Photo Credit: Press Service of the President of Russia

President of Russia Vladimir Putin had a working meeting with Rosneft Chief Executive Officer Igor Sechin, who reported on the Company’s 2016 operational results. According to Igor Sechin, “2016 saw particular volatility on the hydrocarbon markets”, the Company “had to work under pressure, but the year set a record in terms of production for Rosneft”. Total production in liquid equivalent amounted to 265 mmt and increased by 4% compared with the last year. The Company produced 210 mmt of oil and 67 bcm of gas.

Igor Sechin said that the the main factors contributing to the production growth were start of the development of the Suzunskoye field and the Vostochno-Messoyakhskoye field (joint project with Gazpromneft) as well as production growth at Yuganskneftegaz , the Company’s largest production asset. Total investment in 2016 came to RUB 750 bln. Investment went mainly into increasing production drilling in Western Siberia and for new projects. 

The volume of production drilling increased by 35% (to 9.3 mln m) in 2016, 2,700 new wells were brought into operation, which is 43% up on the 2015 result. As noted by Igor Sechin these results we possible due to creation of the company’s own oil drilling service, (total number of well rigs was increased by 20% in 2016 only). 

Igor Sechin reported to the President of the Russia that over the course of the year Rosneft has discovered 13 new fields, 103 new deposits with total reserves of up to 159 mln toe. The reserves increment, according to him, will reach 290 mln toe.

The Russian refineries affiliated to the company processed 87.5 mmt, more than 12 mmt were processed at the Company’s refineries abroad. Total processing thus amounted to c. 100 mmt.  According to Igor Sechin, Rosneft intends to bring this rate up to 120 mmt in 2017. 

The share of light petroleum products in the past year grew to reach 56%, and the refinery yield has increased to reach 71.2%. Domestic market is the priority outlet for the Company’s oil products. Fuel oil production at Russian refineries decreased by more than 10% in 2016, due to new facilities coming into operation, and production of diesel fuel and Euro-5 gasoline grew to 28.4 mmt, surpassing 2015 figures by 42%.

Igor Sechin also reported to Vladimir Putin that Rosneft continues working with its traditional international partners as well as attracting new ones. The Company is actively cooperating with Indian oil corporations including ONGC, and developing its partnership with BP, Exxon, Statoil, Eni.

According to Igor Sechin, in 2017, the Company plans an investment programme of RUB 1.1 trln. Particular focus for the Company will be on building up capacity at the new fields in Russia: developing the Suzunskoye, Lodochnoye, Russkoye, Kuyumbinskoye, Yurubcheno-Tokhomskoye, Srednebotuobinskoye (Taas-Yuryakh) fields, as well as its gas assets: Rospan, Kharampur, and the Kynsko-Chaselskoye field. An investment programme of RUB 1.3 trln is planned for 2018.

Igor Sechin reported that Rosneft’s total budget payments in 2016 amounted to over RUB 3 trln taking into account the funds received from privatization deal. Vladimir Putin agreed on Igor Sechin’s proposal to meet the investors taking part in the privatization deal: Swiss oil trader Glencore, Qatar Investment Fund and Italian bank Intesa, that will brief the President of Russia about the prospects of the work with Rosneft.

Rosneft Information Division
Tel.: + 7 (499) 517-88-97
January 23, 2017