Page 94 - bne IntelliNews Country Report: Russia Dec17

company have complained that the company needs to cut its costs and concentrate on its core business, but as part of the state machine Gazprom has lavished largesse on many state-backed prestige projects such as construction of a ski resort in Sochi for the Winter Olympics, reports Bloomberg . This time it will be Russian-history themed “Russia: My History” fun parks that are slated to be built across the country, co-sponsored by the Russian Orthodox church.
Rosneft has spent more than $100bn on acquiring assets , Bloomberg estimated on November 15. The agency recalled that in 2007, Rosneft took loans to buy back the state assets of Yukos, in 2013 and bought TNK-BP for $55mn. In mid-October 2016, Rosneft bought Bashneft for RUB329.7bnand then repurchased the company's shares from minority shareholders. The effect of integrating Bashneft into the structure of Rosneft in only the first two quarters of 2017 already amounted to RUB40bn, the company's CEO Igor Sechin said at a shareholders meeting in the summer of 2017. In the summer of 2017, Rosneft invested a total of more than $6bn fro a 49% in Indian Essar Oil Limited. And it has spent the same amount for a gas field in Egypt and oil projects in Iraqi Kurdistan, as well as a loan to Venezuela. Rosneft’s total debt grew for the fifth consecutive quarter and reached $48.4bn, Aton’s Alexander Kornilov said.
Russia's Ministry of Finance proposed reducing the mineral extraction tax (MET) rate for Gazprom’s projects, which are developing the Achimov deposits, Kommersant reported on November 7. The decrease in the MET rate is going to be applied to all Gazprom’s projects developing the Achimov deposits and might result in RUB2.8bn ($48mn) lower MET payments by Gazprom and its AchimGas joint venture. Gazprom currently produces gas in the first block of the Achimov deposits at the Urengoyskoye field with Wintershall (AchimGas JV, 50% Gazprom and 50% Wintershall) and in the second block of the Achimov deposits at the field alone. "Potentially, the MET relief might also affect the fourth and fifth blocks of the Achimov deposits, which are to be developed with Wintershall," VTB Capital said in a research note. Gazprom has a 75% in Achimov, and Wintershall owns the remaining 25% share. Production is slated to start in 2020-2021. If the MET is amended by reducing the coefficient in the MET formula from 1.4@, which is to be applied to Gazprom in 2018 to 1, applicable to independent gas producers, this might lead to a reduction of RUB2.4bn ($41mn, or less than 0.5% of 2018 Ebitda) in the MET payments for Gazprom, according to VTB Capital.
Rosneft boosted oil and condensate production by 11% annually to 168.94mn tonnes as of the end of January - September 2017 , the Russian oil major said on Monday. Production of liquid hydrocarbons rose 10.1% to 56.74mn tonnes in the third quarter of this year. Average daily production of liquid hydrocarbons grew by 10.1% year-on-year to 4.57mn barrels, the company said. Production drilling surged 26% year-on-year to 8.8mn m in nine months of this year, the company said. The number of commissioned wells rose 19% on an annualized basis to 2,300, with the 34% share of horizontal wells. Natural gas production added 3.1% annually as of the end of nine months of 2017 to 51bn cubic meters. Gas production in the third quarter rose by 3.5% to 16.7bn cubic meters. Hydrocarbons production in nine months of this year grew by 9.7% in annual terms to 5.72mn barrels of oil equivalent. Average daily production of hydrocarbons in the third quarter of 2017 grew by 8.8% year-on-year to 5.67mn barrels of oil equivalent.
94 RUSSIA Country Report December 2017 www.intellinews.com