By Michael Lelyveld
Boston, 20 Sept
(RFE/RL)
Analysts are puzzled by Iran�s persistence in relying on China to build a critical pipeline for Central Asian oil.
On Wednesday, Iran announced that it has opened talks with a consortium of Chinese companies to build a 392-kilometer pipeline from the Caspian port of Neka to its major refinery at Tehran.
The line is intended to handle oil swaps from Kazakhstan and Turkmenistan, but the project has already suffered from long delays. Under a previous agreement with the Iran Power Management Company, known as MAPNA, construction was to have started by last March. The deal fell though when MAPNA was unable to secure financing, Deputy Oil Minister Ali Majedi said.
Last February, more than a month after a deadline for a deal with China had passed, MAPNA turned to European companies in hopes of forming a partnership. Since then, little apparent progress has been made. Now Iran is turning back to the Chinese companies, which are said to include China National Petroleum and the China Petrochemical Corporation, known as SINOPEC.
The delay could endanger Iran�s plans to provide a major export route for Caspian Sea oil. Tehran has argued that the Caspian does not need a main export pipeline to the west because Iran can use up to 750,000 barrels of oil per day for its local refining. It would export the same amount of Iranian crude through the Persian Gulf to pay the Central Asian nations, while adding a charge for the swaps.
Iran has been swapping small amounts of crude with Kazakhstan and Turkmenistan for over a year, but the results have been largely disappointih Kazakhstan�s Uzen oilfield, the country�s second largest. In July, Kazakhstan complained that the project was going nowhere and did not appear feasible because of depressed oil prices. Chinese officials claimed they were actually speeding up the construction. But last month, China National Petroleum admitted that it was shelving the pipeline due to low returns.
Time may be crucial to Iran�s case that it is a credible option to the planned Baku-Ceyhan pipeline. Iranian officials began their campaign three years ago to convince oil companies that swaps would be a preferable solution for Caspian exports. If the Neka-Tehran pipeline had at least been started, it might have competed with the Baku-Ceyhan scheme, which has also been stalled.
Iranian officials now say the Neka line will cost $360 million, compared with at least $2.4 billion for Baku-Ceyhan. Given the advantage, it is all the more remarkable that Iran has let time slip away.
Analysts have struggled to understand why Iran has tied its fortunes to China, despite the fact that it has been so undependable. A year ago, experts speculated that Iran may have been trying to spread the risk of possible U.S. sanctions against the pipeline by tying itself to a permanent U.N. Security Council member and a top trading partner of the United States.
But the risk of sanctions has faded dramatically since May 1998, when President Bill Clinton waived sanctions against European, Russian and Malaysian firms for their petroleum investments in Iran. To date, the U.S. penalties under the 1996 Iran-Libya Sanctions Act have never been imposed.
LONDON, Sept 22
(AFP)
Oil prices remained firm in London on Wednesday after members of the Organisation of Petroleum Exporting Countries (OPEC) decided to extend production cuts for six months until March 2000.
Brent North Sea crude for November delivery was being traded at 22.86 dollars a barrel on the International Petroleum Exchange shortly after the announcement was made.
This compared with an opening price of 22.88 dollars and 22.68 dollars seen late on Tuesay.
OPEC oil ministers endorsed the widely expected decision at a meeting in Vienna of the 11-member producer club. They agreed last March to reduce output by 1.7 million barrels of oil per day in a bid to inflate prices, which had fallen to the 10-dollar mark.
Sept 20 (Stratfor)
An agreement signed by the presidents of Kazakstan and Ukraine will allow resource-poor Ukraine to curtail its dependency on Russian oil. This economic cooperation with Kazakstan will likely bring Ukraine into a lucrative oil transport corridor by 2003. In the meantime, Kazakstan and Ukraine will bind their economic interests with their military interests, as have other states in the region. Russia�s failure to respond to the growing need for economic cooperation in the CIS will place it at a severe disadvantage in the future.
Ukraine and Kazakstan have reached a number of trade agreements similar to those offered by Ukraine but turned down by Russia over the past two months. Ukraine�s severe gas shortage and debts to neighboring countries do not make it appear to be a particularly valuable economic partner. Ukraine presently owes Russia $1.8 billion for gas deliveries and has failed to meet an adequate payment schedule. Alternative payment plans, including Ukraine�s surrender of eight TU-60 Blackjack bombers and other heavy equipment, have also failed due to disagreements over the equipment�s value. For its part, Russia has not returned the full balance of accounts belonging to Ukrainian citizens frozen in 1991 under the former Soviet Union.
Kazak-Ukrainian relations have been more profitable. Kazakstan agreed to a 10-year treaty on economic cooperation to bolster Ukraine�s energy sector. Alarmed by the dip in cross-border trade over the last year, Kazak President Nursultan Nazarbayev and Ukrainian President Leonid Kuchma signed a �plan of action.� This involves the exchange of Ukrainian An-74 planes for Kazak oil and construction of tractor stations in Kazakstan for repair of Ukrainian tractors, ships and aircraft. Further terms address customs, taxes, crisis response, anti-terrorism training, national bank cooperation and information sharing.
Ukraine�s failed trade negotiations with Russia made it a more willing partner to its neighbors, who are certain to profit from the situation in the long term. Ukraine is already promising Kazakstan shares in its soon to be privatized Lyschansk and Kherson oil processing plants.
Russia�s economic disrepair, financial scandals and current war make it an unappealing economic partner. By sanctioning countries and republics for nonpayment on fuel debts, including Ukraine, Kazakstan, Georgia, Abkhazia, and South Ossetia, Russia is forcing economic cooperation between Central Asian, Caucasian and Eastern European states. In doing so, Russia not only marginalizes its neighbors but works against its own long-term interests.
By Michael Lelyveld
Boston, 21 Sept (RFE/RL)
Russian Prime Minister Vladimir Putin has revived plans for an oil pipeline that would bypass Chechnya, charging that Islamic rebels are seeking control of Caucasus oil.
In a television interview Sunday, Putin said the Islamic forces in Chechnya and Dagestan were trying to �take charge of the mineral resources of that part of the world and that part of Russia.�
On Friday, Semyon Vainshtok, who was installed by the Putin government last week as chairman of the state pipeline company Transneft, said he is under orders to build the bypass pipeline around Chechnya through Dagestan.
Putin�s remarks seemed to be aimed at rallying both domestic and international support for Russia�s struggle against the separatists. By attributing economic motives to the insurgents, the Russian government may hope to counter their claims that they are seeking religious and political independence.
The charge of a threat to all Caucasus oil may also be an appeal to Azerbaijan, whose oil shipments to the Russian port of Novorossiysk have been cut off due to the fighting in Dagestan. On a wider stage, Putin�s remarks may be designed to win support from Washington, which has supported Caspian oil transit through Azerbaijan and Georgia, in case a large-scale Russian crackdown becomes a source of Western criticism.
By implication, Putin may also be suggesting that unnamed Muslim countries that are allegedly supporting the rebels may manipulate world prices by gaining control of the region�s oil.
Whatever Russia�s motives, the plan to build a bypass pipeline seem unlikely to meet with success. Previous efforts have proved fruitless, and analysts have repeatedly cited the futility of such a project.
Almost exactly two years ago, former Deputy Prime Minister Boris Nemtsov announced an identical plan, due to transit disruptions in Chechnya. Before that, the Russian government spent a year negotiating the issues of transit fees, pipeline reconstruction and security with the breakaway territory.
Under Nemtsov�s plan, Transneft was ordered to build a 283-kilometer line from Khasavyurt in Dagestan to Terskaya in Stavropol Krai. The project was to cost $220 million and be completed by May 1998.
Although work reportedly started, it never got far. Russia had few funds available, particularly for projects with such a small chance of success. Analysts questioned the logic of trying to avoid disruptions in Chechnya by simple shifting the pipeline route over the border into Dagestan. The recent cross-border warfare seems only to have proved the point. If anything, a new pipeline would only become a target for terrorism, creating far more insecurity than security for oil shipments.
Russia�s problems this year with transit to Novorossiysk predate the series of recent raids by the Islamic commanders, Shamil Basaev and Khattab. The pipeline through Chechnya was subject to almost daily shutdowns, despite efforts by the government of President Aslan Maskhadov to stop illegal tapping and sabotage.
Since the start of the Basaev offensive, Russia has also suspended rail shipments of Azerbaijani oil through Dagestan. But so far, there seems to be little evidence that the rebels have targeted oil transit in the Caucasus, or that they have sought to capture other export routes. The oil pipeline of the Azerbaijan International Operating Company from Baku to Supsa on the Black Sea has been operating normally. There have also been no reports of rebel interference with the rail route through Georgia.
Whether or not it becomes a reality, Russia may need the bypass plan to retain its own economic influence in the Caucasus, whether the Islamic rebels have economic ambitions or not. Without a route to Novorossiysk, Russia has ceased to be a contender in the competition with Turkey and Iran for a main export pipeline from the Caspian.
But Russia�s strategy of raising the stakes also runs the risk of creating a larger failure in the Caucasus. A military defeat could be seen as a loss of Russian economic influence in the entire region, under Putin�s formulation.
Moscow has other economic reasons for alarm over the rebel offensive, aside from the far greater concerns about civilian bombings in Russia and the spread of ethnic separatism. Dagestan accounts for more than half of Russia�s Caspian shoreline. Independence would greatly diminish Russia�s legal claims to the waterway. While that possibility still seems a long way off, Russian fears may be magnifying the potential strategic cost.
Putin�s remarks suggest that Moscow is focusing on how much the rebels have to gain because of fears that it has so much to lose.
Halyk Savings Bank of Kazakhstan is accepted in World Institute of Savings Banks
Halyk Savings Bank of Kazakhstan (Almaty) has distributed a press release with information that the bank is accepted in the World Institute of Savings Banks (WISB). Such decision was accepted on the sixth general assembly of WISB held in Senegal in the past weekends.
In the press release of Halyk Savings Bank is spoken, that WISB unites 107 organizations from 85 countries, promoting their cooperation and development.
Halyk Savings Bank is one of the first three largest banks of country. It is the strong competitor on the Kazakhstan market of bank services mainly at the expense of the biggest amount of branches. No one from the business banks of Kazakhstan can have such network for several next years. According to the Bank�s financial reporting granted to KASE, on July 01 of the current year its assets make 46.6 billion tenges, shareholders equity - 4.8 billion tenges, net produce - 434.5 million tenges.
The Halyk Savings Bank is the first among the Kazakhstan banks in the attraction of the population�s deposits. In the beginning of 1999 volume of placed in the bank deposits of natural persons has made 20.8 billion tenges.
The next trades with US dollar, Deutsche mark and Euro were held at KASE. 22 banks participated in the trades.
Today the trades were opened with the US dollar at 135.53 tenge per unit of the currency, and immediately the dollar exchange rate soared due to a great demand from the buyers. As the trade continued, strengthening rate of the dollar gradually decreased, but it did not prevent the market to reach 137.63 tenge per dollar at 38th minute.
Last 8 minutes of the session went in an equilibrium market: dollar was traded within 137.44-137.51 range. The trades were closed at � 137.45/50
189 deals were made with US dollars. Weighted average dollar exchange rate made 137.46 (+0.65). Volume of the session - $9.285 mln (-$1.490 mln). Exchange rate fluctuation during the trade was0.42%.
One hour after closing of the trades at over-the-counter market of Kazakhstan dollar was quoted at 137.54/69 tenge per unit of the currency. Two hours later � 137.50/70.
Demand still prevails over supply in the market. There is no principal changes. Banks willingly buy the currency notwithstanding constant and fast growth of its price.
4 deals were made with Deutsche mark. Weighted average exchange rate � 73.60 (0) tenge per unit of the currency. Trade volume - DEM35 (+30 thousand) thousand. At closing of the session Deutsche mark was offered at 74.60 tenge per unit of the currency, with no demand existing.
1 deal was made with euro at 143.50 (+2.00) tenge per unit. Trade volume - EUR5 thousand (-5 thousand). At closing of the session euro was quoted at 143.60 (demand) tenge per unit.
(IRBIS, Sept.23)
All Over the Globe is published by IPA House.
© 1998 IPA House. All Rights Reserved.