Page 10 - FSUOGMWeek352019

FSUOGM PERFORMANCE FSUOGM
Transneft sees positive Q2 cash flow
RUSSIA
Sberbank believes management has a strong argument not to pay interim dividends, however.
RUSSIAN state oil pipeline operator Trans- neft reported stable revenue growth of 2% quarter-on-quarter in 2Q19, due to vol- umes of oil transported in Russia remaining almost unchanged q/q on Opec+ output cut agreement.
Transneft’s Ebitda declined by 7% q/q to $1.8bn due high base in the rst quarter, while net income gained 14% q/q to $862mn, beating consensus expectations by strong 37% due to two times lower currency loss q/q.
e operator maintained a stable free cash ow of $235mn in 2Q19, due to $300mn work- ing capital build up o set by seasonal capital spending decline.
In the meantime the Finance Ministry requested a RUB34.5bn interim dividend from Transne , to bring its total payout ratio to 50%
of IFRS net pro t for last year, as required by the government.
“Transne paid RUB77bn in dividends for 2018, which amounted to 35% of reported IFRS net income, but 50% of net income adjusted for non-cash items,” Sberbank CIB reminds on August 29.
Sberbank believes that Transne ’s manage- ment has a “strong argument not to pay any interim dividends this year” and sees the prob- ability of any material additional dividends as fairly small at this point.
Last month Transne has set the compen- sation for oil companies that sent their crude through the contaminated Druzhba pipeline at $15 per barrel. e troubles with the pipeline did not signi cantly worsen the company’s dividend outlook. ™
Yamalo-Nenets output climbs further in H1
RUSSIA
Leading producers Gazprom and Novatek were responsible for the gas gains.
OIL and gas production in the Yamalo-Nenets district of Western Siberia has risen further this year, signalling the northern region’s growing importance for Russia’s resource industry.
Gas extraction soared 17% year on year in January to June, achieving 352.9bn cubic metres, according to statistics published by the local department of natural resources on August 30. Production rose by 11% y/y in the rst half of 2018, to 307.4 bcm.
e growth this year came as Yamalo-Nenets’ two main gas producers, Gazprom and Novatek, both scaled up operations. In December last year Gazprom launched the third and nal phase of development at Bovanenkovskoye, the largest gas eld on the Yamal Peninsula. Output has now reached 115 bcm per year, up from 82.8 bcm in 2017. As a result, Gazprom’s overall pro- duction in Yamalo-Nenets climbed to 271 bcm in the rst half, up from 237.1 bcm a year earlier.
Meanwhile, Novatek produced more than 55.4 bcm of gas this year, up from 44.3 bcm a year earlier. is increase was largely the result of the company’s Yamal LNG project reaching its three-train capacity of 16.5mn tpy.
Production by other operators in the region dipped slightly to 26.4 bcm, from 26 bcm in the rst half of 2018.
Yamalo-Nenets typically accounts for over 80% of Russia’s overall gas production, with this share set to expand as more Arctic projects
are brought on stream. In April, Gazprom broke ground on Kharasaveyskoye, a eld near Bovanenkovskoye that is tipped to produce 32 bcm per year by the mid-2020s. Novatek, on the other hand, aims to bring two more LNG plants into operation by 2023, boasting a combined liq- uefaction capability of almost 25mn tpy.
Production of oil and condensate in Yama- lo-Nenets pales in comparison to that of neigh- bouring Khanty-Mansiysk, Russia’s main oil province. But this area too is seeing growth. Oil output in the rst half was up 12% y/y at 17.1mn tonnes (830,000 barrels per day), while con- densate yields climbed 14% to 12.1mn tonnes (602,000 bpd).
Russia’s Gazprom Ne was responsible for the lion’s share of oil output, producing 421,000 bpd. Novatek and Rosne came in joint second, extracting 113,000 bpd each. Novatek also pro- duced 278,500 bpd of condensate, while Gaz- prom produced 206,500 bpd. ™
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Week 35 04•September•2019