Page 14 - FSUOGM Week 11 2022

FSUOGM NEWS IN BRIEF FSUOGM

to RUB1 trillion of the sovereign National gas pipelines of Azerbaijan transported 6.8 providers could dry up in the next 6-8
Welfare Fund for buying shares in order bcm of gas (an increase of 6.4%). weeks if Russian aggression against Ukraine
to support the crashing Russian equity Gas from the Shah Deniz field began in shows no signs of letting up.
markets. December 2006, and is currently exported South Korean oil reserves at the moment
Sova Capital estimated that the volume- to Georgia, Turkey and Europe. The remain high, however, with the country
weighted average price (VWAP) when exports from the Shah Deniz field in 2021 holding well over the 90 days of strategic
Rosneft actively purchased shares from amounted to 17.6 bcm, which is 43.6% reserves recommended by the IEA, albeit
March 2020 to December 2021 stood at higher than in 2020. with slightly more currently held in private
RUB367 per share and $5 per GDR, which The contract for the development of the enterprises compared with state facilities.
is 63-65% below the respective average Shah Deniz field was signed in Baku on The MTIE remained typically tight-
prices for Rosneft shares and GDRs in June 4, 1996, and ratified by the parliament lipped following the release announcement,
January. on October 17 of the same year. The equity refusing when asked to confirm actual
Aton Equity sees the news as moderately participation of the parties in the contract is amounts now held, although local analysts
positive for Rosneft, seeing the buyback as currently as follows: BP (operator, 29.99%), believe there to be around 89.4mn barrels
supporting the share price in addition to SOCAR (21.02%), LUKOIL (19.99%), NICO remaining in state reserves after the most
the RUB1 trillion pledged by the NWF. (10%), TPAO (19% ). recent release.
BCS Global Markets believes that after On the political front Seoul backs the
the fall of the company's stock price by US and other Western countries in pushing
more than 40% in a month, the buyback South Korea approves oil for international sanctions against Moscow.
"should be supportive" for Rosneft.. Some regional analysts have noted in recent
release to take pressure off days that Japan, and increasingly South
Korea, are also facing pressure to reduce or
Azerbaijan earned $1.4bn refiners altogether halt purchases and infrastructure
investments related to Russian Far East
from oil exports, $1.3bn The government of South Korea last week energy sites as the war drags on.
gave the green light to release more than
It is understood that to make up any
from gas exports in January 4mn barrels of oil from the country's resulting shortfall on imports going into
the summer – with supplies from Russia
Strategic Petroleum Reserve (SPR).
Azerbaijan exported 2.3mn tonnes of oil in In a statement released by the South predicted to end around May – South
January 2022, which is 11.4% lower than Korean Ministry of Trade, Industry and Korean refineries would turn to African and
the same period 2021, the government Energy (MTIE) just two days prior to the US suppliers.
said in a statement. The total value of election of new President Yoon Suk-yeol, In January, South Korea imported over
oil exported from Azerbaijan during the the outgoing administration revealed 15mn barrels of US crude, an all-time
reporting period amounted to ~$1.4bn (an that a total of 4.42mn barrels was being monthly high. But as the world’s fourth
increase of 42.3%). released. The move comes in a bid to aid ranking crude importer, South Korea would
Gas exports from Azerbaijan in January South Korea’s domestic refineries in finding have to secure at least two very large crude
2022 amounted to 1.98 bcm (an increase replacements for Russian crude supplies in carrier (VLCC) cargoes per month to
of 10.1%). The total value of gas exported the coming weeks. replace current Russian imports.
from the country during the reporting The release follows a decision taken Additional cargoes from Alaska and
period amounted to $1.32bn (an increase earlier this month alongside the 30 other Nigeria are also being considered. Nigeria
of 4.3 times) member countries of the International in 2021 supplied South Korea with a total of
In 2021, Azerbaijan exported ~28.1mn Energy Agency (IEA), who agreed to a co- 7.3mn barrels during the calendar year, and
tonnes of oil (a decrease of 1%) for $13.9bn ordinated release of 60mn barrels of crude over 9.3mn barrels the previous year. In the
(an increase of 1.6 times). Gas exports from SPRs worldwide. process the African country became South
from Azerbaijan in 2021 amounted to 18.9 Addressing South Korea’s release, the Korea’s third-biggest trading partner, with
bcm (an increase of 36.9%) for $6.46bn (an MTIE said: “The decision aims to seek much of last year’s $2bn in trade made up of
increase of 2.3 times). stability in the energy market both at home Nigerian oil and gas shipments.
Azerbaijani gas is currently exported to and abroad, and to express our solidarity
Georgia, Turkey and Europe for consumers with the US and other member nations by
in Italy, Greece and Bulgaria. sending a message that energy resources Kazakh oil output up by 14%
cannot be used as a geopolitical tool.”
There has been some questioning of the y/y in 2021
Azerbaijan increased gas move at home, though, with one manager Oil production in Kazakhstan jumped
at a South Korean refinery quoted as saying:
exports from Shah Deniz by “It wasn’t entirely necessary for the state to by 14% y/y in 2021 with daily production
tap into the SPR because Russian oil makes
reaching 1.7bn barrels of oil, according to
9% in January-February up a very small portion of South Korea’s the latest figures published by energyprom.
overall crude imports ... Nevertheless, the
kz.
The export of Azerbaijani gas from the Shah 4mn barrels of state reserve barrels would That marks Kazakhstan’s overall
Deniz field in January-February amounted more than cover any shortfall in Russian recovery from the dip in production during
to 3.2 bcm, which is 9.3% higher than the crude intake in the near term, and buy us the COVID-19 pandemic as Kazakhstan
same period in 2021, according to the State enough time to fix other alternative supply gradually boosted its output from the 2020
Statistics Committee. deals.” levels.
The share of gas exports from the Shah Since 2019, South Korea has purchased Kazakhstan produced 6.7mn tonnes of
Deniz field accounted for 46.9% of the total an average of almost 3.7mn barrels per crude oil in January, up by 14.2% from the
volume of gas transported through main month of various types of Russian crude. level recorded in January 2021.
gas pipelines in the reporting period. In It is thought that supplies of Russian sweet
general, in January-February 2022, the main crudes from the Far East and Black Sea

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