Information Note on the Annual Shareholders' Meeting of OJSC Rosneft Oil Company, June 10, 2011
 Information for Shareholders’ Meeting
Final press release
Media coverage (Russian)
Media coverage (English)
On June 10, 2011, the annual general meeting of Rosneft shareholders took place in Krasnodar. The meeting was attended by holders of 97.39 percent of shares in the Company.
As last year, Yuri Petrov, head of the Federal Property Agency, opened the meeting. Shareholders were invited to 10 items on the agenda.
- Approval of the annual report of the company.
- Approval of annual financial statements, including profits and losses accounts of the Company.
- Approval of distribution of profits based on the result of 2010.
- Size, timing, and form of payment of dividends for 2010.
- Remuneration and expenses of members of the Board of Directors.
- Election of members of the Board of Directors of the Company.
- Election of the Internal Audit Committee.
- Approval of the external auditor of the Company.
- Amendments to the charter of the Company
- Approval of related party transactions.
Rosneft President Eduard Khudainatov addressed the first and sixth issue; Chief Accountant Sun Ne Kim spoke on the second; First Vice President Pavel Fedorov addressed the third, forth, fifth, and eighth items; and Vice President Larisa Kalanda informed shareholders on the seventh, ninth, and tenth items.
President of Rosneft Eduard Khudainatov spoke of the results of the Company’s activities and of its plans, noting that the future of any company in the oil and gas industry depends on the size and quality of its resource base. According to an international audit, at the end of 2010, Rosneft reserves amounted to the equivalent of 3.123 billion tons of oil.
“The oil reserves as they stand today are enough to keep the company going for 21 years at the current level of production. No other public company in the global oil and gas industry can match this. Rosneft’s significantly surpasses ExxonMobil and ChinaOil in terms of reserves of liquid hydrocarbons,” the president stressed.
In 2010, Rosneft invested 22.5 billion rubles in exploration and received 25 licenses for the discovery of new deposits. The company currently has 572 licenses for exploration and production, of which 17 sites are located on Russia’s continental shelf. Gas reserves to Russian reporting standards are upwards of 3.115 trillion cubic meters.
The growth of Rosneft reserves at the end of 2010 exceded output by 6 per cent. Khudainatov noted that the growth of reserves to Russian reporting standards had reached 163 million tons of oil and 66 billion cubic meters of gas.
The president also pointed out that last year Rosneft had discovered two major oil and gas fields in the Irkutsk Region: Sanarskoye and named after Lisovsky with reserves of 171 million tons of oil.
Khudainatov paid special attention to the issue of Rosneft capitalization, which could increase by $100 billion in the medium-term. “There is potential for $200 billion, it is obvious, so we are building our strategy on this,” he said. Attaining this goal will require achieving four priority tasks: increasing oil and gas production, introducing an advanced business model, upgrading refineries and developing our petrochemical capacity as well as increasing the efficiency of sales of crude oil and petroleum products. This year alone, investments will reach 507.1 billion rubles. “Successful implementation of the plans to upgrade refining facilities that would allow Rosneft to achieve compliance with Euro 5 production standards by 2015 may have a positive impact on the company’s capitalization. Upgrading the refineries will have a dramatic effect on our economics,” the president said.
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Additionally, the implementation of development projects in the Arctic will be of great importance to the company. “Drilling just one well in the Arctic could fundamentally change the view of our company and its valuation. This is what say not only our geologists but also those from around the world,” Khudainatov said.
The president stressed that successful completion of the tasks the company set out to achieve will allow Rosneft to become a global energy corporation.
The meeting approved the Annual Report and Accounts and the distribution of Rosneft’s net profit for 2010. It was decided to allocate 15.2% of non-consolidated net income – that is, 29,251 million rubles (2.76 rubles per ordinary share) – towards the 2010 dividend. The approved dividend payment was 20% higher than for 2009. Dividends will be paid simultaneously to all shareholders no later than August 9, 2011.
Shareholders also elected a new nine-member Board of Directors:
- Vladimir Bogdanov, General Director of Surgutneftegaz;
- Andrei Kostin, President and CEO of VTB Bank;
- Alexander Nekipelov, Vice President of the Russian Academy of Sciences;
- Yuri Petrov, Head of the Federal Agency for State Property Management;
- Hans-Joerg Rudloff, Chairman of Barclays Capital;
- Nikolai Tokarev, President and Chairman of Transneft;
- Eduard Khudainatov, President of Rosneft;
- Sergei Shishin, Senior Vice President of VTB Bank;
- Dmitry Shugayev, Deputy Director General of Rostekhnologii;
The meeting also approved the composition of the Company's five-member Internal Audit Committee, nominated CJSC Audit consulting Group Business Systems Development as auditor of the Company's 2011 RAS Annual Accounts and decided to remunerate the work of independent directors. It also approved a series of related-party transactions. Additionally, changes to the Company Charter were made spelling out the dividend payment procedure.
At the final press conference, newly-elected Chairman of the Board of Directors Alexander Nekipelov and President Eduard Khudainatov took questions from journalists.
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