IN H1 2023, LIQUIDS PRODUCTION
AMOUNTED TO 4.0 MLN BARRELS PER DAY
IN Q2 2023, LIQUIDS PRODUCTION
DECREASED BY 2.2% QUARTER-ON-QUARTER TO 3.9 MLN BARRELS PER DAY
ON THE BACK OF THE PRODUCTION CAP
IN H1 2023, GAS PRODUCTION
INCREASED BY 31.8% TO 1.5 MLN BOE PER DAY
IN H1 2023, EBITDA AMOUNTED TO
RUB 1,401 BLN, AND TO RUB 729 BLN IN Q2 2023
IN H1 2023, NET INCOME ATTRIBUTABLE
TO ROSNEFT SHAREHOLDERS AMOUNTED TO RUB 652 BLN
NET DEBT / EBITDA RATIO AT THE END
OF H1 2023 AMOUNTED TO 1.2X
Rosneft Oil Company PJSC (hereinafter – Rosneft,
the Company) publishes its results for Q2 and H1 2023 prepared
in accordance with International Financial Reporting Standards
RUB bln (except %)
Sales revenue and equity share in profits of associates and joint
Net income attributable to Rosneft shareholders
Igor Sechin, Chairman of the Management Board and
Chief Executive Officer of Rosneft said:
"Following successful implementation of
existing projects and launch of new ones, in H1 2023, the
Company achieved high growth rates of its operating indicators. In
particular, Rosneft came out on top among independent gas producers,
increasing production by almost a third. Daily liquids production
grew by almost 7%. However, in Q2 2023, given external
production constraints, the Company had to reduce its output. I
should note that Rosneft has been limiting crude oil production in
one way or another since 2017, which prevents the Company from fully
unleashing its potential.
The Company has maintained sustainable financial
performance despite market price volatilities. To a large extent,
this becomes possible due to our continuous effort to control costs.
For example, in Q2 2023 the upstream lifting costs on a unit
basis decreased to USD 2.8 per barrel of oil equivalent. On the
other hand, the changing tax environment, including legislative
changes already enacted and new initiatives, makes the Company's
operations more challenging.
Despite the complex external environment, Rosneft
continues to implement major investment projects.
In August 2023, Rosneft completed on time the
payment of the final dividends for 2022 totaling more than
RUB 190 billion."
In H1 2023, liquids production amounted to 4.0 mln
barrels per day (97.0 mln tons). In Q2 2023, liquids production
reduced by 2.2% QoQ to 3.9 mln barrels per day (48.2 mln tons) due to
the introduction of the oil production cap in Russia since March
In H1 2023, gas production increased by 31.8%
compared to H1 2022 and reached 1.5 mln boe per day (43.7
bcm). The increase was attributable to the ramp-up of production at
existing projects, as well as the launch of greenfield gas projects
in the Yamalo-Nenets Autonomous District in 2022. In Q2 2023,
Rosneft reduced gas production by 8.7% QoQ to 1.4 mln boe per
day (21.0 bcm) mainly due to the oil production cap and maintenance.
As a result, in H1 2023 the Company's
hydrocarbon production reached 5.5 mln boe per day, up 12.7% YoY
while in Q2 2023 hydrocarbon production decreased by 4.0% QoQ.
In H1 2023, Rosneft conducted 2.7 th. linear
km of 2D seismic and 5.8 th. square km of 3D seismic onshore in
Russia. Testing of 19 exploration wells was completed with a success
rate of 90%.
In H1 2023, production drilling footage reached
5.9 mln meters, which is 6.3% higher YoY. Rosneft commissioned
over 1.5 th. new wells, 69% of which were horizontal wells. The
share of new horizontal wells with multistage hydraulic fracturing
amounted to 46%. The unit production per horizontal well is twice as
much as per one directional well.
Vostok Oil Project
In H1 2023, the Company conducted over 2.2
th. linear km of 2D seismic and 1.6 th. square km of 3D seismic,
completed drilling of 2 exploration wells and started drilling
another 3 wells, with 8 more wells being tested within the framework
of the flagship Vostok Oil project.
As part of the pilot development of the Payakha
cluster, in H1 2023 the Company drilled 27 th. meters and completed
drilling of 8 production wells.
Preparatory work for drilling of 6 production
wells is underway as part of the pilot development of the
Ichemminskoye field. In July 2023, the Company started pilot
development of another field, Baikalovskoye, where a drilling rig is
currently being mounted to drill 6 wells. The field has initial
recoverable reserves of 81 bcm of gas and 43 mln tons of oil.
The Company continues construction of the Vankor –
Paiyakha – Bukhta Sever trunk oil pipeline and the Bukhta Sever
Port oil terminal, as well as construction of hydraulic engineering
The construction of storage and transshipment
facilities in the Yenisei basin is also underway, as well as the
construction of hydraulic engineering installations, and the
expansion of coastal and berthing infrastructure. During the summer
navigation period along the Yenisei River and the Northern Sea Route,
over 800,000 tons of construction materials and equipment are planned
to be delivered to the project facilities.
In H1 2023, the Company processed 44.1 mln
tons of crude oil in Russia, which is 9.2% higher compared to
H1 2022. In Q2 2023, refinery throughput in Russia was 21.5 mln
tons of crude oil, down 5.1% QoQ, mainly due to seasonal turnarounds.
The Company has been consistently working to
develop local technologies and import substitution, in particular,
supplying its refineries with in-house catalysts required to produce
high-quality motor fuel. In H1 2023, 780 tons of diesel
hydrotreatment catalysts and protective layer catalysts were
produced. 75% of this volume was supplied to the Company's refineries
and another 25% to third party customers. The Company's enterprises
also produced 175 tons of reforming catalysts and 55 tons of hydrogen
production catalysts. 340 tons of regenerated diesel hydrotreating
catalysts were reactivated.
The Company's H1 2023 revenue1
amounted to RUB 3,866 bln, down 25.3% YoY, primarily due to
a significant drop in oil prices. At the same time, revenue for
Q2 2023 increased by 12.1% reaching RUB 2,043 bln. In
settlements with its counterparties for export supplies, the Company
prioritizes payments in rubles and national currencies of friendly
In H1 2023, EBITDA amounted to RUB 1,401 bln,
which is 5.1% lower than for the same period in the previous year.
The better EBITDA dynamics compared to revenue is due to increased
sales volumes in the eastern direction, higher profitability of
export operations and cost control. The EBITDA margin was 36.0%.
EBITDA for Q2 2023 increased by 8.5% reaching RUB 729 bln.
In H1 2023, the net income attributable to Rosneft
shareholders was RUB 652 bln. This indicator for Q2 2023
amounted to RUB 329 bln.
CAPEX in H1 2023 reached RUB 599 bln,
up 13.7% YoY, due to the scheduled Upstream activities.
In H1 2023, free cash flow increased by 21.9% YoY
to RUB 434 bln. Free cash flow has remained positive for
twelve consecutive quarters.
Net debt / EBITDA ratio at the end of
H1 2023 was 1.2x (in US dollar terms). The high level of
financial strength continues to be also supported by the substantial
amount of liquid financial assets on the Company's balance sheet and
available credit lines.
The Company’s sustainable performance drives its
stock price dynamics: since the beginning of 2023, Rosneft share
price at the Moscow Stock Exchange has increased by 1.5 times while
Company market cap reached nearly RUB 6 trln. Exponential growth in
the number of Russian shareholders is another evidence of investor
confidence in the Company: the number of individual shareholders of
Rosneft rose by 4.5 times from 200 to almost 900 th. people in
In H1 2023, the Company continued its efforts
to achieve the Sustainable Development Goals as part of the
Rosneft-2030: Reliable Energy and Global Energy Transition strategy.
Rosneft has been consistently developing the
management system to ensure integrity of its production facilities
and equipment with the goal of achieving a zero accident rate by 2030
or earlier. In H1 2023, the PSER-1 process safety event rate
improved by 45% compared to Q1 2022, and the PSER-2 rate
improved by 28%.
The Company strives to achieve zero fatal injuries
and ensures that targets are aligned with management key performance
indicators and remuneration. For example, while implementing the Work
Controls Concept, managers are incentivized to have all
hazardous operations carried out strictly on a scheduled basis. This
measure is expected to increase the level of safety at work.
As part of the effort to minimize oil and
petroleum product spills, measures are taken to replace field
In H1 2023, no accidents or well control
incidents (oil, gas or water show) during drilling operations were
registered at the Company's facilities.
Rosneft became the Best Russian Oil and Gas
Company in the World Benchmarking Alliance (WBA) international
ranking and was among the top 10 global oil and gas companies on a
number of sustainability indicators. The WBA ranking assesses the
contribution of the world's 100 largest oil and gas companies to the
achievement of the UN Sustainable Development Goals in terms of
meeting social commitments and ensuring a just transition to a
1 This includes sales
revenue and income from associated organizations and joint ventures.
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