ojsc rosneft investor presentation...note: (1) rosneft abc1+c2 reserves under russian classification...
TRANSCRIPT
29.04.2016
April 2016
OJSC RosneftInvestor Presentation
Important Notice
Information herein has been prepared by the Company. The presented conclusions are based on the general informationcollected as of the date hereof and can be amended without any additional notice. The Company relies on the informationobtained from the sources which it deems credible; however, it does not guarantee its accuracy or completeness.
These materials contain statements about future events and explanations representing a forecast of such events. Anyassertion in these materials that is not a statement of historical fact is a forward-looking statement that involves known andunknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to bematerially different from any future results, performance or achievements expressed or implied by such forward-lookingstatements. We assume no obligations to update the forward-looking statements contained herein to reflect actual results,changes in assumptions or changes in factors affecting such statements.
This presentation does not constitute an offer to sell, or any solicitation of any offer to subscribe for or purchase anysecurities. It is understood that nothing in this report / presentation provides grounds for any contract or commitmentwhatsoever. The information herein should not for any purpose be deemed complete, accurate or impartial. The informationherein in subject to verification, final formatting and modification. The contents hereof has not been verified by the Company.Accordingly, we did not and do not give on behalf of the Company, its shareholders, directors, officers or employees or anyother person, any representations or warranties, either explicitly expressed or implied, as to the accuracy, completeness orobjectivity of information or opinions contained in it. None of the directors of the Company, its shareholders, officers oremployees or any other persons accepts any liability for any loss of any kind that may arise from any use of this presentationor its contents or otherwise arising in connection therewith.
2
25
31
37
38
50
52
59
83
131
Liquids Gas14.6
13.4
13.0
13.0
11.7
10.3
9.2
4.3
2.6
1.7
2.4
2.5
2.8
3.0
3.3
4.1
4.1
5.2
29.04.2016
bln boe mmboed $/boe
Hydrocarbon reserves1 Hydrocarbon production Lifting costs
3
Global Leader in Reserves, Production and Efficiency
Note: (1) Rosneft ABC1+C2 reserves under Russian classification as of Jan 1, 2016, data for other companies is taken from Wood Mackenzie reserve estimates including commercial and sub commercial reserves.
The Company's environmental policy was approved. It defines Rosneft’s goals, objectives and principles in environmental protection
Program to improve the environmental efficiency by 2025 in place. Its implementation will help achieving strategic goals in the environmental protection
International organization BSI confirmed the compliance of HSE Information System with ISO 14001, highlighting the strengths of the environmental management system were pointed out
The approved marine ecosystems biodiversity preservation program is being implemented in the Rosneft license areas located in the Arctic zone of the Russian Federation till 2020
The Company and World Wildlife Fund (WWF) Russian Office are implementing agreed Road Map of activities for 2015-2016
4
Environmental Protection Activities
The Company's objective in environmental protection is to be the leader in environmental safety among oil and gas companies
RUB 71.7 bln – environmental protection expenses of which
RUB 44.7 bln capital investments aimed at reducing negative impact on the
environment (+65% vs. 2012)
Key 2015 results
0.282
0,3290.298
0.327
jan feb mar apr may jun jul aug sep oct nov dec
LTIF 2014
LTIF 2015
31
7
12
11
1
44
8
24
11
1
HSE, total Work safety Industrialsecurity
Fire safety Flush, radiationsafety
20142015
5
Lost time injury frequency
HSE expenditures, RUB bln
+42%
Health and Safety Priorities
Company Policy on Industrial Safety and Labor Protection was introduced
British Standards Institution (BSI) confirmed compliance of ICS ISLPE with ISO 14001 and OHSAS 18001
The long term goal of the Company in occupational health is to reduce the work related injuries frequency. To achieve this goal, the Company develops and implements occupational safety programs
A long-term program was implemented to improve the culture of safety and informed leadership in the field of industrial safety and occupational safety.
Measures on flush safety protection are utilized; programs aimed at fire risk reduction are introduced
A set of actions on transport safety is implemented on a regular basis
Implementation of a new approach on ISLP risk management is in progress
Total Health & Safety expensesRUB 44 bln (+42% vs. 2014)
6
Robust Reserve Replacement
>240% average 10 year reserve replacement ratio
132% organic SEC reserve replacement for the last 2years
Global leader in geological exploration: costs per boeof new reserves is more than 10 times lower vs. theaverage level for the key competitors
131 bboe total АВС1+С2 reserves
46 years АВС1 reserves-to-production ratio
Source: companies' dataNote: (1) Calculated as exploration expenses divided by the organic growth of reserves under SEC classification including affiliates. PetroChina – excluding affiliates. Due to the negativegrowth of Petrobras reserves, the cost of organic reserve addition per boe is not shown. (2) Including affiliates. PetroChina – excluding affiliates.
-35%
19%
54%
62%
69%
80%
92%
100%
105%
131%
132%
31.3
5.4
5.3
3.3
3.0
2.5
2.4
1.8
0.3
0.1
100%
Organic reserve replacement cost1 in 2014-2015 Organic reserve replacement ratio2 in 2014-2015
$/boe
7
2010 2015 2020
Gas
Liquid HC
~6.0
2.5
5.2
Efficient Reserve Base Development
Hydrocarbon production growthmmboed
Production doubles every 3 years on average in 1998-2015
Global leader in F&D costs: average spending rate at $4.1 per boe in 2014-2015
Hydrocarbon production growth achieved recently mainly by gas segment
Rosneft plans to produce 300 mmtoe of hydrocarbons in 2020
Maintaining leadership in development efficiency is one of the key strategic goals
Source: companies' dataNote: (1) Calculated as Costs of Exploration + Development costs / Progression of SEC proved reserves through reserves revaluation, discovery of new reserves and reserves delivered by enhanced oil recovery techniques. Including affiliates. PetroChina – excluding affiliates. Due to reserves decline in Petrobras, the exploration and development per barrel costs are not shown.
153.1
32.0
29.2
27.6
27.1
22.0
22.0
17.9
9.8
4.1
F&D costs1 in 2014-2015$/boe
2012 2013 2014 2015
Producer price index
In-house service provider
3rd party contractor
0
2,000
4,000
6,000
8,000
8
Status of the in-house rig fleet
Weighted average drilling rate
In-house service providers
3rd party contractors
+ 22% vs. 2013
2014 2015 2016
Новые БУ (<10 лет) Старые БУ (>10 лет)
34%
66%
РФ
213 rigs223 rigs 220 rigs ~850 rigs2
High-tech In-house Service
Drilling rate1 Service cost dynamics1
meters/rig-month %
New rigs (<10 years) Old rigs (>10 years)
Russia
The program of technical renovation of the in-house rig fleet is in progress: Rosneft drilling services - one of the most advanced among the Russian drilling companies (61% of the rig fleet has an average age of <10 years, including the directly owned rigs and those in financial and operating lease)
Availability of own drilling services restrains the external contractors price growth
Company's demand in drilling capacities at the new fields is fully covered
In 2015, Trican Well Service hydrofracturing assets were successfully acquired and integrated
Note: (1) The data for directional wells of RN-Yuganskneftegaz for 2015 (2) RBK Research, Russian oilfield services market 2014
2014 2015 2016
Directional wellsHorizontal wells
Average flow rates in 20152
9
31%
20% 20%
38%
21%
29%
47%
22%
30%
Gazprom neft Lukoil Rosneft
2013 2014 2015
1,8391,594
+15%
14.3
49.0
9.4
34.0
Average flow rate per oil well Average flow rate per new oil well
Rosneft Russia average
tpd
Drilling Activity Ramp-up and Application of Advanced Technologies
Horizontal wells dynamics1 New oil wells completed
Horizontal wells share growth to 30% across the entire portfolio
Flow rates significantly exceed the sector average
Optimization of well construction technological programs – horizontal wells drilling rate increased by 6% vs 2014
Efficient wellwork – horizontal wells with multi-stage hydrofrac increased by ~45%; side-tracking operations incresed by >44% with incremental production exceeding 2.6 mmt
Yuganskneftegaz: the share of horizontal wells with multifrac increased to 13% in 2015 (8% in 2014)
Note: (1) CDU TEK data, well performance, constructed wells (rate of horizontal wells in development drilling) (2) CDU TEK data, Rosneft - IFRS
10
Leader in E&P Efficiency
High-yield oil and gas production business (gas segment share in 2015 - 20%)
Total E&P unit OPEX and CAPEX 2 times lower vs. Russian competitors and 4-5 times vs. global majors
Increase of competitive advantages under high volatility in the oil market
6.913.8 14.1
28.2 30.0 30.7 32.6 33.337.3
48.1
0
12
24
35
47
59
71opex 2015 capex 2015 opex + capex 2014
$/boe
E&P OPEX and CAPEX 2014-2015
11
Greenfield Development Pipeline
Greenfield start up pipeline Superb efficiency of greenfields3
105.285.8
48.8
159.0
Average flow rateof new wells, tpd
Unit OPEX, RUB/boe
Uvat+VChNG+VankorCompany E&P total
The Company optimizes the budget with a focus on new upstream greenfields
Launch of Labaganskoye field in July 2015 with expected ~1 mmtoe output in 2016
Key near-term launching targets – Suzun, Naul and East Messoyakha
Preliminary contracts signed for Russkoe, Kuyumba, YuTM and E.Messoyakha to deliver oil to Transneftpipeline system (Zapolyarye-Purpe, Kuyumba-Taishet)
Greenfield production and CAPEX4
Note: (1) Production given 100% share. Rosneft share ~50%, (2) Includes oil, condensate and LPG, (3) As for 2015, (4) All projects given 100% share, oil upstream only
Laba
gan
Nau
l
Ros
pan2
Lodo
chno
e
Suzu
n
Тааs
-Yur
yah
(2st
.)
E.M
esso
yakhа1
Rus
skoe
YuТМ
Кuyu
mba
1
Tagu
l
0
2
4
6
8
2015 2016-2017 2018-2019 2019-2020
Pro
duct
ion
plat
eau,
mm
t
Launch year
CAPEX, RUB bln
Production, mmt
mmtRUB bln
Upstream Portfolio Optimization
12
Bringing partners to the existing projects
Vankor
- Activities to finalize the sale of 15% stake to ONGC are under way
- MoU on cooperation assuming increase of ONGC stake to 26% signed
- Heads of Terms on sale of 23.9% stake to the group of Indian companies signed
Taas-Yuryakh
- Deal on sale of 20% stake to BP closed
- Agreement on sale of 29.9% stake to consortium of Indian investors signed
Attracting partners to the new projects to share risks, financing and transfer technologies in order to efficiently develop the fields
Sale of 49% stake in Yurubcheno-Tokhomskoe and Russkoe fields to Sinopec
Low-margin assets optimization
Regular ranking, and prioritizing process; ongoing work with low-margin assets
Sale of 50% stake in Polar Lights closed
RusskoePartner: Sinopec (up to 49%)
YuTMPartner: Sinopec (up to49%)
Moscow
VankorPartner: ONGC (15%, up to 26%), group of Indian companies (up to 23.9%)
Taas-YuryakhPartners: BP (20%), consortium of Indian investors (29.9%)
Polar LightsSale of 50% stake
13
Gas Business: Effective Production Buildup
10% organic gas production growth in 2015
Russian АВС1+С2 gas reserves increased by 4% to 7.5 tcm as of 2015 year end
Key achievements
Gas production1
bcm
0
30
60
90
120
2014 2015 2016 2017 2018 2019 20200
4
8
12
16
2016-2017 2018-2019 2019-2020 2020 +
Pro
duct
ion
plat
eau,
bcm
Ber
egov
oe
Ros
pan
KC
HLA
Kha
ram
pur (
Cen
oman
ian)
Rus
sko-
Rec
hens
koye
Kha
ram
pur (
Turo
nian
)M
inkh
ovsk
oye Sa
khal
in -1
(100
%)
Seve
ro-V
enin
skoe
New fields development
+10%
Key Strategic Targets
Production growth to 100 bcm by 2020
>20% share on the domestic market, the leading position in the Russian market among the independent gas producers
Becoming a global player on the LNG market
Note: (1) Gas production data are calculated as the volume of gas extracted less gas flared and gas used in NGL production. Production at the new acquired assets is shown from the date of purchase.
Rospan and Russko-Rechenskoye
Sibneftegas
Kharampur
KCHLA
Gas projects development in Russia
Sakhalin - 1 Severo-VeninskoyeMinkhovsky LA
14
less than 5 bcmmore than 5 bcm
Key gas transportation routes
Gas production hubs
66% 19% 15%
Electricity producers Industrials Other
KhMAO
Kemerovo Region
Kaliningrad Region
Bashkortostan
Perm Kray
SverdlovskRegion
Moscow Region
Krasnodar Region
Novosibirsk Region
Altay KrayOrenburg
Region
Company's share at the domestic gas market
2012 2013 2014 2015
3%
10%15% 16% 1
Plans of gas supply in UGS zone by 2020
Long-term goals in gas sales
Achievements in gas sales
Note: (1) Preliminary data based on total domestic gas consumption forecast in 2015
Established an effective portfolio of contracts differentiated by time and consumers
Power generation companies, the largest consumers of natural gas in Russia, account for about 2/3 of the portfolio
Current domestic market share at around 16%
Improving gas marketing efficiency via long term contacts with end customers in Russia
Expanding the supply area on the domestic market
Taking the leading position among the independent gas suppliers with a local market share above 20%
Structure of portfolio by types of consumers
bcm
Striving to Take up a Leading Position Among Independent Gas Suppliers in the Domestic Market
15
Progress in refineries upgrade program
Key achievements for 2015
Plans for 2016
Light product yield improved from 54.8% to 55.3%, refining depth increased from 65.3% to 66.5%
Full transition to Euro-5 motor fuels production for the Russian market in accordance with Technical Regulations requirements
Commissioning of isomerization units at Kuibyshev refinery, at Novokuybyshev refinery and at Ryazan refinery and launching MTBE in Angarsk petrochemical company
Reconstruction of catalytic reforming unit at Syzran and Kuybyshev refineries completed
Commissioning of FCC and MTBE units at Kuibyshev refinery
Further progress in facilities upgrade program
Implementation of import substitution program -completion of catalyst regeneration project at Novokuybyshev catalyst plant
Further improvement in efficiency and existing assets management
42%
50%
52%
52%
55%
56%
59%
66%
Рязанский НПЗ
Ачинский НПЗ
Ангарская НХК
Комсомольский НПЗ
Новокуйбышевский НПЗ
Сызранский НПЗ
Туапсинский НПЗ
Куйбышевский НПЗKuybyshev Refinery
Tuapse Refinery
Syzran Refinery
Novokuybyshev Refinery
Komsomolsk Refinery
Angarsk PCC
Achinsk Refinery
Ryazan Refinery
85 87 8588 92
51% 59%
80% 81%
100%
54% 55% 55% 55%
69%
0%
20%
40%
60%
80%
100%
0
16
31
47
63
79
94
2013 2014 2015 2017 ModernizationcompletionRefinery thoughput in Russia, mmt
Gasoline and diesel Euro-4/5 production share,%Light product yield,%
Processing and production of motor fuel1
Rosneft Continues the Refining Modernization in Russia
Note: (1) W/o FEPCO project; share of motor fuel and diesel fuel – w/o mini refineries
Rosneft (2014) Rosneft without modernization Rosneft with modernization
Refinery Modernization Effect
16
Modernization effect+7.5 $/bbl
Note: (1) Refining margins calculated assuming the following macro parameters: crude oil price of $55 per bbl of Brent and exchange rate of RUB 62,5 per USD
Average refining margin growth1
2.6
10.1
4.0
Tax maneuver effect-1.4 $/bbl
Following the modernization at Russian refineries refining depth will increase to ~79%, light product yield will reach ~69%, production of motor fuels conforming technical regulations will grow to 55 mtpa
Refinery modernization and upgrade CAPEX will total c. RUB 1.1 trln (incl. VAT) of which >RUB 700 bln already financed
Worsening macro and refining margins decline following tax maneuver reduced financial options for capital-intense modernization program. However the Company preserved almost all projects in its portfolio and continued their implementation within existing financial constraints
$/bbl
Note: (1) Delayed coking or flexicoking
Refineries primary refining
vacuum block
isomerization
cat cracking
hydrotreatment
reforming alkylation coking1 hydrocra
cking MTBE
Ryazan
Angarsky
Novokuibyshevsky
Syzransky
Kuibyshevsky
Komsomolsk
Touapsinskiy
Achinsk
Saratov
Effect Throughput Refining depth
Euro-5 gasoline
Lightproduct
yield
Euro-5 motor fuels
Euro-5 gasoline
Euro-5 gasoline
Refining depth
Lightproduct
yield
Euro-5 gasoline
Construction completed Completion in 2017+ UpgradeCompletion in 2016
unit capacity
Refinery Modernization Roadmap
17
18
Crude oil sales channels
20%
70%
9%1%
AsiaEurope and otherCISDomestic
200835%
52%
8% 5%
2015
14.8
29.7
42.5
Received 2013 Received 2014 Received 2015
$ bln
Efficient Oil Marketing
Focus on optimizing logistics and maximizing netbacks
Supplies to Asian market up 120% for last 4 years; recordhigh volumes at 39.7 mmt in 2015
Further increase in supply expected to 49.5 mmt by 2020(42% of total crude oil export)
Current portfolio of LT supply contracts offers sustainablehigh-margin realization channels at the market pricingterms ensuring highly profitable resources monetization
Prepayments under LT crude oil supply contractsLong term crude oil supply contracts1
Direction Partner Average annual volumes (mmt)² Duration
China CNPC, Transneft up to 40³ 10-27 years
Novorossiysk/ Primorsk/ Ust-Luga
Glencore, Vitol, Trafigura, BP 13 5 years
Germany Totsa, RTSA 11 2-3 years
Poland Orlen, Grupa LOTOS S.A. 12 3-7 years
Czech Orlen 2 3 years
Domestic market Afipsky Refinery 2 3 years
Note: (1) The list of contracts in force as of March 2016 including duration (2) Volumes for a given year may differ from average volumes (3) The number assumes potential increase of annual supplies from 7 to 10 mmtpa
Note: (1) Including international and off-shore projects
Flexible investment program: quick response to changes inmacro environment
Stability of strategic objectives:
production increase with a focus on the most efficientprojects,
meeting the license and inter-governmental obligationsincluding the provision of oil and petroleum productsupplies,
preserving the market share
2016-17 Capex: new Upstream projects1 ~ RUB 620 bln,Downstream development projects ~ RUB 160 bln.
Sustaining leadership in E&P unit CAPEX
19
0
250
500
750
1000
2014 2015 2016-2017 range
Upstream (brownfields) Upstream (greenfields)Downstream (existing) Downstream (new)Other
595
0
2
4
6
0
250
500
750
1000
2013 2014 4 кв.2015 2015Upstream Downstream Other HC production
RUB bln mmboepd
CAPEX and HC production
186
533560
CAPEX
RUB bln
533
2
595
Flexible Investment Program
33.5
23.8
22.3
21.8
20.3
19.0
17.0
10.1
9.5
4.3
2015 Upstream Capex: benchmarking$/boe
204
596657
2013 2014 2015
Free cash flow (FCF) growth in 2015 to RUB 657 bln(+10% vs. 2014)
Despite worsening macro Rosneft continuesgenerating $6-7/bbl FCF being one of the globalleaders among publicly traded O&G companies
Rosneft retains its leading position in terms of FCF generation in Russian O&G sector
Rosneft with FCF yield above 15% has significant dividend growth opportunity
RUB bln
Free Cash Flow
20
Bloomberg 2016 consensus on FCF and div yield
Dividend financed with debt Dividend covered with FCF
ATADNVTK
LKOD
BANE
ENI
OGZD
BP
FP
XOM
PTRSGGD
COP
CVX
RDSA
STLSIBN
PBR
0%
2%
4%
6%
8%
10%
-20% -15% -10% -5% 0% 5% 10% 15% 20%
Div
iden
d yi
eld
FCF yield
Robust Free Cash Flow Generation
-10.8-3.0-1.6
0.42.6
3.44.24.7
6.06.5
$/boe
2015 Free cash flow: benchmarking (majors)
561
13696169
216
448
1,129
497
Sources Uses
External funding Asset disposalPrepayments under long-term crude oil supply contracts Operating cash flowIncrease of funds available for debt management Acquisition of non-current financial assetsAsset acquisition InterestDividends CAPEX & Licenses
RUB bln
2013 2014 2015
21
596
871378043
1,397
1,257
938
145
Sources Uses
572
8563
1,479
746
470
97
886
Sources Uses
Sources and Uses of Cash
Urals price Gross margin
2014 2015
22
Urals price Gross margin
2014 2015
51
97
-48%
1318
-24%
51
35
3
13
2014 2015$/bbl ∆%
-48%
-54%
-32%
-24%
53
100
-47%
2237
-41%
Crude exporter's margin (Brownfields1) Crude exporter's margin (Greenfields1)
$/bbl $/bbl
Crude price
MET, export duty and transport tariff
Lifting costs
Gross upstream margin
Note: (1) The margin of oil exporter is calculated as follows: for the Brownfields – by the example of route RN-Yuganskneftegaz - Primorsk, for Greenfields - on the example of route Taas-Yuryakh - Kozmino
Steady Earning Power
97
75
4
18
23
89%
11%Foreign currency
Rubles
Debt profile by currency
Debt and net debt dynamics
Note: (1) Based on the CBR exchange rate as of the end of the relevant reporting period, (2) Excluding future interests accrued after Dec 31, 2015, including future lease payments
Debt maturity profile
14.3
8.8 7.2
1.8
13.9
2016 2017 2018 2019 2020-2029
$ bln2
43.8 43.339.9
24.5 23.2
16.7 12.714.4
23.0 22.4
1.5 1.7 1.71.2 1.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0
10
20
30
40
50
60
70
Q4 14 Q1 15 Q2 15 Q3 15 Q4 15
Net debt
Cash & equivalents, ST financial assets and other
Net debt/EBITDA
$ bln1
45.6 Gross debt
60.5 56.0 54.3 47.5 45.6
Gross debt for 12M 2015 decreased by $14.9 bln1
(24.6%) to $45.6 bln1 (RUB 3,323 bln), net debt was down $20.6 bln1 (47.0%) to $23.2 bln1 (RUB 1,694 bln)
Free cash, short-term financial assets and part of long-term deposits amounted to $22.4 bln1 (RUB 1,629 bln) as of Dec 31, 2015
Financial Stability
Dividend payments and oil prices
24
25%18% 14% 12% 8% 5%
-5%
Sustainable Dividend Payments / High Yields
19.75%
69.50%
10.75%
Russian Federation
Free float BP
Rosneft shareholders2
Dividends paid since the IPO totaled ~ RUB 500 bln
DPS CAGR since the IPO >25%
Dividend payout ratio of no less than 25% of IFRS net income starting 2011
RUB 11.75 per share (RUB 124.5 bln, 35% of IFRS net profit) – dividend recommended by the BoD for 2015,+43% YoY
Benchmarking free cash flow yield1
* Adjusted for RUB 167 bln revaluation effect of acquired TNK-BP assetsNote: (1) Calculated using LTM free cash flow, (2) As of April 1, 2016
1.3 1.6 1.9 2.3 2.87.5 8.1
9.2*8.2
11.8
61.7
111.3 108.7
0.000.501.001.502.002.503.003.504.004.505.005.506.006.507.007.508.008.509.009.5010.0010.5011.0011.5012.0012.5013.0013.5014.0014.5015.0015.5016.0016.5017.0017.5018.0018.5019.0019.5020.0020.5021.0021.5022.0022.5023.0023.5024.0024.5025.0025.5026.0026.5027.0027.5028.0028.5029.0029.5030.0030.5031.0031.5032.0032.5033.0033.5034.0034.5035.0035.5036.0036.5037.0037.5038.0038.5039.0039.5040.0040.5041.0041.5042.0042.5043.0043.5044.0044.5045.0045.5046.0046.5047.0047.5048.0048.5049.0049.5050.0050.5051.0051.5052.0052.5053.0053.5054.0054.5055.0055.5056.0056.5057.0057.5058.0058.5059.0059.5060.0060.5061.0061.5062.0062.5063.0063.5064.0064.5065.0065.5066.0066.5067.0067.5068.0068.5069.0069.5070.0070.5071.0071.5072.0072.5073.0073.5074.0074.5075.0075.5076.0076.5077.0077.5078.0078.5079.0079.5080.0080.5081.0081.5082.0082.5083.0083.5084.0084.5085.0085.5086.0086.5087.0087.5088.0088.5089.0089.5090.0090.5091.0091.5092.0092.5093.0093.5094.0094.5095.0095.5096.0096.5097.0097.5098.0098.5099.0099.50100.00100.50101.00101.50102.00102.50103.00103.50104.00104.50105.00105.50106.00106.50107.00107.50108.00108.50109.00109.50110.00110.50111.00111.50112.00112.50113.00113.50114.00114.50115.00115.50116.00116.50117.00117.50118.00118.50119.00119.50120.00
0
2
4
6
8
10
12
14
16
18
20
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
DPS, RUB
Brent, $/bbl
3.7
12.9
• OPEX control• Managing SGA and production costsBelow inflation
• CAPEX control• Review current project portfolio to increase profitabilityOptimization
• Free cash flowPositive
• Dividend payoutNot less than 25% of IFRS net profit
• Preserving financial leverage near current levels~1.3-1.4x Optimal mix of external and internal financing
Provide consistently high shareholder returns
Generate free cash flow sufficient to fulfill all obligations
Optimization of investment portfolio, supplier relationship management
Control over manageable operating expenses
Financial Priorities
25
Appendix
27
Key Financial Indicators
Indicator 2015 2014 % 2013 %
EBITDA, RUB bln 1,245 1,057 17.8% 947 11.6%
Net income, RUB blnattributable to Rosneft shareholders
355 348 2.0% 549 (36.6)%
Adjusted operating cash flow1, RUB bln 1,252 1,129 10.9% 764 47.8%
Capital expenditures, RUB bln 595 533 11.6% 560 (4.8)%
Adjusted free cash flow1, RUB bln 657 596 10.2% 204 >100%
EBITDA, $ bln 20.8 29.0 (28.3)% 29.5 (1.7)%
Net income, $ blnattributable to Rosneft shareholders
6.1 9.3 (34.4)% 17.4 (46.6)%
Adjusted operating cash flow1, $ bln 21.9 29.7 (26.3)% 24.0 23.8%
Capital expenditures, $ bln 9.7 13.9 (30.2)% 17.6 (21.0)%
Adjusted free cash flow1, $ bln 12.2 15.8 (22.8)% 6.4 >100%
Urals,th. RUB/bbl
3.14 3.75 (16.3)% 3.43 9.3%
Note: (1) Adjusted for prepayments under long-term oil supply contracts and operations with trading securities.
Countries of operation
Canada
Gulf of Mexico
Venezuela
RussiaUkraine
Belarus
Germany
Italy
China
Brazil
Vietnam
Norway Mongolia
Turkmenistan
Algeria
VNKhK
Tianjin refinery
Upstream assets
Refineries
Upstream and downstream projects in 23 countries
821 licenses for hydrocarbons production in Russia and abroad1
Largest subsoil user in Russia: oil and condensate resources of 23 bln t, gas resources of 22.8 tcm2
11 refineries in Russia and stakes in 7 refineries abroad
A wide network of retail sites: 2,557 retail sites3
Note: (1) As of 2015 year end, (2) Including foreign projects, (3) As of Dec 31, 2015, including own and leased sites
CubaIndia
Egypt
IndonesiaMozambique
Kyrgyzstan
Geography of Operations
28
Armenia
Georgia