by John O’Donnell and Christoph Steitz
FRANKFURT (Reuters) – After having already mobilized nearly 500 billion euros to combat the consequences of the energy crisis which is hitting the country hard, the German government will also have to assume the risks associated with the 216 billion euros of derivatives made by the energy giant Uniper.
The nationalization of Uniper, hit hard by the stoppage of Russian natural gas deliveries, is the biggest rescue plan for a company ever undertaken in Germany.
The gas giant has recorded billions of euros in losses on derivatives, such as futures, since the start of the war in Ukraine. But its difficulties do not date from Russian aggression and Moscow’s decision to cut gas to Europe, since the group had already had to turn to the German state bank KfW to obtain aid worth two billion euros. euros.
Reuters has relied on recent financial statements from Uniper to calculate for the first time the total amount of its exposure to the arrived products, a sum the company has confirmed.
“In total, we had derivative positions of approximately €216 billion as of September 30, 2022,” a Uniper spokesperson said, saying only a small portion of these positions are high risk.
“Our speculative product positions are only a few million,” he added.
According to its accounts, Uniper held at that date in its assets approximately 198 billion euros of receivables on derivative instruments.
Whether used for hedging or speculative purposes, derivatives involve risk. If the market price falls well below, or conversely exceeds the price of an option, the cost of this position for the company can soar.
To protect themselves against major price fluctuations, traders post collateral, often in cash, with clearing houses. These security deposits have exploded with the recent spike in energy prices.
BAD GOVERNMENT ESTIMATE?
Uniper’s outstanding positions could lead to further losses for the company depending on how these prices move in the future, a person familiar with the matter told Reuters.
This risks increasing the bill for the German government, which has already planned to devote more than 51 billion euros to support plans and the upcoming nationalization of Uniper.
Shareholders of the gas giant are expected to approve its nationalization at an extraordinary general meeting scheduled for December 19.
Uniper reported losses of 40 billion euros in the first nine months of the year, 10 billion of which came from replacing Russian gas with more expensive liquefied natural gas.
The group also factored in 31 billion euros in expected future losses related to “valuation effects on derivatives and provisioning” related to lower Russian gas deliveries, Uniper said in its latest quarterly report. .
These estimates were based on energy prices at the end of September, which have fallen considerably since that date.
“We have to assume that Russia will continue to stop delivering gas to us and that we will incur further losses. Without the (…) deliveries of Russian gas, the gas sector will suffer losses until the end of 2024 “said the spokesperson.
A source close to the government said it feared the economy and energy ministries may have underestimated the risks associated with derivatives in their estimate of the full cost of rescuing Uniper.
A spokesman for the Ministry of the Economy wanted to be reassuring, saying that the losses caused by certain positions could be offset by gains on other derivatives.
The situation remains nonetheless delicate for Uniper, whose volume of liabilities linked to derivatives was multiplied by 2.5 compared to the end of 2021, and whose exposure to this type of product was at the end of the month. of September six times higher than that of the oil giants BP or Shell.
It is also much higher than that of the German energy company RWE, which amounted to 131 billion euros at the end of June, according to available public data.
(Report by John O’Donnell and Christoph Steitz, French version Tangi Salaün, editing by Kate Entringer)
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