Page 139 - RusRPTDec21

vs. YE20 (RUB4.6trillion). Total prepayment liabilities decreased q/q as well as vs. YE20 to RUB1.5trillion.
Rosneft has started to construct the oil pipeline at its Vostok Oil project, Vedomosti writes.
The pipeline is to connect the Vankor cluster (connected to Transneft’s ESPO infrastructure), the Payakha cluster and North Bay Port Oil Terminal. The planning and engineering for the pipeline have been completed, and the company has already signed contracts for pipes and materials.
Vankorneft produced 15-18mnt of oil in 2019-20, and we expect the Vankor cluster to produce 16mnt of oil in the medium term. If the entire amount produced at the Vankor fields is transported by sea after the project is completed, Transneft might lose some 3.5% of its volumes, which is equivalent to a reduction of RUB 18bn in 2024F EBITDA (3.1%), on our numbers.
However, we believe that the utilisation of the ESPO pipeline is unlikely to drop, given that this is a premium direction for oil companies, so the crude volumes which are currently being sent to the west are set to be redirected to ESPO, in our view. In any case, Transneft’s crude shipments are to fall with the launch of the Vostok Oil pipeline (unless Russian oil production at other fields increases substantially, which is unlikely). We therefore treat this news as potentially negative for Transneft in the long term, but do not expect it to have an effect on the stock’s performance in the near term
Rosneft aims to acquire an oil area in the Khanty-Mansi Autonomous Region with an initial value stands at almost RUB1.6bn ($21.4mn). Rosneft and its enterprise RN-Yuganskneftegaz have submitted applications to participate in an auction for the right to use the Lempinsky-2 area in the Khanty-Mansi Autonomous Region, Interfax reports with reference to the Ministry of Natural Resources. The initial price is more than RUB1.59bn. Lempinsky-2 is located 77km from Nefteyugansk. The license includes the right to use the subsoil of the Salymsky site, which is being developed by Rosneft. The oil reserves of the acquired area are estimated at more than 6.2mnt and more than 8.6mnt for B1 and B2, respectively. 105 exploration wells have been drilled at the site. We calculate that the price of the licence implies a multiple of $0.20/boe of B1+B2 reserves. The company might use the existing infrastructure, which will help the profitability of the area’s development. Given the scale, though, we treat this news as neutral.
Rosneft’s CEO Igor Sechin spoke at the Eurasian Forum in Verona at the end of October. The takeaways (per Interfax reporting of the event) are given below.
Rosneft is developing a new company strategy that would incorporate the climate agenda and energy transition.
Sechin called for a full assessment of risks that lie in cutting coal, gas generation and oil. Carbon neutrality will not require a complete phase
139 RUSSIA Country Report December 2021 www.intellinews.com