Naftogaz Reports Y-o-y Lower Losses, Russia Struggles But Continues Talks With Shell
Ukrainian state-run energy company Naftogaz posted a first-half net loss of 4.5 billion hryvnia ($214 million), less than one-seventh of the loss it registered in the first 6 months of 2014.
According to the company, the losses were in part offset by profit from services related to natural gas transportation, and profits of subsidiaries and associated companies.
The company concludes in its note released on Wednesday that if it did not include the profit of daughter companies ‘the result would have been different.’
The Ukrainian company suffered a 50% depreciation of its national currency, which led to higher expenses to serve its foreign-denominated debt. Additionally, 38% of its losses were due to regulated prices.
‘(Naftogaz registered) UAH 8.9 billion of losses from the sale of natural gas to the population (for cooking and heating, including through district heating company) at regulated prices that were 4-5 times lower than the purchase price of imported gas’ the company wrote on its website.
"We are laying the foundation for stable growth in the coming years," Naftogaz chief executive Andriy Kobolev said.
The currency-related losses explain that Naftogaz’ stability has to do with the larger political and financial stability of the country. Some punts fear a further decrease in the popularity of Prime Minister Arseniy Yatsenyuk. At the same time, some experts see some source of risk for Kiev in relation to Western interests’, and European teetering opposition to Russian policies.
On Wednesday, Ukraine’s President Petro Poroshenko had a meeting with US Vice President in New Your, its website reported.
Meanwhile, Bloomberg wrote that Rosneft and Gazprom are delaying some offshore drilling by two to three years because of sanctions and weaker oil prices, adding that Russia will drill two offshore wells in 2017, down from an original 14-well plan.
Nonetheless, Royal Dutch Shell reportedly continues negotiations with Gazprom for the Yuzhno-Kirinskoye gas field offshore Russia's Sakhalin island in the Pacific.