MAY 2018 RUSSIAN OIL AND GAS – TICKLING GIANTS
Contents
Report Summary ...... 3 Gazprom: Performing As Designed ...... 4 And the villages dirty and charging high prices ...... 5 The Ukraine pincer ...... 9 Soon to come: A $250 bln investment program ...... 12 Quantifying a dream ...... 16 Lukoil: Will They Walk the Walk? ...... 19 Putting its cards on the table ...... 21 The market might not believe the management ...... 26 The market might fear a change in control ...... 27 The market might be starved of the marginal investor ...... 29 Valuations ...... 31 Financial Profiles ...... 32
2 SBERBANK CIB INVESTMENT RESEARCH
This document is being provided by [email protected] for the exclusive use of [email protected] RUSSIAN OIL AND GAS – TICKLING GIANTS MAY 2018
Report Summary
We invert the common criticism of Gazprom and ask what needs to be assumed about the company to conclude that it actually serves its function well. We discover that Gazprom’s decisions make perfect sense if the company is assumed to be run for the benefit of its contractors, not for commercial profit. The Power of Siberia, Nord Stream