• 9M 2024 HYDROCARBON PRODUCTION AMOUNTED TO 193.4 MLN TOE

• 9M 2024 LIQUID HYDROCARBON PRODUCTION EQUALED 138.3 MLN TONS

• 9M 2024 GAS PRODUCTION TOTALLED 67.0 BCM 

• 9M 2024 EBITDA AMOUNTED TO RUB 2,321 BLN

• 9M 2024 NET INCOME ATTRIBUTABLE TO ROSNEFT SHAREHOLDERS AMOUNTED TO RUB 926 BLN

• 9M 2024 FREE CASH FLOW AMOUNTED TO RUB 1,075 BLN

• 9M 2024 UNIT LIFTING COSTS AMOUNTED TO $2.8/BOE

Rosneft Oil Company (hereinafter – Rosneft, the Company) announces its results for 9M 2024, prepared in accordance with the International Financial Reporting Standards (IFRS).

* Revised due to completion of the 2022–2023 acquisition price allocation in 2023.

Igor Sechin, Chairman of the Management Board and Chief Executive Officer of Rosneft said:

"Due to the Russian Government's decisions to cap oil production in addition to the quotas set by the OPEC+ agreement, Rosneft's operating performance in the reporting period was under pressure. In this context, the Company has been taking additional steps to ensure stable financial results as well as aimed at achieving a sustainable corporate business model.

The key rate increase resulted in the reduced efficiency of refinery modernization projects that require external financing. The outstripping growth of tariffs of natural monopolies and incremental anti-terrorist security costs exerted additional pressure on the refineries’ performance. In order to protect the shareholders’ interests and avoid losses, Rosneft has been considering the need to suspend refinery modernization projects. At the same time, meeting the domestic demand for quality petroleum products remains a priority.

Continuous changes in the taxation system have a negative impact on the oil industry. In particular, in the reporting period, net income attributable to Rosneft’s shareholders was negatively affected by the income tax rate increase to 25% from 2025. In accordance with IFRS, this resulted in a restatement of a deferred tax with a negative income effect of RUB 0.2 trillion.

However, efficient execution and improved development parameters of a number of our key projects afforded an opportunity to dramatically reduce the negative effect of these changes on our shareholders.

The reported net income attributable to Rosneft shareholders was also negatively affected by the exchange rate revaluation of foreign currency liabilities due to the weakening of the national currency. For example, during the third quarter, the ruble weakened against the yuan by more than 10%.

It is worth pointing out that net income attributable to shareholders adjusted for the non-cash effects mentioned above remained mainly unchanged year-on-year.

Shareholders’ interests remain one of our key priorities. On November 8, the Board of Directors recommended an interim dividend of RUB 36.47 per share which resulted in the semi-annual dividend yield of 7.6%. In full compliance with the corporate dividend policy, a total of RUB 386.5 bln or 50% of H1 2024 net income is recommended to be distributed as dividends.

In the context of high stock market volatility and taking into account our shareholders’ rights and interests, the Company has resumed its Share Buyback Program previously approved by the Board of Directors."

ESG

In the reporting period, the Company continued to implement measures to achieve sustainable development goals under the 'Rosneft-2030: Reliable Energy and Global Energy Transition' strategy.

Rosneft applies advanced technologies and state-of-the-art production methods to create a safe working environment and minimize the risk of occupational injuries and occupational illness. In 9M 2024, the Lost Workday Injury Severity (LWIS) improved by 33%.

In 9M 2024, there were no gas, oil and water shows (release of oil, gas or water to the surface) during drilling operations at Company facilities. As part of efforts to minimize oil and petroleum product spills, measures were taken to replace field pipelines.

In 9M 2024, as part of the corporate program to eliminate the environmental legacy, the area of contaminated land reduced by 7% and the volume of oily waste – by 12%.

In October 2024, Rosneft entered the first quartile in the ESG transparency ranking of the Expert RA credit rating agency. The ranking was compiled based on the analysis of public information on the sustainability performance of 124 Russian companies in four main blocks: environment, society, corporate governance and non-financial reporting standards.

Operating performance

Exploration and production

In 9M 2024, Rosneft liquid hydrocarbons production amounted to 138.3 mln tons (3,753 th. bpd). The indicator performance was primarily driven by the production cap in compliance with the decisions of the Russian Government.

9M 2024 gas production amounted to 67.0 bcm (1,488 th. boepd). Greenfield projects in the Yamal-Nenets Autonomous District commissioned in 2022 account for over a third of the Company's gas production.

As a result, the Company's 9M 2024 hydrocarbon production amounted to 193.4 mln toe (5,241 th. boepd).

9M 2024 production drilling footage exceeded 9.1 mln meters. Rosneft commissioned over 2.2 th. new wells, 71% of which were horizontal.

In 9M 2024, Rosneft conducted 1.2 th. km of 2D seismic and 4.8 th. sq. km of 3D seismic onshore Russia. The Company completed testing of 31 exploratory wells with a success rate of 84%.

Vostok Oil Project

As part of the Vostok Oil project, in 9M 2024 the Company completed 0.7 th. linear km of 2D seismic and 0.6 th. sq. km of 3D seismic. Rosneft carried out successful testing of 3 wells with 3 more wells being drilled and 1 more well being tested.

Pilot development of the Payakha, the Ichemminskoye and the Baikalovskoye fields is in progress: production drilling footage amounted to 64 th. meters, while 10 production wells were completed in 9M 2024.

Drilling and testing of another high-tech well with the horizontal section of 1,000 meters and 7-stage hydraulic fracturing at the Payakha field resulted in a stable oil flow, which confirms the resource potential of the development targets.

Work is underway at the 'Vankor – Payakha – Sever Bay' trunk oil pipeline. Taking into account local climate patters, preparatory works for pipe laying were carried out during the summer period: more than 24 thousand piles were manufactured and prepared for mounting, over 200 km of the pipeline was welded.

Construction of logistics infrastructure, building of hydraulic structures, shore reinforcement, expansion of coastal and berthing infrastructure is underway.

Refining

9M 2024 refining volume in Russia amounted to 62.6 mln tons.

The Company has been consistently developing domestic technologies and import substitution. In particular, Rosneft provides Company refineries with proprietary catalysts, which are essential for production of high-quality motor fuel. In 9M 2024, Rosneft produced 1,810 tons of catalysts for hydrotreatment of diesel fuel and gasoline fractions, as well as protective layer catalysts. Rosneft subsidiaries also produced over 133 tons of gasoline reforming catalysts and 272 tons of catalysts for hydrogen production, petrochemicals and adsorbents. 1,002 tons of coked catalysts for hydrotreatment of diesel fuel were regenerated.

Sustainable supply of high-quality motor fuel to Russian consumers is one of Rosneft's key priorities. In 9M 2024, the Company sold 32.9 mln tons of petroleum products on the domestic market, including 9.9 mln tons of gasoline and 13.5 mln tons of diesel fuel.

The Company is an active participant of trading activities at the St. Petersburg International Mercantile Exchange (SPIMEX). In 9M 2024, Rosneft sold 7.3 mln tons of gasoline and diesel fuel on the exchange, which is twice the required volume. The Company's share in the total volume of exchange sales of gasoline and diesel fuel amounted to 37%.

Financial performance

Operating performance and the current macroeconomic environment combined with management decisions determined the trend of the Company's key financial indicators.

In 9M 2024, the Company's revenue¹ amounted to RUB 7,645 bln, representing an increase of 15.6% year-on-year on the back of higher oil prices. EBITDA reached RUB 2,321 bln, and the EBITDA margin amounted to 30%.

In 9M 2024, the unit lifting costs amounted to $2.8/boe.

9M 2024 net income attributable to Rosneft shareholders amounted to RUB 926 bln, which is 13.9% lower year-on-year driven by lower EBITDA, and higher debt financing rates, as well as non-cash factors, including the exchange rate revaluation of foreign currency liabilities and the effect of changes in the income tax rate.

9M 2024 capital expenditure amounted to RUB 1,052 bln, which was 15.7% higher year-on-year due to the scheduled implementation of the Company’s investment program. At the same time, Rosneft’s free cash flow² in the reporting period reached RUB 1,075 bln.

The net debt/EBITDA ratio at the end of September 2024 amounted to 1.2x. The indicator growth was due to payment of final dividends of RUB 307 bln for 2023, as well as depreciation of the national currency.

¹ Includes revenues from sales and equity share in profits of affiliates and joint ventures
² Adjustment for prepayments under long-term oil supply contracts, including accrued interest payments thereon, net change in operations of subsidiary banks, and operations with trading securities.

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Rosneft Oil Company