OREANDA-NEWS. On October 29, 2008 Rosneft Vice President for Finance and Investment Peter O’Brien spoke at an annual UBS investment conference held in Moscow. According to Mr O’Brien, Rosneft will likely post record crude production and financial results in 2008, notwithstanding „the particularly tough Q4 amid steep drops in oil prices and high export duties“, reported the press-centre of Rosneft.

In his conference speech, Peter O’Brien said that Rosneft is currently finalizing the 2009 business plan, which is based on a conservative Brent price of USD 50 per barrel. The Vice President also emphasized that Rosneft management will continue its concerted efforts to maximize free cash flow and enhance cost control.

Elaborating on the subject, Peter O’Brien said the Company has already made significant progress in controlling upstream production and operating expenses, as in the last three years they have been growing three times slower compared to the real ruble appreciation against the U.S. dollar in the respective period. Mr O’Brien noted that the Company’s suppliers and contractors should also seek to enhance cost control, which would help temper the growth in prices of materials and services.

In his report, Peter O’Brien also dwelt on some of Rosneft’s successes in improving overall efficiency. According to the Vice President, the Company’s implied operating expenses currently equal zero as EBITDA per barrel of production has reached export netback net of Mineral Extraction Tax.

Talking about leverage, Mr O’Brien said that the Company has easy access to several sources of financing and is not faced with any fundraising constraints.

In conclusion, Peter O’Brien noted that proactive discussion with the Russian Government of tax burden issues and ways to hold back rising natural monopoly prices will remain among the Company’s top medium-term priorities.