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8 Pages

The challenges of financing Russia's upstream

The challenges of financing Russia's upstream

Report summary

 As of Q1 2016, Russian upstream players have accumulated around US$140 billion of long-term debt. In the last two years, EU/US sanctions have prohibited access to Western long-term debt markets to certain operators. This pushed Russian upstream companies to find alternative ways of financing. Relying on domestic and Asian banks, oil supply prepayments, and REPO loans, operators have diversified their sources of funding and kept increasing liquids production. However, not having access to cheap Western capital and facing higher premiums, Russian companies face a difficult choice between increasing their interest burden, selling assets, or delaying some investment programmes which could make sustaining the current levels of output challenging in the long term. 

What's included?

This report includes 2 file(s)

  • The challenges of financing Russia's upstream PDF - 677.93 KB 8 Pages, 1 Tables, 7 Figures
  • Debt Russia 2016.xls XLS - 429.00 KB


This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

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  • Executive summary
  • Financial sanctions
  • Less bonds, more alternatives
    • Different strategy for each player
    • Prepayments and asset sales help Rosneft
  • Moving towards Chinese and domestic financing
  • Higher interest burden to negatively impact profitability

In this report there are 8 tables or charts, including:

  • Executive summary
  • Financial sanctions
    • Who is targeted?
  • Less bonds, more alternatives
    • Spread - Russian government 10-year bonds vs. 10-year US Treasuries
    • Long-term debt outstanding per company (Yamal LNG not included)
    • Long-term debt outstanding per asset class (Yamal LNG not included)
  • Moving towards Chinese and domestic financing
    • The challenges of financing Russia's upstream: Image 4
    • The challenges of financing Russia's upstream: Image 5
  • Higher interest burden to negatively impact profitability
    • Gearing evolution since 2013
    • Upstream cash flow forecast until 2020 (nominal terms)
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