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Foreign investors are once again lending to Russian companies.
Submitted by Rhod Mackenzie on Thu, 04/06/2015 - 21:04Foreign investors are once again lending to Russian companies.
There appeared first signs of significant foreign investment into the Russian capital markets, since the start of the sanctions and being in international isolation a year. New deals appear in the segment of foreign syndicated loans actually closed to Russian borrowers last year. And it is not only the fact that instead of Western banks Russian companies borrow from a pooling of Chinese banks. For European lenders Russian rates are now so attractive that they are willing to compete for some Russian borrowers with their colleagues from China.
Foreign investors have begun to look with interest for the provision of syndicated loans to Russian business, a few interlocutors of "the Kommersant" on the banking market inform. "Beginning in the autumn of last year foreign investors sought to minimize their risk to Russian borrowers simply refusing to participate in syndicated loans", - the head of Nordea Bank, Igor Bulantsev recalls. Now, in calmer geopolitical conditions than last year, they gradually begin changing priorities and participating more actively in the transactions of syndicated loans, he adds. "The recovery in lending to Russian companies issue is really noticeable, it was two or three weeks ago", - the head of Rosbank, Dmitriy Olyunin confirmed.
In Q1, as in the end of last year, it was mainly the long-planned attraction. In December agrochemical holding "Akron" borrowed $ 525 million from a consortium of Western and Russian banks for five years to refinance the loan raised in April last year. In Q2 there have been new deal, and in larger quantities, and conditions on them were significantly better than three months ago, the head of the investment banking operations of Raiffeisenbank Oleg Gordienko informs.
External market of syndicated lending was in fact closed for Russian borrowers in 2014 after the introduction and strengthening of the sanctions. "The Kommersant" wrote many times that many Western banks did not directly refuse transactions, as potential Russian borrowers were not under sanctions, but in every way delayed the negotiations, tightened the credit conditions, i.e. demonstrated lack of interest in providing loan funds to the Russian side. In October 2014 the Bank of Russia even expressed the need to support the development of domestic legislation syndicated loan market - in the absence of external loans.
The emerging thaw in the market of foreign loans attracted by the banking pool was largely provided by the Chinese players. So, in early June, it became known that "Uralkaliy" was able to increase the amount of previously attracted from eight international banks syndicated loan worth $ 530 million (for four years under LIBOR + 3.30%) by another $ 100 million due to the Bank of China. In addition, according to "the Kommersant", several Chinese banks may provide "Metalloinvest" more than $ 200 million through the planned syndicated loan. On June 2nd the company announced taking € 267 million from the club of international banks. Chinese banks also show interest in participating in other planned syndicated loans, in particular for NLMK, Taif and "EuroChem". "The syndicated loan is considered as a possible option for financing, plans to attract are in the range of $ 300-400 million, - the NLMK states. - We are observing considerable interest from banks, including Chinese, in participating in structural loans".
"Among foreign investors, with which now the conditions of the syndicate company TAIF are being discussed, there are Chinese banks", - Oleg Gordienko confirmed (Raiffeisenbank is the organizer of attraction). "Evrokhim" did not respond on request of "the Kommersant" yesterday, "Metalloinvest" declined to comment.
But the thaw in the market is not only due to the declared re-orientation of Russian economic activity from the West to Asia-Pacific region. If this was so, then the Chinese banks would rigidly dictate their price terms of loans, and interest rates on the new syndicated loans would be prohibitively high.
Meanwhile, the rates are falling. "According to the new high-quality borrowers margin transactions are now an average of 0.5 p. p. less than if the transaction was closed three months ago", - Igor Bulantsev stated. If the borrower is asking lenders to waive the right of early requirements, though margin on such loans is reviewed in a big way, the new rates on them are lower than would have been at the end of last year and beginning of this, an average of 0.5 p. p., he adds. NLMK confirmed the trend of improving the syndicated loan market, including the price parameters, giving up more detailed comments.
Interest rates on loans are reduced because the Chinese banks are now competing for the quality of Russian borrowers not only with each other but also with European banks, the experts state. For banks, the realities of living in near-zero European rates, Russian profitability of lending is now more important than geopolitical risks. "In the Russian market we are still talking about quality borrowers with low risk, and the yield on loans to them is comparable to the yield on emerging markets due to geopolitical reasons, the foreign investors have again started to increase risk appetite for Russia", - Mr. Gordienko states.
The trend is also observed in the market of the public debt. "We see a significant reduction in interest rates on corporate and sovereign Eurobonds and rouble compared with the end of last year", - the head of the analytical department of the "Zenith" bank Kirill Sychev states.
Thus, forecasts of the experts, interviewed by "the Kommersant" last autumn (see "the Kommersant" dated November 10, 2014) are justified: at the first signs of stabilization of the situation, high Russian rates become more important for foreign investors than political risk.
http://www.kommersant.ru/doc/2740551
Translated by Mikhail Barkov.
New industrialization in the regions of Kazakhstan
Submitted by Rhod Mackenzie on Fri, 25/07/2014 - 17:45On July 2nd 2014 the information on the work carried in the framework of the realization of the State program of the planned industrial-innovation development of Kazakhstan for 2010-2014 was released. The State program of the planned industrial-innovation development aims for the stable and balanced economic growth via the diversification and rise of its competitiveness.
Until 2015 the priority of the planned industrialization policy was the realization of large investment projects in the traditional export-oriented sectors of economy, with the multiplication of new business opportunities for small and medium business via the targeted development of the Kazakh contents, for further processing.
Speaking about the regions, particular attention should be paid to the Atyrau region. There are certainly positive results – compared to 2008 the real growth of gross regional product was 10%, it reaches 3,635.1 bln tenge. In the framework of the industrialization map 27 projects in various sectors of economy for the amount of about 68 bln tenge have been put into operation.
The oil and gas production from 2008 has risen 1.5 times: oil – by 149%, gas - 157.4%. Atyrau will become the center of the oil and gas cluster, one of the main directions of which will be car manufacturing. It is planned to launch 3 unique projects.
The East-Kazakhstan region is the first by the volumes of innovation products in the Republic. The regional enterprises produce ¼ of the entire innovation production of the country. The regional industrialization map comprises 61 projects with the investment cost of 685.2 bln tenge, 70% of which are of high production stage. Within 4 years 37 projects for the total amount of 201 bln tenge have been put into operation.
There are 13 projects in the region on the construction of small water and wind electric stations on which preparatory works are held. It is explained by the deficit of electric energy which amounts to 2 bln kWh that forces to look for new energy sources. The total cost of the projects is about $200 mln. Among the main goals of the East-Kazakhstan region is the project of the National company “Kazatomprom” on the foundation of the first in Kazakhstan enterprise on the production of solar batteries with the capacity of 70 MW a year.
Another large project of Kazakhstan in 2014 is the chemicals plant on reagents production for gold mining enterprises in the Zhambyl region. The plant’s cost is 13 bln tenge. This is the first chemicals enterprise in Kazakhstan that produces this type of import-replacing products.
In total in the framework of the industrialization map 41 projects with the total investment volume of 597 bln tenge are realized in the Zhambyl region. 27 projects for more than 100 bln tenge have been put into operation. Together with the developed sectors, such as construction and agriculture, the projects in the mining and metallurgical, chemicals, light industry, electric engineering, pharmaceutical and other spheres are realized.
The North-Kazakhstan region comprises 31 projects for 38 bln tenge. At the present time 28 projects for 27 bln tenge have been put into operation. The stake of projects in the processing industry rose from 11 to 17%. From 2010 the export of the enterprises made up 4 bln tenge.
The investment into main capital has doubled. More than 100 projects aim for being included in the industrialization map. It is planned to launch the project on the energy boiler equipment.
In the framework of the industrialization 24 projects for the total amount of 150 bln tenge are being realized in the Kyzylorda region. Until 2020 the priority directions are the development of car manufacturing, metallurgy, production of construction materials, agricultural sector, tourism and recoverable sources of electric energy.
20 projects are submitted to the Ministry of Industry and New technologies to be included into the industrialization map. It will comprise 4 large projects: construction of a solar electric station with the capacity of 50 mW; development of the “Shalkiya” lead-zinc deposit; car manufacturing plant and a ferroalloys plant on the production of special and composite alloys.
The Karaganda region shows good results. 80 projects are realized in the region for the amount of 500 bln tenge. 53 projects for 100 bln tenge have been launched. The gross regional projects from 2010 rose from 1.9 to 2.6 trln tenge. The region is the 4th in the country by the volume of the gross regional product.
A half of the region’s gross regional product is produced in the industrial sector – 47%. Within the last 5 year the growth speed of the industrial goods production rose 35%. In 2010-2014 the growth of the production volume from 300 to 700 bln tenge is forecast (not taking into account the volume of Arcelor and Kazakhmys).
The Akmola region plans to use the Kazakh raw materials purchased in the domestic market in the production process. The production will meet the needs of agricultural goods producers of Kazakhstan and will be exported outside the country.
A new innovation concrete plant was put into operation in the Mangistau region. The plant will increase the speed of the accommodation construction in the framework of the housing program. Concrete will be produced by a dry method, by the modern and “clean” technology that has the minimal influence on the environment.
“CaspiiCement” actively participates in the planned industrial-innovation development program. Due to the plant’s activity the dependence on imports will fall, local production is being formed.
The Pavlodar region gave a start to a new plant on the ball-rolling production which will produce balls for the mining enterprises of the country using modern Italian equipment. The project gains particular importance by the fact that FerroSilicoAluminium – “Kazakh Alloy” will be used – the author of which is the President of Kazakhstan, N. Nazarbaev. The plant plans not only to cover the needs of the local market but to enter the CIS markets. More than 50 new plants were launched in the region.
The industrialization map of the Aktyubinsk region comprises 76 investment projects for 590.6 bln tenge. By today 70 projects have been launched. The enterprises of the processing sector are supported by the National Fund. It is planned to help enterprises enter not only the local market but also ship products to the foreign market, including the near-the-border regions of Russia.
36 projects for 286.7 bln tenge are realized in the West-Kazakhstan region. For the last 2 years 360 bln tenge of investment have been attracted. The main focus is made on the development of the non-raw materials sector of the economy. On the basis of one of the processing enterprises the production of transformers with the capacity of up to 5,000 pieces a year with the value of 3.1 bln tenge is growing and it is put into operation in 2014.
The Almaty region shows the following results: on the results of 2013 the launched objects produced goods for the amount of more than 27 bln tenge, in Jan-May 2014 – 13.9 bln tenge. In the framework of the industrialization map 47 projects out of 56 are realized, 6 projects will be launched in H2 2014, 3 – in 2015. The investment into the main capital of the processing industry is planned to reach 36.5 bln tenge, the level of activity in the sphere of innovations – to 9.5%.
In the framework of the industrialization map 13 investment projects for more than 27 bln tenge are realized in the Kostanai region. The production of “Toyota Fortuner” cars refers to them. Within 4 years the stake of the processing sector rose by 13% that has significantly reduced the dominant position of the mining sector. The 2nd project – the plant on tyre processing – has been started.
The South-Kazakhstan region increased the volume of the processing industry by 18%, volume of non-raw materials export by 47% within 5 years.
In Astana and Almaty in the framework of the industrialization map the following work has been done:
In Astana 26 projects for 446 bln tenge are being realized. In total 19 projects have been launched since 2010. In 2013 among the 9 put into operation projects was the launch of the energy saving glass units plants “KSS” LLP – construction of the plant on industrial glass processing.
In the framework of the industrialization program in Almaty the project “Foundation of the Industrial area in the Alatau region” started. The total area is 490 ha. The engineering infrastructure works have been executed by more than 70%. 10 projects with the total cost of 67 bln tenge plan to start the construction this year. For the first time within 40 years the largest Cinema and Concert hall was constructed in Almaty, the construction of a new Ice stadium for 12 thousand people has started.
In general the state support of the economy’s diversification is effected via the realization of measures of economic policy at the macro- and within the sector’s levels as well as with the help of the realization of the selective measures on supporting of certain sectors of economy and projects of the regions.
http://oilnews.kz/1/analitika/%d0%bd%d0%be%d0%b2%d0%b0%d1%8f-%d0%b8%d0%b...
EU could pay Ukraine’s gas debt
Submitted by Rhod Mackenzie on Wed, 18/06/2014 - 13:14The Austrian Economics Minister, Reinhold Mitterlehner suggested that the EU could cover the Ukraine’s debt for gas. However, it is not clear if the EU is ready to support such an initiative.
The politician said that a political solution on an EU level was necessary to prevent the gas disputes between the Ukraine and Russia.
“We are ready to face crisis situation. I can guarantee we will survive winter,” he said.
At the same time he stated it was necessary to search for political resolving of the question, otherwise the EU will have problems. Read more »
Statoil cannot replace Russian gas in Europe
Submitted by Rhod Mackenzie on Wed, 18/06/2014 - 09:51The Norwegian oil company Statoil won’t be able to replace Russian gas with their own supplies in the case of the termination of Russian exports to Europe because of the possible escalation of the conflict between Russia and the Ukraine. This was announced by Statoil’s CEO, Helge Lund at the World Petroleum Congress in Moscow.
He admitted that even in case of an increase of the Norwegian supplies it won’t be possible to replace Russian gas. The company’s representative expressed hope for a pragmatic settlement of the dispute between the Ukraine and Russia. Read more »
Looks like Russia and the Ukraine are going to repeat the gas crisis of 2009
Submitted by Rhod Mackenzie on Mon, 16/06/2014 - 11:39After two months of unsuccessful negotiations with participation of the European Commission, Russia and the Ukraine are preparing for a new stage of the gas conflict – the restriction of the supply. According to the Kommersant, today Gazprom will switch the Ukraine to prepayment that will create preconditions for the transit of Russian gas to Europe. The situation with the supplies will be extremely aggravated by autumn that still gives the parties a chance to continue their negotiations.
This morning Gazprom is likely to realize its threat of two months standing and will supply only prepaid gas to the Ukraine, several sources familiar with the situation said to the Kommersant. This means that the supplies for the Ukraine will be stopped as Kiev rhas efused to pay any advance payment and Gazprom will continue to supply gas to the Ukrainian gas transportation system (GTS) only for its transit to Europe. According to the Kommersant, a meeting with the participation of Gazprom’s head Alexei Miller will be held at the office of the Prime Minister Dmitry Medvedev in the first half of Monday, during which the transfer to prepayment could be officially announced. The parties had the last chance to reach the agreement last night, when the next round of the negotiations was to take place in Kiev - but its results weren’t known by the time we went to press.
The gas talks between Russia, the Ukraine and the European Commission, initiated by Moscow two months ago, have still not been successful. Their most important achievement became the change of the EC’s position from initially pro-Ukrainian to moderately pro-Russian, and the Ukraine doubled its gas reserves into the underground gas storages.
According to Kiev, the main reasons for the failure of the negotiations is that Russia did not reduced the gas price sufficiently and offered an unacceptable mechanism - through the abolition of the Russian export duty. "We are not satisfied with not only the price, because $385 per 1 thousand cubic meters is too much and it doesn’t make sense to pay more than $350-360 in principle, we can buy gas in Slovakia at this price, - a source in the Ukrainian Ministry of Energy said to the Kommersant. - The main problem is disagreement of Russia to revise the pricing formula, because under option with the duty cancellation, we can lose this discount at any time and become dependent on Russia".
In turn, the Russian side thinks that the level of $385 per 1 thousand cubic meters is adequate, given the fact that the neighboring Poland buys Russian gas even at a little higher price. Moscow was ready to guarantee Kiev that it won’t introduce the duty again during the year, but special indignation of Gazprom was caused by the proposal of Kiev to lift the ban on gas re-export and the condition of take-or-pay: the first one is contrary to commercial logic, and the second - the world practice of concluding long-term contracts. Gazprom was also sceptical about the idea of Kiev to buy gas in Europe through reverse supplies, it noted that this gas is also from Russia. Such schemes are possible as long as Europe has available gas: the monopoly can reduce the supplies to European companies, which cooperate with Naftogaz Ukrainy to the minimum contractual levels that will force them to abandon the reversesupplies in favour of their own consumers.
However, as the Kommersant previously noted, purely commercial disputes were not critical and could be overcome in the case of the general improvement in Russian-Ukrainian relations. According to the Kommersant’s sources, stand of the Ukrainian President Poroshenko on the special-forces raids in the eastern Ukraine was a principle for Moscow, as well as payment of the gas debt accumulated before April 1st. The debt was paid in part (it is still $1.4 billion now), and special-forces raids became more intensive in the last week, disabled Moscow to make further concessions. After a telephone conversation between Vladimir Putin and Petr Poroshenko on last Friday Moscow and Kiev publicly accused each other of blocking the gas talks. They continued on the weekend only at the insistence of the European Commissioner for Energy, Gunther Oettinger. The Kommersant’s sources in the Russian Government believe that the ultimate position of the Ukraine is connected with the influence of the United States, which is trying to prevent the improvement of the relations between Moscow and Kiev. Read more »
Russia: On July 24th,the daily extraction of oil and gas condensate made up 1.4203 million tons.
Submitted by Rhod Mackenzie on Thu, 25/07/2013 - 12:23On July 24th,the daily extraction of oil and gas condensate made up 1.4203 million tons.
The extraction of oil and gas condensate at the leading companies of the industry made up as follows:
Rosneft – 556.8 thousand tons;
Lukoil – 234.1 thousand tons;
Russia to lose Japanese LNG market?
Submitted by Rhod Mackenzie on Thu, 25/07/2013 - 11:36Russian companies, which consider Japan as a perspective gas sales market, are likely to have to update their plans. This country that buys a third of the world's volume of LNG, may significantly decrease the demand after the resumption of the work of atomic power plants, stopped in 2011 after the accident in Fukushima-1. In June, only 2 blocks of 50 were launched, but LNG purchases in Japan have fallen by 3% already; the restart of ten more reactor tanks will be discussed in Tokyo in September. If the solution is positive, the fall of LNG demand may be up to 10% on the results of the year, Kommersant writes. Read more »
Khabarovsk oil-refining plant increases oil processing
Submitted by Rhod Mackenzie on Thu, 25/07/2013 - 11:25In the first half of the year oil processing at Khabarovsk oil-refining plant (the Khabarovsk Territory, Far East, Russia) has increased by 11.7% compared to the first half of 2012 – to 2.09 million tons, is said in the report of the enterprise.
Within the reported period production at the enterprise has increased by 13.6% - to 2.04 million tons.
In the first half of the year production of gasoline has reduced by 11.7% - to 182 thousand tons, production of diesel fuel has increased by 12.2% - to 123.2 thousand tons, marine fuels - by 16.5% - to 597 thousand tons, high viscosity export fuel – by 39.6% - to 53.3 thousand tons.
Read more »
Russia reduced oil exports by 1.9% to 97.6 mln.tons in Jan-May, Rosstat
Submitted by Rhod Mackenzie on Wed, 24/07/2013 - 11:48Oil exports from Russia went down by 1.9% in January-May 2013 against the same period last year and made up 97.6 million tons,according to the materials of Rosstat.
The gravity of the crude oil in a total volume of the Russian export made up 34.1% in January-May, and 47.8% in the export of fuel-energy products (in Jan-May 2012 – 35.5% and 49.6% respectively). RIA Novosti reports.
According to the comparative data of Rosstat as for oil production (excl. gas condensate) in the Russian Federation and other leading countries-exporters of this raw material, Russia produced 10.251 million barrels of oil a day in May 2013, while the OPEC countries – 30.567 million barrels of oil a day in total (incl. Iraq and Saudi Arabia – 3.123 and 9.367 mln. barrels a day respectively). In May, Russia kept the leading position on production volume. It went ahed of Saudi Arabia in July last year.
The average actual export price of oil went down by 4.8% in May against April 2013 and made up $687 per a ton. While the world price of the Russian exported oil Urals made up $746.6 per a ton (+1.2% against April 2013).
According to the Central Dispatch Department of the Fuel and Energy Sector, Russia increased oil and gas condensate production in January-June 2013 by 0.8% to 258.5 million tons against the same period last year. The Ministry of Energy expects oil production in Russia to make up 505-510 million tons a year before 2020.
Translated by Iraida Idiyatova
Max Petroleum in new oil find in Kazakhstan
Submitted by Rhod Mackenzie on Wed, 24/07/2013 - 11:46Max Petroleum focused on prospecting and production of oil and gas in the republic of Kazakhstan stated that the appraisal well UTS-10 at the deposit Uytas has been drilled to the depth of 484 meters. According to the company, the openhole logging of the well showed 9 meters of net oil thickness at cretaceous and Jurassic beds. There was monitored 3 metres of net oil thickness at the cretaceous bed at Aptian stage within the interval of bedding of 40 meters with oil showing at a depth of 125-165 meters. The well UTS-10 has been drilled downdip on the periphery of the structure and confirms the location of an oil-drainage boundary at the Aprial stage, which was also monitored at the previous bore hole, drilled in the central part of the structure. There exists 6 metres of an effective oil height within the interval of bedding 48 meters with oil showing at a depth of 328-376 meters at the Jurassic interval. Read more »
