Page 15 - FSUOGM Week 10 2023

FSUOGM NEWS IN BRIEF FSUOGM

barrel on Russian oil have been applied by This was due to be pumped into storage geopolitical uncertainties and the ongoing
the West over Moscow's war in Ukraine. tanks at the Tema Oil Refinery (TOR), COVID-19 pandemic. However, there
Turkey has not imposed any sanctions on marking the first time Russian oil has is some relief for these companies as a
Russia in response to the conflict. Russia been delivered to a West African country slowly devaluing ruble has made their
considers Turkey a friendly country despite since 2018, and potentially a major update operations more profitable, particularly in
its Nato membership. for TOR, which has been dormant since the upstream sector, BCS GM said in a note
Reuters reported Refinitiv Eikon ship it exhausted its feedstock supply in mid- on March 1.
tracking data as showing 860,000 tonnes of 2018. Upon approaching Ghana the CEO As of late February, the ruble had fallen
Urals crude were shipped to Turkish ports of Ghana’s National Petroleum Authority to around 76/$, down from 70.2/$ at the
last month, up from 620,000 tonnes in (NPA) said the tanker would be blocked beginning of the month. This decline
January and 370,000 tonnes in December. if it was found to be heading into the extends the ruble's general slide from
Supplies of Russian oil to the country’s territorial waters. However, the mid-2022 levels, when it traded as high as
200,000-barrel-per-day STAR refinery NPA neglected to respond to requests for 51.45/$ on 30 June. This recovery of the
were restarted at the end of January after a comment after Theseus proceeded to dock ruble was good for Russian consumers, but
month-long hiatus. They reached 100,000 in Ghana nonetheless. it presented certain difficulties for Russia's
tonnes in January and at least 300,000 It is not known whether Theseus has oil producers, which pay taxes and duties
tonnes in February, according to the quoted offloaded its cargo, but as at time of going to based on dollar prices but have operating
data and industry sources. press it remained moored off Tema. costs largely set in rubles.
SOCAR Trading manages the supply of The move comes as traders scramble Luckily, very high world oil prices in
the refinery. to find new buyers for the oil since the 2Q22 likely kept Russian oil profitability
European Union’s ban on Russian imports robust on a per-barrel basis, despite
in December and subsequent block on massive widening in the Urals-Brent
Kazakhstan to transport another product purchases. discount, which has since been questioned
Measures put in place have made
as the Urals price is increasingly seen
20,000 tonnes of crude to Chinese and Indian buyers a top priority as meaningless. Uncertainties surround
for Moscow as Russia faces a worsening a
the actual realised prices for crude and
Germany in March via Russia’s budget deficit after recording a nearly 50% products, which are highly opaque.
Additionally, IFRS reporting has largely
drop in January. Russia has since sold large
Druzhba pipeline volumes of discounted oil to China, as of ceased, removing a model benchmark, BCS
reports.
this month selling the most crude and fuel
Kazakhstan's national oil transport oil to China since the conflict in Ukraine “If current ruble levels are sustained
operator, KazTransOil, has announced began. Product sales have also increased through July, that $1.3 per barrel
plans to transport another 20,000 tonnes of across Latin America. Despite this, however, improvement in upstream earnings could
crude oil to Germany through the Russian purchases from these countries alone help overall EBITDA per produced barrel
Druzhba pipeline in March. are not enough for Russia to compensate rise modestly, from c$27/bbl in 1Q23 to
This follows the successful transportation for lost markets. Russian Deputy Prime $28/bbl in 2Q23, given a largely flat external
of an initial 20,000 tonnes of oil to Germany Minister Alexander Novak said mid- oil price environment of c$83/bbl Brent,”
via the pipeline in February. KazTransOil February that starting in March: “Russia's BCS GM said. “That being said, we offer
said it believed that it could technically oil production would be reduced by 500,000 some two caveats to our estimates. First and
transport up to 300,000 tonnes of Kazakh barrels per day (bpd), or about 5%.” foremost, we have very limited insight into
oil to Germany in the first quarter, subject With Europe having been the largest the actual selling price of the average barrel
to requests from oil companies. market for Russia’s energy sector, the of Russian Urals crude, or for that matter
The statement released by the company nation’s pool of buyers has narrowed the true price of exported Russian diesel,
said that it planned to transport the crude significantly, forcing delivery costs up. This gasoline, fuel oil and other refined products.
through the Transneft pipeline system in in turn has meant that Russia has had to Second, Russian oil companies have almost
the direction of the Adamowo-Zastawa discount the fuel at the point of export to completely suspended reporting detailed
delivery point in Poland for onward transit compensate. Russian President Vladimir financial data to either IFRS or RAS
to Germany. Putin has criticised the sanctions and vowed standards following the start of the Ukraine
to “slash oil exports by 25%” to push prices crisis, removing our ability to meaningfully
up for the West. benchmark the recent accuracy of our
Russian crude oil unsold in Simple Russian Oil Model.”
Despite these uncertainties, a cost cut
Ghana Devaluing ruble offsets falling on a weaker ruble should help all major
traded Russian oil stocks, including Rosneft,
Western sanctions have forced Russia price of oil for Russia’s oil Lukoil, Tatneft, Surgutneftegas and Sibneft.
to send its oil to Ghana for storage after While the current environment presents
existing pools of buyers shrink. On majors challenges for Russian oil companies, the
February 24, the St Kitts and Nevis-flagged slowly devaluing ruble may provide some
Theseus arrived in Tema from a port in Russian oil companies are facing multiple much-needed relief in the short term, BCS
the Black Sea carrying 600,000 barrels of challenges in the current environment, says.
Russian crude. including rising costs of production,

Week 10 07•March•2023 www. NEWSBASE .com P15