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IFRS 9M2014 Results – Rosneft Oil Company

Rosneft Oil Company · Oct 29, 2014 · 31 slides

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Slides

  1. IFRS 9M2014 Results – Rosneft Oil Company – slide 1
    Rosneft Oil Company IFRS 9M2014 Results October 29, 2014 29.10.2014
  2. IFRS 9M2014 Results – Rosneft Oil Company – slide 2
    Macro Environment: Declining Prices against Growing RUB Volatility Crude prices and exchange rate (1) Petroleum product prices (2) /bbl RUB/ /t 125 41 1 200 1,200 Brent Urals ESPO Exchange rate 115 38 1,000 105 35 800 95…
  3. IFRS 9M2014 Results – Rosneft Oil Company – slide 3
    9M2014 Key Highlights: Growing Production against Flat Cost Levels Indicator 9M2014 9M2013 Comments Hydrocarbon production, 5,073 4,831 +5.0% Stable oil production level, with th. boed gas production growing Growing…
  4. IFRS 9M2014 Results – Rosneft Oil Company – slide 4
    9M2014 Key Highlights: Sustainable Free Cash Flow Growth over Debt Reduction bln Indicator 9M2014(1) 9M2013(1) Revenue 118.5 105.8 +12.0% EBITDA 24 6 24.6 21 3 21.3 +15.5% 15 5% EBITDA margin, 20.8% 20.1% % Net…
  5. IFRS 9M2014 Results – Rosneft Oil Company – slide 5
    Revenues: Growing Sales Volumes and Optimization of Distribution Channels RUB bln Company controlled factors: Macro factors: +RUB 505 bln; +15% +RUB 343 bln; +10% 56 (11) 40 420 8 (69) 404 4,192 3,344 9M2013 Exchange…
  6. IFRS 9M2014 Results – Rosneft Oil Company – slide 6
    EBITDA: Efficient Control over Operating and Administrative Expenses RUB bln Company controlled factors: Macro factors: +RUB 161 bln; +24% +RUB 34 bln; +5% 9 (11) 40 (6) (29) (17) (18) 123 155 (5) (46) 869 674…
  7. IFRS 9M2014 Results – Rosneft Oil Company – slide 7
    Net Income: Growth due to high operational efficiency despite unfavorable macro environment RUB bln 9M2014 FX loss: 150 RUB bln (61) 195 (65) 17 18 (84) 29 (95) 57 411 307 250(1) 261 9M2013 9M2013 FX 9M2013…
  8. IFRS 9M2014 Results – Rosneft Oil Company – slide 8
    Production costs: Retained Industry Leadership Lifting costs Benchmarking(1) RUB/boe /boe 142 C Competitors tit R ft Rosneft 132 5 2 3 20 58 56 15 Others 10 Well interventions and OFS 46 41 Electricity…
  9. IFRS 9M2014 Results – Rosneft Oil Company – slide 9
    CAPEX: Major Projects on Track and Investment Program Flexibility CAPEX Investment program flexibility: RUB bln 25.0 tactical investment management including direction 378 370 and size of the program, preserving current…
  10. IFRS 9M2014 Results – Rosneft Oil Company – slide 10
    Operating Performance: Operations p Generate Stable Free Cash Flow Free cash flow(1) and CAPEX RUB bln CAPEX FCF OCF/CAPEX 400 3.0 2.3 2.5 350 2.2 18 1.8 1.6 2.0 300 1.3 1.3 1.2 1.5 250 1.0 171 200 49 0.5 112 35 84 121…
  11. IFRS 9M2014 Results – Rosneft Oil Company – slide 11
    Free Cash Flow: Sustainable Level Underpinned by Improving Operating Performance Free cash flow(1) Benchmarking(2) RUB bln /boe Competitors C tit R Rosneft ft 44 161 34 (64) 24 155 (41) 41 404 14 75 7.5 3.5…
  12. IFRS 9M2014 Results – Rosneft Oil Company – slide 12
    Performance Improvement and Cost Control Upstream energy efficiency improvement program is being implemented (incl. artificial lift, reservoir pressure maintenance, etc.) Effect RUB 2 bln in 2014 Unit cost optimization Logistical…
  13. IFRS 9M2014 Results – Rosneft Oil Company – slide 13
    Availability of Materials: Based on Long-term Contracts and Competitive Prices Until end of 2014 2015 campaign Over 9 months, the materials procurement Procurement procedures initiated in relation campaign was completed by 94% to…
  14. IFRS 9M2014 Results – Rosneft Oil Company – slide 14
    Financial stability: Efficient Debt Portfolio Management g Debt and net debt dynamics Repayment schedule(2) bln(1) Net debt bln (1) Cash, cash equivalents and ST financial assets Net debt/EBITDA 65.6 Gross debt 80 2.5 70 14.6…
  15. IFRS 9M2014 Results – Rosneft Oil Company – slide 15
    Operating results 16
  16. IFRS 9M2014 Results – Rosneft Oil Company – slide 16
    Pobeda Field in the Kara Sea: Key Oil and Gas Industry Event in 2014 In late September 2014, Rosneft successfully finished drilling of the world's northernmost arctic well Universitetskaya-1: Universitetskaya 1: 250 km off Russian…
  17. IFRS 9M2014 Results – Rosneft Oil Company – slide 17
    Oil Production: Stabilization of Brownfield Production, Greenfield Developments Brownfield production stabilization actions: Containing production decline rates(1) Further well intervention program agreed (+1.2 mmt) 2013/2012…
  18. IFRS 9M2014 Results – Rosneft Oil Company – slide 18
    Oil Production: Efficient Technologies g and Oilfield Services Optimization p Changing the number of in-house drilling and sidetracking crews in 2014-2015 (1) 30 17 59 204 42 4 52 RND crews Dec.13 RND additional crews in ODC…
  19. IFRS 9M2014 Results – Rosneft Oil Company – slide 19
    Gas Business: Efficient Production Growth Key achievements Gas production bcm Average g ggas p price sales g grew by y 14.6% 40.9 to 2.9 RUB th./kcm over 9M2014 26.1(1) A change in MET rate calculation methodology gg allow…
  20. IFRS 9M2014 Results – Rosneft Oil Company – slide 20
    Downstream: Operating Process Optimization and Delivery Diversification with a Focus on the East Oil monetization channels in 3Q2014 Russian refining volumes and margins Russia's motor fuels output 2.9 26.0 25.7 1.8 1.7 1.6 1.5…
  21. IFRS 9M2014 Results – Rosneft Oil Company – slide 21
    Objectives until End of 2014 Upstream Downstream Gas Business Finance Increasing offshore On time successful Launch of gas Assuring necessary greenfields production: modernization program production project at liquidity level…
  22. IFRS 9M2014 Results – Rosneft Oil Company – slide 22
    Appendix 23
  23. IFRS 9M2014 Results – Rosneft Oil Company – slide 23
    9M2014 Financial Results, RUB bln Indicator 9M2014 9M2013 Comments Revenues, 4,192 3,344 +25.4% Growing sales volumes RUB bln EBITDA, 869 674 +28.9% Successful implementation of operating RUB bln performance improvement p p p…
  24. IFRS 9M2014 Results – Rosneft Oil Company – slide 24
    EBITDA and Net Earnings Sensitivity y to Urals and FX Rate Urals price change FX rate change RUB bln RUB bln -10/bbl +10/bbl -RUB 2/ +RUB 2/ EBITDA EBITDA -115 115 115 -108 108 108 Net Earnings Net Earnings -92…
  25. IFRS 9M2014 Results – Rosneft Oil Company – slide 25
    Uncontrolled Expenses th. RUB/t 6.11 6.64 5.57 6.70 5.75 5.45 5.00 Net export revenue Export duty Yugansk-Novorossiysk tariff 13.66 MET 13.39 13.77 12.36 12 56 12.56 12 99 12.99 12.01 79% 1.59 1.59 1 59 1.59 1.59 1.59…
  26. IFRS 9M2014 Results – Rosneft Oil Company – slide 26
    Export Duty Lag RUB bln 24 (11) 3 (35) (7) (17) (3) 317 311 293 300 289 301 304 280 273 276 232 215 145 142 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 Normalized EBITDA Actual EBITDA 27
  27. IFRS 9M2014 Results – Rosneft Oil Company – slide 27
    Tax Maneuver Effect Tax maneuver effect over 9M2014(1) Key changes RUB bln Indicator Before After 5 Base MET rate for oil, RUB 470 493 7 3 Marginal export duty rate on (35) 60% 59% crude oil 14 Diesel fuel export duty…
  28. IFRS 9M2014 Results – Rosneft Oil Company – slide 28
    Financial Expenses, RUB bln 3Q2014 2Q2014 1Q2014 4Q2013 1. Accrued interest(1) 23 22 4.5% % 22 21 2. Paid interest 25 18 38.9% 23 18 3 Change in interest payable (1-2) 3. (1 2) (2) 4 (1) 3 4. Capitalized interest(2) 10 10 8…
  29. IFRS 9M2014 Results – Rosneft Oil Company – slide 29
    FX Gains/(Losses) RUB bln Profit/(loss) from F X rate differences ra te at end of period ./ . 30 28 19 17 29 20 11 12 30 10 2 0 31 0 October November December January February March April May June July August September 32 -10…
  30. IFRS 9M2014 Results – Rosneft Oil Company – slide 30
    Net Debt RUB bln 26 274 136 (1,268) 153 16 1,878 (1) 444 1,772 70 (21) 64 31-Jan-13 Operating Asset Financing Proceeds from CAPEX, licenses Acquisition of the RNH Dividend FX rate Finance lease 30-Sep-14 cash flow…
  31. IFRS 9M2014 Results – Rosneft Oil Company – slide 31
    Questions and Answers 32

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