Page 96 - RUSRptOct18

9.2 Major corporate news 9.2.1 Oil & gas corporate news
The Russian government approved the change in the shareholder structure of Russia's largest oil company Rosneft , which will make the Qatar Investment Authority (QIA) holder of 18.93% of Rosneft's shares and will end the two-year privatisation saga of country's largest crude producer. Reportedly the government commission on foreign investment approved QIA buying its stake from the QHG Oil, a Singapore-registered joint venture of QIA and Swiss commodity trader Glencore, Interfax and Vedomosti daily reported on August 31 citing unnamed officials. Initially the Russian government claimed that Rosneft had sold a 19.5% stake to QHG Oil in December 2016 for €10.5bn . However, it later became clear that the money raised was actually a loan. Subsequently, Rosneft announced in September 2017 that a 1 4.16% stake was going to be sold to China’s CEFC for $9.1bn . It was billed as the biggest ever investment by a Chinese company into a Russian company, with QHG Oil theoretically recouping its investment. However, CEFC was rocked by investigations at home in 2017, missed the April 1 deadline to pay a €1.5bn instalment, and finally dropped out of the deal in May .
French energy major Total increased its stake in Russia's second-largest gas producer and rising LNG market player Novatek , Vedomosti d aily and Interfax said on September 25 citing the CEO of Total Patrick Pouyanné. Total increased its stake from 18.9% to 19.4%, which is the highest possible stake under the shareholder agreement of 2011. The French company spent an estimated $6.8bn on the shares that now cost $9.6bn. "Speaking of the cost, I know that people believe there is a strong Russian country risk," Pouyanné said, "but Total was able to identify one of the fast-growing players almost 10 years ago." Novatek rose through the ranks of other Russian energy companies after adopting and successfully implementing ambitious Liquefied Natural Gas (LNG) strategy, recently becoming one of top five of Russia's most valuable companies , along with Sberbank state-controlled bank, Lukoil, and Rosneft oil majors. The company's other major shareholders are Leonid Mikhelson (24.76%), sanctioned Kremlin insider and stoligarch Gennady Timchenko (24.76%), Gazprom gas giant (9.9%), and the free float amounts to 27%. With the help of Total and a consortium of other international energy majors Novatek launched its first major LNG project Yamal in 2017 despite Western sanctions against Timchenko. Total will also acquire a 10% stake in Novatek's next LNG project Arctic-2 . Novatek plans to boost LNG output to 56mn tonnes by 2030 from about 20mn tonnes planned for Yamal and Arctic-2 by 2023, according to Pouyanné. This would make more that half of planned Russia's LNG output of 83mn tonnes, as recently estimated by the Ministry of Energy . Global LNG demand is estimated by Total at 293mn tonnes in 2017, with expected 5% annual growth of the market by 2030. Vedomosti reminds that Pouyanné in May 2018 lobbied for liberalisation of Russian gas exports and asked President Vladimir Putin to allow the joint venture of Novatek and Total (Terneftegas) to export non-liquefied gas by pipelines and not only in liquefied form by sea tankers.
Russia's second-largest gas producer and global LNG market runner-up Novatek continues to expand its LNG supplies geography with the first shipment to Latin America supplied to Brasilian Petrobras, the company said on September 24. Novatek rose through the ranks of other Russian energy
96 RUSSIA Country Report October 2018 www.intellinews.com