Glencore says Rosneft has refinanced part of its debt and repaid $1B in December, and the two companies agree to amend the terms of the remaining loan so that it would convert at least $900M into an equity stake in Rosneft during 2014.
Also says it will study the sale of BHP Billiton’s Australian nickel assets; BHP has booked impairment charges on the Nickel West assets of nearly $1.6B over the past two fiscal years.
Shares +2.5% in London after the company beat analysts’ earnings estimates in its first annual results since the Xstrata takeover.
BP, which still holds 19.75% of Rosneft (RNFTF) after selling it half of the TNK-BP venture last year, lost more than $1B on its investment overnight, highlighting how its relationship with Russia’s state oil company may become awkward as the crisis in Ukraine develops.
BP’s stake in Rosneft is the biggest single foreign investment in Russia’s oil industry and provides 30% of its production.
Royal Dutch Shell (RDS.A, RDS.B) also is likely to keep an eye on the Ukraine situation, since it owns 35% in the Skifska offshore oil block in the Black Sea to the west of Crimea.
However, Q4 net earnings fell 52% Q/Q to 134B rubles after the Q3 bottom line had been boosted by a revaluation of the TNK-BP assets it had acquired; Q4 revenue fell 0.4% Q/Q to 1.35T rubles.
Rosneft produced 4.196M bbl/day of oil and liquids last year, or 40% of all oil output in Russia, as it stabilized production at its largest Soviet-era fields in western Siberia and two new fields were brought on line there.
Gazprom (OGZPY) reportedly may offer a lower price for its gas in talks with China in exchange for billions of dollars in upfront payments, as top brass from the Russian gas giant landed in Beijing for a round of talks today.
Rosneft (RNFTF) already has established a precedent for huge advances on its exports to China, receiving at least $12B in a lump sum late last year as part of a deal to ramp up supplies.
Gazprom is hoping to clinch a deal to pump 38B cm/year by pipeline to China from 2018, which would be a milestone in Pres. Putin's drive to diversify Russia's energy exports away from Europe, where Gazprom faces a probe into alleged monopoly practices, towards energy-hungry Asia.
State-run Abu Dhabi National Oil will not renew its 75-year oil-production agreement with BP, Exxon Mobil XOM, Royal Dutch Shell (RDS.A, RDS.B), Total (TOT) and others to run the fields, which produce more than half the United Arab Emirates' crude output of 2.8M bbl/day.
Abu Dhabi also had green-lighted Occidental Petroleum (OXY), China National Petroleum (PTR), Statoil (STO), Rosneft (RNFTF) Japan's Inpex and Korea National Oil to bid.
The deepening alliance between Exxon Mobil (XOM) and Rosneft (RNFTF) shows the troubled relationship between the U.S. and Russian governments is no bar to America’s most valuable energy company investing billions in Russia.
The joint venture expects to start its first Arctic well this year, targeting a deposit that may hold more oil than Norway’s North Sea; it also plans to frack shale fields in Siberia, sink a deepwater well in the Black Sea and build a natural gas export terminal in Russia’s Far East.
Diplomatic spats are unlikely to derail business relationships with Russia, especially when the country holds the world's largest oil reserves and XOM needs to find new reserves after three straight years of declining output.
Output at state-run oil producer Rosneft (RNFTF) surged to 156.5M tons from 117.5M, as it consolidated its $55B purchase of TNK-BP, and now accounts for ~30% of Russia's output; Lukoil (LUKOY, LUKOF) ranked second in production at 85.8M tons.
Natural gas output rose 2.1% to 668B cm following a 2.3% decline in 2012, but Gazprom's (OGZPY) production fell 0.6% to 476B cm.
It’s been a fine year for Exxon Mobil (XOM +0.6%), with shares recently hitting 15-month highs and rising 16.5% YTD; a post-Christmas push looks to be a response to XOM’s announced joint venture with Russia's Rosneft (RNFTF) to launch a pilot program to drill horizontal wells and revive old wells in western Siberia.
XOM is one of the cheapest Dow stocks and while its earnings and revenues dropped this year, it still managed to outperform the industry average.
XOM predicts a 35% increase in global energy demand by 2040, sparked by more efficient, energy-saving programs and technologies, increased use of natural gas and other less-carbon intensive fuels, and continued development of advanced exploration and production technologies.
Morgan Stanley (MS -0.3%) reportedly is in talks to sell its global oil business to top Russian oil producer Rosneft (RNFTF), as the bank continues to explore options for the commodities business amid falling revenue and rising scrutiny from regulators who are reviewing banks’ activities in the sector.
Stanley's commodity business posted a return on equity of less than 5% in 2012, the lowest among its trading businesses, and the oil unit represents a major part of that.
Any sale probably would include TransMontaigne (TLP +1.2%), a petroleum and chemical transportation and storage company, and the bank’s 49% stake in Heidmar Inc., which manages ~100 oil and chemical tankers.
Eni (E) reportedly is looking to sell its stake in Russian natural gas producer SeverEnergia after Italian utility Enel finally completed the $1.8B sale of its own interest to Rosneft (RNFTF), despite resistance from other shareholders.
Rosneft has acquired Enel’s 40% interest in the Arctic Russia joint venture with Eni that holds a 49% stake in SeverEnergia, giving it a 19.6% holding in the West Siberia-focused producer.
Rosneft (RNFTF) says its Q3 net profit was 280B rubles ($8.8B), more than half of which came from a revaluation of assets from its purchase of TNK-BP earlier this year.
Q3 revenue totaled 1.36T rubles, with EBITDA of 303B rubles.
Liquids production rose 0.2% Q/Q to 4.19M boe/day, supported by drilling at its Vankor and Uvat greenfields; gas output jumped 16.2% to 10.8B cubic meters following the buyout of a former partner in the Itera gas producer.
Russia and China reach agreement on two huge oil and gas supply deals: Rosneft (RNFTF), the world's largest listed crude oil producer, will supply Sinopec (SNP), China's largest oil refiner, with 10M metric tons/year of oil for 10 years; and Novatek (NOVKY), Russia's largest independent natural gas producer, will deliver 3M tons/year of liquefied natural gas from its Yamal LNG project to China National Petroleum (PTR) for 15 years.
Russia is looking increasingly to Asia for customers and funding to help develop its vast energy reserves, with demand in China and elsewhere in Asia soaring while it shrinks in other industrialized countries.