Russia’s Rosneft increases production in 2013

On February 4, Rosneft published consolidated IFRS financial statements for 12 months of 2013.

Crude oil and liquids production equaled 4,196 th.bpd (organic growth 1%), gas production reached a record high figure of 38.17 bcm (organic growth 22%).

According to oil and gas reserve information prepared by independent auditor proved hydrocarbon reserves increased by 74% (organic growth 11%) and amounted to 33.00 billion barrels of oil equivalent on the basis of the standards set forth by the U.S. Securities and Exchange Commission (“SEC”).

Rosneft is the leader in developing Russia’s offshore resources. In 2013, the Company, jointly with its partners, carried out an unprecedented E&A offshore effort, including acquisition of 32.5 th. linear km of 2D seismic and 2.6 th. sq. km of 3D seismic, conducting geological engineering surveys to prepare 12 sites for exploration drilling, as well as acquiring 19 new offshore hydrocarbon exploration and production licenses for the Arctic, the Sea of Okhotsk and the southern seas of Russia. In total, the Company has 46 licenses for developing Russia’s offshore with the resources of 45 bln tons of oil equivalent.

The 2013 performance has made Rosneft the third largest gas producer in Russia with increased gas production to 38.17 bcm. Gas production posted a record more than twofold growth which was primarily due to the integration of the major gas assets resulting from the TNK acquisition and also consolidation of the Itera assets.

In 2013, the Company made a number of key acquisitions with the total synergy effect from capital and operational expenditure reductions amounting to RUB 23 bln.

Despite an unfavorable macroeconomic environment in 2013, the revenues (including the share in the profits of associates and joint ventures) reached a record RUB 4,694 bln (revenue organic growth 2.5%).

In 2013, EBITDA amounted to RUB 947 bln. The Company continues its policy of effective cost control and is constantly implementing the synergy effect on its financial performance, which helps to maintain a stable EBIDTA level.

Rosneft’s 2013 net income totaled RUB 551 bln.

The Company continues to generate a cash flow sufficient to cover its investment needs. In 2013, the Company increased its 2012 dividend payments to RUB 85 bln.

The Company intends to gradually de-leverage. In 2013 the Company repaid part of the loans attracted to acquire TNK assets in the amount of RUB 166.9 bln.

The Company is the country’s biggest corporate taxpayer. The tax revenues from Rosneft to the Russian budget in 2013 equaled RUB 2.7 trln.

Source: Rosneft Press Office, 2014