Novatek

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This article is about a Russian natural gas company. For the Taiwan-based IC design company of the same name, see Novatek Microelectronics.
Novatek PJSC
TypePublic (ПАО)
MCX: NVTK
LSE: NVTK
IndustryOil and gas
FoundedAugust 1994; 29 years ago (1994-08)
FounderLeonid Mikhelson
Headquarters
Tarko-Sale
,
Russia
Key people
Alexander Y. Natalenko (chairman of the board of directors)
Leonid Mikhelson (chairman of the management board)
ProductsPetroleum
Natural gas
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Number of employees
5,997 [1]
Websitewww.novatek.ru/en/

Novatek (Russian: ПАО «НОВАТЭК», MCX: NVTK, LSE: NVTK) is Russia's second-largest natural gas producer (behind Gazprom), and the seventh-largest publicly traded company globally by natural gas production volume.[1] The company was originally known as OAO FIK Novafininvest. Novatek is based in the Yamalo-Nenets Autonomous Region in West Siberia, and maintains a sales office in Moscow. In the 2020 Forbes Global 2000, Novatek was ranked as the 316th-largest public company in the world.[2]

The company is not to be confused with Novatek Inc, a US company that produces synthetic diamonds for the oil and gas industry, or Novatek Microelectronics Corp., a supplier of display controller integrated circuits, or Novatek AS, a Norwegian engineering company.

Operations

In 2006, the company produced roughly thirty billion cubic metres (1.1 trillion cubic feet) of natural gas. By 2010, production had grown to 37.2×10^9 m3 (1.31×10^12 cu ft), and in 2011 to 52.9×10^9 m3 (1.87×10^12 cu ft)[3][4] In 2010, Novatek supplied 13% of the domestic market and accounted for 32% of non-Gazprom production.[5][4] Total reserves amount to 9.4×10^9 BOE (5.8×1010 GJ) using the Securities and Exchange Commission methodology.[4][6] Regarding dry sales gas, Novatek operates only in the domestic market, which is characterized by artificially low prices. Novatek's earnings before interest, taxes, depreciation, and amortization and net profit margin in 2011 were 49% and 32%, respectively.[4]

The major gas field owned by Novatek is the Yurkharovskoye field.[7] On 27 May 2009, Novatek bought a 51% stake in Yamal LNG from Volga Resources, which controls the giant South-Tambeyskoye field.[8] On 2 July 2010, Novatek purchased Tambeyneftegas, which holds the licence to the Arctic Malo-Yamalskoye field, located on the Yamal Peninsula and holding 161×10^9 m3 (5.7×10^12 cu ft) of natural gas and 14.4 million tonnes of gas condensate.[9]

In June 2010 Novatek and Gazprom announced plans to build a liquefied natural gas plant in Yamalo-Nenets Autonomous Okrug.[10] Total S.A. will also be involved as a 20% shareholder.[11]

In was announced in July 2010 that, together with Total S.A., Novatek is developing the Termokarstovoye field in Yamal.[12]

In December 2010, Novatek bought a 51% stake in Sibneftegaz from Gazprombank (Itera owns 49% of the shares).[13] Sibneftegaz holds licences for exploration and production in the Yamal-Nenets region, including for the Beregovoye field, Pyreinoye field, Zapadno-Zapolyarnoye field, and the Khadyryakhinskiy licence area.[14] Sibneftegaz owns rights to develop oil and gas condensate fields with a total resource of 395.53 bcm of natural gas and 8.44 million tonnes of gas condensate.[15]

In 2011, Novatek was awarded licences to develop the Geofizichenskoye field, Salmanovskoye (Utrenneye) field, Severo-Obskoye field, and Vostochno-Tambeiskoye field.[16]

In addition, Novatek acquired[when?] these companies:[citation needed]

Old company logo.

It was announced in 2013 that Novatek would develop the Sabetta port, in a joint project with the Russian government. This port would allow LNG exports by sea from the Yamal Peninsula.[17]

The final investment decision on Novatek's Arctic LNG 2 project was made in March 2019.[18]

In September 2021, Yamal SPG Resurs of Novatek bought Arkticheskoye and Neytinskoye fields for 10,88 and 2,28 billion dollars respectively for further geological study of subsurface resources, exploitation and production. A very special term of the auction sale was the participation of Novatek structures only.[19]

Novatek has been ranked as being among the 13th-best of 92 oil, gas, and mining companies on indigenous rights in the Arctic.[20]

In 2021, Novatek was ranked no. 19 in the Arctic Environmental Responsibility Index (AERI) that covers 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle.[21]

Ownership

Novatek is a public company with shares traded on the London and Moscow stock exchanges. The major shareholders of Novatek are Leonid Michelson, the CEO, with around 28% of the shares, Volga Group with 23% of shares, Total S.A. with 16%, and Gazprom with 9.4%.[22][23][24]

Controversies

On July 16 2014, Novatek was placed on the Sectoral Sanctions Identification list by the U.S. Department of the Treasury following Russia’s continued attempts to destabilize eastern Ukraine.

On January 29 2018, CEO Leonid Mikhelson was named in a Countering America's Adversaries Through Sanctions Act report delivered to Congress.

In September 2021, CFO Mark Gyetvay was arrested in the United States.[25] He allegedly hid $93M worth of assets in offshore accounts. If convicted, he could face a decades-long prison sentence. He has since been released on a $80M bond.[26]

In April 2022, former Deputy Chairman on the Board of Directors, Sergey Protosenya, reportedly stunned his wife and daughter with an axe and then stabbed them to death before hanging himself, at a luxury villa in Lloret de Mar, Spain. He had a fortune of over $400 million. Two other similar reports of gas company executives killing their wives and children emerged around the same time in Moscow. Investigators have not found evidence of third parties in spite of the case not looking like a typical murder-suicide.[27][28] Novatek issued a statement casting doubt on a murder-suicide theory.[29]

See also

References

  1. ^ a b "Novatek 2013 Annual Report" (PDF).
  2. ^ "Forbes Global 2000". Forbes. Retrieved 31 October 2020.
  3. ^ Gyetvay, M., 2012. Fourth Quarter and Full Year 2011 Operational and Financial Results. Novatek, Moscow
  4. ^ a b c d Lunden, Lars; Fjaertoft, Daniel; Overland, Indra; Prachakova, Alesia (2013-10-01). "Gazprom vs. other Russian gas producers: The evolution of the Russian gas sector". Energy Policy. 61: 663–670. doi:10.1016/j.enpol.2013.06.055.
  5. ^ "Madick, G., 2011, Novatek—Dawn of a New Decade. In: Proceedings of Deutsche Bank Global Emerging Markets One-on-One Conference, New York" (PDF).
  6. ^ "OAO NOVATEK Press Center : Press Releases and Events | NOVATEK announces year-end 2011 reserves". www.novatek.ru.
  7. ^ "Novatek boosts flow from Arctic field". Upstream Online. NHST Media Group. 2009-10-19. Retrieved 2010-07-02.
  8. ^ Zhdannikov, Dmitry (2009-05-27). "Russian oil trade king buys more gas assets". Reuters. Retrieved 2010-07-02.
  9. ^ Bachman, Jessica (2010-07-02). "Russia's Novatek acquires new arctic field". Reuters. Retrieved 2010-07-02.
  10. ^ Pitt, Anthea (2010-06-21). "Russian duo team up in Yamal". Upstream Online. NHST Media Group. Retrieved 2010-07-02.
  11. ^ "Total to buy Novatek stake for $4bn". Upstream Online. NHST Media Group. 2011-03-02. (subscription required). Retrieved 2011-03-03.
  12. ^ "Putin nod for Total-Novatek plan". Upstream Online. NHST Media Group. 2009-06-24. Retrieved 2010-07-02.
  13. ^ "Novatek offers Sibneftegaz buyback". Upstream Online. NHST Media Group. 2011-01-21. Retrieved 2011-01-23.
  14. ^ Begum, Aleya (2010-12-17). "Novatek seals Sibneftegaz stake". Upstream Online. NHST Media Group. Retrieved 2011-01-23.
  15. ^ Soldatkin, Vladimir (2010-11-16). "Russia's Novatek to pay $900 mln for Sibneftegaz". Reuters. Retrieved 2011-02-19.
  16. ^ "Novatek wins new Yamal licences". Upstream Online. NHST Media Group. 2011-08-30. Retrieved 2011-08-30.
  17. ^ "Construction of Sabetta port to start this summer". Barents Observer. 17 April 2013. Retrieved 12 January 2015.
  18. ^ "Russia: Launch of the Giant Arctic LNG 2 Development". TotalEnergies. 9 March 2019.
  19. ^ "Novatek secures new gas licenses on Yamal peninsula in Russia". MarketWatch. 2021-09-07.
  20. ^ Overland, Indra (2016). "Ranking Oil, Gas and Mining Companies on Indigenous Rights in the Arctic". ResearchGate. Arran. Retrieved 2 August 2018.{{cite web}}: CS1 maint: url-status (link)
  21. ^ Overland, Indra; Bourmistrov, Anatoli; Dale, Brigt; Irlbacher‐Fox, Stephanie; Juraev, Javlon; Podgaiskii, Eduard; Stammler, Florian; Tsani, Stella; Vakulchuk, Roman; Wilson, Emma C. (March 9, 2021). "The Arctic Environmental Responsibility Index : A method to rank heterogenous extractive industry companies for governance purposes". Business Strategy and the Environment. 30 (4): 1623–1643. doi:10.1002/bse.2698. S2CID 233618866.
  22. ^ Paxton, Robin (2010-03-05). "Timchenko's fund becomes largest Novatek owner". Reuters. Retrieved 2010-07-02.
  23. ^ "Novatek sale 'below market price'". Upstream Online. NHST Media Group. 2011-02-10. (subscription required). Retrieved 2011-02-15.
  24. ^ "Total increased its stake in NOVATEK".
  25. ^ "US arrests Novatek finance chief over alleged tax misconduct". Offshore Technology. 2021-09-24. Retrieved 2022-03-03.
  26. ^ Reuters (2021-09-27). "Deputy chief of Russia's Novatek says he will fight US tax charges". Reuters. Retrieved 2022-03-03.
  27. ^ Chloe Mayer (April 21, 2022). "Russian Oligarch Sergey Protosenya and Family Found Dead". Newsweek. Retrieved April 21, 2022.
  28. ^ Sánchez, Guillem (28 April 2022). "La conexión del crimen de Lloret de Mar con Rusia". elperiodico (in Spanish). Retrieved 2 September 2022. Los agentes creen que primero golpeó con el dorso del hacha en la cabeza de las víctimas y, una vez inconscientes, las mató con un cuchillo.[...] Los Mossos, el fiscal Enrique Barata y el juez que investigan este caso no contemplan otra hipótesis distinta a la de que Sergey las mató y luego se suicidó.
  29. ^ Mia Jankowicz (April 22, 2022). "Ex-company of Russian oligarch found dead with his wife and child throws doubt on murder-suicide theory, saying he was a 'wonderful family man'". Business Insider. Retrieved April 22, 2022 – via Yahoo! News.

External links

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