Page 15 - FSUOGM Week 36

FSUOGM INVESTMENT FSUOGM

Rosneft steps up buybacks

RUSSIA RUSSIAN oil major Rosneft has ramped up its regarding the spike in political risks, as long as
share buyback activity, taking advantage of weak the buyback program is in existence. Currently it
Rosneft's buyback market conditions, BCS Global Markets wrote is only authorised until the end of the year.
scheme is currently on September 8 citing the data disclosed by the "While the ramping up of the buyback does
authorised to continue company to the London Stock Exchange. not appear to have led to outperformance for
until the end of the Rosneft's buyback activity jumped to 1.65mn Rosneft in this instance, it also did not under-
year. shares daily over the last five trading days from perform, something that in past years would
the recent average of 30,000. Its share price in the have been highly likely in a declining market
period fell by 3.9%, while Gazprom's fell 4.6%, due to the higher perceived political risk around
Lukoil's 7.2% and Novatek's 0.3%, according to the state-owned company and its relatively high
BCS GM. level of financial leverage," BCS argueed, seeing
"As data accumulates that Rosneft’s buyback the news as positive for the name.
policies are structured to provide support during As reported by bne IntelliNews, a massive
times of market weakness, investors’ perception share buyback programme was part of Rosneft's
of the stock’s beta are likely changing," BCS ana- 2018 investment makeover, when it pledged to
lysts commented. cut debt, rein in its investment programme and
BCS believes that investors' traditional views shed non-profile assets. The company also raised
on Rosneft are likely to be suspended, especially its dividend payout to 50% of IFRS profit. ™

POLICY

Ukraine's top pro-Russian politician

reportedly sells gasoline to US

UKRAINE VIKTOR Medvedchuk, Ukraine’s top pro-Rus- called NZNP Trade, which has the sole right to
sian politician, has made up to $150mn by selling extract oil from Russia’s Gavrikovskoye oilfield.
ExxonMobil indirectly Russian gasoline to the US despite being under The deposit's estimated reserves stand at 130mn
receives fuel from a sanctions, the Schemes investigative journalism tonnes (953mn barrels).
refinery affiliated with project reported on September 4. According to the international customs data-
sanctioned Ukrainian According to the investigation, Russia's base Import Genius, in 2020, gasoline from the
politican Viktor Novoshakhtinsk oil refinery in Rostov owned Novoshakhtinsky refinery was bought by Exx-
Medvedchuk. by Medvedchuk’s wife, TV host Oksana March- onMobil’s subsidiary and delivered at least six
enko, sells gasoline to a Swiss company called times to the port of Houston.
New Coal, which is allegedly controlled by a Using the Marine Traffic app, Schemes was
member of the Russian State Duma. able to track down the amount of gasoline deliv-
The company later resells gasoline produced ered to the US.
by Medvedchuk’s Russian plant to ExxonMobil Since January, at least 449,000 tonnes of gas-
Sales and Supply LLC. The gasoline is then trans- oline have been transported to Houston from
ported through the port of Houston, Texas. Medvedchuk’s oil refinery. The market value of
While ExxonMobil does not directly buy such gasoline produced in Russia in 2020 ranged
gasoline from the politician under US sanctions, between $30 and $40 per barrel.
retired diplomat Daniel Fried, a former co-or- Medvedchuk’s supplies shipped to Texas are
dinator for US sanctions policy, told journalists estimated at about $150mn.
that such business ties may lead to an investiga- Medvedchuk has been under US sanctions
tion by the Office of Foreign Assets Control. since 2014, when Russia invaded Ukraine.
In September 2018, journalists from Schemes According to Schemes, Medvedchuk’s oil refin-
discovered that Marchenko, through a Cyprus ery uses several intermediaries to sell petroleum
shell company, owns a Russian oil company products to Crimea. ™

Week 36 09•September•2020 www. NEWSBASE .com P15