Page 14 - FSUOGM Week 29 2021

FSUOGM NEWS IN BRIEF FSUOGM

aid to the Afghan mujahedeen against the Afghan reconciliation process, and so reached 9,177 boepd (or 11% less y/y),
Soviet-backed government. Pakistan – with its close ties to the Taliban – including 3,973 boepd in Ukraine (23% less
But now the relations are warming is a useful partner," said Michael Kugelman, y/y).
again as the attention of the superpowers deputy director of the Asia Programme at The company reported its end-June cash
is refocusing on Central Asia and tapping the Wilson Center, a Washington think- balance is $35.6mn, which is 2.5x more y/y
its energy resources. The deal is a boon for tank. "Russia is moving closer to China, and 1.5x more YTD.
Pakistan too, which suffers from an energy a key Pakistani ally. And Russia's long- “Relative success of the IG149 well
deficit. standing relationship with India is starting allowed JKX to show a q/q increase
Pakistan has relied on domestic gas to lose momentum amid deepening US- in Ukrainian output in 2Q21, after six
reserves for power during most of its India ties." consecutive quarters of decline. However,
74-year existence, but in the past two June’s average output of the IG149 well (915
decades the country has struggled to boepd) does not look encouraging, taking
raise gas production and upgrade its Energy ministry expects into account that in early June JKX stated
energy infrastructure in the face of rising that the well’s output had “stabilized” at
demand from a growing population and gasoline supplies flat on 1,340 boepd. If the well’s output continues
industrialisation. declining, the company’s hydrocarbon
Since 2015, Pakistan has mostly bought 2019 in July output in Ukraine will decrease about 20%
LNG from Qatar under a long-term y/y in 2021. We remain skeptical on JKX’
contract or through spot buying on the Gasoline supplies on the Russian market ability to increase its value in the mid-term,”
international market to fill the gap between will be unchanged on the same period in an analyst at the Kyiv-based Concorde
its own production and rapidly rising 2019 in July, the Energy Ministry said in a Capital brokerage said in a research note..
demand. statement on July 16.
Pakistan suffered a supply shock last "As gasoline exports fell significantly, the
month when its LNG terminal was forced to local market supplies are expected at the Gazprom to get boost from
temporarily close and a local gas field also level of the same period of pre-pandemic
went offline. 2019 in July 2021, and diesel fuel supplies Nord Stream 2 agreement,
The government led by Prime Minister have grown 3% since the start of the month
Imran Khan is trying to fast-track gas as compared with the same period of 2019," Europe prices
infrastructure to meet future energy the ministry said.
demands. Two new LNG terminals and The US and German authorities have
underground storage at Port Qasim in reached an agreement on the further
Karachi are being developed and it is implementation of the Nord Stream 2
hoped they will go online in the next three EASTERN EUROPE pipeline of Russian natural gas giant
years, in addition to the new Russian-built Gazprom, Reuters reported citing unnamed
pipeline. JKX increases hydrocarbon sources.
The Pak Stream deal was signed six years US President Joe Biden and German
ago with then-Prime Minister Nawaz Sharif, production in Ukraine in Chancellor Angela Merkel held talks in
but thanks to Western sanctions on Russia's mid-July, with no result, but extended
state-controlled tech Rostec, which was 2Q21 negotiations are reportedly close to
supposed to oversee the project, the project concluding a deal. Sources of Reuters claim
was frozen. JKX Oil & Gas (JKX LN) produced 4,101 that Nord Stream AG, the operator of the
To get round the sanctions Russia's stake boepd of hydrocarbons in Ukraine in project, will avoid sanctions.
in the project was reduced to 26% from 2Q21, which is 7% more q/q, according to As followed by bne IntelliNews, positive
80% and Pakistan took a majority stake and the company’s trading update of July 19. newsflow on Nord Stream, along with high
right of operatorship. US sanctions target Its total output increased 2% q/q to 9,332 export prices and dividend policy, is seen as
international projects where Russian entities boepd in 2Q21, as production at its Russian the main catalyst for Gazprom's shares.
have a 33% or more share. assets declined 2% q/q. On a year-on- "The construction of Nord Stream 2
Russia has been actively wooing Pakistan year basis, the company’s 2Q21 output in is slated to be completed by the end of
recently. Russian Foreign Minister Sergei Ukraine was 17% less, and total output was August. The potential absence of new
Lavrov was in Islamabad in April – the 6% less. sanctions reduces the risks associated
first visit of a Russian foreign minister to The key driver for JKX’ q/q increase of with using the gas pipeline's capacities,"
Pakistan in almost a decade – to cement Ukrainian output was the commissioning VTB Capital (VTBC) commented on July
ties and broker both the energy and arms of new well IG149. The well produced on 20, maintaining a Buy call on Gazprom's
deals, as well as discuss the situation in average 915 boepd in June, the company shares, and estimated that pipeline would
Afghanistan. reported. Another new well, IG21, produced be launched in mid-2022 (with full-scale
Now that major fighting has broken out on average 50 boepd of hydrocarbons since launch in 2023).
in Afghanistan the ties between Moscow mid-April. The company is not drilling In 2023, thanks to the cost savings on
and Islamabad will only get stronger, new wells now, as it is expecting to spud transport, this might generate some $1bn
as Pakistan traditionally maintain close the next well in September. Meanwhile, it is for the company, or 4% of EBITDA, on
contacts with the Taliban. engaged in some well workover operations VTBC numbers.
"Russia wants to step up its game in in Ukraine. In a separate report Interfax wrote that
Afghanistan as a diplomatic actor in the In 1H21, the company’s total production Gazprom had reserved full transit capacity

P14 www. NEWSBASE .com Week 29 21•July•2021