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said on May 18. Novatek, which financed and launched its first major LNG project Yamal despite Western sanctions , plans another Arctic-2 LNG project and has adopted an ambitious strategy for LNG growth through 2030.
Rosneft released its the first quarter of 2018 financials that showed Ebitda flat q/q, despite c9% higher oil in the same period, the company said on May 16. “Although Ebitda was broadly in line with consensus and BCSe (as was the c$0.8bn FCF on CapEx reduction), the market may be disappointed by such a performance, given expectations of a more significant impact from the oil price rally. During the call, Rosneft reiterated CapEx guidance and that prepayments are on time,” BSC Global Markets said in a note. According to company data, liquids output was flat q/q and decreased by 1.2% y/y as a result of the OPEC/Russia agreement. The company said earlier that it is ready to restart full production of oil should the agreement to limit production be lifted and could add 100,000 barrels a day to its production. At the same time refining volumes declined 3% q/q (due to the optimization of the mix) and gas production decreased 1.8% q/q. Oil sales volume was c7% lower q/q, while gas sales decreased 6% q/q and products sales remained flat q/q. “ Following the trends in volume, the first quarter of 2018 revenue increased just 3% q/q to c$30.27bn, despite a 9% higher oil price q/q and c3% lower average $/RUB rate q/q. “We believe weak sales volume momentum and the absence of price growth for both crude and petroleum products on the domestic market ahead of the presidential elections translated into an Ebitda increase of just 1% q/q to c$6.77bn, with Ebitda margin declining q/q. EBITDA was in line with BCS estimates and just 4% higher versus consensus,” BCS said. Net income declined c12% q/q to c$1.4bn in the first quarter of 2018 as the fourth quarter of 2017 figure was positively impacted by the cRUB100bn payment from Sistema, offsetting other negative one-offs, the bank reported. Free cash flow (FCF) turned positive in the first quarter and amounted to c$840mn (c$2.5bn if adjusted for prepayments offsetting) mainly on the back of a seasonal CapEx reduction of 24% q/q. Total debt, including prepayments, totaled c$95bn as of end-1Q18, with net debt at c$74bn (down 1% q/q).
Russia's largest oil company Rosneft said its crude output in the first quarter of 2018 declined by 1.2% year-on-year due to the need to comply with the Opec+ output cuts. This week Rosneft reported first-quarter financials , posting a strong free cash flow and cutting capex and debt as recently promised to investors. But the company's bottom line underperformed due to higher-than-expected effective tax rate, VTB Capital commented on May 15. Together with the reports that gas major Gazprom could face higher extraction taxes , this could question to what extent Russian hydrocarbon majors would profit from rising oil prices vis-a-vis the Russian government. In the meantime in long-term perspective to maintain stable output Rosneft still needs to ensure development of technically challenging Arctic and offshore oil fields, which has been set back by Western sanctions on extraction technology and pulling out of foreign oil majors such as Exxon . On May 14 Rosneft denied the reports that Italy's Eni is ceasing its participation in joint exploration venture due to US sanctions. The company is one of Rosneft’s strategic partners in exploring Russia’s continental shelf in the Barents Sea and the Black Sea. "Information on Eni’s withdrawal from JV with Rosneft does not correspond to reality. Rosneft and Eni remain partners on JV," the Russian company said in a statement, as cited by Tass.
Russia's largest oil company Rosneft slashed its short-term debt in the
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