Page 101 - RusRPTNov18

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Russia's largest oil company Rosneft settled its most recent legal offence against the foreign partners in Sakhalin-1 extraction project at $230mn, confirming previous reports that the company could give up the previous $1.4bn claims, Reuters reported citing the information of Indian ONGC. Rosneft claimed that its partners in Sakhalin have been transferring of oil from the North Chayvo field (owned by Rosneft) to the Chayvo field (Sakhalin-1 project) since 2005 (when crude production at Sakhalin-1 started), although Rosneft did not own the licence for North Chayvo at that time. The company originally claimed RUB89.1bn ($1.4bn) from its foreign partners in the Sakhalin-1 liquefied natural gas project, namely Exxon Neftegaz Limited controlled by the US major Exxon, a subsidiary of Japanese SODECO, and Indian ONGC Videsh (control 30%, 20%, and 20% in Sakhalin-1, respectively). "The settlement amount of $200-300mn... might add 0.7-1.0% to Rosneft’s 2018F EBITDA," VTB Capital calculated on August 6, adding that should the case to be settled in 2018 "the effect on the company’s dividend payments would be rather negligible".
Rosneft might start delivering crude oil to China’s CITIC Resources (a subsidiary of the Chinese government fund CITIC) under the 10mmt/a five year contract signed with CEFC China after the default of the latter, Vedomosti reports, citing unnamed sources. The contract also includes a five-year prolongation option, which might increase the total contracted volumes to 100mmt. CITIC Group might either renegotiate the contract with Rosneft, or transfer it to CEFC Singapore, the paper reports. According to Vedomosti, Rosneft expects the contract signed with CEFC to be implemented based on the original terms. On 12 June, Vedomosti mentioned that Rosneft’s contracts with CEFC would be transferred to the latter’s trading subsidiary after its restructuring and would not be put at risk of cancellation. Therefore, the cancellation of the contract has not been our base case and we do not expect the news to be market-moving.
Russia's largest oil company state-controlled Rosneft plans to gradually increase its output on West Siberian oil fields once the Opec+ extraction ceilings are lifted, Aton Equity said on October 26 citing Rosneft's VP Eric Liron analyst conference on extraction. Since the Western sanctions limited the exports of extraction technology and complicated joint ventures with foreign energy majors, discussions are ongoing whether Russia's largest companies will be able to maintain stable long-term oil output with Siberian brownfields alone , without tapping into challenging Arctic offshore fields. Reportedly, Rosneft has spare capacity in West Siberian fields, which was put on hold under the Opec+ output cuts. The company can launch Tagulskoye field in 2019, resume extraction at the Suzunksoye field, and increase output at the Taas-Yura and Yurubcheno-Tokhomskoye fields. This should compensate lower-than-planned output at the largest West Siberian field Vankor. The capacity of the field was revised from 25mn tonnes to 22mn tonnes recently.
Surgutneftegaz published its 3Q18 RAS financials, reporting net income of RUB 226bn ($3.5bn). The company’s cash pile (cash and cash equivalents, including short and long-term cash deposits) increased 2.2% Q/q to RUB
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