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Investor Day 2014 – Gazprom Neft

Gazprom Neft · Mar 1, 2014 · 72 slides

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Slides

  1. Investor Day 2014 – Gazprom Neft – slide 1
    March, 2014 Investor Day 2014 0
  2. Investor Day 2014 – Gazprom Neft – slide 2
    Agenda Presentation of gas business Strategy Transportation Oleg Aksyutin Dmitry Lyugai Member of Gazprom Management Committee Member of Gazprom Management Committee Head of the Gas Transportation, Underground Storage Head of the…
  3. Investor Day 2014 – Gazprom Neft – slide 3
    Part 1. Strategy Dmitry Lyugai Member of Gazprom Management Committee Head of Prospective Development Department 3
  4. Investor Day 2014 – Gazprom Neft – slide 4
    World gas demand 2030 SHARE OF NATURAL GAS IN WORLD TOTAL PRIMARY ENERGY CONSUMPTION NATURAL GAS CONSUMPTION BY REGION 2030 forecast 2012 19% 26% 17% 3% 12% 3.6 North America 23% tcm 5% 9% Central and South 4% 24% 15%…
  5. Investor Day 2014 – Gazprom Neft – slide 5
    Global gas import/export in 2030 NATURAL GAS CONSUMPTION AND PRODUCTION BY REGION IN 2012 AND 2030 1200 1000 2012 actual 2030 forecast 800 bcm 600 400 200 0 North Central OECD Other Middle Africa Asia Australia North Central…
  6. Investor Day 2014 – Gazprom Neft – slide 6
    Gazprom at the Russian domestic market STRUCTURE OF GAZPROMS GAS SALES REVENUE (1), 2012 GAS PRODUCTION STRUCTURE IN RUSSIA GAS DELIVERIES TO RUSSIAN CONSUMERS * 100% 500 51% Europe Independent gas producers 20% FSU Countries 29%…
  7. Investor Day 2014 – Gazprom Neft – slide 7
    Europe: Gazproms traditional market FORECAST GAS PRODUCTION VS. CONSUMPTION IN EUROPE GAZPROMS PIPELINE GAS DELIVERIES TO EUROPE 300 800 decrease of indigenous gas production in Europe no success in shale gas developments 700 slow…
  8. Investor Day 2014 – Gazprom Neft – slide 8
    Gazprom: upstream development Field productivity Key Gazprom gas greenfields in 2014-2030 period, bcm/year Urengoyskoye (achimov deposits) 24.7 Pestsovoye (neocomian-jurassic) 2 Yubileynoye (apt-albian, senomanian deposits) 1.75…
  9. Investor Day 2014 – Gazprom Neft – slide 9
    Gazprom LNG projects Forecast of LNG demand in the world 800 Plants under construction mln t/year Operating plants Consumption consensus forecast Pessimistic consumption forecast Optimistic consumption forecast 600 Baltic LNG…
  10. Investor Day 2014 – Gazprom Neft – slide 10
    Gas infrastructure development in Eastern Siberia and Far East regions Date of put into Transportation site operation Length, km (not earlier) Trunk pipeline Power of Siberia 2019 4,000 Fields Pipelines: existing Trunk…
  11. Investor Day 2014 – Gazprom Neft – slide 11
    Mutual interest in gas export contract conclusion CHINA RUSSIA DYNAMIC GAS CONSUMPTION GROWTH IN THE COUNTRY LIMITED RESOURCE BASE AT THE TARGETED RUSSIAN GAS MARKETS DIVERSIFICATION OF EXPORT MARKETS DETERIORATION OF…
  12. Investor Day 2014 – Gazprom Neft – slide 12
    Forecast of capital investments Structure of CAPEX by gas business segment average annual Up to 960 bn RR p.a. GAZPROM DEVELOPMENT PROCESSING 8% PROGRAM FOR A TEN-YEAR PERIOD TRANSPORT (incl. UGS1) 52 % PRODUCTION 34 %…
  13. Investor Day 2014 – Gazprom Neft – slide 13
    Part 2. Transportation Oleg Aksyutin Member of Gazprom Management Committee Head of the Gas Transportation, Underground Storage and Utilization Department CEO, Executive Member of the Board of Directors of South Stream Transport…
  14. Investor Day 2014 – Gazprom Neft – slide 14
    Gas transportation system Total pipelines length 168.3 thousand km Number of compressor stations - 222 units Number of gas compressor units 3,738 units Gross installed capacity 43,9 million kW ANADYR Number of gas distribution…
  15. Investor Day 2014 – Gazprom Neft – slide 15
    Development of gas transportation system Yamal South Stream GERMANY SLOVAKIA BOVANENKOVO UKRAINE BARENTS SEA SWITZERLAND AUSTRIA URENGOY FRANCE Tarvizio HUNGARY MOLDOVA NORWAY SLOVENIA NADYM CROATIA ITALY Svobodnica ROMANIA…
  16. Investor Day 2014 – Gazprom Neft – slide 16
    Development of gas transportation systems in Eastern Siberia and the Far East Gas production centers 1 Krasnoyarskiy URENGOY 2 Irkutskiy 3 Yakutskiy 4 Sakhalin OKHA 4 Yurubcheno- SAKHALIN NIZHNEVARTOVSK Tokhomskoye 1 Sobinsko-…
  17. Investor Day 2014 – Gazprom Neft – slide 17
    Underground gas storage Gas storage of Gazprom(1) Arkhangelsk Saint Petersburg Kaliningrad 853.6 Minsk Ukhta Khabarovsk 811.8 BELORUSSIA Urengoy Moscow RUSSIA 745.8 657.6 616 585.8 Kazan Surgut 73.22 74.78 Izhevsk…
  18. Investor Day 2014 – Gazprom Neft – slide 18
    Gazprom energy efficiency improvement Fuel and Energy resources Reduction in specific gas Greenhouse gas emissions saving consumption for own process reduction needs and losses Target savings for the period till 2020 28.2 mln toe…
  19. Investor Day 2014 – Gazprom Neft – slide 19
    Gas transportation system efficiency improvement Implementation of innovative technologies Specific gas consumption for process needs Increase of operating pressure up to 11.8 mPa cm/mmcm/km 35 in the onshore of main gas pipelines…
  20. Investor Day 2014 – Gazprom Neft – slide 20
    Part 3. Export Alexander Medvedev Deputy Chairman of Gazprom Management Committee CEO of Gazprom export 20
  21. Investor Day 2014 – Gazprom Neft – slide 21
    European Natural Gas Market Dynamics bcm Balance of European Gas Consumption Share of Gazprom Deliveries in European Consumption 800 increased from 25.6% in 2012 to 30% in 2013 565.2 609.8 600 556.0 546.7 541.0 30.0% 258.2 298.2…
  22. Investor Day 2014 – Gazprom Neft – slide 22
    Gazprom Sales to European and CIS Markets Gazprom Gas Deliveries to Europe* Gazprom Gas Deliveries to CIS and Baltics bcm /mcm bcm /mcm 180 173.7 500 80 400 156.6 151.0 68.0 71.1 148.1 11.0 64.4 6.6 11.1 450 60 56.1 350 9.5 120…
  23. Investor Day 2014 – Gazprom Neft – slide 23
    Hybrid Pricing - Cornerstone of the European Market Integration of Contract Prices and Hub prices 75% of gas exported to Europe is oil-indexed 14 12 Gas hub prices are not independent from oil- 10 indexed contract prices. The…
  24. Investor Day 2014 – Gazprom Neft – slide 24
    Part 4. Finance Andrey Kruglov Deputy Chairman of Gazprom Management Committee Head of the Department for Finance and Economics 24
  25. Investor Day 2014 – Gazprom Neft – slide 25
    Gazprom continues to maintain its strong financial position among Oil&Gas majors Comparative Revenue, EBITDA, Net Income CAGR Top-5 Oil&Gas Majors by 2013E Net Profit(2) USD bln USD bln USD/boe 14% 40 12% 12% 35 10% 30 10%…
  26. Investor Day 2014 – Gazprom Neft – slide 26
    Revenue diversification: new source of growth Net Sales Gas Condensate Production Sites USD bln Mn tonnes 100 91.0 87.3 90 81.8 80 Yamburg 4.7 70 63.3 5.5 Novy Urengoy Orenburg 60 0.1 Tomsk Astrahan 0.3 50 3.7 40 Mn…
  27. Investor Day 2014 – Gazprom Neft – slide 27
    Sustainable free cash flow generation Gazprom FCF Generation(1) Gazprom vs Russian Oil & Gas Majors USD bln Free Cash Flow Yield, 9m2013 LTM/2014(2) 60 12% 55.1 11% 51.9 10% 50 10.8 10% 8.3 46.5 9% 3.4 40 36.6 8% 7% 7.7 6%…
  28. Investor Day 2014 – Gazprom Neft – slide 28
    Increase of Mineral Extraction Tax (MET) transparency: transition to gas MET formula Gas MET = 15% * Price ratio * Complexity ratio + Transportation ratio Condensate MET = 15% * Price ratio * complexity ratio Gas MET formula RR MET…
  29. Investor Day 2014 – Gazprom Neft – slide 29
    CAPEX efficiency Capital Expenditures: Capex/hydrocarbon production: USD bln Gazprom vs Russian oil majors(1) USD/boe Gazprom vs Russian oil majors(1) 80 140% 18 16,7 127% 124% 118% 16 15,5 70 108% 120% 13,4 13,7 14 13,0 60…
  30. Investor Day 2014 – Gazprom Neft – slide 30
    Balanced CAPEX Gazprom Group CAPEX (1) USD bln 50,0 2014 Priorities Gas Upstream 43 42-43 35-42 Gas Upstream Bovanenkovo field Gas Midstream 40,0 Brown fields and Nadym-Pur-Taz region Gas Downstream Field development projects…
  31. Investor Day 2014 – Gazprom Neft – slide 31
    Natural hedging against rouble volatility Hard currency(1) denominated revenues Hard-currency denominated OPEX Gas sales, Europe 33% Hard currency 66% 22% 2% Gas and oil purchased Hard currency 43% Roubles 34% Crude exports 15%…
  32. Investor Day 2014 – Gazprom Neft – slide 32
    Top Russian borrower USD bln Total and Net Debt(1) Debt Maturity Profile(2) 100 1 31% 21% 26% 26% 0.7x 0.6x 0.6x 0.5x 38% 33% 36% 80 42% 0,5 17% 19% 16% 13% 15% 24% 22% 22% 60 53.4 49.4 2010 2011 2012 9m2013 47.8 0 43.2…
  33. Investor Day 2014 – Gazprom Neft – slide 33
    Dividend payout RR / Share Dividend Per Share(1) Dividend Yields of Major Oil & Gas companies, 2013F(2) 12 8% 8.97 6-8 9 6% 5.3% 4.8% 4.7% 4.7% 4.7% 5.99 4.3% 6 4% 3.4% 3.85 2.6% 3 2% 0 0% 2010 2011 2012 2013F Dividend…
  34. Investor Day 2014 – Gazprom Neft – slide 34
    2014 Outlook Value drivers: Stellar growth in the European gas market Improvement of the Russian gas market competitiveness Outstanding growth of liquids in the production mix Optimization of costs and financing solutions for…
  35. Investor Day 2014 – Gazprom Neft – slide 35
    Part 5. Gazprom neft Alexei Yankevich Member of the Management Board, Deputy CEO for Economics and Finance of Gazprom Neft 35
  36. Investor Day 2014 – Gazprom Neft – slide 36
    Investor day summary Record Financial & Operating Results Large scale deployment of new technologies First Arctic Offshore Production Refinery Quality Program Completion Conversion Program at FEED Stage Domestic Retail Efficiency…
  37. Investor Day 2014 – Gazprom Neft – slide 37
    Executing Strategic Goals Increased stake in SeverEnergia to 40.2% Expanded presence in Iraq (Halabja block acquisition) Launched production at Prirazlomnoye Signed a memorandum with Shell on development of liquids-rich shale…
  38. Investor Day 2014 – Gazprom Neft – slide 38
    Targets on hydrocarbon production, refining, and marketing premium sales expected to be main vehicles for growth Changes in PRMS (SPE) proved reserves, mmtoe Hydrocarbon Production, mmtoe CAGR 1 400 333% Reserves replacement ratio 1…
  39. Investor Day 2014 – Gazprom Neft – slide 39
    Strong record of financial results continued throughout 2013 Revenue, RUB mm Adj. EBITDA(1), RUB mm 1 400 000 1 267 603 400 000 1 232 649 336 752 350 000 323 106 1 200 000 300 077 1 031 794 300 000 1 000 000 250 000 800 000…
  40. Investor Day 2014 – Gazprom Neft – slide 40
    Operational and financial efficiency backed by industry- leading growth Adj. EBITDA absolute 2013 Y-o-Y Growth, % Adj.EBITDA/boe, USD/boe 30 4.2 25 24,2 23,1 23,7 19,8 19,6 20 18,8 15 10 1.1 5 0.0 0 Gazprom Neft Lukoil…
  41. Investor Day 2014 – Gazprom Neft – slide 41
    Combination of New Production and Legacy Fields Driving Growth Traditional and new production centers in Russia Arctic Shelf: North of YNAO: Prirazlomnoye & Dolginsokye SeverEnergia, Messoyakha & Novoportovskoye East…
  42. Investor Day 2014 – Gazprom Neft – slide 42
    Investment Decisions Reached at New Upstream Projects Novoport Messoyakha Kuyumba Tsarichanskoye Peak: 13 MMToe at 2022-2023 Peak: 12 MMToe at 2023 Peak: 12 MMToe at 2029-2030 C1+C2 reserves: 27 MMtoe Completed first winter oil…
  43. Investor Day 2014 – Gazprom Neft – slide 43
    Upstream Portfolio Expanding Tomsk region SeverEnergia Acquired Increased stake to 40.2% Yuzhno-Pudinskiy Block Reserves (C1+C2): 6 MMToe Reserves (C1+C2): 1.7 bln toe Startup: 2016 Startup: 2012 Peak: 0.3 MMToe at 2019 Peak: 42…
  44. Investor Day 2014 – Gazprom Neft – slide 44
    Production Increase Driven by Orenburg, Muravlenkovskoye, SeverEnergia and Priobskoye Hydrocarbon production *Joint operations: proportionally consolidated entities (Tomskneft, SPD). ** Joint Ventures: Equity accounted entities…
  45. Investor Day 2014 – Gazprom Neft – slide 45
    Technological Progress Driving Growth The share of high-tech wells in total drilling in 2012-2013, increased from 4% to 35% Horizontal wells drilled Multi-stage well fracking Multilateral wells drilled 2.7 5.1 4.8 2011 2012…
  46. Investor Day 2014 – Gazprom Neft – slide 46
    First Arctic Offshore Production Recoverable reserves (C1+C2): 74 MMTonnes Startup: 2013 Peak: 5.5 MMTonnes at 2021 Key events: Barents Sea Kara Sea Completed necessary audits ahead of platform launch Murmansk Drilled first well…
  47. Investor Day 2014 – Gazprom Neft – slide 47
    Refining Throughput Levels Remain High Amidst Investment Program Refining throughput, MMTonnes 43.3 -2% 42.6 +7% +7% 40.5 2.1 +28% 2.7 +13% 37.9 2.4 33.4 2.9 9.6 8.6 7.4 -10% NIS 2.4 7.2 6.8 Slavneft 10.8 10.7 +4% 11.1 8.9…
  48. Investor Day 2014 – Gazprom Neft – slide 48
    Completion of quality program leads to higher value product mix Output by products, MMTonnes Gasoline yield Diesel yield 48 Gazprom neft - Investor Day 2014
  49. Investor Day 2014 – Gazprom Neft – slide 49
    Conversion investments will increase light product yields by about 20% between 2013 and 2020 Petroleum product yield structure, % 100 100 100 Half of conversion Gasoline investment program 2722 27 29 2 Naphtha expected to come 7…
  50. Investor Day 2014 – Gazprom Neft – slide 50
    Rebranding pushes annual sales growth Loyalty program Benchmarking 3 1 Accompanying goods and services 2 Retail metrics 4 1 Benchmarking 2 Non oil sales, 3 Loyalty program, mln 4 Retail metrics (Avg. daily sales/site) 1,000…
  51. Investor Day 2014 – Gazprom Neft – slide 51
    Capital Investments support strategic goals Investments (RUB mln) 32% Y-o-Y growth in brownfield capex due to 15.6% increase in use of new technologies in legacy fields Active development of Novoport field, Orenburg cluster and…
  52. Investor Day 2014 – Gazprom Neft – slide 52
    US 2.1** Billion free cash flow generated in 2013 RUB million Cash Flow Reconciliation FY2013 FCF/boe 2013, USD/boe 6 5,6 5 4 3,0 3 2 1 0,8 0 Gazprom Neft Lukoil Rosneft* * Includes TNK-BP 52 Gazprom neft - Investor…
  53. Investor Day 2014 – Gazprom Neft – slide 53
    Diversified debt portfolio Debt maturity profile at the end of FY2013 Debt structure at the end of FY2013, RUB mln and comparison of profiles structures 2013 vs. 2012 From 25% to 34% 100% 21 235 Cash and cash equivalents 90% 91…
  54. Investor Day 2014 – Gazprom Neft – slide 54
    Continued commitment to shareholders via interim dividends In 2013, the expected amount of annual dividends is 25% of IFRS Net Income Launched interim dividend program via payment of 6-month interim dividends Dividend Yield…
  55. Investor Day 2014 – Gazprom Neft – slide 55
    Appendix: 2014 plans for major upstream developments Exploration Appraisal Selection Specification Realization Exploration Appraisal Selection Specification Realization North unit Exploration Appraisal Selection Specification…
  56. Investor Day 2014 – Gazprom Neft – slide 56
    Appendix: 2014 plans for major upstream developments (cont'd) Exploration Appraisal Selection Specification Realization Exploration Appraisal Selection Specification Realization Exploration Appraisal Selection Specification…
  57. Investor Day 2014 – Gazprom Neft – slide 57
    Appendix: Gazprom neft balance Crude, MMTonnes 1.25 MMTonnes Hydrocarbon production abroad 4.74 MMTonnes 49.33 MMTonnes Petroleum products Crude oil production purchase in Russia 0.4 MMTonnes Condensate 6.81 MMTonnes…
  58. Investor Day 2014 – Gazprom Neft – slide 58
    Part 6. Gazprom Energoholding Denis Fedorov Head of Gazprom Directorate for Development of Power and Heat Generation CEO of Gazprom Energoholding 58
  59. Investor Day 2014 – Gazprom Neft – slide 59
    Russian power generation Russia is a Top-6 country Key facts about the market in terms of installed capacity, 2012, GW 33 32 30 24 23 23 22 China 1 220 16 16 19 Market turnover US 1,168* 2008-2012, bn EU 964 2008 2009 2010 2011…
  60. Investor Day 2014 – Gazprom Neft – slide 60
    Electricity consumption in Russia: Dynamics and drivers Consumption of electricity in Russia The Russian GDP growth rate Electricity prices in Russia has been growing at 1.8% annually is expected to grow have potential to grow in…
  61. Investor Day 2014 – Gazprom Neft – slide 61
    Gazprom Energoholding assets profile Gazprom energoholding owns controlling stakes in Mosenergo, TGK-1, OGK-2 and MOEK GEH is the leading thermal generator in Russia As of 2013 Electricity Heat Installed capacity 37.7 GW 71.3 th.…
  62. Investor Day 2014 – Gazprom Neft – slide 62
    The management is focused on value creation Environment We do not affect Prices for power Gas tariff tariffs Heat tariff Climate GEH influence area but we create value for shareholders 1 Operational efficiency via internal…
  63. Investor Day 2014 – Gazprom Neft – slide 63
    Performance of management on GEH assets optimization In 2013 GEH managed to reduce its expenses and strengthen the financial position of its assets GEH also executed the acquisition of MOEK which is expected to create significant…
  64. Investor Day 2014 – Gazprom Neft – slide 64
    Growth of GEH assets financials Gazprom Energoholding significantly outperformed the leading European power companies in terms of growth rates 15.0% EBITDA CAGR 2009-2013F, IFRS Revenue CAGR in 2009-2013 reached 9%, 10.0% EBITDA…
  65. Investor Day 2014 – Gazprom Neft – slide 65
    Expected effect from the drivers of 2013-2014 EBITDA Costs optimization programs implemented by GEH are expected to result in EBITDA increase of over RR 4 bn in 2013 and over RR 2 bn in 2014 Expected effect on EBITDA +1.5 +0.8…
  66. Investor Day 2014 – Gazprom Neft – slide 66
    Additional growth opportunities for GEH Being a part of Gazprom Group, GEH positions itself as an international player Along with the current work on efficiency improvement, the company continues to seek opportunities for added value…
  67. Investor Day 2014 – Gazprom Neft – slide 67
    Appendix: GEH profile General Information Installed capacity in Russia as of 31.12.2012(1) Gazprom Energoholding is the largest owner of power generating assets in Russia (controlling stakes in Mosenergo, TGK-1, OGK-2 and MOEK) 17%…
  68. Investor Day 2014 – Gazprom Neft – slide 68
    Appendix: Operational and financial results outlook for 2013/2014 +5.6% +5.3% Electricity Revenue output 166,9 158,6 167,5 (IFRS) 323,8 336,1 354,0 kWh bn 2012 2013 2014F Change RR bn 2012 2013F 2014F Change Mosenergo 61.3 58.6…
  69. Investor Day 2014 – Gazprom Neft – slide 69
    Appendix: Investments of GEH companies guarantee value creation in the future Upgraded CDA tariff guarantees return on investments Basic IRR of investments on GEH invests into RR ths. per 1 MW/month 499 the basis of Capacity…
  70. Investor Day 2014 – Gazprom Neft – slide 70
    Appendix: MOEK acquisition In 2013 GEH acquired MOEK a strategic transaction which is expected to create the following synergy effects: Economy due to the switch of loads The measures are expected to Potential sale of land plots…
  71. Investor Day 2014 – Gazprom Neft – slide 71
    Appendix: Expected effect of tariffs freeze The so-called tariffs freeze became an important event in power sector regulation in 2013 The freeze assumes indexation of gas, electricity and capacity tariffs (as well as rail) by 0% in…
  72. Investor Day 2014 – Gazprom Neft – slide 72
    Contacts for investors Department for Finance&Economics Department of Corporate Finance Section of Investor Relations Corporate Finance Directorate Investor Relations Fax: (007) (495) 719-35-41 Tel: (007) (812) 385-9548 Tel: (007)…

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