Page 113 - RusRPTJun19

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Russian billionaire Mikhail Fridman completed the merge of his oil assets with German Wintershall, creating the largest independent oil and gas company in Europe, the companies said on May 1. DEA (Deutsche Erdoel AG) is controlled by LetterOne or L1 investment vehicle of Fridman's Alfa Group. The joint output of Wintershall and DEA stood at 215mn barrels in 2018. German BASF gets 67% in the new company, with an option on another a 5.7% shares, while LetterOne 33% of the shares. The full integration of the companies is expected in within a year, with an IPO planned for the second half of 2020. Wintershall DEA will operated as a limited company with HQs in Kassel and Hamburg, managed by a board of six. The amount of the deal is undisclosed, but previous reports have put the merged company valuation at €10bn-20bn. "Despite being the largest oil and gas company in Europe, the combined Wintershall DEA will still produce less oil than Gazprom Neft, Russia’s third-largest oil company. Half of Wintershall’s production comes from Russia, but DEA does not produce in Russia. Because the share of Russian production will drop in the combined company, there is the potential to explore new Russian deals, the general director of Wintershall (now head of the combined company) said in April," BMB commented on the deal. Wintershall DEA has four projects in Russia in the Urengoy gas field and the Yuzhno- Russkoye oil field. It also has an interest in the operator of Nord Stream and an obligation to fund Nord Stream-2. Fridman's Alfa was part of a consortium of Russian oligarchs AAR (Alfa Access Renova) that held a major share in the Russo-British oil joint venture TNK-BP that they sold to state-owned oil major Rosneft in March 2013 in a $55bn deal. Renova is the investment vehicle of Viktor Vekselberg, who was sanctioned along with Deripaska last week and is a close business associated of Fridman’s. Fridman took his share of the proceeds and set up LetterOne (aka L1) in London and since then has been trying to get back into the oil business, as well as making other profitable investments.
Russian state oil pipeline operator Transneft should compensate the losses incurred from supplied of contaminated oil should the damage be proven, Deputy Prime Minister Dmitry Kozak told the press on May 16 after a meeting with his Belarusian counterpart Igor Lyashenko and the head of Transneft Nikolai Tokarev. "Of course - and sadly - Transneft," Kozak said as cited by Reuters, when asked who would pay for disrupted oil exports via Druzhba pipeline and the port of Ust-Luga due to the high levels of organic chlorine, which can damage refinery equipment.
● Gazprom
Russia’s gas giant Gazprom exports to Europe decrease 2% y/y in April
after 12% y/y and 18% y/y declines in February and March
In April, Gazprom’s gas exports to Europe declined 2% y/y to 15.6bcm after falling 12% y/y and 18% y/y in February and March, respectively, Kommersant reported on May 9.
As a result, total exports for January-April amounted to 64.4bcm (-8.4% y/y). According to the paper, demand for Gazprom’s gas in April was supported by increased gas consumption at power plants, as well as a recovery in the Asian
113 RUSSIA Country Report June 2019 www.intellinews.com