Page 14 - FSUOGM Week 38 2021

FSUOGM NEWS IN BRIEF FSUOGM

The latter option carries various (IDR) at 'BBB-' with a stable outlook. Elixir was also reported as stating that its
difficulties and risks for Gazprom, which is The IDR is one notch below KMG's last six wells have all intersected their coal
not keen to show the cost of transporting ultimate shareholder Kazakhstan (BBB/ targets and the company therefore decided
gas through its system, as well as its real Stable) due to Fitch’s assessment of the to accelerate its drilling programme for the
throughput in various directions. linkage between KMG and the Kazakhstan rest of 2021 by adding a third rig.
However, the importance of the gas issue sovereign. At the same time, KMG 's
for Belarus is noticeably decreasing after standalone credit profile (SCP) of 'bb-'
the launch of its Ostrovets (aka Astravets) reflected the firm's solid business profile and Kazakhstan says its OPEC+
nuclear power plant (NPP) at the start of Fitch's expectations of gradual deleveraging,
this year that will significantly reduce its following a rise in leverage in 2020 that compliance at 206%
demand for gas. came with the slump in oil prices caused by
In 2020, Belarus received 18.6bn cubic the COVID-19 pandemic. Kazakhstan’s energy ministry was quoted by
metres of gas from Russia, of which about “We rate NC KMG on a top-down basis, Russia’s Interfax news agency as saying on
10 bcm were consumed by the local power one notch below Kazakhstan's rating of September 17 that Kazakhstan’s compliance
stations. 'BBB'/Stable, using our Government-Related with the OPEC+ oil output cut deal stands
At the end of 2020, Belenergo general Entities (GRE) Rating Criteria, under which at 206%, Reuters reported.
director Pavel Drozd said that after the NC KMG scores 37.5 points,” Fitch said in a Global oil output is currently limited
second of two power units of the Ostrovets statement. “We assess the status, ownership by the oil output reduction agreement.
NPP comes online, gas consumption would and control factor for NC KMG as 'Strong', Kazakhstan’s compliance has been made
be reduced to 4 bcm or more. while we view the support record as possible by a general decline in oil output
Lithuania and Latvia, which previously 'Moderate', because the government allowed amid low demand driven by the COVID-19
bought more than 1.5bn kWh per year NC KMG's gross leverage to remain at pandemic.
from Belarus, have banned supplies of aggressive levels in 2014-2017.”
power over the summer from Ostrovets but “We view the socio-political implications
bought record amounts in the first months of an NC KMG default as 'Strong' and the Petro Matad posts
of this year due to the cold snap. Ukraine financial implications of its default as 'Very
also wants to adopt such a legislative ban, Strong'. We believe NC KMG is a major loss; eyes Mongolia oil
although it still continues to buy electricity Kazakh borrower in the Eurobond market
due to the coal shortage. and a proxy issuer for the government,” production in 2H22
It is believed that the equalisation of Fitch added.
gas prices between Russia and Belarus Oil company Petro Matad, which is
is necessary to create a single electricity developing prospects in Mongolia, has
market, otherwise the Belarusian gas Elixir completes Richcairn- posted a 1H loss.
thermal power plants (TPPs) would Pre-tax losses for the first six months
certainly lose. 1S well at coalbed methane totalled $1.02mn, as against a loss of
The head of the Ministry of Energy of $2.35mn in the same period last year.
the Russian Federation Nikolai Shulginov project in Mongolia Petro Matad in July raised about $10mn
said in July that the energy markets of to fund a development work programme.
the Russian Federation and Belarus could Sydney-listed Elixir Energy has completed It is designed to bring oil production on
merge as early as 2024, but with restrictions: the Richcairn-1S exploration well at the stream during 2H22.
electricity trade will go between authorised Nomgon IX coalbed methane (CBM) “Petro Matad plans to generate revenue
entities of each country. In fact, this design project in Mongolia, Natural Gas World has from early production as soon as possible
is no different from conventional cross- reported. and is working to secure the necessary
border trade at a negotiated one-way The well was reportedly drilled to contracts that will allow this production to
price, which is still available today. Deeper 792 metres, with 16m of coal and 20m get to market,” Petro Matad said.
integration, Shulginov noted, is provided of “highly” carbonaceous mudstone, It added: "The company continues to
only from January 1, 2027. . discovered, as determined from wireline manage its costs closely and will maintain
logs. a small, focused workforce retaining all of
Further wells in what Elixir said could the operational capabilities and experience
be a "very extensive" coal-bearing sub-basin gained from many years of successful
CENTRAL ASIA & SOUTH are set to follow over the remainder of 2021 operations in Mongolia."
and beyond.
CAUCASUS Richcairn 1S is the first of Elixir’s
exploration wells to intersect coal
Fitch affirms KMG’s long- purely from seismic identification. “This
demonstrates the continuous improvements
term IDR at 'BBB-' with in the company’s exploration programme,
from the ongoing gathering of data and the
stable outlook constant optimisation of exploration tools
and analysis for the specific geology of the
Fitch Ratings has affirmed KazMunayGas's South Gobi basin,” Elixir was quoted as
(KMG’s) long-term issuer default rating saying.

P14 www. NEWSBASE .com Week 38 22•September•2021