Page 13 - FSUOGM Week 30 2019

FSUOGM PROJECTS & COMPANIES FSUOGM
Rosneft likely to get $7.3bn in tax breaks
RUSSIA
The support is for the company’s mature Priobskoye eld.
RUSSIAN oil major Rosneft has requested RUB460bn ($7.3bn) worth of tax exemptions for its Priobsky eld, as a form of compensation for a 22mn tonne decline in output since 2017 due to the Opec+ agreement, Kommersant daily reported on July 25 citing communications between company executives and the Finance Ministry.
The news confirms previous reports that Rosne ’s in uential head Igor “Oil Czar” Sechin is pressing the Kremlin hard for compensa- tion related to the Opec+ deal, Druzhba pipe- line troubles, and Arctic development, despite already benefiting from tax breaks on major extraction assets.
As reported by bne IntelliNews, earlier this year Russia’s President Vladimir Putin excluded Rosne ’s Priobsky eld from the tax break mor- atorium he imposed on the oil sector.
Analysts did not necessarily see it as a sign that Rosneft would get tax discounts, but on July 25 BCS Global Markets commented that “Rosne will most likely receive the bene ts, as Priobsky is the only eld excluded from the mor- atorium on new tax bene ts.”
BCS GM sees the news on possible bene ts as
positive for Rosne , as it would allow the com- pany to launch its upcoming projects in line with its schedule.
Reportedly, the decision on additional tax breaks for Rosne needs to be taken by October 1. Sources told Kommersant the bene ts may come in the form of tax exemptions starting in 2019, as with previous tax breaks granted for Samotlor eld.
Notably, in February 2019 the Finance Minis- try opposed giving Priobsky any additional ben- e ts, arguing that the company already bene ts from 80% discounts on MET on certain wells. e ministry estimated the potential loss to the budget at RUB460bn ($7bn), in line with the lat- est report.
Rosne has posted a 62% year-on-year jump in net pro t to RUB131bn in 1Q19 (up 39% y/y to $1.99bn in US dollar terms), the company said on May 13.
e company bene ted from 38% q/q lower export duties o setting lower oil prices to post a 15% q/q gain in Ebitda in 1Q19 of about $8.5bn, beating consensus estimates by 7%-8%. BCS Global Market has a Buy recommendation on Rosne ’s shares at a target price of $9 per GDR.™
RUSSIA
Russian gasoline up 0.7% in June
e price of Russian gasoline increased by 0.7% month on month in June, data published by the Federal State Statistics Service shows, while the cost of diesel rose by 0.1%.
e energy ministry, federal regulators and Russia’s top-ten largest oil companies signed an agreement in October 2018 to keep fuel prices stable and increase supplies to the domestic market. Following an extension, that deal expired at the end of June.
July 25 2019
LNGC completes Northern Sea Route
e Vladimir Rusanov LNG carrier was the rst vessel to complete the Northern Sea Route (NSR) during the summer navigation season, Russia’s Novatek reported on July 25.
Vladimir Rusanov transported an LNG cargo from the Yamal LNG terminal to Tianjjin in China in 16 days, or half the time it would have taken to reach the port via
Week 30 31•July•2019
NEWS IN BRIEF
the Suez Canal and the Strait of Malacca. Novatek noted that the ice-covered section of the journey took only six days – a new record for vessels travelling without ice-breaker support.
Vladimir Rusanov is an Arc7 ice-class vessel, belonging to China’s Cosco Shipping and Japan’s Mitsui OSK Lines (MOL). It was hired under a long-term charter by Novatek for use at Yamal LNG last year
“For the second year in a row, our Arc7 ice-class LNG tankers were once again the rst ships to open the summer navigation period via the Northern Sea Route,” Novatek’s deputy chairman Lev Feodosyev commented. “We will continue to optimise our logistical model to ensure competitive LNG supplies to key global consuming markets.”
July 25 2019
Rosneft unit passes 70mn
output milestone at East Sib
field
Verkhnechonskne egaz, a subsidiary of Rosne , has extracted the 70-millionth tonne of oil at
the Verkhnechonskoye oil and gas eld. Its 400
wells ensure the daily output of approximately 21,500 tonnes of oil. e pilot operation at the eld started in 2005, and since 2008 the Verkhnechonskoye oil has been delivered through the main oil pipeline system.
Due to the geological conditions, the exploration of reserves of the unique Verkhnechonskoye eld requires advanced technology.
e Verkhnechonskoye eld is equipped with the entire necessary infrastructure for the production and treatment of oil for the market. e capacity of the external oil transportation system is 10.5mn tonnes per year, while the reservoir pressure maintenance system amounts to 21mn cubic metres of water per year. Own gas turbine power plants with a total capacity of more than 90 MW and 615 km of high-voltage power lines ensure the autonomous operation of the oil eld. ere are 385 km of roads laid in the eld.
In 2018, the company launched a gas project
to inject associated petroleum gas into an underground storage facility for subsequent use. Verkhnechonskne egaz is developing the Verkhnechonskoye oil and gas condensate eld, one of the largest in Eastern Siberia, located in Katangsky district of the Irkutsk region. Beijing Gas Group from China has held 20% of the company’s shares since 2017.
Rosneft, July 25 2019
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