Page 13 - FSUOGM Week 46 2021

FSUOGM NEWS IN BRIEF FSUOGM

RUSSIA 3.5 trillion cubic metres (tcm) of gas in volumes for both types of shares surged 11x
place, equating to around one-quarter of the and 8x on the previous day’s numbers.
Russia strikes deal on 14.2tcm of gas reserves contained in Iran’s shares of Surgut are prone to mystery rallies.
As followed by bne IntelliNews, the
supergiant South Pars natural gas field in
Iran's multi-trillion dollar the Persian Gulf that accounts for around Previously speculators piled into the name
on reports that the oil "dinosaur", known
40% of Iran’s total estimated 33.8tcm of gas
Chalous gas field as ‘final reserves. for its ultra-conservative financial policies,
OilPrice.com reported that it has learnt
may cancel the treasury shares or unseal its
act in securing control over that, following further studies by Russia, the notorious $50bn cash pile, which is almost
Chalous discovery is now seen as essentially
as much as Russia’s sovereign reserves.
European energy market’ a twin-field site, with the fields nine events or fundamental news that would
"We do not see any particular corporate
kilometres apart, with ‘Greater’ Chalous
A finalised deal to develop Iran’s multi- having 5.9tcm of gas in place, and ‘Lesser’ justify such a reaction," VTB Capital
trillion dollar new gas discovery, the Chalous having 1.2tcm of gas, giving a (VTBC) commented on the latest rally,
Chalous field in the Caspian Sea, combined figure of 7.1tcm. while maintaining a Sell call on the name.
is reportedly regarded by Russian officials “Therefore,” the publication said, “the BCS Global Markets believes that the
“as the final act of securing control over the new Chalous figures would give Iran a total deep corporate governance reform at
European energy market”. natural gas reserves figure of 40.9tcm, whilst SurgutNG, however unlikely, is one of the
Russian companies will hold the major Russia – for a long time, the holder of the very few potential explanations for the
share in the deal, followed by Chinese largest gas reserves in the world – officially extreme share price action.
companies, and only then Iranian has just under 48tcm. That Russian figure, The analysts as BCS GM maintain a Hold
companies, sources close to the agreement though, has not been revised to account for call on ordinary shares of Surgut and Buy
were reported as saying by OilPrice.com on usage, wastage, and gas field degradation for call on the preferred shares.
November 15. The trade publication also many years, and, according to Russian gas BCS GM reminds that Surgut is "no
reported that new calculations show that sources, is around 38.99tcm as of the end of stranger to speculative runs, and this
Iran, taking into account new estimates of 2020. Consequently, the Chalous find makes situation could yet turn out like the one in
the gas contained in Chalous, looks set to Iran the biggest gas reserves holder in the the [autumn] of 2019, which saw the stock
be soon recognised as holding the world’s world.” double on scant news before collapsing back
largest gas reserves, dropping Russia into Following both the upgrading of the to its starting point in February of 2020".
second place. gas reserves estimates in Chalous and However, the size of the trading volumes
Explaining why Iran would relegate spiralling gas prices across Europe of yesterday – nearly 10x typical levels – hints
itself to third place behind Russia and late, the new stake split in the combined that ‘something’ fundamental may well be
China in the development and exploitation Chalous twin-sites is reportedly as follows: going on, the analysts argue.
of Chalous, the media outlet said that Russia’s Gazprom and Transneft will Previously BCS GM argued that both
the Islamic Revolutionary Guard Corps together hold 40%, China’s CNPC and types of shares could have 400%+ upsides
(IRGC)—the Iranian entity controlling CNOOC a combined 28% and Iran’s Khazar if three key corporate governance reforms
field development companies that will Exploration and Production Company were all implemented, including:
participate in Iran’s side of the deal—"has (KEPCO) 25%. * an equalisation of the ord and pref
stated in a series of internal discussions “Gazprom will have overall responsibility dividend policies at 40% payouts
within the Iranian government recently for managing the Chalous development, * the redeployment or payout of the
that the new terms of the Chalous deal that Transneft will do the transportation company’s infamous, $54bn ‘cash pile’
have placed Russian and Chinese interests and related operations, CNPC is doing * and/or the recognition and cancellation
above those of Iran are ‘the price we have to a lot of the financing and providing the of the large packet of reported ‘phantom’
pay for Iran’s access to the technology and necessary banking facilities, and CNOOC treasury shares.
manufacturing capacity required for our will be doing the infrastructure parts and "Of these, only the first – dividend
missile program’”. engineering,” said one quoted source. equalisation – seems very realistic, and
It added: “To gain effective control Given the likely length of gas recovery at could happen relatively easily with only a
over these new Iranian gas flows through Chalous – and the fact that Russia intends BoD decision required. Note that after the
securing such a stake in Chalous, Russia to take less than 10% of it out over the rally, SNGS now trades at near parity with
privately assured Iran that, in addition to course of its 20-year deal –sources close SNGSp, which would be logical if dividend
development and exploration expertise, and to the deal estimate the total value of the policies were indeed about to be equalised,"
some funding, it will also ‘seek to support Chalous gas site at $5.4 trillion, OilPrice. BCS GM suggests.
Iran’s interests in the matter of the JCPOA com said.
[Joint Comprehensive Plan of Action, or
nuclear deal] and in other matters at the Russian gas giant Gazprom
UN’.” Another mystery rally
Russia’s Transneft has, meanwhile, places €500mn Eurobonds
purportedly in the past two weeks projected in shares of Russian oil
that Chalous alone can provide up to 72% Russian natural gas giant Gazprom placed
of all of the natural gas requirements for dinosaur Surgut 7-year Eurobonds worth €500mn,
Germany, Austria and Italy every year for FinamBonds reported on November 9
the full 20 years that the Chalous deal is set The price of ordinary shares of Russian oil citing unnamed financial market sources.
to run, while Chalous alone could supply major Surgutneftegas (Surgut or SurgutNG) Reportedly the issue saw a high demand of
up to 52% of all of the European Union’s gas jumped 17.6% in US dollar terms on €1.15bn, which allowed the yield guidance
needs over the period. November 11, with the company’s preferred to be lowered from 2.125-2.25% to 2%.
Previously, the estimates of Iran and shares adding 2.6% versus the 0.7% growth As reported by bne IntelliNews, in July
Russia were that Chalous contained around for the RTS Oil & Gas index. The trading 2021 Gazprom placed $1bn worth of US

Week 46 17•November•2021 www. NEWSBASE .com P13