Page 11 - FSUOGM Week 10 2021
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FSUOGM INVESTMENT FSUOGM
Volga Gas board accepts takeover
bid from Russian group
RUSSIA THE board of directors of London-listed junior is anticipated to be a formality.
Volga Gas has accepted an offer of $25mn from Volga Gas produced 3,616 barrels of oil equiv-
Volga Gas produces oil Russian investment company GEM Capital to alent per day (boepd) last year, most consisting
and gas in southern buy the company. of gas and condensate. But in August last year it
Russia. Volga Gas, which produces oil and gas in said it would shift the focus of its investment to
southern Russia, said GEM had offered to buy higher-margin crude oil.
92% of its shares. GEM also intends to delist GEM Capital director Thomas Keane laid out
Volga Gas from the London Stock Exchange the reasons for the firm’s interest in the producer
(LSE) and buy all outstanding shares in the last year.
company. “Volga Gas has significant potential but given
“Given that the offer is now wholly uncon- its size, operating environment and geographical
ditional, the board of Volga Gas recommends focus, it would fare far better as a private com-
that Volga Gas shareholders who have not yet pany with a simplified and more cost-effective
accepted the offer now do so promptly,” Volga structure, while benefiting from our support and
Gas said. assistance,” he said.
Volga Gas launched a strategic review in April GEM is owned by a former executive at
last year. In addition to low prices, the company Gazprom’s regional gas distribution arm
has also been struggling with flagging produc- Gazenergoset, Anatoly Paly, and has already
tion levels in recent years. It later revealed it was acquired stakes in specialised chemicals,
in talks with several parties about selling all or nanomaterials, computer gaming and tech
part of its business. firms, including messenger application Tel-
The deal will also need approvals from egram. It raised some $120mn from uni-
authorities in the UK and Russia, as well as back- dentified investors in 2019 for Russia’s first
ing from 75% of Volga Gas’ shareholders, but this block-chain platform.
PERFORMANCE
Russian oil output inches down in February
RUSSIA RUSSIAN crude oil and condensate supply Output at Lukoil amounted to 1.447mn bpd, up
inched down 0.8% month on month in Febru- 1.4% m/m, while Surgutneftegaz’s extraction
Rosneft and its ary, preliminary data from the country’s energy rate increased by 0.7% from January to 1.064mn
subsidiary Bashneft led ministry shows, primarily owing to a decline at bpd. Gazprom Neft lifted 792,000 bpd of oil, up
the decline. fields controlled by state-owned Rosneft and its 2% m/m, while Tatneft flowed 523,000 bpd, up
subsidiary Bashneft. 1% m/m.
National production averaged 10.054mn Excluding condensate, Russian oil output
barrels per day (bpd) during the month, which came to 9.33mn bpd in January and the figure for
also marked a 10.6% drop year on year. Rus- February is not yet available. Assuming conden-
sia and other OPEC+ members committed to sate production remained stable, though, VTB
record supply cuts last April to offset corona- Capital (VTBC) estimates that Russia produced
virus' (COVID-19) impact on oil prices. But 9.26mn bpd of crude last month, in line with its
they have gradually been bringing back supply OPEC+ quota.
since then. “We think the reduction in Russia’s crude
Supply at Bashneft, a mid-sized oil company production in February is a technical issue,”
bought by Rosneft in 2016, slumped 17.8% in VTBC said in a note. “So, the country would be
February to 190,000 bpd. This was barely above able to grow its oil output quickly if the quotas
half what the Bashkortostan-based firm pro- are eased, as per the OPEC+ agreement.”
duced in February last year. Production at Ros- Besides at Bashneft, Rosneft cut back supply
neft, excluding Bashneft contributions, averaged primarily at fields operated by its Orenburgneft,
3.39mn bpd, down 1.5% m/m and 12.6% year Nyaganneftegaz and Udmurtneft subsidiaries.
on year. This was offset by increases at Gazprom Neft’s
These losses were offset by gains at Lukoil, Noyabrskneftegaz fields and Lukoil’s deposits in
Surgutneftegaz, Gazprom Neft and Tatneft fields. the Komi region and Western Siberia.
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