First Vice President of Transneft Maksim Grishanin answered topical questions of investors and analysts during a teleconference organised to discuss the Company's newly published IFRS statements for the Q4 and 12 months of 2020.
Compensation Issues Have Been Settled
According to First Vice President, Transneft has settled or is very close to settling the issues of paying compensations for contaminated crude oil, resulted from the force majeure at the Druzhba oil pipeline.
“We formed a RUB 29.8 billion reserve fund of which RUB 11.3 billion had been used as of the end of 2020, with RUB 18.5 billion still left, and negotiations with consignors continue,” he said.
“The main consignor that has not settled most issues with us yet is Rosneft; as for other oil companies, we have either reached agreements with them or will do so in the next 1-2 months,” added Mr. Grishanin.
Plans for Oil and Petroleum Products Transportation
“Transneft expects the crude oil turnover to remain at the level of 2020, i.e., 442 million tonnes, despite the planned reduction to 439.1 million tonnes,” said First Vice President during the teleconference.
“These are just plans, but we expect the turnover to remain at the level of 2020,” he said.
As for petroleum products, the Company anticipates transported volumes at the level of the previous year, he pointed out. According to the Company’s presentation, 37.9 million tonnes of petroleum products were transported in 2020, with 36.3 million tonnes planned for 2021.
Mr. Grishanin also informed that Transneft hopes to recover crude oil export volumes after the parameters of the OPEC+ deal are eased; in particular he mentioned a positive influence of this factor on the turnover at the port of Novorossiysk where oil shipment volumes went down most steeply compared to other Russian ports.
“This turnover reduction mostly affected the southern destinations. The reduction of oil at Kozmino and Primorsk ports as well as the Druzhba oil pipeline is not as steep as in the southern direction. We believe that if the provisions of the OPEC+ deal are relieved, our turnover at the port of Novorossiysk will recover,” he said.
According to First Vice President, as of now, the available export capacity is present not only for the southern direction. “The export via Druzhba can also be increased, even in the direction of Primorsk, but I cannot give specific figures due to them being confidential,” he pointed out.
The capital investments of Transneft in 2021 will most likely be less than RUB 232 billion. He added that additional capital investments would be related to implementing the strategy of the NCSP development.
“RUB 232 billion is the upper limit, the NCSP factor being determining. The level of investments most likely will be lower,” First Vice President pointed out.
First Vice President stated that the level of capital investments in 2021 would amount to RUB 208 billion and this figure won’t change.
Meanwhile in 2022, the capital costs of Transneft may rise to the level of RUB 240 billion, and to RUB 250 billion in 2023,” Mr. Grishanin predicted.
Transneft plans to use 50% of its net profits according to IFRS to pay out dividends for 2020, First Vice President informed.
“As you probably know, our government has made up their minds concerning the approaches to the Company’s dividend policy and approved 50% of net profits according to IFRS as dividends. Accordingly, the dividends for 2019, paid out in 2020, were roughly distributed following this pattern. The dividends for 2020 will be paid following the same principle in 2021,” he noted.
Mr. Grishanin also specified that the dividends of Transneft for 2020 are expected in the amount of RUB 9,250 per share.
“The Caspian Pipeline Consortium plans to allocate around USD 1 billion for dividends to be paid out to its shareholders in the next two years,” said First Vice President of Transneft at the teleconference.
“The CPC states that they would pay out about USD 1 billion as dividends over the next two years; we’ll have 7% of this amount,” he said.