Pig in a poke for Gazprom
20/04-2012 12:45, Bishkek – 24.kg news agency , by Julia KOSTENKO
In Kyrgyzstan, they say it is possible to make good money on gas industry, if you dispose it properly. But you can incur debts and lose everything – impact, profit, long-term friendly relations with partners. But in fact there are no constructive ideas. We can not even make money, but pay off debts.
Our gasmen promised Kazakhstan that they would pay for consumed fuel. But the debt only grew on. Now it has reached that sizes that it can breaks all existing agreements.
No money - no gas?
Kyrgyzstan and Kazakhstan arranged for natural gas deliveries still in September, 2011. At that point in time the contract terms suited both parties. Kyrgyzstan was attracted by lower price compared to a long-time supplier - Uzbekistan and Kazakhstan - the increase in exports. No one imagined what difficulties were ahead.
In early 2012 Kazakhstan exposed unreasonably high gas price. Uzbekistan increased price to a maximum of $ 35 every three months. And KazTransGaz jumped from $ 195 to $ 281 per thousand cubic meters of gas. We managed to bring down the cost to $ 224 through long negotiations. We arranged for a fixed price - $ 290 with UzTransGaz. It seems that a new supplier does not know that Kyrgyzstan does not keep its word. And there is no monthly prepayment. Suppliers have to wheedle money out.
The contract expires on April 30. The supplier may simply abandon the partnership.
Our distressing debts
At present Kyrgyzgaz owed KazTransGaz $ 7.5 million soms, and UztTansGaz - $ 800 thousand. The problem is that the company can not collect debts from their customers (only budget-funded organizations owe it about $ 9 million), and those are unable to obtain financing from the budget, which is adopted in the country not at the beginning of the year, but to the middle. This is another feature of the Kyrgyz Republic – to decide issues slowly and sadly.
KyrgyzTransGaz told 24.kg news agency that the money was not transferred. The delivery of natural gas will be stopped. According to their data, the debt of Kyrgyzstan is $7.8 million.
A great deal of plans
Kyrgyzgaz OJSC is the only gas monopolist. It has 285, 392 thousand clients. In 2011 – for the first time in six years - the company received 23.5 million soms of profit, loss of natural gas decreased by 2.6 per cent. But the equipment has operated for 25-30 years and the degree of deterioration is 70 percent. It requires a total overhaul.
Kyrgyzgaz intends to attract investors. According to the company director general Turgunbek Kulmurzaev, they require more than $ 500 million for this. The problems of high cost of fuel and depreciation of equipment can be decided if they sell a controlling stake to the Russian Gazprom company.
Our own gas and oil
In February, 2008 the Gas All-Russian Scientific Research Institute prepared technical and economic assessment of mineral resources in Kyrgyzstan for the presence of oil and gas, and a phased program of exploration. The State Agency on Geology and Mineral Resources has issued Gazprom a license to conduct exploration work in the Kugart and Vostochnyi Maili-Suu-IV fields.
Proven natural gas reserves in Kyrgyzstan are priced at 6 billion cubic meters. The implementation of projects will allow the country to abandon imported fuels. However, the development of gas fields is difficult because of geological features and underdeveloped infrastructure. For these reasons, our own natural gas production is currently no more than 30 million cubic meters a year.
According to the data of Kyrgyzneftegaz, in 2011 they produced 77, 56, 4 tons of oil and 26, 566 million cubic meters of gas. With coming of the “Russian gas giant”, the company hopes to increase production. Kyrgyzneftegas thinks well that controlling stock interest of Kyrgyzgaz will belong to Gazprom. Differences in our work will not arise, because the Russian company has more opportunities.
However, the question of Kyrgyzgaz selling remains open up to now. Gas industry is the only in Kyrgyzstan that is ready to sell 75 percent of shares. Its leadership understands that they will not cope with the development without Russia’s help.
Beneficial and acceptable
As for the creation of Gazprom daughter enterprise on the basis of Kyrgyzgaz, this issue is to be solved in September, 2012. In Turgunbek Kulmurzayev’s opinion, the cost of fossil fuels may be decreased. He cited the example of Belarus, where before the arrival of Gazprom fuel cost $ 305 per thousand cubic meters, and now - $ 165. Of course, it would be premature to assert that the republic will receive fuel at the same price.
Moreover, Gazprom will choose suppliers by itself. “As before, we will buy gas from Uzbekistan for the south of the republic. There is no need to pay for transit and to lay a new pipeline. Fuel prices will be also adjusted by the Russian company,” Eugene Orlenko believes.
It is not known what price Kyrgyzstan will set for the company. An independent commission that will determine the market price of shares and the state of Kyrgyzgaz is to arrive in the republic in the near future. Most importantly, the commission’s conclusions will not frighten Gazprom off.
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