Central Asia’s Refineries Under Scrutiny – The Diplomat

Oil refineries in Central Asia are pivotal internal hubs. Analysts mostly compensate courtesy to a export-oriented purpose of these countries, as many of a wanton oil they furnish is pumped and sole abroad. Yet, a closer demeanour into a barrels of oil processed for domestic use and a elites determining a refineries can improved illustrate how Central Asia’s business and governments interact.

In Kazakhstan, a Atyrau refinery is one of 3 categorical hubs for estimate oil. Kazmunaigas, a state-owned oil and gas company, controls a plant, built in 1945. The plant and a city are so intertwined that Kairat Urazbayev, a new mayor allocated in January, formerly served as ubiquitous executive of a refinery. The refinery has prolonged been related to worsening environmental conditions, generally atmosphere and H2O pollution. Only in new months was an atmosphere wickedness monitoring system put in place. Air peculiarity is now monitored both by a supervision and by local NGOs.

In August, a Atyrau oil refinery was subjected to an anti-monopoly investigation for assigning a use agreement except clarity procedures and causing acceleration in a cost of petroleum products. It is common knowledge that one of a country’s richest businessmen, Timur Kulibayev, a son-in-law of Kazakhstan’s initial president, Nursultan Nazarbayev, unofficially maintains tighten links with a supervision of a refinery.

Environmentally, hydrocarbon descent in a Atyrau segment has caused residents to worry several times in a past few months alone: The Atyrau refinery caught fire, while flaring during a Karabatan estimate plant, a onshore trickery that refines wanton oil pumped from a hulk offshore margin of Kashagan, projected an meaningful mushroom cloud that was manifest from a city of Atyrau, 60 kilometers to a west.

In Uzbekistan, a understanding to sell a Fergana refinery, a country’s largest oil estimate plant, lifted eyebrows for a ambiguous web of transactions. In Jun 2020, Belvor Holding Ltd, a Cyprus-based company, took control of Jizzakh Petroleum, a corner try formerly determined by Uzbekistan’s and Russia’s state-owned companies, that operates a Fergana refinery. Belvor, rumored to be tranquil by tighten members of President Shavkat Mirziyoyev’s circle, now owns 68 percent of a refinery, Uzbekneftegaz owns 30 percent, while Gazprom-controlled Gas Project Development Central Asia defended 2 percent after a deal.  

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Observers remarkable that such a pierce could prove that Mirziyoyev is jolt adult a elites in a Fergana segment in an bid to hoard control over a assets. In a leaked recording in 2018, Mirziyoyev pronounced he disapproved of a rapacious opinion of a Fergana elite, reportedly adding that “it would be some-more profitable for us if we chuck a whole Fergana refinery plant into throw metal.” Without categorically fixing a “predators,” Mirziyoyev was clearly referring to Akbarali Abdullaev, a nephew of late President Islam Karimov’s wife, who tranquil a plant until 2013.

In 2019, a tenure of a plant was eliminated from Uznefteprodukt, a state-owned enlightening company, to a State Assets Management Agency, a supervision bend in assign of a post-Karimov privatization drive. While it was originally earmarked for a open sale to Indonesia’s PT Trans Asia Resources – owned by a Aslanov family – a refinery was eventually eliminated into a hands of Jizzakh Petroleum in Feb 2020. The new tenure sacked a prior supervision and combined a position. Bakhtyor Fazylov, ubiquitous executive of Jizzakh Petroleum, also reportedly owns shares in Eriell, a vast use association related to both Uzbekneftegaz and Russia’s Lukoil.

In June, after months of stretched industrial relations, 287 workers during a refinery filed a complaint directly to boss Mirziyoyev, arguing that a new supervision drastically worsened work conditions and seemed to control business in defilement of contractual obligations. Jizzakh Petroleum, however, remained pure by a misunderstanding and sealed onto a $300 million project to update a plant in July.

Undoubtedly, a quasi-private supervision of Kazakhstan’s and Uzbekistan’s refineries points a spotlight on bad corporate governance and rapacious business function that has characterized a story of a petroleum zone in a region. The Atyrau refinery, notwithstanding dear modernization projects, continues to infect a sourroundings and causes cost increases by ambiguous deals. The new owners of a Fergana refinery incited a state item into a tributary for private interests. Those who approaching to breathe new atmosphere with a choosing of Kassym-Jomart Tokayev in Kazakhstan and Mirziyoyev in Uzbekistan continue to mount choked in a permanent cloud of smoke.

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