Russian Oil & Gas
16 September 2013 ¦ 57 pages ir.citi.com
Governance, growth, and risk – Why Russian oil & gas is cheap,
and how things are improving this year
Investor concerns of poor corporate governance, high political risk, and growth constraints in
the Russian oil & gas sector are legitimate, but more than priced in, we think. Indeed, we see
significant progress being made on several fronts that investors may not fully appreciate,
including 3 key regulatory advances expected this autumn. We boost Gazprom’s 2013E exports
to 155bcm, reiterating it and SurgutNG prefs as our two Best Ideas in Russian oil & gas.
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Russian Oil & Gas
13 September 2013 ¦ 13 pages ir.citi.com
Alert: Natural monopoly tariff freeze now seems all but certain,
effects larger for gas companies
News reports in recent days indicate that the Russian government has taken the decision to
delay natural monopoly tariff increases for a year. We see this being more important for
Russia’s gas companies than its oil companies, even were Transneft to be included into the
freeze. We disagree with the theory that this could be a blessing in disguise for Gazprom,
although we remain very positive on that name for other reasons (booming exports, dividend
increases, etc). |
