Page 15 - FSUOGM Week 33

FSUOGM FINANCE & INVESTMENT FSUOGM

Lukoil to give up deal in Senegal

SENEGAL RUSSIAN oil major Lukoil will not be able
to carry out the acquisition of a 40% stake in
the Rufisque, Sangomar and Sangomar Deep
(RSSD) project in Senegal, Kommersant daily
reported on August 17.
Australia’s Woodside Energy has previously
said it might seek to block Lukoil from acquir-
ing a stake in RSSD by exercising its right to pre-
empt the sale of the stake now owned by Cairn
Energy (UK).
Woodside is expected to follow through on
its previous intentions and will pre-empt the sale
and raise its stake in RSDD to 75%.
Kommersant noted that Lukoil was finding it
challenging to expand its resource base in Russia,
as offshore and strategic oilfields were reserved
for state-run majors Rosneft and Gazprom.
Most recently, Lukoil acquired 25% in Con- CIB commented on August 18.
go-based Marine XII for $768mn, 5% in UAE- For Lukoil, the fact that it will not enter the
based Ghasha, and in 2019 increased its stake in project now means lower risks for dividends in
Nigerian extraction Block 132 from 18% to 40%. the medium term, the bank believes, observing
The Russian company is also eyeing participa- that the development of the Sangomar field alone
tion in the EG-27 extraction block in Equatorial could have required a substantial capital invest-
Guinea (80% stake possible with 20% reserved ment outlay from Lukoil of $1.7bn over 2020-
for state GEPetrol), as well as the Etinde project 2023 (over $400mn per year on average).
on Cameroon’s offshore shelf (37.5% stake). VTB Capital (VTBC), in turn, suggested
“After the planned acquisition was on August 18 that in the absence of large-scale
announced by Lukoil in late July, we had written acquisitions, Lukoil might be more willing to
that the RSSD project looked to be an interest- increase the shareholder return.
ing investment opportunity at a fairly low initial Still, VTBC does not expect a tangible mar-
cost – and the fact that Woodside exercised its ket reaction to the news, with Lukoil’s share price
pre-emptive rights supports our view,” Sberbank showing no immediate reaction.™

Rosneft expects capex bounce back in 2021

RUSSIA RUSSIA’S state-run Rosneft expects its capital Apart from cutting its capex by 20% since
expenditure to recover to normal levels in 2021 the beginning of the health crisis (from RUB1
(planned RUB1 trillion – $13.68bn), given that trillion to RUB800bn), Rosneft also reduced
the COVID-19 crisis will have passed, BCS interest costs by over 20% or RUB22bn due to
Global Markets wrote on August 17 citing the the general fall in interest rates.
conference call of Rosneft’s management on BCS GM notes that RUB180bn of the
2Q20 IFRS results. RUB200bn capex cuts in 2020 came from
After posting its first loss since 2012 in 1Q20, upstream activities.
Rosneft bounced back in 2Q20 with above-ex- Rosneft also remains focused on its gas busi-
pectation revenues, earnings and bottom line. ness, emphasising that internal supplies of gas

Week 33 19•August•2020 www. NEWSBASE .com P15