Page 128 - RusRPTJul21

US and EU sanctions imposed on Russia have affected less than 1% of national gas company Gazprom’s production the company said in marketing materials distributed to potential investors into a current Eurobond offering. In 2014, the United States and the European Union imposed sectorial sanctions on the Russian oil and gas industry, banning their companies from producing oil in the Arctic, deep-sea shelf and hard-to-recover fields, supplying equipment for exploration and production in these areas, as well as supplying services in these areas. Gazprom itself did not come under sanctions, the company nor have any restrictions been placed on its ability to attracting debt financing abroad. In 2020, Gazprom produced 453.5bn cubic meters of gas. In 2021, it plans to increase this figure by 11.7%, to 506.5bn cubic meters. It’s daughter company Gazprom Neft that produces oil in 2020 kept the production of hydrocarbons at the level of 96mn tons of oil equivalent. Gazprom placed a 6-year Eurobonds in Swiss francs. The global coordinators of the placement are Gazprombank and JP Morgan. The coupon benchmark and the date of the bond placement have not yet been announced.
Gazprom expects 2021 core earnings to rise by 50% from a year earlier to $30bn, Deputy CEO Famil Sadygov says, adding that the Nord Stream 2 gas pipeline project is now fully financed. Gazprom has cut its initial borrowing plan for the year by 100B rubles ($1.39B) to 411B rubles but expects a Eurobond issue soon, and will consider the euro, U.S. dollar and Swiss franc as possible currencies, Sadygov also says. The company is planning to raise funding for the development of its Ust-Luga gas processing joint project with Wintershall Dea by the end of next year. Finally, Gazprom is not planning a secondary public offering or an additional share issue, Sadygov says. Gazprom said last month that it swung to a Q1 net profit of 447.2B rubles from a year-earlier loss of 116B rubles.
Gazprom Deputy Chairman of the Management Board Famil Sadygov and Head of Department 822 (tax) Karen Oganyan held a press conference 16 June, to discuss the company’s financial and economic policy. The company also reported its production and export numbers for the first five and a half months of 2021. Below are our highlights from the event.
Gazprom expects EBITDA to grow 50% y/y to $30bn, which should help lower ND/EBITDA; the company guided for at 1.6-1.8x by YE21. Our estimate for the company’s 2021 EBITDA (using a RUB/$rate of 73) is $32.1bn.
Gazprom is not planning an SPO, share placement or placement of preferred shares.
The company plans to export 8.5bcm to China in 2021, thus doubling its revenue from exports to China after bringing in RUB44.3bn in 2020. Last year, the monopoly exported 4.1bcm to China. We had expected
128 RUSSIA Country Report July 2021 www.intellinews.com