Page 16 - FSUOGM Week 33

FSUOGM FINANCE & INVESTMENT FSUOGM

provide a stable cash flow. Regarding Rosneft’s of funding for rolling over maturing debt,” BCS
gas strategy, VTB Capital said on August 17 that GM analysts commented.
the company plans to produce in excess of 100bn The Finance Ministry is reportedly attempting to
cubic metres of gas in 2022 (up from 67bcm, get oil majors to pay back the $2.3bn of tax revenues
including joint ventures, in 2019). lost in the 2019 trial of the experimental Excess Profits
BCS GM has previously suggested that inves- Tax (EPT) on certain oilfields. Rosneft and another
tors focus on the company’s potential exposure state-owned oil major, Gazprom Neft, are seen as most
to the Finance Ministry’s latest tax claims, the exposed to this regulatory risk.
speed of output ramp-up in August post-OPEC+ As far as output is concerned, the latest oil
constraints, and the volume of additional Chi- extraction data showed that Rosneft has already
nese prepayments in the very near future. started to increase its output in the beginning of
At the conference call the management con- August. Along with other peers, the state major
firmed reports that it would be taking more Chi- has sharply cut the output from its smaller sub-
nese prepayments later this year. sidiaries (such as Bashneft), so that the parent
“Note that prepayments are effectively companies could produce more. Rosneft has
low-interest debt secured by export contracts already increased its liquids output 6% in August
and thus, in our opinion, represent a good source versus July, according to the management.™

POLICY

Russian energy minister

diagnosed with COVID-19

RUSSIA RUSSIAN Energy Minister Alexander Novak
has reportedly contracted coronavirus (COVID-
19) ahead of this week’s scheduled OPEC+ Joint
Ministerial Monitoring Committee videocon-
ference, but still intends to participate.
“Unfortunately, Alexander Valentinovich
Novak has been taken ill with the coronavirus,”
the Interfax news agency quoted Prime Minister
Mikhail Mishustin as saying on August 18.
Mishustin said Novak had been diagnosed
after he arrived in Blagoveshchensk to attend
both a government meeting and the launch cer-
emony of Sibur’s Amur Gas Chemical Complex Russian Energy Minister
(AGCC), which is projected to cost $10bn-11bn. members had set a historically high compliance Alexander Novak
Sibur launched construction work at the rate with agreed-upon production cuts in July.
facility on the same day as Mishustin’s announce- Reuters cited unnamed OPEC+ sources as well
ment. AGCC, which is slated to come on stream as a draft report from the OPEC+’s Joint Tech-
by 2024-2025, will have faceplate capacity of nical Committee, which met that day, as saying
2.3mn tonnes per year of polyethylene and compliance cuts stood at 95-97% last month.
400,000 tpy of polypropylene. However, prices have since edged back on
“[Novak] arrived and he has left for Moscow. August 19, owing to concerns over the speed of
With all our hearts, we wish him a recovery,” US fuel demand recovery.
Mishustin was quoted as saying at the aforemen- Brent crude futures fell $0.38 to $45.08 per
tioned government meeting. barrel in the early hours of trading, while West
The RIA Novosti newswire quoted an Texas Intermediate (WTI) futures slid $0.25 at
unnamed energy ministry spokesperson as say- $42.64 per barrel.
ing Novak would participate in the OPEC+ vid- “Demand concerns weighed on oil prices,
eoconference slated for August 19. with US economic stimulus still nowhere in
The meeting, alongside US crude supply sight and US-Sino trade talks being post-
data, will help set the scene for international oil poned,” the newswire quoted Nissan Securi-
prices in the coming weeks. Oil prices firmed ties’ general manager of research, Hiroyuki
on August 17 following reports that OPEC+ Kikukawa, as saying.™

P16 www. NEWSBASE .com Week 33 19•August•2020