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IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company

Rosneft Oil Company · Feb 5, 2019 · 46 slides

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Slides

  1. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 1
    Rosneft Oil Company IFRS Results 12M and Q4 2018 February 5, 2019
  2. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 2
    Macroeconomic Environment Indicator 2018 2017 % Q418 Q318 % Urals, /bbl 69.8 53.1 31.4% 67.3 74.2 (9.3)% Urals, 000 Rub/bbl 4.38 3.10 41.2% 4.48 4.86 (8.0)% Naphtha, 000 Rub/ton 36.88 27.56 33.8% 35.10 42.06 (16.5)% Gasoil…
  3. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 3
    Crude Oil Price and Gross Upstream Margin Brent price Gross upstream margin1 Rub/bbl Rub/bbl FY average FY average 6,000 2,000 5,000 1,500 4,000 1,000 3,000 500 2,000 0 Jan-18 Apr-18 Jul-18 Oct-18 Jan-18 Apr-18…
  4. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 4
    Key Achievements: Upstream 84% success rate in on-shore exploration drilling 454 mmtoe 11 reserves additions from exploration, 23 new fields and 230 deposits were discovered with 11+B22 reserves of about 250 mmtoe 173% - Proven…
  5. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 5
    Key Achievements: Downstream 115 mmt refining throughput, including 103.3 mmt processed at Russian refineries Commercial production of high octane gasolines Euro-6 and Pulsar 100 started Laboratories and control rooms of the…
  6. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 6
    Key Operational Highlights Indicator 2018 2017 % Comment SEC proven hydrocarbon Successful exploration, commencement of new field areas, as reserves 41,431 39,907 +3.9% well as development performance improvement mmboe Hydrocarbon…
  7. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 7
    Key Financial Highlights Indicator 2018 2017 % Q418 Q318 % EBITDA, Rub bn 2,081 1,400 48.6% 488 643 (24.1)% Net Income, Rub bn 549 222 100% 109 142 (23.2)% attributable to Rosneft shareholders Adjusted net income1, Rub bn 828 383 100%…
  8. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 8
    Regulatory changes in the O&G industry Initiative Effect Introduction of PBT for new production regions and pilot projects in West Siberia Extension of an existing MET rate component for 2021 Introduction of an additional MET rate…
  9. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 9
    Production Restrictions under OPEC+ Agreement Liquids production in Russia kbpd Russia total, RHS 4,900 Rosneft, LHS 11,550 Entry level for the production cut by the Company (90)2 11,350 4,704 4,700 (120)1 11,150 4,601…
  10. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 10
    Rosneft Liquids Production with OPEC+ Restrictions Implied mmt +3-4.5% +2.1% 225.5 230.2 2017 2018 2019 2018 liquids production increased by 2.1% YoY due to record high output at Yugansk, the Company largest asset,…
  11. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 11
    Rosneft Assets in Venezuela Reimbursement of prepayments in 20181 Car ibbean Sea bn Patao Mejillones Principal Petroperija Boqueron amount Petromonagas 2.3 reduced by 2 times Carabobo-2/4 Junin-6 4.6 VENEZUELA Oil…
  12. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 12
    Operating Results
  13. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 13
    Exploration and Reserves Reserves1 Key achievements in 2018 mmboe Maintaining high levels of 2D and 3D seismic works (onshore) 1,569 84% - exploration drilling success rate (onshore Russia) 454 mmtoe 11 reserves additions by…
  14. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 14
    Development drilling Development drilling footage Key achievements in 2018 000 m Development drilling footage flat YOY 12 mln m with -0.6% 50% share of in-house service. Number of multilateral wells commissioned doubled 3.5%…
  15. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 15
    Hydrocarbon Production kboed +1.3% 44 (22) 50 (29) 30 (31) (23) (19) 3 74 +117 kboed (+2.0%) average daily liquids production growth 5,718 in West and East Siberia 5,795 2017 Yugansk Greenfields in Other mature fields…
  16. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 16
    Progress in Key Projects Indicator Yurubcheno-Tokhomskoe field Kondinskoe field 3 reserves (PRMS) 309 mmtoe / 2,368mmboe1 142 mmtoe / 1,034 mmboe Commissioning year 2017 2017 Production in 2018 2.3 mmt 1.6 mmt Production plateau…
  17. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 17
    Progress in Key Greenfields: Taas-Yuryakh (Srednebotuobinskoye Field, Stage 2) Indicator Value 3 reserves (PRMS) 281 mmtoe / 2,053 mmboe Commissioning Q4 2018 2018 production 2.9 mmt Plateau production (year) c. 5 mmtpa (2021+)…
  18. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 18
    Progress in Key Greenfields: Tagul Field Indicator Value 3 reserves (PRMS) 456 mmtoe / 3,251mmboe Commissioning year Q4 2018 2018 production 1.3 mmt Plateau production (year) 4.5 mmtpa (2022+) Test production period completed…
  19. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 19
    Progress in Key Greenfields: Russkoe Field Indicator Value 3 reserves (PRMS) 416 mmtoe / 2,799 mmboe Commissioning year Q4 2018 2018 production 0.3 mmt Plateau production (year) 6.5 mmtpa (2022+) The field was put on stream, 2018…
  20. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 20
    Progress in Key Greenfields: Kuyumba Field1 Indicator Value 3 reserves (PRMS) 285 mmtoe / 2,176 mmboe Commissioning year2 Q4 2018 2018 production 0.5 mmt Plateau production (year)2 3 mmtpa (2021+) The field was put on stream, the…
  21. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 21
    Gas Business Key achievements for 2018 Gas production Gas revenues increased by 8.8% in 2018 mainly driven by bcm production growth at the Zohr field (offshore Egypt). Field -1.15 development goes ahead of schedule. Gas production…
  22. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 22
    Progress Key Projects: Rospan The project provides the major contribution to the Company near-term production growth Indicator Value 852 bcm of gas, 195 mmt of 3 reserves (PRMS) 6.22 6.45 6.63 gas condensate, LPG and oil Potential:…
  23. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 23
    Brownfields Development: Development Projects at Sibneftegaz The Company's largest asset in terms of gas production. In 2018 production stood at 11.96 bcm Indicator Value 3 PRMS reserves (gas) 543 bcm 12.6 12.1 12.0 2007 (Beregovoy…
  24. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 24
    Greenfileds Development: Kharampur The most significant (after Rospan) project of the Company in terms of gas production growth1 Indicator Value 3 reserves (PRMS), 650 bcm2 gas Gas production plateau: c. 11 bcmpa3 Phase 1…
  25. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 25
    Refining: Further Efficiency Improvement via Units Optimization Key refining highlights in Russia Key achievements in 2018 Gasoline production, mmt Diesel production, mmt Improved product slate at Russian refineries taking into…
  26. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 26
    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 58.3 59.1 61.1 Export…
  27. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 27
    Premium Marketing Channels Development Avia Bunker fuel Lubes Bitumen Key achievements In 2018 jet fuel sales increased In 2018 bunker fuel sales grew As of the year end Company Sales of the new innovative by +6.1% YOY by +10.7% YOY…
  28. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 28
    Progress in Development of the Retail Channel Retail By-product sales 16% - increase of motor fuel sales 1 6% - by-product and services revenues growth 1 36% - increase of hot beverages sales vs 2017 14% - cafe category revenues…
  29. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 29
    Financial Results
  30. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 30
    Revenue 2018 vs 2017 Rub bn 31 25 180 3 1,399 589 8,238 6,011 2017 Exchange rate Prices Exchange rate effect Share in profits of Volumes Other 2018 from prepayments associates and JVs Positive price environment Urals…
  31. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 31
    Operating Costs Dynamics Lifting costs Refining costs in Russia Rub/boe Quarter 12M Average % YOY Rub/bbl Quarter 12M Average % YOY 194 184 215 205 192 199 192 193 180 185 168 172 11.2% 10.1% 3.8% 2.1% 3.0% 0.6% 11.6% -4.4%…
  32. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 32
    EBITDA and Net Income EBITDA 2018 vs 2017 Rub bn 25 (58) 132 (2) 5 (19) (21) (11) 334 20 (9) 285 Internal and seasonal factors: 2,081 1,400 External factors: Rub +116 bn; +8.3% Rub +565 bn; +40.3% 2017 Exchange rate Excise…
  33. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 33
    CAPEX CAPEX and production CAPEX almost flat YOY (+1.5% in Rub terms). Investments Rub bn mmboed were in line with the Company strategy and focused on: 1,500 6.5 development drilling and hydrofracturing at mature 1,200 5.2 assets to…
  34. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 34
    Free Cash Flow and Reimbursement of Prepayments Free cash flow Free cash flow growth by over 4x times to Rub 1.1 trln Rub bn bn (17.9 bn) 1,133 17.9 Industry-leading free cash flow, timely debt service Organic free cash flow and…
  35. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 35
    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…
  36. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 36
    Appendix
  37. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 37
    Revenue Q4 vs Q3 2018 Rub bn 25 (169) 22 2 (6) 5 2,286 2,165 Q3 2018 Exchange rate Prices Exchange rate Share in profits of Volumes Other Q4 2018 effect from associates and prepayments JVs Negative price…
  38. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 38
    Costs in 2018 vs. 2017 Lifting costs Rub bn 12.8 7.3 2.1 2018 lifting costs growth was mainly driven by tariffs indexation of natural monopolies, growth of repair and 359.0 381.2 maintenance costs of growing well stock and other…
  39. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 39
    EBITDA and Net Income EBITDA Q4 2018 vs Q3 2018 Rub bn External factors: Rub -98 bn; -15.2% 8 (43) 2 (64) (1) (9) (13) (19) (16) 643 488 Internal and seasonal factors: Rub -57 bn; -8.9% Q3 2018 Exchange rate Prices Share…
  40. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 40
    FX Risk Hedge 2018, Rub bn 2017, Rub bn Net of income Net of income Before tax Income tax Before tax Income tax tax tax Recognized within other funds and (290) 58 (232) (435) 87 (348) reserves as of the start of the period Foreign…
  41. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 41
    Calculation of Adjusted Operating Cash Flow Profit and Loss Statement Cash Flow Statement 2018, 2018, Indicator Indicator bn bn 10.5 Net income 1 1 Revenue, incl. 133.7 Adjustments to reconcile net income to 15.3 2…
  42. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 42
    Calculation of Adjusted Operating Cash Flow, FY2018 Rub bn 72 91 (205) 162 164 283 (936) 2,069 1,502 Reimbursement of crude oil supplies prepayments 1,133 (average FX rate) Rub 609 bn Net cash provided…
  43. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 43
    Export Duty Lag Rub bn Normalized EBITDA Actual EBITDA +7 Export duty lag effect +32 -57 +1 +15 +26 +6 -7 636 643 565 545 533 488 356 371 364 390 384 385 327 333 313 306 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18…
  44. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 44
    Finance Expenses, Rub bn Indicator 2018 2017 % Q418 Q318 % 1. Interest accrued1 280 230 21.7% 73 72 1.4% 2. Interest paid2 284 219 29.7% 82 78 5.1% 3. Change in interest payable (1-2) (4) 11 (9) (6) 50.0% 4. Interest capitalized3…
  45. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 45
    EBITDA and Net Income Sensitivity Urals price change Rub/ exchange rate change Rub bn -7 /bbl +7 /bbl Rub bn -6.3 Rub/ +6.3 Rub/ EBITDA EBITDA (183) 183 (246) 246 Net income Net income (146) 146 (197) 197 Average Urals…
  46. IFRS Results 12M and Q4 2018 Presentation – Rosneft Oil Company – slide 46
    Questions and Answers

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