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will be at least 2-3 years before we have certainty on whether awards will be granted to Uniper or not, much less their size. Second, in the meantime, Gazprom is likely making extraordinary profits at this time, likely at record levels, so some level of settlements could be borne without material damage to shareholder value. Still, on balance, we have to consider this to be at least somewhat negative for Buy-rated GAZP.
● Rosneft
On September 16 Berlin announced it was taking over Rosneft’s German unit, including stakes in three oil refineries. The move also affects holdings in France, Italy and Austria, highlighting how interconnected Europe’s energy system is. The Schwedt oil refinery was one of the key assets seized. Grid regulator BNetzA will become the trustee of Rosneft Deutschland GmbH and RN Refining & Marketing GmbH, which account for around 12% of Germany’s oil-processing capacity, through stakes in refineries in Schwedt, Karlsruhe and Vohburg. The process is similar to the takeover of Gazprom Germania earlier this year. Germany has the power to take over the administration of an energy company by issuing an order through the German Energy Safety Act. The trusteeship runs until March 15, 2023, but could be renewed. Rosneft can challenge the order in German courts.
Net profit at Russia’s largest oil producer Rosneft climbed 13% in the first half to RUB432bn ($7.2.bn), the company reported on September 15, citing tighter cost controls.
The result was achieved despite the impact of Western sanctions and other negative pressures as a result of Moscow’s invasion of Ukraine, which have impeded some exports and complicated Russian oil companies’ ability to raise financing.
“Rosneft was under an unprecedented pressure of adverse external factors and unlawful sanctions,” CEO Igor Sechin said in a statement. “However, thanks to high operational efficiency and appropriate management decisions, we were able to ensure business continuity and demonstrate stable results.”
The company’s revenues grew by 32.5% year on year to RUB5.172 trillion, as oil prices were higher in spite of the greater discount that Russian oil now trades at versus global benchmarks, while production remained stable.
The company’s overall hydrocarbon output inched up 1.5% year on year to 4.85mn barrels of oil equivalent per day, on the back of a 9.2% gain in gas extraction to 1.12mn boepd. Crude output declined, but only by 0.5% to 3.73mn boepd.
Control of Rosneft’s local refining assets has been transferred to
146 RUSSIA Country Report October 2022 www.intellinews.com