Rosneft · RUS:ROSN
Rosneft — Rosneft Oil Company — FY2020 Earnings Presentation
37 slides from Rosneft's earnings presentation, Feb 12, 2021
Slide 1: Rosneft Oil Company IFRS Results Q4 and 12M 2020
Rosneft Oil Company IFRS Results Q4 and 12M 2020 February 12, 2021
Slide 2: Important Notice
Important Notice Information herein has been prepared by the Company. The presented conclusions are based on the general information collected as of the date hereof and can be amended without any additional notice. The Company relies on the information obtained from the sources which it deems credib
Slide 3: Key Events
Key Events 1 Positive FY 2020 financial result despite the drop in oil prices and production constraints 2 Global leadership in production efficiency - unit production costs fell to $2.6 / bbl in Q4 2020 2 key new projects, Erginsky license area and 3 Severo-Danilovskoye field, launched in 2020 with
Slide 4: Facing the COVID-19 Challenge: Priority to People's Health and Well-being
Facing the COVID-19 Challenge: Priority to People's Health and Well-being Care for employees Care for operations Care for clients Transition to remote work Priority Action Plan approved by the Production of two sanitizer Board of Directors to ensure components, ethyl alcohol Regular testing
Slide 5: Progress in Sustainable Development Reflected in International ESG Ratings
The Company's Progress in Sustainable Development is Reflected in Designated International ESG Ratings One of the global leaders, Rosneft remains a The Company included in ahead of most O&G constituent of the the top 100 companies international of 843 emerging market companies, Rating improved to 70
Slide 6: The Carbon Management Plan for the period until 2035
The Carbon Management Plan for the period until 2035 Key features Rosneft climate goals by 2035 The Carbon Management Reduction of Upstream Preventing emissions2 Plan for the period until 2035 emissions intensity1 forms the foundation for Rosneft’s environmental -20 mln t CO eq. 2 agenda in the co
Slide 7: COVID-19 Impact on Crude Oil Demand
COVID-19 Impact on Crude Oil Demand Oil demand in Europe, mmbd 15 2019 -8% +3% -0.3% -5% -8% -1% +1% -2% -2% +8% 10 5 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Oil demand in Asia-Pacific region, mmbd 35 2019 30 -13% +4% +2% +2% +2% -1% -4% -1% -0.2% +6% -3%
Slide 8: COVID-19 Impact on Petroleum Products Demand
COVID-19 Impact on Petroleum Products Demand Main petroleum products demand in Europe, mmt 2019 Gasoline Jet fuel Diesel Fuel oil 30 22 100 16 15 11 50 8 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Domestic demand for main petroleum products, mmt Gasoline Jet fuel Diesel Fuel oil 10 4 12
Slide 9: Record Low Oil Prices Followed by Partial Recovery
Record Low Oil Prices Followed by Partial Recovery Oil prices and differentials1, $/bbl Gross Upstream margin2, ‘000 Rub/t Brent Monthly average 80 Urals 16 FY average ESPO 60 12 40 8 20 10 4 Urals-Brent ESPO-Brent 5 0 -5 0 -10 0 May-19 Mar-19 Mar-20 May-20 Feb-19 Feb-20 Apr-19 Oct-19 Apr-20 Oct-20
Slide 10: High Shareholder Return
High Shareholder Return 2020 total shareholder return (TSR) Stock price performance YTD (MOEX) 125% Rosneft 0.8% Peers (average) 120% Peers (range) +14.2% 115% 110% -9.6% -11.8% 105% 100% +2.8% -25.3% 95% Rosneft Peer group MOEX Brent oil and gas YoY index (Rub) 90% 30/12 6/1 12/1 15/1 20/1 25/1 28/
Slide 11: Vostok Oil: Integrated Development of a Unique Resource Base
Vostok Oil: Integrated Development of a Unique Resource Base Key features 6 bn tonnes of liquids – confirmed resource base 50 license areas whithin the scope of the project Light (40о API) and sweet (sulfur content <0,05%) tops the quality of ESPO and Brent blends Expected traffic (Northern
Slide 12: Operating Results
Operating Results 12
Slide 13: Key Operating Indicators
Key Operating Indicators Liquids production, 4,674 kbd 3,908 3,984 4,141 Q3'20 / Q4'20 2019 / 2020 Gas production, mmcmd 174.8 183.4 162.6 171.7 Q3'20 / Q4'20 2019 / 2020 10.13 10.97 Refining throughput, 100.1 93.01 mmt 2.94 2.75 22.52 23.05 Q3'20 Q4'20 2019 2020 in Russia abroad 13
Slide 14: Efficient Reserve Replacement
Efficient Reserve Replacement Proven reserves reconciliation1, bn boe Key 2020 achievements 19 fields and 208 new deposits were discovered with total 1.5 AB1C1+B2C2 reserves of over 2 bn toe 1.9 1.4 4.3 3 largest global discoveries in 2020: Marshal Zhukov, West Irkinskoye, Marshal Rokossovsky2 4
Slide 15: Navigating OPEC+ Environment
Navigating OPEC+ Environment Crude oil production in Russia (2020), mmbd The Company has started oil production cuts under the new OPEC+ agreement since May 2020 Production cuts on a pro rata basis 6 11 According to the agreements reached at the 12th and 13th Ministerial meetings, the level of
Slide 16: Development of Key Oil Projects
Development of Key Oil Projects Severo-Komsomolskoye field Lodochnoye field 3Р (PRMS) reserves – 264 mmtoe1 3Р (PRMS) reserves – 87 mmtoe Preparations are underway for the full-scale field development (PK-1 Pilot development programs are being implemented with connection to horizon) the facilities o
Slide 17: Gas Business
Gas Business Gas production in Russia, bcm (OPEC+ limitations caused the output of associated gas reduction) Despite negative gas production dynamics in Russia in 2020 the Company was able to limit the decline rates1 -6.2% The key factor of gas production dynamics was 737. 7 reduction of associa
Slide 18: Development of Key Gas Projects
Development of Key Gas Projects Rospan Kharampur field (gas formations) 3Р (PRMS) reserves – 1,246 bcm of gas; 313 mmt of gas condensate, 3Р (PRMS) reserves – 739 bcm of gas LPG and oil Gas production plateau: 1st stage (Senoman) - ~11 bcm Production plateau – >21 bcm of gas, >5 mmt of stable conden
Slide 19: Refining
Refining Refining margins1, $/t Key product prices less cost of feedstock, Russian refineries1, $/t 68.3 63.3 300 30 46.7 38.7 39.3 30.4 19.4 100 10 14.0 -11.7 -100 -10 -24.8 -20.8 -29.1 -300 -30 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 3 кв 19 Q3’19 4 кв 19 Q4’19 1 кв 20 Q1’20 2 кв 20 Q2’20 3 кв 20 Q3’2
Slide 20: Focus on Distribution Channels Development
Focus on Distribution Channels Development Netbacks of the main crude oil marketing channels,$/t Crude oil marketing breakdown, mmt Нетбэк Export,экспорта Asia в направлении Азии Нетбэк Export,экспорта Europe в направлении Европы Нетбэк переработка Refining in Russia Нетбэк вн.рынок Domestic market
Slide 21: Premium Marketing Channels Development
Premium Marketing Channels Development Avia Bunker fuel Lubes Bitumen In 2020, the network of gas The volume of bunkering with a In 2020, “RN-SM” became a Polymer-bitumen binders sales stations in Russia and abroad was new product - low-sulfur residual supplier for OJSC “BELAZ”, OJSC more than doubl
Slide 22: Development of the Retail Channel
Development of the Retail Channel Retail By-product sales 1,500 filling stations connected to the contactless fuel 15.5 mln loyalty program participants, incl. payment service Pulsar gasolines are sold at >1,100 filling stations 1.7 mln – virtual loyalty cards holders Key achievements Efforts under
Slide 23: Financial Results
Financial Results 23
Slide 24: Key Financial Indicators
Key Financial Indicators 147 Rub bn Positive net income for 2020 425 Rub bn FY 2020 free cash flow -9.7 Rub bn Reduction of net financial debt during 2020 24
Slide 25: EBITDA and Net Income Dynamics
EBITDA and Net Income Dynamics EBITDA Q4 2020 vs.Q3 2020, Rub bn Net Income Q4 2020 vs. Q3 2020, Rub bn Net income Q3 2020 366 attr. to shareholders (64) Q3 2020 Crude oil price 9 Minorities 14 EPT effect 3 Q3 2020 (50) Share in profits of associates (2) EBITDA (2) and JVs Export duty lag 12 DDA (2)
Slide 26: Costs Dynamics
Costs Dynamics Lifting costs, Rub/boe Refining costs in Russia, Rub/bbl Quarter 12M average % YoY Quarter 12M average % YoY 200 217 253 208 205 197 220 226 196 207 191 181 22.8% 15.0% 2.5% 2.0% 2.3% 0.5% -1.1% 0.0% -2.1% -4.4% Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 General and a
Slide 27: CAPEX
CAPEX CAPEX evolution, Rub trln 2021 CAPEX breakdown up to 1.0 0.9 Upstream 0.9 0.8 Downstream Other 2018 2019 2020 2021 Plan >20 % ≈90 % 5.5 $/boe 2020 CAPEX program optimization Share of Upstream CAPEX in 2020 Unit Upstream CAPEX in 2020 Investment portfolio was optimized Maintaining stable pr
Slide 28: Sustainable Free Cash Flow
Sustainable Free Cash Flow Free cash flow calculation, Rub bn Crude oil price and free cash flow dynamics, LTM Net cash provided by operating activities 1,745 Reimbursement of prepayments received (historical FX rate) 300 4.11 Reimbursement of 3.85 other financial obligations 160 3.33 Prepayment rec
Slide 29: Efficient Debt Management
Efficient Debt Management Liquidity position as of December 31, 2020, $ bn Financial debt breakdown as of December 31, 2020 32.0 Available credit lines 32% Rubles Liquid financial assets Foreign currencies 10.8 46% Floating rates 54% Fixed rates 68% Short-term financial Available liquid debt assests
Slide 30: Appendix
Appendix 30
Slide 31: Key Operational Highlights
Key Operational Highlights Indicator Q4’20 Q3’20 % 2020 2019 % Hydrocarbon production, incl. 5,048 4,898 3.1% 5,186 5,791 (10.4)% kboed Liquids 3,984 3,908 1.9% 4,141 4,674 (11.4)% kbpd Gas 1,064 990 1,045 1,117 7.5% (6.4)% kboed Oil refining 25.80 25.46 1.3% 103.98 110.23 (5.7)% mmt Product output
Slide 32: Key Financial Highlights
Key Financial Highlights Indicator Q4’20 Q3’20 % 2020 2019 % EBITDA, Rub bn 364 366 (0.5)% 1,209 2,105 (42.6)% Net Income, Rub bn 324 (64) − 147 7053 (79.1)% attributable to Rosneft shareholders Adjusted net income1, Rub bn 85 108 (21.3)% 168 9143 (81.6)% Adjusted operating cashflow2, Rub bn 289 348
Slide 33: EBITDA and Net Income Dynamics
EBITDA and Net Income Dynamics EBITDA 2020 vs. 2019, Rub bn Net Income 2020 vs. 2019, Rub bn Net income 12M 2019 2,105 attr. to shareholders 705 12M 2019 Exchange rate 244 Minorities 97 Tax maneuver completion (42) 12M 2019 802 EPT effect 27 EBITDA (896) Crude oil price (646) Share in profits of ass
Slide 34: Calculation of Adjusted OCF
Calculation of Adjusted OCF Profit and Loss Statement Cash Flow Statement 2020, 2020, № Indicator Indicator № $ bn $ bn 2.7 Net income 1 1 Revenue, incl. 83.2 Adjustments to reconcile net income to cash 12.2 2 flow from operations, incl. Reimbursement of prepayments and other Reimbursement of prepay
Slide 35: Finance Expenses, Rub bn
Finance Expenses, Rub bn Indicator Q4’20 Q3’20 % 2020 2019 % 1. Interest accrued1 65 66 (1.5)% 259 282 (8.2)% 2. Interest paid and offset2 69 64 7.8% 259 283 (8.5)% 3. Change in interest payable (1-2) (4) 2 – – (1) – 4. Interest capitalized3 31 32 (3.1)% 131 158 (17.1)% 5. Net loss from operations w
Slide 36: Variance Analysis
Variance Analysis 2020 EBITDA and net income sensitivity 2020 EBITDA and net income sensitivity to +/-10% change in Urals price, Rub bn to +/-10% change in Rub/$ exchange rate, Rub bn EBITDA EBITDA -161 161 -203 203 Net Income Net Income -128 128 -107 107 -10% 41.7 +10% -10% 72.1 +10% $/bbl Rub/$ So
Slide 37: Questions & Answers
Questions & Answers 37