Page 11 - FSUOGM Week 05 2021

FSUOGM POLICY FSUOGM

Russia to hold Arctic field

contest in March

RUSSIAN RUSSIAN subsoil licensing agency Rosnedra or Yamal peninsulas will be able to take part in
has announced it will stage an auction for rights the contest, according to Rosnedra. Further-
Novatek made a to the Severo-Gydansky licence in the Russian more, the extracted gas must be used for LNG
request for Severo- Arctic on March 24. production.
Gydansky to be The block straddles the shore of the Novatek has no immediate need for extra
auctioned off two years Gydan Peninsula and is estimated to hold resources. The operator of Yamal LNG already
ago. up to 270bn cubic metres in possible has the gas at hand to support Arctic LNG-2,
resources. But modern drilling and other Arctic LNG-1 and potentially a fourth major
exploration work will be needed to assess liquefaction project, Arctic LNG-3. However, by
reserves properly. securing licences now it can ensure they do not
Russia’s top LNG exporter Novatek had fall into the hands of its domestic rivals Gazprom
requested that an auction be held for Seve- and Rosneft.
ro-Gydansky in 2019. The company is seeking Rosnedra recently said it intended to auction
more gas on the Gydan Peninsula to underpin off licences for three other blocks in the Yama-
its future LNG projects, as it works towards its lo-Nenets province in the second quarter, named
goal of producing 70mn tonnes per year (tpy) Logasegansky, Khoshgortyegansky and Kharae-
of super-cooled gas by 2030. Only companies gansky. Contests for these areas had been due to
that already have licences on either the Gydan take place in 2020. ™

Russia urges refiners to ramp up runs

RUSSIA RUSSIAN authorities have urged oil companies actual prices are expected to increase by less, the
to ramp up refining runs following a steep rise in firms say.
Russian oil firms are wholesale fuel prices. Novak also called on oil companies to accu-
seeking adjustments to Deputy Prime Minister Alexander Novak mulate more gasoline and diesel in storage over
the damper mechanism met with industry representatives on January 28, the coming months, after stocks reached a mul-
in return. but the two sides were unable to agree on how ti-year low in January.
to resolve the problem. Oil firms are asking for The damper mechanism keeps has kept
changes in the so-called damper mechanism in pump prices stable over the past year, despite vol-
Russian oil taxation that affects pump prices, in atility created by the coronavirus (COVID-19)
exchange for increasing runs. pandemic. The recent surge in wholesale prices,
The damper was introduced following a however, means that fuel suppliers are struggling
steep growth in retail fuel prices in 2018, and to earn a profit on the domestic market. The situ-
requires that fuel suppliers pay extra into the ation has hit independent fuel retailers hardest,
budget when indicative domestic pump prices while integrated players are better positioned to
are higher than export netbacks. Conversely, absorb the impact.
they can collect a subsidy when the situation Wholesale prices also soared after the refin-
is reversed. ers were caught by surprise by the speed of the
However, oil companies argue that the indic- fuel recovery after coronavirus restrictions were
ative domestic price has little connection with eased in Russia during the summer. The govern-
actual market trends. The indicative price rose ment’s response then was to call for refiners to
by 5% to RUB56,300 ($744) per tonne for gas- supply more fuel to the St Petersburg Interna-
oline and RUB50,700 per tonne for diesel, but tional Mercantile Exchange. ™

Week 05 03•February•2021 www. NEWSBASE .com P11