Development prospects and strategy
Rosneft has set itself the goals of strengthening its position among leading global energy corporations, maintaining prime positions by operating indicators, and entering the top group by financial indicators and level of capitalization.
Achievement of these goals will require:
- continuous improvement of efficiency in all aspects of Company business;
- sustainable business growth;
- greater information transparency and openness;
- a high level of social responsibility;
- development and application of new technologies.
The rapid development of the Company in recent years has created great potential for sustainable growth and systematic implementation of strategic tasks. The best guarantees of Rosneft’s future success are its unique size and the quality of its resource base, highly qualified personnel, and an efficient system of innovative development.
Main strategic priorities
Sustainable growth of crude oil production
Rosneft is committed to sustainable growth of oil production, based on the assumption of a favourable macroeconomic environment and optimal tax regime. The Company’s strategic priority is efficient reserve extraction and achievement of the highest possible recovery factor at its fields.
Production growth in the short and medium term will be concentrated at fields in Eastern Siberia. The main project in this region is the Vankor field, which was brought into production in 2009. Target output level at the field, which should be achieved in the next few years, is 25 mln tonnes (the output figure in 2010 was 12 mln tonnes).
The Company’s other main field in Eastern Siberia is the Yurubcheno-Tokhomskoye field with annual output potential of 7.5 mln tonnes. However, further implementation depends on an optimal taxation system being in place. Rosneft discovered four large fields in Eastern Siberia during 2009-2010 with overall reserves of 425 mln tonnes of oil under Russian C1 and C2 classifications. Development of these fields is the next task for the Company.
The Company’s traditional production regions of Western Siberia and Central Russia still have much potential and will remain fundamental to Rosneft’s business in the medium term. The main emphasis in these regions will be on efficient reserve development, application of new technologies in extraction from complex reservoirs, and additional exploration using the latest methods.
Rosneft is constantly expanding its resource base to ensure sustainable growth of production in the long term, and a large-scale geological exploration program is underway in new regions. Eastern Siberia and the Black Sea are of particular importance for resource expansion and Arctic shelf resources will play a key role in the more distant future. The Company acquired its first licenses for exploration and development of Arctic shelf resources in 2010.
Monetization of gas reserves
Rosneft has about 800 bln cubic meters of proved gas reserves under international classification and only 24% of these reserves are being developed at the present time. So development in the gas sector and monetization of reserves is a priority for the Company.
Rosneft has the potential to produce 55 bln cubic meters of gas each year. The main source of production growth would be the Kharampurskoye field in Western Siberia, which contains 50% of Rosneft’s proved gas reserves.
Monetization of gas reserves is supported by Rosneft’s ongoing program for increasing use of associated oil gas to a level of 95%. Greater use of associated gas is also necessary in order to ensure compliance with Russian legislation.
Refining and marketing development
The main challenges for Rosneft in the refining and marketing sector are to achieve sustainable growth of quantitative and qualitative indicators and comply with new compulsory product standards.
The Company is systematically implementing a large-scale plan for modernization of its refineries to achieve greater refining depth and improve output qualities. The modernization will lead to more efficient use of raw hydrocarbons, increased value-added on petroleum products and compliance with the latest environmental standards (Euro-4 and Euro-5), as well as expansion of the range of products, which the Company offers.
The largest of Rosneft’s current projects for enlargement of refining capacity is the upgrading of the Tuapse Refinery, where capacity will be increased from 5 to 12 mln tonnes. It was decided in 2010 to proceed with construction of a 3.4 mln tonne petrochemical plant in the Russian Far East and a new oil refinery with 1 mln tonnes capacity in the city of Grozny (southern Russia). Agreement was also reached on acquisition of 50% of Ruhr Oel GmbH, which owns stakes in four oil refineries in Germany, and a ceremony was held to mark the start of construction of a refinery in China with 13 mln tonnes capacity.
Rosneft is continually expanding, optimizing and modernizing its filling station network, and developing its business in the new segments of bunkering and aircraft refuelingrefueling , in order to maximize benefits from vertical integration.
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