Thu. Dec 3rd, 2020

Transneft’s pumping rate for nine months sagged due to the OPEC + agreement. This was especially reflected in the third quarter, during which export supplies fell by almost a quarter and the total volume of transportation – by 17%. Due to the decline in supplies, the state’s consequences are not ready to compensate; the company will have to optimize costs.

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Oil exports through the Transneft system in the third quarter of 2020 decreased by 23.8% to 47.5 million tons, including non-CIS countries – by 24.4% to 43.3 million tons compared to the same period of the previous of the year. The third quarter was the worst for the company in a year. In general, the volume of oil transportation decreased by 16.7% to 105.6 million tons. Raw material supplies to Russian refineries fell by 10.1% to 58 million tons. This figure decreased by 3.7% for nine months compared to January-September 2019 (to 176.5 million tons).

In the nine months of 2020, oil transportation amounted to 334.8 million tons (a decrease of 7.5%), export supplies – 158.2 million tons (a decrease of 11.5%), including to non-CIS countries – 148.9 million tons, which is 9.8% lower than the level of nine months of 2019.

As Kommersant explained in Transneft, the main reason for the significant drop in indicators was the reduction in production by companies under the OPEC + deal.

This trend was most pronounced in the third quarter of 2020 in connection with the agreement on limiting oil production throughout this quarter, ”the company said (the agreement is valid from May 1).

Simultaneously, the volume of supplies of petroleum products at the request of companies in January-September 2020 increased by 5.9% (21.6 million tons). Total pumping increased by 1.8% to 28.9 million tons. Of these, 74.7% were exported, and 25.3% of the total volume of oil products transportation to the domestic market. In the third quarter of 2020, the total volume of refined products’ transportation decreased by 1.1% compared to the third quarter of 2019.

The decrease in pumping rates will negatively affect the financial performance of Transneft.

“In connection with a significant reduction in the volume of oil transportation through the company’s system since May 2020 as a result of the entry into force of an agreement on limiting oil production by Russian producers and the lack of compensation by regulating bodies for falling volumes of transportation and, as a result, proceeds from tariff sources, Transneft is taking a set of measures to reduce operating costs further, and also developed a set of measures to optimize capital expenditures within budget stress scenarios, ”the company says.

Also, Transneft reported that Rosneft and the French concern Total were finally able to agree on the amount of compensation for the substandard oil supplied to the German Leune refinery in April 2019, which was contaminated with organochlorine compounds due to an incident on the Druzhba oil pipeline. “. The company clarified that compensation was calculated based on $ 15 per ton. Its size and volume of oil are not disclosed in Transneft.

 

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