Page 12 - FSUOGM Week 50 2019

FSUOGM
NEWS IN BRIEF
FSUOGM
RUSSIA
OPEC raises output outlook for Russia
OPEC raised the outlook for Russia’s oil and gas condensate production in 2019 to 11.43mn barrels per day from 11.41mn barrels per day, the organization said in a report on December 11 reports Prime.
OPEC still expects Russia to produce 11.5mn barrels of oil and gas condensate per day in 2020.
In 2018, Russia’s liquid hydrocarbon reached a historic high of 11.35mn barrels per day.
OPEC said it over fulfilled the OPEC plus non-member oil production cut agreement by 46% in November due to the production in Saudi Arabia.
The organization kept the outlook for oil supply by non-OPEC states at 64.3mn barrels per day in 2019 and 66.46mn barrels per day in 2020. The forecast for the growth of global oil demand was also retained at 0.98mn and 1.08mn barrels per day in 2019 and 2020 respectively.
bne IntelliNews, December 12 2019
Gazprom approves new dividend plan
Russian gas giant Gazprom has approved a new dividend policy that will pay dividends of at least 30% of the adjusted net profit
for 2019, at least 40% for 2020 and at least 50% for 2021 under International Financial Reporting Standards (IFRS), the company said in a statement on December 12.
The dividend policy must still be approved by the board of directors, but is in keeping with the earlier statements of the company on increasing its dividend payout in line with the Ministry of Finance’s orders to all state-owned enterprises (SOEs) to increase dividend payments to 50% of profits.
“In accordance with the draft new dividend policy, the net profit will be adjusted for several non-monetary items (items of income and spending unrelated to the cash flow in the reporting period),” Gazprom said.
The board of directors can decide on a reduction of dividends if the ratio between adjusted net debt to earnings before interest, taxes, depreciation and amortisation (Ebitda) exceeds 2.5, Prime reports, This will allow the company to retain a comfortable debt burden.
Gazprom will implement the new dividend policy in its affiliates and controlled firms.
bne IntelliNews, December 12 2019
Rosneft lures Japanese Investors to Vostok Oil
The influential CEO of Russia’s largest crude oil producer Rosneft, Igor Sechin, met representatives of Japan’s biggest companies on December 11 to seek investment in the company’s Vostok Oil mega-project in the Russian Arctic, according to the reports 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 significant resources at the company as Russia’s existing oil fields reach peak production.
Reportedly, Sechin is scheduled to meet with representatives of the Agency for Natural Resources and Energy, the state-owned energy company JOGMEC, as well as Mitsubishi, Itochu, Marubeni, Mitsui, and Inpex.
This made the first roadshow for the project overseas, but Sechin also reportedly plans to court investors in China and India. Rosneft wants Japanese investors to make up between 10% and 40% of the project, sources told the news agency.
Previous reports claimed that Rosneft
is seeking to sell 15-20% in Vostok, a joint venture with Neftegasholding of veteran oilman Eduard Khudaynatov.
Vostok Oil will require the construction of pipelines, roads, a seaport, and other infrastructure, and the mega-project is expected to cost about RUB10 trillion ($157bn), Russia’s Deputy Energy Minister Pavel Sorokin told reporters last month.
An unnamed government official told Vedomosti daily previously that, “without tax incentives, the development of the project’s fields is both technologically and economically pointless.” Other sources estimated Vostok at $15bn based on its reserves.
bne IntelliNews, December 13 2019
Novatek bags two northern licences
Novatek has won at auction two new
oil and gas licences in Russia’s Yamalo- Nenets region, it said in a press release on December 17.
“The licences, covering exploration and production activity for 25 years, are for the South-Yamburgsky and East-Ladertoysky blocks. South-Yamburgsky is located near the North Urengoiskoye field, operated
by joint venture between Novatek and Gazprom Neft. It contains 506bn cubic metres of gas and 4.3bn barrels of oil equivalent in liquids
East-Ladertoysky is on the Gydan Peninsula, bordering several other Novatek licences which the company is hoping to use to underpin future LNG export projects. It holds 184 bcm of gas and 1.5bn boe of liquids.
Novatek paid RUB1.07bn ($17mn) for South-Yamburgsky and RUB81mn for East- Ladertoysky.
December 17 2019
Novatek to sell LNG to Transneft as vehicle fuel
Novatek signed a co-operation agreement with Russian oil pipeline monopoly Transneft on LNG as a vehicle fuel, it said on December 17.
Transneft will consider buying LNG from Novatek to fuel its fleet of cargo trucks, and has signalled its intent to replace some of its older diesel-burning trucks with new gas- powered trucks.
“This agreement is consistent with Novatek’s strategy to expand the use of LNG as a motor fuel and to develop the necessary refuelling infrastructure,” Novatek Deputy Chairman Lev Feodosyev commented in
a statement. “Switching to LNG in road transportation can significantly reduce harmful emissions into the atmosphere,
as well as achieve a lower overall cost to consumers compared to diesel fuel.”
December 17 2019
EASTERN EUROPE
Ukraine seeks contractor for field work
Ukrainian state gas company UkrGasVydobuvannya (UGV) is seeking a contractor for work at 13 gas fields in the west of the country. It is considering bids from a Chinese joint venture between Xinjiang Beiken Energy Engineering and Zhongshi Shengli Oil Engineering, and Romania’s Expert Petroleum Solutions.
UGV’s first deputy chairman Oleksandr Romanyuk said in a statement: “Our goal is to increase the volume of marketable gas, but most Ukrainian gas fields are depleted. This is especially true in the western region.”
Commercial negotiations with the companies are to begin. The winner will be granted control of production infrastructure, to boost recovery.
December 12 2019
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Week 50 18•December•2019