Page 12 - FSUOGM Week 14 2021

FSUOGM NEWS IN BRIEF FSUOGM

RUSSIA “It is very difficult to assess the situation, retail division could lead to a decrease of its
we are looking into it now and may issue valuation in the process of the assets split,
Russia's Transneft guides bonds now or delay them to this autumn. … which could benefit Naftogaz,” an analyst at
the Kyiv-based Concorde Capital brokerage
We are discussing the sum, we will track the
for 2020 dividends market situation … which has been tough,” said in a research note.
he said, adding that the company still
Russia's state oil pipeline operator Transneft planned to offer 3-year bonds in 2021.
on March 31 guided for 2020 dividends Rosgeo said it wanted to spend the JKX Oil & Gas' net profit
of RUB9,250 ($121.1) per preferred share, money on investment program until 2025
implying a 6% yield, as estimated by Sova and refinancing of current debt. falls 10.6% in 2020 to
Capital analysts. He also said that the company planned
As reported by bne IntelliNews, to do geologic exploration on the shelf $20mn
Transneft posted stable results for 2020, of Vietnam in 2021, and finish seismic
and was seen by the analysts as turning exploration on the shelf of India ahead of Oil and gas company JKX Oil & Gas,
into a strong dividend investment play. In schedule. which operates several fields in Ukraine
December Transneft confirmed its 50% and Russia, saw its profits fall by 10.6%
minimum dividend payout policy at a to $19.87mn in 2020, the company said
conference call following the release of its in a report filed with the London Stock
3Q20 IFRS results. Exchange (LSE) on March 31.
Sova calculates that the final payout to The company was upbeat about the
be approved by the government will stand result, which it said was a success due
at RUB9,151/pref, which is slightly lower EASTERN EUROPE to a challenging year that saw a number
than the guidance provided during the of capital projects in both Russia and
call, although both provide a 6% yield. The Ukrainian Antimonopoly Ukraine suspended due to the coronacrisis,
analysts maintained a Buy call on Transneft according to the chairman of the board,
shares. Committee has sanctioned Charles Valceschini.
"It is possible that before the dividend Revenue last year decreased by 31.6%, to
season, the government could make changes Kolomoisky-related fuel $69.62mn, with a decrease in production of
to Government Decree No. 774-r, which 5%, which is associated with a sharp drop
requires state companies to pay out 50% of stations in sales prices for oil and gas, he added, as
net income as dividends," Sova notes. cited by Interfax Ukraine.
Such changes could clarify the process of The Antimonopoly Committee of Ukraine Valceschini indicated that the company
normalising net income, which could mean decided on March 30 to penalise operators in 2020 saw an increase in free cash to
adjusting Transneft’s net income, and push of 1,625 Ukrainian fuel stations for a total of $24.3mn from $20.6mn a year earlier. .
the DPS to RUB10,612/pref, implying a 7% UAH4.7bn ($169mn). The move comes after
yield. the AMC discovered a conspiracy between
"Based on its approved dividend policy, them aiming at setting uniform retail PGNiG signs MoU with
Transneft must pay out at least 25% of prices for their products and purchasing
adjusted net income as dividends. Over the fuel from a local producer at above-market Naftogaz on gas exploration
past three years it has paid slightly more prices. Penalised companies include Avias,
than 50% of adjusted net income based on Ukrtatnafta, Ukrnafta (UNAF UK) as well and production in Ukraine
the results published in the presentation," as over 160 small legal entities (collectively
Sberbank CIB reminds. named by the committee as “project Poland’s listed state-controlled oil and
Sberbank CIB also finds it moderately AVIAS”), which cumulatively have a 25% gas exploration and production company
disappointing that the management of share of the domestic fuel retail market. PGNiG has signed a memorandum of
Transneft did not clarify why the payment The investigation was initiated in 2016, the understanding with Ukrainian peer
would be based on reported net income committee reported. Naftogaz on “cooperation in exploration of
(RUB133bn) rather than adjusted net Tycoon Ihor Kolomoisky controls the hydrocarbon resources and gas production
income (RUB150bn). Avias petrol network as well as minority in Ukraine,” PGNiG said on March 30.
The analysts also believe that the stakes in the vertically integrated oil The two companies will focus
payment could increase should the company Ukrnafta and fuel producer efforts on Western Ukraine, where the
government approve the net income Ukrtatafta. A stake of 50% in Ukrnafta same promising geology extends from
adjustment approach in 2Q21, as the and 43% in Ukrtatnafta is owned by neighbouring Poland, PGNiG said.
Finance Ministry has guided previously. state-controlled natural gas giant Naftogaz “Ukraine, which has one of the largest
(NAFTO). gas reserves in Europe, offers very attractive
“No doubt the penalised companies growth potential for upstream companies
Rosgeo may delay bond will sue the committee, and the litigation like PGNiG. We are particularly interested
in gas production development in Western
might take many years. In any case, the new
offerings due to tough episode of pressure on Kolomoisky should Ukraine, the region bordering to the area
be welcomed by Ukraine’s Western partners. where we have already been producing
market situation The committee’s ruling indicates that it natural gas for several decades,” PGNiG said
is a high time for Naftogaz to pursue the
in a statement.
Russian state geological exploration division of Ukrnafta assets between the state According to PGNiG, available data
company Rosgeo may delay its debut bond company and the group of Kolomoisky, proves a high reservoir potential of the
offerings until September–November from where the latter, as we understand the region. Increasing gas production in
until the end of May as the current market process, will receive the gasoline retail Western Ukraine “will be beneficial from
situation is tough, CEO Sergei Gorkov told business of Ukrnafta. Theoretically the the point of view of the development of
reporters in a news briefing on April 5. penalties imposed on Ukrnafta’s gasoline our companies, as well as for strengthening

P12 www. NEWSBASE .com Week 14 07•April•2021