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Main page News room Rosneft today
Rosneft today

Igor Sechin Reported to Vladimir Putin on Rosneft 2015 Operational Results

28 March 2016
Photo credit: Press-service of the President of Russia

President of the Russian Federation Vladimir Putin had a working meeting with the Head of Rosneft Igor Sechin, who reported on the Company’s 2015 operational results.

Igor Sechin said that Rosneft set a new record, having increased hydrocarbon production up to 254.2 mmtoe (5.16 mmboed). Development drilling meterage increased by 36% and reached 6.9 mln meters. More than 1.8 thousand of new wells were commissioned.

The Head of Rosneft noted that the growth of overall commercial speed of drilling for the Company exceeded 2%, while for horizontal wells – almost surpassed 6%. He also indicated that the Company commissioned 555 horizontal wells (more than a 24% increase), and that accounts for 30% of the total number of wells commissioned in 2015. The Company continues accelerated implementation of more effective well completion types. Increase in the number of horizontal wells drilled using hydrofracturing and completed with construction is above 45%.

Igor Sechin reported to the President of the Russian Federation on the implementation of the strategy aimed at the development of Rosneft’s in-house service which allows improving efficiency of production projects even in complex macroeconomic environment. In 2015 the share of in-house performed drilling accounted for 56%. In 2016, due to the implementation of new technologies, the Company plans to increase commercial speed of drilling and retain the share of in-house service with the planned growth of drilling volumes by 34%.

According to the Head of Rosneft, the Company conducted 2D seismic operations in the volume of 22.6 thousands linear kilometers and 3D seismic operations in the volume of 7.2 thousands km2. Success rate of onshore exploratory drilling in Russia amounted to 84%. This is the highest Company’s rate for the last five years. 7 fields and 117 new reservoirs with cumulative С1+С2 reserves of 232 mmtoe were discovered with participation of the partners in 2015. ABC1 commercial reserves replacement ratio amounted to 429 mmtoe, or 168% of the production volumes in Russia.

Igor Sechin also reported to the President of the Russian Federation on the completed transition to the production for the Russian motor gasoline and diesel fuel market of Euro-5 class only. Processing volume at the Rosneft’s refineries amounted to 96.7 mln tons in 2015 (84.7 mln tons at refineries in Russia). Light product yield was increased from 54.8% in 2014 to 55.3% in 2015 as well as increase of conversion rate from 65.3% in 2014 to 66.5% in 2015.

Crude oil sales volumes in 2015 versus 2014 increased by 3% and amounted to 114.5 mln tons, of which Rosneft exported 109.1 mln tons. Deliveries in the East direction last year amounted to 39.7 mln tons (increase by 18.5% versus 2014). Petroleum products sales volumes at 2015 year end amounted to 97.4 mln tons, having increased by 1.2%. The Company exceeds its commitments with regard to domestic shipments of petroleum products. Supply volume of motor fuels of Euro-4/5 class in Russian Federation increased by 34% in 2015. Share of Euro-4/5 class motor oil production in the total production increased from 59.4% to 80.1% or by 20.7 percentage points as of the end of 2015 versus 2014.

Igor Sechin reported that in 2015 Rosneft sold USD 45.5 bn, thus providing a significant support to the Russian currency market and stability of the Russian national currency. The price of the Company’s shares in Rubles increased by almost 30% over 2015. Investment volume was increased up to RUR 660 bn. The growth is primarily due to the increased volumes of development drilling at brown fields, as well a boosted pace of infrastructure setup and new fields development. In 2016-2018 Rosneft plans to increase volume of investments up to circa RUR 1 trillion annually. Significant capital investments will be channeled to maintain production from brown fields, with increase of development drilling volumes up to 34% in 2016 while retaining achieved level of operations efficiency.

Igor Sechin stated that implementation of the investment program will ensure fulfillment of obligations to partners with regard to oil deliveries under long-term contracts, retaining of the leadership positions of Rosneft on the market, as well as generation of a stable volume of financial receipts both for keeping the Company’s stability and for raising money for the state budget and to achieve favorable socio-economic effect in the regions of presence. Payments of taxes and export customs duties by the Company in 2015 amounted to RUR 2.3 trillion. Rosneft’s tax payments and customs duties formed above 12% of the respective Russian budget income, including up to 18% of the respective income of the Russian Federal budget. The Company demonstrated the full-control of operating expenditures. Those were retained in the range of RUR 156-166 per boe in 2015 (2.5-3.0 $/boe), with the prices increase in the industry for the same period by 13%. Unit Capex in Exploration and Production amounted to 4.3 $/boe for 2015 (average level across the industry in Russia – 7.8 $/boe). Therefore, per unit economic efficiency of the Company increase more than twofold since 2011: from 9.4 to 4.3 $/boe. Actual operating expenditures of the Company in 2015 decreased by RUR 43 bn or by 9 % versus the previous year. ...

Rosneft
Information Division,
March 28, 2016