Novatek

Not to be confused with Novatek Inc, a US company that produces synthetic diamonds for the oil and gas industry.

Novatek OAO
Public (OAO)
Traded as MCX: NVTK
LSE: NVTK
Industry Oil and gas
Founded August 1994 (August 1994)
Headquarters Tarko-Sale, Russia
Key people
 Alexander Y. Natalenko (Chairman)
Leonid Mikhelson (CEO)
Products Petroleum
Natural gas
Revenue $8.02 billion[1] (2016)
$4.6 billion[1] (2016)
$3.95 billion[1] (2016)
Total assets $14.4 billion[1] (2016)
Total equity $9.81 billion[1] (2016)
Number of employees
 5,997 [2]
Website www.novatek.ru/en/

Novatek (Russian: ОАО «НОВАТЭК», MCX: NVTK, LSE: NVTK) is Russia's largest independent natural gas producer, and the seventh largest publicly traded company globally by natural gas production volume.[2] The company was originally known as OAO FIK Novafininvest. Novatek is based in the Yamalo-Nenets Autonomous Region in West Siberia, and maintains a sales office in Moscow.

Operations

In 2006, the company produced roughly 30 billion cubic metres (1.1 trillion cubic feet) of natural gas. By 2010, production had grown to 37.2 billion cubic metres (1.31 trillion cubic feet), and in 2011 to 52.9 billion cubic metres (1.87 trillion cubic feet)[3][4] In 2010, Novatek supplied 13% of the domestic market and accounted for 32% of non-Gazprom production.[5][4] Total reserves amount to 9.4 billion barrels of oil equivalent (5.8×1010 GJ) utilizing the Securities and Exchange Commission methodology[4][6]. Regarding dry sales gas, Novatek operates only in the domestic market, which is characterized by artificially low prices. Novatek's EBITDA (earnings before interest, taxes, depreciation and amortization) and net profit margin in 2011 were 49% and 32%, respectively.[4]

The major gas field owned by Novatek is the Yurkharovskoye field.[7] On 27 May 2009, Novatek bought a 51% stake in Yamal LNG from Volga Resources, which controls the giant South-Tambeyskoye field.[8] On 2 July 2010, Novatek purchased Tambeyneftegas, which holds the licence to the Arctic Malo-Yamalskoye field, located on the Yamal Peninsula and holding 161 billion cubic metres (5.7 trillion cubic feet) of natural gas and 14.4 million tonnes of gas condensate.[9] Novatek and Gazprom plan to build a liquefied natural gas plant in Yamalo-Nenets Autonomous Okrug.[10] Total S.A. will also be involved as a 20% shareholder.[11] Together with Total S.A., Novatek is developing the Termokarstovoye field in Yamal.[12]

In December 2010, Novatek bought a 51% stake in Sibneftegaz from Gazprombank (Itera owns 49% of the shares).[13] Sibneftegaz holds licences for exploration and production in the Yamal-Nenets region, including for the Beregovoye field, Pyreinoye field, Zapadno-Zapolyarnoye field, and the Khadyryakhinskiy licence area.[14] Sibneftegaz owns rights to develop oil and gas condensate fields with a total resource of 395.53 bcm of natural gas and 8.44 million tonnes of gas condensate.[15]

In 2011, Novatek was awarded licences to develop the Geofizichenskoye field, Salmanovskoye (Utrenneye) field, Severo-Obskoye field and Vostochno-Tambeiskoye field.[16]

In addition, Novatek has acquired the following companies:

  • SNP Nova - pipeline construction
  • Purneftegasgeologiya - natural gas
  • Tarkosaleneftegas - natural gas
  • Khancheyneftegas - natural gas
  • Yurkharovneftegas - natural gas

Novatek is developing the Sabetta port, in a joint project with the Russian government. This port would allow LNG exports by sea from the Yamal peninsula.[17]

Novatek has been ranked as being among the 13th best of 92 oil, gas, and mining companies on indigenous rights in the Arctic.[18]

Ownership

Novatek is a public company with shares traded on the London and Moscow stock exchanges. The major shareholders of Novatek are Leonid Michelson, the CEO, with around 28% of the shares, Volga Group with 23% of shares, Total SA with 16% and Gazprom with 9.4%.[19][20][20][21]

US sanctions

In July 2014, the US Government announced sanctions targeting the Russian energy sector[22] in retaliation to the Kremlin's annexation of Crimea. These sanctions target the provision of long-term (over 90 days) debt financing denominated in USD offered to companies with the Russian Energy Sector.

See also

References

  1. 1 2 3 4 5 http://www.novatek.ru/common/tool/stat.php?doc=/common/upload/doc/Novatek_FS_ENG_12m2016_FINAL.pdf.
  2. 1 2 "Novatek 2013 Annual Report" (PDF).
  3. ↑ Gyetvay, M., 2012. Fourth Quarter and Full Year 2011 Operational and Financial Results. Novatek, Moscow
  4. 1 2 3 4 Lunden, Lars; Fjaertoft, Daniel; Overland, Indra; Prachakova, Alesia (2013-10-01). "Gazprom vs. other Russian gas producers: The evolution of the Russian gas sector". Energy Policy. 61: 663–670. doi:10.1016/j.enpol.2013.06.055.
  5. ↑ Madick, G., 2011, Novatek—Dawn of a New Decade. In: Proceedings of Deutsche Bank Global Emerging Markets One-on-One Conference, New York. http:// www.novatek.ru/common/upload/doc/2011.09.07-09–DB_NYC_GEM_1on1.pdf
  6. ↑ Novatek, 2012. NOVATEK Announces Year-end 2011 Reserves. Press Release. http:// www.novatek.ru/en/press/releases/printable.php?print=1&id_4=500
  7. ↑ "Novatek boosts flow from Arctic field". Upstream Online. NHST Media Group. 2009-10-19. Retrieved 2010-07-02.
  8. ↑ Zhdannikov, Dmitry (2009-05-27). "Russian oil trade king buys more gas assets". Reuters. Retrieved 2010-07-02.
  9. ↑ Bachman, Jessica (2010-07-02). "Russia's Novatek acquires new arctic field". Reuters. Retrieved 2010-07-02.
  10. ↑ Pitt, Anthea (2010-06-21). "Russian duo team up in Yamal". Upstream Online. NHST Media Group. Retrieved 2010-07-02.
  11. ↑ "Total to buy Novatek stake for $4bn". Upstream Online. NHST Media Group. 2011-03-02. (subscription required). Retrieved 2011-03-03.
  12. ↑ "Putin nod for Total-Novatek plan". Upstream Online. NHST Media Group. 2009-06-24. Retrieved 2010-07-02.
  13. ↑ "Novatek offers Sibneftegaz buyback". Upstream Online. NHST Media Group. 2011-01-21. Retrieved 2011-01-23.
  14. ↑ Begum, Aleya (2010-12-17). "Novatek seals Sibneftegaz stake". Upstream Online. NHST Media Group. Retrieved 2011-01-23.
  15. ↑ Soldatkin, Vladimir (2010-11-16). "Russia's Novatek to pay $900 mln for Sibneftegaz". Reuters. Retrieved 2011-02-19.
  16. ↑ "Novatek wins new Yamal licences". Upstream Online. NHST Media Group. 2011-08-30. Retrieved 2011-08-30.
  17. ↑ "Construction of Sabetta port to start this summer". Barents Observer. 17 April 2013. Retrieved 12 January 2015.
  18. ↑ Overland, Indra (2016). "Ranking Oil, Gas and Mining Companies on Indigenous Rights in the Arctic". ResearchGate. Arran. Retrieved 2 August 2018.
  19. ↑ Paxton, Robin (2010-03-05). "Timchenko's fund becomes largest Novatek owner". Reuters. Retrieved 2010-07-02.
  20. 1 2 "Novatek sale 'below market price'". Upstream Online. NHST Media Group. 2011-02-10. (subscription required). Retrieved 2011-02-15.
  21. ↑ http://www.novatek.ru/en/press/releases/index.php?id_4=762
  22. ↑ http://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20140716.aspx
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