Interesantísima todal a info de gsk, pero como dijeron, para mí es imposible calcular a futuro cuanto puede llegar a ganar o no. Gazprom siento que es casi facílisimo de predecir salvo cisnes negros.
Volviendo a la gazprometa, excelentísimo artículo en seeking alpha.
Mega resumen, NS2 no es tan importante, puede llegar a venir power of siberia 2 que es equivalente al ns2 en volumen de exportación, pero más allá de todo eso lo más importante es el futuro de la industria del shale, que en estos precios no es rentable, sacó a muchos jugadores del juego, y esto debería empujar precios al alza. Gazprom sobrevivió a la última década que fue la etapa de oro del shale, ahora sin este jugador, con precios al alza, Gazprom debería brillar.
https://seekingalpha.com/article/440415 ... king_alpha
Summary
While most people are watching the Nord Stream 2 saga as a way to gauge Gazprom's prospects, a much bigger story is missed, namely the end of the shale boom.
The shale boom of the last decade did not impede Gazprom from significantly increasing its gas exports, as many people thought it would.
With the shale boom nearing its end, Gazprom has one less significant potential supply rival to worry about.
Even if shale production will not decline, LNG exports would, because the only way to maintain shale production going forward is to increase prices, so drillers stop losing money.
These days most Gazprom (OTCPK:OGZPY) investors and analysts are focused on the fate of the North Stream 2 pipeline. It is assumed that obstructing the 55 Bcm/year capacity pipeline would limit Gazprom's ability to export natural gas. It is a misguided assumption, given that Russia does still have an agreement with Ukraine on gas transit, even if it is at lower volumes than it used to be. Furthermore, the Turkstream pipeline is ramping up and approaching its full 31.5 Bcm/year capacity. Together with the Nord Stream 1 pipeline, Yamal, as well as potential LNG shipments, Gazprom already has enough capacity to more than match record shipments to Europe reached in the past few years. The Nord Stream 2 addition is more of a security of supplies project than a volumes increase one. It goes without saying that if the project will be finished it will inevitably lead to Russia capturing some more of the EU gas market, but it would not be an increase that would be equal to the capacity of the pipeline. Nor will it completely end Ukraine's role as a natural gas transit country, though it may further reduce its volumes. On the other hand, if it does not get built, there will be a new gas pipeline to China, with a 55 Bcm/year capacity and Russia would most likely utilize that new route to the fullest extent or close to it. Either way, the obstruction of Nord Stream will not do much to reduce Gazprom's longer-term gas export prospects. It will cause a one-time need to write down the value of the Nord Stream 2 investment. The damage to Europe's energy security however could be multiple times more painful than any temporary Gazprom setback. The US prescription for EU energy security, namely massive amounts of LNG imports is increasingly looking like a non-option. US shale production is increasingly struggling. With the apparent peak in US shale, Gazprom is set to see a massive increase in piped gas demand, as well as higher prices, therefore things are looking up for this company going forward.
Gazprom's financial results reflect the rough time that the entire oil & gas industry is going through.
With the massive disruption in industrial activities and transport in 2020, the oil & gas industry did not fare very well last year. Gazprom was no exception in this regard, even though things are starting to look up from here.
Gazrpom Q3, 2020 financial results
Source: Gazprom.
As we can see, sales volumes declined by 14%, profits went in the wrong direction, with a net loss in the third quarter of 2020 versus a profit in 2019. A worrying trend is a significant increase in debt. It is not a massive debt load by any means, but the 34% increase over a one-year period is worrying. It goes to show that Gazprom would not survive many years as we had in 2020. Then again, many oil & gas companies did not survive 2020 and there would be many others that would collapse way before Gazprom would. The good news for Gazprom is that a number of factors are converging which will work in its favor in coming years.
The Shale boom made it a tough past decade for Gazprom, and yet it came out better through the decade.
Starting in 2010 US natural gas production started to expand at a dizzying pace, together with oil production. It was by far the number one factor that influenced the global oil & gas market in the past decade.
US natural gas production
Source: EIA.
As the chart shows, in the last decade, to the end of 2019, US natural gas production increased by about 55%. While the industry was preparing for more and more LNG imports to make up a growing shortfall before the shale boom, the US actually became an LNG exporter. Starting with the Ukraine crisis in 2013, America started pushing for LNG exports into Russia's main export market as a matter of geostrategic imperative, even though commercial interests were suspected all along.
Gazprom's outlook went from a situation where the US was about to compete for LNG supplies with Europe and Asia, by buying shipments from places like Qatar, to trying to push LNG sales to those same areas that represent Gazprom's main export markets. The only factor that it still had going was a pricing advantage, given that it is much cheaper to transport gas by pipeline than it is to do it on a ship. Because LNG prices went down, mostly due to the large excess supply, Gazprom also had to watch its pricing in order to make it competitive, thus cutting into its profits.
Despite all the geopolitical turmoil, as well as the robust increase in US natural gas production, which greatly weakened the demand outlook for Russian gas, Gazprom did manage to increase exports to Europe considerably since 2010.
Gazprom exports to Europe by year
Data source: Gazprom.
We should keep in mind that starting in 2014 geopolitical factors also started kicking in. In 2014 the South Stream pipeline project was obstructed by the EU and the US. From that point on, it was assumed that the EU will greatly reduce its reliance on Russian natural gas, while imports of American "freedom gas" will grow exponentially. As the data above shows, it did not turn out that way. Going forward, the likelihood that the EU will ditch Russian gas in favor of American LNG is even less likely to materialize. The changing nature of the shale industry makes it very unlikely for American LNG to be either plentiful enough or price-competitive in order to take on Russian pipelined gas.
The Shale industry lost money throughout the boom period of the last decade. It cannot afford to do so in the future.
The shale revolution produced a massive boost in global energy supplies. It was a much-needed boost, given that global conventional oil production in particular had no hope of keeping up with demand on its own in the past decade. The conventional natural gas situation is somewhat healthier around the world, with still plenty of places where production can still be expanded. The fact that the global natural gas supply situation was already adequate in the last decade, made the shale gas production increase in the US an even harder situation for Gazprom to grapple with. In the end, Gazprom still has one insurmountable advantage over shale exports to the old world, namely the ability to profitably produce and ship gas to customers at a lower price.
The shale industry on the other hand has been a victim of its own production success. All the excess production that could not be soaked up by the continental market, nor exported in a timely manner, pushed US natural gas prices down, below the minimum price needed for shale producers to break even. Shale production also had a similarly depressing effect on oil prices. As a result, the shale industry lost about $300 billion since 2010 by some estimates. For many years, investors accepted these losses, given that market consensus was that it was all part of ramping up costs, with very little attention being paid to the actual economics of each well when all costs were factored into the equation. Shale drillers were taken at their word when they were offering break-even cost forecasts. A few lone voices, such as mine were mostly ignored. I produced a series on shale producers on this site back in 2015, which pointed out back then that those break-even estimates were mostly fictitious, called "Economics Of A Shale Well". The first company I analyzed for that series was Sanchez Energy which went bust since then, as did a number of other companies I looked at for that series. Those that did survive were mostly companies which managed to position themselves into some of the best acreage, mostly in the oil sector of the shale patch.
Back then I did get shale profitability right, based on what we have seen since then. What I did get horribly wrong was investor willingness to continue ignoring the continuing financial hemorrhage of shale companies and the overall industry under the assumption that the losses were mostly due to production ramp-up costs. It did take investors almost another half a decade to finally come to terms with the realities of shale profitability. While there are still many misunderstandings in regards to shale profitability, there is now a wider consensus in regards to the fact that the shale patch needs much higher prices for both oil & gas in order to make it profitable to continue increasing production.
Because investors are no longer ready to pick up the tab for continued production expansion in the shale patch, something will have to happen to make the industry viable. Because more and more firms and entire fields are faced with the prospect of running out of prime drilling locations, that something needs to be substantial and sustained. The only thing that can help sustain the shale industry will be much higher oil & gas prices.
The dilemma of higher natural gas prices in particular is that it will make it harder to export it as LNG. US LNG has to compete not only with pipelined gas which tends to be cheaper, but also with cheaper sources of LNG. For instance, on the European market, Norwegian as well as Russian LNG shipments do have a price advantage, mostly because of the shorter distance that the gas travels on ships. Russian LNG also has a similar advantage in a number of Asian markets, where its Sakhalin facilities are in relatively close proximity to a number of major LNG customers, such as Japan and China's East Coast. Qatar also sells LNG at very competitive prices into most major markets. US LNG needs low natural gas prices in order to remain competitive. The US LNG industry's needs are at odds with the minimum needs of the shale producers in terms of natural gas price levels.
Gazprom is about to lose a major emerging competitor.
The American shale industry was supposed to emerge as perhaps one of Gazprom's fiercest competitors in the last decade. Now it looks increasingly like US shale will become a minor player outside of North America, at best. In fact, things may get to the point where within the time span of the current decade, the US could become a net LNG importer, reducing the volumes that will be available to Gazprom's customers in Europe and Asia for LNG exports from places like Qatar or Australia.
For Gazprom, the growing realization that US shale gas, therefore LNG shipments will cease to grow soon and then eventually start declining, will mean that it will give potential customers more incentive to secure pipeline deals and complete existing projects. The Nord Stream 2 project will get done if recent news are anything to go by. It seems that work on the pipeline did restart, even though there continues to be a lot of political opposition in the US and in the EU to the project. At this point, given how much money has been invested in the project, not only by Gazprom but also many of its EU partners, I do not see much of a chance of the project being abandoned. It may be further delayed, but that is not an immediate concern, because Gazprom already has enough export capacity towards Europe, between its Ukraine transit deal, its existing pipelines, as well as the continued ramping up of Turkstream. The Nord Stream 2 capacity might only become an immediate issue if the Ukraine deal were to fall apart for whatever reason, which I do not see happening.
If the unlikely will happen and the Nord Stream 2 pipeline will eventually be abandoned, There is a plan B in place, in the form of Power of Siberia 2 pipeline to China. This potential project is in its feasibility study phase at the moment and the planned capacity is 55 Bcm, which is same as Nord Stream 2. The source fields will be the same that currently provide natural gas to Europe. It is possible that the second pipeline to China will materialize, even if Nord Stream 2 will be finished, but if it will get obstructed, I think the pipeline to China will become an almost sure thing.
The last thing I want to highlight is the fact that pricing trends are likely to go in Gazprom's favor this decade, in addition to higher export volumes. There are two major factors that will affect pricing moving forward. The main factor is oil pricing. In that regard, shale profitability issues are starting to come into play as well. Higher oil prices are needed in order to maintain shale drilling, given the massive losses suffered by the industry so far, as well as the fact that drillers are increasingly running out of prime acreage, meaning that production costs are headed much higher going forward. The shale industry currently produces about 8% of global oil production, therefore prices will have to rise to a point where drilling can at least be maintained at a level which will allow for a gentle decline in production. Gazprom's long-term gas supply contracts are largely tied to oil price movements, therefore things are looking overall alright for Gazprom in this respect for the decade. There may be a few bumps in the road along the way, where demand factors may push oil demand, therefore prices down, but on average oil prices should be relatively healthy this decade.
The second factor is competition-related price discounting, which is also less likely to occur, given that the pressure will be off to price pipeline gas much lower in order to discourage LNG shipments. While LNG tends to be significantly more expensive, it is nevertheless attractive in many ways, because it offers more supply flexibility. The price of that flexibility tends to become too high if the price gap between pipeline gas and LNG is significant. With shale gas supplies probably on the verge of a permanent decline and with the US gas market most likely going into higher price mode, Gazprom's need to discount its gas in order to ward off competition is lessened somewhat.
In the last decade, Gazprom weathered the worst that the shale competition scenario had to offer, without suffering a decline in exports, in fact it gained significant market share. All the geopolitical pressures that came last decade, after the Ukraine crisis, did little to stop Gazprom's exports growth. Not only did it increase supplies to Europe, but it also opened a new pipeline to China, which will eventually have a capacity of 38 Bcm. It also did it without having to lose money in most years. Now, with the shale boom either at an end or close to it, Gazprom's prospects look increasingly promising. If it managed to thrive during what was probably the most significant challenge in decades, it should be able to rake in some decent profits this decade and improve its overall financial position.
