OJSCY - Public Joint Stock Company Rosneft Oil Company

Other OTC - Other OTC Delayed Price. Currency in USD
0.00 (0.00%)
At close: 9:49AM EST
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Previous Close7.20
Bid0.00 x 0
Ask0.00 x 0
Day's Range7.20 - 7.20
52 Week Range3.80 - 7.83
Avg. Volume1,024
Market Cap77.061B
Beta (5Y Monthly)0.93
PE Ratio (TTM)4.37
EPS (TTM)1.65
Earnings DateN/A
Forward Dividend & Yield0.42 (5.80%)
Ex-Dividend DateOct 09, 2019
1y Target EstN/A
  • How to Bring BP's Climate Vision Into Focus

    How to Bring BP's Climate Vision Into Focus

    (Bloomberg Opinion) -- The official slogan of BP Plc’s climate event on Wednesday was “reimagining energy.” The unofficial one, based on new CEO Bernard Looney’s liberal use of the phrase, could be WE GET IT.That “it” contains multitudes. Carbon emissions from fossil fuels must fall rapidly. BP is viewed as both a source of the problem and an obstacle to fixing it. Targets set for 2050 sound good; but, let’s face it, 12 months is a long time in this business. And so on.Looney was also addressing multitudes, ranging from the activists perfecting the art of shutting down BP’s headquarters to the politicians that may one day shut down its projects or markets. These are exceptionally interesting times for any new oil CEO. While the world remains heavily dependent on oil and gas, the implacable challenge of climate change suggests the industry is mortal after all.That an oil major of BP’s stature acknowledged this reality represents a milestone for the industry. Milestones are markers, though, not terminals. As Looney also acknowledged upfront, much of the detail is TBD, with an analyst day due in September.The big question for investors (and, indeed, activists) is what this means for the thing that defines any oil major: how it deploys capital.There is a tension in funding energy transition with revenues from oil and gas: The objective is inherently bearish for oil, while the thinking behind the funding is necessarily bullish. The added twist here is that, as Looney intimated at one point, oil majors have gotten an F from investors in the management of that core business over the past decade, as return on capital collapsed.In effect, investors already doubtful of the industry’s capabilities in its core business are being asked to believe it can profitably invest in a set of new activities. What’s more, the old and new businesses have fundamentally different return profiles (at least as currently constituted), which is why Looney fielded so many questions about BP’s dividend.Oil and gas exploration and development is traditionally a higher-return, long-duration business. When oil majors are regarded as rock solid, this is great. Consider a project with an internal rate of return of 20% and a life span of 30 years on an 8% cost of capital. The implied net present value equates to more than 100% of the original investment. Cue champagne.Push that cost of capital to 12% and limit the life span to 20 years — as investors shy away and screws tighten on emissions — and the implied value, while still positive, drops to only about half of the capex. In theory, renewable-energy projects could offer better overall economics than that second case; while they sport lower rates of return, they also offer growth and a lower risk profile. Plug in a 12% rate of return but with a 6% cost of capital and 30-year horizon, and the net value is more than two-thirds of your outlay.(4)Math is fun, of course, but pulling that kind of thing off inside a giant incumbent is the innovator’s dilemma on steroids. Hence, BP is also overhauling its corporate structure, combining the old upstream and downstream operations into one unit and, in a McKinsey-esque flourish, creating cross-division “integrators” for functions such as strategy. This would have been a major event even without the energy transition stuff. It remains to be seen how the matrix works in practice. One obvious question is what would happen if the sustainability integrator wanted to veto a project proposed by the production and operations division (imagine the reply-all email chains, for starters).In addressing all this in September, BP will need hard targets linked to incentives. Top wish-list items would be transparent assumptions for carbon pricing in guidance and, beyond that, straightforward breakeven oil prices incorporating transition-related inputs and dividends. Similarly, near-term capex guidance for non-fossil fuel investments are needed.Beyond this, BP’s roughly 20% stake in Russian oil major Rosneft Oil Co. PJSC should be considered for disposal. While Looney defended Rosneft’s sustainability credentials on Wednesday, convincing investors the Russian major is all-in on a green future seems a rather tall order. Sure, BP’s equity share of Rosneft accounts for 30% of its own production. But then volume isn’t the point, and $15 billion would help address a priority: reducing leverage.It is good that BP has put a vision out there, even if details are yet to come. As it fleshes out the strategy, there will be an ongoing need to keep it focused, understandable — and unconventional.Too often, the industry conversation on transition centers on this or that technology, such as carbon capture, aimed at shoring up the existing business rather than reconsidering it at a more fundamental level. As Harry Benham, an oil-industry veteran turned chairman of transition-advocacy group Sandbag, put it to me on Wednesday, a century-old industry built on extraction and thermal systems is now locked in a battle with an adversary that operates in a completely different way: “manufactured electrical energy.” And that’s it.(1) I've borrowed the math here from a recent report by UBS titled "How fossil capex restrictions could lead to convergence of the energy and utility sectors."To contact the author of this story: Liam Denning at ldenning1@bloomberg.netTo contact the editor responsible for this story: Mark Gongloff at mgongloff1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Maduro Wants Dollars to Feed His Cronies, Not His People

    (Bloomberg Opinion) -- Under the misrule of Nicolas Maduro, Venezuela has ginned up a fake currency (the petro), fantasy price controls and a bootleg president of the legislative assembly. Now comes fake capitalism.With the economy crumbling and millions fleeing the country, the heir and keeper of what Hugo Chavez branded 21st-century socialism has allowed once-taboo dollars to flood the market. Private companies, yesterday’s enemies of the revolution, are peddling luxuries from designer rum to imported cars. The Caracas club scene is on fire. Maduro is even flirting with privatizing the state oil company PDVSA, the Bolivarian crown jewel.So is this a deathbed conversion to the free market or a cagey survivor’s pivot to authoritarian capitalism to save socialism? Neither. The more likely motive for Venezuela’s careening toward free market practices is anomie in league with expediency — with a wink at felony.The first part is no mystery. “There’s no written policy shift behind these maneuvers,” said Venezuelan economist Juan Nagel, who teaches at the Universidad de los Andes in Santiago, Chile. A better explanation, he said, is that the government has become so hollowed out it has scant tools to keep a grip on the command economy. “You need a functioning, paid bureaucracy to enforce price controls, collect taxes and police contracts, and many of these guys have already left the country,” said Nagel. “The government simply isn’t looking anymore.”So much the better for Venezuela’s well-heeled. Disarray has put some businesses, especially retailers, back in the money. Whether wired home by expatriates or flown in from Russia, dollars are rolling in. Oxford Economics lead economist Carlos de Sousa reckons that half the country’s transactions are now carried out in cash, from euros and dollars to Brazilian reais and Colombian pesos. Banks charge native high rollers a 1% to 2% monthly fee to store the hard currency loot in their vaults. The upper middle class, no longer hostage to the ennui of scarcity, is living high again.While Venezuela’s less fortunate have little to celebrate, the recent lapse in enforcement of price controls has eased the chronic shortages that emptied stores shelves and turned grocery runs into scavenger hunts. Annual inflation has slowed considerably, from 2,688,844% in the year to January 2019 to 7,374% by December, reports Oxford Economics. Gross domestic product is still contracting but at a much slower pace. No one expects the estimated 4.6 million Venezuelans who have fled the country to rush back, although a few have returned on the tide of dollars. However, the estimated $4 billion a year the diaspora sends back home to friends and family help alleviate deprivation. More importantly for Maduro, every expatriate greenback is one dollar less his regime must spend on Venezuelan welfare, not to mention a welcome source of cash through remittance taxes and fees for a regime ring-fenced by U.S. sanctions.In the Bolivarian republic, however, not all discontents are equal.Keeping those with the deepest pockets in baubles and pleasure boats is a hedge against mutiny at the top. “Most Venezuelans with lots of money are regime people,” de Sousa told me. “They had investments abroad before U.S. sanctions and now can’t move their money anymore. All of them are obliged to put their money in Venezuela. To be profitable, they need to get rid of price controls.”Maduro also has gone out of his way to indulge another powerful cohort: the favored bureaucrats, political operators, military officials and assortment of felons whom he has regaled with patronage jobs, a cut of public concessions and even authority over basic bureaucratic functions, as Moises Naim and Francisco Toro recently wrote. Forget 21st-century socialism: This is a good old barony of bandits.  The trick of this arrangement is to relax the rules and look the other way at violators to encourage enterprise in the shadows, but never transcribe those practices into policy or law. “We know that a lot of Venezuelans have suffered and are starving. But there are also a lot of people who have profited from Maduro’s maneuvers,” said Monica de Bolle, senior fellow at the Peterson Institute for International Economics. “These are not reforms, they’re tidbits for cronies. It’s all a balancing act."To keep his footing, Maduro strives to preserve the optics of revolutionary socialism even as it spins out of his control. For that matter, so do some of the government’s most strident international foes, who are invested in the conceit that Venezuela is the last socialist bastion in South America. Hence the strange consensus uniting devoted Bolivarians, who admire Maduro as an insurgent and leftist bulwark against imperialism, with archrival Donald Trump, to whom Maduro is a “socialist dictator” whose “grip on tyranny will be smashed and broken,” as he said in his state of the union speech Wednesday.Venezuelan opposition leader and shadow President Juan Guaido knows better, but was caught in the middle as he brought his case for democratic diplomacy to the poisonous politics of Washington. Trump, in his speech, feted Guaido as a rebel for democratic freedom only to abruptly cancel a scheduled Oval Office joint presser the next day after Republican Senator Mitt Romney voted for impeachment.Venezuela’s opposition is also uneasy over Maduro’s sudden affinity for capitalism’s animal spirits. Guaido and his backers have long called for freer markets and relaxing rules for foreign investment, especially in oil exploration. What they want to avoid is for Maduro to make the call on reform, much less capture the benefits.Not all of Venezuela’s renascent profiteers are comfortable with his off-books workaround. The collapse of PDVSA has already forced the government to ignore constitutional strictures on foreign capital and surrender operations to international partners, such as Russia’s state-owned oil major Rosneft. Now those same partners want to convert the de facto rule into a written one – a paradox that has turned Moscow into a leading voice for free markets and the rule of law. “Foreign companies want legal certainty,” said de Sousa.The tone-deaf regime in Caracas may not heed their call any more than it did that of the 82% of Venezuelans who last year said they wanted Maduro gone by 2020. Maduro’s market maneuvers bespeak a leader who wants to have his revolution and short it, too. For a country that has lost 65% of its national wealth since 2013 and seen extreme poverty spike from 10% of the population in 2014 to 85% by 2019, relief is still an illusion. Ersatz liberalism won’t change that.To contact the author of this story: Mac Margolis at mmargolis14@bloomberg.netTo contact the editor responsible for this story: James Gibney at jgibney5@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Mac Margolis is a Bloomberg Opinion columnist covering Latin and South America. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Oil Posts Longest Weekly Losing Streak Since 2018 on Demand Woes

    Oil Posts Longest Weekly Losing Streak Since 2018 on Demand Woes

    (Bloomberg) -- Oil declined for the fifth straight week as the spreading coronavirus clouded the demand outlook and OPEC awaited Russia’s decision on whether to cut production.Futures in New York fell 2.4% for the week, posting the longest weekly losing streak since 2018. Chinese refiners are processing 15% less crude than before the outbreak as the infection crimps demand. Meanwhile, Russia hesitated to accept a proposal by OPEC+ to cut output by 600,000 barrels a day. Russian Energy Minister Alexander Novak promised an answer to the proposal in “days.”“It’s wait and see right now,” said Rob Haworth, who helps oversee about $150 billion at U.S. Bank Wealth Management in Seattle. “Investors have tried to reprice for what they think demand shortfall could be due to the coronavirus and the quarantines, but all those are really guesses for everyone at the moment.”In the U.S., gasoline futures rose to the highest in more than a week after Phillips 66 shut the sole fuel-making unit at its Bayway refinery in New Jersey, the largest on the East Coast. Futures rose 1.7% to settle at $1.5239 per gallon.Majors including Total SA and BP Plc projected a significant hit to global oil demand this year due to the virus, compounding fears of a supply glut plunging the market’s structure into a bearish contango.Both state-owned and private refineries in China have scaled back processing by at least 2 million barrels a day over the past week, said people with knowledge of operations at the nation’s largest complexes. So-called throughput could fall further as demand for aviation and transportation fuels continues to shrink as entire cities remain locked down and travel is restricted, the people said.See also: $60 Oil Is A ‘Wonderland’, Could Fall to $47: Citi’s MorseWest Texas Intermediate for March delivery fell 63 cents to settle at $50.32 a barrel on the New York Mercantile Exchange.Brent for April delivery lost 46 cents to settle at $54.47 a barrel on the London-based ICE Futures Europe exchange putting the premium over WTI at $3.92.China’s January trade data was scheduled to be released Friday, but will instead be announced together with February’s numbers, according to the customs administration.\--With assistance from Alex Longley and James Thornhill.To contact the reporter on this story: Jackie Davalos in New York at jdavalos10@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Jessica SummersFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • U.S. Weighs Rosneft Sanctions But Wary of Oil Market Chaos

    U.S. Weighs Rosneft Sanctions But Wary of Oil Market Chaos

    (Bloomberg) -- The U.S. is weighing whether to sanction Russia’s biggest oil producer, Rosneft PJSC, for maintaining ties with Venezuela’s Nicolas Maduro, though American officials are wary that the move could cause chaos in global oil markets, according to people familiar with the matter.Officials at the Treasury Department worry that sanctions on Rosneft may drive up prices for oil, the people said. The U.S. has placed heavy economic sanctions on Venezuela as the Trump administration seeks to oust Maduro, its president, but the country’s oil industry continues to function. Crude accounts for 95% of Venezuelan exports and bankrolls Maduro’s regime.Rosneft shares fell as much 6.2% on Friday, the most since April 2018.The Trump administration plans to ramp up its pressure on Maduro over the next 30 days, a senior administration official told reporters in a briefing on Wednesday. The U.S. will look “very closely” at potential actions against Rosneft and will “likely take action in the near future on that issue,” National Security Adviser Robert O’Brien said Wednesday at an event hosted by Meridian International Center.President Donald Trump promised in his State of the Union address on Tuesday “that Maduro’s grip of tyranny will be smashed and broken.” Venezuelan opposition leader Juan Guaido attended the speech and met with Trump at the White House on Wednesday.A spokeswoman for the Treasury Department didn’t immediately respond to a request for comment and a spokesman for the White House National Security Council declined to comment.The threat of U.S. sanctions on a large Russian commodities company upended global markets in 2018, when the Trump administration moved against Russian billionaire Oleg Deripaska in retaliation for what Treasury Secretary Steven Mnuchin called “malign activity around the globe” by the Russian government. At the time, Deripaska held a majority stake in United Co. Rusal, the world’s second-largest aluminum producer.Sanctions were never imposed on Rusal due to repeated waivers by Treasury. But global aluminum prices shot up as much as 20% at one point, and each delay in imposing sanctions caused more turbulence.In the wake of U.S. sanctions on Venezuela, Russia has become the second-largest source of American oil imports. The nation’s crude and oil product exports to the U.S. climbed to 20.9 million barrels last October, the highest since November 2011, according to U.S. government data.Rosneft is currently subject to some U.S. market-sector sanctions, although those measures aren’t as far-reaching as the sanctions against businesses associated with the Maduro regime and don’t prevent Rosneft from entering into transactions for Venezuelan oil.Rosneft has been Venezuela’s main shipper of crude, which goes predominantly to refineries in India and China. The Moscow-based company, controlled by Russian President Vladimir Putin’s government, has loaned $6.5 billion to PDVSA in exchange for oil.Venezuelan oil sales fell to a 34-year-low in 2019 after sanctions cut off trade with the U.S., until then the country’s biggest customer.Rosneft also supplies gasoline and diesel in exchange for crude oil. Subsidized gasoline helps Maduro keep his hold on power in a country suffering from inflation, food shortages and a widespread humanitarian crisis. Gasoline is so cheap that Venezuelans can fill a tank with less than $1.As of November 2019, Rosneft’s five joint ventures with PDVSA, the Venezuelan state-owned oil company, pumped an average of 84,700 barrels a day, compared to 158,000 in the same month a year before, according to data compiled by Bloomberg. A jointly run upgrader of heavy crude oil has been halted since mid-2019 due to operational issues.(Updates Rosneft share price move in third paragraph.)\--With assistance from Peter Millard, Lucia Kassai and Fabiola Zerpa.To contact the reporters on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net;Ben Bartenstein in New York at bbartenstei3@bloomberg.netTo contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Helen Robertson, Amanda JordanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Aeroflot stock takes off after Russia grounds rivals over coronavirus

    Aeroflot stock takes off after Russia grounds rivals over coronavirus

    Russian state carrier Aeroflot's shares have surged 10% since authorities in Moscow suspended commercial flights to China by its Russian rivals to prevent coronavirus spreading. Aeroflot now holds an effective monopoly on Russia-China flights at home and is likely to receive additional volumes of passengers travelling through Moscow to Europe, analysts say. Several rivals have stopped flying to China.

  • Reuters

    Chevron says activities in Venezuela permitted by U.S. Treasury

    Chevron Corp on Thursday said its operations in international crude marketing through joint ventures in Venezuela are permitted by the U.S. Treasury and pay for expenses related to maintenance of operations. Chevron operates in Venezuela through joint ventures with Petroleos de Venezuela, or PDVSA.

  • Exclusive: BP eyes sale of Algerian gas plant after Rosneft talks fail - sources

    Exclusive: BP eyes sale of Algerian gas plant after Rosneft talks fail - sources

    BP is seeking buyers for its stake in a major Algerian gas plant deep in the Sahara desert after recent talks on a sale to Russian oil giant Rosneft failed, three industry sources told Reuters. BP hopes to raise around $2 billion from the sale of its 45.89% stake in the In Amenas natural gas plant that was the target of a deadly attack by Islamist militants in 2013. The approval of a sale of the Algerian assets will be one of the first major decisions for Chief Executive Bernard Looney who took office on Wednesday after his predecessor Bob Dudley stepped down following a decade at the helm.

  • Reuters

    Venezuela exported 14% less oil in Jan, but stocks still fell -data

    Venezuela's oil exports declined almost 14% in January compared with December, but crude inventories continued to fall, helping state-run company PDVSA alleviate a glut in storage that accumulated due to U.S. sanctions. PDVSA and its joint ventures exported 951,903 barrels per day (bpd) of crude and refined products last month versus 1.1 million bpd in December and 1.38 million bpd in January of 2019, according to the company's internal reports and Refinitiv Eikon vessel-tracking data. Venezuela's exports fell by a third last year to an average of 1 million bpd, mainly due to sanctions imposed in early 2019 by Washington in an effort to oust socialist President Nicolas Maduro while supporting an interim government led by the congress chief, Juan Guaido.

  • Benzinga

    ExxonMobil Wins Rare Challenge Against OFAC Penalty

    Oil and gas giant ExxonMobil Corp. (NYSE: XOM) recently achieved what many in the export compliance profession thought would be impossible. It won a federal court case against the Treasury Department's Office of Foreign Assets Control (OFAC) to reverse a $2 million penalty for noncompliance. In July 2017, OFAC issued the penalty against ExxonMobil for alleged "reckless disregard" of the Ukraine Related Sanctions Regulations when the company in May 2014 entered contracts with Russian oil company Rosneft OAO.

  • Putin’s Grand Gas Project Makes Sense Now

    Putin’s Grand Gas Project Makes Sense Now

    (Bloomberg Opinion) -- In the space of just a few momentous weeks, one of Russian President Vladimir Putin’s most ambitious projects — a Russian natural gas export system to match the new geopolitical reality rather than the Cold War-era one — has taken its final shape. It will probably last, without major change, until the end of Russia’s run as a top energy exporter. The finishing touches to the project, begun in 2001 with the construction of the Blue Stream pipeline to Turkey, include the launch of the Power of Siberia pipeline to China on Dec. 2, last week’s U.S. sanctions on the Nord Stream 2 pipeline to Germany, a new gas transit deal with Ukraine and the commissioning of the TurkStream pipeline, planned for January.External pressure and market circumstances have helped shape the new Russian gas export system so that it can’t really be used as a sinister tool of Putin’s rogue foreign policy. Meanwhile, it’s structured in a such a way that post-Putin Russia will still be able to maintain its energy market share and use it as a basis for useful trade partnerships. That makes it a positive part of Putin’s legacy, if not entirely thanks to Putin.Problems Inherited and Self-MadeRussia inherited contracts from the Soviet Union to supply natural gas to Europe, one of the biggest sources of hard currency for Russia’s reeling post-Communist economy. But the Soviet pipelines were laid across Ukraine and Belarus, which were part of the empire. But they became independent nations that demanded transit fees and low-priced energy supplies in exchange for maintaining Russia’s energy supplies to Europe, or rather, to its ex-Communist part, where Russia and everything that came from it were newly unpopular.At the same time, gas suppliers in Central Asia and Azerbaijan presented a competitive threat: It was relatively easy for them to pipe gas to Turkey, which could deliver it further to Europe.In the 2000s, when Putin and his advisers nurtured the notion of Russia as an “energy superpower,” it became clear to Kremlin strategists that they needed more flexibility to increase supplies and get more economic leverage over neighbors in Europe and Asia. Blue Stream, laid across the bottom of the Black Sea to the Turkish port of Samsun and opened in 2003, was the opening move of the Putin gas game.But Blue Stream’s capacity of 16 billion cubic meters of natural gas per year was dwarfed by the roughly 180 billion cubic meters the Soviet-built pipelines could export to Europe via Ukraine and Belarus. It helped Russia compete in Turkey, but didn’t solve the bigger problem of Russia’s dependence on Ukraine and Belarus. The share of European natural gas imports that came from Russia kept falling.In 2011, Russia obtained full control over the Belarussian gas transit system in exchange for discounted gas supplies. But Ukraine remained firmly in control of its pipelines, which accounted for the lion’s share of Russia’s export capacity.Putin wanted more direct access to southern and western Europe. He wanted to be able to bypass Ukraine, for both economic and political reasons. The Ukrainian pipeline system, run by National JSC Naftogaz Ukraine, was falling into disrepair, and Gazprom, the Russian export monopoly for pipeline gas, feared it might have to invest in fixing it without having much influence over its operation. At the same time, Putin wanted leverage over the Ukrainian government to keep it in Moscow’s orbit. Twice in the 2000s, Russia cut off gas supplies to Ukraine to try to bring it to heel, but without alternative export routes, such tactics were unsustainable.In 2012, Russia made another major move with the opening of Nord Stream, stretching across the bottom of the Baltic Sea to northern Germany. With a capacity of 55 billion cubic meters a year, it boosted Russia’s share of European imports. At the same time, Russia was planning a major pipeline to southern Europe, South Stream, across the Black Sea to Bulgaria. From there it would branch out to carry gas to Greece, Italy, Serbia and on to central Europe. The 2014 Crimea annexation made it imperative for Putin to redraw the gas export map. Now, Ukraine wasn’t just an inconvenient partner, it was an adversary, and bypassing it became a geopolitical necessity for Putin. Europe, too, was more worried than ever about increasing gas exports from Russia, which could use it to expand its political influence. The European Union scuppered South Stream in late 2014 by putting pressure on Bulgaria. Plans to expand Nord Stream by laying two parallel strings of pipe, known as Nord Stream 2, also became politically toxic, especially given U.S. resistance to that project: In Washington, fears of increased Russian leverage over Germany were compounded by the desire to supply more U.S. liquefied natural gas to Europe.Art of the PossibleThe way Russia altered its gas export plans in the last five years reflects a major shift in its geopolitical thinking. Putin’s anti-Western partnerships with key authoritarian regimes — those of Turkish President Recep Tayyip Erdogan and Chinese President Xi Jinping — had to be backed up with gas pipelines. At the same time, Putin wanted to maintain a lifeline to Germany, with its history of regime-agnostic Ostpolitik; Putin, a German speaker and a former Soviet intelligence agent in East Germany, sees Russia’s relationship with Europe as one with Germany first, even if Chancellor Angela Merkel is one of the continent’s least Putin-friendly leaders.So South Stream mutated into TurkStream, a pipeline with a planned capacity of 31.5 billion cubic meters running to the western part of Turkey, from where gas will flow to the Balkans. It was first filled with gas in late November, and Putin and Erdogan plan to inaugurate it on Jan. 8.The pipeline to China, Power of Siberia, which should be delivering 38 billion cubic meters of gas a year by 2024, opened early this month, with Putin and Xi watching via video link. It runs from Gazprom’s deposits in Eastern Siberia, too far from Europe for deliveries to make economic sense.At the same time, Russia has made a point of competing with the U.S. and Middle Eastern suppliers on the new and fast-expanding European market for liquefied natural gas. Novatek PJSC, a private company in which state-owned Gazprom is a minority shareholder along with France’s Total SA, started exporting from its enormous LNG facility on the Yamal Peninsula in 2018, and this year it approved a $21 billion investment in a second LNG plant. (Gazprom and Rosneft, another state company, have their own LNG capacity, but mostly for export to Asian markets). In the third quarter of 2019, Russia was the EU’s second biggest LNG supplier after Qatar, with 15% of imports; the U.S. was fourth, with 12% — although data from the U.S. Energy Information Administration show that the U.S. has overtaken Russia more recently.All these developments make it almost inevitable that Russian natural gas exports will keep increasing as spare production capacity keeps shrinking. Though vessels laying pipe for Nord Stream 2 and their owners have been sanctioned by the U.S., and Swiss contractor Allseas has suspended work on the project to avoid falling afoul of the U.S. government, that pipeline will be completed, too. Gazprom and one of its Russian contractors have pipe-laying vessels of their own. Though they’ll move slower than the bigger one provided by Allseas, Peter Beyer, the German government’s coordinator for trans-Atlantic issues, said in a radio interview on Monday that the government expected Nord Stream 2 to be operational in the second half of 2020. The delay has forced Russia to do a better deal with Ukraine than it would have been able to negotiate had there been no Nord Stream 2 sanctions. To replace the transit deal that runs out at the end of this year, Russia was trying to sign a mere one-year extension. Ukraine and the EU, which mediated the talks, were fighting for a 10-year contract that would spell out a minimum amount of gas for Gazprom to pump every year. Ukraine gets about $3 billion a year in transit fees from Gazprom, and it would develop a major hole in its budget without the funds.Russia agreed to a five-year deal with a minimum of 65 billion cubic meters to be supplied in 2020 (slightly less than this year’s projected imports) and 40 billion cubic meters in the following years. Both sides compromised on outstanding litigation that arose from the two countries’ previous tumultuous relationship as partners in the natural gas business. Gazprom agreed to pay Naftogaz the $3 billion it had won in an arbitration case, and Naftogaz agreed to drop lawsuits seek an additional $8 billion and to refrain from filing any others.Other compromises may have been reached, too. It’s been reported in Ukraine that Russia might resume direct supplies of gas for Ukraine’s own needs — something unthinkable under former Ukrainian President Petro Poroshenko’s government, when Ukraine was buying Russian gas in the EU rather than deal with the invader of Crimea. Russia is denying that direct supplies are part of the deal, but current Ukiraine president, Volodymyr Zelenskiy, is more pragmatic than Poroshenko was and eager to end the armed conflict Russia has instigated in Ukraine’s eastern regions. The new gas deal, described by the EU official who brokered it as a win-win solution for both sides, shows that Putin, with his transactional approach to foreign policy, values Zelenskiy’s willingness to bargain and compromise. As a result, Ukraine will remain an important pillar of the new Russian gas export scheme at least for the next five years. Though Putin didn’t originally want that, making every effort to establish gas supply channels that go around it, Russia’s resulting export system is remarkably balanced. It links Russia to China, Turkey, southern, northern and eastern Europe. All these markets are competitive, especially in Europe, where the EU has cracked down on Gazprom’s earlier attempts at monopoly pricing.Putin may have made and changed his plans for export channels in hopes of geopolitical leverage. This — and the big infrastructure contracts for Kremlin cronies that came with the pipeline buildout — helped justify the tens of billions of dollars invested in the pipeline and LNG projects. Gazprom’s capital expenditure has averaged $6.4 billion per quarter in the last five years, some 23% of the average quarterly revenue over the same period. The company has remained profitable throughout, but it has more than doubled its debt load since 2013, while revenue has increased by a projected 40% this year compared with 2014.Now that the infrastructure mostly is in place and the deposits needed to feed it are either online or coming online in the near future, the marginal cost of exporting gas will be relatively low, and Russia is guaranteed a solid export revenue stream in a fast-changing global gas market. That’s important for a country that exported $49.1 billion worth of natural gas in 2018 and collected some 7% of its budget revenues from the gas industry. Russia's export partners, of course, eventually move to phase out fossil fuels. That, however, won’t be happening anytime soon, as both Europe and China will need more gas as they replace coal. Russia is projected to account for around a third of the EU’s gas supply at least until 2040. Putin will be gone by then, but Russia’s energy trade will be more diversified than when he came to power. More benign Russian governments will be able to use it as a basis for good neighborly relations rather than as an instrument of pressure. The results of Putin’s grand project show how multiple players — Putin the ambitious authoritarian, his situational allies such as Erdogan and Xi, his adversaries such as the U.S., his reluctant partners such as the EU and his victims such as Ukraine — can combine efforts to build something worthwhile. To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.netTo contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

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