The state found one more way to support NOVATEK

The government of Russia found one more way to support NOVATEK. The sanctions were imposed on it. In particular, the Ministry for natural resources of the Russian Federation agreed to prolong duration of licenses for several large extractive fields of the company and also to postpone terms of input to operation of the expensive project «Arctic LNG-2», what allows the company concentrating on «Yamal LNG».

As RBC daily informs, the head of NOVATEK Leonid Mikhelson sent the letter to the head of the government Dmitriy Medvedev with the request to support the company. Access to the American capital market is closed for the company because of the sanctions imposed by the USA. As he notes, the company fulfills two large projects, the total investments to which will exceed $30 milliard. Taking into consideration growing political and economic pressure on gas sector of Russia, risks, financial, technological and resource restrictions appearing in this connection, NOVATEK considers expedient to concentrate its financial and production potential on their fulfillment, as Leonid Mikhelson writes to Dmitriy Medvedev. At that, he asks Dmitriy Medvedev to entrust the Ministry for natural resources to prolong duration of licenses for several extractive fields in Yamal as a measure of support.
The talk is about the licenses for exploration and development of Samburg field, Yevo-Yakhinskoye and Yaro-Yakhinskoye fields of subsoil areas of federal significance: the licenses for them act till 2018, and NOVATEK asks to make them perpetual. It is offered to prolong action of the license for Malo-Yamalskoye gas condensate field on other 20 years, till 2039. On Zapadno-Urengoyskoye field, Severo-Yubileynoye field and Raduzhnoye field NOVATEK asks to postpone terms of conducting of geological prospecting to 2020, terms of beginning of extraction – to 2025. On Geofizicheskoye field it is offered to postpone the beginning of extraction till 2030. This area should become the resource base for the second LNG-project – «Arctic LNG-2», the first stage of which it was planned to start up in 2022.
Earlier investments to Geofizicheskoye field and Salmanovskoye field (also should become the base for «Arctic LNG-2») were evaluated in 209 milliard rubles.
Prime minister responded on the request of Leonid Mikhelson quickly enough and sent the corresponding instruction to the head of the Ministry for natural resources Sergey Donskoy. He supported the suggestions of NOVATEK. In his answer to the government Sergey Donskoy notes that the Ministry for natural resources considers expedient to support the enumerated suggestions. Rosnedra (The Federal agency on subsoil use) will be ready to bring in changes to the license agreements, after NOVATEK sends corresponding applications in the set order.
His decision the minister explains with the necessity to support the company in the conditions of the sanctions. According to the words of Sergey Donskoy to RBC, the decision to prolong terms of the license will allow the company – the future provider of liquefied natural gas — to concentrate financial resources on fulfillment of acting projects and to increase their attractiveness for investors.
The most obvious profit for NOVATEK is in postponement of terms of development of Geofizicheskoye field and fulfillment of the project «Arctic LNG-2». Their startup will require for milliards of investments, as an analyst of UBS Maksim Moshkov notes. Now NOVATEK can allocate these funds to «Yamal LNG». And prolongation of licenses of already acting fields means that the company will not be busy with these issues in the future. Having financed building of infrastructure for «Yamal LNG» and having agreed for prolongation of terms of input to operation of Geofizicheskoye field, the state becomes a more interested side in success of this project («Yamal LNG»). It is obvious that in the case of worsening of the situation the state will give additional financing to it, as he considers.
NOVATEK really counts on financial support from the side of the state. The meeting of Dmitriy Medvedev and Leonid Mikhelson took place on the 9th of September. Then Dmitriy Medvedev declared that the state would continue supporting Russian business in the conditions of the western sanctions. As Prime Minister says, before the face of such inequitable acts one should not doubt in so that the state always rendered and will render support to Russian business. Last week, within the economic forum in Sochi, the deputy minister of economic development Nikolay Podguzov declared that NOVATEK had applied to the ministry with the application for receiving funds from the Russian National Wealth Fund in the size 100 milliard rubles for the project «Yamal LNG». He notes that the ministry is ready to scrutinize the application of the company quickly enough.
Oil and gas companies consider that the state have other instruments to support the branch, which suffered from American and European sanctions. Thus, LUKOIL asks to give access to undistributed fund of hydrocarbon fields, as the deputy minister for energy Kirill Molodtsov declares. As he notes, the Ministry for energy together with the Ministry for natural resources, the Ministry for economic development and the Ministry for finances at the present moment are elaborating the set of necessary instruments for support of oil companies in the conditions of the western sanctions, including, from the point of view of preferences on acting extractive fields.