• a US$1 per barrel change in the average WTI oil price results in an estimated $20 million change in oil royalties;• a 1 U.S. cent change in the average value of the Canadian dollar results in an estimated $31 million change in non-renewable resources revenue.
- WTI oil prices are forecast to average US$94.25 per barrel in 2014-15
- Exchange rate of 91.50
- WTI is lower than forecasted at US$82.31 per barrel (not good for Saskatchewan)
- Exchange rate is lower than forecasted at 88.31 (but this is good for Saskatchewan since we sell our oil and potash in US dollars and thus realise higher revenues)
Uralkali Announces Senior Management Change
Uralkali (LSE: URKA; the Company), one of the world’s largest potash producers, announces that Viktor Belyakov has resigned from his position as Chief Financial Officer of the Company.
Anton Vishanenko will act as the interim CFO until the next Board of Directors meeting scheduled for the end of October when the Board will consider his appointment as the permanent CFO. Viktor Belyakov will advise the interim CFO in order to ensure an effective and smooth transition of responsibilities.
Anton Vishanenko has extensive financial experience in the role of Chief Financial Officer at several major Russian companies, including Mechel, UralChem and Novorossiysk Commercial Sea Port. He holds an Executive MBA from INSEAD, and is a member of ACCA and CPA.
Dmitry Osipov, Uralkali CEO, commented: “In his 12 years at Uralkali, Viktor Belyakov has played an instrumental role in the Company’s continued growth. He helped steer the business through key milestones, including Uralkali’s IPO in 2007, the transformative merger with Silvinit in 2011 and the subsequent integration. He also capably led the Company as acting CEO during September-December 2013. We are grateful to Viktor for his excellent work and wish him the very best in his future endeavours”.
Uralkali (www.uralkali.com) is one of the world’s largest potash producers and exporters. The Company’s assets consist of 5 mines and 7 ore-treatment mills situated in the towns of Berezniki and Solikamsk (Perm Region, Russia). Uralkali employs ca.11,300 people (in the main production unit). Uralkali’s shares and GDRs are traded on the Moscow Exchange and London Stock Exchange, respectively.
Moscow moves to seize oligarch’s oil firm, raising fears of wider intervention
MOSCOW — Reuters
Published Friday, Sep. 26 2014, 9:21 AM EDT
Last updated Friday, Sep. 26 2014, 9:23 AM EDT
Russia moved to wrest control of an oil company from oligarch Vladimir Yevtushenkov on Friday, seizing his conglomerate Sistema’s shares in the firm and deepening investors’ fears the Kremlin wants to reclaim prized state assets.
A Moscow court ordered the seizure of Sistema’s stake in Bashneft a day after a judge refused to release Yevtushenkov, who is under house arrest on suspicion of money laundering during the oil firm’s acquisition in 2009.
The case has raised fears among investors that President Vladimir Putin, who favors what is known as “state capitalism,” wants to increase intervention in the economy as Russia tries to cope with Western sanctions imposed over the Ukraine crisis.
Although Yevtushenkov has kept out of politics, the case has drawn comparisons with the fate of Mikhail Khodorkovsky, the former chief executive of the Yukos oil firm who was jailed on fraud and tax evasion charges a decade ago after falling out with Putin.
“They [officials] are telling themselves, to ease their conscience, that they are doing a high-minded thing by returning it to state ownership,” Sergei Petrov, an opposition deputy, told Reuters this week. “The channel is already known, the method has been tested … as it was last time with Yukos.”
Khodorkovsky was freed last year but Yukos, which was once worth $40-billion, was broken up and nationalized with most of its assets eventually handed to Rosneft, an energy giant run by a Putin ally.
Sistema acquired an almost 80 per cent stake in Bashneft from local authorities in the Ural mountains region of Bashkortostan for $2.5-billion and the oil producer has since been showing one of the sector’s fastest rates of output growth. It is Russia’s sixth-largest oil company by production.
The deal is being challenged by the Russian prosecutor-general’s office, which said it had uncovered “significant violations” of the law and was acting to end the “illegal possession” of Bashneft and restore it to federal ownership.
It said the Moscow arbitration court had granted its request to seize the shares as an interim measure and the court said it would hold a hearing on the lawsuit on Oct. 9.
Shares in both Sistema and Bashneft fell further in early trade on Friday. Moscow-traded shares in Sistema lost almost 18 per cent by 9:15 (GMT), leaving them down more than 50 per cent since Yevtushenkov was placed under house arrest. Bashneft’s stock price was down around 8 per cent.
Russia’s problems were also compounded by concerns about frayed relations with Ukraine, with the rouble hitting an all-time low against the dollar at 38.97.
Fears that Russia could demand immediate repayment of a $3-billion debt owed by Ukraine also hit Kiev, pushing up the cost of insuring some Ukrainian debt to seven-month highs.
Yevtushenkov, who was 66 on Thursday, never seemed the sort of person likely to become a target of such intrigue. He had no apparent political ambitions of his own, and built up his telecoms-to-oil empire quietly from the 1990s.
Sistema groups 15 business sectors ranging from oil to Detsky Mir, a retailer of toys and children’s clothes, and Yevtushenkov became known in the business community for running an efficient, if unwieldy, conglomerate. He was put under house arrest on Sept. 16 and a court ruled on Thursday that this should continue until Nov. 16.
Sistema has been unable to deal in its Bashneft shares since at least July because of a related investigation. It has denied the accusations against Yevtushenkov, though it and Bashneft declined comment on Friday.
Putin has propagated “state capitalism” in his third term as president, which began in 2012, pushing for wider government control over important sectors of the economy such as energy, which contributes about half of federal budget revenues.
Putin’s ally Igor Sechin, head of state-controlled Rosneft , increased the state’s share in the oil industry to more than 50 per cent when the company bought Anglo-Russian firm TNK-BP for $55-billion last year.
Rosneft has denied it plans to buy Bashneft, despite widespread media reports that it wants to do so.
Yevtushenkov’s house arrest shocked the Russian business community and foreign investors, prompting Economy Minister Alexei Ulyukayev to suggest last week it had damaged the business climate and could spur capital flight.
Russian business leaders back Putin over the Ukraine crisis, in which Moscow has annexed the Crimean peninsula and is accused by the West of directly supporting armed pro-Russian separatists in east Ukraine – charges the Kremlin denies.
But many businessmen fret over the direction the economy is taking and regret the country’s growing isolation.
CHART: BHP before and after spin-off
September 25, 2014
BHP Billiton announced in August a plan to create an independent metals and mining company based on a selection of its aluminium, coal, manganese, nickel and silver assets.
This chart from the Melbourne-based company’s 2014 annual report shows just how much the structure of BHP Billiton has changed since 2005, with iron ore, and oil and gas playing a dominant role and potash set to become a significant contributor in the future.
Potash Corp sees good sense in BHP’s fertiliser go-slow
- by: BARRY FITZGERALD
- From: The Australian
- September 25, 2014 12:00AM
CANADA’S leading potash producer Potash Corp says there is good reasoning behind BHP Billiton’s decision to go slow on its push in to the global fertiliser industry with the development of its Jansen project in Saskatchewan.
It comes down to Potash Corp — the group BHP tried to take over in 2010 for $40 billion — and its fellow producers already having the capacity to cover what growth there will be in the market until around 2020, effectively locking out Jansen.
Potash Corp chief financial officer Wayne Brownlee told a fertiliser conference in Toronto this week that there would not be any meaningful supply additions from outside of the Canpotex marketing arm used by Potash Corp, Mosiac and Agrium over the next three years, probably drifting “up close to 2020’’.
Under its original planning, Jansen was meant to be in production next year. But based on its own assessment of market demand, BHP said last year it could take to the “decade beyond 2020’’ before Jansen was ramping up to design capacity.
The broad agreement between BHP and its Canadian competitors that Jansen’s market opening is around 2020 is in keeping with BHP’s decision to modulate the rate at which it spends the $US2.6bn ($2.9bn) it has committed to at least finish the excavation and lining of the production shafts to gain access to the deeply buried resource.
BHP chief executive Andrew Mackenzie refers to Jansen as a potential “fifth pillar’’ for the company alongside iron ore, petroleum, copper and coal.
Last month he was quizzed by on the timing at Jansen. “We are taking this very slowly,” he said. “We want to do it right, in terms of the technology for developing the shaft, which is the most difficult part.
Russia’s Uralkali sees flat H1 potash supply to China
By Polina Devitt and Andrey Kuzmin
MOSCOW Tue Sep 23, 2014 5:59am EDT
MOSCOW (Reuters) – Russia’s Uralkali (URKA.MM), the world’s largest potash producer, expects volumes to China to remain flat or rise slightly in the first half of 2015, the company’s head of sales told Reuters.
The company hopes to increase the price in the new contract by 10 percent from the $305 per ton on a cost-and-freight (CFR) basis of the previous contracts, Oleg Petrov said in an interview at the Reuters Russia Investment Summit.
China is the world’s largest consumer of the crop nutrient, and its contracts are seen as a benchmark by most participants in the market. Potash prices are gradually recovering after Uralkali broke a powerful trading alliance with Belarus in 2013.
“The pace of market recovery has exceeded our expectations,” Petrov said. Negotiations over the new contract with China for the first half of 2015 are expected to start in October and to end by January.
“We expect a price rise on contract markets – in China and India; spot market reaction will depend on many factors,” Petrov said at the summit, held at the Reuters office in Moscow.
Uralkali’s contract with India lasts until February.
Uralkali quit the trading alliance with Belarus in July last year to focus on maximizing sales volumes, triggering a slump in global potash prices. Before the collapse of the alliance Uralkali was supplying potash to China at $400 per ton.
Since it started trading on its own, the company has regained its export market share of 23 percent and refocused its strategy on maximizing revenue.
Asked whether the company would want to cooperate with privately-held Russian fertilizer maker Eurochem, which starts its own potash production in Russia in 2017, he said that he sees “potential for cooperation in terms of trading”. Petrov did not elaborate.
Global potash deliveries are expected to rise by 1-2 million tonnes from this year’s 59 million tonnes, Petrov added. The company sees its own output flat in 2015. In 2014, it plans to produce between 11.5 million and 12 million tonnes.
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(Reporting by Polina Devitt, Andrey Kuzmin, Natalia Shurmina, Alessandra Prentice and Elizabeth Piper; Editing by Michael Urquhart)