Rosneft Investor Day_2013


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Rosneft Investor Day_2013

  1. 1. ROSNEFT INVESTOR DAYLONDONIgor I. SechinApril 23, 2013
  2. 2. 2012: Another Successful Year•Reserve replacement131%•Well above industry average131%P d ti thWell above industry average•Production growth•Increased output at new and maintained production plateau of existing fields4.5%Increased output at new and maintained production plateau of existing fields•Efficient cost control•Reduced lifting costs per boe in real terms(5.4%)Reduced lifting costs per boe in real terms•Stock price upturn•2012 GDR price growth above global majors35%2012 GDR price growth above global majors•2012 GDR price growth above global majors•New level of dividends270%2012 GDR price growth above global majors2New level of dividends•Payout ratio of 25% IFRS net profit approved270%Payout ratio of 25% IFRS net profit approved
  3. 3. Key Highlights Record high crude production of 2.4 mln bbl per dayB k h h i b i JV i h I l i h Breakthrough in gas business: JV with Itera, long-term contract withINTER RAO UES 16 fi i it b ilt d d i th t t f th R fi 16 refining units built or upgraded since the start of the Refinerymodernization program 12 ff h li d i f F 12 more offshore licenses secured size of France On track with ExxonMobil, ENI, Statoil and CNPC agreements Intergovernmental agreements on additional crude oil supplies to China 40% total shareholder return in 2012Acquisition of TNK-BP successfully completed40% total shareholder return in 2012q y p3
  4. 4. Efficient ProductionRosneft Rosneft367 309 0.1% (0.3)%thbpdproduction atVankorthbpdtotal production atVIOC* greenfieldsYugansky-o-y flatWest Siberia**y-o-y declinebpd133bpd65per bbl$2.9per bbl$5.6bpdaverage flowrate per wellbpdaveragein Russiaper bbllifting costsper bblaveragein Russia4* Vertically Integrated Oil Companies** Excluding Yugansk
  5. 5. Monetization of GasGas is 24% of provedhydrocarbon reserves100Gas production, bcmhydrocarbon reservesItera JV provides acess tounique regional distributionRospanSakhalin-3Othersunique regional distributionnetworkOver 75% of target gasKharampur53Kynsko-ChaselskoeOver 75% of target gasproduction already contracted in2017VankorKharampur41Long-term target gas share inproduction is 10-15%TNK-BP41R fExistingfieldsItera5Rosneft2013 2020
  6. 6. Refinery Modernization Program E 5 liFuel oil in petroleum products output When completed:Target  Euro-5 compliance Light product yield up from 56% to 80%5%Target28% Refining margin up from $7.5 to $11 per bbl Cost and quality control2012 Cost and quality control• Standard units at different refineriesSMotor fuels comply with the TechnicalRegulation requirements• Scale increases price tension amongsubcontractors Further $14 bln required for programRegulation requirements36mln t Further $14 bln required for programcompletion 16 refining units launched110 16 refining units launched6before modernisation 2012 after modernisation0
  7. 7. Progress on Strategic PartnershipsRussian offshore Drilling candidate chosen in the Kara Sea. Drilling to start 2014Tight oil Pilot program accepted, finance up to USD 300 mlnTight oil Pilot program accepted, finance up to USD 300 mlnInternational projectsStake in US Gulf of Mexico projects and Cardium in Canada (with limitedbudget)Russian offshore 4 license areas in the Barents Sea and the Sea of OkhotskTight oil Joint technical evaluation and developmentNorwegian offshore Joint bidding for offshore license blocks in Norwegian shelfRussian offshore Development of 3 license blocks in the Barents and Black SeasLogistics & Trading Synergies in logistic and infrastructure networksR i ff h3 license areas in the Barents and Pechora Seas and several areas inRussian offshore3 license areas in the Barents and Pechora Seas and several areas inEastern SiberiaCrude oil supplies Heads of terms on crude supplies with prepayment7+ Others
  8. 8. Venezuela: Largest New Discoveries Total Capex of $10 bln over 10 years startingProved oil reserves by countriesOthers in 2-3 years Tax breaks depending on project payback1 7 t l17.9%VenezuelaOthers Low lifting costs• Carabobo-2 (40%):1.7 trlnbbl 16.1%10.6%46.3%Saudi Arabia• Junin-6 (24%):• PetroMonagas (16 7%)Rosneft assets in Venezuela9.1%CanadaIranPetroMonagas (16,7%)• Petroperija (40%)Junin-6PetroPerijaPetroMonagasBoqueron• Boqueron (26,6%)GuianaVenezuelaColombiaGuyanaSurinamCarabobo-28GuianaBrasilexisting Rosneft projectsTNK-BP projects
  9. 9. TNK-BP AcquisitionNew shareholder structure The largest deal ($55.3 bn) in theThe largest deal ($55.3 bn) in theindustry Rosneft is the largest public oil companyFree floatBP19 75%10.75% Synergies exceeding $10 bn BP ready to share industry insight and19.75%BP ready to share industry insight andknow-how Private shareholder base reached30 5%30.5%69.50%Russian government9
  10. 10. Strong Consolidated Metrics of the Companies2012Rosneft 100% in ÒNK-ÂÐ$ bnRevenue 99.0 60.8EBITDA 19.6 13.8Net IncomeO ti11.0 8.5Operatingcash flow 16.6 13.2Cashyear end12.6 4.610
  11. 11. Integration ProcessA steering committee, chaired by the CEO, coordinating HQ, secretariat and 21 working groupshave been set up to integrate the two companiesSt 1 (b A il 1 2013)Robert Dudley (CEO of BP) joined the steering committee on TNK-BP integration and has beennominated to the Rosneft Board of DirectorsStage 1 (by April 1, 2013)- joint operation, synergies identified- Integration launched- teams createdStage 2 (100 days after Stage 1)- integrated teamsintegrated teams- unified budgeting and planningStage 3 (by the end of 2013):- medium and long term business plans developed and presented- $250 mln G&A savings11$ g
  12. 12. Synergies Total Value1.00 31 543.0Upstream Marketing&Logistics Refining Personnel Procurements Others Total21. Joint use of Vankor infrastructure, exploration portfolio optimization2 Crude and petroleum products supply chains and filling station networks optimization31 542. Crude and petroleum products supply chains and filling station networks optimization3. Optimizing project portfolio of refineries and gas processing plants to be upgraded, use ofstate of art technologies and best practices124. G&A reduction, using qualifications of best industry professionals5. Unification of purchase terms
  13. 13. Scale of OperationsEurope9 overlapping regions in Upstream, 11 in DownstreamRussiaSuzun & TagulMessoyakhaPolar LightsWest‐EuropeBelarusUkraineMoscowRusskoeSuzun & TagulVankorRospanUdmurtneftPurneftegazSakhalin ‐1,3,5Yurubcheno‐TokhomskoeKuyumbinskoeKharampurKynsko‐ChaselskoeBeregovoePyreinoeKhadyryakhinskoeZapolyarnoeGubkinskoe Taas‐YuryakhMozyr YanosRyazanEastSevernaya NeftSamaraneftegazVCNGTomskneftUvatSamotlorNyaganOrenburgneftYuganskneftegazSakhalinmorneftegazMegionneftegazKomsomolskTuapse AchinskLisichanskySaratovSamara groupNizhnevartovskPriazovneftKrasnodarneftegasCaspian Oil CompanyRosneft Assetsp AchinskAngarskMediterraneanStavropolneftegazGrozneftegazDagneftOil productionRosneft AssetsOil production Gas productionTNK-BP AssestGas productionExplorationExploration RefineriesRefineriesItera AssetsGas production13Note: (1) Under PRMS (2) Company will also own stakes in 4 refineries in Germany, Mozyr refinery in Belarus and Lisichansky refinery in Ukraine
  14. 14. New Global Leaderperdayn,mlnboeProductioSEC reserves, bln boe14Source: Company data
  15. 15. Corporate GovernanceRosneft shareholders proposed to add three new international board membersincreasing the depth of senior corporate governance experience and knowledge ing p p g p gboth the oil and gas sector as well as corporate financeDonald Humphreys John MackRobert Dudley p yFormer Senior Vice Presidentand Treasurer of ExxonMobilMr. Humphreys brings toJohn MackSenior Advisor at KKR andCo. L.P.Mr. Mack has served asRobert DudleyChief Executive Officer of BPp.l.c.Mr. Dudley has 33 years of p y gRosneft 36 years ofexperience as a corporatefinance professional in the oiland gas sector at ExxonMobilChairman and CEO of MorganStanley as well as CEO ofCredit Suisse First Bostony yexperience in the oil and gassector and has served as CEOof TNK-BP from 2003-200815g
  16. 16. Strategic PrioritiesGlobal leadership in hydrocarbon productionTNK-BP acquisitionTNK BP acquisitionIncrease of high-margin outputsRefinery modernization program 35% completedRefinery modernization program 35% completedGas business developmentCreated Itera JV, signed long term contract with INTER RAO, gas reserves up 17%Efficient domestic and export marketingp gTerm contracts, margins upTechnological leadershipTechnological leadershipInternational alliances with global majorsT d I f ti Di l16Transparency and Information DisclosureRegularity, timeliness, accessibility, accuracy and completeness
  17. 17. Important NoticeThe information contained herein has been prepared by the Company. The opinions presented herein are based on generalinformation gathered at the time of writing and are subject to change without notice. The Company relies on informationobtained from sources believed to be reliable but does not guarantee its accuracy or completeness.g y pThese materials contain statements about future events and expectations that are forward-looking statements. Anystatement in these materials that is not a statement of historical fact is a forward-looking statement that involves known andunknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to bematerially different from any future results performance or achievements expressed or implied by such forward-lookingmaterially different from any future results, performance or achievements expressed or implied by such forward lookingstatements. We assume no obligations to update the forward-looking statements contained herein to reflect actual results,changes in assumptions or changes in factors affecting these statements.This presentation does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchaseiti d thi t i d h i h ll f th b i f t t it t h t N liany securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance maybe placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy orfairness. The information in this presentation is subject to verification, completion and change. The contents of thispresentation have not been verified by the Company. Accordingly, no representation or warranty, express or implied, is madeor given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as tothe accuracy, completeness or fairness of the information or opinions contained in this presentation. None of the Companynor any of its shareholders, directors, officers or employees nor any other person accepts any liability whatsoever for any losshowsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.17
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