Page 10 - FSUOGM Week 36 2021

FSUOGM PIPELINES & TRANSPORT FSUOGM

Transneft could split shares

despite sanctions

RUSSIA THE management of Russian state pipeline "As a reminder, EU sanctions block Transneft
operator Transneft maintains its plan to execute from placing new shares, thus the negotiations
Analysts believe the a share split, and the company is waiting on the with the EU regulator. The stock reacted posi-
split is positive for the EU regulator hoping to reach an agreement and tively to the call, likely on the back of the work
company. conduct the split in 2022, Sova Capital wrote being done on the split," Sova commented.
on September 2 citing the conference call of the Otherwise Transneft confirmed settling two
company. cases related to the Druzhba pipeline incident,
Previously the analysts saw the news on the guided for load of 445mn tonnes of crude and
share split as positive and possibly fuelling the 38mn tonnes of oil products to be transported
rise in Transneft's share price. in 2021, which is a slight increase from previ-
Sova Capital reiterated that a stock split could ous 440mn tonnes, and maintained a capital
be positive for Transneft, but expects the issue to expenditure guidance of RUB232bn ($3.18bn)
become topical only next year, since few details unchanged.
have been provided, while reiterating a Buy call In a separate report Kommersant daily
on the company's shares. claimed that Transneft could spend RUB38bn
In 2017 reports claimed that the Russian until 2025 on digital transformation. Manage-
Direct Investment Fund (RDIF) was pushing for ment confirmed this would be in addition to
a 100:1 preferred share split, to attract new insti- the current capital spending, without providing
tutional and retail investors. more details. ™

POLICY

OPEC+ unlikely to heed US

calls for output hike

OPEC THE OPEC+ group is unlikely to make any change of policy was unlikely.
changes to its oil output policy when mem- However, Kuwaiti Oil Minister Moham-
At this rate, it will take bers meet this week, according to numerous mad Al-Fares caused confusion when he
nearly 15 months for delegates. said on August 29: “The markets are slowing.
OPEC+ to restore If correct, this will give OPEC+ a total com- Since [coronavirus] COVID-19 has begun its
production to the pre- bined production target of 37.14mn barrels per fourth wave in some areas, we must be care-
pandemic level. day during September, up from the 36.74mn bpd ful and reconsider this increase. There may
August target. The increase in output follows the be a halt to the 400,000 (bpd) increase,” only
agreement reached in July to collectively ease later to clarify that Kuwait would support
production cuts by 400,000 bpd each month any decision based on “consensus” among
from August and push back the current April OPEC+ members.
2022 end date until the end of the year. “As always, the State of Kuwait supports
At this rate, it will take nearly 15 months for the consensus within the OPEC+ group, as all
OPEC+ to increase production by the 5.8mn options are explored, and confirms that no
bpd withheld under the agreement reached in decisions have been reached yet with regards to
early 2020 as the group scrambled to balance the the forthcoming meetings on September 1,” he
market. added.
In August, the US government urged OPEC When Fares was asked about US efforts to
and its allies to ramp up output to slow rising lobby for a production increase, he said: “There
gasoline prices, which have been viewed as pos- are meetings with OPEC countries, especially
ing a challenge to economic recovery. the Gulf Cooperation Council [GCC] coun-
OPEC+ delegates were quoted by several tries, and so far there are different views on how
media outlets including Reuters as saying that a to handle this issue.” ™

P10 www. NEWSBASE .com Week 36 08•September•2021