Bloomberg News

Russia Oil and Gas Dividend Boost to Lift Yields, Otkritie Says

July 04, 2012

The 2012 dividend yield on Russian oil and gas companies will rise as OAO Gazprom, OAO Transneft and OAO Rosneft increase their payouts, Otkritie Capital said.

The energy industry’s average dividend yield will climb 190 basis points from 6.3 percent now, Otkritie analysts wrote in an e-mailed research note today. Crude rose to a one-month high yesterday, touching as much as $88.04 a barrel. MSCI Inc.’s Russia Energy Index slumped 18 percent last quarter.

“A combination of strong oil prices and lackluster share price performance means that the Russian oil and gas sector currently trades at an attractive average 2012 dividend yield,” analysts led by Alexander Burgansky wrote. “This could potentially grow to 8.2 percent as a result of possible favorable policy changes at Gazprom, Rosneft and Transneft.”

Gazprom, Russia’s natural gas export monopoly, and Transneft, Russia’s oil-pipeline operator, may start calculating dividends based on international reporting standards, boosting their dividend yields to 9 percent and 22 percent, respectively, Otkritie said. Rosneft’s plan to distribute additional 2011 dividends will lift the stock’s 2012 dividend yield to 7 percent, according to Otkritie.

Gazprom and Transneft trade at a dividend yield of 5.68 percent and 1.49 percent, respectively, Bloomberg data show. Rosneft’s yield is 1.6 percent. The MSCI Russia Energy Index (MXRU0EN) currently has a 4.41 percent dividend yield.

Gazprom fell 0.7 percent to 157.97 rubles, the biggest intraday drop since June 28, by 12:33 p.m. in Moscow. Rosneft declined 0.9 percent to 209.53 rubles and Transneft preferred shares retreated 1.2 percent to 47,699 rubles. The Micex Index fell as much as 0.8 percent before trading little changed at 1,436.22.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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