INVESTOR PRESENTATION 9M AND 3Q 2019 28 November 2019
DISCLAIMER This presentation (hereinafter – the “Presentation”) of the Alliance Oil Company (hereinafter – the “AOC”) was prepared exclusively for the information purposes in order to improve the transparency of disclosure of relevant information and materials of AOC and establish a continuous dialogue with investors. The data contained in this Presentation constitutes the confidential information of the AOC group of companies and shall not be disclosed or transmitted to any third parties without the prior written consent of the disclosing party. The information contained in this Presentation was prepared and provided by the AOC structural departments. These data can be changed with the course of time and are subject to regular update and amendment. This presentation is not an offer or solicitation of an offer and does not cause creation of any rights or obligations from the AOC and/or potential partners to carry out transactions or to enter into negotiations on cooperation. The information provided in this Presentation is not an offer or proposition to conclude an agreement. AOC makes no warranty in respect of the accuracy or reliability of the information contained in the Presentation and accepts no liability for any losses suffered by third parties arising from inaccuracy or unreliability of such information as well as for other negative effects. 2
Operating Environment On 1 June 2017 the Office of Foreign Assets Control of U.S. Department of the Treasury (“OFAC”) included AO Nezavisimaya Neftegazovaya Kompaniya and AO NNK-Primornefteproduct, subsidiaries of the Group, to the Specially Designated Nationals and Blocked Persons list (“SDN List”). Sanctions were imposed pursuant to the US President Executive Order No. 13722 of 15 March 2016, concerning blocking the property of the Government of North Korea and the Workers’ party of Korea, and prohibiting certain transactions with North Korea. The Group cooperates with OFAC on all arising matters. The Group has received a confirmation from The Bank of New York Mellon of the current absence of obstacles for the provision of services and payments settlement under the Group’s existing Eurobonds. As of now there are no further developments that the Group is able to report. Information will be updated accordingly. 3
9M 2019 Market Environment Oil products prices USD/bbl RUB/USD USD/bbl Crude oil prices and exchange rates 120 80 120 110 70 100 100 90 60 80 80 70 50 60 60 40 50 40 40 30 30 20 20 20 Naphtha Diesel Fuel (Gasoil 500 ppm) Fuel Oil (HSFO 180) Brent Exchange rate 9M 2019 9M 2018 9M 2019 9M 2018 Indicator % Indicator % average average average average Brent, USD/bbl 64.65 72.08 -10% Naphtha, USD/bbl 55.89 68.97 -19% Exchange rate, USD/RUB 65.08 61.44 +6% Diesel fuel, USD/bbl 77.53 84.57 -8% Fuel oil, USD/bbl 60.15 62.35 -4% 4
HIGHLIGHTS FOR 9M 2019 AND 3Q 2019 Indicator 9M 2019 9M 2018 3Q 2019 3Q 2018 Comments Financial Results 9M/9M stable revenue effected by RUB weakening. 2,716 Revenue, MUSD 2,809 957 1,037 3Q/3Q decrease primarily due to lower crude oil and oil products (export and bunkering) prices 9M/9M decrease - due to lower crude oil prices and increased MET (Upstream). 3Q/3Q increase – 291 314 123 118 EBITDA, MUSD due to lower cost of crude oil purchased for refining and income on reverse excise tax (Downstream) 69 (217) 4 (14) Net Result, MUSD Net result improved due to FX gains Decreased profitability of Upstream (9M/9M and (5) 60 22 33 Adjusted Result 1 , MUSD 3Q/3Q) Operational Results 12.2 11.9 4.1 4.0 Production, mboe Stable volumes 9M/9M decrease due to planned major 25.8 27.0 9.9 10.0 Refining volumes, mbbl maintenance works at the Khabarovsk Refinery in 2Q 2019 9M/9M decrease due to planned major 25.0 26.5 9.7 9.7 Throughput, mbbl maintenance works at the Khabarovsk Refinery in 2Q 2019 1 Adjusted Result is defined as the Group’s Net Result adjusted for non -cash items such as foreign currency exchange gain/(loss), modification loss on loans, allowance for deferred tax assets and other significant one-off items in profit or loss. 5
UPSTREAM OPERATIONS Crude Oil and Gas Reserves and Production Timano-Pechora 9M 2019 production: 3.8 mboe (31%) 1 3Q 2019 production: 1.3 mboe (32%) Volga-Urals and Kazakhstan Tomsk 9M 2019 production: 9M 2019 production: 5.9 mboe (48%) 2.5 mboe (21%) 3Q 2019 production: 3Q 2019 production: 1.9 mboe (47%) 0.9 mboe (21%) Alliance Oil Company, consolidated 2P oil reserves: 526.9 mboe 2 2P gas reserves: 41.7 mboe 9M 2019 production: 12.2 mboe (average daily: 44,669 boepd ) 3Q 2019 production: 4.1 mboe (average daily: 44,436 boepd ) Notes : (1) Percentage in consolidated Alliance Oil Company production. (2) As per DeGolyer & MacNaughton as of 31 December 2018. 6
UPSTREAM OPERATIONS Crude Oil and Gas Production Hydrocarbon Production, boepd Hydrocarbon Production, mboe 50 000 4,5 4,1 4,1 4,1 4,0 4,0 4,0 48 000 3,5 3,0 46 000 45 091 2,5 44 741 44 480 44 436 2,0 44 000 42 971 1,5 1,0 42 000 0,5 40 000 0,0 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Implemented 95 well interventions, launched 51 new wells for 9M 2019 Due to successful interventions oil production has stabilized. Previous decrease in production explained by minimal capital expenditures in 2016-2017 due to negative macro parameters The Group has USD 79 mln of capital commitments for Upstream segment capital construction 7
UPSTREAM OPERATIONS Crude Oil Sales Crude Oil Sales, mbbl Export Domestic Produced Domestic Re-sold Export Domestic Produced Domestic Re-sold 20 6 5,4 5,3 16,9 16 1,6 14,4 1,8 5,6 4 3,9 12 2,1 1,8 6,1 8 5,3 2 4 1,7 1,7 5,2 5,2 0 0 9M 2018 9M 2019 3Q 2018 3Q 2019 Increase due to trading in crude oil purchased from third parties (9M/9M) and higher production volumes (9M/9M and 3Q/3Q) 8
UPSTREAM OPERATIONS Crude Oil Netbacks Crude Oil Netback Prices, USD/bbl Export Domestic Export Domestic 70 70 60 60 52,8 53,0 51,2 45,0 47,5 46,5 46,7 50 50 52,6 50,5 50,1 47,0 40 40 46,3 44,0 43,6 30 30 20 20 10 10 0 0 9M 2018 9M 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Netbacks in all destinations affected by crude oil quotes and tax maneuver effective since Q1 2019 Notes: The netback prices are calculated by deducting VAT, railway and pipeline transportation costs (for Russian domestic sales) or transportation, export duty, brokers’ commission and certain other costs (for export sales). 9
UPSTREAM OPERATIONS Gas Sales and Price Gas and Gas Liquids Prices, USD/boe Gas and Gas Liquids Sales, kboe 60 1 000 916 48,8 48,0 50 800 633 40 600 30 400 20 148 7,9 7,7 200 10 93 0 0 9M 2018 9M 2019 9M 2018 9M 2019 Gas net price, USD/boe Gas Liquids net price, USD/boe Sold volume of gas, kboe Sold volume of gas liqids, kboe 400 60 56,5 54,2 53,6 350 48,6 50 44,4 279 300 40 250 195 30 200 150 20 100 7,5 7,5 7,7 7,8 7,5 47 10 28 50 0 0 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 3Q 2018 3Q 2019 Sold volume of gas, kboe Sold volume of gas liqids, kboe Gas liquids prices affected by crude oil quotes 10 Notes: The net prices are calculated by deducting VAT.
UPSTREAM OPERATIONS Crude Oil and Gas Sales Revenue from Sales of Crude Oil, Gas and Gas Liquids, MUSD Export Domestic Produced Domestic Re-sold Export Domestic Produced Domestic Re-sold 292 1 000 300 252 833 250 781 99 800 73 274 212 200 600 150 95 95 272 292 400 100 200 50 98 297 84 267 0 0 9M 2018 9M 2019 3Q 2018 3Q 2019 9M/9M revenue increased due to trading in crude oil purchased from third parties and higher production volumes. 3Q/3Q revenue decreased due to lower crude oil prices 11
DOWNSTREAM OPERATIONS Assets and Refining volumes Kamchatka region Retail gas stations: 18 Marine terminals: 1 Jet fuel depot: 1 Far East: Amur, Primor and Khabarovsk regions TOTAL Retail gas stations: 258 Operating retail gas stations: 293 Operating oil depots: 12 Operating oil depots: 12 Marine terminals: 2 Marine terminals: 3 Railway tankers: 1,449 Jet fuel depot: 1 Railway tankers: 1,449 The Republic of Buryatia Khabarovsk Oil Refinery Retail gas stations: 17 Refining volumes: 9M 2019: 94,412 bopd (9M 2018: 99,071 bopd ) 3Q 2019: 107,933 bopd (3Q 2018: 108,230 bopd ) Throughput: 9M 2019: 25.0 mbbl (9M 2018: 26.5 mbbl ) 3Q 2019: 9.7 mbbl (3Q 2018: 9.7 mbbl ) 12
DOWNSTREAM OPERATIONS Khabarovsk Oil Refinery Refining volumes, bopd Light oil products yield,% 9M 2019 9M 2019 59,2% 94 412 9M 2018 9M 2018 62,5% 99 071 3Q 2019 3Q 2019 62,0% 107 933 3Q 2018 60,9% 3Q 2018 108 230 Oil Products Breakdown in 9M 2019, % Refining throughput, mbbl 4% 25,0 9M 2019 18% Fuel oil 9M 2018 26,5 Marine fuel 39% Gasoline 3Q 2019 9,7 Diesel fuel 19% Others 9,7 3Q 2018 20% 13
DOWNSTREAM OPERATIONS Oil Products Sales Oil Products Sales, mbbl Export Bunkering Wholesale Retail Export Bunkering Wholesale Retail 32 12 28 9,7 26,8 26,5 9,7 10 24 6,0 6,6 2,2 2,3 8 20 5,7 2,4 16 6 4,7 15,5 12 4 9,8 3,5 8 2 1,6 1,6 4 4,5 1,5 3,7 1,2 0 0 9M 2018 9M 2019 3Q 2018 3Q 2019 Increase in retail volumes due to strong demand Decrease in sales volumes 9M/9M due to planned major maintenance works at the Khabarovsk Refinery during 2Q 2019 The Group resumed bunkering sales in 3Q 2018 (terminated in 3Q 2017) 14
Recommend
More recommend
