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9M 2007 FINANCIAL RESULTS – LUKOIL

LUKOIL · Dec 10, 2007 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 1
    9M 2007 Financial Results (US GAAP) December 2007
  2. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 2
    Company Strategy Overview: Meeting Challenges of Global Oil & Gas Market
  3. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 3
    Shrinking Global Access to Hydrocarbon Reserves: Minimum Level for the Last 100 Years Global proved oil reserves, bln barrels Reserves of Reserves of national the Soviet companies 1% Union 14% 1995 2005 743 661 Full access for…
  4. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 4
    Building Strong Reserve Base LUKOILs Way LUKOIL hydrocarbon production, LUKOIL Group reserves, bln boe mln boe per day 40 2.4 Possible +70% +156% 30 1.8 Probable 20 1.2 Proved 10 0.6 Oil Gas Oil Gas 0 0.0 1998 1999 2000…
  5. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 5
    Successful Exploration Projects All Over the World Exploration projects Timan-Pechora Recent success at exploration projects (2007) Promising regions for exploration projects Northern Caspian (2006) Western Siberia (2007)…
  6. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 6
    LUKOIL is Valued Lower Against Its International Peers on Reserve Base LUKOIL subsidiaries finding and development (F&D) costs, /boe 7 F&D costs growth is mainly 6 fuelled by increasing +130% 5 operations in new regions…
  7. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 7
    LUKOILs Resource Base Supports Long-Term Goal: Production Level 3.54 Mln Boe per Day Average hydrocarbon reserves to production (R/P) ratio of global oil majors, years 16 Average R/P ratio of global oil majors decreased by 15 26%…
  8. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 8
    Projects with Special Tax Regime (PSAs) Make Up over 80% of Russias Total Production Growth in 2007 370 0.3 mln tons 1.4 mln tons 367.4 mln tons +0.1% +2.1% 7.7 mln tons +38.0% 365 +2.6% +9.4 mln tons Production drilling…
  9. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 9
    Putting Pilot Kandym-Khausak-Shady PSA Project in Uzbekistan on Stream Natural gas production forecast in Uzbekistan, bcm LUKOIL is the first Russian 16 company to start 12 F O development of a major KAZAKHSTAN R E…
  10. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 10
    Yuzhnaya-Khylchuya Field (YK): Start of Commercial Development of the Northern Timan-Pechora (2008) USA, Europe LUKOIL Yuzhnaya-Khylchuya field the Varandey Company major field in the North of Timan-Pechora. LUKOIL share 70%,…
  11. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 11
    Northern Caspian Fields: Major Event of 2009-2010 Estimated oil production in the Northern Caspian, th. bpd As a result of exploration works 280 conducted by the Company in the Russian sector of the Caspian Sea in 1995-2006, LUKOIL…
  12. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 12
    Continuing Refineries Upgrade Refinery throughputs, th. barrels per day 1,200 High quality and developed refining portfolio +35% Focus on further capacity expansion and quality improvement 900 Upgrade of existing refineries EURO-4…
  13. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 13
    Launch of New Units at Group Refineries in 2007-2008 Construction of isomerization units for production of high-octane components of gasoline: Perm refinery (capacity 430,000 tons per year) put into operation; Volgograd refinery…
  14. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 14
    Upgrade of the Nizhny Novgorod Refinery: Product Quality Improvement Major Project First stage (20062010): increase in output of motor gasoline, production of motor gasoline meeting Euro-4 standards Catalytic cracking complex…
  15. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 15
    Constantly High Attractiveness of the Russian Market Russian refining margin Regular gasoline price at Nizhniy (average refinery without catalytic Novgorod refinery gates (net of cracking in European Russia), /barrel tax), /ton 15…
  16. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 16
    Crude Refining in Russia and Retail Sales of Petroleum Products Throughputs at LUKOIL refineries in Russia, th. tons/day 130 +9.5% +5.9% 120 +4.9% 110 100 2005 90 2006 2007 80 jan feb mar apr may jun jul aug sept oct…
  17. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 17
    Building the Power Generation Segment Important Contributor to Increase in LUKOIL Value Development and expansion of power generating assets aims at: Construction of the power-generating units at the fields in order to supply…
  18. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 18
    TGK-8 TGK-8 is created on the base of the assets of Astrakhan, Volgograd, Rostov and Krasnodar power-generating companies The assets of the company are situated in the key gas production region of LUKOIL South federal district of…
  19. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 19
    9M 2007 Financial Results (US GAAP)
  20. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 20
    Highlights Net income 2,482 mln in 3Q 2007 (+2.1% y-o-y), 6,298 mln in 9M 2007 9M 2007 production of marketable hydrocarbons 2,181 th. boe per day (+2.0%): Oil production 1,967 th. barrels per day (+2.3%) Gas production 214 th.…
  21. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 21
    Macroeconomic Environment Macroeconomic environment (9M 2007 to 9M 2006) Brent 0.2% Positive factors Negative factors Urals 1.5% -0.8% Diesel fuel (Europe) Fuel oil (Europe) 3.0% -2.9% Diesel fuel (Russia) Gasoline (Russia)…
  22. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 22
    Marketable Hydrocarbon Production LUKOIL Group production of marketable hydrocarbons rose by 2.0% y-o-y to 2.181 mln boe per day in 9M 2007. In 9M 2007 production of crude oil reached 537 mln barrels (72.7 mln tons), which is 2.3%…
  23. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 23
    Marketable Hydrocarbon Output Reconciliation (y-o-y) 2,250 Decrease in production growth rates was due to sale of 50% share in Caspian Investments Resources (April 2007), reduction in natural gas purchases by Gazprom, and shift of the…
  24. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 24
    Financial Results 3Q 2Q 9M 9M , % mln , % 2007 2007 2007 2006 21,415 20,196 +6.0 Total revenue 57,347 51,803 +10.7 (1,555) (1,471) +5.7 Operating expenses (4,469) (3,338) +33.9 Taxes other than income taxes (6,440) (5,615)…
  25. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 25
    Sales Reconciliation 59 0.8 57.1 57 0.5 2.0 55 bln 2.3 53 +11.0% 51.5 51 49 Total sales in Change in Change in prices Change in sales Increase in other Total sales in 25 9M 2006 volumes sold mix sales 9M 2007
  26. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 26
    Sales Breakdown, mln 60,000 57,096 +1.9% International sales of crude oil (exculding near-abroad countries) 51,459 50,000 13,207 25% Sales of crude oil in near-abroad countries 12,932 27% 653 315 Sales of crude oil in Russia…
  27. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 27
    Sales Volumes Breakdown, mln tons -1.3% 98.79 100 94.41 International sales of crude oil (excluding near-abroad countries) 28.49 32.2% 80 28.37 34.1% Sales of crude oil in Russia and near-abroad countries +7.1% 3.34 3.86…
  28. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 28
    SG&A and Transportation Expenses Transportation expenses Transportation expenses reconciliation (9M 2007 to 9M 2006) 32% 3,600 29% 3,251 24% 3,200 mln 16% 13% 12% 2,800 11% 10% 2,613 8% 2,400 2% 0% 2,000 Nominal…
  29. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 29
    Operating Expenses 3Q 2Q 9M 9M , % mln , % 2007 2007 2007 2006 699 699 +0.0 Hydrocarbon lifting costs 2,049 1,682 +21.8 221 218 +1.4 Own refining expenses 631 528 +19.5 48 55 -12.7 Refining expenses at third-party refineries…
  30. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 30
    Operating Expenses Reconciliation 4,600 95 4,469 102 29 +2.8% +0.9% 114 +3.1% 4,200 141 +3.4% +4.2% 283 mln +8.5% 3,800 367 +11.0% +33.9% 3,400 3,338 3,000 Increase in Increase in own expenses at…
  31. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 31
    LUKOIL Successfully Controls Production and Refining Expenses Lifting costs, /boe Real ruble appreciation to US dollar 5.0 10% 8,8% +1.1% 8% 4.0 3.64 3.68 3.31 3.34 3.21 6% 5,3% 2.98 4,7% 3.0 2.82 4% 3,8% 3,5% 2.0 3,0%…
  32. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 32
    Tax Burden Tax expenses of LUKOIL Group and crude oil price 8,000 80 Mineral extraction tax and export tariffs comparison, /ton 240 7,000 190 189 180 70 -0.3% 120 86 88 6,000 60 +2.6% total tax expense, mln 60 crude…
  33. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 33
    33 mln 2,000 4,000 6,000 8,000 10,000 12,000 Net income in 9M 2006 6,442 Net increase in revenue* 4,087 Decrease in income tax 39 * Increase in revenue less purchases of oil and petroleum products.…
  34. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 34
    34 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Cash at the beginning of the year 752 Operating activities 7,251 Proceeds from sale of property and interests in 1,190 affiliates and…
  35. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 35
    CAPEX Breakdown 3Q 2Q 9M 9M , % mln , % 2007 2007 2007 2006 1,873 1,669 +12.2 Exploration and production 5,258 3,382 +55.5 1,659 1,475 +12.5 Russia 4,699 2,887 +62.8 Including ConocoPhillips spending in 138 104 +32.7 366 190…
  36. 9M 2007 FINANCIAL RESULTS – LUKOIL – slide 36
    LUKOIL Long-term Strategy Realization: 20052007 Results Goals Execution Average annual production growth rate Annual production growth rate at least 5% 6.5% Average annual gas production growth rate Accelerated growth of gas…

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