Page 133 - RusRPTMar21

could come in 2023.
Production and capex guidance Novatek plans to increase gas and liquid hydrocarbons production in 2021 by 1% YoY. The company guides for flat capex YoY in 2021. The company plans to increase its condensate output by 6-8%, decrease its crude output and maintain its market share of 18% on the Russian gas market.
● Lukoil
Lukoil reported its 4Q20/2020 operating results February 8. The results should already be priced in, as the results for Russia were generally in line with the data reported by CDU-TEK. One bright spot in the results release was the significant 135% q/q increase in gas production abroad to 3.9bcm.
Lukoil reported a 2.1% q/q increase in liquids production to 19.2mnt in 4Q20, although total liquids production was down 8.5% y/y in 2020 to 87.5mnt due to OPEC+ restrictions. The company’s production in Russia was up 2.2% q/q in 4Q20 to 17.8mnt but down 10.5% y/y to 73.5mnt in 2020. Lukoil increased production in 2020 at the V. Vinogradov, Imilorskoye, Sredne-Nazymskoye and Pyakyakhinskoye fields by 20.4% y/y to 4.2mnt. The company’s high-viscosity oil (HVO) output at Yaregskoye and the Permian reservoir of the Usinskoye field was up 6.2% y/y to 5.2mnt (7% of total Russian production). As a reminder, the changes to HVO taxation take effect this year.
Total gas production was up 37.8% q/q in 4Q20 to 8.2bcm but down 17% y/y in 2020 to 29bcm. As a reminder, gas production in 2Q20 and 3Q20 outside of Russia was down significantly y/y due to a lack of demand in China, which caused Lukoil to idle some of its assets in Uzbekistan.
Total refinery throughput was down 11.5% q/q to 13.1mnt in 4Q20 and 14.7% y/y to 58.6mnt in 2020. Refining in Russia fell 5.1% q/q in 4Q20 and 9.2% y/y in 2020.
The results for Russian production were more or less in line with the dynamics reported by CDU-TEK at the start of January. We view the increased gas production in Uzbekistan positively. Regarding Lukoil’s increased HVO production at Yaregskoye and Usinskoye, we expect management to add more color on the company’s strategy regarding this type of oil during the FY20 IFRS results call on 11 March.
Interfax has published selected statements from Lukoil’s First Vice President Azat Shamsuarov. According to him, Lukoil has guided for production of around 80mnt in 2021 (flat YoY), although that would depend on the parameters of the OPEC+ agreement for the year.
133 RUSSIA Country Report March 2021 www.intellinews.com