Page 15 - FSUOGM Week 23 2021

FSUOGM NEWS IN BRIEF FSUOGM

Russia’s Lukoil ready to rate of around 45% and, although there is
RUSSIA NIOC anticipates a healthy recovery
Tatneft upsets on income in return to Iran’s Mansouri less data available on the Ab Teimour field,
which remains largely undeveloped, NIOC
1Q21 petroleum project estimates are that it holds around 2 billion
barrels of oil.
Russian regional oil major Tatneft of the Russia’s Lukoil is ready to re-engage on At the time of the MoU signing,
Tatarstan republic posted 17% year-on-year Iran’s western Mansouri oilfield as and NewsBase quoted a senior oil and gas
growth in revenues under IFRS to $3.5bn, when sanctions on operating in the country industry source in Tehran as saying: “The
adjusted EBITDA growth of 32% y/y, and are lifted. trade off for Lukoil is that it gets an open
net income growth of $0.6bn, up by 49% Speaking on the sidelines of the St goal with Mansouri in exchange for having
y/y. Petersburg International Economic Forum to put a bit more effort into Ab Teimour, but
The company's free cash flow (FCF) (SPIEF) on June 3, Lukoil’s president Vagit with the prospect of a huge payout down
in the reporting quarter stood at $0.4bn, Alekperov told reporters the company the line, as per the terms of the contract.”
slightly below an average of $0.45bn per hopes it can return to the development of He added: “The preliminary contract
quarter the previous six periods, but in the field. that has been signed will be the IPC model,
line with the 4Q20, BCS Global Markets When asked about the cessation of US stipulate that the take for Lukoil from [Ab
commented on June 4. sanctions imposed on the Islamic Republic Teimour] will be around 30% higher than
Tatneft's results in 1Q21 beat that might be ahead and the potential is being offered as the standard for oil and
consensus expectations on revenues, but for Russian companies to re-enter the gas fields that have been partially developed
underperformed on EBITDA and net country, he said: “Yes, we are interested. We already.”
income. have advanced quite far there, almost all
"Both EBITDA (+35% quarter on documents on the Mansouri field are ready.”
quarter) and net income (+75% q/q) “As soon as all these restrictions are Transneft posts $0.7bn
showed an expected, large q/q increase, lifted, we will be happy to resume both the
something that had been seen with peers negotiation process and practical work on profit in 1Q21, delivers on
Lukoil, Gazprom Neft and Rosneft," the project,” he said.
BCS GM noted. But given the mixed The company signed a memorandum of dividends
performance at the EBITDA and net income understanding with the National Iranian Oil
lines, BCS GM considers the results to be a Co. (NIOC) in 2016 for studies of the Ab Russian state oil pipeline operator Transneft
neutral event for the stock. Teymour and Mansouri fields. reported EBITDA growth of 17% year
The analysts at BCS GM maintained Alekperov added that the terms of the on year to RUB253bn and net income of
a Buy call on the company's shares, and Iran Petroleum Contract (IPC) contract RUB50bn ($0.7bn) in 1Q21 under IFRS,
suggest a focus on how Tatneft is adapting proposed by the Iranian side suited Lukoil, with the bottom line beating consensus
to the loss of tax breaks for high-viscosity but added that his company was yet to expectations by 19%.
oil and highly depleted fields, the status of consider other projects in the country. Transneft also cut capital expenditures
ongoing negotiations with the government Discussions on the projects were put to RUB38bn, which supported free cash
about renewing those oil tax breaks, and on hold after the US pulled out of the Joint flow (FCF) of RUB55bn, despite the total
the progress in launching the next stages of Comprehensive Plan of Action (JCPOA) pipeline load declining by 12% y/y to
the upgrade of Tatneft’s TANECO refinery, and reimposed sanctions on the country’s 106mn tonnes in 1Q21 and total revenue
anticipated by the end of 2021. oil industry. being down 4% y/y at RUB253bn.
Analysts at Sova Capital also believe that The Mansouri field, in the southern Sova Capital sees 1Q21 results as
1Q21 results are unlike to elicit a strong Khuzestan province, has an estimated 3.1bn "generally positive", with the beat on net
market reaction. As expected, the company’s barrels of oil in place. income line being similar to what was seen
cash position expanded and FCF remained On June 3, Russia’s energy minister from Russian oil companies and provides a
healthy, Sova wrote, while maintaining a Nikolay Shulginov met with Iranian good base for dividends. Sova maintained a
Buy call on Tatneft's shares. counterpart Reza Ardakanian on the at the Buy call on Transneft preferred shares.
As reported by bne IntelliNews, Tatneft same event for talks on bilateral cooperation As reported by bne IntelliNews,
is the company most exposed to the and joint investments, as well as for a Transneft posted stable results for 2020,
proposed raising of the Mineral Extraction discussion on the situation on the global and was seen by the analysts as turning
Tax (MET) on high-viscous oil and other energy market. into a strong dividend investment play. In
proposed reforms to the taxation of the According to NIOC, by 2015 the December the operator confirmed its 50%
oil sector. The management estimated the project to develop Mansouri was around minimum dividend payout policy.
losses at RUB80bn ($1bn). 99% complete with new production and Upon the publication of its IFRS results
As a result, the company's dividend desalting units almost complete. Transneft's board recommended a dividend
payments have been in limbo. It was notably The Phase 1 production target was set per share (DPS) of RUB9,222 per ordinary
the first Russian oil company to cancel its at 100,000 barrels per day (bpd) with the and preferred share, making a 50% payout
dividend for 4Q19, citing the impact of the second phase adding a further 150,000 bpd. on unadjusted IFRS profit and 6.5%
coronavirus (COVID-19) pandemic. But Production from the Asmari layer alone dividend yield (DY), VTB Capital (VTBC)
it had since indicated it would continue averaged around 60,000 bpd in early 2004 analysts estimated.
payments up to the end of 2020. and has achieved 100,000 bpd at various For 2021, VTBC expects DPS to increase
points since 2007. to RUB13,380 on the back of recovering oil

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