Page 16 - FSUOGM Week 13 2021

FSUOGM PROJECTS & COMPANIES FSUOGM

Novatek bags new Arctic block

RUSSIA RUSSIAN gas independent Novatek has secured were able to take part in the contest, and the
rights to another gas block in the Arctic, as it extracted gas must be used for LNG production.
Novatek has been continues gathering resources to underpin its This made it very likely that Novatek would be
waiting for some time planned series of liquefaction projects. the winner.
to obtain rights to The operator of the 17mn tonne per Novatek has no immediate need for extra
Severo-Gydansky. year (tpy) Yamal LNG plant said it had paid resources, as it already has sufficient gas on hand
RUB775mn ($10.2mn) for a 30-year licence for its upcoming 19.8m tpy Arctic LNG-2 and
for the Severo-Gydansky (North-Gydansky) 5-6mn tpy Obsk LNG projects. Arctic LNG-2
block. The block is situated partly on the shore is on track for launch between 2023 and 2025,
of the Gydan Peninsula and partly in the shal- while Obsk LNG should come online after 2024,
low waters of Gydan Bay. Russian authori- although Novatek is yet to take a final investment
ties place its resources at 9.8bn barrels of oil decision (FID).
equivalent (boe), including some 270bn cubic The company has other projects in the pipe-
metres of gas. line, however. The Severo-Gydansky block was
“The new licence area borders Novatek’s issued to a Novatek subsidiary called Arctic
existing assets on the Gydan Peninsula and LNG-1. This is also the name of another 19.8mn
expands the company’s resource base for imple- tpy project the company is hoping to develop.
menting new LNG projects,” the company said Arctic LNG-1 is expected to use the 358 bcm of
in a statement on March 24. C1+C2 resources at Novatek’s Soletsko-Khan-
Novatek has been waiting for some time to vaiskoye, Geofizicheskoye and Trekhbugor-
obtain rights to Severo-Gydansky, having orig- noye fields. But Novatek has not said yet when it
inally requested that an auction be held for the intends to sanction the development, although
area in 2019. Only companies that already had Russia’s government has said it expects the facil-
licences on either the Gydan or Yamal peninsulas ity to be up and running after 2027. ™

NEWS IN BRIEF

RUSSIA "Therefore, a year-on-year fall in the any excessive price fluctuations by the
RUB/$ rate triggers a forex gain, which current mechanisms," Peskov said, when
Weak ruble improves increases the pref’s DPS. This mechanism asked whether Russia could raise oil
has caused high yields to be paid several
production in May to use it in the country.
SurgutNefteGas dividend times since 2014, including yields of 20%, has no plans to get in contact with the
He said that President Vladimir Putin
17% and 19% on 2014, 2015 and 2018,
appeal all highly correlated with large y/y ruble OPEC plus colleagues and that Russia is
represented in the current negotiations by
devaluations," BCS GM argues.
The board of Russian natural gas major The analysts estimate an excess return Deputy Prime Minister Alexander Novak.
The falling ruble is supporting the chances of 75% for the preferred shares, "easily the "There are no contacts scheduled for the
that Russian oil major SurgutNefteGas highest in the Russian oil & gas universe", head of the state at the moment but they
(SurgutNG) will post a two-year dividend and reiterate the Buy recommendation on can be organized really promptly if needed
yield of about 30% on its preferred shares, the stock. because the level of dialogue with Saudi
with 18% DY expected for 2020 and 12% As followed by bne IntelliNews, Surgut Arabia is very good," Peskov said.
for 2021 at the current ruble to US dollar is the Russian oil sector's "dinosaur" known
exchange rate. for its ultra-conservative financial policies,
As reported by bne IntelliNews, basing operations only in rubles, and its Most OPEC plus states want
previously analysts warned that SurgutNG $50bn-odd cash pile, which is almost as
could barely show a net profit in 2021 due much as Russia’s sovereign reserves. to prolong deal to May
to the further strengthening of the ruble,
thus losing its dividend appeal. The majority of OPEC plus members want
However, as SurgutNG dividends are Peskov says Russia to prolong the current deal terms to May, a
correlated with the ruble exhange rate, the source in one of the delegations told PRIME
recent ruble weakening could support the protected against fuel price on March 30.
dividend yields. "There was contact yesterday. Saudi
"SurgutNG’s pref dividend occasionally fluctuations" Arabia, as one of the main participants
gets a tremendous boost from the ruble," of the process, knew the opinions of the
BCS GM writes, reminding that the Russia's mechanisms against fuel market alliance members,” the source said.
company holds a $48bn ‘cash pile’, mostly volatility are sufficient to prevent excessive “Riyadh said that according to its
in US dollars, but reports in rubles, and is price fluctuations, spokesman for the contacts, the bulk of the participants have
obligated to pay out 40% of earnings per president Dmitry Peskov said on March 30. the desire to prolong the terms of agreement
share on the preferred shares. "The local fuel market is, let's say, to May as well."
sufficiently protected, it is hedged against The source explained the decision by

P16 www. NEWSBASE .com Week 13 31•March•2021