Page 9 - FSUOGM Week 25

FSUOGM PERFORMANCE FSUOGM
RussNeft pledges higher dividends
RUSSIA
MID-SIZED Russian oil producer RussNe has pledged to expand its dividend payments by two and a half times within the next three years, its majority owner Mikhail Gutseriev has said.
The comments, made at a meeting of the company’s shareholders on June 21, come a er state gas giant Gazprom recently doubled its dividend payout, causing a 40% spike in its share price.
Since holding an initial public offering (IPO) three years ago, RussNeft has paid $40mn annually in dividends to the own- ers of its preferred shares only. According to Gutseriev, the company intends to make pay- ments to ordinary shareholders within the next three years as well.
“Nowwearepaying$40mnindividends,”the businessman said. “My plan as a shareholder is to bring this amount to $100mn, which all share- holderswillreceiveinthecomingyears.”
Gutseriev and his family sold off 20% of ordinary shares in RussNe at an IPO in Mos- cow in November 2016, raising 32.4bn rubles ($514mn). He later said the company would pay shareholders 50% of net pro ts starting in 2018,
but postponed this plan because of di culties with debt.
RussNe ’s net debt totalled almost RUB96bn ($1.5bn) at the end of last year, up 20.6% y/y and just under double its EBITDA in 2018 of RUB48.6bn ($771mn). Gutseriev said he hoped to agree a restructuring plan with the company’s main creditor, state-owned VTB Bank, that will reduce annual repayments by $17mn per year starting this September – funds that can be redis- tributed as dividends.
“As soon as the debt drops to [the level of] EBITDA, the large dividends will begin,” the businessman said, adding that he intended to increase dividend payments to preferred share- holders next year to $60mn.
RussNe controls eldsmainlylocatedinthe Khanty-Mansiysk region of Western Siberia and the Volga-Urals area. It produced 7.6mn tonnes (152,600barrelsperday)ofcrudeoilin2018,up 1.3% y/y. In the same year the company earned RUB15bn ($238mn) in net pro ts, up 85%.
Moving forward, RussNe aims to expand its EBITDA to 55-60bn rubles ($873-952mn) this year and ramp up output by 3%.™
POLICY
Tashkent confirms $600mn debt to Lukoil
UZBEKISTAN
UZBEKISTAN has con rmed owing $600mn to Russia’s Lukoil, the Central Asian state’s biggest foreign investor, for unpaid gas supplies last year.
Lukoil operates the giant Kandym-Khau- zak-Shady and Southwest Gissar gas projects in southern Uzbekistan, which together owed 13.4 billion cubic metres of gas in 2018. The terms of its production-sharing agreements (PSAs) for the elds allow the company to ship all output to China.
In March, however, a senior Lukoil manager revealed in an investors’ call that the company had instead been selling its gas to Uzbekistan, with Tashkent racking up a debt of $600mn for supplies last year.
Uzbek President Shavkat Mirziyoyev acknowledged the arrears in a speech to the Uzbek Senate on June 21. e debt had accu- mulated as a result of national oil company Uzbekneftegaz (UNG) buying Lukoil’s gas at $146 per 1,000 cubic metres but selling it onto consumers for only $40, he explained. The Uzbek leader went on to ask rhetorically why the “national interest had not been taking into account” when Lukoil’s PSAs were drawn up more than a decade ago.
Lukoil said in March it had agreed a plan for Uzbekistan to repay the debt in monthly
installations over two years, while also pledg- ing to provide the domestic market with 5 bcm per year of gas at a 12.5% discount to its export netback.
Since entering Uzbekistan in 2004, Lukoil has expanded to become the country’s biggest private gas producer as well as its largest single source of foreign direct investment (FDI). On the surface, the outstanding debt does not appear to have strained relations between the company and Tashkent, with Uzbekistan’s deputy energy minister Zhurabek Mirzamakhmudov stating in May that the issue had been “resolved suc- cessfully on the basic of mutual understanding.” Later that month Lukoil expressed interest in exploring new territory in Uzbekistan.™
Week 25 26•June•2019 w w w . N E W S B A S E . c o m P9