Page 11 - FSUOGM Week 30 2019

FSUOGM PERFORMANCE FSUOGM
Serbia’s NIS slashes profits, invests more
SERBIA
NIS plans to invest €1.5bn in new projects by 2025.
SERBIAN oil company NIS, majority owned by Russia’s Gazprom, reported a net profit of RSD3.2bn (€27.2mn) for the first half of 2019, significantly below the RSD11.5bn net profit posted in 1H18, the company said on July 29. At the same time, the company invested RSD18.4bn in the first six months, up 7% y/y.
In March, NIS announced that will invest €1.5bn in new projects and facilities by 2025 and is considering launching oil and gas production in Bosnia & Herzegovina.
e rst half investments were made mainly in exploration and production, as well as in the modernisation of processing capacities, spe- cifically the construction of deep-processing facilities with delayed coking technology in the
Pancevo Oil Refinery, the company said in a statement.
In the rst six months, the earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at RSD15.9bn, down from RSD24bn a year earlier.
Oil and gas production amounted to 641,000 tonnes of oil equivalent, down from 661,000 tonnes in the rst half of 2018. e company pro- cessed 1.2mn tonnes of crude oil and semi- n- ished products.
NIS is majority owned by Russia’s Gazprom Ne , which holds a 56.15% stake in the com- pany. The Serbian government owns 29.87% while the remaining stake belongs to citizens, current and former employees and other minor- ity shareholders. ™
POLICY
Rosgeologia calls for state- backed Arctic search
RUSSIA
The natural resources ministry has faced criticism for a lack of progress in the Arctic.
RUSSIA’S state mineral exploration agency Ros- geologia has asked for RUB292.5bn ($4.6bn) in state support to fund a decades-long exploration campaign in the Arctic.
The agency’s new head, Sergey Gorkov, reportedly proposed the exploration pro- gramme at a meeting with Russia’s state commis- sion for Arctic development on July 25, Russia’s Kommersant reported this week, citing a copy of his presentation. Gorkov suggested it could help Moscow ful l its goals for expanding use of the Northern Sea Route (NSR).
According to the Rosgeologia head, the rst stage of the programme would run between 2020 and 2024 and cost RUB89.3bn ($1.4bn), while the second stage would continue until 2035 and require a further RUB104.6bn ($1.65bn). e nal phase would run until 2045 and carry a RUB98.6bn ($1.55bn) price tag. During these stages, Rosgeologia would carry out geological studies and undertake parametric and appraisal drilling, with the aim of identify- ing new deposits and evaluating the potential of existing ones.
Gorkov suggested that funding for the pro- gramme could come from Russia’s sovereign wealth fund and its state budget.
Rosgeologia, which receives contracts from the government to explore new areas for natural resources, is subordinate to Rus- sia’s natural resources ministry. e ministry has come under re recently for failing to do enough to spur development in frontier Arc- tic regions.
e head of Russia’s Arctic commission, Dep- uty Prime Minister Yury Trutnev, said last week that the ministry’s work in the area had been “unsatisfactory”.
“Little money is allocated, and geologi- cal exploration is carried out in insufficient quantities; fields are not being developed,” he said.
Realising projects in the Arctic is challeng- ing owing to infrastructure scarcity, extreme climatic conditions and, in some cases, di cult geology. Onshore, projects are moving forward albeit slowly, while offshore, the government does not anticipate any new eld start-ups until at least the 2030s.
Moscow has awarded generous tax breaks and other regulatory support to help encourage development. But Gorkov’s proposals would involve the state taking a more active role in nd- ing and de-risking new deposits.™
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