Gazprom Neft Board of Directors reviews provisional results for 2014 and plans for 2015

19 December 2014

The Board of Directors of Gazprom Neft has reviewed provisional outcomes of the company’s 2014 budget and investment programme, as well as plans for 2015. Production volumes for the current year are expected to reach 66 million tonnes of oil equivalent (mtoe), some six percent higher than the previous year. Refining volumes stand at 43.3 million tonnes, up 1.5 percent on 2013. Sales in premium sectors (through the company’s filling station network, wing-tip aviation refuelling and bunkering, and the sale of oils and bitumens) are expected to reach 25.4 million tonnes, exceeding 2013 levels by six percent.

Total investment in 2014 is expected to reach RUB334 billion, consistent with the investment programme outlined by the Gazprom Neft Board of Directors in September 2014. The company retained its market-leading position throughout 2014 on the basis of key indicators including return on capital invested (ROCI) and cash flow from operations (per barrel of oil equivalent).

This year the company has strengthened its position in the Yamalo-Nenets Autonomous Region and in the Russian Arctic, with first oil despatched from the Prirazlomnoye field – the first E&P project on the Russian Arctic shelf – in April. Several licensed blocks were also acquired in the Orenburg Oblast, where Gazprom Neft is developing a new extraction cluster, and preparations for commercial production are ongoing at the Messoyakha and Novoportovskoye fields – major assets in the north of the Yamal-Nenetsk Autonomous District. Prospecting was also completed on the Pechora Sea shelf, with the drilling of exploration wells – the completion of such an extensive work programme during the short ice-free season setting a new record in the industry. Commercial production commenced at the Badra field, Iraq, with the company delivering against its commitments to the Iraqi government, with production of 15,000 barrels of oil per day over a period of 90 days. Geological prospecting is also ongoing at three other fields in Iraqi Kurdistan.

Modernisation of Gazprom Neft’s refineries also continued throughout 2014, as the company moved towards completion of the second phase of its modernisation programme – improving the depth of refining: a process which saw the fulfilment of a range of ecological initiatives, as well as projects to improve energy efficiency throughout the production process.

The Board of Directors confirmed the investment budget for 2015 at RUB346.4 billion,* of which 30 percent is committed to major E&P projects, including the Novoportovskoye, Messoyakha and Prirazlomnoye fields. Investment in refining is expected to reach RUB49.2 billion in 2015.

Gazprom Chairman Alexei Miller commented: “Gazprom Neft continues to demonstrate sustainable growth in its operational results, while retaining its market leadership on various economic indicators. Key achievements this year include: sea-bound consignments of first oil from Arctic oil fields – from the Prirazlomnoye field on the Pechora Sea continental shelf and the Novoportovskoye field in the north of the Yamalo-Nenetsk Autonomous Region; work on ‘tight’ reserves (predominantly in those regions in which the company has traditionally operated); and a new phase in the modernisation of our refineries, as we move towards greater depth of refining. The changing macro-economic climate notwithstanding, Gazprom Neft will, next year, maintain its rapid growth in production volumes and in the efficiency of its refineries, in line with targets envisaged under the company’s strategy to 2020.”


*Investment budget commitments may be reviewed in the event of major changes to the macro-economic climate in 2015.