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Q4 2010 EARNINGS CALL – Rosneft Oil Company

Rosneft Oil Company · Feb 4, 2011 · 48 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. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 1
    ROSNEFT Q4 and 12M 2010 US GAAP Financial Results February 4, 2011
  2. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 2
    Q410 and 12M10 Highlights Positives Challenges, Priorities Strong financial results: Q410 challenges EBITDA USD 5.4 bln in Q4 and Growth in transportation tariffs USD 19.2 bln in 12M Strengthening of the RUB against the USD Net…
  3. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 3
    Macroeconomic Environment: Prices Up YonY and QonQ, Real Strengthening of the Ruble 12M10 12M09 , % Q410 Q310 , % Urals FOB Primorsk, /bbl 76.7 59.5 28.9% 83.6 75.1 11.3% Gasoil 0.1% (FOB/CIF Med), /tonne 672.3 520.7 29.1% 732.7…
  4. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 4
    Noncontrolled Expenses: Transportation Tariffs Up Again 12M10 12M09 , % Q410 Q310 , % Export customs duty USD/bbl 37.40 24.51 52.6% 39.23 35.82 9.5% Yugansk Novorossiysk tariff RUB/t 1,307 1,115 17.3% 1,347 1,307 3.0% Yugansk…
  5. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 5
    Q410 and 12M10 Results Overview: Record EBITDA and FCF, Strong Volume Growth 12M10 12M09 , % Q410 Q310 , % Daily crude oil production, th. bpd 2,322 2,182 6.4% 2,352 2,332 0.9% Gas production, bcm 12.34 12.68 (2.7)% 3.25 2.86…
  6. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 6
    Daily Crude Oil Production: Continuing to Contribute Majority of Russian Production Growth Daily Crude Oil Production in Russia, 2010 vs. 2009 Rosneft 6.4% TNK-BP 2.0% Crude oil output in Russia, th. bpd Tat neft 0.0%…
  7. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 7
    Daily Crude Oil Production Implementing Sustainable Growth Strategy th. bpd Key priorities for 2011 Launch of Turnaround 2,500 production at works at Vankor Sakhalin-1 Production growth by 1% 2,400 Construction works at Vankor…
  8. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 8
    Drilling Activity and Wells Productivity Drilling More Wells with Industry Leading Flow Rates New production and injection wells put into operation by Average flow rates of the new wells, 9M10 Rosnefts subsidiaries bpd 3,043…
  9. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 9
    Yugansk: 2.6% Ahead of Plan in 2010 Yuganskneftegaz Daily Crude Oil Production, 000 bpd Plan-fact Analysis, 000 bpd 1,330 1,350 1,320 13 1,310 5 1,300 1,324 15 1,290 1,291 1,280 2010 Plan Higher flow Additional Higher 2010…
  10. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 10
    Vankor: Above Midpoint Guidance for 2010, Expanding Capacities in 2011 000 bpd 000 bpd 350 350 Current output - 280 th. bpd Extended zero stage, 300 260 th. bpd just within 300 8 months Gradual launch 250 250 of the Central oil…
  11. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 11
    Refinery Upgrade Progress on Schedule Completed construction and upgrades and plan for 2011 Key new units to be completed after 2011 2009 2010 2011 Komsomolsk hydrocracking + hydrotreatment Komsomolsk catalytical reforming,…
  12. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 12
    Revenues Reconciliation, USD mln 583 157 23 4 23 17,384 350 (77) (5) (253) (34) 1,142 Q410 vs. Q310 Q410 vs. Q310 15,471 +12.4% Q3'10 Oil exports Oil exports Product Product Product Product Bunker fuel Gas Petroche Oil…
  13. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 13
    Expenses Dynamics Decreasing in Real Terms Upstream Operating Expenses, USD/bbl of oil produced Refining Operating Expenses, USD/bbl of oil processed 4 +10.1% yony 3 +6.4% yony 3.48 3.41 at 12% real ruble appreciation at 12% real…
  14. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 14
    EBITDA and Net Income per bbl Reconciliation: 12M10 vs. 12M09 (7.77) 16.61 USD/bbl EBITDA, USD/bbl (0.47) (1.52) (0.74) (0.09) EBITDA, 18.63 24.65 +32.3% 12M'09 Revenue Taxes Purchases Transport OPEX SG&A 12M'10…
  15. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 15
    Operating Cash Flow Reconciliation, USD mln 649 (497) (475) Operating Cash Flow Reconciliation vs. Q310 Q410 vs. Q310 (191) (107) (273) 230 4,386 15.1% 3,722 Q410 Q3'10 Increase in net Difference in Difference in…
  16. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 16
    Sources and Uses of Cash: Strongest Cash Flow Generation 12M2010 Q42010 Net increase in debt Increase in cash 170 and investments 5,250 Net increase Dividends paid and in debt Increase in cash rights for Sochi2014 and…
  17. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 17
    Capital Expenditures: At the Lower End of the Initial Guidance in 2010 11,000* USD mln USD mln 8,931 8,732 7,252 6,780 2,768 2,318 2,091 2010 2007 2008 2009 2010 2011 1,754 2011 Upstream Yugansk Upstream…
  18. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 18
    Net Debt Reconciliation: Reaching pre2007 Acquisitions Level USD bln USD mln 26.3 24.8 21.4 21.3 19.2 18.5 15.8 13.3 13.7 31.12.06 30.06.07 31.12.07 30.06.08 31.12.08 30.06.09 31.12.09 30.06.10 31.12.10 278 (25)…
  19. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 19
    Credit Profile Strengthened Further Dec. 31, Dec. 31, Repayment profile*, USD bln 2010 2009 Total debt, USD bln 23.6 23.5 The China Development Bank facility Net debt, USD bln 13.66 18.49 (USD 15 bln) was fully drawn by Longterm…
  20. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 20
    Strategic Alliance with BP Beginning of the Arctic History Worldclass joint exploration program in the South Kara Sea (Rosneft to have 66.67% stake in the Joint Operating Company, BP to carry financing of the initial exploration…
  21. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 21
    Black Sea Exploration Efforts High Potential to Share with Partners Chevron will be the partner for the West Chernomorsky block ExxonMobil will be the partner for the Tuapse Trough block Rosneft is estimated to hold 67% stake…
  22. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 22
    Arctic and Far East Shelf Prospects: Best Access to Large Resource Base Licenses received Application for licenses filed Western Arctic Eastern Arctic 1-st Priority RUSSIA Crude oil resources: 58.2 bln bbl Gas resources: 12.8…
  23. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 23
    Blocks at the South of Eastern Siberia 3 bln bbls of Likely C1+C2 Reserves Discovered in Just 2 Years Exploration region of strategic priority 15 blocks at 50-600 km from the ESPO Complex geology Commercial viability depends on…
  24. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 24
    Q410 and 12M10 US GAAP Financial Results Appendix 25
  25. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 25
    Reserves Proved Crude Oil Reserves (bln bbls) Oil Reserve Replacement (2006-2010) Rosneft (PRMS) 18.1 18,089 Rosneft (SEC) 13.7 LUKOIL 13.7 14,877 5,408 PetroChina 11.3 3,644 1,448 BP 10.5 Petrobras 10.3 Exxon 8.9…
  26. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 26
    Daily Crude Oil Production: Vankor the Key Driver mln bbl Daily Crude Oil Production Reconciliation, 12M10 vs. 12M09 000 bpd 8 6 182 2,364 2,322 (24) (16) (14) (2) 2,182 +6.4% 12M'09 Western Timan Southern Far…
  27. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 27
    Blocks around Vankor 9 exploration blocks 2009 discovery of the Baikalovskoye field adjacent to Vankor (total 1 and 2 recoverable reserves 53.1 mln tonnes of oil and gas condensate and 28.2 bcm of gas) 2010 results 17,600 meters…
  28. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 28
    P&L: Key Line Item Analysis 12M10 12M09 , % Revenues 63,047 46,826 34.64% Higher prices and volumes Transportation Increase in tariffs of natural monopolies and higher transportation expenses 6,980 5,414 28.93% volumes due to…
  29. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 29
    Interest Expense 12M10 Q4'10 Q3'10 Q210 Q110 USD mln 1. Interest accrued according to loan agreements 681 174 163 172 172 2. Interest paid (cash) 618 44 297 42 235 3. Change in interest payables (12) 63 130 (134) 130 63 4.…
  30. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 30
    Income Tax USD mln 12M10 Q410 9M10 Income before income tax 13,316 3,652 9,664 Statutory income tax rate 20% 20% 20% Theoretical income tax 2,663 730 1,933 Add/(deduct) tax effect of: Change in valuation allowance 50 30 20 Effect of…
  31. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 31
    Netback Ladder 2010 vs. 2009 Total sales: 811 mln bbl 1. Urals average price: USD 78.3/bbl 2. Crude Export Duty: USD 37.4/bbl 3. Implied crude net export revenue (1-2) = USD 40.9/bbl Domestic sales: 30.4 4. Weighted average…
  32. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 32
    Netback Ladder Q410 vs. Q310 Total sales: 206 mln bbl 1. Urals average price: USD 85.2/bbl 2. Crude Export Duty: USD 39.2/bbl 3. Implied crude net export revenue (1-2) = USD 46.0/bbl Domestic sales: 34.7 4. Weighted average…
  33. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 33
    Crude Oil Sales Crude Oil and Condensate Sales Volumes, mln bbl Average Prices, USD/bbl 140 58.0% 56.8% 60% 140 54.3% 120 120 114.0 117.2 111.9 50% 100 80 100 40% 60 80 40 30% 20 60 0 20% Q4'09 Q3'10 Q4'10 40 Europe and other…
  34. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 34
    Net Revenue of an Oil Exporter USD/bbl 100 90 17.1 16.4 16.5 16.5 80 14.8 15.2 14.6 70 13.4 13.3 13.5 12.7 12.9 13.3 13.7 12.6 12.8 12.7 13.0 60 41.5 43.4 50 36.8 36.4 39.7 47.4 47.1 31.6 34.7 32.9 36.5 34.0 36.1 37.4…
  35. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 35
    Gas Production and Sales Gas Sales vs. Production, bcm Gas Sales Prices, USD per 1,000 cubic meters 4.5 Production by subsidiaries 80 4.0 Sales 70 3.44 3.5 3.25 60 2.86 3.0 50 2.5 41.6 43.9 37.8 40 2.0 30 1.5 1.0 20 0.5 10…
  36. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 36
    Gas Sales Prices USD RUB 55 1,400 1,347 1,279 1,274 1,251 1,300 50 1,200 45 1,113 1,078 1,100 1,044 40 1,000 961 976 977 1,000 915 35 900 767 780 800 742 30 710 700 25 27.5 30.1 31.6 41.2 40.7 40.3 33.6 28.8 33.5 33.3…
  37. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 37
    Petroleum Product Revenues Petroleum Products: Average Prices and Volume Breakdown USD/t 1,000 800 789 790 779 779 769 707698 688 648 667 649 641 614 627 636 600 580 585 556 573 561 551 548 12% 503 12% 528 12% 478 12% 6%…
  38. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 38
    Petroleum Product Prices in 20092010 (Rosneft Refineries)* USD/t 600 400 200 0 Jan- Feb- Mar- Apr- May- Jun- Jul-09 Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul-10 Aug- Sep- Oct- Nov- Dec- 09 09 09 09…
  39. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 39
    Net Refining Margin USD/bbl 25 Domestic prices lag export netbacks. To normalize in Q1 2011. 20 17.3 17.6 16.1 16.0 15.0 15 13.5 10 7.7 8.4 7.5 7.3 6.1 6.3 5.4 5 4.4 0.1 0 Q1 1.4Q2 Q3 Q4 Q1 Q2 Q3 Q4 5 2009…
  40. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 40
    Key Processes Planned within Refinery Upgrade Program Relevance to Rosneft Unit/process Description of process Result of construction / upgrade refineries New units: Syzran, Kuibyshev, Production of highoctane gasoline…
  41. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 41
    Key Processes Planned within Refinery Upgrade Program Relevance to Rosneft Unit/process Description of Process Result of construction / upgrade refineries Production of lowsulfur diesel Conversion process. Uses vacuum gasoil…
  42. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 42
    Key Processes Planned within Refinery Upgrade Program Relevance to Rosneft Unit/process Description of Process Result of construction / upgrade refineries MTBE (methyl tertiary Uses refinery gases as input. Produces Production of…
  43. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 43
    Transportation Costs Dynamics Tariffs and FX Key Growth Factors Total Transportation Costs, USD mln Transportation Costs for Crude Exports, USD mln 6,980 3,059 5,414 2,316 12M'09 Tariffs Volume Mix FX 12M'10 12M'09 Tarriffs…
  44. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 44
    Transportation Costs, Factor Analysis: Q410 vs. Q310 Total Transportation Costs, USD mln Transportation Costs for Crude Exports, USD mln 796 1,763 751 1,701 Q3'10 Tariffs Volume Mix FX Q4'10 Q3'10 Tariffs Volume Mix FX…
  45. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 45
    EBITDA and Net Income per bbl Reconciliation: Q410 vs. Q310 (3.16) 8.95 (0.08) 0.12 (0.24) USD/bbl EBITDA, USD/bbl (2.08) EBITDA, 23.52 27.03 +14.9% Q3'10 Revenue Taxes Purchases Transport OPEX SG&A Q4'10…
  46. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 46
    Excess Cash Management Rosnefts total cash position including cash and equivalent and shortterm investments related to excess cash management was USD 9.9 bln as of December 31, 2010 Excess cash management is based on analysis of…
  47. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 47
    Progress on Tax Regime The Right Direction Jul 06 JulAug 06 Jul 08 Dec 08 Dec 09 Dec 10 2011 + Rosneft Mineral Extraction Mineral Extraction Tax Export duty calculation Zero export duty Resolution to Rebalancing upstream IPO Tax…
  48. Q4 2010 EARNINGS CALL – Rosneft Oil Company – slide 48
    Best in Class Transparency, IR Effort Consistently enhancing disclosure IPO and bond Quarterly US GAAP, Investor presentations, High quality website prospectus MD&A conference calls Recent awards IR Magazine Awards S&P…

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