Page 100 - RusRPTDec18

company anticipates 20-25% capex growth, driven by new upstream projects (details are to be determined in December). A noteworthy development is that Venezuela’s PDVSA reduced the principal debt owed to Rosneft $0.5bn to $3.1bn as of end of 3Q18.
Rosneft leans on its business partners to counter sanctions. Rosneft sent a proposal to Western oil buyers obliging them to compensate the state-owned oil company for “property losses” in the event they sever trade because of sanctions. Rosneft partners BP, Royal Dutch Shell, Total, Vitol and Gunvor have already received the letter. Rosneft also sent documents to Glencore and Asian customers. According to one Vedomosti source, Rosneft began sending these letters in February after the US published its Kremlin list. While Rosneft has been under US sectoral sanctions since 2014—the company cannot borrow from Western banks for more than 30 days—the fear is that the US will impose Deripaska-style sanctions on the oil major, prohibiting international companies from transacting with it.
Russia's largest oil company Rosneft had dropped the claims against former foreign partners in the Sakhalin-1 extraction project, Interfax reported on November 2 citing sources in Indian ONGC, which did not disclose the amount of the final settlement. Previous reports suggested that Rosneft settled its most recent legal offence related to Sakhalin-1 at $230mn, giving up the original $1.4bn claims against Exxon Neftegaz Limited controlled by the US major Exxon, a subsidiary of Japanese SODECO, and Indian ONGC Videsh (control 30%, 20%, and 20% in Sakhalin-1, respectively). Rosneft claimed that its partners in Sakhalin have been transferring of oil from the North Chayvo field (owned by Rosneft) to the Chayvo field (Sakhalin-1 project) since 2005 (when crude production at Sakhalin-1 started), although Rosneft did not own the licence for North Chayvo at that time.
Russia's largest oil company Rosneft expects its investment programme in 2019 to increase by 20-25% in rubles due to the launch of new extraction projects, Reuters reported citing the phone conference of the CFO of the company Pavel Fyodorov. In 2018 investment programme is seen increasing to RUB900bn from RUB800bn. The bullish capex forecast is in line with previous reports that Rosneft is ready to boost its output in West Siberia brownfields once the limitations of Opec+ output cuts are lifted.
● Novatek
Russia's second-largest natural gas producer and global LNG runner-up Novatek for the first time transferred a shipment of liquefied gas from tanker to tanker in the north of Norway, the company said on November 26. "The icebreaker tanker of Arc7 ice class Vladimir Rusanov successfully transferred the shipment from Yamal LNG plant to a tanker of lower ice class Pskov, which then continued the route to North-Western Europe," Novatek said. Such tanker-to-tanker scheme allows cutting transportation costs of operating Arc7 icebreaker tankers and will be used to transfer shipments in Russian Murmansk and Kamchatka regions. On November 22 Novatek announced the completion of the third line of its Yamal LNG project one year ahead of schedule and reaching the full capacity of 16.5mn tonnes annually. Adopting and successfully implementing ambitious Liquefied Natural Gas (LNG) strategy that started with Yamal in 2013 has pushed Novatek to recently becoming one of top five of Russia's most valuable companies. With the help of French energy major Total and a consortium of other international energy majors Novatek launched its first major LNG project Yamal in 2017 despite
100 RUSSIA Country Report December 2018 www.intellinews.com