Leading positions in hydrocarbon production growth

Proven hydrocarbon reserves (PRMS-SPE) Data does not include the reserves and production volume of NIS. (mn TOE)

The resource base of the Company’s current assets has deteriorated in terms of the remaining commercial reserves as most fields are in a late stage development. An increase in high-tech drilling and the use of tertiary methods to boost oil recovery has enhanced the efficient development of these reserves.

Hydrocarbon production (mn TOE)

The launch of the Gates of the Arctic export terminal at the Novoportovskoye field, the start of production at the East Messoyakha field, increased output at the Prirazlomnoye field, Orenburg Region fields and SeverEnergy (Arcticgas), the consolidation of 50% of the production of Northgas CJSC, growth in the use of associated gas at fields in the Khanty-Mansi region and expanded production in Iraq all combine to provide the Company with high growth rates in hydrocarbon production volumes from year to year.

Balanced refining

Oil refining At the Company’s oil refineries and joint venture assets. (mn t)

The volume of oil refined in 2016 was optimal given the existing demand and price situation for oil and petroleum products. The Company also increased the production volume of light petroleum products, while fuel oil and marine fuel accounted for the biggest decrease in output.

Strong financial results despite low oil prices

Sales revenue (RUB mn)

Sales revenue increased by 5.3% due to growth in the production and sales volume of the Company's own oil and oil acquired from third-party manufacturers, growth in petroleum product prices on the domestic market and a decrease in the customs duty rate for oil and petroleum products. Growth in revenue was also constrained by lower oil and petroleum product prices on global markets.

Adjusted EBITDA (RUB mn)

Increasing hydrocarbon production, maintaining the Company’s positions on petroleum product sales markets and management’s actions to improve cost effectiveness and optimisation in 2016 led to a 12.7% increase (RUB 51.4 bn) in operating profit (EBITDA) in 2016 compared with 2015.

Net profit (RUB mn)

The growth in net profit was mainly due to an increase in EBITDA and positive exchange rate differences from the revaluation of the loan portfolio.

Strong growth in oiland petroleum product sales

Oil and petroleum product sales (mn t)

The 36.7% year-on-year growth in oil sales is due to increased oil production at the Novoportovskoye, Prirazlomnoye and Messoyakha fields, in Iraq and the Orenburg Region as well as a decrease in refining volumes in the Russian Federation. The decrease in petroleum product sales in 2016 resulted from:

  • a decrease in refining volume;
  • a decrease in the sales volume of marine fuel due to diminished demand among ship owners for transit bunkering;
  • a decrease in jet fuel sales due to reduced demand for international travel and the suspension on charter flights to Turkey and Egypt.

Sales via premium channels (mn t)

Sales volume via premium channels decreased by 2.1% year-on-year primarily due to a reduction in sales of marine fuel due to lower demand for transit bunkering from ship owners and the introduction of an excise tax on medium distillates. An effective marketing strategy led to a 3.7% increase in motor fuel sales despite an overall decline in demand on the market.

Responsible approach to supporting production safety, resources and the environment

LTIFR injury rate
 
Energy efficiency in production and refining (1,000 t of standard fuel)

Responsible approach to supporting production safety, resources and the environment

Expenses on supporting environmental safety and protection This report presents updated statistics on environmental safety expenses taking into account the current overall expenses on all environmental protection activities and expenses on environmental services in accordance with state statistical reporting 4-OS ‘Information about current expenses on environmental protection and environment payments’. The new form was approved by Order No. 387 of the Federal State Statistics Service dated 4 August 2016. (RUB mn)
Social investments Includes social projects, volunteer and charitable events and grant contests. (RUB mn)

Production and environmental safety is a priority in the Company’s activities. Gazprom Neft’s strategy in industrial, environmental and occupational safety aims to achieve the ‘Goal – Zero: No Harm to People, Objects or the Environment’.