ojsc rosneft investor presentation · this presentation does not constitute an offer to sell, or...
TRANSCRIPT
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14.06.2016
June 2016
OJSC Rosneft
Investor Presentation
-
Important Notice
Information herein has been prepared by the Company. The presented conclusions are based on the general information
collected as of the date hereof and can be amended without any additional notice. The Company relies on the information
obtained 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. Any
assertion in these materials that is not a statement of historical fact is a forward-looking statement that involves known and
unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or implied by such forward-looking
statements. 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 any
securities. It is understood that nothing in this report / presentation provides grounds for any contract or commitment
whatsoever. The information herein should not for any purpose be deemed complete, accurate or impartial. The information
herein 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 any
other person, any representations or warranties, either explicitly expressed or implied, as to the accuracy, completeness or
objectivity of information or opinions contained in it. None of the directors of the Company, its shareholders, officers or
employees or any other persons accepts any liability for any loss of any kind that may arise from any use of this presentation
or its contents or otherwise arising in connection therewith.
2
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14.06.2016
bln boe mmboed $/boe
Hydrocarbon reserves1 Hydrocarbon production Lifting costs(2)
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 (2) Chevron, Shell, PetroChina, ExxonMobil, BP, Eni data for 2015.
25
31
37
38
50
52
59
83
131
Liquids Gas 14.6
13.4
13.0
13.0
10.3
10.2
9.2
3.5
2.1
1.7
2.4
2.6
2.6
3.5
3.7
4.3
4.3
5.2
-
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
0,329 0,298
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
2014
2015
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 expenses
RUB 44 bln (+42% vs. 2014)
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6
Robust Reserve Replacement
>240% average 10 year reserve replacement ratio
132% organic SEC reserve replacement for the last 2
years
Global leader in geological exploration: costs per boe
of new reserves is more than 10 times lower vs. the
average level for the key competitors
131 bboe total АВС1+С2 reserves
46 years АВС1 reserves-to-production ratio
Source: companies' data
Note: (1) Calculated as exploration expenses divided by the organic growth of reserves under SEC classification including affiliates. PetroChina – excluding affiliates. Due to the negative
growth 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
http://www.gazpromneft-badra.com/tendershttp://www.gazpromneft-badra.com/tenders
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7
2010 2015 2020
Gas
Liquid HC
~6.0
2.5
5.2
Efficient Reserve Base Development
Hydrocarbon production growth
mmboed
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' data
Note: (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
http://www.gazpromneft-badra.com/tenders
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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)
34%
66%
РФ
213 rigs 223 rigs 220 rigs ~850 rigs
2
High-tech In-house Service
Drilling rate1 Service cost dynamics1
meters/rig-month %
New 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
-
2014 2015 2016
Directional wells
Horizontal wells
Average flow rates in 20152
9
31%
20% 20%
38%
21%
29%
47%
22%
30%
Gazprom neft Lukoil Rosneft
2013 2014 2015
1,839 1,594
+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
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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
6.9
13.8 14.1
28.2 30.0 30.7
32.6 33.3 37.3
48.1
0
12
24
35
47
59
71
opex 2015 capex 2015 opex + capex 2014
$/boe
E&P OPEX and CAPEX 2014-2015
http://www.gazpromneft-badra.com/tenders
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11
Greenfield Development Pipeline
Greenfield start up pipeline Superb efficiency of greenfields3
105.2
85.8
48.8
159.0
Average flow rateof new wells, tpd
Unit OPEX, RUB/boe
Uvat+VChNG+Vankor
Company 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 Transneft
pipeline 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
Lab
ag
an
Nau
l
Ro
sp
an
2
Lo
do
ch
no
e
Su
zu
n
Тааs-Y
ury
ah
(2
st.
)
E.M
esso
yakhа
1
Ru
ssko
e
YuТМ
Кu
yu
mb
a1
Tag
ul
0
2
4
6
8
2015 2016-2017 2018-2019 2019-2020
Pro
duction p
late
au,
mm
t
Launch year
CAPEX, RUB bln
Production, mmt
mmt RUB bln
-
Upstream Portfolio Optimization
12
Bringing partners to the existing projects
Vankor
- Deal on the sale of 15% stake to ONGC closed
- 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, Russkoe
and Tagulskoe fields
Low-margin assets optimization
Regular ranking, and prioritizing process; ongoing work
with low-margin assets
Sale of 50% stake in Polar Lights closed
Russkoe Sale of up to 49% stake
YuTM Sale of up to 49% stake
Moscow
Vankor Partner: ONGC (15%, up
to 26%), group of Indian
companies (up to 23.9%)
Taas-Yuryakh Partners: BP (20%),
consortium of Indian
investors (29.9%)
Polar Lights Sale of 50% stake
Tagulskoe Sale of up to 49% stake
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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 2020
0
4
8
12
16
2016-2017 2018-2019 2019-2020 2020 +
Pro
duction p
late
au,
bcm
Bere
go
vo
e
Ro
sp
an
KC
HL
A
Kh
ara
mp
ur
(Cen
om
an
ian
)
Ru
ssko
-Rech
en
sko
ye
Kh
ara
mp
ur
(Tu
ron
ian
)
Min
kh
ov
sko
y
e
Sakh
alin
-1 (
100%
)
Sev
ero
-Ven
insko
e
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-Veninskoye Minkhovsky LA
-
14
less than 5 bcm
more than 5 bcm
Key gas transportation routes
Gas production hubs
66% 19% 15%
Electricity producers Industrials Other
KhMAO
Kemerovo
Region
Kaliningrad
Region
Bashkorto
stan
Perm Kray
Sverdlovsk
Region
Moscow
Region
Krasnodar
Region
Novosibirsk
Region
Altay Kray Orenburg
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
85 87 85 88
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 Modernizationcompletion
Refinery 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
46%
48%
50%
55%
55%
58%
59%
62%
Ryazan Refinery
Achinsk Refinery
Angarsk PCC
Komsomolsk Refinery
Novokuybyshev Refinery
Syzran Refinery
Tuapse Refinery
Kyubyshev Refinery
-
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
isomeri
zation
cat
cracking
hydro
treatment
reform
ing alkylation coking1
hydrocra
cking MTBE
Ryazan
Angarsky
Novokuibyshevsky
Syzransky
Kuibyshevsky
Komsomolsk
Touapsinskiy
Achinsk
Saratov
Effect Throughput Refining
depth
Euro-5
gasoline
Light
product
yield
Euro-5
motor
fuels
Euro-5
gasoline
Euro-5
gasoline
Refining
depth
Light
product
yield
Euro-5
gasoline
Construction completed Completion in 2017+ Upgrade Completion in 2016
unit capacity
Refinery Modernization Roadmap
17
-
18
Crude oil sales channels
20%
70%
9% 1%
Asia
Europe and other
CIS
Domestic
2008
35%
52%
8% 5%
2015
14.8
29.7
41.7
Received 2013 Received 2014 Received 1Q 2016
$ bln
Efficient Oil Marketing
Focus on optimizing logistics and maximizing netbacks
Supplies to Asian market up 120% for last 4 years; record
high 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 sustainable
high-margin realization channels at the market pricing
terms ensuring highly profitable resources monetization
Prepayments under LT crude oil supply contracts Long 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 in
macro environment
Stability of strategic objectives:
production increase with a focus on the most efficient
projects,
meeting the license and inter-governmental obligations
including the provision of oil and petroleum product
supplies,
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 2015
Upstream Downstream Other HC production
RUB bln mmboepd
CAPEX and HC production
186
533 560
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
http://www.gazpromneft-badra.com/tenders
-
204
596 657
2013 2014 2015
Free cash flow (FCF) growth in 2015 to RUB 657 bln (+10% vs. 2014)
Despite worsening macro Rosneft continues
generating $6-7/bbl FCF being one of the global
leaders 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
ATAD
NVTK
LKOD
BANE
ENI
OGZD
BP
FP
XOM
PTR SGGD
COP
CVX
RDSA
STL SIBN
PBR
0%
2%
4%
6%
8%
10%
-20% -15% -10% -5% 0% 5% 10% 15% 20%
Div
ide
nd
yie
ld
FCF yield
Robust Free Cash Flow Generation
-10.8
-3.0
-1.6
0.4
2.6
3.4
4.2
4.7
6.0
6.5 $/boe
2015 Free cash flow: benchmarking (majors)
http://www.gazpromneft-badra.com/tenders
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561
136
96
169
216
448
1 129
497
Sources Uses
External funding Asset disposal
Prepayments under long-term crude oil supply contracts Operating cash flow
Increase of funds available for debt management Acquisition of non-current financial assets
Asset acquisition Interest
Dividends CAPEX & Licenses
RUB bln
2013 2014 2015
21
596
87 137 80 43
1,397
1 257
938
145
Sources Uses
572
85 63
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%
13 18
-24%
51
35
3
13
2014 2015 $/bbl ∆%
-48%
-54%
-32%
-24%
53
100
-47%
22
37
-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
-
43,3 39,9
24,5 23,2 23,9
12,7 14,4
23,0 22,4 23,6
1,7 1,7
1,2 1,1
1,2
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
0
10
20
30
40
50
60
70
80
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Cash & equivalents, other ST financial assets and part of LT deposits
Net debt
Net debt/EBITDA 47,5 Gross debt
56,0 54,3 47,5 45,6 47,5
Debt maturity profile
Financial Stability
23
Note: (1) Based on the CBR exchange rate as of the end of the relevant reporting period, (2) Based on exchange and interest rates as of Mar 31, 2016 (excluding future interests accrued,
including future lease payments), (3) As compared to the end of 2015, (4) Including free cash short-term financial assets and part of long term deposits, (5) As of Mar 31, 2015
Credit portfolio management:
During 2015 gross debt decreased by 24.6%, net
debt – by 47.0%
In Q1 2016 gross debt increased by 4.2%3, net
debt – by 3.0%3
Liquidity:
Significant amounts of liquid funds4 on the balance
– over $20 bln1 as of the end of Q4 2015 and Q1
2016
Smooth debt maturity profile with no peak
repayments
89%
11%
Foreign currency
RUB
Debt profile by currency5
Debt and net debt dynamics
9,2 9,7 11,7
1,8
15,6
Q2-Q4 2016 2017 2018 2019 2020-2029
$ bln1
$ bln2
-
Dividend payments and oil prices
24
18%
11% 11% 10% 7% 5%
-7%
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 615 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 assets
** Including recommended by the BoD dividends for 2015
Note: (1) Calculated using LTM free cash flow, (2) As of June 1, 2016
1,3 1,6 1,9 2,3 2,8
7,5 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
http://www.gazpromneft-badra.com/tendershttps://www.google.ru/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCMfM85jfrcgCFcu_cgodCUoDyw&url=https://en.wikipedia.org/wiki/Gazprom&bvm=bv.104317490,d.bGQ&psig=AFQjCNGcRYk_BOlp9goePqSekIX3COSrtQ&ust=1444217370352228http://changellenge.com/company/tatneft/http://ethixbase.com/russia-suspect-in-bashneft-case-levon-airapetyan-loses-appeal-of-house-arrest/http://www.ru.novatek.pl/materialy-dla-mediow
-
• OPEX control
• Managing SGA and production costs Below inflation
• CAPEX control
• Review current project portfolio to increase profitability Optimization
• Free cash flow
Positive
• Dividend payout
Not 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
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Appendix
-
27
Key Financial Indicators
Indicator 2015 2014 % 2013 %
EBITDA, RUB bln 1,245 1,057 17.8% 947 11.6%
Net income, RUB bln attributable 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, $ bln attributable 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.
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Countries of operation
Canada
Gulf of Mexico
Venezuela
Russia Ukraine
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
Cuba
India
Egypt
Indonesia Mozambique
Kyrgyzstan
Geography of Operations
28
Armenia
Georgia