Information of the 50th General Meeting of Geoplin
Information on the 50th General Meeting of Geoplin
At yesterday's 50th General Meeting of Geoplin d.o.o. Ljubljana, the shareholders gave their consent to extending the loan agreement based on which the majority shareholder, Petrol d.d., Ljubljana, will ensure liquidity for Geoplin and enable it to continue to operate smoothly. The management has estimated that a capital increase of the company is not needed given the current market situation.
Aiming to ensure secure supply, Geoplin’s management has been managing liquidity and business risks and limiting potential negative effects of substantially reduced supplies of natural gas by the supplier Gazprom Export (hereinafter “Gazprom”). By taking into account the activities implemented by the company in the field of procurement source diversification and the substitute purchases of natural gas from western partners, supply to Slovenian customers will not be affected even in the case of a potential complete halt of supply by Gazprom, if the European gas market continues to function.
Geoplin has diversified its procurement portfolio and purchased enough gas from European partners for this year, which means that Slovenian customers are not dependant on the long-term natural gas supply agreement with Gazprom, even if the supply is further reduced or even stopped. For next year, a part of gas supply has already been agreed with European partners, whereas a part of the needed quantity has been agreed under the contract with Algerian Sonatrach based on which natural gas will start flowing to Slovenia on 1 January 2023
At the General Meeting, the shareholders were also briefed on the financial effects of the limited gas supply. Problems with the management of the Russian agreement are a result of the unannounced supply reductions which have been in effect since 14 June 2022. The amounts of daily reductions are unpredictable, which has prevented a normal and efficient management of the agreement in a way that would prevent Geoplin from suffering any significant damage. Based on experience with supply insecurity in the past and given the high volatility of natural gas prices, there is a real risk that the negative result from this agreement would continue in the future.
The aforementioned long-term agreement can no longer be managed efficiently, and it has had a negative effect on Geoplin’s operations. Therefore, the General Meeting gave its consent to executing legal transactions and acts to protect the interests of the company. Geoplin has called upon Gazprom to resolve the breach of the agreement and provide full compensation for the damage resulting from such breach.
Geoplin’s management will continue to carry out all activities necessary to ensure the smooth supply to Slovenian natural gas customers in the future.