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Some will have to drill in the harsher winter The worst is now over for Gazprom, with
months in order to secure rigs, rather than work- its European sales continuing their recovery
ing in the more favourable summer months. and prices slowly but surely rising. But it will be
This is set to be a long-term if not permanent struggling with the fallout from this steep fall in
shift in market dynamics, Bassoe says. If opera- earnings for some time.
tors cannot find a way to progress with plans in Rosneft is understood to be unhappy with a
the coming year, it could lead to more units being tax mechanism introduced last year that penal-
retired or cold-stacked, making rig scarcity even ises companies for charging too much for vehicle
worse. fuel in Russia.
Neptune Energy, the Netherlands’ biggest The so-called damper mechanism means
oil and gas producer, saw its core earnings more companies pay more in tax when domestic fuel
than halve in the second quarter. But the com- prices are higher than export price. But when
pany fared better than others thanks to hedging Russian prices are lower, they receive a subsidy.
a good deal of its production. But the mainly The pandemic caused European fuel prices to
gas-focused producer warns that the recovery in collapse, but Russian prices were relatively stable.
gas and LNG prices will be slow. As such, suppliers suffered some $3.2bn in losses
Neptune’s fortunes were lifted in August from the pandemic as a result of the damper.
when it made the Dugong oil discovery off Rosneft is now seeking amendments – hope-
Norway – the country’s largest find of the year fully ones that allow it to claw back some of its
containing up to 120mn barrels of oil equivalent losses. But the Finance Ministry is likely to block
(boe). It now says there is scope for additional such a move, or simply compensate for any
potential at the site, but has not divulged details. changes by introducing an additional tax on the
industry elsewhere..
If you’d like to read more about the key events shaping
Europe’s oil and gas sector then please click here for If you’d like to read more about the key events shaping
NewsBase’s EurOil Monitor. the former Soviet Union’s oil and gas sector then
please click here for NewsBase’s FSU Monitor .
FSU: Gazprom’s disappointing quarter
Russia’s Gazprom has reported its worst set of US LNG bounces back
quarterly results since the 2000s, as the corona- US LNG operations that were disrupted by Hur-
virus (COVID-19) pandemic took its toll on the ricane Laura were resuming this week, amid a
company’s European sales. broader recovery from the slowdown experi-
Gazprom’s EBITDA was $1.3bn, versus enced over the summer, when numerous cargoes
$7.4bn a year ago, marking its worst earnings in scheduled for loading from US terminals were
at least a dozen years. The company was also free cancelled.
cash flow (FCF) negative, and its net debt crept On August 31 it was reported that Cheniere
up 9% to around $53bn. Energy, the leading US LNG exporter, was
The Russian giant’s European gas business restarting its Sabine Pass liquefaction terminal in
performed particularly poorly, with prices down Louisiana, which had been shut down in prepa-
38% and sales volumes down 16.7%. COVID-19 ration for the hurricane making landfall in the
and its impact on demand was the main factor area. The facility is reported not to have suffered
here, but high levels of gas in storage, a warm any significant damage.
winter and a pre-pandemic glut in global LNG On the same day, Sempra Energy said it had
supply did not help matters. Its sales in Russia been able to conduct preliminary visual inspec-
offered comparative stability. tions of the nearby Cameron LNG terminal.

P8 www. NEWSBASE .com Week 35 02•September•2020