Novatek
Since 1994
Russia
Central Federal District of the Russian Federation
Moscow
117420, Nametkin St., 12a
Top managers:
Mikhelson Leonid Viktorovich
Gennady Nikolaevich Timchenko
Natalenko Alexander Egorovich
Owners:
Mikhelson Leonid Viktorovich - 25%
Gennady Nikolaevich Timchenko - 23%
Total - 19%
Gazprom - 10%
For April 2019
The company is engaged in the exploration, production and processing of natural gas and liquid hydrocarbons.
Owners
Aktivs
According to 2017 data, it ranks 6th in gas production and 3rd in proven gas reserves in the world. The structure includes more than 20 subsidiaries and affiliates located in Russia and abroad. There are more than 7,000 highly qualified specialists in the state.
In 2010, all fields and license areas of NOVATEK are located in the Yamal-Nenets Autonomous Okrug of the Russian Federation. Yamal-Nenets Autonomous Okrug is the world's largest natural gas production region, accounting for more than 90% of total natural gas production in Russia and approximately 20% of global gas production.
Performance indicators
2023
Debt reduction by 8 times to 9.24 billion rubles
By the end of 2023, Novatek's net debt amounted to 9.24 billion rubles against 73.95 billion rubles two years earlier. The Group reported these figures in accordance with International Financial Reporting Standards (IFRS) in February 2024. At the same time, the data for 2022 are not provided, the statements for this period under IFRS (there were only data on RAS) were not published.
In 2023, Novatek earned 1.37 trillion rubles in revenue, and the company's net profit amounted to 463.03 billion rubles. Normalized EBITDA, taking into account the share in EBITDA of joint ventures, reached 889.8 billion rubles.
Net cash received from the Group's operations amounted to RUB 433.3 billion in 2023. Cash used to pay for capital investments amounted to 223.8 billion rubles.
It also follows from Novatek's materials that the company's hydrocarbon production at the end of 2023 amounted to 645 million BOE. The average daily production is 1.77 million BOE/day.
Novatek's main income comes from the sale of natural gas, while in fact we are talking about two types of goods that differ in terms of sales geography, delivery method and price:
- pipeline natural gas (TPG) - sold within Russia and delivered via a pipeline controlled by Gazprom;
- liquefied natural gas (LNG) - sold in foreign markets, both directly and through joint LNG projects. Prices and volumes of supplies are highly dependent on external conditions and fluctuations in quotations at large international gas hubs.[1]
Gas production growth by 0.3% to 82.39 billion cubic meters
At the end of 2023, Novatek increased gas production by 0.3% to 82.39 billion cubic meters from 82.14 billion a year earlier. The company published such data on January 17, 2024.
It also follows from Novatek's materials that in 2023 the company's hydrocarbon production amounted to 644.7 million barrels of oil equivalent (boe), an increase of 6 million boe, or 0.9%, compared to a year ago.
The total volume of natural gas sales, including LNG, in 2023 amounted to 78.63 billion cubic meters. m, which is 2.7% higher than in 2022.
The volume of processing of deethanized gas condensate at the Purovsky ZPK increased by 1.2% and amounted to 13.4 million tons. At the complex in Ust-Luga, the volume of stable gas condensate processing increased by 0.4% and amounted to 7 million tons.
The total volume of sales of liquid hydrocarbons in 2023 amounted to 15.9 million tons, which is 0.3% higher than the same indicator in 2022, the press service of Novatek reported.
As of December 31, 2023, 1.1 billion cubic meters. natural gas, including LNG, as well as 1.3 million tons of stable gas condensate and products of its processing were reflected as "residues of finished products" and "goods on the way" in the reserves.
In December 2023, Novatek sent a notice of force majeure to customers on future supplies of liquefied gas from the Arctic LNG-2 project, which was the result of US sanctions. After that, as the Kommersant newspaper wrote, the foreign shareholders of the Arctic SPG-2 project - French TotalEnergies, Chinese CNPC and CNOOC and a consortium of Japanese Mitsui and JOGMEC - announced force majeure to participate in the project.
Novatek is Russia's largest independent natural gas producer. The Company conducts exploration, production and processing of gas and liquid hydrocarbons. 32 fields and license areas of the company are located in the Yamalo-Nenets Autonomous Okrug (data at the end of 2023).[2]
2022
Increase in global LNG market share to 5.4%
Novatek's share in the global liquefied natural gas (LNG) market in 2022 increased to 5.4%. This is stated in the statements that the company published in early April 2023.
According to the Prime agency, citing Novatek's materials, the company has strengthened in the global LNG market due to the growth of LNG production on the Yamal Peninsula and in the city of Vysotsk. The Yamal LNG plant is the fourth in the world in terms of LNG production and the largest LNG project in Russia, Novatek noted.
It is noted that the loading of Yamal LNG in 2022 amounted to 120% of the nominal capacity of the plant. It worked at a technological maximum and produced 21 million tons of LNG and 0.8 million tons of stable gas condensate.
 | The actual reliability of the first three production lines in 2022 amounted to 99.5%, which is one of the best indicators in the industry, the Novatek report said. |  |
According to the company's own data, the Cryogas-Vysotsk LNG project in 2022 worked at the level of 107% of the design capacity and produced 707 thousand tons of liquefied natural gas. Speaking about the key events of 2022, Novatek noted the following:
- start of construction of the second LNG loading station for road transport at the Cryogas-Vysotsk LNG plant;
- development of detailed design documentation, placed orders for the main equipment;
- start of construction of a 2.5 MW booster compressor station in order to increase the design capacity of the Cryogas-Vysotsk plant from 660 thousand to 820 thousand tons of LNG per year.
Novatek increased LNG sales abroad to 8.45 billion cubic meters. m in 2022, which is 6.3% more than a year ago. LNG has become the only type of fuel whose supplies from Russia to Europe increased in 2022.[3]
Revenue growth by 10.3% to 804.8 billion rubles
In 2022, Novatek earned 804.8 billion rubles in revenue, which is 10.3% more than a year ago. The company's net profit doubled to 640.4 billion rubles. The cost of sales increased to 451.9 billion rubles. (year-on-year growth - 6.4%), according to the financial statements under RAS, which was published in mid-March 2023. The company did not disclose the figures under IFRS by the end of March 2023 for unknown reasons, and earlier it did this around February. RAS and IFRS are different.
In 2022, Novatek's hydrocarbon production amounted to 638.9 million barrels of oil equivalent (boe), including 82.14 billion cubic meters. natural gas and 11.9 million tons of liquid hydrocarbons (gas condensate and oil). Compared to 2021, hydrocarbon production increased by 12.6 million boe or 2%.
The total volume of natural gas sales, including LNG, according to preliminary data amounted to 76.55 billion cubic meters. m, which is 1% higher than in 2021. 68.09 billion cubic meters were sold in Russia. m of natural gas, which is 0.3% more than in 2021. The volume of LNG sales in international markets amounted to 8.45 billion cubic meters. m, showing growth of 6.3%.
The volume of processing of deethanized gas condensate at the Purovsky ZPK increased by 3.3% and amounted to 13.2 million tons. At the complex in Ust-Luga, the volume of stable gas condensate processing remained practically unchanged and amounted to 6.9 million tons.
The volume of sales of finished products of the complex in Ust-Luga amounted to 6.2 million tons, including 3.8 million tons of naphtha, 1.0 million tons of kerosene, 1.4 million tons of fuel oil and diesel fraction (gas oil). The volume of oil sales amounted to 2.9 million tons, stable gas condensate - 3.3 million tons.
As of December 31, 2022, 1 billion cubic meters. gas, including LNG, as well as 1.2 million tons of stable gas condensate and products of its processing were reflected as "residues of finished products" and "goods on the way" in the reserves.[4]
2021: Revenue growth by 62.5%, to 1.16 trillion rubles, profit - 432.93 billion rubles
Novatek's revenue at the end of 2021 amounted to 1.16 trillion rubles, an increase of 62.5% compared to 2020. The company released such data under IFRS on February 16, 2022.
Novatek's net profit in 2021 was 432.93 billion rubles against 67.83 billion rubles a year earlier. The main factors of profit growth were the favorable macroeconomic situation, which led to an increase in hydrocarbon sales prices, as well as the commissioning of new gas production facilities in the last quarters of 2021.
Novatek's capital investments in 2021 decreased by 6.5% compared to the previous year, to 191 billion rubles. Free cash flow in 2021 amounted to 228.2 billion rubles after a negative value of 32.7 billion rubles a year earlier.
The company's assets at the end of 2021 amounted to 870.5 billion rubles, capital - 1.1 trillion rubles, liabilities - 546.1 billion rubles.
The volume of production of natural gas and liquid hydrocarbons, taking into account the share in the production of Novatek joint ventures in 2021, increased by 3.3% and 0.5%, respectively, mainly as a result of the start of operation of gas condensate deposits in the fields of the North-Russian block (North-Russian and East-Tazovsky fields in the third quarter of 2020, as well as the Harbey field in the fourth quarter of 2021). The increase in production at these fields fully compensated for the decrease in production at "mature" fields of our subsidiaries and joint ventures, the company's press service said.
In 2021, natural gas sales amounted to 75.8 billion cubic meters. m, slightly increasing (by 0.3%) compared to 2020. The volume of sales of liquid hydrocarbons amounted to 16.6 million tons, which is 1% more than in 2020.[5]
Board of Directors
Main article: Novatek Board of Directors
History
2024
Northern Sea Route LNG Supplies
Novatek began transporting liquefied natural gas (LNG) along the Northern Sea Route. The first batch of LNG was shipped from the port of Sabetta on June 21, 2024. The Arc7 tanker Eduard Toll with an LNG cargo is sent to China under the escort of the Siberia icebreaker.
According to Kommersant, this event marked the opening of a new navigation season on the eastern route. The transportation of hydrocarbons along the Northern Sea Route directly to the Asian market was made possible by cooperation with the Gecon consulting center. The tanker began its journey with a bend to the east from the Gulf of Ob, and the terminus of the route is China.
Earlier, on June 14, 2024, the oil tanker Arc7 Shturman Skuratov of Gazprom Neft also went east along the Northern Sea Route, but according to ship tracking systems, it goes in ballast and goes to the port of Kozmino.
Representatives of Rosatom reported that until July 1, 2024, winter-spring navigation continues in the waters of the Northern Sea Route. The ice situation in the Kara Sea is assessed as light, in the Laptev Sea - medium, and in the East Siberian and Chukchi Seas - heavy, which requires the involvement of an atomic icebreaker to ensure the safety of navigation.
The main intrigue of summer-autumn navigation will be the possibility of LNG supplies from the Arctic LNG-2 project, which previously faced US sanctions. The first line of the plant has already been commissioned, but deliveries could not begin due to the lack of Arc7 tankers. In April - May, Novatek's fleet was replenished with four Arc4 tankers - North Air, North Mountain, North Sky and North Way, which received permission to pass through the eastern sector of the Northern Sea Route from July 1 to September 7, 2024[6]
Opening an office in China
In February 2024, it became known that Novatek was opening an office in China to sell gas under sanctions - Bloomberg sources.
In recent months, Novatek, Russia's largest LNG producer, has formed a business development and marketing team in Beijing, six sources familiar with the situation said.
2023
Purchase of 27.5% of Sakhalin Energy
On April 12, 2023, the official Internet portal of legal information announced that the Russian government approved the sale of a 27.5 percent stake in Sakhalin Energy LLC to Novatek, which produces natural gas. Read more here.
Leaving the London Exchange
On February 7, 2023, Novatek announced its departure from the London Stock Exchange (LSE). The Russian company will stop listing on this site from March 8, 2023, but will remain on the Moscow Exchange.
| | Due Great Britain to the de facto suspension of trading on the company's global depositary receipts [GDRs] from March 3, 2022, it hereby notifies its application to the Financial Conduct Authority to cease listing the company's global depositary receipts, it said. | |
At the same time, the GDR program remains in force and is valid. Receipt holders can exercise their rights under securities, taking into account the current Russian legislation, the Novatek press service explains.
As Interfax notes on February 7, 2023, trading in company receipts has not actually been carried out on the LSE for almost a year. In April 2022, amendments to the Law "On JSC" entered into force, which prohibit the placement of depositary receipts on securities of Russian companies on foreign sites and oblige them to delist such securities traded abroad. At the same time, Novatek was allowed by the government commission to control the implementation of foreign investments in the Russian Federation not to stop the GDR program and continue their appeal outside the Russian Federation.
In August 2022, for those receipts of Novatek, the rights to which are taken into account in Russian depositories, an automatic conversion of GDR was launched. The Company listed global depositary receipts on the London Stock Exchange in 2005. At the end of 2021, Novatek's GDR share was 17.46% of the authorized capital.[7]
2022
Purchase of 49% of Terneftegaz shares from TotalEnergies
In August 2022, the French TotalEnergies sold 49% in Terneftegaz to Novatek, which previously owned 51% in the company. Now NOVATEK owns 100% of Terneftegaz.
TotalEnergies records $3.5 billion impairment loss on Novatek stake
In July 2022, TotalEnergies decided to record an impairment loss of $3.5 billion on its share in the Russian company Novatek.
Plan for construction of a small-tonnage complex for the production of liquefied natural gas
An agreement was concluded between the Government of the Samara Region and NOVATEK, a natural gas producer in Russia. The signatures in the document were put by the Governor Dmitry Azarov and the Chairman of the Board of the company Leonid Mikhelson. This was announced by the Agency for Attracting Investments in the Samara Region on June 17, 202.
NOVATEK intends to build a small-tonnage complex for the production of liquefied natural gas on the territory of the Togliatti special economic zone. Investments in the project will amount to 2 billion rubles.
| | I really hope that cooperation will continue, and this project one for the production of liquefied gas, which we are creating in the Togliatti Special Economic Zone, will be successful. I am sure that in 2022 we will start implementing it, starting, construction- said Dmitry Azarov. | |
| | I consider the Samara region my homeland, because I began my career there, - said Leonid Mikhelson. - Samara region is a region with huge industrial potential. We completed the construction of the center of large-capacity structures, a large number of enterprises in the region were involved, which created special equipment for us - for example, this is Syzran Tyazhmash. We continue to support social programs. And now we have signed an agreement to build an LNG plant as part of our extensive program. We will continue to build gas stations to gradually convert motorists and public transport to liquefied natural gas, which will ultimately have a significant impact on improving the environmental situation. | |
| | The project was given the status of a resident of the SEZ, the direct construction of the enterprise will start in 2022, and the planned launch is scheduled for 2023. The future plant will enable enterprises in the Samara region to use liquefied natural gas to effectively transfer cars to a more economical type of fuel. The project will also create additional jobs and allow the Samara region to make its contribution to the development of trunk road corridors in our country, - said Dmitry Bogdanov, Minister of Economic Development and Investments of the Samara Region, about the project. - In the near future, refueling stations will appear on the map of Russia, where transit carriers will be able to refuel with high-quality and economical fuel. This means that additional transit flows will go through the Samara region to optimize transport costs. This is especially important and relevant for the project of the transport corridor "Europe - Western China," which we are actively developing, - the minister explained. | |
2021: Arrest in the United States of NOVATEK Deputy Chairman Mark Anthony Jitway
In September 2021, NOVATEK Deputy Chairman of the Board Mark Anthony Jitway was arrested in the United States on charges of non-payment of taxes worth $93 million. If indicted, he faces up to 20 years in prison.
According to the US tax authorities, between 2005 and 2016, Jetway, with the help of offshore companies, hid his assets so as not to pay taxes. In order not to declare these funds, Jetway took deliberate steps, in particular, indicating his wife, a citizen, Russia as the beneficiary of assets.
The largest LNG exporter in Russia fell by almost $2 billion dollars in 10 minutes.
The next day, Mark Jetway was released from custody on bail of $80 million. He will remain under house arrest, having handed over his passports and wearing an electronic bracelet.
2020: Net profit fell from 865.47 billion rubles to 67.83 billion rubles
Novatek's revenue in 2020 reached 711.81 billion rubles, down from 862.8 billion rubles a year earlier. Revenues from the sale of oil and gas during this time decreased from 852.23 billion to 699.75 billion rubles.
The company registered a net profit of 67.83 billion rubles received at the end of this period. In 2019, net profit was measured at 865.47 billion rubles.
According to Novatek, the group's financial results in 2020 were significantly influenced by an unfavorable macroeconomic situation, which led to a decrease in hydrocarbon sales prices and recognition of significant exchange rate differences. The company also reflected the effects of transactions for the sale of shares in the Arctic LNG 2 project: recognition in 2019 of profit from the sale of a 40% interest in the Arctic LNG 2 project in the amount of RUB 675.0 billion and recognition of losses from the subsequent non-cash revaluation of contingent compensation for these transactions in 2019 and 2020 in the amount of 34.5 billion and 47.8 billion rubles, respectively. In 2019, the company also recognized a profit from the reorganization of the joint venture of Arcticgas JSC in the amount of 7.8 billion rubles.
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In addition, the continued volatility of global commodity prices has a significant impact on the Russian ruble exchange rate, which led Novatek to recognize a significant exchange rate difference in loans and loans in foreign currency from a number of subsidiaries and joint ventures.
The cash used to pay for capital investments in 2020 amounted to 204.577 billion rubles, which is 25.9% more compared to 2019. A significant part of Novatek's investments was aimed at developing LNG projects (the Arctic SPG-2 project, the project to create a center for the construction of large-capacity offshore facilities in the Murmansk region and the Obsky LNG project).[8]
2019: US sanctions on China's Cosco deprive Novatek of 14 of 15 LNG tankers under construction
The American sanctions strike on the Chinese ship company Cosco in October 2019 was greatly failed by the Russian NOVATEK. The Chinese were sanctioned for transporting Iranian oil. As a result, the Yamal LNG project immediately lost more than a third of its ice fleet. These are six type Arc7 LNG tankers that were supposed to be delivered by a joint venture between Chinese Cosco and Canadian Teekay. Given the extraterritorial nature of the sanctions, these shipping vessels will remain in ports until U.S. sanctions are lifted. Not only American companies, but also foreign companies and ports will not work with them, under the threat of repeated sanctions.
Unfortunately, the problems do not end there. It is known that the Chinese also have shares in two other international companies, which are to supply 8 more tankers for NOVATEK. The share of co-ownership in these JVs does not put them under direct restrictions, but OFAC recommends "cautiously assessing the possibility of transactions with unblocked persons in which blocked persons own a significant share, but less than 50%."
Thus, the actions of the United States in relation to Cosco directly or indirectly jeopardize the work of 14 of the 15 Arc7 tankers for Yamal LNG. The maintenance and insurance of these ships will become unavailable around the world. The only tanker suitable for international operation will be Christophe de Margerie, owned by Sovcomflot. Now the urgent creation of a domestic gas commissioning icebreaker fleet has turned out to be at the peak of relevance. And, given the threat of new US sanctions "passages," ships will have to be built without the participation of foreigners.
2017
3rd place in gas production in Russia: 45.5 billion cubic meters
Gas production in Russia in 2017 amounted to 690.5 billion cubic meters. m (+ 7.9% vs 2016).
Production indicators of companies in 2017:
- Gazprom - 472.0 billion cubic meters. m (+ 12.4%) or 68.4% of total production in Russia.
- Rosneft - 47.5 billion cubic meters. m (+ 1.8%),
- Novatek - 45.5 billion cubic meters. m (-9.1%),
- Lukoil - 21.1 billion cubic meters. m (+ 14.9%),
- Gazprom Neft - 15.3 billion cubic meters. m (+ 13.4%),
- Surgutneftegas - 10.0 billion cubic meters. m (+ 2.0%),
- Russneft - 2.4 billion cubic meters. m (-1.1%),
- Neftegazholding - 1.4 billion cubic meters. m (+ 0.4%),
- TATNEFT - 0.9 billion cubic meters. m (-3.7%)[9].
Oil production 11.8 million tons
For the period January-December 2017, oil production in Russia:
- Rosneft - 210.8 million tons (-0.3%),
- Lukoil - 82.2 million tons (-1.6%),
- Surgutneftegas - 60.5 million tons (-2.1%),
- Gazprom Neft - 59.9 million tons (+ 3.8%),
- TATNEFT - 28.9 million tons (+ 0.9%),
- Novatek - 11.8 million tons (-5.5%),
- Bashneft - 10.4 million tons (-3.4%),
- Russneft - 7.0 million tons (+ 0.2%),
- Neftegazholding - 2.1 million tons (-7.5%).
2011: Total is part of the company's shareholders
In 2011, the French company Total acquired a stake in Novatek.
2010: 8.09 billion barrels oil equivalent of proven reserves
At the end of 2010, NOVATEK has 8.09 billion barrels of oil equivalent of proved reserves.
In 2010, gross production amounted to 37.78 billion cubic meters. natural gas and 3,632 thousand tons of liquid hydrocarbons. Compared to 2009, natural gas production increased by 5.0 billion cubic meters. m or 15.3%, liquid hydrocarbon production increased by 583 thousand tons or 19.1%.
The volume of processing of deethanized gas condensate at the Purovsky ZPK in the fourth quarter and in 2010 amounted to 940 and 3,401 thousand tons, respectively.
2009: Launch of the second launch complex of the second stage of the Yurkharovskoye field
In 2009, the company completed the construction and commissioned the second launch complex of the second stage of the Yurkharovskoye field. The launch of the second launch complex increases the company's capacity to produce gas and gas condensate by 7 billion m3 and 600 thousand tons per year, respectively. The second launch complex allows increasing the annual production volume at the field to 23 billion m3 of gas and 2 million tons of condensate. This increases the company's gas production capacity to 44 billion m3 per year.
1994: Establishing a Company
Novatek was established in 1994.
Information Technology
2018: New Chief information officer - Andrey Burlutsky
At the end of 2018, Andrei Burlutsky was appointed by Novatek to the position of IT director, told TAdviser at Sibur IT, from where he moved to this job from the post of general director.
Notes
- ↑ NOVATEK reported financial results for 2023
- ↑ NOVATEK reported preliminary production figures for 12 months of 2023
- ↑ Novatek in 2022 increased its share in the global LNG market
- ↑ Net profit of Novatek under RAS in 2022 doubled
- ↑ NOVATEK announced the financial results of its activities under IFRS for 2021
- ↑ Gas departed to the east
- ↑ Press releases and events Notice of planned delisting from the London Stock Exchange
- ↑ NOVATEK Announces 2020 IFRS Financial Results
- ↑ Industrial health monitoring based on IPEM indices
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