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3Q 2018 Earnings – Rosneft Oil Company

Rosneft Oil Company · Nov 6, 2018 · 39 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. 3Q 2018 Earnings – Rosneft Oil Company – slide 1
    Rosneft Oil Company IFRS Results Q3 2018 November 6, 2018
  2. 3Q 2018 Earnings – Rosneft Oil Company – slide 2
    Overview of Key Corporate Developments Macroeconomic Environment1 Indicator Q318 Q218 % 9M18 9M17 % Urals, /bbl 74.2 72.5 2.4% 70.7 50.6 39.6% Urals, 000 Rub/bbl 4.86 4.48 8.6% 4.34 2.95 47.0% Naphtha, 000 Rub/ton 42.06 38.52 9.2%…
  3. 3Q 2018 Earnings – Rosneft Oil Company – slide 3
    Key Operational Highlights Indicator Q3 2018 Q2 2018 % 9M 2018 9M 2017 % Hydrocarbon production, incl. 5,720 5,826 5,706 2.1% 5,747 0.5% kboed Oil and liquids 4,585 4,726 4,604 2.6% 4,633 1.0% kbpd Gas 1,100 1,102 (0.2)%…
  4. 3Q 2018 Earnings – Rosneft Oil Company – slide 4
    Key Financial Highlights Indicator Q3 2018 Q2 2018 % 9M 2018 9M 2017 % EBITDA, Rub bn 643 565 13.8% 1,593 1,010 57.7% Net Income, Rub bn 142 228 (37.7)% 451 131 100% attributable to Rosneft shareholders Adjusted net income1, Rub bn…
  5. 3Q 2018 Earnings – Rosneft Oil Company – slide 5
    Operating Results
  6. 3Q 2018 Earnings – Rosneft Oil Company – slide 6
    OPEC+ Deal Liquids production in Russia Crude oil price kbd Rub/bbl /bbl 4,900 11,550 6,000 90 Total Russia ( (RHS) ) , Brent, ./. ( ) Rub/bbl (RHS) ( ) Rosneft (LHS) , Brent, ./. /bbl (LHS) ( ) 11,350 5,000 70 4,700…
  7. 3Q 2018 Earnings – Rosneft Oil Company – slide 7
    Development drilling Development drilling footage Key achievements in 9M 2018 000 m Increase in development drilling footage by 5% (vs 9M +5% 2017) to 9.2 mm meters with c. 60% share of in-house service 13% increase in new wells…
  8. 3Q 2018 Earnings – Rosneft Oil Company – slide 8
    Hydrocarbon Production kboed +0.5% 43 (51) 61 (39) 22 (42) 86 (32) (21) +100 kboed (+1.7%) average daily liquids production growth 5,720 in West and East Siberia 5,747 9M 2017 Yugansk Greenfields in West Other mature…
  9. 3Q 2018 Earnings – Rosneft Oil Company – slide 9
    Progress in Key Projects Indicator Yurubcheno-Tokhomskoe field Kondinskoe field 3 reserves (PRMS) 282 mmtoe / 2,156 mmboe1 143 mmtoe / 1,036 mmboe Commissioning year 2017 2017 Production in H1 2018 1.7 mmt 1.0 mmt Production plateau…
  10. 3Q 2018 Earnings – Rosneft Oil Company – slide 10
    Progress in Key Greenfields: Taas-Yuryakh (Srednebotuobinskoye Field, Stage 2) Indicator Value 3 reserves (PRMS) 286 mmtoe / 2,096 mmboe Commissioning year Q4 2018 Plateau production (year) c. 5 mmtpa (2021+) MET1 and export duty…
  11. 3Q 2018 Earnings – Rosneft Oil Company – slide 11
    Progress in Key Greenfields: Tagul Field Indicator Value 3 reserves (PRMS) 447 mmtoe / 3,180 mmboe Commissioning year Q4 2018 Plateau production (year) 4.5 mmtpa (2022+) Tax benefits MET tax break Work is performed using mobile…
  12. 3Q 2018 Earnings – Rosneft Oil Company – slide 12
    Progress in Key Greenfields: Russkoe Field Indicator Value 3 reserves (PRMS) 426 mmtoe / 2,874 mmboe Commissioning year Q4 2018 Plateau production (year) 6.5 mmtpa (2022+) Tax benefits MET tax break1 As at the end of Q3 2018…
  13. 3Q 2018 Earnings – Rosneft Oil Company – slide 13
    Progress in Key Greenfields: Kuyumba Field1 Indicator Value 3 reserves (PRMS) 282 mmtoe / 2,154 mmboe Commissioning year2 Q4 2018 Plateau production (year)2 3 mmtpa (2021+) MET3 and export duty tax Tax benefits breaks…
  14. 3Q 2018 Earnings – Rosneft Oil Company – slide 14
    Gas Business Key achievements for 9M 2018 Gas production bcm Revenue from gas sales increased by 6.8% due to increase of -0.91 regulated price by 3.4% in Q3 2018 among other reasons (-1.8%) Gas transportation costs reduced by 9% due…
  15. 3Q 2018 Earnings – Rosneft Oil Company – slide 15
    Progress Key Projects: Rospan The project provides the major contribution to the Company production growth by 2020 Indicator Value 3 reserves (PRMS) 878 bcm of gas, 191 mmt of (PRMS) gas condensate, LPG and oil 6.22 6.45 Potential:…
  16. 3Q 2018 Earnings – Rosneft Oil Company – slide 16
    Brownfields Development: Projects at Sibneftegaz The Company's largest asset in terms of gas production. For 9M 2018, production stood at 9.07 bcm Indicator Value 3 PRMS reserves (gas) 514 bcm 2007 (Beregovoy LA) 11.8 12.1 12.6…
  17. 3Q 2018 Earnings – Rosneft Oil Company – slide 17
    Greemfileds Development: Kharampur The most significant (after Rospan) project of the Company in terms of gas production growth1 Indicator Value 3 reserves (PRMS), 636 bcm2 gas Gas production plateau: 11 bcmpa3 Phase 1 (Senomanian)…
  18. 3Q 2018 Earnings – Rosneft Oil Company – slide 18
    Refining: Further Efficiency Improvement via Units Optimization Key refining highlights in Russia Key achievements in Q3 2018 Gasoline production, mmt Diesel production, mmt Saratov refinery started commercial production of high 20.…
  19. 3Q 2018 Earnings – Rosneft Oil Company – slide 19
    Profit Maximization from Crude Oil Marketing Netbacks for the main crude oil marketing channels Oil marketing breakdown Refining capacity utilization Export netback mmt Refining netback Domestic market netback 59.1 56.8 57.9 400…
  20. 3Q 2018 Earnings – Rosneft Oil Company – slide 20
    Financial Results
  21. 3Q 2018 Earnings – Rosneft Oil Company – slide 21
    Revenue Q3 vs Q2 2018 Rub bn 59 (3) 33 (23) 4 24 127 2,286 2,065 Q2 2018 Exchange rate Prices Exchange rate Share in profits of Number of days in Volumes Other Q3 2018 effect from associates and the period…
  22. 3Q 2018 Earnings – Rosneft Oil Company – slide 22
    Operating Costs Dynamics Lifting costs1 Refining costs in Russia Rub/boe Quarter 12M average % YOY Rub/boe Quarter 12M average % YOY 192 199 178 189 192 193 185 192 180 180 168 172 39.5% 9.1% 11.2% 10.1% 11.6% 3.8% 2.1%…
  23. 3Q 2018 Earnings – Rosneft Oil Company – slide 23
    EBITDA and Net Income EBITDA Q3 vs Q2 2018 Rub bn 4 28 11 (46) 8 1 21 (28) 2 7 6 64 643 External factors: Internal and seasonal factors: 565 Rub +81 bn; +14.3% Rub -3 bn; -0.5% Q2 2018 Exchange rate Prices Share in…
  24. 3Q 2018 Earnings – Rosneft Oil Company – slide 24
    CAPEX CAPEX and production 9M 2018 CAPEX was in line with Company strategy and Rub bn kboed mainly included: 6,000 development drilling at mature assets to maintain 1,000 922 production levels taking into account the OPEC+ 4,500…
  25. 3Q 2018 Earnings – Rosneft Oil Company – slide 25
    Early Execution of the Working Capital Reduction Target Reduction/(increase) of working capital Rub bn Rub/bbl 300 208 6,000 Change in working capital Price factor 5,500 200 Brent, Rub/bbl (RHS) Change in working capital adjusted for…
  26. 3Q 2018 Earnings – Rosneft Oil Company – slide 26
    Free Cash Flow and Reimbursement of Prepayments Free cash flow Rub bn 872 Free cash flow growth by over 4x times YoY to Rub FY 9M 872 bn (13.9 bn) for 9M 2018 Industry-leading free cash flow and net income growth Organic free cash…
  27. 3Q 2018 Earnings – Rosneft Oil Company – slide 27
    Industry-leading Free Cash Flow and Net Income Growth Net income Free cash flow bn % bn % 236% 309% 13.9 8.6 8.0 7.4 7.1 7.1 101% 3.8 4.1 29% 2017 9M 2018 2017 9M 2018 2017 9M 2018 2017 9M 2018 Rosneft Sector…
  28. 3Q 2018 Earnings – Rosneft Oil Company – slide 28
    Dividend Policy Payout ratios Dividend payments and oil prices of the largest state controlled companies3 DPS, Rub per share as % of IFRS net income 111.3 108.7 21.22 117.50 120.00 119.50 119.00 118.50 118.00 Brent, /bbl…
  29. 3Q 2018 Earnings – Rosneft Oil Company – slide 29
    Appendix
  30. 3Q 2018 Earnings – Rosneft Oil Company – slide 30
    Revenue 9M 2018 vs 9M 2017 Rub bn 123 3 19 19 1,270 334 6,073 4,305 9M 2017 Exchange rate Prices Effect from Share in profits of Volumes Others 9M 2018 prepayments associates and JVs reimbursement Positive market…
  31. 3Q 2018 Earnings – Rosneft Oil Company – slide 31
    Costs in 2018 vs. 2017 Lifting costs Rub bn 1.4 9.4 4.4 9M 2018 lifting costs growth was mainly driven by higher electricity tariffs, repair and maintenance costs 261.8 277.0 of growing well stock as well as other oilfield services…
  32. 3Q 2018 Earnings – Rosneft Oil Company – slide 32
    EBITDA and Net Income EBITDA 9M 2018 vs 9M 2017 Rub bn 32 2 (19) 2 (1) 25 (15) (8) 88 19 (7) 287 13 165 1,593 External factors: Internal and seasonal factors: 1,010 Rub +479 bn; +47.4% Rub +104 bn; +10.3% 9M 2017 Exchange…
  33. 3Q 2018 Earnings – Rosneft Oil Company – slide 33
    FX Risk Hedge Q3 2018, Rub bn 9M 2018, Rub bn Net of income Net of income Before tax Income tax Before tax Income tax tax tax Recognized within other funds and (216) 43 (173) (290) 58 (232) reserves as of the start of the period…
  34. 3Q 2018 Earnings – Rosneft Oil Company – slide 34
    Calculation of Adjusted Operating Cash Flow Profit and Loss Statement Cash Flow Statement 9M 2018, 9M 2018, Indicator Indicator bn bn 8.6 Net income 1 1 Revenue, incl. 100.6 Adjustments to reconcile net income to 11.8 2…
  35. 3Q 2018 Earnings – Rosneft Oil Company – slide 35
    Operating Cash Flow Adjustment, 9M 2018 Rub bn 40 67 (129) 126 126 195 (679) 1,551 Reimbursement of 1,126 crude oil supplies prepayments (average FX rate) 872 Rub 447 bn Net cash provided Reimbursement of FX rate…
  36. 3Q 2018 Earnings – Rosneft Oil Company – slide 36
    Export Duty Lag Rub bn 6 (7) 15 26 1 32 7 636 643 565 533 371 364 390 384 385 327 333 356 313 306 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Normalized EBITDA Actual EBITDA Note: The effect of the time…
  37. 3Q 2018 Earnings – Rosneft Oil Company – slide 37
    Financial Expenses, Rub bn Indicator Q3 2018 Q2 2018 % 9M 2018 9M 2017 % 1. Interest accrued1 72 70 2.9% 207 162 27.8% 2. Interest paid2 78 63 23.8% 202 154 31.2% 3. Change in interest payable (1-2) (6) 7 5 8 (37.5)% 4. Interest…
  38. 3Q 2018 Earnings – Rosneft Oil Company – slide 38
    EBITDA and Net Income Sensitivity Urals price change for 9M 2018 Rub/ exchange rate change for 9M 2018 Rub bn -7.1 /bbl +7.1 /bbl Rub bn -6.1 Rub/ +6.1 Rub/ EBITDA EBITDA -145 145 -190 190 Net Income Net Income -116…
  39. 3Q 2018 Earnings – Rosneft Oil Company – slide 39
    Questions and Answers

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