Page 15 - FSUOGM Week 31 2022

FSUOGM NEWS IN BRIEF FSUOGM

two other bonds include a €600mn five-year At the same time, analysts of the regulator (Leningradskiy and Rusanovskiy fields
bond at 7.125% due in 2024 and a $500mn believe that the economy of Ukraine will licence) and in the Barents Sea.
seven-year bond yielding 7.625% due in show a recovery of 5-6% in 2023-2024. This
2026. will become possible if the active phase of
With Ukraine running out of money, the war ends and the Black Sea ports are Azerbaijan increased gas
the government asked other state unblocked.
companies State Automobile Roads The regulator expects inflation to return supplies to Turkey by 1.6
Agency (Ukravtodor) and power company to the goal of 5% in 2025. According to the
Ukrenergo to also defer bond payments for NBU forecast, inflation will decrease to times in May
two years. However, with other national 20.7% in 2023 and 9.4% in 2024..
companies looking set to default, Ukraine’s Azerbaijan exported 3.72 bcm of gas
state-run Ukreximbank surprised experts to Turkey from the Shah Deniz field in
by making its scheduled, regular 2025 Son of Russian hawk January-May, which is 14.6% lower than the
eurobond payment of $26.21mn, reported same period last year, according to the data
Bloomberg. Patrushev to become of the Turkish Energy Market Regulatory
Nevertheless, several state companies Council. According to the council, gas
have been downgraded by the rating agency Gazprom’s offshore drilling exports from Azerbaijan to Turkey
Fitch, including Naftogaz, Ukrenergo and amounted to 681.63 mcm in May, which
Ferrexpo, as a result of Ukraine’s increased contractor is 59.74% higher than the same period last
country risks and financial crisis, Ukraine year.
Business News reported on August 1. The servicing company Aurora will In May, Azerbaijan accounted for 18.28%
Naftogaz’s long-term rating has been change its name to Gazprom ShelfProekt, of all gas supplies to Turkey. In general,
downgraded to the level of RD (limited and could become the main offshore Azerbaijan remained in third place in terms
default), for failing to pay its eurobond debt drilling contractor of the Russian natural of gas supplies to Turkey in May. In the first
on July 19. Ferrexpo’s foreign-currency gas giant, Gazprom, Kommersant daily place is Russia, which accounted for 38.58%
issuer default rating (IDR) rating fell from reported citing unnamed sources. Aurora is of all deliveries, in the second place was
B- to CCC+, whilst Ukrenergo’s five-year controlled by Andrey Patrushev, the son of Iran (23.11%), and in the fourth place was
state-guaranteed notes’ senior unsecured the security hawk Nikolai Patrushev. Egypt (7.53%). At the same time, pipeline
rating dropped to C from CCC. Gazprom ShelfProekt reportedly aims gas accounted for 2.98 bcm (79.97% of all
A financial crisis has begun in Ukraine. to become a specialised centre of Russian deliveries, a decrease of 5.32%), and LNG
In addition to leading state-owned offshore engineering competencies. In 2020 was 747.08 mcm (20.03% of all deliveries,
companies defaulting on their debt, the Gazprom acquired its main drilling and an increase of 66.23%).
currency is in free fall to the point where servicing contractors from the companies of In total, deliveries to Turkey in May were
the national bank has just ordered exchange oligarchs Gennady Timchenko and Arkady carried out from six countries (Azerbaijan,
kiosks to stop displaying the exchange rate Rotenberg. Russia, Iran by pipelines, USA, Algeria
and the government is running a deficit it As followed by bne IntelliNews, in March and Egypt in LPG). Turkey is supplied
can’t cover. The economy is on course to 2022, for example, the US-based oilfield with Azerbaijani gas produced within the
contract by over a third by the end of this service giants Baker Hughes, Weatherford framework of Stage-1 and Stage-2 of the
year – a catastrophic crash, worse than any International and Schlumberger announced development of the Shah Deniz field.
of the multiple crises seen since the collapse they were scrapping all new investment Azerbaijan and Turkey signed a new
of the Soviet Union. in Russia following the fourth sanctions agreement on the sale and purchase of gas
But there is some good news. Economic package of the EU, which banned from Stage-1 in 3Q21 for about 11 bcm
activity has begun recovering in Ukraine investment in the energy sector in response of natural gas to go through the Baku-
after a significant drop at the beginning of to Russia’s military invasion of Ukraine. Tbilisi-Erzurum pipeline. Deliveries under
the full-scale invasion, according to Deputy Halliburton, another major oilfield the agreement began on October 1, 2021.
Chairman of the National Bank Serhii service provider (OSP), has also said it will Deliveries for 2022 under the new contract
Nikolaychuk. This does not mean that the cease operations in the country. are provided for in the amount of 2.55 bcm.
GDP is growing but that the depth of the Gazprom ShelfProekt is headed by At its peak, the volume of supplies under
fall is decreasing, he said in July. Alexander Korobkov, who, according to the contract is provided at the level of 3.7
The economy's recovery can be seen Kommersant, also runs Gazpromneft- bcm/y.
in the following indicators: revitalisation Sakhalin, a joint venture between Gazprom Azerbaijan in 2021 exported to Turkey
of trade networks, increase in restaurant Neft (51%) oil company and Novatek (49%) 8.8 bcm of gas from the Shah Deniz field (a
turnover, and a drop in the number of non- gas major. decrease of 22.7%).
working businesses. In addition, exports are In 2021 Aurora leased a Perro Negro The contract for the development of the
also gradually recovering and the end of the 8 drilling platform from Italy's Saipem as Shah Deniz field was signed in Baku on
blockade on Ukrainian ports should make a part of a contract with Novatek to drill at June 4, 1996, and ratified by the Milli Majlis
very big difference to the country’s balance the Geofizicheskoye field. However, Saipem on October 17 of the same year. The share
of payments. withdrew from the project, Patrushev of the parties in the contract is as follows:
Nevertheless, NBU predicts a 2022 junior’s companies will be able to continue BP (operator, 29.99%), SOCAR (21.02%),
drop in GDP of more than a third and an offshore drilling for Novatek, sources told LUKOIL (19.99%), NICO (10%), TPAO
increase in inflation to more than 30%. The Kommersant. (19%).
national bank estimates that the economy Kommersant reminds that Gazprom
will decline by 40% in the first half of this plans to drill three oil wells in Russia's
year and will end the year down by 30-35%. Arctic seas, namely in the Kara Sea

Week 31 05•August•2022 www. NEWSBASE .com P15