12 Nov 2015 15:00
Production results for Q3 2015 and 9M 2015
• Daily HC production increased by 1.4% up to 5.14 mboed in 9M 2015
• Increase in drilling meterage by 32.6% in 9M 2015. Share of horizontal wells in total fund exceeded 30%
• Fourfold growth rate of 2D seismic resulted from active works in Arctic region
• Sustainable refinery throughput in 9M 2015 with increased level of light oil output up to 55.3% (compared with 54.7% in 2014)
• Increase in domestic delivery of gasoline by 3.6% in 9M 2015
• Growth of sales volumes of crude oil and petroleum products to the East direction by 15.3% up to 39.1 mmt in 9M 2015 in accordance with contractual obligations
• Acquisition of assets of LLC "Trican well services", the unit of hydraulic fracturing
Upstream
In Q3 2015 production of hydrocarbons reached 63.1 mmtoe (5.08 mboed). In 9M 2015 production of hydrocarbons reached 189.6 mmtoe (5.14 mboed). The level of production was ensured by accelerated drilling program, including increase in share of horizontal drilling with hydraulic fracturing, sidetracking, implementation of simultaneous-separate production and injection, measures of oil inflows stimulation.
Production drilling meterage increased by one third in 9M 2015 compared with 9M 2014 and over 1,300 new wells were put into use (+16%), that is a new historic record for the Company. The Company optimized rig time by 6% and number of new horizontal wells composed over 390 or 30% of total wells put into use in 9M 2015, which by 25% exceeds the performance of 9M 2014. The company continues accelerated implementation of more effective types of injection: number of completed horizontal wells with frac increased by 40% compared with 9M 2014 with accompanied growth in production. In line with drilling program, the Company accelerates rate of well stock reconstruction using side-tracking: in 9M 2015 this operation is performed for more than 700 wells or by 48% exceeds the performance of 9M 2014, with additional oil production nearly 1.5 mmt (+12% compared to 9M 2014).
The Company continues with the strategy of development its own drilling service: in Q3 2015 in-house rigs fleet increased by 3.7% and achieved 223 units and workover crews - 208 units. Share of production drilling performed only with internal resources exceeded 50%. The Company successfully integrates in its structure internal specialized unit of hydraulic fracturing on the basis of the new acquired assets of LLC "Trican well services".
As a result of successful wellwork program and optimization of well operations a number of assets achieved a steady growth and increased contribution to total production of the Company in 9M 2015 compared with 9M 2014: average daily production growth in JSC "Samaraneftegaz" was + 5%, in JSC "Verkhnechonskneftegaz" + 7.4%, in LLC "Uvatneftegaz" + 10.3%.
In Q3 2015 the Company started exploitation at Labaganskoe field in Nenets Autonomous district with increased production plan of up to 1 mmtoe in 2016.
In Q3 2015 the Company considerably increased completion rate of 2D seismic works due to works in Arctic region (over 9.6 thousand km in the Laptev, Kara, Chuckchee Sea), and also increased rates of 3D seismic works by 2.2% compared to Q2 2015.
In terms of the drilling program execution and creating a new hub of the Uvat project in Q3 2015 new fields at the South-Gavrikovskoe, West-Epasskoe fields and Malyka field (recoverable ABC1+C2 reserves amounts to 29.8 mmt of crude oil and condensate, 0.8 bcm of gas) were put into development drilling.
In Q3 2015 the Company completed testing of 12 on shore exploration wells. In just 9M 2015 the Company completed 31 on shore exploration wells with 90% success rate. The Company discovered 2 fields and 56 deposits with (ABC1+C2) reserves of over 21 mmtoe in 9M 2015. In Q3 2015 the Company completed a comprehensive engineering research at South-Russkoye license area in the Pechora sea ahead of schedule (recoverable reserves of the site amounts to 269.8 mmt of crude oil and condensate and 64.1 bcm of gas). As a result of the research all the required data for further exploration was obtained.
Based on performance in 9M 2015 production of gas reached 45.92 bcm, having increased by 12.3% compared to 9M 2014. The growth of gas production was mainly provided by commissioning of gas wells in Tarasovskoe field of Purneftegaz in H2 2014 and increased production at Vankor field, where pipeline Vankor - Khalmerpayutinskoe field was built in 2014. The level of utilization of accompanying petroleum gas ("APG") reached 86.8% in 9M 2015 compared to 78.6% in 9M 2014.
In September 2015 JSC "Rospan International" commissioned the oil preparation unit that will enable to produce crude oil and APG in the Valanginian deposit the pilot production in which is located within East-Urengoy license area. The recoverable reserves of the formation comprise 98 bcm of gas and 19 mmt of oil and condensate.
Downstream
In Q3 2015, Russian and foreign refineries of the Company have refined 25.21 mmt of crude oil that is 6.1% more than in Q2 2015. Slight decrease in refining (by 0.4%) in 9M 2015 was due to temporary cease of processing at Mozyr refinery under processing agreement in Q1 2015 accompanied by re-allocation of crude oil to higher marginal trading channels.
In 9M 2015 production share of Euro 4/5 at refineries in Russia amounted to 80% compared to 55.9% in 9M 2014. The Company increased its output share of light fuel up to 55.3% in 9M 2015. Resulting from complex technical restructuring in Q3 2015 Novokuibyshevsk and Kuibyshev refineries completely launched production of Euro-5 diesel fuel. In September 2015, within the extension of product line, the production of new type of marine fuels (RMG 380, RMG 500) was launched at Komsomolsk refinery which fully meets the requirements of international standards. The dispatches of RMG 380 have started in Russian Far East ports.
In terms of import substitution program in Q3 2015 the Company succeeded in usage of catalyst of steam reforming produced at Angarsk refinery and organic synthesis on hydrogen plant produced at Syzran refinery that enable the Company to meet needs in catalyst capacity entirely by in-house production.
The Company successfully extended product mix delivered to Asia markets resulted from effective supply via Vanino port of heavy fuel which production was launched at Komsomolsk and Angarsk refineries in Q3 2015.
In 9M 2015 sales volumes of crude oil and petroleum products increased by 2.0% compared to 9M 2014 up to 159.5 mmt. Sales volumes to east direction increased by 15.3% and amounted to 39.1 mmt compared to 9M 2014.
In Q3 2015 the Company increased the domestic sales volume of gasoline by 3.4% compared to Q2 2015. Growth in domestic sales volume of gasoline amounted to 3.6% in 9M 2015 compared with 9M 2014. Increase in sales through exchange trades amounted to 30%, that ensured regular excess in the planned level of exchange trades.
Due to the stable production and continuous shipment of petroleum products and produced necessary reserves of gasoline the Company managed to ensure stable passing the period of seasonal growth in prices of motor fuel, that allowed to prevent shortage and sharp growth in wholesale and retail prices in the period of high demand.
Gas sales volumes increased by 1.8% up to 13.51 bcm in Q3 2015 compared with Q2 2015. Growth of gas sales volumes by 5.6% in 9M 2015 compared with 9M 2014 was mostly due to commencement of supplies under new long-term contracts.
Volumes of exchange trades in natural gas comprised 56% share of the total volume of gas sales at the exchange for 9M 2015 and amounted to 2 bcm in this period.
In Q3 2015 within the cooperation with EGPC and EGAS companies the Company concluded petroleum products and LPG supply agreements which contributed to considerable progress in cooperation with Egypt and to strengthening Rosneft's positions as a supplier of petroleum products and LPG in North Africa markets.On August 31, 2015 Rosneft publishes consolidated IFRS financial results for Q2 2015.
Key production indicators for Q3 2015 and 9M 2015:
Q3 2015 | Q2 2015 | Change, % | 9M 2015 | 9M 2014 | Change, % | |
Hydrocarbon production (thboed) | 5,081 | 5,149 | (1,3)% | 5,143 | 5,074 | 1.4% |
Gas production (bcm) | 14.83 | 15.29 | (3.0)% | 45.92 | 40.87 | 12.3% |
APG utilization level | 86.3% | 86.7% | (0.4)p.p. | 86.8% | 78.6% | 8.2 p.p. |
Exploration drilling (thousand meters)* | 1,875 | 1,669 | 12.3% | 4 914 | 3,705 | 32.6% |
2D seismic (km)* | 9,729 | 745 | >100% | 11,813 | 2,702 | >100% |
Refinery throughput (mmt) | 25.21 | 23.75 | 6.1% | 73.31 | 73.59 | (0.4)% |
Crude oil processing at Rosneft's refineries in Russia (mmt) | 21.96 | 20.55 | 6.9% | 64.18 | 63.82 | 0.6% |
Crude oil processing outside Russia (mmt) | 3.25 | 3.20 | 1.6% | 9.13 | 9.77 | (6.6%) |
Petroleum product output in Russia (mmt) | 21.47 | 20.36 | 5.5% | 62.84 | 61.66 | 1.9% |
Gasoline (mmt) | 2.90 | 2.64 | 9.8% | 8.47 | 7.83 | 8.2% |
Naphtha (mmt) | 1.52 | 1.33 | 14.3% | 4.21 | 4.24 | (0.7%) |
Diesel (mmt) | 6.81 | 6.14 | 10.9% | 19.94 | 19.90 | 0.2% |
Fuel oil (mmt) | 6.68 | 6.55 | 2.0% | 20.27 | 20.65 | (1.8%) |
Jet fuel (mmt) | 0.94 | 0.81 | 16.0% | 2.40 | 2.60 | (7.7%) |
Petrochemicals (mmt) | 0.19 | 0.29 | (34.5%) | 0.68 | 0.56 | 21.4% |
Other (mmt) | 2.43 | 2.60 | (6.5%) | 6.87 | 5.88 | 16.8% |
Petroleum product output outside Russia (mmt) | 3.40 | 3.29 | 3.3% | 9.29 | 9.76 | (4.8%) |
Crude oil, petroleum products and petrochemicals sales (mmt) | 53.30 | 53.40 | (0.2)% | 159.5 | 156.4 | 2.0% |
Gas sales (bcm) | 13.51 | 13.27 | 1.8% | 42.71 | 40.46 | 5.6% |
*according to management accounting
Rosneft Information Division
tel.: +7 (495) 411 54 20
fax: +7 (495) 411-54-21
November 12, 2015
These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. 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.