Page 16 - FSUOGM Week 07 2023

FSUOGM NEWS IN BRIEF FSUOGM

ANPZ halted operations of Atyrau's out on taxes as Urals was trending at $49.5. period. Last year the company paid nearly
catalytic cracker and associated installations This would mean that they would have to UAH100bn ($2.7bn) in taxes despite the
from January 10-11 due to a shortage of free pay taxes on $85-$25 or $60 per barrel base, ongoing war against Russian aggression.
LPG storage space. The temporary outage as this is a higher value than the $49.5 Urals
reduced the refinery's normal output of price.
500 tonnes per day of LPG to 20 tonnes Previously FinMin admitted that heavily KazMunayGas delays start of oil
per day, 6,000 tonnes per day of motor discounted Urals price is no longer a solid
gasoline to 1,500 tonnes per day, and 4,000 indicator for fiscal purposes. "In view of exports from Tengiz oilfield via
tonnes per day of diesel to 2,000 tonnes per the declining relevance of the Urals price
day. Mirzagaliyev said such incidents are as an objective price indicator of Russian Baku-Tbilisi-Ceyhan pipeline
inadmissible at a time when the supply of oil export prices, approaches to a transition
petroleum products to the domestic market to alternative price indicators for taxation Kazakh state-run oil and gas firm
is a pressing issue, amid the repeated purposes are currently being studied," a KazMunayGas (KMG) has delayed the
criticism expressed by the country's Finance Ministry spokesman previously start of its oil exports from Tengiz oilfield
leadership towards ANPZ and the ongoing told Vedomosti daily. through the Baku-Tbilisi-Ceyhan (BTC)
disruptions in its operation. The analysts surveyed by Vedomosti see pipeline after BP Azerbaijan announced
the proposed Urals+discount cap quotation force majeure on oil shipments from
system as "quite adequate" because it would Ceyhan, Reuters has reported, citing four
Russia’s FinMin meddles with allow the Russian oil price to be determined market sources.
more accurately and would encourage
The planned oil shipments were set to
benchmark oil price to raise companies to negotiate to reduce discounts. begin in February from KMG's share in
Tengizchevroil, a company it co-owns with
revenues Chevron and other investors.
The company was expected to transport
Russia’s Finance Ministry (FinMin) is Fitch rates Naftogaz at up to 120,000 tonnes of crude oil from
preparing to change the formulas for Restricted Default Aktau port to Baku, then to the BTC
benchmark oil price for calculating tax pipeline.
base, Vedomosti and RBC business portal Fitch Ratings affirmed the Long-Term Issuer BP Azerbaijan said on February 9 that
reported citing a draft bill submitted to the Default Rating (IDR) of Naftogaz, Ukraine’s Azerbaijani crude oil exports from Turkey's
State Duma. national gas giant, at 'RD' (Restricted Ceyhan port had been stopped due to
As covered by bne IntelliNews, the Default), Ukraine Business News reported earthquake damage, and repair work was
mushrooming of the discount on Russia’s on February 10. under way.
Urals blend of oil versus the benchmark The state-run company struggled last The report noted that exports from
Brent has pushed Russian federal budget to year following Russia’s full-scale invasion the BTC pipeline may resume as early as
a record-high deficit in January 2023. and is currently in discussions with February 13, pending further inspection.
Now the FinMin wants to cap the bondholders over the restructuring of
discount of Urals blend oil to Brent oil price Eurobonds originally due in July 2022 (for
at $25 to $34 per barrel, when calculating $335mn) and November 2026 (for $500mn). Turkey reportedly restarts
the taxable base applied for oil companies The failure to come to an agreement with
for such taxes as the mineral extraction tax creditors contributed to Fitch’s RD rating. Ceyhan loadings of Azerbaijani
(MET), supplementary income tax, excise “Russia's invasion of Ukraine (CC) has
tax on oil raw materials, and others. affected Naftogaz's performance and cast oil after earthquake damage
The ministry plans to introduce the uncertainty over our financial projections
maximum discount gradually during several for the company's performance. Its liquidity assessment
tax periods in order to allow companies to position is weak and is affected among other
adjust, starting with $34 per barrel in April, factors, by the need to import natural gas Turkey’s southeastern port terminal Ceyhan
$31 in May, $28 and in June, and $25 in July. from Europe at high prices, even though on the afternoon of February 12 reportedly
According to the bill, the tax base will be its import needs have reduced on weaker restarted tanker loadings of Azerbaijani
calculated on the highest value of the two - domestic demand,” Fitch stated. crude oil following a suspension brought
the monthly average Urals per barrel price Naftogaz will submit an alternative in after the huge earthquakes that hit the
or the Brent (North Sea Dated) per barrel consent solicitation for the Eurobonds. The surrounding region on February 6.
price minus $25-$34. company successfully came to an agreement The restart was confirmed by Tamam
According to unnamed sources of the with creditors to defer the payment on a Bayatli, a spokeswoman for BP’s Baku office,
Kommersant daily, the FinMin planned to separate Eurobond (€600mn) due in July in an email to Bloomberg.
boost its oil revenues even more by setting 2024 for two years. BP declared force majeure on Azerbaijani
the maximum discount at $20, but this was Last month, Fitch stated that Ukraine oil exports via Ceyhan and carried out an
rejected by the Deputy Prime Minister and is spiralling towards default, rating the assessment of possible earthquake damage.
ex-Energy Minister Alexander Novak. country’s Long-Term Foreign-Currency There were reports of a control room at the
The analysts surveyed by the daily IDR at 'CC'. The agency said that it has port suffering quake impacts.
estimated that the discount cap could bring de-linked Naftogaz’s rating from that of the Ceyhan typically handles around 1mn
RUB1 trillion worth of additional revenues. state with its current rating reflecting its barrels a day (b/d) of crude. Around 60% of
The ministry is also creating a direct Standalone Credit Profile (SCP); however, it is sourced from Azerbaijan’s Caspian Sea
incentive for oil companies not to sell oil will review the company’s impact on the fields. The rest flows from Iraq.
cheaper than the ceiling. For example, at the state following restructuring. BP operates the Baku-Tbilisi-Ceyhan
average January’s $85 per barrel Brent per Naftogaz is one of Ukraine’s most (BTC) pipeline, which carries Azerbaijan’s
barrel price and the ceiling discount of $25, important companies and has kept the crude to to Ceyhan. The pipeline also
Russian companies would already be losing country going through the brutal winter transports oil from Turkmenistan and

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