Page 16 - FSUOGM Week 08 2021

FSUOGM NEWS IN BRIEF FSUOGM

Gazprom boosts gas burden of the company," Sadygov said. EASTERN EUROPE
He said that Gazprom's executives like
exports to Germany by 48% the market situation but have no plans to Polish and Ukrainian
raise the investment programme.
in February are happy about it but only a month and foreign ministers call on
"We set a record almost every day… We
Russian natural gas major Gazprom a half passed. We are setting no goal to Biden to stop completion of
increased its exports to Germany by 48% raise any investment program or any other
year on year in February, Interfax reported, spending," Sadygov said. Nord Stream 2
attributing the jump in exports to cold Gazprom has no plans to hold a buyback
weather in the region. but does not rule doing this in the future, The administration of US President Joe
As reported by bne IntelliNews, he said. Biden should “use all means at his disposal
Gazprom has previously boosted its gas Sadygov separately said that Gazprom to prevent” the Nord Stream 2 gas pipeline
exports to Europe by 41.5% y/y in the first is about to finish the executive motivation project from completion, Poland’s Foreign
15 days of January 2021 to 9.1bn cubic program and will approve it in 2021. Minister Zbigniew Rau and his Ukrainian
metres, the second-best reading ever. counterpart Dmytro Kuleba said in a letter
Even though a sharp rise in German published by Politico Europe on February
exports was anticipated due to cold 22.
weather, the news is positive for Gazprom, Neighbouring countries Poland and
"underlining just how much the European Ukraine have long been irked by the
gas market has improved in the last three Bashneft posts $154mn loss looming completion of the pipeline, which
months," BCS Global Markets analysts would double the size of Russia’s gas
commented on February 14. in 2020 exports directly to Germany, circumventing
Gazprom’s sales to the countries of Ukraine and stripping it of transit income, a
Central Europe are expected to be strong Bashneft, an oil producer of Bashkiria potentially destabilizing factor. The foreign
in the month due to the onset of very cold republic in Russia, reported a $154mn loss ministers' letter represents a last attempt to
weather over the region, but which should under IFRS for 2020. The company's loss for stiffen US opposition to the pipeline, which
quickly warm this week, BCS GM analysts 4Q20 alone stood at $94mn. is now very close to completion.
note. VTB Capital (VTBC) analysts on Poland is among the staunchest
In December 2020 BCS Global Markets February 15 noted that even as Bashneft's opponents of Nord Stream 2 and Russian
"enthusiastically confirmed" a Buy call results were anticipated to be weak, they influence in Europe. Polish officials argue
on Gazprom. The analysts noted that were lower than expectations, with Ebitda that Nord Stream 2 will needlessly increase
Gazprom's exports are recovering faster missing the analysts' forecast by 22%. Europe’s dependence on Gazprom for gas.
than expected after a tough year, with VTBC reminds that Bashneft is more In October, the Polish antimonopoly
European exports seen returning to normal exposed to refining (as opposed to crude oil watchdog UOKiK slapped Kremlin-run
by 2023.. sales) than any other integrated oil company gas supplier Gazprom with a $7.6bn fine
in Russia, and the final quarter of 2020 was for going ahead with the Nord Stream 2
not favourable for the downstream segment, pipeline without its consent.
Gazprom says to pay especially domestically in Russia. more integrated, internally resilient and
“Europeans decided to move toward a
In addition, the negative bottom line
dividends fully for 2020, for Bashneft was exacerbated by other transparent market for natural gas in order
to better withstand future disruptions.
expenses and a foreign currency loss. VTBC
2021 analysts warn that Bashneft is unlikely to However, the Kremlin was busy drafting
a plan that would strengthen its grip on
pay dividends for 2020 given the net loss
Russian gas giant Gazprom will pay full (official dividend payout policy of 25% Europe’s gas supply and untether Ukraine
dividends for 2020, while payments for 2021 of IFRS net income), and affirm a Hold from the rest of Europe,” Rau and Kuleba
will reach 50% of the adjusted net profit recommendation on the company's shares. wrote.
under International Financial Reporting Bashneft is consolidating its oil “This is how Russia came up with the
Standards (IFRS), Deputy CEO Famil extraction assets in the Republic of idea for Nord Stream … touted as a tool
Sadygov said late onFebruary 21. Bashkortostan (Bashkiria). The company for diversification of natural gas supplies
"I’ve said many times that yes, in and its solid cash flow and dividend payout to Europe. In reality, Nord Stream was
accordance with the dividend policy we were in focus after a dramatic takeover by designed to sabotage Europe’s energy
have a chance not to pay dividends for 2021, Russian state oil major Rosneft from private security,” they warned.
if net debt to EBITDA is above 2.5,” Sadygov investment conglomerate AFK Sistema and The ministers’ call is coming as Germany
said. a corporate conflict that was finally settled is seeking to make a deal with the US that
“We expect an increase of the figure this in March 2018. would ease the completion of Russian
year, in the results of 2020. I’ve reiterated Currently Rosneft owns 57.66% in the Nord Stream 2 pipeline via the Baltic Sea,
that we have no plans to use it as a pretext company, with 25% held by Bashkiria's local Bloomberg reported on February 16, citing
for nonpayment or lower payment." government, 8% treasury shares, 4.4% held sources familiar with the matter. The US has
According to the official, Gazprom by companies affiliated with Bashneft, and imposed sanctions on companies involved
expects the net debt to earnings about 4% held by minority shareholders. in the project in an effort to block the
before interest, taxes, depreciation and As reported by bne IntelliNews, Rosneft pipeline.
amortization (EBITDA) ratio to decrease itself suffered a near 80% drop in net profit The construction of the pipeline was
below 2 in 2021 from slightly less than 3 in 2020, as the coronavirus (COVID-19) halted for a year due to earlier imposed
estimated for 2020. pandemic sapped fuel demand and caused sanctions, but Russian gas giant Gazprom is
"This was the key challenge for us not to prices to collapse. determined to complete both lines of Nord
allow significant deterioration of the debt Stream 2 by the end of April 2021.

P16 www. NEWSBASE .com Week 08 24•February•2021