Page 11 - FSUOGM Week 08 2022

FSUOGM PERFORMANCE FSUOGM

Novatek profits soar on

high gas prices in 2021

EUROPE EBITDA at Russian LNG exporter Novatek In its conference call, Novatek highlighted
soared in 2021 by 90%, landing at RUB748bn the progress it had made in delivering on
Novatek is making ($9.9bn), the company reported on February its energy transition strategy. Novatek has
strides on the ESG front 16, attributing the result to soaring oil and gas sought to improve environmental social and
as well. prices. governance (ESG) reporting of its emissions.
The operator of the Yamal LNG terminal gen- In the fourth quarter of 2021, it launched
erated RUB433bn in net profit for the year, up satellite tracking of methane emissions at its
from RUB67.8bn, as revenues grew to RUB1.16 assets, and detected no leaks or uncontrolla-
trillion, from RUB711.8bn. Besides higher ble emissions.
prices, the results were buoyed by a 3.3% growth Meanwhile, pre-FEED work on the planned
in natural gas production, supported by the Obskiy Gas Chemical Complex continues, with
launch of three deposits in the North-Russkiy a report due to be published in the next few
cluster in Western Siberia. weeks. That means the project might progress to
Analysts at VTB Capital (VTBC) noted the next phase, FEED work, in the second quar-
that 25% of sales from Novatek’s flagship 17mn ter. Novatek also pointed to the certification of
tonne-per-year Yamal LNG plant are spot-based, sites for carbon capture utilisation and storage
with the rest tied to oil prices under long-term (CCUS) on the Yamal and Gydan peninsulas,
contracts. This helped the company capitalise on as well as its non-binding agreement to deliver
soaring LNG prices in Asia and Europe. 1.2mn tonnes of ammonia annually to Germa-
The company’s capital investment guidance ny’s Uniper. The main hurdle for CCUS develop-
of $2.6bn exceeds VTBC’s expectation of $2.2bn, ment in Russia is legislative, Novatek said, as the
the brokerage said, creating some extra risk to government is yet to introduce the appropriate
free cash flow.. VTBC expects Novatek’s hydro- regulation. The company added that it could
carbon sales to be flat this year, in line with only provide CCUS services for third parties in the
a 1% predicted uptick in production. future. ™

POLICY

Hague court starts hearings on

Crimean gas asset seizures

NETHERLANDS THE Hague Permanent Court of Arbitration to 3 bcm by 2015. In addition, Russia obtained
(PCA) started hearings on February 21 to deter- two drilling rigs worth $400mn that Naftogaz
Russia has dismissed mine how much Russia should pay for seizing had recently bought, as well as various equip-
the case as natural gas assets in Crimea that had belonged ment and local infrastructure such as pipelines
meaningless. to Ukraine’s Naftogaz. and gas storage facilities.
The same court ruled in February 2019 that Russia has dismissed the case as meaningless,
Russia had violated its bilateral investment treaty arguing that The Hague lacks jurisdiction in the
with Ukraine when it took control of its assets in matter. A final award was initially anticipated
Crimea during its annexation of the peninsula in in mid-2021, but is no longer anticipated until
early 2014. But it is yet to determine the amount 2023.
Russia will have to pay, although Naftogaz esti- Later on the same day as the hearings
mates the damages at $10bn. commenced, Russian President Vladimir
Russia seized several gas fields off Crimea Putin recognised Ukraine’s breakaway
operated by Naftogaz, putting an end to regions of Donetsk and Lugansk as inde-
Ukraine’s ambition of developing offshore pendent states, and since then Moscow has
resources. Some of these fields were already in moved its troops into these areas. Putin has
production, flowing 1.65bn cubic metres of gas said their annexation is not under consider-
in 2013. Output had been projected to increase ation at this stage. ™

Week 08 23•February•2022 www. NEWSBASE .com P11