OREANDA-NEWS. NK RussNeft summed up the consolidated production and financial results of the year 2012.

Oil production output of the Company amounted to 13.9 million tons exceeding the analogous figure of 2011 by 1.7%. During the last two years the Company has steadily been numbered among the leaders of the branch by production growth rate. This being the case, the positive production indicator was achieved due to efficient implementation of the Company’s large-scale production programs at the oilfields in Western Siberia and the Tomsk Region.

Thus, in the Tomsk region RussNeft increased oil production in the report period by 54% - up to 1.045 million tons (in 2011 – 696.5 thousand tons). This result was achieved due to development of utility infrastructure of the oilfields and drilling programs implementation. In future RussNeft is planning to found and develop a new production center on the basis of the Tomsk region oilfields, which is to become a substantial contribution to traditional production regions of the holding.

Development of Sapshinskaya group of oilfields is also one of strategic production project of the holding. According to the last year results, oil production at the license areas of the group amounted to 1.4 million tons. This year the Company is intended to increase crude oil production output at Shapshinskaya group by 7% - up to 1.5 million tons.

One of substantial factors determining the positive dynamics of production indicators of the holding is commissioning of 138 new producing wells, their aggregate production gain amounted to 1 172 thousand tons. In the meanwhile Novo-Aganskoye and Poselkovoye oilfields were put into exploitation. 7 producing wells were drilled at Novo-Aganskoye, and 3 wells – at Poselkovoye.

In 2012 RussNeft kept on implementing the projects aimed at increasing associated petroleum gas (APG) utilization efficiency, as well as the programs of natural gas production, gas processing and gas-energy. The Company worked up the design and budget documentation for 117 facilities, installed 59 gas metering stations, effected technical upgrading of 15 flaring systems.

Large-scale construction of gas infrastructure facilities enabled the Company in 2012 to substantially (+19%) increase the share of associated petroleum gas utilization. The major gas projects implemented are: construction of a fuel gas treatment unit with a gas piston power station in the area of booster pumping station of Verkhne-Shapshinskoye oilfield, (a joint project with ZAO YugraGasProcessing); a 7.5 MW energy complex at Mokhtikovskoye oilfield, a gas pipeline NB-200mm from the CPF of Mokhtikovskoye oilfield to gas turbine power station at Zapadno-Poludennoye oilfield (15.6 km); a compressor station at the CPF of Zapadno-Mogutlorskoye oilfield, an energy complex of 17 16 MW gas piston power stations.

In total, in 2012 the Company assigned for construction of gas infrastructure facilities RUB1 756 million (in 2011 – RUB677 million). The total volume of OAO NK RussNeft investments in gas programs in 2012-2014 will amount to RUB6 billion 250 million.

Resource base replacement is numbered among the priorities of OAO NK RussNeft. Thus, in 2012 reserves growth compensated production completely and amounted in category C1 to 600 million tons which exceeds the figure of 2011 by 586 million tons.

OAO NK RussNeft long-term development strategy determines the Company’s active position in world mineral markets. The sphere of interest of Russneft encompasses hydrocarbon deposits in the countries of the CIS and Africa. In 2012 the Company carried out 3D seismic surveys in Mauritania and Azerbaijan. Besides, last year NK RussNeft obtained the certificate of Algerian Energy and Mining Ministry for the right to carry on prospecting and exploration works at the territory of the republic. Obtaining of this qualification determines extensive participation of the Company in Algerian oil and gas projects and evidences the capabilities and potential of the Russian holding in joint implementation of these projects.

The Company’s IAS-based earnings in 2012 amounted to USD 5 384 million (USD 4 407 million in 2011). Net profit made USD 414 million (USD 771 million in 2011). OIBDA indicator equaled USD 1 652 million (2011- USD 1 662 million). Debt-OIBDA ratio decreased from 3.3 in 2011 to 3.0 in 2012. Operational profit decreased by USD 151 million (-11% as compared to 2011). Cost of goods sold increased from USD 3 353 million to USD 3 380 million. In the meanwhile selling costs decreased by 27% - from USD 615 million (2011) to USD 448 million (2012).

During the report period the Company reduced the amount of the gross debt by 7% - from USD 5.403 billion to USD 5.031 billion. On the total in the period of 2011-2012 RussNeft has already paid the creditors about USD 2.4 billion meeting the undertaken financial liabilities faultlessly.

In 2012 the Company restructured its debt to OAO Sberbank of Russia and Glencore: OAO Sberbank credit was prolonged up to May 2019, credit interest was reduced to 7% per annum and repayment schedule was modified. Operational and managerial success permitted to reduce the debt burden by USD 372 million. Optimization of the credit portfolio enabled OAO NK RussNeft to form up an efficient investment program aimed at full implementation of the Company development strategy.

In 2012 the total volume of the Company’s investments amounted to USD 517 million, and more than 50% was assigned to exploitation drilling. In the mid-run RussNeft is planning to keep focusing investments on exploitation drilling and industrial infrastructure development. The total volume of investments in the period 2012-2017 will make more than USD 3 billion.

Among important results of the report period one may point out the fact that OAO NK RussNeft obtained international ratings. Thus, international rating agency Standard & Poor’s assigned to NK RussNeft the ratings “B+/uA+” with “positive” forecast. International rating agency Moody’s assigned to the Company a corporate rating and default probability rating “Ba3” with stable forecast. Besides, the Company was assigned national scale rating “Aa3.ru”. High opinion of the experts results from operational efficiency of the Company, successful implementation of the borrowings share reduction program.

In the long-run the strategy of RussNeft will be aimed at further maintaining high rate of growth at the account of oil production intensification at the license blocks under development and commissioning of new oilfield of the holding.