Page 8 - FSUOGM Week 31 2019

FSUOGM PERFORMANCE FSUOGM
Russian oil, gas output continues rising despite setbacks
RUSSIA
Production is up despite the Druzhba dirty oil crisis and a recent slump in Gazprom exports.
RUSSIAN oil and gas production climbed fur- ther in the rst seven months of 2019, despite cutbacks relating to the dirty oil crisis and a recent dip in gas exports.
Crude oil and condensate output from Janu- ary to July grew by 2% year on year to more than 325mn tonnes (11.2mn barrels per day), accord- ing to data published by the energy ministry’s CDU TEK department. Extraction was down 0.6% y/y in July, however, at 47.15mn tonnes.
Output had slumped 10.7% to 11.11mn bpd in May, as exports via the Druzhba pipeline were disrupted a er it was found that millions of barrels of crude had been contaminated with organic chlorides. It then fell to a three-year low of 10.8mn bpd in early July, a er national pipeline operator Transne stopped receiving oil from state-owned producer Rosneft. The move was believed to be part of a larger dispute between the pair over e orts to resolve the con- tamination crisis.
Overall production for July came to 47.15mn tonnes (11.15mn bpd), according to CDU TEK, indicating that supply bounced back during the second half of the month. But this still marked a 0.6% decline on the amount produced in July last year.
Rosne produced 112.8mn tonnes in the rst seven months of 2019, while leading private oil companies Lukoil and Surgutne egaz produced 47.9mn tonnes and 35.1mn tonnes respectively.
Meanwhile, Russian gas production increased 3% y/y from January to July at 431.9bn cubic metres, according to CDU TEK. e out- put for July alone was 54.66 bcm, up 0.5% y/y.
ese gains came despite a 5.6% y/y slump in state-owned supplier Gazprom’s exports countries outside the former Soviet Union between January 1 and July 15, down to 102.8 bcm. e company’s output was una ected by weaker European sales, rising 1.9% y/y to 294.5 bcm.
Russia’s top independent gas producer Novatek extracted 40.86 bcm of gas in the rst seven months, while Rosne produced 25.43 bcm, Lukoil 11.93 bcm and Surgutne egaz 5.58 bcm. ™
Surgutneftegaz cash pile shrink on currency rates in 2Q19
RUSSIA
The secretive Siberian driller has been building a large cash stockpile over the years.
RUSSIAN Accounting Standards (RAS) net pro t of Surgutne egaz (Surgut) oil major came in at $0.7bn for 2Q19. In 1H19 overall the com- pany posted RAS net loss of RUB38bn. As a result of FX loss, the company’s notorious cash pile fell by RUB105bn to RUB2.955 trillion.
e famously opaque company that is nev- ertheless close to the Kremlin in 2018 grew its cash pile by 32% to over RUB3 trillion, making the highest value since 2013. As reported bybne IntelliNews, the company’s cash reserves are almost on par with the funds kept in the sover- eign National Welfare Fund.
“Net income was relatively modest, mainly due to a $1.3bn revaluation loss on the company’s
dollar cash position owing to the ruble’s 3% strengtheningfromthestarttotheendof2Q19,” Sberbank CIB commented on July 31.
“ e [1H19] loss was widely expected, given the spot RUB/$rate,” BCS Global Markets also said on July 31. Should the currency exchange rates remain stable, BCS expects dividend yield
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w w w . N E W S B A S E . c o m Week 31 07•August•2019