Rosneft’s EBITDA amounted to USD 5,283 million in Q3 2011, which is an increase of 13.9% year-on-year. An increase in the tax burden, particularly due to annulment of a reduced export duty for Vankor crude and the end of Vankor MET holidays, put downward pressure on the figure. The increase was also tempered by higher transportation and electricity tariffs year-on-year. Stringent spending control and important optimization measures had a positive impact on Q3 EBITDA.
In Q3 2011, Rosneft’s average crude oil output (including production by subsidiaries and share in production by affiliates) increased by 2.9% year-on-year, reaching a record 2.4 million barrels per day. The increase reflects higher production at the Vankor field, at Yuganskneftegaz, Samaraneftegaz and as part of the Sakhalin-1 project, as well as at the Verkhnechonsk field.
Petroleum product output by Rosneft was 15 million tons in Q3 2011, which is 21% higher year-on-year. The growth reflects the acquisition by Rosneft of a 50% stake in Ruhr Oel GmbH, which owns stakes in four German refineries.
Commenting on the results, Rosneft’s President Eduard Khudainatov said:
“The results for the third quarter are of fundamental importance for Rosneft, as they demonstrate a significant leap forward for the Company in three key areas.
Firstly, we concluded a landmark agreement with ExxonMobil, a global oil and gas industry leader. Our partners not only confirmed their commitment to invest in joint projects but are also ready to share and exchange the latest technologies and experience from international projects. This will give Rosneft the competitive edge in offshore operations and at deposits with unconventional reserves.
Secondly, Rosneft developed a new management model for the commercial block that envisages greater application of the crude oil swap mechanism, increasing efficiency of our sales network and also cutting expenses across the Company to maintain Rosneft’s policy of moderate pricing. The new operation model has been in place since July 2011, and initial results have shown that the new approach will offer a further boost to drive strategic growth and enhance sales efficiency. In the third quarter alone the new model secured an additional USD 400 million of income for the Company’s shareholders compared to the second quarter.
Thirdly, we continue to make strategic hires across key divisions, such as exploration, business development, marketing and sales and logistics, and have recently hired skilled specialists from leading global companies and top Russian experts, a practice we intend to continue.
Despite our strategic achievements, and also the fact that Rosneft’s operating income in the third quarter was 10% higher than market expectations, we understand that this is only the beginning of our journey. We will continue to make every effort to ensure the best results for Rosneft shareholders.”