Page 15 - FSUOGM Week 16 2021

FSUOGM NEWS IN BRIEF FSUOGM

products exports rose by 3.1% to 23.829mn of hydrocarbons in 1Q21, according to its operational at the end of 2020—remain in the
tonnes, with the cost falling 17.4% to April 14 trading update. This is a 7% decline ramp-up phase, but their impacts are already
$8.797bn. quarter on quarter and 17% decline year being felt in the liquefied natural gas (LNG)
on year. Most of the decline happened on market, according to S&P Global Platts.
its Ukrainian assets, where production was LNG supplies to Greece in the first
Russia to raise 3,843 boepd in 1Q21 (down 12% q/q and quarter of 2021 more than halved year on
year, as pipeline deliveries via the SGC began
28% y/y). The company explained such a
compensations to oil firms result by the absence of drilling activity and sky-high spot LNG prices saw cargoes
diverted to Asia, it reported.
in the previous year as well as the loss of
for fuel prices the IG142 well in mid-February (which to take 1bn cubic metres (bcm) per year of
Greek state importer DEPA is contracted
produced 321 boepd in early 2021). JKX
The Russian government will again raise also stated that it has completed the drilling gas from Azerbaijan. Italian buyers have
compensations to the oil companies for of the IG111 well (with no concrete results taken approximately half of their contracted
holding down local fuel prices, while so far) and successfully worked over the TAP volumes so far in 2021.
the budget spending should be partially NN76 well (now producing 243 boepd) in “Greece can therefore be expected to be
compensated by a slight increase of the 1Q21. It started drilling a new IG149 well taking a little over 1 million cu m/d via TAP
mineral extraction tax (MET) on oil, on April 9. In Russia, JKX output remained so far this year,” S&P added in its analysis.
Kommersant business daily reported on relatively stable at 5,334 boepd (down 3% Azerbaijan’s SGC-transited gas flows as far
Aoril 16 quoting sources. q/q and 5% y/y). as Italy via Georgia, Turkey, Greece, Albania
“The indicative price gasoline in the The company also reported on its high and a seabed link laid under the Adriatic Sea.
damper formula will fall by 4,000 rubles liquidity as its end-1Q21 net cash balance
per tonne from May 1 instead of previously stood at $28.4mn, up from $24.3mn as of
expected 2,700 rubles. The Energy Ministry end-2020 and $14.9mn as of end-2019. Azerbaijan's oil exports in
and the Finance Ministry coordinated “The company’s Ukrainian performance
this decision because of the weakening of disappoints, as even without the lost well Q1 posted at 8.9mn tonnes
the ruble against the U.S. dollar, which, IG142 it is demonstrating about an 8% q/q
along with the oil price, defines the export decline in production, after a 5%-7% q/q Azerbaijan's oil exports in the first quarter
alternative price for fuel,” Kommersant decline demonstrated in 1Q20-3Q20. The amounted to 8.9mn tonnes, according to
reported. 1Q21 result in Ukraine already marks a the country’s State Statistics Committee.
The ministries agreed to compensate 50% 38% decline from the peak production level Around 77% flowed through the Baku-
of budget spending on the changes in the demonstrated in 3Q19, and the decline Tbilisi-Ceyhan (BTC) pipeline that reaches
fuel price damper by an increase of MET, in 2Q21 should be about 10% q/q. With Turkey via Georgia.
but how MET will be raised is unclear. such performance, the Ukrainian output However, Azerbaijan’s oil exports through
Sergei Yezhov, senior economist of Vygon of JKX could fall by more than 25% y/y the BTC declined by 9.3% y/y to 6.9mn
Consulting, told the business daily that and its total output could decline by over tonnes in the first quarter, the statistics body
additional payments on the damper will 14% y/y in 2021. The company needs a added.
amount to around 62 billion rubles, and the critical mass of new successful wells to The BTC pipeline is used to export oil
practice of raising MET without tying the stabilise its Ukrainian output and improve from the Azeri, Chirag and Guneshli oilfields
growth to the economies of oil production fundamentals in the mid-term,” an analyst operated by BP.
could lead to unpredictable consequences. at the Kyiv-based Concorde Capital
The government previously created the brokerage said in a research note.
damper to cap the fuel prices on the Russian
market. In broad terms, the government
compensates a part of difference between
the export and local fuel prices to the oil CENTRAL ASIA & SOUTH
companies if the export price is higher than
the indicative local price. But if the local CAUCASUS
prices are higher, the oil companies share
their excessive profits with the government. Flows of Azerbaijan gas to

Greece, Italy via TAP ‘still in
ramp-up phase but impacts
EASTERN EUROPE
JKX decreases hydrocarbon felt in LNG market’

output 17% y/y in 1Q21 Flows of Caspian Sea gas to Greece and
Italy from Azerbaijan via the Trans Adriatic
JKX Oil & Gas (JKX LN) produced 9,177 Pipeline (TAP)—the final piece of the
barrels of oil equivalent per day (boepd) Southern Gas Corridor (SGC), which went

Week 16 21•April•2021 www. NEWSBASE .com P15