Page 124 - RusRPTAug21

Energy within the Board’s Strategy Committee, which is to be chaired by Dominique Marion, VP for reservoir evaluation and management of TotalEnergie, according to a company press release. This subcommittee is to be tasked with reviewing business operations and developing recommendations for the company board as concerns its strategy on ESG topics such as climate and decarbonisation issue
● Lukoil
Iraqi Oil Minister Ihsan Abdul-Jabbar Ismail said on a video on Facebook that Lukoil notified the Iraqi government that it planned to sell its stake in West Qurna-2, Vedomosti reported yesterday citing reports from Ria Novosti, S&P Global Platts and Reuters. Lukoil has 75% in West Qurna 2, and signed its service contract on the project in January 2010, according to the company’s MD&A. The project works in a compensation scheme, and the company reported 609kt of compensation oil in 1Q21 vs. 463kt in 4Q20. Lukoil could sell its stake to a Chinese company, according to Iraq’s oil minister. Igor Yushkov of the National Energy Security Fund estimates Lukoil could sell its stake for $1.5bn or more, Vedomosti reported.Lukoil is not alone in its potential exit, BP could exit Rumaila and ExxonMobil might pull out of West Qurna-1, Argus reported.
Lukoil has signed an agreement to acquire a 50% stake in Area 4, located on the Mexican shelf, by purchasing a holding company that owns the operator company. The transaction amount is $435mn, plus expenses actually incurred in 2021 as of the closing date of the transaction, according to Lukoil. The transaction is to close after the fulfillment of suspensive conditions, including approval by the Mexican government. The project includes two oil fields with a total area of 58sq km located on the shelf of the Gulf of Mexico, 42km from the coast with a sea depth of 30-45m in the area. Two oil fields, Ichalkil and Pokoch, include recoverable hydrocarbon reserves of 564mnboe, which are more than 80% oil. The project partner is PetroBal (an oil and gas company which is part of the Mexican conglomerate Grupo BAL) with a 50% stake. The combined capex to develop Block 4 was earlier estimated at $7.6bn, according to Kommersant. Analysts calculate that the company is to pay at least $1.54/bbl of reserves. The project is developed under a PSA, which limits the risk factors. We think that the acquisition is generally consistent with the company’s previously announced plans to enter upstream projects abroad with low geological risks, as production in the area being acquired is going to start in 3Q21, with the maximum level planned at 115kboe/d. Lukoil is likely to be able to manage the operational risks, as the company has experience on the Caspian shelf. We therefore deem the news as neutral for the stock. Lukoil’s other projects in Mexico include the Amatitlan block and Blocks 12, 28, 10, 14.
● Other
Transneft reported its 1H21 operating results, 8 July. In 1H21, crude exports were down 13% YoY to 91.6mnt, while deliveries to Russian refineries were flat YoY at 118.6mnt. For 2Q21, exports were down 2.2% YoY and deliveries to refineries grew 7.8% YoY to 59.7mnt. Total load for crude oil was down 5.1% YoY for 1H21 to 217.6mnt, while in 2Q21, load was up 2.8% YoY to 112mnt. Oil product volumes exported slipped 5.2% YoY in 1H21 to
124 RUSSIA Country Report August 2021 www.intellinews.com