RussNeft built up its consolidated profit in 2008 by 20%.
Moscow. OAO NK “RussNeft” (RTS: RUSN) in 2008 built up its consolidated profit by 20% - up to USD 8.09 billion, which is the maximal level in the record of the company, says the press-release of NK
The company explains the growth of proceeds by advantageous pricing conjuncture at oil and oil products market, and building up of refining output.
Production in 2008 grew by 0.6% - up to 14.2 million tons. In 2008 “RussNeft implemented drilling work programs in Western Siberia and in Udmurt Republic, began exploiting new oilfields: Verkhne-Shapshinskoye and Yuzhno-Roslavlskoye in Western Siberia. In 2008 cumulated production for the whole stock of new wells of “RussNeft” exceeded 1.1 million tons, the average oil-production rate per one new well amounted to 59,9 tons per day. The investments into exploration and operating drilling amounted to more than USD 257 million.
In 2008 the company enlarged its raw hydrocarbon base by more than 20 million tons - by 5% as compared with the year 2007.
“RussNeft” discovered Luzianinskoye oilfield in Saratov region, new deposits were discovered within the borders of Tagrinskoye (Khanty-Mansi Autonomous Area), Roslavlskoye (Khanty-Mansi Autonomous Area), Belokamennoye (Saratov region) and Gurarinskoye (Tomsk Region) oilfields.
Refining output at the refineries of NK “Russneft” increased by 2.4% - up to 7.5 million tons. The growth of refinery output is connected, first of all, with upgrading of refining capacities of the company. Investments into technical re-equipment of the company’s refineries exceeded USD 40 million, more than USD 9,6 million was assigned to repair programs.
The total volume of oil products retail sales through the own distribution network of “RussNeft” in 2008 amounted to 650.8 thousand tons, that is, 11% more than the analogous figure of the last year.
“RussNeft” reported as well that in 2008 it completely settled tax claims held against the company. The total sum of payments of “RussNeft” to the budgets of all levels, inclusive of settlement of tax indebtedness, amounted to USD 3.6 billion.
In December 2008 NK “Russneft” completely fulfilled its obligations tp acquire the bonds put for redemption, within the frames of inaugural bond loan “Russneft-1”; the sum of the company’s payments exceeded USD 280 million (6,97 billion rubles). The proceeds generated by NK “RussNeft” at present precondition fulfillment of the company’s obligation in future as well.
In 2008 NK “RussNeft” embarked on a program of assets restructuring, based on association of the company’s subsidiaries into business-units (blocks) by regional principle.
The aim of restructuring is “to increase efficiency of work, optimize costs and create a transparent corporative structure in 2008 NK The target model of NK “RussNeft” contemplates setting up five blocks on the basis of the existing assets of the company: two in Western Siberia and one at each of the following regions: Udmurtia, Tomsk region and Central Russia – Volga Region. In 2008 the majority of subsidiaries undertook corporative procedures necessary for making decisions of their corresponding reorganization.
“RussNeft” showed good results in 2008, but the context of the global crisis and worsening of market conjuncture made us review seriously the pattern of the company’s work. The key task of “RussNeft” in 2009 is to gain substantial reduction of the company’s expenditures and cost of production”- this comment of the Chairman of the Board of Directors of NK Vladislav Solovyov is quoted in the report. He said with certainty that RussNeft” possess a serious potential for development, and in “near future it may be numbered among the most efficient Russian companies”.
According to the press-release in 2009 the management of NK “RussNeft” intend to secure considerable reduction of the company’s production cost and stabilization of the company’s financial statement at the account of implementation of the package of anti-crisis measures and completing restructuring of the assets.
The company is planning to concentrate at the oilfields with stable production growth. At that the target figure for reduction of lifting costs is 30%.
In 2009 NK will go on investing in upgrading of its own refineries, considering it the company’s strategic target to bring the depth of oil refining to the figure of 92%.
The proved reserves of Oil and Gas Company “RussNeft”, according to the report of audit group “Miller and Lents” (USA) as of January 1, 2008 amounted to 1713.3 barrels of oil equivalent, including 1562.5 million barrels (213.2 million tons) of oil and 905 billion cubic feet (25 billion cubic meters) of gas. The net effective pay of the oilfields owned by “RussNeft” under Russian classification (ABC1+C2) is 588 million tons of oil and 86 billion cbm of gas.