Page 15 - FSUOGM Week 44 2019

FSUOGM
FSUOGM
vessels in the Arctic Northern Sea Route was introduced in 2019 to support domestic shipbuilding.
Reportedly, Gazprom is now requesting an exemption for foreign vessels employed for work on the continental shelf under a special customs procedures, which is now being discussed by the Ministry of Transportation and the Ministry of Energy.
Previously Russia’s second largest gas producer and LNG runner-up Novatek was already exempted from the rules and was allowed to lease 26 foreign tankers to transport LNG until 2044 on the Northern Sea Route.
The head of Novatek and Russia’s richest man according to Forbes Leonid Mikhelson previously sharply criticised any attempts to limit foreign-registered ships, suggesting the introduction of targeted measures of support for domestic shipbuilders instead.
bne IntelliNews, October 30 2019
Gazprom, BASF promote tech cooperation
Gazprom and Germany’s BASF has agreed to devise a comprehensive solution for separating sulphur from natural gas, under a deal reached at a conference in Sochi.
Together they plan to optimise the performance of the Astrakhan gas processing plant (GPP) by deploying state-of-the-art technologies. Special consideration will also be given to a possible application of highly- selective and energy-efficient technologies
of BASF to boost the productivity and operational efficiency of amine gas treatment units at the Orenburg GPP.
October 31 2019
Russian oilfields 65%
profitable, Surgut holds
most unprofitable fields
About 65% of oil fields developed by Russian oil majors are profitable, Vedomosti daily reported on November 1 citing the study of the Ministry of Energy and the State Reserves Commission (GKZ).
The company with the highest share of oil fields that would not break even without fiscal support is Surgutneftegaz, with 41% profitable oil fields. The study checked 483 fields of nine Russia’s largest oil companies, and 126 fields of smaller independent producers.
The highest share of commercially solvent reserves is reported for regional oil major Tatneft (86%), Russneft of Mikhail Gutseriev (81%), state oil major Rosneft (69.5%),
Gazprom gas giant (63%), and largest private oil company Lukoil (60%).
Previously another analysis by Russian natural resources also found that about 35% of Russian oil fields would not break even without state support or other incentives.
Study by Vigon Consulting claims that given the targeted decline of oil price to
$40 per barrel by 2035 (as forecasted by the Ministry of Economic Development) about a third of 8.6bn tonnes of Russian oil reserves would be unprofitable to extract.
bne IntelliNews, November 1 2019
RosneftoutputslumpsinQ3
Russia’s Rosneft lowered its production by 1.5% y/y to 5.74mn barrels of oil equivalent per day in the third quarter, according to
a company report. It produced 57.88mn tonnes of liquids during the period, down 1.4%, and 16.3bn cubic metres of gas, down 1.9%.
Over the first nine months of the year, the company lifted production slightly by 0.6% to 5.783mn boepd. This figure included 49.73 bcm of gas, down 0.4%, and 172.2mn tonnes of liquids, up 0.9%. Oil production grew
on the back of higher contributions from greenfield projects, namely the Yurubcheno- Tokhomskoye, Srednebotuobinskoye, Kondinskoye, Russkoye, East-Messoyakha fields.
November 5 2019
CENTRAL ASIA & SOUTH CAUCASUS
Kazakhstan to supply 1mn-
3.5mn tonnes of oil and oil
products to Belarus
Kazakhstan plans to supply 1mn-3.5mn tonnes of oil along with oil products to Belarus, Kazinform reported on October 29, citing Minister of Energy Kanat Bozumbayev.
Belarus’ Belneftekhim state energy holding said on September 26 that Belarus and Kazakhstan would sign a deal on deliveries
of Kazakh oil to Belarus in October when Belarusian President Alexander Lukashenko was expected to visit the Central Asian nation. Lukashenko originally made the suggestion
to import Kazakh oil in the wake of Russia halting oil flows via the Druzhba pipeline in April after contaminated oil was discovered. Belarus has previously accused Russia of supplying low-quality oil.
Moreover, Belarus had to reduce the workload of its refineries, possibly due to a
row between Moscow and Minsk over a new tax regime on Russian oil that will cost the Belarusian budget billions of dollars.
Despite the contamination leading to a brief halt in oil flows to Belarus and parts of Europe, Belarusian refineries will not post losses in 2019, Belneftekhim’s deputy head Vladimir Sizov has told reporters.
bne IntelliNews, October 30 2019
H1 profit of Georgian Oil and
Gas Corporation hit by weak
lari
First-half net profit at Georgian Oil and Gas Corporation (GOGC) plummeted
by 68.5% y/y to $11.9mn, despite robust Ebitda, dragged down by foreign exchange effects, according to unaudited results.
Revenue was up 17.8% y/y to $160.4mn in the period, mostly due to a 19.8% y/y ($106.7mn) increase in the sale of gas. Revenue from electricity generation,
the second largest revenue category for
the company, was up 21.6% y/y, while Georgian lari (GEL) denominated gas pipeline rental revenue was down 7.1% y/y.
Meanwhile, operating expenses increased 14.9% y/y to $130.9mn in the first half of the year. The cost of gas, the largest expense category, which combines gas purchased for resale (85% of cost of gas) and gas used by Gardabani I power plant, grew 19.6% y/y to $114.5mn.
GOGC’s adjusted Ebitda grew by 21.7% y/y to $36.6mn, supported by strong H1 revenues. This translated into an adjusted Ebitda margin of 22.8% in the half, slightly above last year’s level (22.1% in H1 2018).
But the local currency depreciated by 7% y/y against the dollar during the six months, generating a non-cash FX loss of $16.7mn in 1H19, compared to a $11.2mn gain in 1H18.
After upgrading Georgia’s sovereign rating from BB- to BB in October 2019, S&P Ratings lifted GOGC’s rating from
B+ to BB-. The decision was backed by GOGC’s strong financial position (sizeable cash balance, stable earnings and steady cash flows from the electricity segment). In addition, S&P Ratings expected the commissioning of Gardabani II in late 2019 to improve the company’s financial position, after a temporary deterioration of credit metrics (high capex, lower cash balance).
Notably, S&P Ratings has not changed Georgian Railway’s credit rating, leaving it at B+, two notches below that of the government.
bne IntelliNews, November 4 2019
Week 44 06•November•2019
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