Page 94 - RusRPTMar20

9.2 ​Major corporate news 9.2.1​ Oil & gas corporate news
● Gazprom
Gazprom​ was forced to cut output as a result of the unseasonably warm start to the year​. Gas production fell to its lowest level in four years in January, Russian news agency Interfax reported, down 6% compared to last year, as demand for heating in Russia and abroad slumped. Moscow recorded its warmest January on record, with the average January temperature in the Russian capital in positive territory — at plus 0.1 degrees — for the first time ever. As a result of the warmer temperatures, Gazprom’s gas production dropped to 44.3bn cubic meters, while exports slumped by a quarter, down to 13.5bn cubic meters.
Flush from cashing a $2.9bn check from Gazprom in December, Naftogaz continues to sue Russia for $8bn for assets ​– including offshore oil platforms – stolen by Russia during the 2014 annexation of Crimea. In a case started in 2016, the International Court of Arbitration in The Hague acknowledged jurisdiction. Yuriy Vitrenko, Naftogaz executive director, writes on Facebook that the December settlement with Gazprom does affect the Crimea suit, which is against the Russian state.
Ukraine’s national gas company​ ​Naftogaz​ received $578.4mn from Russia’s​ ​Gazprom​ to ensure natural gas transit ​during three months in January 2020, Executive Officer of Naftogaz Yuriy Vitrenko said at the start of February. "In January, Naftogaz received $239.5mn for transit in December, as well as $175.1mn as advance payment for January and $163.8mn for February. Only $578.4mn," he wrote on his Facebook page. He said that this amount makes up almost a third of the national budget receipts in January 2020. "If we had not actually exchanged claims in the new arbitration for a new transit contract, then in January Naftogaz would have received only $239.5mn, and this would be the last payment for transit," Vitrenko added.
Gazprom Neft​ 4Q19 IFRS revenues beat forecasts, EBITDA and net income in line. ​Revenues decline 5% q/q due to weaker refining volumes and macro. In upstream, the top line declined 9% q/q to $2.72bn on the back of an 8% drop in sales volumes (mainly due to oil purchases reduction), underperforming our expectations 7% as we had projected a less prominent drop in sales volumes and, in particular, non-CIS exports. Revenues from refining came in 8% lower q/q, due to a sales volume decline of the same magnitude. However, downstream revenue beat our forecast 5% thanks to a better-than-expected realised domestic oil products price (9% higher than we had estimated).​ ​In-line net income, 8.5% DY19E at 45% payout ratio. EBITDA was in line with our and consensus expectations at $2.16bn, mainly due to cost inflation in Other opex, which almost tripled q/q and was 201% (or $222mn) above our forecast. Below the operating level, there were no major surprises. Although the company printed a $54mn net FX gain vs. the minor FX loss expected by us. This was offset by slightly higher Other expense and lower interest income. As a result, Gazprom Neft’s net income was down 23% q/q, almost completely matching us and the consensus. On the results call, the management said that the company would pay 50% of net income for 2H19, which translated into a RUB19.53/sh 2H19 DPS, we calculated, or 4.4% 2H19
94​ RUSSIA Country Report​ March 2020 ​ ​www.intellinews.com