Page 16 - EurOil Week 42 2021

EurOil PROJECTS & COMPANIES EurOil

Gazprom to build up $10.2bn risk fund

RUSSIA RUSSIA’S Gazprom announced on October 19 estimate from RUB45.6 to RUB39 per share,
it would be a reserve fund worth RUB726bn implying yields of 11% and 12% respectively.
The company expects ($10.2bn) by the end of the year to manage
to earn record revenues potential risks, even while it generates record Sanctions talk
this year. gas revenues on the back of a surge in prices over Gazprom could come under additional sanc-
recent months. tions pressure after fresh US calls to imple-
The deputy chairman of Gazprom’s man- ment sanctions on the Nord Stream 2 project,
agement committee, Famil Sadygov, said the although analysts doubt that this will cause any
fund would provide “necessary budget strength serious problems.
and resistance to volatility in the external During a hearing on the US Treasury Depart-
environment.” ment’s sanctions policy on October 19, Repub-
Gazprom has approved its 2021 investment lican Senator Pat Toomey pressured Deputy
programme at the previously announced level Treasury Secretary Wally Adeyemo on why the
of RUB1.19 trillion rubles, Sadygov said, which Biden administration had not implemented
includes RUB1.02 trillion of capital expenditure. sanctions imposed on the Nord Stream 2 pipe-
This figure is based on an average gas price of line under the Countering America’s Adversaries
$269.6 per 1,000 cubic metres, he said. Through Sanctions Act into law. Biden himself
Gazprom typically uses a conservative gas has indicated that continued US pressure on
price to calculate its investment in a given year. Nord Stream 2 is pointless, as Germany remains
Wholesale gas prices have spiked in recent a staunch supporter of the pipeline and Wash-
months, reaching almost $2,000 per 1,000 cubic ington needs to prioritise its relationship with
metres at the Dutch TTF hub on October 6. The Berlin.
price growth will have affected some of Gaz- “We’re committed to working with you and
prom’s long-term contracts, which factor in hub this committee to hold Gazprom responsible for
prices. its activities that violate our sanctions,” Adeyemo
“Compared with the initial plan, the pro- said, but did not disclose details on how the
ceeds from gas sales have increased by almost treasury department would do this.
30%, which will allow Gazprom to reach an his- “At this time, we do not expect additional
toric record level of revenues in 2021,” Sadygov sanctions pressure on Gazprom, although Nord
said. Stream 2 AG could eventually be added to the
This comes after Gazprom recently SDN list, as this is technically required by law
announced it had boosted gas flow to countries even though the entity was given an exception
outside the former Soviet Union by 13.1% in the earlier this year,” Sova said. “There have been
year up to mid-October, to almost 152bn cubic bipartisan calls to follow through with sanc-
metres (bcm). tions on Nord Stream 2 AG, and such legislation
Gazprom also expects its EBITDA to almost could be included in this year’s National Defense
double to over $45bn this year, although ana- Authorization Act (NDAA). We believe Gaz-
lysts at Moscow-based Sova Capital said this prom and Nord Stream 2 AG, along with Ger-
figure was slightly below their forecast. Based on many, are prepared for such actions from the
that, they have lowered their dividend per share US. ™

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