Page 14 - FSUOGM Week 07 2020

FSUOGM
NEWS IN BRIEF
FSUOGM
RUSSIA
Russian oil major Gazprom
Neft could pay 50%
dividends faster
Russian oil major Gazprom Ne could switch to 50% of IFRS net income dividend payout faster than expected, as the natural gas giant Gazprom said at its investor day that all of its subsidiaries would pay out 50% of their bottom line in dividends that would be distributed in 2020.
As reported by bne IntelliNews, in 2019 the Finance Ministry succeeded in forcing the 50% of IFRS net pro t dividend payout ratio on almost all the country’s largest corporations, including Rosne , Transne , and state-controlled banks Sberbank and VTB.
“Our understanding is that this implies that Gazprom Ne will switch to a 50% payout this year (from 2019 net income), a year earlier than we had previously expected,” Sberbank CIB commented on February 12.
e earlier payout would provide a moderate upside to the 2020 dividend forecast and should be moderately positive for the stock, the bank believes.
e move could boost the 2020 dividend yield by up to 1pp, to over 9%, and would imply a dividend for 2H19 of RUB23.6 per share, assuming a total payout of 50% of net income for the full year 2019.
To compare, Gazprom Ne paid an interim dividend for 1H19 of RUB18.14 per share (a payout of 41%), for a 4% yield. Overall the dividends paid in 2020 are estimated at around $2.7bn (including a dividend for 1H20), which would be fully covered by free cash ow of $3bn, the bank estimates.
bne IntelliNews, February 13 2020
Russia’s Rosneft unveils
sizeable capex for Arctic
Vostok Oil project
The capital expenditure for Vostok Oil, the new Arctic project of Russia’s largest oil company Rosneft, may top RUB10tn ($158bn), the influential head of the company, Igor Sechin, told President Vladimir Putin, as cited by Interfax.
As reported by bne IntelliNews, Vostok Oil is a joint venture (JV) set up to explore and exploit the oil resources of the Arctic, and
the Kremlin has started to throw signi cant resources at the company as Russia’s existing oil elds reach peak production.
Vostok Oil will be developed on the Taymyr Peninsula, based on two elds, Payakhskoe and West-Irkinskoe, while the massive development will include 15 new industry towns, two airports, a seaport, circa 800km of new pipelines, 3,500km of new electricity lines and 2,000 MW of electric power capacity, BCS Global Markets noted on February 12.
“ e announced capex will likely be partly covered by the government and partners, hence free cash ow is likely to remain positive in 2020-2024,” BCS GM analysts believe, but see the additional value for Rosne as di cult to quantify at this point given the lack of details.
“ e guided capex of RUB10tn likely implies this amount will be invested over years and will probably be partly covered by partners and the government, speci cally from tax breaks for the Vancouver cluster,” according to BCS GM.
Previous reports claimed that Rosne was seeking to sell 15-20% in Vostok, a joint venture with Ne egasholding of veteran oilman Eduard Khudaynatov.
Reportedly, in December 2019 Sechin met with representatives of the Japanese Agency for Natural Resources and Energy, the state- owned energy company JOGMEC, as well
as Mitsubishi, Itochu, Marubeni, Mitsui and Inpex to seek investment in the company.
bne IntelliNews, February 13 2020
Rosneft plans to boost green investment to $4.7bn
Russia’s largest oil company Rosneft plans to boost investment in “green” initiatives from RUB240bn to RUB300bn ($4.7bn), the company announced.
The announcement is in line with the drive by Russian industry and energy majors to improve their environmental, social and governance (ESG) scores. As reported by bne IntelliNews, in 2018 Rosneft also launched an investment makeover.
Rosneft reported that in the past five years over half of the green investment was channelled into recycling the APG (associated petroleum gas), on which the company spent RUB125bn. As Rosneft maintains natural gas ambitions of over 100bn cubic meters extracted annually by 2022, the company aims to lower the production of APG by 5%.
At the same time the refineries
controlled by Rosneft have cut greenhouse gas emissions by 11%. The company plans to cut emissions by another 8mn tonnes
of CO2 equivalent by 2022.
bne IntelliNews, February 18 2020
Russian gas majors
Gazprom and Novatek
reshuffle 10% stake
Russian natural gas giant Gazprom plans to transfer is 9.99% stake in the country’s second-largest natural gas producer and LNG runner-up Novatek from a Cyprus fund Gazfin Cyprus Limited to Russian Gazprom Capital, according to Interfax.
The reshuffle was linked by the analysts to mitigation of risks from the renewed claims against Gazprom by the Ukrainian state gas company Naftogaz. As reported by bne IntelliNews, in the latest move Naftogaz now seeks $8bn from Russia in compensation for the seizure of its assets in Crimea in early 2014.
“In our view, Gazprom may be transferring assets to a territory that will be harder for Ukraine to reach in case Naftogaz becomes more active with its lawsuits,“ BCS Global Markets commented on February 18.
Should Gazprom consider selling the stake on the market in order to fund
its dividend pledges, Novatek will face pressure, despite the increase in the free flow, BCS GM warns, while seeing such scenario as unlikely. BCS GM sees the news as neutral for both names having no impact on respective capitalisations at this point.
bne IntelliNews, February 19 2020
EASTERN EUROPE
Naftogaz in talks with
investment banks over
possible IPO
Ukraine’s national gas company Na ogaz has held talks with international investment banks and potential investors about the prospects for an IPO, Na ogaz CEO Andriy Kobolev said on February 17.
“ e success of this process will depend on the ability to demonstrate customer focus. In particular, creating value for
the end consumer through convenience
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Week 07 19•February•2020