Page 9 - FSUOGM Week 05 2020

FSUOGM PERFORMANCE FSUOGM
Lukoil sees output rise on growth in Uzbekistan
RUSSIA
Lukoil’s Uzbek projects now account for more than 40% of its gas output.
PRODUCTION at Lukoil, Russia’s largest inde- pendent oil company, was up 1.3% in 2019, driven by growth at gas projects in Uzbekistan.
e company produced 2.35mn barrels of oil equivalent per day of hydrocarbons during the year excluding contributions from Iraq’s West Qurna-2 eld, it said on February 3, up from 2.139mn boepd in 2018. Q4 output averaged 2.388mn boepd, up 3.5% compared with the previous three months.
Gas production climbed 4.5% year on year to 35.05bn cubic metres in 2019, and by 14.2% quarter on quarter to 9.43 bcm from October to December. is growth came on the back of the full-scale launch of the Kandym gas-processing plant (GPP) in Uzbekistan in April 2018. Lukoil’s output in the Central Asian state rose by 7% y/y to 14.1 bcm in 2019 – equivalent to more than 40% of its total gas production.
Lukoil’s oil output was relatively at in 2019 in contrast, rising only 0.3% y/y to 85.88mn tonnes (1.72mn boepd). Production in Russia
was virtually unchanged at 85.07mn tonnes, while overseas extraction expanded by 6.8% to 610,000 tonnes.
Lukoil has a number of green eld projects in Russia, but its focus in recent years has shi ed overseas. Company president Vagit Alekperov recently highlighted West Africa as an area where Lukoil wanted to expand. It bought a 25% stake last September in the Marine XII block o the Congo for $800mn, and has reportedly led bids for additional acreage in the country.
In December it exercised an option to buy a 40% interest in Block 132 in Nigeria from Chev- ron, and is also in talks to join Italy’s Eni at Nige- ria’s Aba project.
Lukoil’s push overseas can mainly be explained by its desire to develop new fields, with the number of available green eld projects in Russia decreasing. e company’s domestic production is also restricted under Moscow’s OPEC+ commitments, making foreign projects more attractive. ™
POLICY
Tatneft seeks tax breaks at flagship field
RUSSIA
Romashkinskouye is one of Russia’s biggest and oldest oil elds.
RUSSIAN mid-sized oil producer Tatne has requested tax concessions to help boost recov- ery at the mature Romashkinskoye oil eld in Tatarstan.
Romashkinskoye is one of Russia’s biggest and oldest oil elds, rst discovered in 1948. It still ows around 311,000 barrels per day (bpd) of oil, accounting for more than half of Tatne ’s production.
Addressing a press conference on January 29, Tatne CEO Nail Maganov outlined plans to spend RUB1 trillion on the eld, in order to recover an extra 245mn tonnes (1.8bn barrels) of oil. e project, he said, would involve the drilling of 21,600 new wells, as well as repairs at thousands more existing ones.
However, he said the investment would only be possible if Tatne paid zero mineral extrac- tion tax (MET) on production from the new wells for three years.
“All the equipment will be made by Russian enterprises, which will enable the creation of
30,000 jobs,” Maganov explained. “We are ready to provide technical documents right now and start production immediately. We are intending to sign agreements worth RUB350-370bn.”
Since oil prices collapsed in late 2014, Russian producers have been seeking incresingly gener- ous tax breaks to support investments they claim are necessary to keep output stable. State pro- ducers Rosne and Gazprom Ne were recently awarded almost RUB60bn in concessions over a 10-year period at the Priobskoye eld in Western Siberia.
The Tatarstan region’s government owns a 36% stake in Tatneft, with the rest divided between mostly small, private shareholders. e company produced a total of 29.8mn tonnes (598,000 bpd) of oil in 2019, up less than a 1% compared with its output in the previous year. Like other Russian producers, Tatne ’s ability to expand production is restricted under Rus- sia’s commitments as a member of the OPEC+ group. ™
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