attended by about 300 representatives of the oil and gas sector of Azerbaijan, Europe and Central Asia including representatives of the biggest oil and gas companies, refineries, trading companies, ports, terminals, banks and analytical agencies. The forum participants are discussing, among other issues, the development of energy sector of Azerbaijan, Uzbekistan, Turkmenistan and Kazakhstan; the SOCAR oil refining and petrochemical cluster in Turkey; the latest refining technologies for refineries; regional gas projects; possible imbalances in the global hydrocarbon market in 2019; new fields in the region and their impact on trade flows and export routes; and Caspian and Central Asian oil in a global context. BP Announces $6 Billion Project in Azerbaijan’s ACG BP announced on April 19 that they were undertaking a $6 billion project to further develop the offshore Azeri-Chirag-Gunashli (ACG) oilfield in Azerbaijan’s Caspian waters. This initiative, known as the Azeri Central East (ACE) project, will see the construction of a new offshore platform and a processing facility by 2022. ACE will start producing in 2023 and is expected to yield up to 300 million barrels of oil in total. A BP-led consortium signed a 30-year PSA on ACG in 1994 and in 2017 reached an agreement on a 25-year extension, allowing the group to continue operating there until 2049 and thus to continue investing in new production. Turan Wins $500 Million Contract from BP Turan Drilling & Engineering Company LLC won a 5-year, $500 million for operations and maintenance of drill rigs used in BP’s offshore operations in the Caspian. Starting in May, Turan will service 7 rigs in ACG and Shah Deniz fields. The firm was founded in July 2018 as a joint venture between UK-based oilfield services provider KCA Deutag and SOCAR AQS, the latter being itself a joint venture between Azerbaijani NOC SOCAR and a division of Nobel Oil, a firm with roots in Azerbaijan. Though Western firms are often considered key oilfield services providers, Turan’s selection by BP as a services provider shows that firms outside of the US and EU can develop the intellectual capital necessary to compete in the oilfield services industry. Turkmenistan Resumes Gas Deliveries to Russia Turkmenistan resumed gas deliveries to Russia on April 15, restarting bilateral gas trade for the first time since 2016. Moscow bought an average of 10 billion cubic meters of gas from Turkmenistan between 2010 and 2015, but volumes were cut dramatically in 2015 and then completely eliminated in 2016. No contracts between Gazprom and Turkmengaz has been announced, and both trade volumes and gas pricing between then firms remain unknown. Volumes of Gas Supply Via TANAP Revealed By April 1, 2019, over 1.5 billion cubic meters of gas were transported via the Trans-Anatolian Natural Gas Pipeline (TANAP) to Turkey, Energy Minister of Azerbaijan Parviz Shahbazov said. He announced these figures when speaking at the 4th SOCAR International Caspian and Central Asia Downstream Forum on Trading, Logistics, Refining and Petrochemicals in Baku.

Security

Azerbaijan and Turkey to Hold Joint Military Drills Turkish troops have traveled to Azerbaijan ahead of a joint military exercise taking place from May 1-3. The Mustafa Kamal Ataturk 2019 will improve coordination between the two armies and include military units, armored vehicles, artillery batteries, mortars, airplanes and helicopters, and air defense systems. Azerbaijan to Participate in International Security Conference Azerbaijan will send a delegation to Moscow to take part in the VIII Conference on International Security from April 23-25. Azerbaijan’s Deputy Minister of Defense, Lieutenant General Kerim Veliyev will lead the group. The conference will focus on regional security and threats as well as specific defense agencies responses. Azeri Pilots Begin Training on New Aircraft Several pilots of the Azerbaijani military have begun practical training flights on the Super Mushshak and L-39 aircraft and "Mi" Series multipurpose helicopters. These pilots already passed training sessions on simulators. The training is part of a plan to improve military pilots’ qualifications according to the combat training plan for 2019. Azerbaijan also opened a new Training Centre of the Air Force MiG-29 fighter jets on April 18. Kazakhstan’s Ruling Party to Nominate Candidate Kazakhstan’s Ruling Party Nur Otan will meet on April 23 to nominate a party candidate for the country’s upcoming presidential elections. Kazakhstan is holding early presidential elections after former president Nursultan Nazarbayev resigned last month. Nazarbayev remains head of Nur Otan. Iranian Navy Sends Friendly Flotilla to Kazakhstan An Iranian “peace and friendship flotilla” will dock in Aktau for several days. The flotilla includes the missile-launching warships Separ and Joshan. Iranian and Turkish Foreign Ministers Meet Iran’s Foreign Minister Javad Zarif met with his Turkish counterpart Mevlut Cavusoglu on April 17. Zarif stopped in Ankara on his way from Damascus, where he had been meeting with embattled Syrian president Bash al-Assad. High-Level Working Group on the Caspian Sea Meets in Kazakhstan The second meeting of the High-Level Working Group on the Caspian Sea took place in Nur-Sultan last week. The group continued adjusting the draft agreement on establishing direct baselines in the Caspian and discussed issues related to implementing the Convention on the Legal Status of the Caspian Sea. Year of Kazakhstan in Uzbekistan Kazakh President Kassym-Zhomart Tokayev launched the Year of Kazakhstan in Uzbekistan April 15. The ceremony was attended by Uzbek President Shavkat Mirziyoyev. Some of Kazakhstan’s brightest stars, including Dimash Kudaibergen, Medet Chotabayev, Nurlan Bekmukhambetov and Maria Mudryak, performed at the concert. The Year of Kazakhstan in Uzbekistan is meant to boost cultural ties between the two countries, among the goals agreed to by Mirziyoyev and Tokayev during Tokayev’s recent state visit to Uzbekistan. Last year was the Year of Uzbekistan in Kazakhstan.

Economy

Kazakhstan to Host Fourth General Assembly of Turkic Council Turkic University Union The Akhmet Yassawi University, the current Chair University-in-Office of the Turkic University Union, will host the Fourth General Assembly of the Union to be held in Turkistan, Kazakhstan, on 24 April 2019. The representatives from 18 member universities of the Union from Azerbaijan, Kazakhstan, Kyrgyzstan and Turkey, delegates of the Student Council and officials of the Turkic Council Secretariat will attend the Assembly. Hungary will participate in Assembly for the first time by delegating a representative from the University of Szeged. Turkmenistan Introduces Electronic Payments for Water in Ashgabat A digital system for services and calculations of consumers (including for drinking water) is planned to be introduced in the Turkmen capital of Ashgabat. An electronic database has been created under the Ashgabat Agyz Suw Association under Ashgabat City Administration, where information on consumers living in the capital, including addresses, the amount of electricity used, and payment terms, is stored. Residents can make payments via cell phones, payment terminals, and Internet provider systems. Agriculture Products Dominate in Trade Turnover of Uzbekistan, Kazakhstan The trade turnover of Kazakhstan with Uzbekistan amounted to $2.5 billion in 2018, which is 25.3 percent more than in 2017. Exports amounted to $1.6 billion, with an increase of 31.6 percent and imports to $0.8 billion, with an increase of 14.8 percent. Baku International Sea Trade Port to be Able to Receive More Cargo After full completion of construction, the Baku International Sea Trade Port will become the biggest port in the Caspian Sea, Tural Aliyev, advisor to the director-general for transportation issues of the port, said. Aliyev stressed that the cargo transshipment potential of the Baku International Sea Trade Port will be increased up to 25 million tons per year in the future. Korea to Deepen Co-Op with Kazakhstan in IT, Space Fields South Korean President Moon Jae-In met with President of Kazakhstan Kasym-Zhomart Tokayev on Apr. 22. “Yesterday, at a meeting in a narrow circle, we discussed both the development of bilateral relations and the political situation on the Korean Peninsula and in Central Asia, I am quite satisfied with the results of the discussion,” Moon Jae-In said. He noted that Kazakhstan is one of the Central Asian countries developing at the fastest pace. World Bank: Uzbekistan to Become an Upper Middle-Income Country by 2030 Uzbekistan has the potential to become an upper middle-income country by 2030—a goal that the government is pursuing. It was noted that Uzbekistan is making strong progress in implementing an ambitious economic and social reforms agenda to support the development of the country and build opportunities for its citizens. "During the past two years, Uzbekistan has taken serious efforts to liberalize the economy which include eliminating control over of foreign exchange and lifting the trade and investment barriers. These steps increase the country’s attractiveness for foreign investors," the WB representative said. Azerbaijan Improves Position in Startup Ecosystem Rankings Azerbaijan found itself one place higher and came in 67th in the Startup Ecosystem Rankings 2019 published by StartupBlink, one of the world’s most comprehensive map and research centers of startup ecosystems. Baku’s position rose by 55 spots to 302nd, according to the Startup Ecosystem Rankings. “As for our recommendations, the country’s main focus should be to make Baku into a more powerful regional hub (ranked at least in the top 200), and at the same time bring more local ecosystems into the game,” StartupBlink said. Korea to Help Turkmenistan with Commercialization of 5G Mobile Communication The Republic of Korea will help Turkmenistan with the commercialization of 5G mobile communications. South Korean President Moon Jae-in noted this offer during his talks with Turkmen counterpart, Gurbanguly Berdimuhamedov, while on a state visit in Turkmenistan between April 16-18. China to Complete $545 Million Modernization for Tajik Smelter China's state-owned engineering company China Machinery Engineering Corporation (CMEC) will modernize Tajikistan's flagship aluminum smelter in a $545 million deal. A representative for Talco has confirmed "the contract between CMEC and Talco was signed on April 15," though without details on how Talco would finance the deal. (Sources: Al-Monitor, Anadolu Agency, AzerNews, BP, Eurasianet, Mehr News, New EuropeCrypto Daily, KCA Deutag, Reuters, Nobel Oil, Trend News Agency, Wall Street Journal, and Yahoo News.)