Oil & gas: Ruble exchange rate and its effect on margins

The operating profitability of Russian oil and gas exporters has suffered from the strong ruble. A sensitivity analysis of EBITDA and net income to fluctuations in the USD/RUB exchange rate shows that 1% appreciation (depreciation) of the ruble decreases (increases) EBITDA and net income of oil and gas producers by 1.1% and 1.8%, respectively. Rosneft, Tatneft and SurgutNG are the most sensitive to moves in the ruble. Should the current USD/RUB rate persist until year end, SurgutNG may finish the year with a net loss and therefore not pay dividends for 2022.