Page 14 - FSUOGM Week 05 2023

FSUOGM PROJECTS & COMPANIES FSUOGM

Novatek foresees 50% growth

in profit in 2023

RUSSIA RUSSIA’S Novatek estimates that its profit the company and others in the Russian oil and
last year increased by more than 50% last year, gas sector.
Novatek was supported despite headwinds caused by Western sanctions,
by higher prices. company CEO Leonid Mikhelson said at a con- Arctic LNG-2 still on track for 2023 launch
ference in India on February 6. Novatek still intends to launch the first of the
The LNG exporter’s net income under inter- 19mn tonne-per-year (tpy) Arctic LNG-2 pro-
national financial reporting standards (IFRS) ject’s three trains this year as initially planned,
totalled RUB433bn ($6.1bn) in 2021 – up from Mikhelson said. The departure of Western
RUB421bn in the previous year. contractors and suppliers from the project in
“For this year, the business plan will most response to Moscow’s invasion of Ukraine had
likely be adjusted,” Mikhelson told reporters, raised some doubts that development would
noting the risk that further Western sanction continue on schedule.
packages could be introduced. “We officially confirmed when we made the
“I cannot predict what financial results will be investment decision. We plan the commission-
for this year, but looking at 2022, all companies ing of the first train in 2023, the second in 2024
in the oil and gas sector saw a two- or threefold and the third in 2026,” Mikhelson said. “Today
increase in EBITDA,” Mikhelson said. “We, too, we keep the commissioning deadlines.”
in terms of profit, will have more than 50% more The CEO added that Novatek had found a
than in relation to 2021.” solution for supplying power to Arctic LNG-2’s
Mikhelson also reaffirmed that Novatek first and second trains. Baker Hughes had been
would pay out dividends in line with its existing contracted to provide power turbines for the
policy, which is to return at least 50% of IFRS net project, but pulled out after the war in Ukraine
income to shareholders. began.
“What is very important to note is that we “We have found the necessary power gener-
have no problems with selling all the products ation – both the first and second lines are fully
that we produce,” he said. provided with the necessary capacities for power
While Russian oil and piped gas exports generation,” Mikhelson said, without disclosing
to European markets have slumped over the what the solution was.
past year as a result of the political fallout from Earlier Russian media reported that a float-
Moscow’s invasion of Ukraine, its LNG exports ing power plant could be supplied by Turkey’s
remain firm, and even increased to Europe in Karpowership for the project. But Mikhelson
2022. said that negotiations with Karpowership had
Mikhelson added that he does not yet see the ended “a long time ago because they changed
possibility of Novatek resuming full disclosure the conditions for providing this power plant
of its financial statements. It ceased this disclo- every month.”
sure after the war broke out in Ukraine and the “They can’t work with Novatek like this,” he
West subsequently imposed sanctions against said. ™

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