Page 14 - FSUOGM Week 31

FSUOGM INVESTMENT FSUOGM

Ukraine secures $61mn EU loan to

cut energy imports

UKRAINE UKRAINE has secured a €51.9mn ($60.9mn) role to play in achieving energy independence,
loan from the European Bank for Reconstruc- especially under the current unfavourable
Ukrainian gas tion and Development (EBRD) to help reduce price climate,” Naftogaz CEO Andriy Kobolyev
producers are reeling its reliance on imported energy. said. “Signing this agreement with the EBRD is
from the impact that State gas supplier Naftogaz and Ukraine’s another step towards strengthening the country
COVID-19 has had on finance ministry signed an agreement on the and further evidence of the successful corporate
gas markets. loan with the EBRD, Naftogaz said in a statement governance reform at Naftogaz.”
on July 31. The Ukrainian firm said it was seek- Naftogaz’s upstream arm, Ukrgasvydobu-
ing to attract more international investment to vannya (UGV), will use the funds to upgrade its
boost domestic gas output and improve energy fleet of workover rigs, enabling them to operate
efficiency. at wells deeper than 5 km. It will also introduce
Ukrainian gas producers are reeling from energy-saving technology at the Lokachyn field
the impact that the coronavirus (COVID-19) in the Volyn region of north-western Ukraine.
pandemic has had on gas markets. European “Additional workover rigs will improve our effi-
gas prices have slumped to historic lows, and ciency and performance at depleted fields,” UGV
Ukraine's government takes these rates into CEO Olena Kobets said, allowing the company to
account when calculating what Naftogaz can maintain production and boost overall recovery.
charge consumers. The EBRD’s loan will be issued in two
Ukraine relies on a mix of domestic supply tranches of €36.4mn and €15.45mn, repayable
and imports from its EU partners Hungary, in nine and 15 years respectively. The annual
Poland and Slovakia. It has not bought any gas interest rate will be under 2.5%.
directly from Russia, once its only foreign sup- UGV will procure equipment and services
plier, in almost five years. using the loan via the EBRD’s bidding platform.
“International investments have a crucial The loan is backed by the Ukrainian state. ™

Russia's Rosneft speeds up share

buyback in July

RUSSIA RUSSIA'S largest crude oil producer Rosneft fell dramatically, to less than 0.2mn per day on
reported buying 1.9mn of its own shares and average," Sberbank CIB reminded on August 4.
Rosneft's policy stands global depository receipts (GDRs) during the
in stark contrast week of July 31, of which 1.1mn shares were Should the unexpected increase in buyback
to those of many bought from the Moscow Exchange. activity seen on July 31 be sustained, this could
international oil As reported by bne IntelliNews, a massive provide additional support for Rosneft's shares,
companies. share buyback programme was part of Ros- the bank believes, but notes that it is too early to
neft's 2018 investment makeover, when it draw any conclusions on the pace of the buyback.
pledged to cut debt, limit the investment pro- "The approved buyback programme is for
gramme and shed non-profile assets. The com- up to 340mn shares until the end of this year
pany also raised its dividend payout to 50% of (3.2% of total shares outstanding). So far, the
IFRS profit. company has bought back 42mn shares (12%
The buyback was renewed in March 2020 as of the programme limit, almost equally split
the oil major and other Russian blue chips were between shares and GDRs) for $182mn (for an
actively acquiring their own shares, as the prices average price of $4.4 per share)," Sberbank CIB
have tanked on the combination of coronavi- calculated.
rus (COVID-19) pandemic and the drop in oil Rosneft's policy stands in stark contrast to
prices. those of many international oil companies,
"During the first month of the programme, which immediately suspended their buyback
which began on March 23, the company had programmes after the March oil price crash.
been buying on average 1.4mn shares and Many do not expect to resume them until 2021
GDRs per day. However, in late April the pace or later.™

P14 www. NEWSBASE .com Week 31 05•August•2020