Page 108 - RusRPTApr20

9.2 Major corporate news 9.2.1 Oil & gas corporate news
● Gazprom
Gazprom’s export revenues barely exceeded $3bn in January, dropping 41.1% from the same month in 2019. Per federal customs statistics, Gazprom’s delivery volumes declined 11% in January. It is unclear what share of these exports went to non-CIS states, as the company stopped reporting on the monthly dynamics of exports at the beginning of the year. What caused these bleak financials? Gazprom has suffered a perfect storm of low demand in Europe, its key export market, due to an abnormally warm winter and gas reserves accumulated in preparation for a Russia-Ukraine gas war, and excess global supply of LNG. Given that coronavirus didn't begin to exert significant pressure on gas quotes until February, it looks like the worst is yet to come for Russia’s gas giant.
Gazprom said at its investor day in February that it hopes that the start of gas deliveries through Power of Siberia in 2019 will incentivise China to accelerate negotiations on the construction of a second Power of Siberia 2.
Gazprom Neft published its 4Q19 results. Revenues were $10.04bn, 6% above consensus, respectively, but a decline of 5% q/q. EBITDA dropped 16% q/q to $2.16bn, in line with us and the consensus. Net income came in at $1.26bn, which was only 1% ahead of the consensus and us. During the conference call, management said that the company would pay 50% of net income for 2H19, which translated into a RUB19.53 2H19 DPS.
Gazprom Neft also presented at the investor day in February, the key points are as follows. The company confirmed it would switch to a 50% dividend payout for 2020. FY19 net income grew 3% y/y to $6.2bn, while adjusted EBITDA fell 3% y/y to $12.3bn. The company’s investments in FY20 are to grow 4% y/y to $7.3bn, of, which $2.4bn is to be allocated to the upstream. Downstream capex is to grow to $2.2bn. In 2020-23, the company is to focus on Messoyakha, the Otdalennoye group of fields and the Zima field. The priority projects for the company in the medium term are the development of the Chonskoye field (reserves of 60mnt), the joint venture with Repsol and the development of the South Yamal field (reserves of 101mnt). In the long term, the company is to look at projects in the north of the Krasnoyarsk region and the offshore project with Sakhalin.
Gazprom is to increase gas sales through its electronic trading platform in an attempt to maximise sales volumes, Vedomosti reports. So far this year, the company has sold more than 8.6bcm through the ETP, including 2.4bcm since the start of March. The average selling price has dropped to $113/kcm this month. Additionally, in March Gazprom changed the term structure of ETP sales: unlike January and February, when 80% of sales were made with deliveries within a month, in March, 75% of volumes were sold with delivery in two or more months. Some deliveries are scheduled for 4Q20 and 2021.
● Rosneft
108 RUSSIA Country Report April 2020 www.intellinews.com