Page 9 - FSUOGM Week 07 2022

FSUOGM PERFORMANCE FSUOGM

Rosneft profits hit record on high prices

RUSSIA PROFITS AT Russia’s largest oil company Ros- Rosneft’s liquids output grew 2.3% year on
neft surged to a record-high last year on the year to 3.91mn barrels of oil equivalent per day
Rosneft is expected to back of rising oil and gas prices and economic (boepd) in 2021, recovering some ground fol-
easily lead production recovery, which more than offset the impact of lowing a 11% slump in 2020. Rosneft and other
growth over the coming OPEC+ restrictions. Russian producers had to make unprecedented
years in Russia. The company, which accounts for 40% of Rus- cuts to their oil supply after the coronavirus
sian oil output, achieved a seven-fold increase in (COVID-19) pandemic began as part of Mos-
ruble terms in net profit to RUB883bn, while in cow’s OPEC+ commitments. Those cuts have
US dollar terms, it rose almost sixfold to $11.9bn. mostly been eased now, but will not fully end
“Against the background of the recovery of until April.
the global economy, the company achieved new Rosneft is expected to lead easily in oil pro-
financial records in 2021,” CEO Igor Sechin said duction growth among its Russian peers, ana-
in a statement, noting that Rosneft’s production lysts at BCS Global Markets said, forecasting a
costs achieved their lowest level in five years, 9% climb in its output in 2022. The Vostok oil
down 3.6% at $2.7 per barrel of oil equivalent megaproject in the Russian Arctic is anticipated
(boe). to guide its production upwards in the latter half
Rosneft gained from a 60-70% climb in the of the decade.
price of the oil it exports, as well as a weaken- The company’s gas production rose by 3%
ing of the ruble. The company’s costs are paid in 2021 to almost 65bn cubic metres, thanks to
in rubles, while its revenues from exports are in growth at the Rospan project and other gains
dollars, providing it some relief when the Rus- in Siberia and Egypt, where the company has a
sian currency is weaker. stake in the Eni-operated Zohr field. ™

POLICY

Moldovagaz expects gas price

to double this year

MOLDOVA THE average annual purchase price for Russian the subsidies for the entire first quarter of the
natural gas in 2022 is projected at $620 per thou- year, as Moldovagaz was facing default. However,
He said the company sand cubic metres, according to the chairman of in the meantime the market regulator ANRE
had to recover the board of Moldovagaz, Vadim Ceban. approved higher end-user prices enforced ret-
losses from financial This is twice as high as the average price paid roactively since January 1 therefore the govern-
deviations. in 2021 by the Moldovan gas transport and dis- ment can in principle increase the subsidy and
tribution company, and has put Moldovagaz make the payment to Moldovagaz.
under considerable stress as it struggles to pay Even if Moldovagaz manages to pay its
its monthly gas bills to Russia's Gazprom. monthly bills in due time, it will still have to
"We are forwarding these calculations to the collect the $78mn financial deviation from
National Energy Regulatory Agency. For 2022, end-users.
we have presented a forecast of $620 per thou- "We will need to eliminate the accumu-
sand cubic metres," Ceban said. lated financial deviations, which amount to
He also said that even if the price of imported MDL1.4bn (about $78mn),” said the head of
gas is decreasing, it is not possible to expect Moldovagaz.
lower end-user prices because the company has According to him, these financial imbalances
to recover massive $78mn financial deviations. accumulated in the first 10 months of last year.
At this moment, the company is striving to "In those 10 months, we bought gas for $216
pay its monthly bills to Gazprom. By February per thousand cubic metres, and the end-user
20, the company still must pay $61mn, after it price was calculated for an import price of $148
made a $35mn payment this month. If custom- per thousand cubic metres. In July, we talked
ers pay their bills on time and the government about the need to increase the tariff by 35%. But
disburses the promised end-user subsidy, Mol- no one it was not possible because of the elec-
dovagaz will manage to make the payment in tions, then the contract with Gazprom expired
time, Ceban said. and then the things got out of control,” Ceban
In January, the Government had to disburse explained. ™

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