Page 14 - FSUOGM Week 50 2020

FSUOGM INVESTMENT FSUOGM

Russian investor makes $25mn

bid for Volga Gas

RUSSIA RUSSIAN investment company GEM Capital structure, while benefitting from our support
announced on December 14 it had made an offer and assistance,” GEM Capital director Thomas
Volga Gas has been worth $25mn to buy all shares in Volga Gas, a Keane said last month.
struggling with flagging London-listed gas producer working in southern The deal will need approvals from the High
production levels and Russia. Court of England & Wales in the UK and Russia’s
more recently, low Volga Gas holds five exploration and produc- Federal Antimonopoly Service (FAS), as well as
prices. tion licences on the banks of the Volga river in backing from 75% of Volga Gas’ shareholders,
Russia, lifting some 2,945 barrels of oil equiva- but this is expected to be a formality.
lent per day (boepd) in November. The company, GEM is owned by a former executive at Gaz-
which has been under pressure from low prices, prom’s regional gas distribution arm Gazener-
launched a strategic review in April. It later said goset, Anatoly Paly, and has already acquired
it was in talks with several parties about selling stakes in specialised chemicals, nanomaterials,
all or part of its business. computer gaming and tech firms, including
GEM has obtained irrevocable undertak- messenger application Telegram. It raised some
ings to accept the offer from holders of around $120mn from unidentified investors last year for
64.7mn shares, reflecting about 80% of the com- Russia’s first block-chain platform.
pany’s issued share capital. In addition to lower prices in 2020, Volga has
“Volga Gas has significant potential but given also been grappling with flagging production
its size, operating environment and geographic levels in recent years. In August the company
focus, it would fare far better as a private com- said it would shift the focus of its investment
pany with a simplified and more cost-effective from gas and condensate to higher-margin oil.™

Sinopec cleared by Russian authorities

to take stake in Amur GCC

RUSSIA RUSSIAN authorities have cleared China’s Sino- years. The Chinese firm bought a 10% stake in
pec to take a 40% stake in Sibur’s planned Amur Sibur in 2015.
Sibur has been in talks gas chemical complex (GCC) in the Russian Far Sibur has not given a concrete target for
with Sinopec for over East. Amur GCC’s launch given that it is yet to reach
five years. Russia's special commission on foreign an FID. But it has suggested that the facility could
investment cleared the deal on December 15, the be up and running in 2024-2025. Its production
Russian government confirmed in a statement. will be shipped to China and other markets in
Sibur and Sinopec signed a shareholder agree- the Asia-Pacific region.
ment on forming a joint venture for the project Part of Sinopec’s past reluctance to invest in
back in June. It is understood that the investment Amur GCC is understood to stem from its pref-
has already been approved by Sinopec’s board. erence for developing petrochemicals in China
The Amur GCC in the Russian Far East is instead. Domestic projects create more Chinese
expected to produce 2.3mn tonnes per year of jobs and are of greater benefit to the Chinese
polyethylene and 400,000 tpy of polypropylene. economy, which are key considerations for Sin-
It will be supplied with 3.5mn tpy of ethane and opec as a state-run company. ™
LPG feedstock produced at Gazprom’s Amur
gas processing plant (GPP), which is due to start
handling Russian gas on route to China via the
Power of Siberia pipeline starting in 2023.
Sibur has repeatedly delayed taking a final
investment decision (FID) on the project, which
it anticipates will cost $10.7bn, because of diffi-
culties attracting partners to cover some of the
project’s expenses and share some of its risks. It
has been holding talks with Sinopec for over five

P14 www. NEWSBASE .com Week 50 16•December•2020