Petroneft Resources, Russia
The IFRS net profit of JSC "Bashneft" in H1 2014 increased by 18.5%, the statement informs.
The proceeds of Bashneft from the sales increased by 18.9% - to 309.844 billion roubles. The adjusted EBITDA increased by 24.6% - up to 54.995 billion roubles. The net profit attributable to shareholders of the parent company increased by 18.5% - up to 29.814 billion roubles. The operating cash flow increased from 22.757 billion roubles to 47.122 billion roubles.
The capital expenditure increased by 31.7% to 18.811 billion roubles. The oil production growth was 9.3%, the increase in the petroleum products production - 3.6%. The production of gasoline and diesel fuel of Euro-5 increased by 34.9% and 26.1%, respectively.
The Government's intention to make polymer packaging for the food safe for the environment has perturbed the petrochemical sector. From 2017 traditional polymers will not be allowed to be used for packaging in Russia, these measures, according to estimates of our sources, will cost the industry up to 10 billion roubles of profit per year, Russia will have to build more capacities for the production of biopolymers for their substitution, more than there are in the rest of the world.
The petrochemical companies are concerned that the government's initiative to transfer to biodegradable plastics for food packaging will bring them billions of dollars in losses. According to the estimates of the sources in the industry, petrochemical production can lose 7-10 billion roubles of profit per year from the prohibition of the traditional polymers. The producers of polyethylene and polypropylene will have to export their products, which now go to the premium domestic market, and this is a loss of 6 billion roubles of operating profit. The exports will be the only alternative for PETF. But the Russian factories will not be able to compete in export markets, the companies will receive less than 35-40 billion roubles of revenue and about 3 billion roubles of operating profit per year and are likely to be closed, the interlocutors believe
The Irish PetroNeft and the Indian Oil India Limited restart the work on oil wells drilling and launching of the Tungol, Arbuzovskoye and Sibkrayevskoye oil deposits in the Tomsk region.
In July 2014, PetroNeft sold 50% in license site 61. It used to be the owner via Stimul-T Ltd to Oil India Limited. After the sales of the shareholding, PetroNeft remained the operators of the site.
Gazprom plans to build seven new gas stations in the Volgograd region by 2016, Viktor Zubkov, the Chairman of OAO "Gazprom" Board of Directors, announced during the meeting with Andrei Bocharov, the Acting Governor of the Volgograd region.
Viktor Zubkov noted that a major agricultural region and one of the centers of the domestic engineering industry has great potential for the development of the motor fuel market at the meeting on the development of the motor fuel market in the Volgograd region. The full use of this potential will increase the competitiveness of the local enterprises, the introduction of high-performance and highly profitable technologies, the environmental improvement.
Novatek – the largest independent gas producer in Russia – published the reports for Q2 and held a conference call, at which the representatives of the company highlighted the questions interesting for the investment community.
Novatek’s results were significantly better than my (Gregory Birge, "Investkafe" – Ed.) forecasts and market expectations. As expected, the increase in revenue is primarily contributed to the increase in the production of hydrocarbons, as well as the increased sales volumes of more high-margin products of gas condensate processing.
The new EU sanctions - now against the Russian oil sector – will primarily hit the offshore projects and the development of hard to recover reserves, according to most analysts polled by RIA Novosti.
On Tuesday evening it became known that the EU countries have reached a preliminary agreement on the imposition of the economic sanctions against Russia in connection with the situation in the Ukraine. In particular, the EU Council decided to restrict the exports of equipment for the oil industry into Russia, Bloomberg reported citing an informed source. At the same time the economic sanctions may be reviewed after three months.
Last week the United States expanded the sanctions against Russia. Gazprombank, Vnesheconombank, "Rosneft" and Novatek were added to the list. The U.S. did not try to stop the daily activities of these companies and banks, but they have closed access to the country's financial markets, prohibiting the U.S. companies and individuals to give them loans for more than 90 days
Now there are currently about 200 refineries in Russia, but only about three dozen of them are large. The overwhelming majority of the rest are low level of efficiency enterprises, they only exist due to the differential in the duties, Ilya Trunin, the director of the RF Ministry of Finance tax department, states. The tax reform in the oil sector will remove this differential - and the inefficient refineries will disappear, he expects.
The existence of the mini-refineries, i.e. approximately 150 plants, is questionable, another official of the RF Ministry of Finance states. In reality the loss will be even greater, according to a federal official: the country has about 300 different "samovars" (illegal mini-refineries), the RF Ministry of Energy’s registry ignores them.
In 2014 the limit coefficient in the oil duty formula was 59%, while the duty on heavy oil was 66% of the oil; the refineries with a minimum depth of processing produce cheap oil, and almost all of it is sent for export. Crude oil export would be more profitable for the budget, the RF Ministry of Finance officials explained. The government wanted to eliminate this source of refineries’ income by increasing the duties on fuel oil to 100% in 2015, but the oil companies have stated that this will kill the industry, and the RF Ministry of Finance proposed the tax manoeuvre.
The explosion at the Achinsk oil refinery will seriously change fuel prices in the region. The sellers of the petroleum products already buy gasoline and "diesel" at the new prices. The fuel shortage could lead to the closure of private gas stations.
The explosion at the Achinsk oil refinery happened on the night of June, 16th. According to the investigators, there was an explosion of hydrocarbon gas at the site, which caused a fire over an area of 400 square meters. According to the recent reports, eight people died.
According to the press service of " "Rosneft" the company will make every effort to restore the production in the shortest possible time. Now a plan of the disaster management and full recovery with the facilities output to the capacity of the corresponding prefault indicators of the plant has been developed. The president of the compan,y Igor Sechin personally supervises the situation. At the time of the accident preventive maintenance was planned at the Achinsk oil refinery.
The government is discussing two options of changes in the tax legislation for the oil industry, Arkadiy Dvorkovich, the Deputy Prime Minister, announced.
"We have not come to a final conclusion yet. We discuss two options: one does not imply any manoeuvres, but implies a change in the schedule of increasing and decreasing the duties on oil and oil products. That is not a one-time increase of duties on oil to 100% but increase stretched on schedule. Another option is the MET maneuver" - Arkadiy Dvorkovich stated.
However, according to Dvorkovich, the tax burden on the oil industry is optimal. "I think that in general the tax burden on the oil industry should stay the way it is now, - he stated. - But the structure can be modified to create certain incentives for increasing the depth of processing, and not to suffer too large losses within the Eurasian Union".
JSC "RN-Aero" – a subsidiary of JSC "NK "Rosneft" - signed contracts for the jet fuel supply of the aircrafts in Simferopol for JSC "AK "Transaero", LLC "Airline "VIM-AVIA", JSC "Atlas-Jet", JSC "Nordavia". Thus, the "RN-Aero" continues to increase the amount of jet fuel sales in the Crimea, the company stated.
The cooperation in the jet fuel supply of the aircrafts between "RN-Aero" and OJSC "AK "Transaero" began in 2012. Currently, "RN-Aero" provides the "Transaero" aircraft fueling in more than 15 airports in Russia. Last month two new cities joined the geography of the cooperation - besides Simferopol "RN-Aero" began refueling "Transaero" aicrafts in Irkutsk.