Page 99 - RusRPTAug19

Ongoing EPC contracting on the project confirms the company’s costs estimates.
The company also confirmed its guidance of launching the first train in 2023 • The transactions with Chinese companies on Arctic LNG will be reflected in Novatek’s 3Q19 financials.
• The company considers the global gas market to be oversupplied. This situation is to remain until mid-2020, when the recently launched LNG plants capacities are to be absorbed by the gradually growing demand. Low LNG prices are to stimulate demand, which will allow prices to recover to higher levels eventually.
• Even under the current gas prices, Novatek’s LNG is competitive in Latin America, Europe and Asia thanks to its low costs, according to the company.
● Other
Russian oil major Surgutneftegaz reported its 2Q19 RAS results on July 30. It posted a net profit of $0.7bn for the quarter, while its cash and deposits climbed to $45.7bn. Net income was relatively modest, mainly due to a $1.3bn revaluation loss on the company's dollar cash position owing to the ruble's 3% strengthening from the start to the end of 2Q19. If $/RUB remains at the current level of 63-64 through the end of the year, the 2019 dividend for the preferred shares are expect to be RUB1.5-1.9 per share, for a 5-6% yield, which is down on the previous 19%. In the event of a net loss for the full year, we would expect the company to pay out a preferred dividend at least at the level of the dividend on the commons, which has historically been RUB0.6 per share. With the reduced ruble volatility due to the budget rule, Surgutneftegaz's preferred shares have lost their appeal for investors as a defence against a falling ruble.
Russia's Transneft oil pipeline operator fired the director of the Russian part of Druzhba pipeline Oleg Bogomolov following the ongoing disruption of clean oil supplies to refineries in Europe via Ukraine and Belarus. No other details were yet disclosed on the managerial reshuffling in Transneft, RBC business portal said on July 2. Transneft originally diverted responsibility and launched a criminal investigation into possible "deliberate contamination" of oil in Druzhba pipeline.
Motor fuel prices started to rise in Russia after the government gave up the price control deal closed with the largest oil companies in 2018, RBC daily reported on July 2 citing the data by the Moscow Fuel Association. In November 2018 amid ongoing concerns over high gasoline prices Russian oil companies agreed to lower the wholesale gasoline and diesel prices and then freeze them, adding to the regulatory uncertainty in the downstream segment. The deal was later prolonged until the end of June. Reportedly as of July 1 when the deal lapsed the prices for diesel fuel and petroleum increased by up to RUB0.14 per litre as compared to the previous week. Among the gas stations raising the prices were those controlled by oil majors Lukoil, Gazprom Neft, Shell, and Tans-AZS.
Russia's largest bank Sberbank has asked the Kremlin to provide support to the troubled Antipinsky refinery, Vedomosti daily said on July 30 citing the letter of bank's CEO German Gref to the President Vladimir Putin. As
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