Page 19 - FSUOGM Week 23

FSUOGM NEWS IN BRIEF FSUOGM

Ministry. “There is a very interesting gas trading affected the global oil industry, avoiding
As reported by bne IntelliNews, to business,” he told Interfax Ukraine. “We overstocking of storage facilities, which, in
finance the fiscal stimulus amid the agreed on the memorandum between turn, led to positive dynamics in the steady
unprecedented double shock of the Poland, Ukraine and the United States, growth of world oil prices,” Nogayev said.
coronavirus (COVID-19) pandemic, as well signed by the United States in early Kazakhstan reduced its oil and gas
as to cover the missing oil and gas revenues, September 2019 concerning the US gas condensate output by 10% m/m to
the ministry planned to tap RUB2 trillion trade to Ukraine through Poland.” 1.689mn barrels per day in May but failed
($29bn) from the NWF, as well as to expand “However, there are some parallel talks to fully meet its obligations under the
borrowing in the domestic ruble OFZ bond between Naftogaz and Gazprom, and we OPEC+ global production cut agreement,
market. [await] the direction [that] the Ukrainian industry sources told Reuters on June 3.
Analysts surveyed by RBC portal said company will decide to choose, namely, The ex-Soviet state was meant to reduce
that as Russia has committed to cutting oil purchases from Russia or trade through its oil output by 22% from its first-quarter
output under the OPEC+ deal, the actual Poland,” he added. average. The deal does not cover gas
cut-off price for the budget adjusted for As reported earlier, Ukraine’s condensate production - a separate figure
lower output would have to be at $44-47 per government approved a memorandum with for that has not been published.
barrel. Some analysts see the adjusted price Louisiana Natural Gas Exports on possible
being as high as $50 per barrel. LNG supplies from the United States
From March to June the Central Bank to Ukraine and the development of gas Kazakhstan exceeds
of Russia (CBR) and the Finance Ministry infrastructure with Poland.
have acquired about $6.2bn off the market. May oil output quota, will
As of June 1 the liquid part of the NWF
stood at $116bn, with another $10bn of maintain lower output in
government’s Fx reserves on CBR accounts. CENTRAL ASIA & SOUTH
Should Urals price be maintained August and September
at above the threshold on average for CAUCASUS
one month, adjusted for the lower than Kazakhstan exceeded its May oil output quota
planned oil output and exports, the Finance Lukoil may halve production under the OPEC+ oil output cut agreement
Ministry would have to start replenishing by 3.13mn barrels and will offset this by
the NWF by buying the currency off the in Uzbekistan in 2020 maintaining lower output in August and
market and transferring it to the NWF, in September, Energy Minister Nurlan Nogayev
co-ordination with the CBR. Russia’s second-largest oil producer Lukoil said said on June 9.
It is also unlikely that the Urals price on June 4 that its natural gas production in The overproduction took place in the
will be maintained at above the budget rule Uzbekistan could halve to 7bn cubic metres in first 12 days of May and the Central Asian
threshold without fluctuation until the end 2020. nation has since kept its output in line with
of the year, thus securing the budget from That would be a result of a slump in the quota, Nogayev noted.
lower oil revenues and the need to tap into demand in China caused by the ongoing Reports last week by Reuters indicated
the NWF. coronavirus (COVID-19) pandemic-related that Kazakhstan reduced its oil and gas
Russia’s Ministry of Economic lockdowns, the company added. condensate output by 10% m/m to 1.689mn
Development has a conservative outlook The company also said that it has already barrels per day in May but failed to fully
of an average price of $31.1 per barrel for made a return of $8bn on its investments meet its obligations under the OPEC+ pact.
2020. RBC cites studies by Goldman Sachs in projects in Uzbekistan compared to the The ex-Soviet state was meant to reduce
and Morgan Stanley that warn that demand $9.9bn it has invested there. its oil output by 22% from its first-quarter
for oil will remain depressed at least until In February, Lukoil reported that its average. The deal does not cover gas
the end of 2021. production was up 1.3% in 2019 thanks to condensate production - a separate figure
growth at gas projects in Uzbekistan. for that has not been published.
The Kazakh government signed a decree
on May 11 to cut oil output starting from
Kazakhstan supports OPEC+ by OPEC and non-OPEC oil producing
EASTERN EUROPE May in line with a deal agreed in April
Poland awaits Naftogaz’ decision to cut oil output nations. Kazakhstan’s energy ministry
said on May 1 that the ex-Soviet state was
decision on gas trade with until end-July reducing production at certain giant, large
and medium sized oil fields to meet the
US – ambassador Kazakhstan has agreed with an OPEC+ country’s commitments under the OPEC+
decision to cut oil production until the end
deal on global output cuts. None of the
In early September 2019, a memorandum on of July, Kazakhstan’s energy minister Nurlan fields concerned were specified, but the
the sale of US gas to Ukraine through Poland Nogayev said on June 7. Tengiz and Kashagan fields are the country’s
was signed between Poland, Ukraine and the The agreement was reached on June 6 biggest producers.
United States, and now Warsaw is awaiting via a teleconference. The parties decided Cuts in daily output at the largest Kazakh
a decision from Ukraine’s state-run oil and to extend the overall reduction in oil oilfields reportedly started in May.
gas company Naftogaz in this regard, Polish production at 9.7mn barrels per day until
Ambassador to Ukraine Bartosz Cichocki was the end of July.
quoted as saying by Interfax Ukraine. “The current agreement positively

Week 23 10•June•2020 www. NEWSBASE .com P19