Page 102 - RPTRusFeb17

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Russian state-controlled natural gas producer Gazprom expects revenue from gas exports in 2017 to grow to $35bn (€33.2bn) f rom $30bn last year, Alexander Medvedev, deputy chairman of Gazprom Management Committee, was quoted as saying by TASS on March 2. In January 2017, Gazprom set an all-time record of gas exports to non-CIS countries, delivering 19.1bn cubic metres of gas to consumers, making a 26% increase year-on-year. In 2016, the company increased gas supplies to non-CIS countries by 12.5% compared with 2015 to all-time high of over 179.3bn cubic metres. Earlier, chairman of the Gazprom board Viktor Zubkov said that in 2017, gas supplies to non-CIS countries may be higher than last year's, although this depends on a variety of factors. Meanwhile, Gazprom's board recommended that dividends of RUB7.89 per share be paid for 2016. "The RUB7.89 dividend per share corresponds to the annual revenue of 5.89%, which is in line with earlier posted forecasts," BCS said in a research note. Last month, Gazprom announced that it was lowering wages for its board members for first time in several years, by 9.4% to RUB2.5bn. No explanation for the decision was provided. Still to be released, Gazprom's 2016 figures are expected to drop more significantly than the board members' wages. Earlier, Bloomberg predicted that the company's Ebitda will decline by 28% to 1.4 trillion.
Gazprom has had access to the OPAL gas pipeline limited to 50% of capacity since 1 February, according to Kommersant. The company is apparently not going to increase gas transit via Ukraine and is to compensate for the reduction in volumes supplied with higher gas withdrawals from underground gas storage facilities in Europe, the paper reports. The gas price in Europe increase 4% on February 13 and almost reached its two-year high. VTBC calculates that each 5% increase in the European gas price might add 3% to Gazprom’s EBITDA this year. All in all, the news is generally seen as supportive for the name, VTBC doubts that this is a long-term development. In December 2016, Poland filed a lawsuit at the European Court of Justice against the decision of the European Commission to allow Gazprom to use up to 90% of OPAL (36bcm of total capacity). In addition, Polish state gas company PGNiG has filed a second analogous suit at a Düsseldorf court, which claims that the decision of the European Commission on OPAL might represent a threat to the energy security of the EU and Poland. In October 2016, the European Commission allowed Gazprom to use an additional 40% of OPAL’s capacity for gas supplies through auctions.
Russian state gas major Gazprom is defying Kremlin orders and refusing to sell natural gas to a future project of state oil major Rosneft in the Far East , RBC daily reported on February 21. Despite a decree of President Vladimir Putin issued in December 2016, Gazprom refuses to contract gas to Rosneft's Eastern Petro-chemical Complex (VNHK), arguing that Rosneft has its own gas on the Sakhalin islands, RBC said, citing a February 8 letter sent by the company to the Ministry of Energy. The press services of both companies and the ministry declined to comment. Gazprom suggests transferring a "sufficient amount of Rosneft's gas on the Sakhalin shelf" for the needs of VNHK through its Sakhalin-Khabarovsk-Vladivostok pipeline, meaning the 20% stake of Rosneft in the Sakhalin-1 project with proven reserves of 536bcm of gas. Gas exports
102 RUSSIA Country Report February 2017 www.intellinews.com