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Argus FSU Energy
News, prices and analysis from the Former Soviet Union and Central Europe
Volume XXV, 15, 16 April 2020
Russia plans flexible approach

Russia’s energy ministry and oil firms are still discussing how to approach the
distribution of production cuts under the new Opec+ agreement.
“The heads of oil companies fully support the parameters of the deal and
noted that decisive actions are needed,” energy minister Alexander Novak said at
a 15 April meeting between government ministers and President Vladimir Putin.
Novak met oil company chiefs on 13 April.
Urals Med vs North Sea Dated Russian producers’ cut quotas were distributed proportionally under Opec+
$/bl Diff
agreements in January 2017-March 2020. But Novak said after the finalised version
5
North Sea Dated = 0 of the new output cut deal was announced on 12 April that Russia is “flexible”
and “other proposals” are possible this time around, insisting that firms can
0
“promptly deliver the quotas Russia has taken on”.
- Gazpromneft chief executive Alexander Dyukov told company employees this
-5
week that “new large-scale projects are not yet in the active investment phase,
which adds to the flexibility of our decision-making”. But he acknowledged that
-10
Apr Jul Oct Jan Apr the company will have to re-evaluate its plans and delay “certain projects”.
19 20
The company is ready to deliver its share of production cuts in May, Dyukov
told Russian newspaper Kommersant, but reining in output will be “easier in
June, when Gazpromneft can reduce [spot supplies] to fit into our quota”. The
RTS oil and gas index firm has already sold April-May crude, despite the global demand slump.
300 Lukoil says it has “an understanding of how we will reduce production, but at
280 this stage it is premature to talk about it in public”. The company “consistently
260 supported an extension of the Opec+ deal [that expired on 31 March]… and fully
240
endorses the conclusion of this new agreement”, it says.
220
200 Rosneft declines to comment. Chief executive Igor Sechin was an outspoken
180 15 Apr = 164.56 opponent of Russian participation in previous Opec+ agreements, and Rosneft was
160 the most eager of Russia’s producers to increase output when the Opec/non-Opec
140
120
alliance collapsed in early March.
Apr Jul Oct Jan Apr
19 20
The first cut is the deepest
After a production cut of 2.508mn b/d in May-June, Russia is due to reduce
output by 2.007mn b/d in July-December and by 1.505mn b/d in January 2021-
April 2022 — all against a 11mn b/d baseline. Novak’s “flexible” approach could
mean passing much of the burden to producers facing natural decline, rather than
Contents
those operating new projects with growing production — Gazpromneft lobbied
Shell exits Russian joint venture 3 unsuccessfully for such an approach in 2017.
Gazpromneft to cut output, capex 4 Most of Russia’s oil companies reined in production at brownfields to cut
output in 2017-20, although Rosneft slowed greenfield development. Less efficient
Rosneft could reduce spending 4
brownfields are the obvious choice for cuts, some industry observers say, but
Gazpromneft plans refining cut 5
others argue that a swift reduction can only come from greenfields, where there
Kazakhstan expects output drop 6
are fewer wells with higher flow rates.
Gazprom presses on with PoS 1 7 “It is much more efficient to reduce production at large new projects in the
Novatek sells less LNG 8 short term — this will cost less and it will be easier to restore output when
Duma approves LNG export changes8 demand recovers,” Sberbank analyst Andrei Gromadin says. In a lower oil price
More Urals moves east 9 environment, efficiency at older and newer fields is comparable if crude quality is
FSU product exports 21-22 similar, he says.
Copyright © 2020 Argus Media group Available on the Argus Publications App
Лицензия зарегистрирована на: Ekaterina Sablina, Argus Media (Moscow)
Argus FSU Energy 16 April 2020
editorial
Too little, too late

Lukoil vice-president and co-owner Leonid Fedun this week likened the new
Opec+ production cut deal to the Brest-Litovsk treaty of March 1918, when the
“Bolsheviks were, because of various reasons, forced to agree to a deal with
Germany, which was humiliating and hard”.
The Brest-Litovsk treaty ended the war on the eastern front, allowing belea-
guered revolutionary Russia to consolidate and ultimately survive, at the cost of
surrendering huge swathes of territory. There are no winners or losers in last
week’s Opec+ agreement — all participants have pledged to sacrifice crude
output in pursuit of market stability — but the new deal does resemble a fragile
peace treaty between great powers, with the participants’ commitment likely to
be tested by mutual suspicion and external circumstances.
At the heart of the latest version of Opec+ is a deal between Russia and Saudi
Arabia that aims to halt the precipitous collapse in prices that followed the unrav-
elling of the previous agreement on 6 March. Moscow and Riyadh, unable to
compromise then over how to support the market in the face of the initial impact
of Covid-19, have found common ground again much sooner than either side
would have expected a month ago.
The new deal is much harsher than the old one by several orders of magni-
tude, reflecting how the pandemic has ravaged the global economy in the
intervening weeks. It is meant to take 10mn b/d off the global market in May-
June, 8mn b/d in the second half of the year and 6mn b/d in 2021 and early 2022.
Russian firms are ready to fall in behind the agreement and deliver the
necessary cuts promptly, according to energy minister Alexander Novak (see p1).
Gazpromneft chief executive Alexander Dyukov said this week that co-ordinated
global output cuts are the only efficient strategy in response to the sharp drop in
demand. “It is definitely preferable to reducing production because storage
facilities are full,” he added. But exactly how Russian companies will deliver and
how the reduction will be distributed among them is not yet clear.
The cuts will be a tall order for most Russian firms, even those already
struggling to maintain output. Russia’s initial 2.508mn b/d output reduction in
May-June will, if implemented, take overall liquids production down to levels last
seen in 2005. And unless the agreement is revised, output is likely to remain well
below 10.5mn b/d until the end of April 2022. Returning production to earlier
levels, assuming market conditions warrant it, will also be a challenge.
Do the maths
And there is no guarantee that any of this will work. The cuts take place against
an expected 18mn b/d year-on-year collapse in global demand in the second
quarter, pointing to stockbuilds of 12mn-13mn b/d in April-June, according to
Argus estimates. At this rate, global storage capacity is likely to be full by late
May, even with the cuts.
And the headline 10mn b/d cut should be treated with caution. The baselines
— 11mn b/d for Russia and Saudi Arabia, October 2018 output for everyone else
— mean that the actual volume removed from the market this quarter may be
closer to 8mn b/d, even before factoring in patchy compliance. There will of
course be organic reductions from other producers. Infrastructure constraints will
trigger shut-ins in the short term, and spending cuts will do the same in the
medium term. But this will not radically change the market arithmetic.
The Brest-Litovsk treaty referred to by Lukoil’s Fedun bought time for the
Bolshevik government. Russia’s participation in the new Opec+ agreement is also
an attempt to buy time, but it may be too little, too late.
Copyright © 2020 Argus Media group Page 2 of 23

Issue Ref: 130219

news
Shell exits Russian joint venture

Shell is pulling out of a Russian joint-venture exploration agreement with long-
term partner Gazpromneft.
“Shell will not pursue completion of the deal creating the Meretoyakhaneft-
egaz joint venture… because of the challenging external environment,” it says.
The major has been reducing investment and withdrawing from projects around
the world as a result of the global economic downturn, the sharp drop in oil
prices and demand uncertainties related to Covid-19.
Gazpromneft and Shell agreed to establish a 50:50 joint venture based on
the former’s Meretoyakhaneftegaz production subsidiary in June. The unit holds
the licence for the Meretoyakhinskoye field in Yamal-Nenets, and licences for the
promising Tazovsky, Severo-Samburgsky and two Zapadno-Yubileiny blocks were
to be transferred to Meretoyakhaneftegaz when the deal closed.
The companies pledged around Rbs100bn ($1.4bn) of investment to develop
the blocks’ combined geological crude reserves of up to 8bn bl. The joint-venture
deal was expected to be completed by the end of 2019, but the government com-
mission responsible for inward foreign investment delayed approval in November,
requesting clarification of “technical and economic issues”.
Gazpromneft will continue development of the blocks on its own, in ac-
cordance with a previously approved work plan, the company says. It still plans
to commission the 76.6mn t (559mn bl) Tazovsky field by the end of this year
— Gazpromneft originally indicated that it would launch the field in September-
October, but this was before global demand and oil prices collapsed and before
Russia agreed to renewed, deeper production cuts under the latest Opec+ deal of
2.5mn b/d in May-June.
Shell’s decision to exit Meretoyakhaneftegaz “will not affect [its] commitment
to develop its business in Russia, including co-operation with Gazpromneft” on
existing partnerships and potential new opportunities, the major says. The firm’s
core activities in Russia include a 50pc holding in the Salym Petroleum Develop-
ment (SPD) joint venture with Gazpromneft in western Siberia and a 27.4pc stake
in the Gazprom-led Sakhalin 2 project in Russia’s far east.
The March addition of the Salymsky 2 block to the SPD portfolio will expand
exploration and development activity at the venture, Shell says. The major was
earlier forced to abandon a joint venture with Gazpromneft to develop Russian
shale formation reserves, after the US and EU imposed sanctions on Russia in
2014 specifically targeting such projects, alongside Arctic offshore and deepwa-
ter development.
Putin congratulates BP
Separately, President Vladimir Putin on 16 April congratulated BP on the 30th an-
niversary of its presence in Russia. In a statement on the Kremlin website, Putin
“expressed confidence that BP Russia will continue to maintain a strong position
in the Russian energy market and make a significant contribution to strengthening
the energy and economic potential of the Russian Federation”.
BP is one of the main overseas investors in the Russian energy sector, along-
side Shell, Total and ExxonMobil. It holds a 19.75pc stake in Rosneft and partners
the Russian firm in three upstream joint ventures. BP in February refuted sugges-
tions from some analysts that it could consider selling its stake in Rosneft to help
boost its green credentials — speculation that appears to have been sparked by
expectations that the major’s new chief executive, Bernard Looney, will focus on
a lower-carbon future for the company. The firm said at the time that it remains
committed to its “strategic partnership” with Rosneft.

news
Gazpromneft ready for output, capex reductions

Gazpromneft is ready to cut output and capital expenditure (capex) in 2020 because
of the sharp oil price fall and uncertain demand outlook stemming from Covid-19.
Chief executive Alexander Dyukov told employees this week that Gazpromneft
may have to “delay certain projects to meet its [new Opec+] cut commitments”.
Gazpromneft lowered brownfield output to comply with previous Opec+ agree-
ments, between January 2017 and 31 March 2020, and avoided cutting at new
fields where output is rising. But the magnitude of the latest cuts means that this
tactic alone may prove insufficient to deliver the required reduction (see p1).
“We expect the second quarter to be the most difficult period, but we hope
that the lifting of lockdowns and restoration of business activity will begin this
summer, and that crude demand may return to pre-crisis levels this autumn,”
Dyukov said. Under an optimistic outlook, oil prices rise to $40-45/bl by the end
of this year and grow further in 2021, he said.
In planning for a capex reduction, Gazpromneft is considering delays to explo-
ration and development off Sakhalin island, in Russia’s far east, where it discov-
ered the Neptune and Triton fields’ combined 840mn bl of recoverable reserves
in 2017-19. But upstream projects already under way will continue, Dyukov said —
including the drilling of three new production wells at the Arctic offshore 511mn
bl Prirazlomnoye field and development of new fields in Yamal-Nenets.
Gazpromneft revealed its Rbs420bn ($5.7bn) capex budget for 2020 in Febru-
ary. The base scenario of its 2020 business plan envisages crude at $30/bl, but a
“stress scenario” for $15/bl has been tested, Dyukov said.
Following a production cut of 2.508mn b/d in May-June, Russia has pledged to
reduce output by 2.007mn b/d in the second half of this year and by 1.505mn b/d
in January 2021-April 2022 — all against the same 11mn b/d baseline.
news
Rosneft may cut capex, bank says

Rosneft could reduce capital expenditure (capex) by 30pc to Rbs700bn ($9.5bn)
this year, because of production cuts under the new Opec+ deal, according to
bank Renaissance Capital (RenCap).
“The company maintains that it has a flexible capex programme and can re-
duce spending to Rbs700bn… to support free cash flow generation,” RenCap said
following a conference call with Rosneft.
Russia’s leading oil firm indicated in February that capex would this year rise
to Rbs1 trillion ($15.5bn at the time), from Rbs936bn in 2019. Around 90pc was
planned for domestic upstream operations, such as new field developments.
“Rosneft’s output is well positioned, because of low production costs, infra-
structure access, diversified supply routes, with a focus on China, and premium
pricing for pipeline crude exports to China,” RenCap says. The firm expects “a
trough in global oil demand in April but a recovery from May, with overall demand
down by 5mn-7mn b/d this year”, the bank says.
Rosneft declines to comment on the possibility of a capex reduction or on its
production plans. The firm accounts for about 40pc of Russian output, and may be
expected to shoulder the largest share of the country’s 2.5mn b/d of cuts in May-
June under the Opec+ deal — if distributed proportionally among Russian firms.
Core Rosneft crude production rose by 0.7pc on the year to 48.27mn t (3.87mn
b/d) in the first quarter, preliminary energy ministry data show. Output from
Rosneft-controlled, medium-sized producer Bashneft was 0.5pc higher than a year
earlier at 4.69mn t (376,000 b/d).

news
Gazpromneft plans refining cut

Gazpromneft is the first Russian oil company to admit publicly that it plans to
reduce domestic refinery throughputs in response to declining products demand
because of the Covid-19 pandemic.
Crude runs will fall by 10-15pc in May, chief executive Alexander Dyukov told
Russian daily newspaper Kommersant this week. “Based on the market situation,
we must react,” he said. But April throughputs will not be affected, according to
Dyukov. Gazpromneft operates the 430,000 b/d Omsk and 240,000 b/d Moscow
refineries, and co-owns the 280,000 b/d Yaroslavl plant with Rosneft.
Rosneft and Lukoil have not said whether they plan to reduce crude runs. But
they will have no choice other than to lower domestic throughputs, according
to some market participants. Refiners may have to make even deeper cuts than
those Dyukov has outlined, and could be forced to close some plants, traders say.
Russian energy minister Alexander Novak said at the start of April that he ex-
pects domestic products demand, particularly for motor fuels, to contract by up
to 40pc following the introduction of a nationwide lockdown — in place until 30
April. Gazpromneft hopes gasoline and diesel demand will recover in the summer,
while the outlook for jet fuel depends how swiftly regular international air traffic
resumes. Russia suspended international flights indefinitely on 27 March.
Before the coronavirus took hold in Russia, some industry analysts expected
Russian integrated oil firms’ domestic operations — including crude and products
sales — to provide financial support during the global demand slump.
Russian refiners normally reduce throughputs in April because of plant main-
tenance. But some small independent refineries have maximised crude buying to
take advantage of lower prices, storing it in the hope that products demand will
recover next month, market participants say.
in brief
Reprieve for expiring licences

Russia’s government has agreed to extend subsoil licences that expire this year,
including for oil and gas, to support licence holders in a difficult macroeconomic
environment, the natural resources ministry says. All licences expiring on 15
March-31 December will be extended for 12 months. And the ministry and its sub-
soil agency, Rosnedra, plan to propose additional measures to support geological
exploration to avoid a slowdown in activity. A number of Russian oil companies,
including Lukoil, Gazpromneft, Rosneft and Tatneft, plan to cut capital expendi-
ture (capex) by 20-30pc this year in response to the slump in global oil demand.
When trimming capex, Russian oil firms typically target exploration budgets and
delay costly upstream development projects.
Chevron reduces Tengiz work because of Covid-19

Kazakhstan’s Chevron-led Tengizchevroil consortium is temporarily scaling back
development work at the 9bn bl Tengiz field to minimise the impact of the
Covid-19 pandemic. Production is continuing as normal, Chevron says, but only
activity critical to expansion projects is proceeding. Chevron raised its cost
estimate for the Tengiz expansion by about 25pc to $46.5bn in November, includ-
ing a $1.3bn contingency fund, and pushed back start-up by a year to mid-2023.
The overall growth plan aims to lift Tengiz production capacity to 1mn b/d of oil
equivalent. Tengiz crude output increased by nearly 3pc on the year to 7.9mn t
(658,00 b/d) in the first quarter. Chevron holds 50pc in Tengizchevroil, ExxonMo-
bil has 25pc, state-owned Kazmunaigaz 20pc and Lukoil 5pc.

news
Kazakhstan expects production reduction

Kazakh crude and condensate production could fall by 6.7pc to 84.5mn t (1.75mn
Kazakh crude production* ’000t
b/d) this year because of participation in the new Opec+ output cuts agreement,
±% Jan-
Mar ±% Feb Jan-Mar
Mar 19 energy minister Nurlan Nogayev says.
PSA projects: 6.0 12.3 15.5 8.0
Kazakhstan has committed to rein in production by 390,000 b/d in May-June
and is developing a plan to implement the reduction, the energy ministry says.
Tengiz 2.9 8.5 7.9 2.8
The baseline for the cut is October 2018 output of 1.709mn b/d, according to the
Kashagan 1.2 12.3 3.2 5.5
Opec+ document released on 9-10 April. The baseline excludes condensate, which
Karachaganak 1.9 18.5 4.4 20.9 accounted for 335,400t — or around 4pc — of Kazakh liquids output in March.
Other 2.3 -17.2 8.1 -9.0 Under the new restraint deal, Kazakhstan has agreed to cut output by 312,000
Total 8.3 2.2 23.6 1.5 b/d in July-December against the same baseline figure, implying a production cap
Total ’000 b/d 2.0 2.2 2.0 0.4 of 1.319mn b/d in May-June and 1.397mn b/d in the second half of 2020.
*comparisons based on average daily output
Allowing for around 90,000 b/d of condensate output, this suggests that overall
liquids production will be much lower than Nogayev’s forecast, which is equivalent
to 1.69mn b/d using the Kazakh energy ministry’s preferred 7.3 bl/1t conversion
factor. Argus uses a 7.58 conversion for the country’s predominantly light crude.
Kazakhstan revised down its official 2020 production forecast to 86mn t from
90mn t earlier this month, because of reduced global demand and lower prices.
Output of 23.6mn t in January-March was up by 1.5pc on the year, driven by the
country’s three largest fields — the onshore 9bn bl Tengiz and 9bn bl Karachaganak
fields, and the offshore 13bn bl Kashagan (see table). Rising Kashagan output since
the field’s restart in late 2016 prevented Kazakhstan from fulfilling commitments to
curb production under previous Opec+ agreements from January 2017.
Kazakh crude and condensate exports were 1.6pc higher on the year at
18.9mn t in the first quarter, according to the energy ministry. Crude deliveries to
Kazakh refineries were unchanged on the year at 4mn t in January-March.
news
Transneft predicts stable crude quality

Transneft expects the planned 2.5mn b/d May-June reduction in Russian output
under the new Opec+ deal to be spread evenly between lower and higher-sulphur
crudes, ensuring consistent quality in its pipeline system. But less significant cuts
under previous Opec+ agreements resulted in lower supplies of sweet crude, forc-
ing Russia’s energy ministry to increase the maximum permitted sulphur content in
Urals in March 2018. Crude quality has mostly remained within these parameters
since then. Urals quality was little changed on the month in March, but was slightly
heavier and sourer at the port of Novorossiysk on the Black Sea (see table). In ad-
dition to the 2.5mn b/d output cut in May-June, Russia has committed to reducing
production by 2.007mn b/d in the second half of this year under the Opec+ deal and
by 1.505mn b/d in January 2021-April 2022 — all against an 11mn b/d baseline.
Crude quality in Transneft system

Destination Density, °API Sulphur, %
Mar ± Feb Mar ± Feb 2020* Max.†
Novorossiysk (Urals) 30.14 -0.33 1.53 0.01 1.50 1.55

Primorsk (Urals) 30.03 -0.04 1.58 0.00 1.60 1.65
Ust-Luga (Urals) 30.36 0.05 1.68 -0.01 1.73-1.75 1.80
Druzhba (Urals) 30.60 0.14 1.67 -0.03 1.73-1.75 1.80
China (ESPO pipeline) 35.21 -0.26 0.55 0.01 0.55 0.60
Kozmino (ESPO Blend) 35.33 0.12 0.51 -0.01 0.55 0.60
*forecast †maximum permitted — Transneft

news
Gazprom presses on with PoS 1 plans

Gazprom has given details of planned work for this year on its 38bn m³/yr Power
of Siberia 1 (PoS 1) export pipeline to China. And the company has provided an
update on developments that will eventually supply the delayed 55bn m³/yr Nord
Stream 2 export route to Germany.
PoS 1 was commissioned in December and is delivering 10mn m³/d to China
from the 1.2 trillion m³ Chayandinskoye field in Sakha-Yakutia, east Siberia — ex-
ports are scheduled at 5bn m³ this year, rising to 10bn m³ in 2021. Gazprom will
start up a helium separation unit this year to strip 36mn m³/d from Chayandin-
skoye gas before export. Helium will be reinjected at the field.
For now, supplies through PoS 1 contain helium, ethane, propane and butane,
as well as methane. But full methane separation from other fractions will begin
once the first 14bn m³/yr of capacity is commissioned in April-May at Gazprom’s
42bn m³/yr Amur gas processing plant (GPP) in Svobodny, 167km north of
Blagoveshchensk, near the Russia-China border. Testing at the GPP will start soon
and a further 7bn m³/yr of capacity is planned for commissioning next year.
The Amur GPP should be operating at design capacity in late 2024, enabling
contracted PoS 1 exports to China of 38bn m³/yr from 2025. Gazprom plans to
commission 160MW of power capacity for the GPP at the end of this year.
Gazprom will invest Rbs78.5bn ($1.1bn) to start up a second PoS 1 compres-
sor station — Ivan Moskvitin — this year to ensure increased gas flows from 2021.
And it will begin construction of the 800km pipeline to Chayandinskoye from the
2.7 trillion m³ Kovykta field in east Siberia’s Irkutsk region — the second source
of gas supply for PoS 1. Work will start by September, with spending of around
Rbs47.7bn allocated in 2020. The link should be commissioned by late 2022, when
first Kovykta gas is scheduled to flow along PoS 1.
Separately, the company is steadily expanding its 4.5bn m³/yr Sakhalin-
Khabarovsk-Vladivostok (S-Kh-V) pipeline in Russia’s far east, to provide an extra
7bn m³/yr of capacity from 2022 — Russia hopes to export up to 42bn m³/yr to
China through S-Kh-V by 2035. Gazprom has built 66km of a 390km section of the
route between Komsomolsk and Khabarovsk.
Looking west
On Russia’s far north Yamal peninsula, Gazprom plans to commission 52 produc-
tion wells at its 3.7 trillion m³ Bovanenkovo field this year. Production from the
field’s upper Cenomanian layers rose by nearly 11pc to more than 96bn m³ last
year, and Bovanenkovo output is expected to reach 115bn m³/yr in 2021-22.
To transport this additional gas, Gazprom is increasing capacity on its 60bn
m³/yr Bovanenkovo-Ukhta 2 pipeline, which connects to the 45bn m³/yr Ukhta-
Torzhok link and the 55bn m³/yr Gryazovets–Slavyanskaya feeder line for the Nord
Stream 2 export route beneath the Baltic Sea.
The completion of Nord Stream 2 — originally scheduled for commissioning at
the end of 2019 — has been held up by delays to permitting of the pipeline route
and by unilateral US sanctions, imposed late last year, on firms providing pipelay-
ing vessels for the offshore section. Nord Stream 2 could now be commissioned
early next year, according to Russian president Vladimir Putin.
Gazprom will start drilling the first production wells at its 1.9 trillion m³ Khar-
asavey field on the Yamal peninsula this year. It will also begin building a first gas
treatment unit at Kharasavey in 2020, and will start laying a 100km pipeline to
link the field to Bovanenkovo — including a booster station at Kharasavey.
Full-scale Kharasavey development started last year. Gazprom aims to pro-
duce first commercial gas at the end of 2023.

news
Novatek sells less LNG

Russian independent producer Novatek sold 2.45bn m³ of gas from its Yamal LNG
project overseas in January-March, 28.4pc less than a year earlier.
“The decrease in sales volumes on international markets was due to the de-
crease of Yamal LNG shareholders’ share, including Novatek’s share, of LNG sales
on the spot market, and a corresponding increase of Yamal LNG direct sales un-
der long-term contracts,” Novatek says. The Yamal-LNG consortium is responsible
for long-term sales, with individual shareholders able to sell leftover volumes on
a pro-rata basis.
Novatek sold 18.24bn m³ of gas on the domestic market in January-March,
2.9bn m³ less than a year earlier, largely because mild weather in winter resulted
in a drop in demand.
The company’s gas production rose by 2.2pc on the year to 19.08bn m³ in
the first quarter. This is lower than overall sales, because Novatek buys minor
gas volumes from Russian petrochemical firm Sibur, which is co-owned by No-
vatek’s shareholders.
Duma approves LNG export amendments

Russia’s lower house of parliament, the Duma, has passed the second reading
of amendments to the country’s gas export law, two months after they re-
ceived cabinet approval. The amendments must be approved by the upper par-
liamentary house, the Federation Council, and signed by President Vladimir Pu-
tin, but these steps are expected to be formalities, paving the way for Novatek
to take an investment decision on its planned 5mn t/yr Obsky LNG plant. The
changes grant LNG export rights to upstream licences awarded since 1 Janu-
ary 2013 that are under development specifically for LNG production — only
Novatek holds licences that meet these criteria, although the company is not
identified directly. Novatek secured licences for the Verkhnetiuteiskoye and
West Seyakhinskoye fields on the Yamal peninsula that will provide feedgas for
Obsky LNG after 1 January 2013. It aims to commission the plant in 2022-23.
news
Gazprom plans storage boost

Gazprom plans to increase withdrawal capacity from its storage facilities in Rus-
sia by 18.6pc to 1bn m³/d by winter 2030-31, to enable a quicker response to daily
winter demand peaks. The firm will increase storage capacity at facilities in Ka-
liningrad and Volgograd, and aims to commission three new sites in Russia by 2030
(see tables). Higher storage withdrawal capacity is needed to offset declining
production capacity. Russian storage can cover 22pc of Gazprom’s daily supplies
and could cover up to 30pc at peak demand. In 2011, the company set targets for
increasing withdrawal capacity to 870mn m³/d by 2015 and 1bn m³/d by 2020 —
withdrawal capacity was 620mn m³/d at the time.
Planned new storage sites* mn m³ Storage expansion projects*

Facility Location Cap. Working gas Withdrawal cap.
cap. (mn m³) (mn m³/d)
Shatrovaskoye Kurgan region 1,000 Facility 2020 2031 2020 2031
Novomoskovskoye Tula, Tula region 340 Kaliningrad 174 800 na 12

Arbuzovskoye Tatarstan 500-600 Volgograd 300 820 25 70
*commissioning by 2030 — Gazprom *commissioning by winter 2030-31 — Gazprom

news
More Urals moves east

More than 700,000 b/d of Urals has left Baltic Sea ports for Asia-Pacific so far this
month, as sellers look east in the face of limited European buying interest.
Almost all of the shipments are heading to China on 80,000-120,000t Afra-
max tankers, with shippers opting to send smaller cargoes on direct voyages
rather than waiting to build up very large crude carrier cargoes through off-
shore loading operations.
April’s eastbound supplies are already more than double the 300,000 b/d
that was shipped to Asia-Pacific in March. And Chinese state-controlled Sino-
pec’s trading arm Unipec this week picked up a 100,000t (726,000 bl) Urals
cargo for 30 April–4 May loading from Primorsk or Ust-Luga, which is also likely
to head east.
Exports from Russian Baltic and Black Sea ports are scheduled at just over
1.79mn b/d in the first five days of May, down by around 10pc in comparison
with the same period in April, but 20pc below that month’s scheduled average
of 2.22mn b/d.
The 1-5 May programme, which emerged on 16 April, has set Urals exports at
230,000 b/d below a preliminary plan circulated the previous day. Rosneft has
swapped a 140,000t Black Sea cargo for an 80,000t loading and dropped two
100,000t Baltic cargoes, with one position taken up by small producer Neftisa
(see tables).
If the final May schedule is lower than the April programme, it could reflect
crude production cuts — Russia has pledged to cut more than 2.5mn b/d of output
Primorsk Urals loadings, May ’000t in both May and June, from an 11mn b/d baseline, as part of its commitment to
Loading Exporter Volume
the new Opec+ production restraint agreement.
30-01 Rosneft 100 Ust-Luga Urals loadings, May ’000t Novorossiysk Urals loadings, May ’000t
01-02 Lukoil 100 Loading Exporter Volume Loading Exporter Volume
02-03 Surgutneftegaz 100
30-01 Rosneft 100 01-02 Lukoil 80
02-03 Rosneft 100
01-02 Rosneft 100
02-03 Rosneft 80
03-04 Rosneft 100 02-03 Kazakh producers 100
04-05 Neftisa 100 04-05 Kazakh producers 80
03-04 Surgutneftegaz 100
Total 600 Total 400 Total 240
Total ’000 b/d 864 Total ’000 b/d 576 Total ’000 b/d 346
news
US takes more fuel oil in March

Transatlantic fuel oil shipments from European and Russian ports rebounded by
European fuel oil exports ’000t
23pc on an average daily basis to 1.42mn t in March, as US refiners continued buy-
Destination March Feb Jan-Mar ±% Jan-Mar 19
ing the product as an alternative to heavy crudes.
US 1,420 1,080 4,100.0 -66.32 But US refiners could start purchasing more heavy and medium sour crude in
Asia-Pacific 130 930 1,960.0 355.61 April, as some grades, including Urals, have started trading at a discount to high-
Mideast Gulf 0 680 1,330.0 -41.80
sulphur fuel oil (HSFO) because of falling demand.
Argus assessed Urals crude at its widest ever discount to northwest European
Total 1,550 2,690 7,390.0 3.74
HSFO barges on 15 April — $5.79/bl, against a premium of $5/bl on 1-31 March.
— Vortexa data, shipping lists, fixture lists
European cracked fuel oil exports to Singapore — the world’s largest bunker-
ing hub — crashed to 130,000t in March, compared with 930,000t a month earlier,
after long-haul economics collapsed.
And there were no deliveries of HSFO to the Middle East after Saudi Arabia
increased imports from Egypt.

EXPORTS AND TRADE
Gazpromneft Arctic crude loadings fall

Russian crude and condensate exports from the Arctic region, outside the
Transneft pipeline system, dropped by almost 13pc on the month to 337,000 b/d
(1.41mn t) in March.
The fall was mainly because of lower Gazpromneft supply through its Umba
floating storage tanker, moored in Kola bay, near the Barents Sea port of Mur-
mansk. Umba loadings were down by a fifth against February at 692,000t — the
lowest since September 2017. Gazpromneft was accumulating crude in the vessel
last month, according to traders. The company supplies its Novy Port Light and
Arco crudes from the Umba but does not provide a breakdown by grade.
Gazpromneft Trading sells Arctic crudes under 12-month contracts as well as
on the spot market. Supplies to the French port of Le Havre fell in March, but
shipments to Immingham in the UK resumed after a one-month break. Exports
to Rotterdam rose and 100,000t was delivered to the Skaw loading area offshore
Denmark, where crude is transferred to larger tankers for long-haul voyages. è p11
Non-Transneft Arctic crude exports ’000t

Mar ±% Feb Jan-Mar ±% Jan-Mar 19
Varandey Blend 618.3 4.3 1,728.6 -17.2

From Varandey* 620.7 5.2 1,793.3 -1.2
From the Umba 691.9 -20.5 2,517.4 -9.0
Novy Port Light* 637.3 -0.7 1,874.7 -3.6
Arco* 269.4 -6.6 742.7 -2.3
Total crude† 1,310.2 -10.3 4,246.0 -12.6

Nornickel 12.5 -6.5 25.0 -1.1
Yamal LNG 83.2 -37.5 291.1 -9.9
Total condensate 95.7 -34.7 316.1 -9.3

Grand Total 1,405.9 -12.7 4,562.1 -12.3
Total, ’000 b/d 337.0 -12.7 371.4 -12.3
Comparisons based on daily average exports *supplies from fields †other than through the Umba
Arco, Novy Port Light supplies ’000t

Destination Receivers in the port Mar Feb
UK 100 100
Immingham Lindsey (Total), Humber (Phillips 66) 100 0
Finnart Grangemouth (Petroineos) 0 100
Germany 0 100
Wilhelmshaven Wesseling (Shell), Gelsenkirchen and Lingen (BP), Harburg (Tamoil) 0 100
Denmark 100 0
Skaw Loading on VLCCs 100 0
Netherlands 400 300
Rotterdam 400 300
BP Rotterdam (BP, ExxonMobil, Gunvor, Koch, Shell), Antwerp 100 0
(ExxonMobil, Total), Gelsenkirchen (BP), Godorf (Shell),
Maasvlakte Vlissingen (Total/Lukoil) 200 200
MET 100 100
France 100 200
Le Havre Gonfreville and Grandpuit (Total), Port-Jerome (ExxonMobil) 100 200
Croatia 0 100
Omisalj Pancevo (NIS); Bratislava, Rijeka, Sisak, Szazhalombatta (Mol) 0 100
— Morcentre-TEK, Vortexa, shipping agents

EXPORTS AND TRADE
Varandey Blend supplies ’000t

Destination Receivers in the port Mar Feb
UK 200 0
Fawley ExxonMobil 200 0
Germany 300 194
Netherlands 100 106
Rotterdam 100 106
Maasvlakte Rotterdam (BP, ExxonMobil, Gunvor, Koch, Shell), Antwerp 70 0
(ExxonMobil, Total), Gelsenkirchen (BP), Godorf (Shell), Vlissingen
MET (Total/Lukoil) 30 6
Team 0 100
US 0 140
Marcus-Hook Monroe Energy 0 30
Big-Stone Axeon Specialty Products, Monroe Energy, PBF Energy, Sunoco 0 110
Greece 0 100
Agioi Theodoroi Corinth (Motor Oil Hellas) 0 100
Lukoil increased exports of Varandey Blend from the Kola floating storage
tanker, also moored in Kola bay, by 4.3pc compared with February to 149,500 b/d
(618,000t) in March. The company’s trading subsidiary, Litasco, shipped cargoes
to Fawley in the UK after a one-month interval and increased supplies to the Ger-
man North Sea port of Wilhelmshaven, but Varandey Blend was not delivered to
the US or Greece last month.
Condensate exports from the Yamal LNG consortium dropped by almost 38pc
on the month to 22,000 b/d (83,000t), with only two cargoes shipped in March —
both to Rotterdam, with no deliveries to Wilhelmshaven. Metals and mining firm
Nornickel exported a single 12,500t cargo of condensate from the Arctic port of
Dudinka to Neste Oil’s 197,000 b/d Porvoo refinery in Finland. Nornickel plans to
export about 100,000t this year, compared with around 90,000t in 2019.
Combined crude and condensate exports from Russia’s Arctic region were
down by 12pc on the year at 371,400 b/d (4.56mn t) in the first quarter, with
reduced supplies from all exporters.
Arctic condensate supplies ’000t

Destination Receivers at the port Mar Feb
Yamal LNG
Germany 0 40
Netherlands 80 80
Rotterdam 80 80
Rotterdam (BP, ExxonMobil, Gunvor, Koch, Shell), Antwerp
Calandkanaal (ExxonMobil, Total), Gelsenkirchen (BP), Godorf (Shell), Vlissingen 80 40
(Total/Lukoil)
Vopak 0 40
Nornickel
Finland 12.5 12.5
Porvoo Neste 12.5 12.5

exports and trade
Rail gasoil exports surge

Russian rail product exports ’000t Rail shipments of products for export from Russia fell by 1.7pc on the month on a
±% Jan daily average basis to 8.51mn t in March. But rail exports were steady on the year
Mar ±% Feb Jan-Mar
-Mar 19 at 25.53mn t in the first quarter, according to freight forwarding companies.
Fuel oil 2,861 -9.1 8,934 -8.9 Supplies of gasoil and diesel by rail were nearly 13pc higher than in February
Gasoil 1,998 12.7 5,664 8.1 at almost 2mn t last month. The increase was supported by strong demand for
Naphtha 1,385 -5.4 4,297 -0.5 Russian product in Europe as a result of reduced refinery output in the region —
VGO 1,058 -4.2 3,159 -1.0 because of industrial action in France and widespread, scheduled maintenance.
Gasoline 668 1.6 1,971 42.1
Exports of Russian gasoil and diesel by rail were more than 8pc higher on the year
Other 157 7.6 432 6.0
in the first three months of 2020 (see table).
On the Black Sea, gasoil and diesel supplies to the port of Tuapse rose by
Coke 140 32.9 380 25.0
more than a third on the month to 417,300t in March, mainly because of higher
Lubricants 90 -21.1 318 0.9
deliveries from the Rosneft-controlled Ufa refineries. And rail deliveries for
Bitumen 78 106.5 143 133.4
export through the Baltic port of St Petersburg were up by more than 40pc
Jet-kerosine 76 -28.7 234 4.6
compared with February at 201,000t last month. Rosneft shipped 30,000t to St
Total 8,510 -1.7 25,533 0.0
Petersburg from its 140,000 b/d Saratov refinery — the first delivery from Saratov
Comparisons based on daily average shipments
in two years — and Lukoil upped supplies to the port from its 290,000 b/d Perm
and 365,000 b/d Nizhny Novgorod refineries.
Shipments of fuel oil by rail for export fell by almost 9pc on the month to
2.9mn t in March, with first-quarter exports down by 9pc on the year. Deliveries
to Tuapse were almost a quarter lower at 125,500t, because of reduced ship-
ments from Rosneft’s 190,000 b/d Novokuibyshev refinery during maintenance.
Supply to the Baltic port of Ust-Luga dropped by 15pc to 1.37mn t last month,
mainly because of lower Rosneft supplies.
Rail supply of naphtha for export fell by 5pc against February to 1.38mn t last
month, as a result of refinery maintenance and rising Russian gasoline production,
but first-quarter shipments were roughly stable on the year. Naphtha deliveries to
Ust-Luga, the largest outlet for the product, were down by 13pc on the month to
477,900t in March, but were up on the year in the first quarter.
Vacuum gasoil (VGO) exports by rail fell by 4pc on the month to 1.06mn t in
March because of lower production — first-quarter supplies were only slightly
lower than a year earlier. Supplies to the Black Sea port of Taman dropped by
42pc to 156,500t last month after Rosneft reduced deliveries from its Samara
and Ufa refining complexes. Forteinvest increased VGO supplies to Taman from
its 120,000 b/d Afipsky refinery by 28pc to 103,400t. Shipments to Vanino port
in Russia’s far east reached 123,800t in March, up from 77,700t in February, with
Rosneft increasing supplies from its eastern refineries.
Gasoline on the up
Rail exports of Russian gasoline rose slightly to 667,700t in March, but first-quarter
supplies were up by 42pc on the year to 1.97mn t. Forteinvest shipped 37,200t
direct to Poland last month — the first deliveries there since March 2019. Ship-
ments to Ust-Luga dropped by 17pc to 234,800t last month, with no product
delivered from Gazprom’s 254,000 b/d Salavat refinery, the 160,000 b/d Taif plant
in Nizhnekamsk, or Lukoil’s 95,000 b/d Ukhta. Neftekhimservis’ 60,000 b/d Yaisky
refinery started shipping gasoline to Ust-Luga in March, supplying 30,000t.
Jet-kerosine supplies by rail for export from Russia fell by 29pc on the month
to 75,850t, as a result of lower production and reduced global demand — the
Covid-19 pandemic has led to severe restrictions on air transport. Shipments to St
Petersburg rose by 30pc against February to 35,500t, following a reduction in sup-
plies through the far north port of Arkhangelsk. Only 4,400t of Russian gasoline
was exported by rail to Kazakhstan last month, down from 20,300t in February.

EXPORTS AND TRADE
CPC Blend exports to rise in May

Exports of CPC Blend crude are provisionally scheduled at just over 1.47mn b/d in
May, up by 4pc against the final April plan.
Higher loadings by Chevron-led Kazakh producer Tengizchevroil (TCO) and
state-owned Kazmunaigaz (KMG) offset a dip in exports by shareholders in Ka-
zakhstan’s 13bn bl Kashagan project. The latter are scheduled to supply 356,000
b/d in May, compared with 392,000 b/d planned for April. The preliminary May
programme includes Shell Trading — possibly a first for the firm — loading around
46,000 b/d next month.
Mediterranean demand is muted, putting pressure on values for smaller car-
goes. Larger volumes remain sought-after, with sellers booking 135,000t cargoes
to Asia-Pacific and to the US. Traders say that floating storage is the only viable
outlet for smaller CPC Blend cargoes, with up to two very large crude carriers
holding the grade in the Mediterranean.
Total this week picked up a cargo from trading firm Glencore at a discount of
around $7.50/bl to North Sea Dated on a cif Augusta basis, according to traders,
having earlier bid unsuccessfully for a 25-29 April cargo at a $9.95/bl discount.
Total has been looking for a cargo delivered on board a vessel with a 60-day float-
ing storage option.
CPC Blend loadings, May ’000t CPC Blend loadings, May ’000t
Date Exporter Vol. Date Exporter Vol.
01-02 TCO 135.5 18-19 TCO 99.0

02-03 TCO 94.0 18-19 KBV 130.0
02-03 TCO 94.0 19-20 KPO 87.0
03-04 TCO 135.5 19-20 Shell 85.0
04-05 TCO 94.0 20-21 TCO 94.0
04-05 TCO 138.5 20-21 TCO 90.0
05-06 KPO 87.0 21-22 TCO 135.5
06-07 TCO 94.0
21-22 Litasco 135.0
06-07 KPO 87.0
22-23 TCO 94.0
07-08 TCO 135.5
23-24 KPO 50 + KPV (ACS) 85 135.0
08-09 TCO 94.0
23-24 KPV (CNPC) 99.0
08-09 KPO 87.0
24-25 KMG 88 + KOA 12 + PSA 30 130.0
09-10 TCO 135.5
25-26 TCO 135.5
09-10 Shell 95.0
25-26 KPV (Inpex) 100.0
10-11 Litasco 135.0
26-27 TCO 94.0
11-12 TCO 94.0
26-27 Shell Trading 90.0
11-12 Total 100.0
27-28 KPO 87.0
12-13 KPO 135.0
28-29 TCO 138.5
12-13 KPV (ACS) 100.0
28-29 KBV 120 + South-Oil 10.05 130.1
13-14 TCO 99.0
13-14 TCO 133.5 29-30 TCO 135.5
14-15 KPO 85.0 29-30 Total 135.0
14-15 Shell Trading 90.0 30-31 Total (ExxonMobil) 90.0
15-16 TCO 94.0 30-31 Shell 80.0
15-16 KMG 93.5 31-01 KPO 87.0

Abbreviations — TCO: Tengizchevroil; KPO: Kara-
16-17 TCO 90.0 31-01 Litasco 135.0
chaganak Petroleum Operating; KOA: Kazakhoil
Aktobe; KBV: KMG Kashagan; PSA: KMG Kashagan, 16-17 KPO 87.0 Total 5,728.6
from resources of PSA; ACS: Agip Caspian Sea;
17-18 Total (ExxonMobil) 135.0 Total, ’000 b/d 1,472.1
KPV: Kazakhstan Pipeline Ventures

exports and trade
Rail crude exports at 10-month high

Supplies of crude by rail for export from Russia rose by more than 3pc on the
month to 54,500 b/d (232,700t) in March — the highest since May 2019’s near
three-year high. First-quarter shipments jumped by 43pc on the year to 668,100t
because of a large increase in crude exports by rail to Belarus, which offset re-
duced deliveries to other destinations.
Rail shipments of 101,400t to Belarus last month were mainly by subsidiaries
of private-sector Safmar Group, including 100,000t from Neftisa, while small pro-
ducers supplied 1,310t from Kadzherom station, in the Komi republic — the first
deliveries by such companies since 2011.
Neftisa is scheduled to supply about 80,000t by rail to Belarus in April, mar-
ket participants say. The Russian energy ministry has agreed rail shipments of
500,000t of sweet crude to Belarus by Safmar companies in 2020. Crude deliver-
ies to Belarus’ 323,000 b/d Mozyr refinery were almost 33,600t on 1-12 April,
according to freight forwarding companies.
Rosneft increased crude supplies by rail to the Caspian Pipeline Consortium
(CPC) system by 5pc on the month to 111,300t in March, but first-quarter ship-
ments were down by a fifth on the year. The company more than doubled sup-
plies from Novosergievskaya station in the Orenburg region and upped shipments
slightly from Novaya Zhizn station in the Stavropol region. But Rosneft suspended
deliveries to CPC from Chervlennaya station in Chechnya in March, instead resum-
ing supplies to its 240,000 b/d Tuapse refinery after a one-month break.
Lukoil deliveries to Svetly port in the Baltic Kaliningrad region were down by
more than 10pc, both on the month and the year in March and the first quarter.
Rail crude exports ’000t

Destination Mar ±% Feb Jan-Mar ±% Jan-Mar 19
Svetly 20.0 -10.2 66.6 -10.7
Baltic Sea ports 20.0 -10.2 66.6 -10.7

CPC 111.3 5.1 306.6 -20.5
Black Sea ports 111.3 5.1 306.6 -20.5
Belarus 101.4 3.9 294.9 4,413.5
Railway border crossings 101.4 3.9 294.9 4,413.5
Total 232.7 3.1 668.1 43.1
Total, ’000 b/d 54.5 3.1 53.3 43.1
Comparisons based on daily average exports
Rail crude exports ’000t

Company Shipper Origin station Destination Vol
Independent Pek Kadzherom Belarus 1.3

Neftisa Neftisa Sorochinskaya Belarus 45.0
Neftisa Neftisa Buzuluk Belarus 38.0
Neftisa Neftisa Orenburg Belarus 17.0
Rosneft Dagneft Novaya Zhizn CPC 76.2
Rosneft Ingushneftegazprom Karabulaksky siding CPC 4.6
Rosneft Krasnodarneftegaz Konokovo CPC 1.5
Rosneft Rosneft Novosergievskaya CPC 29.0
Lukoil Kaliningradmorneft Znamensk Svetly 20.0
Total 232.7

exports and trade
Condensate deliveries hit new low

Condensate supply by rail for export from Russia dropped by 15pc on the month
to 24,000 b/d (91,400t) in March — the lowest since Argus started monitoring rail
shipments in March 2009. First-quarter exports were down by 10pc on the year.
March deliveries were lower on all routes, with a particularly sharp drop in
Gazprom supplies to Azerbaijan — the firm halted condensate shipments from
the 254,000 b/d Salavat refinery and reduced exports from the Sosnogorsky gas
processing plant. Rosneft condensate supplies to the CPC system fell. Transit
shipments of Kazakh condensate to Belarus were suspended and Kazakh producer
Nostrum Oil and Gas slightly reduced deliveries to Svetly in March.
Rail condensate exports ’000t

Destination Mar ±% Feb Jan-Mar ±% Jan-Mar 19
Svetly 18.7 -3.4 55.3 -
Baltic Sea ports 18.7 -3.4 55.3 -

CPC 61.7 -5.0 192.7 -10.1
Black Sea ports 61.7 -5.0 192.7 -35.9
Azerbaijan 11.0 -53.3 59.2 33.4
Belarus 0.0 -100.0 1.0 -
Kazakhstan 0.0 - 0.1 -
Railway border crossings 11.0 -53.6 60.2 34.2
Total 91.4 -15.4 308.2 -10.8
Total, ’000 b/d 24.0 -15.4 27.4 -10.8
Comparisons based on daily average exports
Rail condensate exports ’000t

Company Shipper Origin station Destination Vol
Gazprom Sosnogorsk GPP Vetlasyan Azerbaijan 5.0

Gazprom Astrakhan GPP Aksaraiskaya-2 Azerbaijan 5.0
Other Byarkat Ples Azerbaijan 1.0
Rosneft Purneftegaz Purpe CPC 2.4
Rosneft Rospan International Syvdarma CPC 59.3
Transit Kazakhstan Rostoshsky (siding) Svetly 18.7
Total 91.4
IN BRIEF
Ilsky offers fuel oil

Ilsky product exports ’000t The 60,000 b/d Ilsky refinery in southern Russia has offered 110,000-120,000t of
straight-run fuel oil for export on a fob basis in May through Novorossiysk. The
1Q 1Q19
product will be available at the port’s Sheskharis terminal, in cargoes of 35,000-
Fuel oil 225 205 37,000t, priced against 1pc sulphur fuel oil on a fob Mediterranean ports basis.
Naphtha 125 139 Trading companies Petraco and Petroforce are buying Ilsky straight-run product
Gasoil 40 132 in April at a $20-25/t discount. Total product exports from independent refiner
Total 389 475
Kuban Oil and Gas’ Ilsky plant fell on the year in the first quarter, with only fuel
oil bucking the downward trend. Exports of Ilsky gasoil were less than a third
of shipments in January-March 2019 — the refinery last exported the product in
January, according to rail freight forwarding companies.

In brief
Forteinvest offers Afipsky products

Independent refiner Forteinvest is selling gasoil, naphtha and vacuum gasoil (VGO)
from the 120,000 b/d Afipsky refinery through Russian Black Sea ports in June-July.
The company is offering 30,000t of 0.25pc sulphur gasoil in June and 60,000t of the
product in July. Single 85,000t cargoes of naphtha are available each month, as
well as a 30,000t cargo of VGO in June and two 30,000t VGO shipments the
following month. The gasoil and naphtha cargoes are offered on a fob Novorossiysk
basis, with the VGO on fob Taman terms, all through Afipsky’s trading subsidiary,
Oil Technologies. All prices will be based on fob prices in the Mediterranean market
— for 0.1pc sulphur product in the case of gasoil. Trading firm Coral Energy has
been the main buyer of Afipsky gasoil this year, according to market participants.
Afipsky products exports ’000t

Product Route 1Q 1Q19
Gasoil Novorossiysk 498 527

VGO Taman 317 296
Fuel oil Taman 219 259
Naphtha Novorossiysk 222 202
Kavkaz 0 4
Total 1,257 1,288
— freight forwarders
Export duty tumbles

Russian oil export duty $/t Russian oil export duties will fall to 20-year lows in May following the recent
collapse in global oil markets. Crude duty will drop to just $6.50/t (90¢/bl), from
May Apr
$52/t in April, and rates for products will fall sharply (see table). Export duty is
Crude 6.80 52.00 calculated based on monthly monitoring of Argus-assessed Urals prices. The
High-viscosity crude 1.00 5.20 reduction is good news for oil companies as they face a significant drop in export
Clean products*, base oils 2.00 15.60 revenue, but it will deprive the state of crucial funding. Export duty is channelled
Naphtha 3.70 28.60
into Russia’s National Wealth Fund, which Moscow will have to draw on to cover a
shortfall in budget revenues, finance minister Anton Siluanov said last month.
Dirty products † 6.80 52.00
Petroleum coke 0.40 3.30
Gdansk refinery runs hold up in March
Average Urals price ‡ ($/bl) 19.00 47.27
Refinery runs at Polish firm Grupa Lotos’ 210,000 b/d Gdansk plant fell only slightly
*gasoline, gasoil, jet kerosine †fuel oil, VGO last month despite a decline in products demand because of Covid-19. Crude runs
‡during the 15 Mar-14 Apr monitoring period
of 208,000 b/d were down by 2.5pc from February, and only 1pc below the first-
quarter average, Lotos says. Diesel output of 520,000t in March was 19pc higher
than in February, when Gdansk’s delayed coker was partially shut. The coker’s full
restart drove a near-trebling of petroleum coke output to 39,000t last month.
Kremenchug stocks up
Ukrainian crude and condensate sales Ukraine’s only operational refinery, the 363,000 b/d Kremenchug, bought
Seller Price $/t* Vol ’000t
608,000t of domestic crude through an auction on the UEB exchange on 7 April
— probably for delivery by the end of July, traders say. Companies linked to Privat
Crude 608.2
Group, which controls Kremenchug, paid a record low $160.10/t ($21/bl) for crude
Ukrnafta 160.10 529.3
sold by auction in Ukraine. State-controlled Ukrnafta and private-sector produc-
Ukrnafta/private-sector JV 160.10 12.0
UkrKarpatOil 160.10 61.9
ers with joint operating agreements are legally required to sell crude through
Kashtan Petroleum 160.10 5.0
UEB. Kremenchug received 195,600t of BTC Blend and Azeri Light by pipeline
Condensate 3.7 from the Black Sea port of Odessa in January-March, up from 151,500t a year
Ukrnafta 190.70 3.7 earlier. It also took 25,500t of Libyan Esharara crude in the first quarter and
*National Bank of Ukraine hryvnia exchange rate about 80,500t of US Bakken at the end of March — the first supplies since August-
27.08:$1 on 7 Apr; excl. 20% VAT
October. Kremenchug runs about 200,000 t/month (50,000 b/d) of crude.

Stock Markets
Energy shares 15 Apr RTS slips as crude falters

±8
52 52 Russia’s RTS index fell by 6pc on the week — half the previous week’s gains — to
Russia $ 15 Apr week week
Apr
low high close at 1,047 points as the rouble resumed its fall against the dollar after a brief
period of stability. Oil prices are now back below $20/bl on doubts about whether
Indexes the latest Opec+ cut deal will be enough to ease the global crude supply glut.
RTS 1,046.88 -67.72 808.79 1,651.82 Russia’s finance ministry has published statistics for the first quarter show-
RTS Oil & Gas 164.56 -16.45 122.95 289.57 ing that overall budget revenues were Rbs4.73 trillion ($63.8bn). This includes
52 52
Rbs1.78 trillion of oil and gas revenues, which were down by 10pc on the year.
Oil & gas issuer 15 Apr ±8 Apr week week Sberbank also points out a 10pc fall in March budget revenues from oil and gas,
low high reflecting the drop in prices.
Bashneft 21.51 -1.05 15.16 27.55 And budget revenues will face an even bigger hit next month from the drop in
Gazprom 2.46 -0.13 2.45 4.24 oil prices, because Russia’s monthly oil export duty rates are calculated based on
average prices up to the middle of the previous month, Sberbank says. The bank
Rosneft 4.10 -0.45 2.84 6.06
expects the drop in prices in March to translate into a significant drop in oil and
Lukoil Holding 59.78 -8.71 46.28 86.05
gas tax revenues in April.
Novatek 12.69 -1.35 8.63 17.46 State revenues will also take a hit from the non-oil sector because of the
Gazpromneft 4.11 -0.407 2.88 5.92 country’s Covid-19 lockdown, and as a result Sberbank predicts a sizeable budget
deficit this month. But it points out that the finance ministry will have no prob-
Surgutneft. 0.45 -0.04 0.37 0.85
lem covering this from the National Wealth Fund.
Surgutneft.
0.49 -0.03 0.48 0.70 If the average oil price this year is around $30/bl, Sberbank expects a budget
pref
Tatneft 6.81 -1.16 4.70 10.58 deficit of 2.5-3.0pc of GDP, but says that “much will depend on the amount of
Transneft pref 1,946 -155.67 1,780 2,563
support the government provides for the economy, which has been hit hard by
the spread of the coronavirus and the quarantine measures”.
Utilities
Considering the potential consequences of the latest Opec+ deal for the Rus-
Mosenergo 0.025 -0.002 0.017 0.033 sian oil sector, brokerage Aton expects Russian oil companies to remain under
ADRs and GDRs pressure. “The gradual oil price recovery that is expected to follow as produc-
tion starts to decrease will not offset the agreed production cut of around 18pc
Gazprom 4.86 -0.25 3.94 8.50
excluding gas condensate,” Aton says.
Lukoil 60.01 -8.24 45.12 108.87
Rosneft this week continued to buy shares on the open market under its
Mosenergo € 1.15 -0.03 0.88 1.88 $2bn buy-back programme, which has been under way since 23 March. So far
Novatek 126.70 -11.60 88.45 220.80 this week, Rosneft has repurchased 2mn shares and 73,000 of global depositary
receipts, paying a total of $9.3mn. Its overall buy-back spending in April has so
Central & Eastern Europe (local currency)
far amounted to $17mn.
Hungary
Mol 2,030 +89.00 1,501 3,398
Predictably weak
Latvia Novatek last week revealed in its preliminary operational results for the first
Latvijas Gaze 10.00 -0.10 8.10 10.60 quarter that gas production, including shares in joint ventures, increased by 1.4pc
Lithuania on the quarter and by 2.2pc on the year to 19.1bn m³. But its gas sales were down
Klaipedos Nafta 0.35 +0.016 0.30 0.44 on the quarter and on the year at 20.7bn m³, and Aton says sales were predict-
Poland ably weak because of the unfavourable macroeconomic environment.
PKN 62.00 -2.80 42.00 109.05 “The slump in gas prices accelerated in the first quarter due to the spread of
the coronavirus, with the situation exacerbated by a more than 50pc slump in oil
Grupa Lotos 60.78 -4.82 39.00 99.54
prices that will also affect the majority of longer-term gas supply contracts glob-
Romania
ally with a lag,” Aton says.
Rompetrol 0.040 -0.001 0.032 0.052
Slovakia Currency exchange rates (per $) 15 Apr
Slovnaft na na 85.00 118.00 Central and eastern Europe
Slovenia Bulgarian lev 1.79 Romanian leu 4.43 Georgian lari 3.13
Petrol 302.00 +1.00 255.00 395.00 Croatian kuna 6.97 Former Soviet Union Kazakh tenge 425.58
Czech koruna 24.82 Russian rouble 73.31 Turkmen manat 3.51
Independent E&P companies (UK pence)
Hungarian forint 322.46 Azeri manat 1.70 Ukrainian hryvnia 27.29
JKX 18.00 -1.00 13.50 60.50 Polish zloty 4.17 Belarusian rouble 2.4535 Uzbek som 10,121.00

Products markets
Demand remains under Covid-19 cloud

HSFO: 180cst Singapore diff to 3.5% NWE
• Products markets remain under pressure, with Covid-19 lockdown measures
$/t Diff
160
causing demand declines of as much as 80pc across much of western Europe, and
140 available storage capacity for surplus supply filling fast.
120
100
80 • Diesel fixtures from the Baltic to northwest Europe totalled 120,000t this week,
60
-
up from 96,000t last week. Litasco, Glencore and Shell booked loadings for 17-20
40
20
April. Litasco and Neutrade booked a total of 60,000t of low-sulphur diesel for
0 delivery to the Mediterranean from the Black Sea, down from 74,000t last week.
Apr Jul Oct Jan Apr
19 20 French diesel premiums to North Sea Dated narrowed by almost $1/bl to $15.05/bl.
Heating oil: New York Harbor vs NWE • Around 194,000t of fresh naphtha bookings emerged this week at Baltic and
Black Sea ports, down from 348,000t last week. Historically low refining margins
$/t Diff
20 east of Suez weighed on Asia-Pacific demand, with only 97,000t booked to head
NWE = 0
10 east from Russian ports. The remaining 97,000t has European and US Atlantic
0
coast delivery options, but low demand in both regions could mean that product
-10
goes into storage. Naphtha’s discount to Dated narrowed by $4.16/bl to $2.22/bl.
-20 --
-30
-40 • Low-sulphur vacuum gasoil (VGO) cargoes reached parity to Ice June Brent on a
-50 cif northwest Europe basis, with high-sulphur VGO at a 25¢/bl discount. Demand
Apr Jul Oct Jan Apr
19 20 from the marine fuel pool has provided a floor for low-sulphur VGO, while high-
sulphur VGO has been buoyed by demand for storage.
Heating oil: cif NWE/Mediterranean
$/t Diff • Northwest European high-sulphur fuel oil (HSFO) premiums to Urals crude
700
widened to $5.79/bl from $5.17/bl. Extensive Russian refinery maintenance and
600 refinery run cuts in Asia-Pacific helped buoy HSFO margins, as bunkering demand
500 remained more robust than that for motor fuels.
400 -
Product prices 15 Apr

300
NWE $/t ±8 Apr
Mediterranean
200
Apr Jul Oct Jan Apr NW Europe (cif)
19 20
Heating oil 226.50 - 227.50 -42.00
Diesel 245.25 - 246.25 -42.00
Russian HSFO cif NWE/Mediterranean
$/t Fuel oil 3.5% sulphur 126.00 - 130.00 -23.00
Diff
500 Gasoline 95R unleaded 200.00 - 200.50 +15.25
NWE
400
Mediterranean Naphtha 65 para 139.00 - 140.00 -4.25
300 Jet 181.25 - 182.25 -36.00
200 - VGO 1.6% sulphur 182.50 - 185.75 -20.88
100 West Mediterranean (cif)
0 Heating oil 211.75 - 212.75 -46.00

Apr Jul Oct Jan Apr
19 20 Fuel oil 3.5% sulphur 126.00 - 130.00 -24.50
Gasoline 95R unleaded 204.75 - 205.25 +10.75
Naphtha 65 para 125.75 - 126.75 -3.75
Freight Rates 15 Apr
WS $/t Rotterdam barges (fob)
Heating oil 230.75 - 231.25 -38.75
Black Sea-Mediterranean
Clean 30,000t 230.0 25.67 Fuel oil 3.5% sulphur 123.00 - 127.00 -23.00
Dirty 30,000t 160.0 16.22 VGO 1.6% sulphur 175.50 - 179.00 -21.00
Baltic-UKC
Clean 30,000t 135.0 12.22 Futures
Dirty 30,000t 160.0 14.74 Ice gasoil May 260.75 -37.00

Crude markets
Urals weakens in May trade

• After a brief increase at the end of last week, outright crude prices have
slumped again, although they have not yet reached the depths seen at the start
of this month. The North Sea Dated benchmark closed down by $4.64/bl on the
week at $17.89/bl.
• May Urals trade kicked off at wide discounts to the benchmark, despite tight
preliminary export schedules. Just over 2mn b/d of Urals is scheduled to load in
early May, unchanged on early April but down by 9pc on the full-month plan.
• In northwest Europe, Sinopec trading arm Unipec picked up a 100,000t Baltic
Urals cargo for 30 April-4 May loading from trading firm Vitol at a $4.30/bl
discount to Dated. Unipec bid unsuccessfully for 19-23 April-loading crude at a
$3.75/bl discount late last week. Unipec’s May cross-month cargo will probably
head to Asia-Pacific following record eastbound shipments this month — up to
720,000 b/d from Baltic terminals to date, against just 300,000 b/d in March.
• CPC Blend discounts to Dated narrowed on demand in the Mediterranean for

crude to put into floating storage. Total bid unsuccessfully for an 85,000t cargo
of CPC Blend loading on 25-29 April at a $9.95/bl discount, looking for a cargo on
board a tanker with a 60-day floating storage option. It subsequently picked up a
cargo from trading firm Glencore at a narrow $7.50/bl discount, traders say.
• BTC Blend and Azeri Light values firmed slightly against the benchmark,
although there is little sign of May demand next month in key market Italy. May
supplies are valued at $2-3/bl discounts to the benchmark.
FSU oil prices ($/bl) 15 Apr
Primorsk 12.36
Mazeikiai
Urals (Germany) 27.10
North Urals (Poland) 26.87
Sea
a
zhb
BELARUS Dru
Rotterdam POLAND Mozyr
GERMANY Adamowo
Urals (Belarus) 19.32
Urals 13.59
CZECH
REPUBLIC Budkovce
Fenyeslitke UKRAINE
Urals (Slovakia) 26.36
HUNGARY
ROMANIA
Urals (Hungary) 26.36
Black
Sea
Urals 13.39
CPC Blend 10.39
Azeri Light 14.64
Augusta
Mediterranean Siberian Light 12.39

Crude markets
Crude prices 15 Apr

NW Europe $/bl ±8 Apr ± N Sea Dated
North Sea Dated 17.86 - 17.92 -4.64 —

Urals (cif) 13.56 - 13.62 -4.19 -4.30
Urals Primorsk (fob netback) 12.33 - 12.39 -4.00 -5.53
Mediterranean
Urals 80kt (cif) 13.36 - 13.42 -5.59 -4.50
Urals 135kt (cif) 13.06 - 13.12 -5.59 -4.80
Urals 80kt Novo (fob netback) 11.82 - 11.88 -5.47 -6.04
Urals 135kt Novo (fob netback) 11.35 - 11.41 -5.81 -6.51
Siberian Light (cif) 12.36 - 12.42 -4.64 -5.50
CPC blend (cif) 10.36 - 10.42 -2.89 -7.50
CPC Terminal (fob netback) 8.77 - 8.83 -3.16 -9.09
Azeri Light (cif) 14.61 - 14.67 -3.64 -3.25
BTC (cif) 14.86 - 14.92 -3.64 -3.00
BTC Ceyhan (fob netback) 13.89 - 13.95 -3.45 -3.97
Tengiz (cif) 10.46 - 10.52 -2.89 -7.40
Kirkuk (fob) 13.46 - 13.52 -4.64 -4.40
Saharan Blend (fob) 12.96 - 13.02 -4.94 -4.90
Druzhba monthly prices Mar-2020 ± N Sea Dated*

Low High
Slovakia 26.11 - 26.61 -5.60 -5.10

Hungary 26.11 - 26.61 -5.60 -5.10
Poland 26.11 - 27.62 -5.60 -4.09
Germany 26.71 - 27.49 -5.00 -4.22
*monthly average
±8 Apr ± N Sea Dated
Belarus 19.29 - 19.35 nc +1.43
Far East ±Dubai swaps
Azeri Lt, CPC Blend & Sib Lt vs Dated ESPO Blend 25.60 - 25.70 -5.09 -0.90
$/bl Diff Sokol (cif) 24.18 - 24.28 -0.96 -6.25
10 Sakhalin Blend (fob) 22.43 - 22.53 -3.21 -8.00
Azeri Light CPC Blend Siberian Light
8
6
4
2 CIF basis Singapore ± N Sea Dated
0
-2
----
BTC Blend 19.80 - 19.86 -3.45 +1.94
-4
-6 Urals (Black Sea) 17.52 - 17.58 -5.81 -0.34
-8
-10 North Sea Dated = 0
-12
Apr Jul Oct Jan Apr
Futures
19 20
Ice Brent Jun 27.69 -5.15 —
Urals differentials to North Sea Dated
$/bl Diff
6 Freight Rates 15 Apr
NWE Mediterranean
4 Black Sea-Mediterranean WS $/t
2
Crude 135,000t 135.0 13.46
0
Crude 80,000t 110.0 10.97
-
-2 Primorsk to UKC
-4 Crude 100,000t 90.0 8.27
North Sea Dated = 0
-6 Mediterranean/Black Sea-Far East
Apr Jul Oct Jan Apr
19 20 Crude 135,000t (lump sum) 6,000,000 44.44

FSU product exports

FSU product exports, Mar ’000t
Fuel oil Gasoil/Diesel/Heating oil Naphtha
±% YTD ±% YTD ±% YTD
Mar ±% Feb YTD Mar ±% Feb YTD Mar ±% Feb YTD
19 19 19
Baltic and northern ports 2,197 -27.4 7,425 -15.5 2,582 -14.7 7,987 11.4 1,141 5.7 3,153 -12.0
Arkhangelsk
Baltiysk
Kaliningrad (Svetly) 46 -30.6 169 80.6
Klaipeda 132 -22.3 291 -62.2 0 -100.0 24 -88.5
Liepaja
Murmansk
Primorsk 1,693 -4.5 5,066 16.0
Riga 0 -100.0 35 -81.2 7 na 25 -74.4 31 na 74 283.0
Sillamae† 66 -37.6 295 -29.6
St Petersburg† 157 -35.3 763 -4.2 387 54.1 904 94.1
Tallinn* 223 24.9 581 11.4 7 na 7 na
Ust-Luga 1,209 -32.1 4,256 -7.3 82 858.9 90 -43.6 939 1.0 2,648 -5.1
Ventspils 52 -53.2 201 -38.0 7 -98.6 669 -24.3
Vysotsk 358 -14.1 1,003 -15.2 353 -19.5 1,033 15.6 171 14.3 431 -10.4
Black Sea total 1,618 9.7 4,424 -8.6 2,256 17.8 5,712 28.7 576 -28.5 2,031 -0.3
Batumi 0 nc 15 -55.3 6 na 6 na
Chernomorsk (Ilichevsk)
Kavkaz 15 180.6 26 -22.5 33 -3.5 85 596.5
Kerch strait‡ 509 -18.2 1,446 174.0 13 -39.2 40 -43.0 0 -100.0 150 5.4
Kulevi 45 91.3 74 -53.7 14 na 14 na
Nikolaev
Novorossiysk 287 45.9 621 -49.6 1,268 10.9 3,301 23.0 218 -33.4 838 -9.1
Odessa 0 na 6 -91.9
Pivdenne (Yuzhny)
Sevastopol
Taganrog 3 na 3 na
Taman 369 43.2 1,105 -46.0 148 42.7 355 -12.5 5 -94.6 111 na
Tuapse 438 11.3 1,205 38.4 740 25.9 1,848 72.4 339 15.3 918 -2.3
Overland 1 -6.5 2 -98.6 49 -24.9 193 -31.2 72 -14.7 263 -37.1
China
Finland 4 na 5 na 36 -29.8 126 -6.1
Hungary
Moldova
Mongolia 45 -31.0 188 -32.3 1 na 4 -21.3
Poland 1 -6.5 2 -98.6 35 5.6 133 -52.3
Romania
Slovakia
Pacific total 156 -22.4 483 1,596.3 407 56.7 888 3.2 63 -45.9 298 28.5
Nakhodka 156 -4.6 364 na 371 105.4 699 15.9 0 -100.0 54 0.2
Slavyanka 0 -100.0 95 na 36 -38.8 161 -32.6
Vanino 0 nc 24 -15.7 11 -39.5 28 111.8
Vladivostok
Vostochny 0 -100.0 28 na 52 -25.2 216 31.1
Total Russia 3,972 -15.6 12,334 -10.6 5,294 0.5 14,780 15.9 1,852 -11.2 5,745 -8.4
*includes loadings from Alexela Paldiski terminal †includes product supplied by river ‡ loadings from floating storage (product supplied by river)

FSU product exports

FSU product exports, Mar ’000t
VGO Gasoline Jet-kerosine
±% YTD ±% YTD ±% YTD
Mar ±% Feb YTD Mar ±% Feb YTD Mar ±% Feb YTD
19 19 19
Baltic and northern ports 491 230.4 1,064 -28.8 841 -21.1 2,558 16.6 125 -4.2 314 -11.5
Arkhangelsk 72 -26.0 277 39.0 40 96.9 59 141.7
Baltiysk
Kaliningrad (Svetly) 43 34.1 87 20.5
Klaipeda 69 na 93 251.7 184 41.1 441 -0.3
Liepaja
Murmansk 0 nc 22 na
Primorsk
Riga 86 570.4 119 216.3
Sillamae† 88 135.2 156 -7.6 0 nc 12 na
St Petersburg† 136 57.1 343 190.8 31 -3.3 61 27.6
Tallinn* 0 -100.0 21 58.8 110 -18.3 236 -43.5
Ust-Luga 100 na 162 -40.8 67 -36.7 239 50.7 54 -30.8 194 -31.4
Ventspils 279 -28.9 885 2.3
Vysotsk 98 473.0 289 -30.3 0 -100.0 240 na
Black Sea total 781 3.0 2,122 35.3 30 0.2 118 136.8
Batumi
Chernomorsk (Ilichevsk)
Kavkaz 10 211.8 13 na 0 -100.0 9 -81.9
Kerch strait‡ 0 -100.0 162 -44.5 30 na 30 na
Kulevi 25 na 25 na 0 -100.0 19 na
Nikolaev
Novorossiysk 163 -21.4 417 3.8
Odessa
Pivdenne (Yuzhny)
Sevastopol
Taganrog
Taman 440 12.5 1,124 74.9 0 nc 60 na
Tuapse 143 21.6 381 64.3
Overland 66 147.0 130 -18.1 0 -100.0 4 -75.4
China
Finland
Hungary
Moldova
Mongolia 29 8.5 93 -36.0 0 -100.0 4 -73.8
Poland 37 na 37 179.9
Romania
Slovakia
Pacific total 244 192.6 470 -5.3
Nakhodka
Slavyanka 134 258.2 224 7.4
Vanino 110 139.3 246 -14.5
Vladivostok
Vostochny
Total Russia 1,516 53.2 3,656 2.7 937 -16.5 2,806 16.8 125 -5.7 318 -14.3
All products 13,696 -4.2 39,639 1.2
*includes loadings from Alexela Paldiski terminal †includes product supplied by river †† loadings from floating storage (product supplied by river)

Netbacks
Russian crude netbacks ($/bl) 15 Apr

Novorossiysk Novorossiysk
Primorsk Ust-Luga
(Urals) (Sib Light)
Russian oil production Urals cif 13.59 13.59 13.39 12.39

mn b/d
Freight 1.08 1.08 1.35 1.32
11.4
Insurance 0.00 0.00 0.00 0.00

11.3
Demurrage and navigation dues 0.15 0.15 0.19 0.19
11.2
Urals fob/daf 12.36 12.36 11.85 10.88
11.1
Port loading 0.30 0.34 0.44 0.43
11.0
Jan Apr Jul Oct Jan Export duty 7.24 7.23 7.22 7.04
19 20
Transit through Belarus — — — —
Transit through Ukraine — — — —
Russian pipeline crude exports Nizhnevartovsk
mn b/d Tariff through Russia 4.35 4.22 4.15 3.76

Russian crude Transit crude
6
Netback to Nizhnevartovsk 0.47 0.57 0.04 -0.35
5
4 Domestic market price, ex-VAT 12.01 12.01 12.01 12.01

3 Export margin -11.54 -11.44 -11.97 -12.36
2
Samara
1
0 Tariff through Russia — 2.14 2.04 —

Jan Apr Jul Oct Jan
19 20 Netback to Samara — 2.65 2.15 —
Domestic market price, ex-VAT — — — —
Export margin — — — —
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Argus FSU Energy

Volume XXV, 15, 16 April 2020

Russia plans flexible approach

Too little, too late

Copyright © 2020 Argus Media group Page 2 of 23

Issue Ref: 130219

Shell exits Russian joint venture

Copyright © 2020 Argus Media group Page 3 of 23

Gazpromneft ready for output, capex reductions

Rosneft may cut capex, bank says

Copyright © 2020 Argus Media group Page 4 of 23

Gazpromneft plans refining cut

Reprieve for expiring licences

Chevron reduces Tengiz work because of Covid-19

Copyright © 2020 Argus Media group Page 5 of 23

Kazakhstan expects production reduction

Transneft predicts stable crude quality

Crude quality in Transneft system

Novorossiysk (Urals) 30.14 -0.33 1.53 0.01 1.50 1.55

Copyright © 2020 Argus Media group Page 6 of 23

Gazprom presses on with PoS 1 plans

Copyright © 2020 Argus Media group Page 7 of 23

Novatek sells less LNG

Duma approves LNG export amendments

Gazprom plans storage boost

Planned new storage sites* mn m³ Storage expansion projects*

Novomoskovskoye Tula, Tula region 340 Kaliningrad 174 800 na 12

Copyright © 2020 Argus Media group Page 8 of 23

More Urals moves east

US takes more fuel oil in March

Copyright © 2020 Argus Media group Page 9 of 23

EXPORTS AND TRADE

Gazpromneft Arctic crude loadings fall

Non-Transneft Arctic crude exports ’000t

Varandey Blend 618.3 4.3 1,728.6 -17.2

Total crude† 1,310.2 -10.3 4,246.0 -12.6

Total condensate 95.7 -34.7 316.1 -9.3

Arco, Novy Port Light supplies  ’000t

Copyright © 2020 Argus Media group Page 10 of 23

EXPORTS AND TRADE

Varandey Blend supplies  ’000t

Arctic condensate supplies  ’000t

Copyright © 2020 Argus Media group Page 11 of 23

exports and trade

Rail gasoil exports surge

Copyright © 2020 Argus Media group Page 12 of 23

EXPORTS AND TRADE

CPC Blend exports to rise in May

01-02 TCO 135.5 18-19 TCO 99.0

14-15 KPO 85.0 29-30 Total 135.0

14-15 Shell Trading 90.0 30-31 Total (ExxonMobil) 90.0

15-16 TCO 94.0 30-31 Shell 80.0

15-16 KMG 93.5 31-01 KPO 87.0

Copyright © 2020 Argus Media group Page 13 of 23

exports and trade

Rail crude exports at 10-month high

Rail crude exports ’000t

Svetly 20.0 -10.2 66.6 -10.7

Baltic Sea ports 20.0 -10.2 66.6 -10.7

Rail crude exports ’000t

Independent Pek Kadzherom Belarus 1.3

Copyright © 2020 Argus Media group Page 14 of 23

exports and trade

Arco, Novy Port Light supplies ’000t

Varandey Blend supplies ’000t

Arctic condensate supplies ’000t

FSU oil prices ($/bl) 15 Apr

Russian oil production Urals cif 13.59 13.59 13.39 12.39

Russian pipeline crude exports Nizhnevartovsk

Argus FSU Energy is published by Argus Media group