Bashneft Group Investor presentation Russia: The Inside Track One-on-One Conference Sberbank CIB 5-6 September 2013, London
Table of Contents Section Page 1. Business Overview and Key Achievements in 2Q2013 6 2. Start of Pilot production at R. Trebs and A. Titov fields 8 3. Bashneft petrochemical assets consolidation and divestment 18 4. Bashneft…
1. Business Overview and Key Achievements in 2Q2013
Vertically-integrated Value Chain: from Oil Well to Petrol Tank Exploration Production Refining Marketing: Wholesale & Retail Three interconnected Reserve life of 18 Petroleum products Intensively Sustainable refineries in…
Bashnefts key achievements in the second quarter of 2013 Operating results Average daily oil production increased by 1.0% to 314.8 thousand bbl/d; Average daily refining reached the level of 424.0 thousand bbl/d; Refining depth…
2. Start of pilot production at the R. Trebs and A. Titov fields
Pilot production at the R. Trebs and A. Titov fields is a new stage in developing a large-scale project in the strategic region of exploration and production KEY FACTS C1+C2: 140.1 million tonnes RUSSIA The area including 1 reserves…
Average daily oil output performance since the beginning of 2013 46,9 mln. tonnes 46,4 45,9 Start of pilot production at the R. Trebs and A. Titov fields in the Nenets Autonomous District 45,4 44,9 44,4 43,9 43,4…
Key stages of the T&T project development April 2011 September 2011 February 2012 2011-2012 Bashneft and Lukoil signed an The Central Development Commission of the Federal Subsoil The first exploration well over 4.2 All projects…
Start-up oil production facilities: constructing facilities at exploration wells and connecting oil- gathering pipelines In 2011-2013, as part of preparing for pilot production at the R. Trebs and A. Titov fields, LLC…
Start-up crude oil distillation facilities: the first stage of the Central Gathering Station (CGS) at the R. Trebs field The project is aimed at gradual development of the CGS at the R. Trebs field, where all oil produced at the T&T…
Start-up facilities at the R. Trebs field: the metering station in Varandey External transport and product loading facilities a high-pressure pipeline between the CGS at the R. Trebs oilfield and the metering station in Varandey…
Advanced technologies for geological exploration and development Field development involving maintaining reservoir energy by means of water-alternating-gas (WAG) injection; Optimization of field development resulting in a…
Advanced technologies for drilling and well completion An operational drilling support centre (DSC) designed and built by Schlumberger; Enhancing the efficiency of well drilling by using rotary steerable systems; Horizontal well…
Technologies for designing and constructing the ground infrastructure Using 3D engineering for large on-site facilities; Using advanced solutions when constructing facilities in permafrost areas: 100% of reservoirs have ground…
3. Bashneft Group petrochemical assets consolidation and divestment
Optimization of Group Structure The historical complexity of the corporate structure had prevented the Group from fully achieving strategic goals; Transition to a single share As part of streamlining its corporate structure, in 2012…
Petrochemical assets consolidation timeline April 2012 January 2013 February 2013 July 2013 The Board of Directors of JSOC FAS granted JSOC Bashneft the OJSC UPC established LLC The Board of Directors of JSOC Bashneft approved the…
Investments in petrochemical segment dont meet strategic goals of Bashneft The buyer and Rationale for the transaction the structure Possible structure of the UPC sale of a possible transaction Petrochemical business is a AFK…
Production hits a new record high Average daily oil production, thousand bbl/d +15.0% In the second quarter of 2013, the Groups average daily 320 315 312 production reached 314.8 thousand bbl/d, hitting a 310 305 305 308 306 308…
The refinery upgrade programme implemented at the Ufa refineries enables Bashneft to meet the requirements of the Technical Regulations for fuel quality in due time Oil refining In the first half of 2013 Bashnefts refineries in Ufa…
Marketing: efficiently developing own marketing channels Bashneft acquired a 100% stake in LLC Alternativa, which owns a network Exports of petroleum products and petrochemicals of 12 filling stations in the Orenburg Region and operates…
Strategy Expand upstream assets through organic growth and acquisitions Upstream Continue development of the Trebs and Titov fields and implement an extensive geological study in the Republic of Bashkortostan Upgrade refinery…
Changes in revenue Revenue factor analysis, thousand tonnes, 2Q2013 vs. 1Q2013 In the second quarter of 2013, the revenue of Bashneft Group +10.7% 6 400 totalled 134,903 million roubles, which is 7.4% higher than in 40 6 200 the…
Changes in operating expenses 2Q2013 1Q2013 , % Operating expenses, billion roubles 2Q2013 2Q2012 , % 15.3 12.5 22.8% Production and operating expenses 15.3 13.8 10.6% 29.7 28.7 3.5% Cost of purchased crude oil, gas and petroleum…
Unit costs Unit production costs, roubles/bbl 250 202.3 205.0 246* In the second quarter of 2013, unit costs for production of crude oil roubles/bbl roubles/bbl 240 231* increased by 20.0% as compared to the first quarter of 2013 and…
CAPEX and investments in the acquisition of property, plant and equipment In the second quarter of 2013, capital expenditures increased by 45.4% as compared CAPEX breakdown in 2Q 2013 to the first quarter of 2013 and totalled 8,462…
Control of debt portfolio Debt structure As of June 30, 2013, the total debt of the Group in the form of Short-term loans short-term and long-term borrowings amounted to 105,832 14,1% Bank loans million roubles compared to 125,186…
Appendix: Group Structure, Reorganization and Corporate Governance
Commitment to Highest Governance Standards OVERVIEW OF COMMITTEES GENERAL SHAREHOLDER MEETING Nomination and Remuneration Committee discusses major questions concerning the motivation and compensation systems for employees, provides…
Experienced Board of Directors Felix Evtushenkov Vitaliy Artyukhov Aleksey Buyanov Chairman of the Board of Directors of JSOC Bashneft Independent director, Member of the Budget and Audit Non-executive director, Member of the Audit…
Experienced Management Team Alexander Korsik Viktor Gantsev President, Chairman of the Management Board Senior Vice President, Oil Refining and Petrochemicals 20062007 President of Itera 20062009 General Director, Ufaneftekhim…
Tax and Duty Regime BASHNEFT MINERAL EXTRACTION TAX EXEMPTIONS MINERAL EXTRACTION TAX, RUB/BBL Relief on depleted fields with level of reserve depletion 80% Relief on small fields with initial recoverable reserves of…
Reorganization Overview Carried Out within the Announced Timeframe, in Compliance with the Russian Law and Market Practices March 2012 April 2012 October 2012 November 2012 End of February 2013 Conversion ratios and Extraordinary…
Current Group structure 50.59% * (50.59% **) Minority Sistema - Invest Sistema shareholders 50.10% * (57.26% **) 25.24% * (30.24% **) 49.41% * (49.41% **) 21.01% * (10.68% **) Bashneft Bashneft-Polyus 74.9% Upstream…
Reorganization of Oilfield Service Companies Will Improve Efficiency and Cost Controls LLC Bashneft-Service Assets, the oilfield service holding company, holds 11 oilfield service companies which have a market development potential…
Bashnefts strategic goal in the sphere of HSE is to become an industry leader among Russian companies The HSE committee, which The Company assumed Bashneft has adopted consists of eight members of Bashneft issued a responsibility…
Thanks for your attention 5, 1-st Tverskaya-Yamskaya, Moscow, 125047, Russia Tel: +7 495 228 15 96 Fax + 7 495 228 15 97 irbashneft.ru
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