Page 144 - RusRPTJan21

Gazprom’s key gas markets, accounting for 25% of the company’s exports to Europe in 9mo20. This year, we expect Gazprom to supply around 47bcm to the country, down 11% from 2019 and 19% from the peak deliveries achieved in 2018. Thus, the new contract might add 13% to Gazprom’s supplies to Germany, we calculate.
We remind readers about the that risk that the European Gas Directive might be applicable to the pipeline, limiting its operating capacity to 50%, unless the company grants access to supply gas via the pipeline to third-parties (see our Morning Comment of 17 January). Thus, the new contract might theoretically help Gazprom to bypass some of the restrictions by selling gas to OMV in Russia, while the Austrian company later delivers it to Germany through Nord Stream 2.
OMV already has a long-term Russian gas import contract with Gazprom for 6.9bcm/year for deliveries to Austria until 2040. We also note that OMV is a co-financier of the Nord Stream 2 gas pipeline.
● Rosneft
Rosneft​ hosted an analyst call on its ambitious Vostok Oil project. ​Top management participated, including Didier Casimiro, First VP and Head of Downstream, and the Head of Vostok Oil, Andrey Polyakov. Our main takeaways included the following:
· Management’s first statement was that Vostok Oil is a “transformational project” for Rosneft. Based on the details laid out in this call, this seems an accurate assessment
· The project is targeted to produce 2.3mmbpd by 2033. With 400kbd of production already from the existing Vankor Cluster – which is being rolled into the Vostok Oil JV – the project is already ‘working’
· Rosneft is planning on a round of divestments of marginal assets to ‘high-grade’ its assets and provide capital for developing Vostok Oil. Vedomosti reports those asset sales may be part of the payments to Neftegazholding for the licenses to the Payakha Group of fields. We see this as an important development, as historically Rosneft has been far more focused on acquisition than optimization of existing assets
· Vostok Oil already has estimated 3P resources of c6bn tons (c44bn bbl). Only the first two fields to be developed in the Taimyr region (Payakha Group and
144 ​RUSSIA Country Report​ January 2021 www.intellinews.com