Page 59 - UKRRptMay20

9.2 ​Major corporate news 9.2.1​ Oil & gas corporate news
Net profit at Ukraine's state-owned natural gas monopoly ​Naftogaz skyrocketed 5.5 times to UAH63.3bn ($2.3bn) in 2019​. The result was attributed to payment of $2.9bn by Russia's monopoly Gazprom under the Gas Transit Award of the Arbitration Institute of the Stockholm Chamber of Commerce, the company said in a statement on April 28. Naftogaz chief financial officer Peter van Driel said in the statement that the company has delivered a strong cash flow performance in 2019. "We generated UAH110bn in cash flow from operating activities, including UAH55.7bn from the Gas Transit Arbitration (net of income tax), and distributed over UAH20bn in dividends to our shareholder the State of Ukraine," "We have seen lower volumes and gas prices in the fourth quarter of 2019, and we expect the macroeconomic environment to continue to be challenging in 2020. We have identified cost reductions and remain committed to capital discipline. Our balance sheet is robust with a relatively low leverage and we are well positioned for a prolonged downturn.” In 2019, the monopoly produced 16.1bn cubic metres of gas, 78% share of Ukraine’s total, and 89.6 bcm of gas transit.
Naftogaz​ received UAH2.1bn, or $77.6mn, less from transit shipments of Russian Gazprom's gas via Ukrainian territory to European countries in 2019 ​against 2018. This is reported in the 2019 consolidated financial statements by the Naftogaz Group. According to the report, transit payments transferred by Gazprom in 2019 totalled UAH70.21bn ($2.59bn), whereas the Russian company paid Ukraine UAH72.34bn ($2.67bn) for its gas transit in 2018. Naftogaz says that "Gazprom was the only external customer with concentration of revenue exceeding 10% of total revenues during the years ended December 31, 2019 and 2018." In 2019, Naftogaz revenue from transportation, oil refining and fuel sales decreased by 7.7%, to UAH11.95bn ($441.8mn) from UAH12.95bn ($478.7mn). As UNIAN reported earlier, Naftogaz in 2019 posted UAH63.3bn, or $2.34bn, in net profit. It was 5.5 times more than in 2018, as UAH55.7bn, or $2.06bn, came from the Gas Transit Arbitration against Russia's Gazprom last year.
Naftogaz​ group paid UAH24.1bn of taxes and duties to the state and local budgets in January-March 2020​. Revenues from Naftogaz group exceeded 13.1% of total state budget revenues in Q1 2020. Naftogaz group remains Ukraine’s biggest taxpayer. In 2019, Naftogaz group’s tax and dividend payments to budgets of all levels totalled nearly UAH121bn.
With the world awash in cheap oil, Naftogaz wants to create a duty free oil storage system for Ukraine​, Andriy Kobolyev, CEO of the state energy company, tells Ukraine 24 TV. Three years ago, Naftogaz launched a duty free gas storage system, opening up 10 underground reservoirs in western Ukraine. Increasingly popular with European gas traders, this ‘customs warehouse’ allows companies to store gas paying a rental fee, but no import duties or taxes. With international oil companies desperately seeking storage, Kobolyev believes Naftogaz could earn $1 to 3mn a month by renting out unused storage tanks, largely near idle refineries.
With oil storage at a premium worldwide, Ukraine’s Naftogaz could profit by storing oil in its little used pipelines and refinery tank farms, ​Naftogaz
59​ UKRAINE Country Report​ May 2020 ​ ​www.intellinews.com