Rosneft Awarded 5 Offshore Greenfields by State
OREANDA-NEWS. October 18, 2010. The state awarded to Rosneft yesterday the Yuzhno-Russkiy block in the Barents sea, three blocks of Vostochno-Prinovozemelsky in the Kara sea, as well as the Yuzhno-Chernomorsky block in the Black sea. A decree allowing the distribution of the state’s above mentioned greenfields without conducting the license tender was signed by Prime Minister Putin, reported the press-centre of OTKRITIE Financial Corporation.
View: Among the assets, there are three Vostochno-Prinovozemelsky blocks, which comprise 1800BCM (1609MMtoe) of gas reserves. These exceed Rosneft’s current gas reserves more than two-fold. We think that possession of these assets indicates Rosneft’s plans to significantly bolster the share of gas projects in its business. Reportedly, BP may be involved in the development of the arctic shale projects. The offer was made by Rosneft in exchange for the redemption of BP’s pre-emptive buyout rights in Ruhr Oel -- a subsidiary of the Venezuelan company PDVSA. Ruhr Oel operates a number of refineries in Germany. Meanwhile, the development of these blocks is a rather distant prospect. Therefore, we view this news as neutral for the company at this juncture.
Valuation and Action: Rosneft trades at a 2011E P/E of 6.4x and a 2011E EV/EBITDA of 4.3x. We maintain our BUY rating on the stock and a target price of USD11/share.
Комментарии