Page 16 - FSUOGM Week 21 2021

FSUOGM NEWS IN BRIEF FSUOGM

RUSSIA Nevertheless, Lukoil’s shares declined 2% EASTERN EUROPE
on May 17 following reports published by
Lukoil’s reaction to the oil Kommersant that the size of the spill was Nord Stream 2 moves ahead
much larger than originally reported, even
spill seen as satisfactory if its environmental impact was limited. with pipelaying in German

Russian oil major Lukoil is believed to waters
have reacted rapidly and responsibly to Gazprom Neft affiliate
a 90-tonne spill of oil reported at the German authorities announced that the
weekend, analysts reported on May 18. confirms oil spill on Yamal Nord Stream 2 pipeline of Russian natural
Investors are understandably nervous gas giant Gazprom will start pipelaying in
about oil spills after a power unit belonging Gazpromneft-Noyabrskneftegaz, an affiliate German waters from May 22 to June 30,
to mining behemoth Norilsk Nickel in June of Russian oil producer Gazprom Neft, according to Interfax.
2020 spilled over 20,000 tonnes of oil into has detected depressurization of a pipeline As reported by bne IntelliNews, in a
rivers in the Pyasino region that flow to at the Kraineye deposit on the Yamal major de-escalation of sanction pressures,
the Kara Sea, making it one of the worst Peninsula and an oil-containing fluid spill the US exempted the Kremlin-linked
ecological catastrophes in the history of and is cleaning it, a spokesperson for the operating company building the Nord
the Arctic region. The spill was declared affiliate told PRIME on May 21. Stream 2 gas pipeline between Russia’s
a federal emergency by the Kremlin and "There is no threat to water resources Yamal gas fields and Germany.
Norilsk was fined $2bn for the accident. and the forest fund. The company is The news on entering German waters
While the amount of the Lukoil spill is investigating the reasons of the accident. comes as the pipelaying barge Fortuna
much larger, it was mostly all spilled onto The land plot has been separated, the wraps up its work on Line B in Denmark’s
the land and only 9 cubic metres got into cleaning works are underway," the person territorial waters, as improved weather in
the local river, according to Lukoil, so the said. the Baltic Sea has substantially increased
scale of the environmental damage will be A representative of the emergency pipelaying speed in recent days, BCS Global
less. services told PRIME earlier on Friday that Markets commented on May 24.
Moreover, BCS GM report that after the oil products spilled on a territory of about "The reported speed of Fortuna is now
spill was discovered on a routine helicopter 2,000 square meters in the Purovsky district 1.5 km per day, implying that Line B may be
inspection the company rapidly rolled out a of Yamal after a pipeline broke. finished in days rather than weeks," Ronald
clean-up response and informed the relative P Smith at BCS GM believes.
authorities, as required by law. The pipelaying barge Akademik Chersky
Lukoil released a press release on May Gazprom Neft to raise still has about 60 km of pipe in Danish
17 outlining the steps taken to contain the waters and about 8 km in German waters,
spill. Of the 90 tonnes of oil spilled (the supplies to own refineries implying that September remains a more-
equivalent of about 4 large truckloads), less than-achievable target for both lines to be
than 9 cubic meters of oil made it into the 5.4% in 2021 completed by end-September and before the
river. Substantial containment and clean-up European heating season starts, BCS GM
equipment has been employed, including Russian oil major Gazprom Neft plans to analysts argue.
floating barriers on the river and copious raise oil supplies to own refineries to 39 Gazprom remains one of BCS Global
amounts of oil-absorbent material. million tonnes in 2021 from 37 million Markets' top picks in Russian equity, with a
“Equity markets appear overly cautious tonnes in 2020, Vadim Simdyakin, director Buy recommendation on its shares.
on the oil spill issue. We frankly did not of the department for logistics and
consider the Kommersant story to initially operations with oil, told Energy Intelligence
be newsworthy given the small nature of on May 24. Gazprom makes new
the problem relative to Lukoil’s overall “The volume of supplies to our refineries
operations. However, with Norilsk Nickel amounted to 37 million tonnes in 2020, in attempt to force Moldova
having recently been hit with extremely 2019, this figure was at 38 million tonnes.
large fines for environmental violations, ... The plan for supplies to our refineries for to pay breakaway
perhaps it is understandable that the market 2021 is about 39 million tonnes, the rest of
would be wary of such news,” BCS said in a oil will be exported,” Simdyakin said. Transnistria’s gas bill
note. As for oil exports, they fell 7.4% to
“Lukoil’s proactive response to a modest- 20.1 million tonnes in 2020 and may Gazprom has initiated another lawsuit
sized issue reinforces our initial view: be increased in 2021 if the OPEC+ deal — the 16th — against its own subsidiary
Lukoil appears to have reacted quickly and conditions are eased, he said. Moldovagaz with the International Court
responsibly to the spill. If fault is found, “Today, we are directly dependent on of Arbitration of the Russian Chamber of
it would more likely be in the pipeline's the decisions taken under the OPEC+ Commerce and Industry in Moscow, in
construction or maintenance, rather than agreements. If there is a softening under relation to the $370.5mn natural gas bill for
in its reaction to the spill. Some level of fine the OPEC+ deal, we will increase supplies, the year 2018.
may very well be coming, but we would including for export, both to European All the unpaid bills sent by Gazprom
expect it to be quite limited, most likely consumers and to the Asia-Pacific to Moldovagaz in Chisinau are for the
within a rounding error of the company's countries,” he said. gas delivered to the Moldovan separatist
annual EBITDA,” BCS GM concluded. republic of Transnistria, although Moldova

P16 www. NEWSBASE .com Week 21 26•May•2021