Page 81 - RusRPTJuly18

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
The ad hoc Arbitral Tribunal in Stockholm has issued a preliminary decision allowing the Polish PGNiG gas major to demand a revision of the price of gas supplied to Poland under the Yamal Contract with Russian gas exports monopolist Gazprom, the Polish company said on June 30 . Previously Ukrainian Naftogaz also succeeded in Swedish court to win a $2.6bn award against Gazprom , but the court decision is currently being delayed in a lengthy appeal process that could take over 12 months .
Russia's crude oil output increased by 0.9% month-on-month and 1.1% year-on-year to 11.06mn barrels daily (mndb) in June 2018, Reuters reported on July 2 citing the data of CDU TEK. The output growth was mostly driven by state oil giant Rosneft that accounts for more than 50% of Russian crude output potential.
"Russia’s output is substantially above the level implied by the OPEC+ production cut agreement , with its June 2018 output reflecting a production cut of 0.184mnbd (vs a 0.3mnbd agreed cut)," Renaissance Capital commented on June 2.
Rosneft’s core output (excluding Bashneft subsidiary) was up 1.6% m/m and 3.3% y/y in June 2018 , while Bashneft increased its output 0.5% m/m (down 9.5% y/y). Russia's second-larges oil company private Lukoil saw the output in June down 0.1% m/m and flat y/y. Oil arm of Gazprom gas giant Gazprom Neft also saw the production decline of 0.1% m/m and 0.4% y/y.
The data for June could suggest that Rosneft was the main lobbying force on the Russian side in the recent Russia-Saudi effort to push Opec+ deal to allow relaxing output cuts on the back of Venezuela's falling extraction.
Rosneft has reiterated its output growth strategy by 2022 a t the recent annual shareholder meeting, by developing new fields in the Vankor and Erginskoye areas, as well as the Russkoye and Yuzhno-Komsomolskoye fields. At the meeting the influential head of Rosneft Igor Sechin tried to reconcile the vision of growing output in the short-term with the reality of Russia’s promise to capped output under Opec+ deal. He argued that Rosneft will have to grow its market share to fill a structural deficit of oil expected by him globally in the coming 10 years, due to higher demand and exhausting resource base by largest players, an assumption that was challenged by the analysts surveyed by Vedomosti d aily.
Gazprom increased gas supplies to Europe and Turkey 4.1% YoY during the period 1-15 June, while gas exports from the beginning of the year reached 93.6bcm (+5.6% YoY), Vedomosti reports. As a result, Gazprom’s gas exports in the first half of the year might exceed 100bcm for the first time in history. According to the paper, Gazprom’s export to Europe might also receive
RUSSIA Country Report July 2018 www.intellinews.com