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Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company

Rosneft Oil Company · Jul 25, 2014 · 41 slides

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Slides

  1. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 1
    Rosneft Oil Company IFRS 2Q and 1H2014 Results July 25, 2014 25.07.2014
  2. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 2
    Important Notice The information contained herein has been p prepared p byy the Company. p y The opinions p presented herein are based on p general information gathered at the time of writing and are subject to change without…
  3. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 3
    2Q and 1H2014 Key Highlights: Free Cash Flow Growth with Debt Reduction Change Change Indicator 2Q2014 1H2014 Causes YoY YoY Revenue, 1,435 +22.0% 2,810 +41.3% Sales volume growth RUB bln Control of operating and administrative…
  4. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 4
    2Q and 1H2014 Key Highlights: Greenfield Development Startup with Cost Control Change Change Indicator 2Q2014 1H2014 Causes YoY YoY Hydrocarbon production, 5.0 +4.6% 5.0 +4.6% Stable production of crude oil, gas mln boed production…
  5. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 5
    Financial results 5
  6. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 6
    Revenues: Increase of Sales Volumes and Optimization of Sales Channels RUB bln Company controlled C t ll d ffactors: t +RUB 61 bln; +5% Macro factors: + RUB 198 bln; +17% 14 4 4 39 68 3 127 1,435 1,176 2Q2013…
  7. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 7
    EBITDA: Positive Contribution of Internal Factors RUB bln Macro factors: Company controlled factors: + RUB 64 bln; +30% +RUB 25 bln; +11% 4 4 17 21 (3) (3) (18) 19 48 304 215(1) 2Q 2013 Exchange rate Tax maneuver…
  8. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 8
    Operating Expenses: Retaining Leadership in the Industry Lifting costs Benchmarking (1) RUB/boe Electricityy Other /boe Competitors Rosneft 20 146 140 34 39 15 10 106 107 5 4.3 4.2 3.8 2.9 0 2Q2013 2Q2014…
  9. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 9
    Capital Expenses: Efficiency and Implementation of Major Projects as Scheduled CAPEX dynamics Growth in 1H2014 vs. 1H2013 is associated with new RUB bln 732 25 assets consolidation and offshore development 560 20 Target unit oil…
  10. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 10
    Free Cash Flow: Sustainable Level due to Production Efficiency Growth Free cash flow(1) Benchmarking(2) RUB bln /boe Competitors Rosneft 45 20 36 (34) 35 13 25 42 112 15 75 7.5 5 3.5 7.7 1.5 -5 35 -15 2Q 2013…
  11. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 11
    Increasing Efficiency and Cost Reduction: Optimization of Tender Procedures and Contractual Arrangements Centralized tender for proppant and drilling services, services which allows to secure Zero inflation and maximum discounts…
  12. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 12
    Optimization of Relationships with Suppliers and Contractors Actions Expected Result Build a standardized nomenclature Implement unified criteria and requirements Discounts Localize practices and technologies Improved quality…
  13. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 13
    Financial Sustainability: Efficient Management g of Debt Portfolio Net debt Repayment schedule(1) RUB bln Net debt RUB bln 2 000 1,909 1,860 Net debt/EBITDA /EBITDA 3 1 800 1,586 1,495 2,5 1 600 1 400 2 1 200 1,9 1 000 1,8…
  14. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 14
    Operating results 14
  15. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 15
    Offshore Projects Development: Arkutun-Dagi Field Development Startup Berkut drilling platform designed for year-round operations in the harsh environment of the Sea of Okhotsk Oil production up to 12 th. tpd First pproducingg…
  16. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 16
    Offshore Projects Development: Drilling at North Chaivo Field Area size 172.5 sq. km The area is located in the shallow waters of Sakhalin North-East Shelf, at sea depths of up to 20 m 1+2 reserves: oil 14.8 14 8 mln t gas 12.9…
  17. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 17
    Offshore Projects Development: Preparations for Drilling at the Universitetskaya Structure Development within strategic cooperation with Key parameters (100% carry financing of the first 1.7 bln for E&A, E&A 50% subsequent 500…
  18. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 18
    Brownfields: Cutting-edge Technologies for Production Stabilization Reducing production decline rates(1) Key achievements in 1H2014 Production stabilization due to: 2013/2012 2014/2013 7.1% Additional wellwork program approved(2)…
  19. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 19
    Brownfields: Samaraneftegaz Potential of Mid-term Growth Oil production over time Profile and achievements for 2Q2014 th. tpd 35 One of the oldest oil producing assets in Volga-Urals: Over 77 years of oil production Recoverable…
  20. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 20
    Brownfields: Production Maintenance by Development of Tight Oil Reserves Key parameters 3 mln t(1) tight oil production for 1H2014 ((RUB 6 bln in MET tax benefits)) Tight g oil reserves 1 493 mln t 1,493 (SRR data as of Jan 1,…
  21. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 21
    Production Growth Drivers: Siberian Greenfields Greenfield production Key accomplishments in 2Q2014 th. bpd 810 Uvat: 781 788 800 763 731 Record drilling speed 1,632 m per day Ust-Tegusskoe CGF capacity increase from 6 to 7 mln…
  22. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 22
    Production Growth Drivers: Uvat The Uvat project includes development of the following 3 assets: Key features East Development Hub (infrastructure center set up, 73% of well Field oil reserves stock drilled out) 337 mln t (1+2 as…
  23. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 23
    Production Growth Drivers: Vankor Cluster Key features Fields located in the Turukhansk and Taymyr Project name Suzun Tagul Lodochnoe y districts of the Krasnoyarsk Territoryy in the Oil reserves, mln t direct vicinity of Vankor…
  24. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 24
    Gas Business: Effective Production Growth Key facts Gas production Average gas sales price growth by 42% bcm to th. th RUB 3.0 3 0 per th. th cm in 1H2014 26 7 26.7 Execution of long-term contracts for the supply of over 30…
  25. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 25
    Production Growth Drivers: Rospan An asset that will ensure maximum production Urengoyskoe field growth in the next 5 years East-Urengoyskoe+ as U e goys oe North-o Esetinskoe field 2014-2018 savings of RUB 26.3 bln in MET…
  26. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 26
    Production Growth Drivers: Sibneftegaz Gas brownfield with a growth potential 2014 2014-2018 2018 savings of RUB RUB 4 bln in MET breaks Beregovoe field for gas Key targets for 2H2014: Pyreinoe field Start of the development…
  27. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 27
    Entry into LNG Market: Far East LNG LNG plant key parameters Plant location Island of Sakhalin Kaygano-Vasyukanskoye Sea Annual capacity 5 mln t Sakhalin-1 Severnoe Chaivo g Year of commissioning 2018-2019 Astrakhanovskoye Sea…
  28. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 28
    Refining: High-margin Crude Monetization Channel Oil monetization channels in 2Q2014: refining Refinery throughput Motor fuels production in Russia mln t 1 83 1,783 8.0 7.8 1,477 32% 36% back, /t +0.2% 8 /t 6 /t…
  29. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 29
    Oil Product Supplies to East Siberia and Far East Achinsk Refinery accident Plan in place to replace shortfall in volumes 15 June 2014 saw an accident during start-up Despite the emergency shutdown of the refinery, supplies of oil…
  30. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 30
    Oil and Oil Product Trading: Increased Supplies pp via Premium Channels Oil monetization channels in 2Q2014: export Oil export structure Exchange-based trading on Russian domestic market in 2Q2014 311 /t 358 /t 23.1% 23.7% +122%…
  31. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 31
    Retail sales and B2B: Expanded Premium Channels Key achievements in 2Q2014 Average sales per retail site, tpd Retail network: Subsidiary reorganization launched to increase efficiency and 26.6 Premium optimize costs segment…
  32. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 32
    Appendix 32
  33. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 33
    2Q 2014 Financial Results ((USD bln)) Indicator 2Q 2014(1) 2Q 2013(1) Change Revenue 41.0 37.2 +10.2% EBITDA 8.7 6.8 +27.9% Net Profit 4.9 1.1 x4 Operating Cash Flow(2) 7.0 6.7 4.5% Capital Expenditures 3.8 4.8 (20.8)%…
  34. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 34
    Revenue: Record 1H 2014 Result Oil and Gas Sales Petroleum Product Sales 5.2% 2.6% 45.7% 3.9% 2.7% 58.5% 4.4% RUB RUB 3 8% 3.8% 1,486 13.5% 1,286 bln bln 28.6% 14 1% 14.1% 17 0% 17.0% Europe and Other Asia Europe…
  35. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 35
    Non-Controlled Expenses RUB th. per t 5.87 6.48 6.70 5.75 5.45 5.00 Net Exporter Revenue Export Duty Tariff Yugansk-Novorossiysk 13.66 MET 13.39 12.36 12 56 12.56 12 99 12.99 12.01 77% 1,59 1,59 1 59 1,59 1,59 1,59…
  36. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 36
    Tax Maneuver Effect Tax Maneuver Effect in 1H 2014(1),(2) Key Changes RUB bln I di t Indicator B f Before Aft After 3 4 Crude oil MET base rate, RUB 470 493 2 10 Maximum Crude Oil Export 60% 59% Duty Rate (24) (8)…
  37. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 37
    Financing Costs, RUB bln 2Q 2014 1Q 2014 Change 4Q 2013 3Q 2013 1. Interest Accrued(1) 22 22 - 21 19 2. Interest Paid 18 23 (21.7%) 18 22 3 Change in interest payable (1-2) 3. (1 2) 4 (1) - 3 (3) 4. Capitalized Interest(2) 10 8…
  38. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 38
    FX Gains/(Losses) RUB bln FX Gains/(Losses) EOP RUB/US Exchange Rate RUB/US 29 30 28 19 17 20 29 11 12 10 2 30 0 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 31 -10 -6 32 -20 -14 -21 33 -30 34 -40 -44 35 -50…
  39. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 39
    Net Income RUB bln Company controlled factors: +RUB 34 bln; +131% Macro factors: +RUB 112 bln; +431% 14 (5) 25 (2) 84 172 (34) 64 26(1) 2Q 2013 EBITDA (macro Income tax FOREX Other expenses EBITDA (com (com.…
  40. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 40
    Net Debt RUB bln 18 16 4 (110) (245) 133 9 70 14 1,586 1,495 1Q 2014 Adjusted operating Asset purchase Loans to JVs and CAPEX and Interest Purchase of partial Purchase of FOREX Other 2Q 2014 cash flow (1)…
  41. Rosneft Oil Company IFRS 2Q and 1H2014 Results – Rosneft Oil Company – slide 41
    Q&A 41

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