PRESS: Transneft may lose 40% revenue from low oil transport price
MOSCOW, Jun 29 (PRIME) -- Russian oil pipeline monopoly Transneft may lose more than 40% of its revenue of oil transportation tariffs are cut to the level of 2008 prompting the government to introduce emergency support measures to save the company, First Vice President Maxim Grishanin said in an interview to Kommersant business daily published on Monday.
On May 12, oil major Rosneft CEO Igor Sechin asked President Vladimir Putin to discuss bringing tariffs of transport monopolies in compliance with the current oil prices. Sechin said that in 2008, the oil price in rubles stood at around 1,100 rubles and the tariff for pumping at 822 rubles per tonne, while now the oil price is 1,200 rubles, and the tariff is 2,100 rubles per tonne.
“At a meeting chaired by (Deputy Prime Minister) Yury Borisov, we presented calculations showing that it would be necessary to introduce emergency support measures if the price of oil pumping through Transneft’s system was reduced to the level of 2008, as the deficit of funds for 2020 would amount to 130 billion rubles, for 2021 to 227 billion rubles, and for 2022 to 304 billion rubles,” Grishanin told Kommersant.
“This is why we will be unable to fulfill any debt repayment liabilities or maintain our infrastructure in a working state as we will lose more than 40% of revenue.”
The Federal Antimonopoly Service and the Energy Ministry supported the company, and the Economic Development Ministry will work out different options for changes in Transneft’s tariffs on Borisov’s orders, he said.
The government has no plans to abolish the “inflation minus” principle for raising Transneft’s tariffs in the next 10 years as it ensures predictability of the tariff policy for the company and its clients, he told the business daily.
The OPEC+ oil output reduction deal means a 17% cut in services provided by Transneft in 2020–2022, and the company expects a more than 50% fall of free cash flow. “Unlike oil companies, we are unable to simply reduce capacity of transport infrastructure,” Grishanin said, as quoted by Kommersant.
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