Page 9 - FSUOGM Week 31 2019
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FSUOGM PERFORMANCE FSUOGM
for 2019 to be below 4% and has a Hold recom- mendation on Surgut shares.
Sberbank believes that should $/RUB remain at the current level of RUB63-64 through the end of the year, 2019 dividend for the preferred would be 5-6%.
“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,” Sberbank argues.
Surgut’s huge cash pile has made it an investors’ darling (for the preferred shares), despite the fact that company is notoriously secretive and shares little information with investors.
“With the reduced ruble volatility due to the budget rule, Surgutne egaz’s preferred shares have become somewhat less attractive as a defen- sive asset, in our view,” Sberbank CIB analysts warned.
Oil output at ACG project down in H1-2019
AZERBAIJAN
A bump in production is expected in the early 2020s after the launch of a new platform.
OIL production at BP’s Azeri-Chirag-Deepwater Gunashli (ACG) project in the Caspian Sea fell to 542,400 barrels per day in the rst half, down from 596,000 bpd a year earlier, the company said on August 1.
Associated gas output was also down at 0.9bn cubic metres, compared with 1.1 bcm a year earlier.
e BP-led consortium operating ACG spent around $272mn in operating expenditure from January to June, up 15.2% year on year, and $657mn in capital expenditure, down 16%. 124 oil wells were in operation at the site at the end of June, following the addition of seven more bore- holes since the start of the year.
The Baku-Tbilisi-Ceyhan (BTC) pipeline, which transports ACG’s oil across the South Caucasus and Turkey, exported 329,000 bpd of crude in the period.
First developed in the late 1990s, ACG’s out- put has been declining since reaching a peak of 823,000 bpd in 2010. A bump in production is
anticipated a er the commissioning of the new 100,000 bpd Azeri Central East platform in mid- 2022, however. e project is part of a $40bn redevelopment programme, aimed at main- taining output and boosting overall recovery between now and 2050.
At Shah Deniz, Azerbaijan’s largest gas eld operated by a separate BP-led group, out- put reached 8.2 bcm, up 58% y/y thanks to the launch of the eld’s second phase. Some $376mn in operating expenditure was incurred at Shah Deniz, marking a 50.4% growth y/y, while capital expenditure was down 30.5% at $555mn.
BP recently disclosed plans to sink an explo- ration well at Shah Deniz next year to test its deeper reservoirs, which could potentially hold several trillion cubic metres of gas. e company has mooted plans in the past for a phase-three development of the eld, which would under- pin an expansion of the Southern Gas Corridor (SGC) network designed to ow Azeri gas to Turkey and southern Europe.
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