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Poor-Quality Gasoline Refused by Taliban Doesn’t Belong to Uzbekistan

The Customs Committee of Uzbekistan denied that gasoline returned by the Taliban due to its poor quality in fact belongs to Uzbekistan, according to a post on the committee's Telegram channel. The Times of Central Asia has reported that the Taliban returned 120,000 liters of gasoline imported via the Hayraton border point to Uzbekistan due to its poor quality. It has been reported that the returned oil products didn't originate in Uzbekistan. On the contrary, 120 tons of gasoline loaded in two tanker trucks were sent to Afghanistan from Russia and moved through the territory of Uzbekistan only in transit mode. On February 7, these tankers left for Afghanistan through the Ayritom station in Surkhandarya, Uzbekistan. These oil products returned by Afghanistan entered Uzbekistan on April 6 through the Ayritom station. Also, the Customs Committee asked certain mass media operating in the country not to distribute unverified, one-sided, unconfirmed information. “At this point, we ask the mass media to study carefully before disseminating such information, taking into account the friendly relations between the two countries,” the Customs Committee report said.

Oil & Gas Rule of law

Kazakhstan Increases Amount of Claim Against Western Oil Companies to $150 Billion

Kazakhstan is demanding compensation for lost profits from the operating consortium of the Kashagan oil field, North Caspian Operating Co (NCOC). Arbitration claims made by Kazakhstan have grown to $150 billion, Bloomberg reports, citing people familiar with the story. An additional claim concerns $138 billion of lost profits stemming from volumes of oil promised to the Kazakh government but not provided by the developers of the field due to delays in Kashagan's startup and production growth. According to the Bloomberg's source, Kazakhstan's claims are also related to problems with the infrastructural arrangement at the Kashagan field, disruptions of production deadlines and cost overruns. "There is another compensation claim related to contracts for the development of Kashagan. They allegedly saw signs of corruption in [the contracts]," the source told Bloomberg. The international scandal underscores the complexity of operating in Central Asia's largest oil-producing country, according to Bloomberg. "Here, large international companies face difficult environmental and geological conditions, as well as a government that is committed to maximizing profits from signed production-sharing agreements," reads the article. Despite the published information, the Ministry of Energy of Kazakhstan isn't disclosing the details of the conflict, calling it a purely commercial dispute. The parties in the consortium NCOC, which includes Eni, Total, ExxonMobil, Shell, China National Petroleum Corp. (CNPC), Japan's Inpex and Kazakh state oil & gas producer, KazMunayGas, believe that they have acted in accordance with the contractual agreements. Earlier, Kazakhstan filed a number of claims in international arbitration against the operators of the Kashagan and Karachaganak oil fields. The claims cover the period from 2010 to 2019.

Uzbekistan Economy Export/import Afghanistan Oil & Gas

Taliban Returns 120,000 Liters of Uzbek Oil Products Over Low-Quality

The National Department of Standards of Afghanistan has reported that it returned two tanker trucks worth of oil products with a volume of 120,000 liters from the port of Hairatan back to Uzbekistan. According to Radio Television of Afghanistan (RTA) English, the reason for this was the low quality of the imported refined products. Furthermore, the National Administration of Standards sent back another 19 oil tankers from Sheikh Abu Nasr Farahi Port to Iran over their low-quality. The standards board once again asked Afghan businessmen to prevent the import of low-quality goods into the country. In January of this year, it was reported that the Taliban returned more than 62 tons of low-quality oil to Uzbekistan through the Hairatan border point. In response to this, Uzbekneftgaz Chairman Bahadir Sidikov said the report was misinterpreted, and that the oil products returned by the Taliban was of high quality. Sidikov stated that the product was returned not because of its low quality, but because its standard isn't available in Afghanistan. "This new product was supposed to enter the Afghan market. Unfortunately, the first batch was sent back. But it’s a process. It will not be easy to enter every market. To prove the quality of this product, we sold 1,000 tons of the same diesel to Estonia last month. They received it as a “premium” and ordered 10,000 tons [more]. Currently, we are producing 10,000 tons of [oil] products. In addition, there are inter-governmental agreements," commented Sidikov at that time.

Uzbekistan Oil & Gas Energy Investments

Uzbekistan Aims to Become One of World’s Largest Producers of Olefins

Uzbekistan's largest private oil and gas company, Sanoat Energetika Guruhi (Saneg) will build a gas chemical plant to produce olefins from methanol. The work will be done in partnership with the Chinese state-owned energy giant, Sinopec. The complex will utilize natural gas from the Mubarek fields. Olefins are raw petrochemical materials used for a range of polymer products, such as plastics and films. The $3.3 billion plant will be able to process 1.3 billion cubic meters of natural gas by 2026. About 44% of the production will be exported, mainly to China and Turkey. In addition, the project will make it possible to produce value-added products from natural gas rather than simply burning it for energy or exporting it. The construction of the complex will also stimulate the development of related industries. The Karakul free economic zone in the southeastern Bukhara region will house plants producing textiles, carpets, footwear, plastic pipes and fittings, and other polymer products. "Uzbekistan's gas-chemical complex plans to produce 300,000 tons of polyethylene terephthalate annually, 350,000 tons of polypropylene, and other materials. This is expected to reduce the country's imports of polymers by $500 million a year and attract $350 million a year from their exports," said Bakhodyr Khafizov, director of the Karakul free economic zone. Saneg representatives said that, according to a marketing study, annual polymer consumption in Uzbekistan is now 5.5 kilograms per capita, far below that of other developing economy peers. For example, that figure in Turkey is 23 kilograms, meaning that the Uzbek domestic market shows significant room for expansion. However, there may be problems with exporting polymers abroad, as Uzbekistan has no direct access to the sea. In this regard, production will require additional investments taking into account overland logistics.

Oil & Gas

Kazakhstan Exceeds Oil Production Quota Under OPEC+ Agreement

Last month Kazakhstan exceeded its oil production quota under its agreement with the Organization of Petroleum Exporting Countries (OPEC+). According to Times of Central Asia research into oil data, Kazakhstan exceeded its March 2024 limits by 131,000 barrels per day (bpd). However, Kazakhstan's Energy Ministry emphasized that this was a one-off occurrence, brought about by climatic factors in the country. "Despite this, Kazakhstan will continue efforts to comply with its obligations and compensate for overproduction in the first quarter [of 2024]," said the ministry's press service. In addition, based on the results of the 53rd meeting of OPEC's Joint Ministerial Monitoring Committee, Kazakhstan committed to submit a detailed compensation plan to the OPEC Secretariat by April 30. In early March, Kazakhstan agreed to extend its voluntary crude production cut of 82,000bpd until the end of June 2024, reaffirming its commitment to comply with international agreements and maintain stability in oil markets.

European Union Energy Russia Kazakhstan Central Asia Oil & Gas Economy

Kazakh-Owned Rompetrol, On Brink Of Collapse, Appeals To Tokayev

According to Romanian news portal gandul.ro, Rompetrol, which operates in oil refining, petrochemicals, and distribution in parts of Eastern Europe, is close to collapse. The stated reason is that Rompetrol top management -- which includes representatives of Kazakhstan's state energy company KazMunayGas (KMG), the majority owner of Rompetrol -- prioritize personal interests over the economic good of the company. The allegations are serious. KMG International, a group owned by Kazakhstan's national oil and gas company KazMunayGas, acquired the Rompetrol brand in 2007, strengthening its position as a key player in the Black Sea and Mediterranean region. It currently owns 55% of Rompetrol, with Romania's Ministry of Energy controlling just under 45%. The Kazakhstani company is accused of assisting Russia, which itself is trying to avoid sanctions imposed by the European Union (EU). Gandul.ro claims that it's possible to bring oil from Russia to be refined in Romania despite the embargo on Russian crude. Rompetrol CEO Ilyas Kuldzhanov has Russian citizenship, although he also registered Kazakh citizenship in Romania's National Trade Register to avoid possible EU sanctions. Gandul.ro published an open letter penned by some of the company's employees, which they sent to the Kazakh Government. The letter contains the following passages: "Dear Sirs, we are writing to you regarding current issues related to Rompetrol. At the beginning of this message, we apologize for using Google Translate to translate from Romanian to Russian and for remaining anonymous. We decided to remain anonymous because we fear reprisals from KMG management. We want to draw attention to the growing problems inside Rompetrol, because no one is interested in the future of the company. The company needs a radical change of management and new people with different perspectives at all levels, from the board of directors to the top management, with a vision in line with the goals. In terms of management, first of all we should mention Ilyas Kuldzhanov, an extremely incompetent person with no experience in managing large companies, Baurzhan Nurgaliyev (Operations Director), who until recently ran a company selling elevators in Astana, Saken Shoshanov, Baurzhan Nugumanov and other members of management. Appointments to management positions are made on the basis of the ethnic origin of the clan. Most of the new managers in Romania and Kazakhstan have been hired without any competition or selection, and have no experience or knowledge of how the corporation should operate. Note the price of oil and how diesel fuel was purchased in 2023 due to an emergency equipment shutdown at the Petromidia refinery. Why is this equipment not repairable? Why do accidents and explosions continue to occur? Because Rompetrol management is looking for contractors willing to pay commissions. We would like to inform you that similar messages will be sent to the Romanian authorities because the situation is critical." Rompetrol employees also create a disastrous picture of the company's behavior. In the letter they ask Tokayev to check how components and electricity are purchased for the plant -- questions that refer to expenditures of tens of millions...