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9.2 ​Major corporate news 9.2.1​ Oil & gas corporate news
Ukraine’s biggest crude oil producer Ukrnafta can soon receive from Naftogaz almost UAH30bn to repay its tax obligations​, Yuriy Vitrenko, the executive director of Naftogaz (NAFTO), reported on February 3. This is a part of an amicable agreement signed between Naftogaz and Ukrnafta in February 2019, he wrote on his blog. As a part of the deal, Naftogaz will pay about UAH15bn for the natural gas owned by Ukrnafta (2.06 bcm) and prepay UAH14.6bn for natural gas that Ukrnafta will produce in the future. Naftogaz will receive such money from the government (which must compensate for its PSO-related losses), will pay it to Ukrnafta, and the latter will use the funds exclusively to repay its tax obligations. Vitrenko expects that Naftogaz will receive from the state budget the necessary funds to make such a deal. The dealwasapprovedbythe​UkrnaftashareholdermeetingofMarch28,​ butthe previous cabinet (led by PM Groysman) failed to approve it. The new cabinet “has removed the limitations,” Vitrenko wrote. Ukrnafta is owned by the government (represented by Naftogaz) with its 50%+1 stake, while its second-largest shareholder (over 42%) is a business group related to Igor Kolomoisky.
UK-based​ ​JKX Oil & Gas​, which operates in Ukraine and Russia, has fully repaid its $5.82mn bond together with a $0.38mn interest, ​the company reported on February 20. Following the repayment, JKX becomes debt-free, the company said. It also reported that the group’s CFO Ben Fraser decided to leave the company and will be replaced by Dmitry Poddubniy, who acted as CFO in 2017. JKX had a strong year in 2019 reporting record high income after a new well proved to hold more reserves than the company initially believed. Alexander Paraschiy at Kyiv-based brokerage Concorde Capital wrote in a note on February 20 that taking into account JKX’s end-2019 cash balance of $20.5mn, the company faced no challenge with the smooth repayment of its latest debt tranche. "Therefore, this news is neutral for the company, as well as news about the CFO replacement,' he added.
A new tender to develop the Dolphin hydrocarbon section on the Black Sea shelf may be held in March 2020​. This was announced at a press conference by the head of the State Service for Geology and Subsurface Resources Roman Opimakh. Last summer, Trident Acquisitions, an American company, won a tender to develop the 9,500 square kilometer block. The new government cancelled the tender.
Near the Dolphin block, Exxon Mobil wants to sell its 50% stake in the Neptun Deep offshore project, located in Romania’s Black Sea waters. This decade-long project lost momentum when a government change in Bucharest resulted in price caps, taxes and export restrictions. A new government is reversing these policies. But, with European natural gas prices as 20-year lows, Exxon Mobil lost interest.
Burisma Holdings, another private gas company, plans to drill 15 wells this year​. “We continue to invest in the exploration and development of new areas to increase domestic hydrocarbon production,” Burisma board member Karina Zlochevska said, according to Burisma’s press service.
59​ UKRAINE Country Report​ March 2020 ​ ​www.intellinews.com