investor day presentation - gazprom...
TRANSCRIPT
INVESTOR DAYPRESENTATION
July 8 ,2015, Abrau-Dyurso
| 2GAZPROM NEFT
2014 Gazprom neft results
| 3GAZPROM NEFT
HIGHLIGHTS
*Including GPN share in EBITDA of associates and jont ventures
Operational progress in FY2014:FY2014 Financial performance
Revenue, RUB 1,408 bln 2P PRMS reserves up
Net Income, RUB 122 bln Refining volumes up
reflects significant negative FX effect in 4Q2014
EBITDA*, RUB 343 bln Hydrocarbon production up
Premium sales up
+1.7% Y-o-Y +6.4% Y-o-Y
+7.5% Y-o-Y
+11.1% Y-o-Y +11.5% Y-o-Y
-31.4% Y-o-Y
+2.0% Y-o-Y
| 4GAZPROM NEFT
2014 KEY EVENTS
» Agreed 50/50 ownership of SeverEnergia with NOVATEK
» Aquired 9.1% stake in Northgas
» Obtained exploration and production licenses in YANAO, Orenburg and for oil horizons at southern Priobskoye
» Shipped first Arctic oil (ARCO) in April from Prirazlomnoye; aquired 100% of Gazpromneft Shelf
» Shipped first four cargoes of ’Novy Port’ crude
» 15,000 bpd production from Badra triggered cost reimbursement
» Refinery and storage terminal reconstruction and modernization continues
» Launched Russia’s most modern and powerful motor oil production plant at Omsk
» GPN-Total JV completed polymer-modified bitumen production facility
» Established joint venture with SIBUR and Titan Group for Omsk polypropyl-ene plant (Poliom)
» Retail network: built 20, reconstructed 62, rebranded 16 stations (excl. Europe)
» Increased average daily throughput per station for Russian network to 20.0 tpd
UPSTREAM DOWNSTREAM
| 5GAZPROM NEFT
2014 RESULTS: GROWTH IN ALL KEY PERFORMANCE INDICATORS
Proved and probable reserves (PRMS) incl. JV, MMToe
Hydrocarbon production, MMToe
Premium sales, MMTonnesRefining throughput, MMTonnes
1,343
948
1,443
1,112
2013 2014
+ 11.5 %
948
2012
1,200
927
43.3 42.6
2012 2013
43.5
2014
+ 2 %
59.7
62.3
2012 2013 2014
+
6.4
%
66.3
22.924.0
2012 2013
25.8
2014
+
7.5 %
| 6GAZPROM NEFT
BEST UPSTREAM RESULTS OF RUSSIAN PEERS IN 2014
Hydrocarbon production performance Y-o-Y, MMToe. Production dynamics comparison at fields of West Siberia
Gazprom neft Gazprom neft
Company 1 Company 1
Company 4
Company 2
Company 2
Company 5
Company 3
Company 3
4.2
-1.8%
-1.1%
-1.0%
0.9%
3.1
1.9
0.4
+6.9%
+1.3%
+11.8%
+0.4%
-3.0%
+0.4%0.1
-2.1
In 2014 Gazprom neft increased production at mature fields due to:
» High-tech workover program (Noyabrskneftegaz, Gazpromneft-Khantos); increased horizontal drilling 17% from 184 wells in 2013 to 215 in 2014, including 4% increase in multi-stage fracks from 137 wells in 2013 to 142 in 2014
» Involvement in development of 15 MMtonnes of hard-to-recover reserves
Source: CDU TEK
| 7GAZPROM NEFT
FINANCIAL PERFORMANCE IN THE CONTEXT OF PRICE VOLATILITY
Revenue, RUB bln EBITDA*, RUB bln.
Operating cash flow, RUB bln.Net income, RUB bln
1,233 1,268
2012 2013
1,408
2014
176 178
182**
2012 2013
122
188**
2014
323 337
2012 2013
343
2014
248277
2012 2013
284
2014
*Including GPN share in EBITDA of associates and joint ventures**Adjusted for the change in FX for the period
| 8GAZPROM NEFT
Delivering growth from mature field development and aquisitions
Exploration and Production
| 9GAZPROM NEFT
NEW FIELD RESOURCES EXCEED ONE BILLION TONNES OIL EQUIVALENT
ESPO
Eastern SiberiaKuyumba2P reserves: 229 MMTonnesStart up: 2018
Chonskiy 2P reserves: 63 MMToeStart up: 2020
Arctic offshore
Group share in proved and probable (PRMS) reserves at new projects exceeds one billion tonnes of oil equivalent*
Central and Eastern Europe
Prirazlomnoye2P reserves: 51 MMToeStart up: 2014
DolginskoyeEstimated reserves: 70 MMTonnes Start up: 2021
Exploration projectsin Serbia, Hungary,Romania, Bosniaand Herzegovina
North of YANAO
Oil pipeline New projects
Oil pipeline under construction ESPO Mature field production areas
Junin 6 Estimated reserves: 1,8 bln tonnes Start up: 2012
Venezuela
Kurdistan (Iraq)Estimated reserves: 178 MMTonnesStart up : 2015
Badra2P reserves: 72 MMToeStart up : 2014
Iraq
China
MongoliaKazakhstan
66.3 MMToe total hydrocarbon production from over 100 mature fields in Khantiy-Mansiysk, Yamalo-Nenets, Krasnoyarsk, Tomsk, Omsk,
Tyumen, Orenburg regions and Serbia
Reserves data are for 100% share.* Group share of proved and probable reserves in accordance with PRMS classifications as of 31 December 2014; excludes estimated reserves associated with NIS exploration projects and Dolginskoe field.
Novoport2P reserves: 127 MMToeStart up: 2015-2016
Messoyakha2P reserves: 145 MMTonnes Start up: 2016
SeverEnergia2P reserves: 1,070 MMToeStart up: 2012
Northgas2P reserves: 242 MMToeStart up: 2001
| 10GAZPROM NEFT
NOVY PORT: FIRST SUMMER AND WINTER SHIPMENTS
» In August 2014, Gazprom Neft made the first summer oil shipment from the settlement of Mys Kamennyi. The quality of (trademarked) Novy Port crude is superior to the Brent benchmark
» February 2015: Winter shipping launched
» The crude was loaded onto the ocean tanker in accordance with a transitional scheme that was approved by an environmental review and confirmed in public hearings
» 11 tankers were sent during the 2014-2015 summer and winter seasons with a total volume of roughly 212 mt
3 421
Shipping/receivingpoint
Flexible pipe
Transfer to river tankervia flexible pipe
Transfer tosea-going tanker
Transfer from river tankerto sea tanker
Crudeshipment
Shuttle barge
Tanker
| 11GAZPROM NEFT
PRIRAZLOMNOYE: SHIPED ~ 470,000 TONNES CRUDE TO CUSTOMERS IN NORTHWEST EUROPE
* The vessel was built at the Admiralty Shipyards in St. Petersburg specifically for year-round transportation of oil from platforms in Arctic conditions
» Seven shipments completed
» Over 500,000 crude since first commercial production
» Two reinforced, double-hulled Arc6 tankers: Kirill Lavrov* and Mikhail Ulyanov*
» Two multifunctional icebreaker service boats provide uninterrupted support to the Prirazlomnoye platform
| 12GAZPROM NEFT
BADRA: FIRST OIL
January February March April May June July August September October November December
» Production reaches 15,000 bpd
» Completed construction of basic infrastructure; began filling oil tanks » Produced millionth barrel from Badra field
» First oil deliveries to Iraqi pipe-line system; official field startup ceremony
» Achieved commercial production level required for cost recovery (95 days at 15,000 bpd in a 120 day period)
» Commercial production startup
| 13GAZPROM NEFT
CONTINUED DEVELOPMENT OF NEW FIELDS IN KRASNOYARSK, EASTERN SIBERIA, AND IRAQI KURDESTAN
» Implemented reinjection scheme at productive formation
» Agreed new detailed geological mod-el of Kuyumba field
» Completed four exploration wells and nine horizontal production wells
» Completed 3D and 2D seismic
» Completed workover of Sarkala-1 well
» Drilled Shakal-2 and Shakal-3 wells to planned total depth
» Completed testing at three explo-ration wells in East Messoyakha license area and one well in West Messoyakha license area with up to 110 tpd oil
» Positive government expert review of all infrastructure elements
» Commenced infrastructure construc-tion
» Completed 900 km2 3D seismic, includ-ing 600 km2 using UniQ technology
» Drilled and tested five exploration wells
Chona Kurdistan (Iraq)MessoyakhaKuyumba
| 14GAZPROM NEFT
EXPANDED NEW PROJECT PORTFOLIO IN 2014
January February March April May June July August September October November December
*Reserves data shown for 100% stake
» Acquired a total of 10 licenses in 2014 in Yamalo-Nenets, Khantiy-Mansiysk, Orenburg regions and on Arctic shelf. ABC1 reserve growth: 5.1 MMToe
SeverEnergia » Reached agreement with NOVATEK on
50/50 ownership structure
» Completed first phase of ownership restructuring: effective Group share 45.1%
» 2P reserves (PRMS)*: 1.07 billion toe
Northgas » Obtained 9.1% effective share in Northgas
» 2P reserves (PRMS)*: 242 MMToe
Added 126 million toe of ABC1 reserves through asset acquisition, new licenses and asset transfer from Gazprom
| 15GAZPROM NEFT
INCREASINGLY SOPHISTICATED WELLS DELIVER INCREASED PRODUCTION
Share of horizontal wells , % Relative initial flow rate, (m3/day per meter thickness of effective oil-bearing layer)
Advanced well technologies, %
2011
100%
2014 2013 2012
■ Share of horizontal wells
13%
33% 40%
4%
2011
100%
2014 2013 2012
■ Multilateral ■ Horizontal with multi-stage frac ■ Share of horizontal wells
6% 10% 10%
33%
64%
57%
89% 61% 26%
33%
4%
7%
2011 2014 2013 2012
11.710.8
5.7
3.0
| 16GAZPROM NEFT
BAZHENOV MILESTONES IN 2014
Key activities in 2014
Confirmed geological understanding of Bazhenov accumulations
Technology development
Hydrodynamic modeling
Began first priority pilot projects: Palyanovskiy and Priobskiy
» Palyanovskiy project: Drilled five deviated wells with hy-drofracs
» Priobskiy project: Drilled four appraisal wells with hydrof-racs
» Developed exploration program to study potential of Ba-zhenov layers at all Group subsidiaries in Khantiy-Mansiysk and Yamalo-Nenets districts
Increasing resource base
» Received three geological study licenses (Yulskiy 4 and 5, South Lungorskiy)
» Successful bids for Nyalinskiy and Panlorskiy licence areas » Began work to transfer license for West-Yubileyniy from
Gazprom
| 17GAZPROM NEFT
Achieving strategic goals for refining and premium channels
Downstream
| 18GAZPROM NEFT
GROWTH IN REFINING THROUGHPUTS MAXIMIZING EFFICIENCY
7.7 MMTonnes Yaroslavl
Refining throughput, MMTonnesт
10.8 MMTonnes Moscow
1.2 MMTonnes Mozyr, Belarus
21.3 MMTonnes Omsk
2.6 MMTonnes NIS, Serbia 2010 2011 2012 2013 2014
19.0 19.9 20.9 20.2 21.3
8.910.8 10.7 11.1 10.8
7.2
7.4
9.6 8.6 8.82.9
2.4
2.12.7
2.6
37.9
40.5
43.3 42.6 43.5+14.7% +2.0%
Omsk Moscow Slavneft NIS
2014/2010Y-o-Y
Capacity: 15 MMTonnesQuality: 8.1 Nelson indexLocation: 270 km to Moscow. Sits on product exportspipeline; helps to cover the premium Moscow region,takes advantage of low cost export capacity
Capacity: 12.15 MMTonnesQuality: 7.0 Nelson indexLocation: Sits within the Moscow circle road; Coversthe highest margin and deepest market
Capacity: 21.57 MMTonnesQuality: 8.1 Nelson indexLocation: Mid-South of West Siberia – center of Russians oil production 1,200 km to the nearest competitor
Average Nelson index in Russia – 5.1
Capacity: 7.31 MMtonnesQuality: 7.9 Nelson indexLocation: Pancevo, Serbia. Covers the Balkans market, where it has a large retail chain
| 19GAZPROM NEFT
MODERNIZATION OF EXISTING UNITS WITH THE GOAL OF IMPROVING RELIABILITY AND ENVIRONMENTAL PERFORMANCE
2014
» Moscow: VDU reconstruction Launch of gas fractionation plant with cleaning reflux
» Omsk: SGC terminal
» Yaroslavl: Gasoline pool reconstruction Diesel hydrotreater reconstruction
Plans for 2015-2017
» Moscow: Reconstruction of catalytic cracking unit Improving efficiency of wastewater treatment
» Omsk: Reconstruction of distillation unit Reconstruction of deep conversion unit
» Yaroslavl: Group III base oils Hermetically-sealed oil product loading into rail tankers
| 20GAZPROM NEFT
LAUNCH OF DEEP CONVERSION INVESTMENT PROGRAM
MoscowComplex refining unit
OmskDelayed coker
Project details Target indicators
Depth of refining
Light product output
93% 96%71%
94%
2014 2020 2014 2020
Omsk Moscow
67% 80%53%
80%
2014 2020 2014 2020
Omsk Moscow
Complex refining unitTimeline 2014-2018
Deep conversion complexTimeline 2014-2020
CDU/VDUTimeline 2014-2018
Delayed cokerTimeline 2014-2018
Deep conversion complexTimeline 2014-2018
– Primary distillation project – Complexity project
| 21GAZPROM NEFT
SUCCESSFUL IMPLEMENTATION OF REBRANDING AND RECONSTRUCTION PROGRAM ALLOWS FOR INDUSTRY-LEADING RETAIL NETWORK
Retail metrics Benchmarking, tpd(Avg. daily sales/site in RU)
Loyalty program, mln members Non oil sales, 1,000 RUB/sq.m.
■ Russia Network, units ■ Europe, units ■ CIS Network, units◆ Average daily sales per site in Russia,tpd
■ Gazprom Neft ■ Company 2■ Company 1
4
8
12
16
20
1.9
3.3 4.3
5.3
2011 2012 2013 2014
12.3 14.9
16.7 18.7
2011 2012 2013 2014 2011 2012 2013 20144q 2014
1,043 1,060 1,111 1,150
425 344 408 420
202 205 228 239
14.2 17.6 19.0 20.0
2011 2012 2013 2014
21.9 22
Recordrate
| 22GAZPROM NEFT
» Expanded presence from 170 to 198 airports » Expanded refueling complexes to 40 from 38 » Expanded global network to 149 from 125 airports » Number of aviation partners 74 » Signed agreement on refueling GPN-Aero clients via international Shell
aviation network
» Expanded presence from 32 to 34 ports » Increased fleet by 11 units, including high-tech vessel for Black Sea. » Renewed annual contracts with leading international shipping compa
nies (CGM, HMM, Maersk, MSC, SCF, Thenamaris, ZIM) » Began bunkering activities in Riga, Latvia
» Opened 11 branded G-Energy Service stations (4 in Russia, 3 in Italy, 3 in Georgia, 1 in Belarus)
» Opened automated blending line at Omsk » Number of countries in which products are sold has increased to 52
PREMIUM CHANNELS CONTINUE DOMESTIC AND GLOBAL EXPANSION IN 2014
Aviation Bunkering Lubricants
2012 2013 2014
2.9 3.2 4.2
Premium sales, MMTonnes
Market sharein Russia
Market sharein Russia
Market sharein Russia
Premium sales, MMTonnes Premium sales, mt
2012 2013 2014
2.12.4
2.8
2012 2013 2014
145 170 190
24.5%18
.6% 13.6
%
| 23GAZPROM NEFT
MOTOR OIL BLENDING COMPLEX AT OMSK
Produces 110 mt of motor oils
Gazprom Neft launched Russia’s most modern and powerful motor oil production plant
Simultaneous storage of 10 mt of motor oils
Packaging over 350 types of productsPackaging 180 mt of finished product
| 24GAZPROM NEFT
Yaroslavl
LEADING POSITION ON BITUMEN MARKET
production facilities Russian bitumen plants of Russia’s roads are built using Gazprom Neft bitumen
The company successfully cooperates with government cus-tomers and regulators
» Russian Federation Ministry of Transport » SC Avtodor, Rosavtodor » Moscow Government
Gazprom Neft bitumen is used in the construction and repair of all federal and inter-regional facilities; road networks of the Russian Federation
Traditional brands for Russia Moscow
Kazakhstan
Omsk
Omsk
Serbia
Moscow JV with TotalRyazan
Innovative premium brands
International bitumen production
mt/y of capacity for production of polymer-modified bitumen via GPN-Total JV
branded bitumen distributors deliv-ered over 100 mt to consumers in 2014
site in Russia for premium segment sales (polymer-bitumen binders)
7
32
2
60
30%
1
| 25GAZPROM NEFT
Dividend Policy and Investments Outlook
| 26GAZPROM NEFT
STABLE FULFILLMENT OF SHAREHOLDER OBLIGATIONS
Dividend yield benchmarking* Dividends, 2010-2014.
» Expect to pay 2014 dividends equivalent to 25% of IFRS Net Income » Continuing program of 6-month interim dividends
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2010 2011 2012** 2013** 2014
Gazprom Neft Company 2 Company 1
21,051
44,09434,611
44,473
30,676
4.44
7.30
9.30 9.38
6.47
3.00
2.00
1.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
0
5,000
15,000
25,000
35,000
45,000
55,000
65,000
2010 20122011 2013 2014
Dividends, RUB mln Dividends per share, RUB
* Calculated on the basis of dividends declared in the corresponding period and stock prices in rubles for Jan. 1, matching period (MICEX)** Began programs for payment of interim dividends of Gazprom Neft and Company 2
| 27GAZPROM NEFT
DISCIPLINED CAPITAL SPENDING TO DRIVE FUTURE SUCCESS
■ M&A■ New projects■ Other■ Marketing and distribution■ Refining■ Greenfields■ Brownfields
217.4
2013
318.5
2014
380.9
2015E
Investments outlook, RUB mln 2015 Investments breakdown, RUB mln
142.4
130.
9
40.6
21.6
26.9
6.911.6
380,9