Page 147 - RusRPTJun21

Growth remains in focus: Management focused on new areas of growth, particularly the partnership with parent Gazprom to develop oil rims and deep, tight horizons of supergiant gas fields. The company will produce about 3mt (60kbd) from oil rim projects this year, and with significant growth going forward
Regarding taxes: In the upstream, the company has converted around 40 fields to the Excess Profits Tax (EPT) following the tax changes last fall – practically all that were eligible. In the downstream, the 30% premiums on the reverse excise tax from the recently-made agreements on refining upgrades were already being received in the first quarter
CapEx guidance for 2021 is for Rb420bn, “plus or minus”, which is down a modest 5% from the Rb444bn the company spent in 2020.
● Rosneft
Rosneft has launched the construction of the port in the Sever Bay on the Taimyr peninsula for its Vostok Oil project, Vedomosti reports. The engineering works are to be carried out by LenmorNIIproject (which specialises in engineering and the design of ports), with construction done by OEK. The first stage of the project envisages the construction of port facilities for transporting up to 30mnt/a of oil by 2024. After the second and third stages of the project are commissioned, the port’s capacity is to increase up to 100mnt/a.
● Novatek
Novatek has launched the fourth and final line at its Yamal LNG, Kommersant reports. The line’s nameplate capacity is 0.95mnt per annum.
Investors and analysts have been waiting for this event, we believe, and so the news is likely to be perceived neutrally by the market. Additional LNG sales volumes are to add up to 1.5% to Novatek’s earnings this year, we calculate (to recap, the company reflects its share in Yamal LNG as income from associates in its P&L).
This fourth line has been entirely built using new Russian technology and equipment. Given that this is the first such project, its launch came later than scheduled (the company initially planned to commission it in 4Q19) due to the longer than expected testing period. With this line the nameplate capacity of Yamal LNG (three lines of 6.5mn) would reach almost 17.5mnt. We note, though, that the plant’s utilization stands at a higher rate, with LNG production last year of 18.8mnt.
Novatek pledged 100% of Arctic LNG’s shares to Sberbank in the financing deal with Russian banks, Vedomosti reports. We treat the news as not market-moving for Novatek and do not think it will affect the receipt of additional financing. It was known that Novatek would pledge its shares (60%) as part of the project financing of Arctic LNG 2. To recap, Arctic LNG 2 has signed a loan agreement with Russian banks (Sberbank, Gazprombank, VEB and Otkritie) for a 15-year credit line facility for a total of €3.11bn. Sberbank is to provide €2bn of this. This is part of the external financing package for the
147 RUSSIA Country Report June 2021 www.intellinews.com