Table of Contents
Executive summary ........................................................................... 3
Changes in key assumptions ....................................................................................................3
Valuation ..................................................................................................................................3
Risks ........................................................................................................................................3
Target price and estimate revisions................................................. 4
Target price revisions................................................................................................................4
Estimate revisions.....................................................................................................................5
Top picks – we add LUKoil alongside Rosneft................................ 7
Oil sector remains the preferred way to play Russian energy ..................................................7
Gas sector newsflow may continue to be negative..................................................................8
South African energy sector negatively affected by strong rand ..............................................9
Crude oil price assumptions........................................................... 11
The global economy................................................................................................................11
World oil demand....................................................................................................................12
Non-OPEC oil supply...............................................................................................................13
OECD inventories....................................................................................................................13
Oil price outlook......................................................................................................................14
Earnings revisions (Russia) ............................................................. 17
Revision of price assumptions ................................................................................................17
Introduction of East Siberian export duty holidays..................................................................17
Reduction of light product export duties.................................................................................17
Sasol earnings revision ................................................................... 18
Appendix A....................................................................................... 32
Valuation methodology ...........................................................................................................32
Recent changes ......................................................................................................................32
Valuation of individual companies ...........................................................................................34
Appendix 1 ....................................................................................... 41