The company needs an asset in Yamal to compensate for the decline in production.
The Federal Antimonopoly Service of Russia (FAS) allowed Novatek to buy JSC Yuzhno-Khadiryakhinskoye, which owns a license for the same-named deposit located in the Yamal-Nenets Autonomous District. This is stated in the message of the service. “Novatek” during this year actively buys gas assets in Yamal to support declining production.
The reserves of the Yuzhno-Khadiryakhinskoye field in 2012 were estimated at 25-30 billion cubic meters. m of gas, Interfax reported. Whether mining is being conducted at the field is not known. It is located next to the active assets of Novatek. “We are considering acquisitions, something in the area of the existing infrastructure. I think that in the coming months we will gain something, “said the main owner and chairman of the company’s board Leonid Mikhelson on November 15 (quoted by Interfax).
Manages Yuzhno-Khadiryakhinsky, according to SPARK-Interfax, OOO Alrep Management Company, 100% owned by Ar Oil and Gas BV, registered in the Netherlands According to SPARK-Interfax, this is the gas producing joint venture of the Spanish Repsol SA and Alliance Oil, which is part of the Independent Oil Company (NOC) Eduard Khudainatov.
Earlier, the license for the field belonged to JSC “Evrotek”, from which the new JSC was allocated this summer. Eurotec Alliance Oil and Repsol also own together (they have 51% and 49% respectively). “Evrotek” bought Yuzhno-Khadiryakhino site at an auction in 2006 for 2.2 billion rubles., Wrote Interfax. And 100% of Alliance Oil in 2014 Khudainov bought from Musa Bazhayev.
The representative of Novatek declined to comment, like his colleague from the NOC. A source close to one of the parties said that the deal could be closed on Tuesday.
The market value of the field with a stock level of about 25 billion cubic meters. m may be about $ 70-90 million, assumes the possible amount of the transaction analyst Raiffeisenbank Andrei Polishchuk. “The spread can be quite large – it depends on the degree of availability of the field to start production and the availability of necessary infrastructure,” says Polishchuk.
Novatek is one of the three largest gas producers in Russia after Gazprom and Rosneft. The main customers of the company are large industrial consumers, to whom the company can sell gas at a discount relative to the regulated prices of Gazprom. However, starting from 2015, the company’s own production, taking into account the share in the JV, decreased by almost 7 billion cubic meters. m per year. The company explains the fall of the “natural decline in reservoir pressure” in mature fields and expects to compensate it to some extent due to new acquisitions. On November 23, Novatek announced the acquisition of OOO Severneft-Urengoy from Evrokhim. “Severneft-Urengoy” produces 700-800 million cubic meters. m of gas per year, but Novatek expects to increase production by 40%. In addition, Novatek’s interest in acquiring non-core gas assets of Alrosa at the end of November was reported by a source close to one of the shareholders of the diamond mining company. “Alrosa” expects in the coming months to sell at auction “Geotransgaz” and the Urengoy gas company.
NOC is probably interested in the deal no less than Novatek. Hudainatov’s company needs money – its net debt is about $ 2.1 billion, and the debt burden is 4.45 EBITDA. Since the spring of this year, NOC has actively sought to reduce the debt burden. First, it was a question of attracting a strategic investor, negotiations were conducted with both the Qatar Investment Authority (which had already bought a stake in Rosneft), and with investors from the UAE and the Chinese, but it did not come to the deal.
In April, NOC managed to sell several Rosneft fields to the Kondinsky Group for 40 billion rubles. In June, the company fell under American sanctions. Now NOC is considering the possibility of selling up to 50% minus 1 share in the Paiyah oil field of the Chinese CEFC, told sources, familiar with the negotiations, to Vedomosti.
Author: Arthur Toporkov
Article in Russian: Vedomosti