the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Novatek
Company Analysis
SWOT Analysis
Russia’s largest private gas producer is going from strength to
strength. On the back of good Kremlin connections and solid
management, production and reserves continue to rise steadily
and profitability remained strong even in the 2008-2009
downturn. The big test for the company’s ambitions, however,
will come once its Arctic LNG projects get under way, as the
company will be challenging Gazprom’s export monopoly.
Strengths: Large untapped Arctic gas field
Good reserve base
Good Kremlin connections
Condensate cash flow
Financial Statistics
Sales
• RUB52.3bn (H110)
• RUB86.9bn (2009)
• RUB76.1bn (2008)
Net income/(loss)
• RUB18.1bn (H110)
• RUB25.7bn (2009)
• RUB22.9bn (2008)
Operating Statistics
Net Condensate Production
• 60,000b/d (2009)
Net Gas Production
• 32bcm (2009)
Proven Hydrocarbon Reserves
• 8.85bn boe (end-2009)
Weaknesses:
Remote deposits
High costs of LNG projects
Kremlin’s anxiety over foreign partners in the Arctic
Opportunities:
Northeastern Passage
Exports to Asia
Threats:
Lack of export markets
Resurgence of Gazprom’s monopolistic instincts
Cost inflation in the Arctic
Market Position
Novatek was founded in 2004 and is Russia’s largest private gas-focused player, focusing its activities on
Yamal-Nenets. Its proven reserves were 8.85bn boe by the end of 2009. The strong reserve growth was
attributed to new wells at the Yurkharovskoe and Sterkhovoye fields, and the discovery of new deposits
in the Khancheyskoe field. The company is majority-owned by its management, although Gazprom has a
19% interest. While still a minnow in comparison with the state gas giant, Novatek has been growing
steadily, reaching 32bcm of output in 2009, plus 60,000b/d of oil and condensate.
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