Page 17 - FSUOGM Week 07 2023

FSUOGM NEWS IN BRIEF FSUOGM

Kazakhstan. of the fiscal position, but Fitch does not see another round of tripartite talks with the
BTC has a throughput capacity of 1.2mn evidence of additional public debt.” management of Gazprom on February 9,
b/d. However, actual Ceyhan exports Turkmenistan's IDRs also reflect key the parties touched upon the first results of
haven’t held above 1mn b/d for a sustained rating drivers such as unconventional a study of the technical condition of the gas
period since at least 2008, according to economic policies, Fitch said, adding: “The transmission system supposed to be used
cargo loading data compiled by Bloomberg. parallel market exchange rate (around for the transit of Russian gas to and through
TMT19/USD) trades at a large discount Kazakhstan.
to the official rate (TMT3.5/USD) and Russia's suggestion that a gas union of
Fitch revises Turkmenistan does not appear to have moved in the Russia, Uzbekistan and Kazakhstan was first
past six months and is around the same
aired in November.
outlook to positive, affirms IDR level as early 2020, despite the significant Uzbekistan’s energy minister, said that his
Previously, Jurabek Mirzamakhmudov,
improvement in external liquidity. It
at ‘B+’ is unclear whether additional foreign country was intending to import gas under
contracts, and not "through an alliance
exchange revenues will be used to tackle the
Fitch Ratings on February 10 revised its parallel market exchange rate and associated or a union." Kremlin spokesman Dmitry
Outlook on Turkmenistan's Long-Term economic distortions.” Peskov replied that there was no question of
Foreign-Currency Issuer Default Rating Monetary policy in Turkmenistan is "political conditions" for the supply of gas.
(IDR) to Positive from Stable and affirmed underdeveloped relative to peers, with At the end of December, Russian deputy
the Issuer Default Rating (IDR) at 'B+'. credit targeting the main policy tool, Fitch PM Alexander Novak announced the
Fitch noted Turkmenistan’s external and also advised. “The use of price controls to continuation of negotiations for gas supplies
sovereign balance sheets are benefiting from manage inflation and state banks to support to Central Asia. On January 18, Kazakhstan
higher energy prices. “Data for 9M22 show the private sector creates risks for public signed a roadmap for cooperation with
a current account surplus of USD4.7 billion finances. Economic diversification and Gazprom. Uzbekistan did the same the
(6.9% of Fitch-projected full year GDP) and increasing the role of the private sector have following week.
exports for the full year on a customs basis been re-emphasised as key economic policy According to Mirzamakhmudov,
were up 43% yoy. Fitch expects continued goals,” it said. Uzbekistan was gearing up for natural gas
surpluses in 2023 and 2024, albeit Fitch estimated Turkmen growth was supplies from Russia that would commence
narrowing due to a fall in energy prices 2.4% in 2022 (2016-2021 average 0.8%, on March 1.
and a pick-up in imports related to capital according to IMF data), though the official
spending.” estimate was 6.2%.
The Central Asian country’s external “A fall in gas production and low single Russia's Gazprom seeks
debt fell to 6.1% of GDP at end-2022 and is digit increases in the output of key export
forecast to remain stable to end-2024 due products underpin our numbers, with the compensation from Bulgaria,
to the absence of significant new foreign- post-pandemic reopening and a revival in
financed projects, the ratings agency said. capital spending also supportive factors. caretaker energy minister says
“Sovereign net foreign assets increased Inflation eased to mid-single digits at
by USD4.9 billion in 2022 to USD35.1 end-2022, reflecting price controls, more Russia’s Gazprom is seeking compensation
billion and are projected to rise by a further restrictive credit policy and base effects,” from Bulgaria, after Sofia refused to start
USD5.4 billion to end-2024, equivalent to Fitch said. paying for natural gas supplies in rubles
54% of GDP ('B' median -25.3%),” it added. Turkmenistan's rating is underpinned by in 2022, caretaker Energy Minister Rossen
Preliminary data put the Turkmen state its possession of the world's fourth-largest Hristov said on February 10.
budget surplus for 2022 at 1% of GDP gas reserves, but Fitch did not anticipate a At the end of April, Gazprom decided
based on Fitch's presentation, meaning the significant increase in gas production over to halt gas supplies to Bulgaria, after the
country is due to record its first surplus its forecast period. country followed the EU’s decision to reject
since 2014, with oil and gas revenues “Turkmen gas is sold at the border Moscow’s request for payment in rubles.
jumping by 80%, Fitch said. “The lagged and major new supply would require new Until then, Bulgaria was almost completely
pass-through embedded in energy contracts infrastructure, which would be financed dependent on Russian gas.
and still high prices will ensure revenues by the buyer, and long-term contracts, The country had a contract with
remain strong over our forecast period and in addition to investment to expand Gazprom until the end of 2022, under
while we expect capital spending to rise in production. Gas production declined by which it was supposed to pay in US dollars.
response, the surplus is forecast to widen to 1.8% in 2022 to 82.3bcm, reflecting a near "There is an ongoing correspondence.
1.4% of GDP in 2023 before returning to a halving of exports to Russia, after a one- Claims have been made by the Russian side
small deficit in 2024,” it also observed. off special request for exports above the for a certain sum, we have answered back...
Looking at Turkmen public debt, Fitch contracted level in 2021. Around 70% of gas I do not want to comment further because
said: “Public debt fell to 6.1% of GDP at exports are to China, where exports rose by of confidentiality," Hristov said in an
end-2022 ('B' median 57%) reflecting the 3.5% in 2022,” Fitch said. interview with public Broadcaster BNT.
repayment of all domestic debt in January, "They want us to pay for something they
and is forecast to fall further with the believe that we owe them," he added.
government indicating it does not intend Uzbekistan, Kazakhstan aim Later on the same day, the energy
to borrow domestically. Liquid assets of ministry clarified on its website that
the fiscal reserve fund, Turkmenistan to accelerate Russian gas Gazprom is seeking compensation for
Stabilisation Fund (TSF), were 4.7% of GDP unpaid sums from April for gas already
at end-2022. deliveries supplied.
“Off-budget transfers to and from the
TSF and the role of off-budget entities and The energy ministers of Uzbekistan
funds, particularly in capital spending, lack and Kazakhstan have agreed to speed
transparency and complicate the assessment up deliveries of Russian gas. During

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