Page 18 - FSUOGM Week 21 2021

FSUOGM NEWS IN BRIEF FSUOGM

social functions and its importance as a state unit profitability measured as consolidated terminal at the Kenar enterprise for the
vehicle for the development of oil and gas FFO to total upstream production was storage and shipment of oil products
projects. healthy at USD20/boe in 2019, lower than owned by the Turkmenbashi Complex of
“We assess SOCAR's Standalone Credit that of integrated oil majors (e.g. Royal Oil Refineries (TCOR), state-run Turkmen
Profile (SCP) at 'b+', with high leverage being Dutch Shell plc, AA-/Stable, USD32/boe), newspaper Nebit-Gaz reported on May 17.
the main constraint.” which have stronger downstream divisions, The terminals primarily service oil
SOCAR's 1H20 performance was better and closer to that of Russian oil producers tankers at the Turkmenbashi International
than expected in Fitch’s previous rating (e.g. PJSC Lukoil, BBB+/Stable, USD20/boe). Sea Port. The seaport is Turkmenistan’s
case, with broadly flat EBITDA year on year, The upstream segment is SOCAR's key profit largest. It launched in 1986. In 2018, it
as weaker performance in the upstream driver.” commenced a $1.5bn facility that handles
segment was partially offset by stronger Taxes paid by SOCAR accounted for traffic on North-South shipping routes,
trading operations, the ratings agency said. almost 10% of government revenue in 2019, tripling the remote Central Asian country’s
It added: “We estimate 2020 EBITDA will while the state guarantees 9% of SOCAR's annual cargo handling capacity to 25mn-
have only moderately fallen yoy and should debt and provides equity injections to cover 26mn tonnes. The seaport’s routes include
rebound in 2021, on stronger international cash deficits when needed, Fitch noted.. Baku (Azerbaijan), Aktau (Kazakhstan) and
oil prices and increased regulated fuel prices Astrakhan (Russia).
since January 2021. We expect funds from Vice chairman of the seaport enterprise
operations (FFO) net leverage to remain Turkmenistan constructing Shahym Abdrakhmanov reported on the
below 4.5x over 2021-2023, materially below progress of the third terminal’s construction
our 6x downgrade sensitivity, and in line third oil loading terminal at at a meeting of the Cabinet of Ministers held
with the 'b+' SCP.” by President Gurbanguly Berdimuhamedov
SOCAR's 'b+' SCP takes into account Turkmenbashi International on May 14 in the city of Turkmenbashi, the
its high leverage, but also its fairly high report said.
production (267,000 barrels of oil equivalent Sea Port
(boe) per day) and robust oil proved reserve
life of 12 years, said Fitch, adding: “SOCAR's Turkmenistan is building a third oil loading

P18 www. NEWSBASE .com Week 21 26•May•2021