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2Q 2020 Earnings Results – Rosneft Oil Company

Rosneft Oil Company · Aug 14, 2020 · 32 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. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 1
    Rosneft Oil Company IFRS Results Q2 2020 August 14, 2020
  2. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 2
    Inclusive Approach* to Combat COVID-19 Concern for people's well-being is the Companys top priority Strict compliance with sanitary and epidemiological requirements Regular testing, over 270,000 test taken Over 16 mln units of…
  3. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 3
    H1 2020 Key ESG Results Environmental c. RUB 17 bn green investments* Social Constant progress in occupational safety: Process safety events rate complies with top quartile** Governance Extension of goals and functions: focus on…
  4. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 4
    COVID-19 Impact on Crude Oil and Petroleum Products Demand Oil demand in Europe Main petroleum products demand in Europe 15 mmbd 50 mmt Gasoline Jet fuel Diesel Fuel Oil 2019 40 -8% -9% +4% 30 -4% +6% 10 20 10 5 0 Jan-20…
  5. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 5
    Record Low Oil Prices Followed by Partial Recovery Oil prices and differentials1 Gross Upstream margin2 80 /bbl 12 000 Rub/t Brent Monthly average Urals FY average ESPO 60 9 40 6 20 /bbl 10 3 Urals-Brent ESPO-Brent 5…
  6. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 6
    Key H1 2020 Events Final 2019 dividends approved. Payments 1 completed ahead of schedule (July 14) 45 mln shares and GDRs for a total of c. 196 mln 2 have been purchased under the share buyback program1 Positive free cash…
  7. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 7
    Operating Results 8
  8. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 8
    Key Operating Indicators Oil production, 4,640 4,681 kbd 4,338 4,036 Q1'20 / Q2'20 H1'19 / H1'20 Gas production, mmcmd 182.7 184.7 174.7 166.6 Q1'20 / Q2'20 H1'19 / H1'20 4.70 5.47 Petroleum product and petrochemical…
  9. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 9
    Navigating OPEC+ Environment Crude oil production in Russia (2020) 6 mmbd 11 The Company has started oil production cuts under the new OPEC+ agreement since May 2020 Production cuts on a pro rata basis stage 2 5 stage 1 9…
  10. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 10
    Examples of Successful Production Management Regulating pump jacks parameters (Bashneft-Dobycha, lowering stroke length and pumping speed) Reduction of flow rates Number of wells Regulation of the ESP* rotation frequency and…
  11. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 11
    Development of Key Oil Projects . / 3 (PRMS) reserves 269 mmtoe1 3 (PRMS) reserves 85 mmtoe The implementation of the 1st stage of full-scale field development (PK-1 Pilot development programs are being implemented with connection to…
  12. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 12
    Development of Key Gas Projects Rospan Kharampur 3 (PRMS) reserves 897 bcm of gas; 204 mmt of gas condensate, LPG 3 (PRMS) reserves 735 bcm of gas and oil Gas production plateau: 1st stage (Senoman) - 11 bcm Production plateau 21 bcm…
  13. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 13
    Excess Profit Tax Introduction Impact Crude oil production growth at fields that switched to EPT, 2019 mmt The EPT regime was introduced since 2019 +41% It is an important step towards a sustainable and economically balanced…
  14. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 14
    Gas Business is Resistant to Volatile Prices at Global Markets Domestic and export netback Starting 2020 domestic gas netbacks have been from Novy Urengoy more efficient compared to export deliveries at Rub/mcm spot prices. Forward…
  15. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 15
    Gas Business Gas production in Russia (OPEC+ impact is limited by the amount of associated gas) The Companys H1 2020 gas production declined by c. bcm 4% (YoY) compared to 9.6% total reduction in Russia1 -9.6% The main growth driver…
  16. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 16
    Refining Refining margins Refining economics in Q2 2020 Russia11 Europe /bbl Decrease of refining margin in Russia during Q2 2020 was mainly caused by a negative impact of macro environment: outstripping recovery of oil 9.23…
  17. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 17
    Focus on Distribution Channels Development Netbacks of the main crude oil marketing channels Crude oil marketing breakdown Export, Asia Export, Europe mmt Refining in Russia . Domestic market 450 /t 400 61.7 63.4 50.6 350…
  18. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 18
    Financial Results 19
  19. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 19
    Key Financial Indicators H1 2020 EBITDA amid the 479 Rub bn demand reduction and oil price drop 206 Rub bn H1 2020 free cash flow -4.3 bn Reduction of debt and trading liabilities YTD 20
  20. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 20
    EBITDA and Net Income Dynamics EBITDA Q2 2020 vs. Q1 2020 Net Income Q2 2020 vs. Q1 2020 Q1 2020 Rub bn Net Income Rub bn 309 attr. to shareholders Q1 2020 (156) Exchange rate 56 Minorities 13 EPT effect (47) Q1 2020 (143)…
  21. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 21
    Efficient Cost Control Lifting costs Refining costs in Russia Rub/boe Quarter 12M average % YoY Rub/bbl Quarter 12M average % YoY 199 200 220 207 207 208 191 203 196 191 181 201 20.3% 5.7% 6.1% 4.1% 2.5% 2.3% -1.1% 0.0%…
  22. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 22
    Strong Free Cash Flow Free cash flow calculation Crude oil price and free cash flow dynamics, LTM Net cash provided Rub bn by operating activities 383 Reimbursement of 4.50 4.47 prepayments received 135 4.25 (historical FX rate)…
  23. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 23
    Debt Optimization Liquidity position as of June 30, 2020, bn Financial debt breakdown as of June 30, 2020 18.5 14.4 Available credit lines Rubles Liquid financial assets 35% Foreign currencies Floating rates 50% 50% Fixed…
  24. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 24
    CAPEX CAPEX evolution Rub trln Following negative macro environment and 0.85 production cuts the CAPEX program was optimized by 20% 0.44 The program still allows for fast project 0.37 development recovery and production buildup…
  25. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 25
    Appendix 26
  26. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 26
    Key Operational Highlights Indicator Q2 2020 Q1 2020 % H1 2020 H1 2019 % Hydrocarbon production, incl. 5,051 5,753 (12.2)% 5,402 5,806 (7.0)% kboed Liquids 4,036 4,640 (13.0)% 4,338 4,681 (7.3)% kbpd Gas 1,015 1,113 1,064…
  27. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 27
    Key Financial Highlights Indicator Q2 2020 Q1 2020 % H1 2020 H1 2019 % EBITDA, Rub bn 170 309 (45.0)% 479 1,063 (54.9)% Net Income, Rub bn attributable to Rosneft shareholders 43 (156) (113) 325 Adjusted net income1, Rub bn (56)…
  28. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 28
    EBITDA and Net Income Dynamics EBITDA H1 2019 vs. H1 2020 Net Income H1 2019 vs. H1 2020 Rub bn Rub bn H1 2019 1,063 Net income attr. to shareholders H1 2019 325 Exchange rate 11 51 Tax maneuver completion (19) H1 2019 376 EPT…
  29. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 29
    Calculation of Adjusted OCF Profit and Loss Statement Cash Flow Statement H1 2020, H1 2020, Indicator Indicator bn bn (1.1) Net income 1 1 Revenue, incl. 42.5 Adjustments to reconcile net income to cash 4.0 2 flow from…
  30. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 30
    Finance Expenses, Rub bn Indicator Q2 2020 Q1 2020 % H1 2020 H1 2019 % 1. Interest accrued1 63 65 (3.1)% 128 145 (11.7)% 2. Interest paid and offset2 60 66 (9.1)% 126 141 (10.6)% 3. Change in interest payable (1-2) 3 (1) 2 4 (50,0)%…
  31. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 31
    Variance Analysis H1 2020 EBITDA and net income sensitivity to +/- 10% H1 2020 EBITDA and net income sensitivity to +/- change in Urals price 10% change in Rub/ exchange rate Run nb Rub bn EBITDA EBITDA (84) 84 (104) 104…
  32. 2Q 2020 Earnings Results – Rosneft Oil Company – slide 32
    Questions & Answers 33

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