Page 22 - FSUOGM Week 22

FSUOGM
NEWS IN BRIEF
FSUOGM
RUSSIA
Russia’s Rosneft may not
have enough oil for foreign
buyers on OPEC+ cuts
Russia’s largest oil company Rosneft is facing difficulties in supplying both its domestic refineries and foreign traders with oil amid the need to cut output to comply with the OPEC+ deal, Reuters reported on May 28, citing unnamed industry sources.
As reported by bne IntelliNews, Russia could seek to extend the co-ordinated oil output cuts in order to support prices, which could have an adverse effect on the oil major’s financials.
Reportedly, Rosneft has warned the Ministry of Energy that it is already struggling to support domestic refining capacities with crude oil and respect the binding long-term contracts with foreign traders at the same time.
As of May 26, Rosneft had to cut
its output by 17% compared to April, sources told Reuters. As a result, June’s shipments to Glencore and Trafigura traders have reportedly been cut to two (from eight in April) and one (10 in April) respectively, each carrying 100,000 tonnes of Urals oil.
Total shipments from Baltic ports will be cut to only eight, compared with 27 in April and 13 in May, while the demand from the traders has remained stable. The Urals blend could be replaced by ESPO Blend and Sokol to compensate for missing shipments.
VTB Bank says price of
Lukoil’s diamond unit sale
at market level
The sales by Russian oil major Lukoil of diamond mining unit AGD Diamonds passed diversified expert evaluation, and consultants VTB Bank and Goldman Sachs said the price was in line with the market, VTB Bank said in a statement on June 1.
“The deal passed a thorough and diversified expert evaluation, the price of the company was acknowledged as a market price by both consultants of the deal and
it satisfied the seller and the buyer,” the statement read.
If a law suit is launched, courts should make a fair decision and avoid revision
of such a large deal, but the suit could cause indefinite disruption of operating and financial activity of a large Russian company, break the procedure of approval and coordination of similar deals, and hurt Russia’s investment attractiveness, the bank said.
Lukoil sold Arkhangelskgeoldobycha to an affiliate of Otkritie Holding for U.S. $1.45 billion in 2017. The company was earlier renamed into AGD Diamonds.
The Federal Antimonopoly Service
said on May 25 that it had filed a suit to the Arbitration Court of the Arkhangelsk Region, asking to void the deal, because Otkritie hid its foreign beneficiaries, which resulted in foreign control over
the strategically important company. The service also said that the sum of the deal was two times higher than the actual value of the diamond producer.
EASTERN EUROPE
Naftogaz reports a net profit of $118mn in January-March
Ukraine’s state-run oil and gas company Naftogaz reported a consolidated net profit of UAH3.2bn ($118mn) after tax in the January- March period.
On June 2, the company said that the period was characterised by producing 3.9bn cubic metres of natural gas and selling 6.3 bcm and generating cash flows from operating activities of UAH10.9bn ($402mn).
“We are facing challenging circumstances with the [coronavirus] COVID-19 crisis
and the macroeconomic environment, with a sharp decline in gas prices this quarter,” Naftogaz chief financial officer Peter van Driel commented in a statement. “Cash flow from operating activities for the first quarter was UAH10.9bn, compared with UAH28bn ($1bn), excluding discontinued operations, for the same period a year earlier.”
“The result reflected lower gas prices and demand. We are lowering our spend and remain committed to capital discipline. Our balance sheet is robust with gearing at 12.4%,” he added.
Russian gas transit through Ukraine dropped by 46%
in 5M 2020 to 20bn cubic metres
Russian gas transits through Ukraine dropped
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Week 22 03•June•2020