NOVATEK amid falling prices for oil and gas is going to reduce by a third investment in 2020 — up to 170 billion rubles, said a top company managers on the conference call. The company has shifted the terms of the project Finance for the project “Arctic LNG 2” on a year — for 2021, but still considering the possibility of increasing dividends.NOVATEK plans to reduce investment in 2020, said in a conference call with investors, chief financial officer mark following members were elected. So, according to him, capital expenditures will fall another 15% (or in total RUB 80 billion) to 170 billion rubles At the beginning of the year NOVATEK has already announced the reduction of investments by 20% from the originally scheduled for 2020 250 billion. the Major part of the company spends for the construction of LNG projects now in the final stages of construction of the fourth stage (0.9 million tonnes) flagship project LNG Yamal LNG (commissioning is scheduled for the fourth quarter). Further, the company planned to move on to other projects — Ob LNG (4.8 million tons) and “Arctic LNG 2” (19.8 million tons). In the second quarter NOVATEK cut its net profit by 40% in comparison with last year, to 41.5 billion rubles., EBITDA decreased by 45.6% to 37.6 billion RUB Revenue fell 34.1%, to 143.9 billion rubles. While in the second quarter net cash flow was negative (minus 57 billion rubles). According to Mark Jetway, the company maintains its growth forecast of gas production in 2020 is 2% or slightly above, and waits for the extraction of liquid hydrocarbons at the level of 2019.Mr. following members were elected said that NOVATEK, despite the difficult situation in the markets and reduction of the investment still aims to increase dividend payments and will discuss this issue at the next Board of Directors in August. “Our aspirations as a company — to increase our dividend payments at the expense of our results and the macro environment. We carry out all the recommendations on dividends and we will fulfill. Does this mean a change in policy, it will be discussed”,— said Mr. following members were elected.Now the company, according to the dividend policy to pay to shareholders not less than 30% of normalized net profit.Finally, NOVATEK due to the complicated situation with sales of LNG to world markets moved the timing of project Finance to the project “Arctic LNG 2” from the end of 2020 to 2021. While the project is financed by the contributions of shareholders — Total, CNPC, CNOOC, and Mitsui and JOGMEC. The investment decision has on the project made in September 2019, the investments are estimated at $20.3 billion NOVATEK expects gas prices on the world’s major hubs will begin to recover closer to the fourth quarter, but “the rebalancing will be confined to the resumption of LNG exports from the United States,” said Mr. following members were elected. Thus, according to the forecast, gas demand in China will increase by 4% year-exprs, and LNG imports to the country will reach 65 million tons. In Europe, where the decline in demand for LNG was due to the glut of the raw materials market, NOVATEK expects that LNG imports will be at the level of last year to 80 million tons “may be a little higher,” added Mr. following members were elected.Tatiana Woodpecker
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