print version 

Find company
Home About the ProjectContact usFor the Clients
Enter code or ISIN
 
alpha / industry search

Issuers' Corner
Press Releases
Annual Reports Library

Financial Statements
SEC & FFMS Filings
Corporate Presentations
GM Materials
Issues Documents
Corporate Governance Materials
Russian Company Guide
Company Profiles
Corporate Calendar
Markets Corner
Consensus Estimates
Media Corner
News Line


Get updates



Home  Issuers' Corner  Press Releases  Rosneft Oil Company REGISTER LOG IN

Press Releases > Rosneft Oil Company  all about the company

company search
all press releases
all Rosneft Oil Company press releases

Rosneft Oil Company

June 30, 2005

Rosneft Board of Directors meeting held

Rosneft’s Board of Directors held a meeting on June 29, at which it was decided to appoint Igor Sechin (Deputy Head of the RF Presidential Administration) Chairman of the Board.

Sergei Oganesyan (Head of the Federal Power Engineering Agency) and Yuri Medvedev (Deputy Head of the Federal Property Agency) were also appointed Deputy Chairmen.

The Board of Directors approved the results of the company’s production and economic activities in the first quarter of 2005.

The meeting concluded that Rosneft had joined the ranks of the leading oil majors - Lukoil, TNK-BP and Surgutneftegaz – in terms of volumes of oil produced in 2005, and ranked second after Lukoil according to first quarter results. This was achieved through the purchase of Yuganskneftegas.

Rosneft’s share in the total amount of oil produced in Russia increased by 15.6% as compared with 4.6% in the same period of 2004. The company has retained its leading position in gas extraction (ranking second), in terms of numbers of non-producing wells (third), and in terms of capacity utilization at refining facilities (second).

All the company’s subsidiaries fulfilled their targets for the first quarter of 2005, with 17.787 million tons of oil produced in total. The average production rate (taking in account the purchase of Yuganskneftegaz) increased 3.5 times as compared with the same period of 2004. Severnaya Neft company displayed the highest increase in production rates, 1.6 times.

Gas extraction targets were also met, with gas extraction levels totaled 3.1 billion cubic meters, up 1.3 times as compared with the same period of 2004. Rosneft-Purneftegaz, Selkupneftegaz and Rosneft-Krasnodarneftegaz increased their gas development rate due to the gas program implementation.

The company conducted a large volume of works to attain these extraction rates:

  • Yuganskneftegaz’s drilling and repair facilities, downgraded in 2004, were fully reinstated;
  • Purneftegaz took delivery of equipment required, activated and drilled wells at the Fakhirovsky gas-and-condensate deposit; Selkupneftegaz continued works on the Kynsky field development;
  • Severnaya Neft drilled, equipped and put into operation new wells at the Gamburtsev Swell deposits;
  • Grozneftegaz continued repairs and commissioning of new and preserved wells.

At the end of the first quarter of 2005, the company’s oil well stock totaled 17,593 wells. During this period, 68 new wells were placed into operation, including 54 newly-drilled wells. Commissioning of new wells increased 1.9 times as compared with 2004 figures.

Average well yield totaled 13.2 tons a day in the first quarter of 2005, compared with 7.1 tons a day in the first quarter of 2004, due to the increase in the number of high-yield wells.

In the first quarter of 2005, the number of non-producing wells totaled 16.6% - 7% lower than the average industry figure, but almost 8% higher than Rosneft’s previous figure. The reason for this is the large quantity of non-producing wells in the Yuganskneftegaz well stock.

In the first quarter of 2005 Rosneft enterprises completed drilling of 204,200 meters of wells, drilling of 191,200 meters commenced and 13,000 meters are subject to exploration drilling. Drilling volumes increased some 1.6 times as compared with the first quarter of 2004.

During the first quarter of 2005, customers were supplied with 17.2 million tons of crude oil - 3.4 times higher than in the same period of 2004. The amount of oil refined at Russian refineries totaled some 5 million tons, up by 2.5 times. The company refined 2.5 million tons of oil at its own refineries, up by 34.9% as compared with the first quarter of 2004.

The following items of the company’s strategic plans were implemented in the first quarter of 2005:

  • In the Vankor group of fields development project, 4,300 meters was drilled, and seismic research was conducted. Tests of Vankor Well No. 9 revealed an oil flow of 1,000 tons a day.
  • In the Black Sea shelf development project, 2D marine seismic research work (2,000 linear km.) was completed to assess the Tuapse Arch’s oil and gas potential, scientific research and estimate works were conducted.
  • In the Western Kamchatka shelf development, project, ecological and fishery works were completed in February 2005. Dalmorneftgeofizika was selected to conduct 2D seismic research in 2005. Rosneft and its project partner, KNOC (the Korean National Oil Company) started works on the establishment of a joint corporate structure and the project operator.
  • In the Sakhalin-2 project, Rosneft continued preparations for the start-up of a temporary technological complex, pipelines, a terminal and an offshore single-point terminal; it also continued construction of the Chaivo onshore integrated processing facilities. Over 11,000 meters of controlled directional wells were drilled (third highest figure in the world).
  • In the Sakhalin-4 project (the Zapadno-Shmidtovsky sector) and the Sakhalin-5 (Vostochno-Shmidtovsky sector), the company held a tender and selected the contractor for seismic research; preparation of designs and specifications was started.
  • In the Sakhalin-5 project (Kaigansko-Vasyukansk sector), the company prepared the main designs and specifications for Udachnaya Well No. 1; the process for obtaining permissions and conducting expert appraisals was initiated; letters of intentions for the works and drilling services were signed.

The Board of Directors approved Rosneft’s target figures for 2005, making allowances for their ability to be corrected each quarter in accordance with Russia’s macroeconomic development.

Rosneft is to produce 75.35 million tons of oil, including increases in Yuganskneftegaz production by 0.4% to total 52 million tons. Other subsidiaries’ production will increase by 7.9% to 23.35 million tons. Total oil production will increase by 3.5 times as compared with 2004.

In particular, the following companies are set to increase their production:

  • Yuganskneftegas, by drilling and commissioning 243 new wells, as well as conducting shelf hydraulic fracturing at 351 wells;
  • Severnaya Neft, by drilling and commissioning 41 new wells at the Gamburtsev Swell and in the Severo-Bagansky fields;
  • Selkupneftegas, by activating and drilling, as well as developing and starting-up the new Fakhirovsky gas-and-condensate deposit;
  • Rosneft-Sakhalinmorneftegas, by drilling and commissioning new wells at the Odoptu-More deposits;
  • Grozneftegas, by reconstructing and commissioning power-driven wells and wells undergoing major repair.

Oil wells stock will total 17,800 ones by the end of 2005, the share of non-producing wells will be 15.5%.

In 2005, the company schedules to increase its gas production by 38%, and extract 12.9 billion cubic meters of gas. That will be Rosneft-Krasnodarneftegas and Rosneft-Purneftegas, who will increase their extraction amount most of all.

The amount of drilling will go up 1.9-fold in 2005, the company schedules to drill 1038.8 thousand meters of geological material. Yuganskneftegas will conduct the main amount of work, 743.4 thousand meters, 71% of which will be drilled at the Priobsky deposit. Severnaya Neft will continue drilling at the Gamburtsev Swell, in the Bagansky group of fields, Rosneft-Purneftegas - in the Komsomolsky, the Yuzhno-Kharampursky, the Festivalny, the Ust-Kharampursky fields. Sakhalinmorneftegas will keep on drilling horizontal wells at the Odoptu-sea deposit.

The company’s oil supplying value, scheduled for 2005, will be ahead 3.5-fold the 2004 level, and total about 75 million tons.

The gas supplies amount will also total 9.2 billion cubic meters, up by 25%.

The company is going to enter new world markets and directions. More than 4 million tons of oil is to be delivered to China by railway, more than 2 million tons is to be shipped using the Caspian pipeline consortium system.

The amount of oil export through the Privodino-Talagi-Belokamenka system will total 2.9 million tons.

Russian refineries, including mini-refineries, will process 20.1 million tons of oil in 2005. The refineries of Rosneft will process 10.3 million tons of oil, other companies’ refineries – 9.7 million tons.

The charge rate of the Komsomolsky refinery will increase by 1 million tons comparing to 2004, and total 6.24 million tons. The average annual processing rate of the Tuapse refinery will total 6.24 million tons, up by 1 million tons. The 2005 processing of the Tuapse refinery will total 4.1 million tons.

In the second quarter of 2005, the company schedules to put into operation some processing units for diesel fuel hydrogen refining, with capacity of 800 thousand tons a year, and a unit for sulfur production, with capacity of 15 tons a day at the Komsomolsky refinery. This will allow producing ecologically safe low-sulfur diesel fuel meeting modern international quality requirements, and recycling hydrogen disulfide with producing free sulfur. Oil processing rate is scheduled at the rate of 59.4%.

Oil refining rate at the Tuapse Refinery is to total 55.1% this year. The company schedules to conduct some works on maintaining the working facilities, and ecological and productive safety measures. Technical and economical estimation for designing the most perspective way of the plant’s development in the medium-term prospective will be done within the year.

The Moscow Nefteprodukt plant is scheduled to make 5.2 thousand tons of different kinds of production.

The total amount of oil derivatives produced by the Russian oil refining plants will make up 18.7 million tons that is by11.8 million tons or 2.6 times more than in 2004.

Rosneft will assume supplying its sales enterprises in 2005. The outside suppliers share will decrease from 49% in 2004 to 7% in 2005.

The amount of sales through bulk plants and gasoline filling stations will total 4.7 million tons, up by 24.2% in comparison with the 2004 data, therewith the company schedules to sell 947 thousand tons of different kinds of oil products through the filling stations.

Oil products transshipment through the company’s terminals will total 19.9 million tons, including the 18.6 million tons for export.

The company is going to continue works on reconstructing the transshipment terminals, building and rebuilding the filling stations, reequipping the bulk plants.

Under the scheduled sales chain optimization, a number of non-profitable and low-loaded storage terminals and filling stations will be abolished; they will gradually put their facilities to their real needs, thereby lower costs and raise the efficiency of an enterprise.

The company schedules to improve its organizational framework, introduce a computer-aided accounting system and a non-cash payments system at its bulk plants and filling stations.

The totals amount of 2005 investments will be about 80 billion rubles, which is twice more than in 2004. The most of the capital investments are scheduled for the oil extraction industry.

Rosneft’s strategic plans to be implemented in 2005:

  • Gas extraction:
    • Most investments are planned for developing the Vankorsky group of oil fields: designing works, seismology, drilling 4 prospective wells, commercial drilling preparatory works;
    • Implementation of the Russian seas shelves, Kazakhstan and Algeria development projects;
    • Under the Sakhalin-1 project, a primary extraction technological complex construction; start of gas deliveries to the Khabarovsk Territory; installation of the Orlan platform and start of drilling; export through the De-Castri terminal, tankers and ice-breaking fleet;
    • Seismological data interpretation within the Sakhalin-3 (Veninsky block), the Sakhalin-4 (the Zapadno-Shmidtovsky sector) and the Sakhalin-5 (the Vostochno-Shmidtovsky sector) projects;
    • Drilling and testing the second prospective well at the Kaygansko-Vasyukansky licensed area; testing the first prospective well, drilled last year.
  • Oil processing: OJSC OC Rosneft- Komsomolsky NPZ reconstruction works, commissioning the distillate products hydrogen refining unit, and the sulfur producing and amine recovery unit;
  • Oil products supply: reconstruction of the Arkhangelsky terminal (Rosneft-Arkhangelsknefteprodukt) secondary objects; reconstruction of a number of Rosneft- Tuapsenefteprodukt objects; building and reconstruction of Rosneft’s gasoline filling stations.

As for scientific work, the company schedules to intensity implementing of project financing, engineering service accounting, and long-range surveys, as well as to complete centralization of the sphere by establishing the corporate science and technical center, consolidating control over all the company’s science and project organizations.

Investments in scientific research (regarding the joint projects with the Shlumberge company) are scheduled to total 1.1 billion rubles. The works include geological, scientific and engineering survey, preparing project and technological documents basing on deposits geological and hydrodynamic model-based analysis, oil-and-gas extraction engineering; future prospects analysis.

The company’s social programs investing will total 4.1 billion rubles in 2005.

The sum includes:

  • constructing a shift camp in the Vankorsky oil field;
  • constructing shift accommodation at some Rosneft-Purneftegas and Severnaya Neft deposits;
  • constructing accommodation and social objects in some regions of Rosneft’s activity.

The OJSC OC Board of Directors approved the company’s management activity on the corporate structure improvement, including sales of non-core and inefficient assets.

Besides, the Meeting adopted the credit policy of Rosneft, and decided on holding the next Board of Directors Meeting in September 2005, with the appropriate order of business, based on the Board’s 2005-activity schedule.

Reference Note:

Rosneft’s ABC1+C2 category recoverable reserves totaled 3.245 billion tons as of January 1, 2005, an increase of 2.4 times in comparison with 2004 data. This is primarily due to the purchase of Yuganskneftegas in December 2004.

The total ABC1+C2 category recoverable reserves of associated gas and non-associated gas are 1.882 trillion cubic meters, 57% lower than the previous year, due to the sale to Gazprom of Rosneft’s stake in joint gas extraction projects.

 

 

 

Search by industry

Agriculture, Foresty and Fishing | Chemicals | Engineering | Ferrous Metals | Financial, Insurance & Real Estate | Food & Kindred Products | General Construction | Information Technology | Media & Publishing | Non-Ferrous Metals | Oil & Gas | Pharmaceuticals | Power Industry | Precious Metals and Diamonds | Telecommunications | Transportation | Wholesale & Retail Trade

Search by alpha index

A B C D F G H I K L M N O P R S T U V W X Z


Site Map
© RUSTOCKS.com
Privacy Statement | Disclaimer