Gazprom Neft · RUS:SIBN
Gazprom Neft — Sibneft — Brunswick UBS Warburg one-on-one Conference, New York 2003
35 slides from Gazprom Neft's conference presentation, 2003
Slide 1: Brunswick UBS Warburg one-on-one Conference New York, 2003
Brunswick UBS Warburg one-on-one Conference New York, 2003
Slide 2: Sibneft: a Leader in the Oil Industry and on Financial Markets
Sibneft: a Leader in the Oil Industry and on Financial Markets
Slide 3: Industry Leader in 2002
Industry Leader in 2002 ¾ 2002 RTS stock market leader: Sibneft showed a 202 % return versus 34 % for the RTSI index and about 55% for the RTS Oil sector index.. ¾ 2002 production growth leader: Sibneft moved into 5th place in terms of production and was the absolute leader in terms of production gr
Slide 4: Full-Year 2002 Operating Results and 2003 Forecasts
Full-Year 2002 Operating Results and 2003 Forecasts ¾ Production : 26.344 mln. tons (520,000 b.p.d.), up 27.4% y.o.y. 2003 target - 33.0 mln.tons. ¾ Total drilling was about 860,000 meters, down slightly from the previous year, as more attention was focused on 3D seismic (a record 939 sq. km acquire
Slide 5: Stock Market Leader in 2002
09 .0 0 100 200 300 400 500 600 700 05 1.95 .0 05 4.9 .0 5 28 7.95 .0 28 9.9 .1 5 02 2.95 .0 02 4.96 .0 26 7.9 .0 6 25 9.96 .1 26 2.9 .0 6 25 3.97 .0 18 6.9 .0 7 19 9.97 .1 25 2.97 .0 26 3.9 .0 8 23 6.98 .0 21 9.9 .1 8 Stock Market Leader in 2002 22 2.98 .0 24 3.99 .0 21 6.9 .0 9 17 9.99 .1 21 2.9 .
Slide 6: Bond Market Leader in 2002
100 101 102 103 104 105 106 107 108 01.10.02 08.10.02 15.10.02 22.10.02 29.10.02 05.11.02 12.11.02 Sibneft maturity 2009 Sibneft maturity 2007 Bond Market Leader in 2002 19.11.02 26.11.02 03.12.02 10.12.02 17.12.02 24.12.02 31.12.02 07.01.03 14.01.03 21.01.03
Slide 7: Sibneft 2002 Financial Results Guidance
Sibneft 2002 Financial Results Guidance
Slide 8: Preliminary 2002 Financial Results and 2003 Expectations
Preliminary 2002 Financial Results and 2003 Expectations (mln.USD) 2001 2002 y.o.y. % Revenues from 3 449 4 835 + 40.1% oil and gas sales EBITDA 1 719 1 775 + 3.2% Net income 1 305 1 050 -19.5% Total Debt 923 2 175 2001 2002 2003 (est.) CapEx 619 880 925 Upstream 534 680 690 Downstream 85 200 235
Slide 9: Preliminary 2002 Financial Results and 2003 Expectations
Preliminary 2002 Financial Results and 2003 Expectations ¾ Factors driving Revenue growth: 9 Production increase, 9 Export growth, 9 Average world market crude price higher. ¾ Factors hindering Revenue growth: 9 Fall in domestic oil product prices during 1H 2002. ¾ Factors hindering EBITDA growth: 9
Slide 10: Preliminary 2002 Revenue Breakdown
Preliminary 2002 Revenue Breakdown (mln. USD) 2001 2002 est. Crude exports 1 191 1 790 Oil product exports 548 710 Crude domestic 19 180 Oil product domestic 1 487 1 620 Siboil resale 203 535 Total revenues from oil 3 449 4 835 and gas sales
Slide 11: Debt Position at Year-End 2002
Debt Position at Year-End 2002 Total debt position 2.175 bln. USD of which … amount rate maturity Eurobond 1 400 mln. USD 11% 2007 Eurobond 2 500 mln. USD 10.75% 2009 Trade finance: Citibank, BNP 360 mln. USD Libor + 3.5% 3.5 years Paribas, WestLB WestLB 90 mln. USD Libor + 3.5% 3.5 years Citibank,
Slide 12: Sibneft's Strategy: Strong Today, Stronger Tomorrow
Sibneft’s Strategy: Strong Today, Stronger Tomorrow
Slide 13: Long Term Production Growth Targets
Long Term Production Growth Targets (mln. tons/year) 70 60 Ne w Acquisitions to 50 compe nsate for Re se rve De ple tion 40 30 the re is a goal to incre ase Rese rve 20 by 2010 Re se rve Re cove ry Ratio to 0.40 Curre nt Rese rve Re cove ry Ratio is 10 Re cove ry Ratio = e xpecte d to grow to 0.33 0
Slide 14: Our Reserves Policy
Our Reserves Policy ¾ Sibneft’s policy is not to drill as much as we can, but to drill effectively. ¾ Our exploration drilling is decreasing, but we are substantially increasing 3D seismic, which leads to more effective production wells. 35 1,000 900 30 800 25 700 600 20 500 15 400 10 300 200 5 100
Slide 15: Production Growth in 2002. Plans for 2003.
Production Growth in 2002. Plans for 2003. ¾ Production rose on “green” and “brown” oil fields. ¾ More then 40 horizontal wells drilled in 2002. Drilling 50 horizontal wells is planned in 2003. ¾ Every year Sibneft does about 200 hydrofracking operations. This increase the well productivity from 20
Slide 16: Productivity Kept High, Water Cut Kept Low
Productivity Kept High, Water Cut Kept Low 90 70% 80 68% 70 ton per well per day 66% 60 50 64% 40 62% 30 60% 20 58% 10 0 56% 1996 1997 1998 1999 2000 2001 2002 Daily Flow, ton per well per day New Wells Daily Flow, ton per well per day Water cut, %
Slide 17: Well Productivity Up, Costs Under Control
Well Productivity Up, Costs Under Control 100 3.76 4,0 90 3,5 80 3,0 ton per well per day 70 2.61 60 2,5 USD per barrel 1.75 50 1.70 1H 2002 Lifting 2,0 Costs = $1.52/ bbl. 40 1,5 30 0.95 1,0 20 10 0,5 0 0,0 1997 1998 1999 2000 2001 2002 Materials & Supplies Utilities Transport Salaries Workovers Ot
Slide 18: Refining: Omsk + Moscow
Refining: Omsk + Moscow ¾ Stable volumes at the Omsk Refinery. Total 2002 throughput was 13.26 mln. tons. Refining depth has reached 83.2%, the highest in Russia. ¾ Sibneft acquired 37% of the Moscow Refinery in late 2001. In 2002, Sibneft processed an additional 2.55 mln. tons of crude in Moscow, o
Slide 19: Retail Expansion: Moscow and Beyond
Retail Expansion: Moscow and Beyond ¾ By the end of 2002, Sibneft had 20 proprietary petrol stations in Moscow and the Moscow region and 26 operating under franchise agreements. ¾ By the end of 2002, our share of the Moscow retail market was about 4 – 5%, up from zero in 2001. TNK 16,5% Other Tatnef
Slide 20: Slavneft Auction – Valuable New Asset in Our Portfolio
Slavneft Auction – Valuable New Asset in Our Portfolio
Slide 21: Slavneft Auction Terms and Results
Slavneft Auction Terms and Results ¾ Slavneft – charter capital of 4.7542 million RUR. of 4.7542 billion voting shares of 0.001 face value. ¾ Stake privatized – 74.95%. Starting value – USD 1.7 billion. Auction price USD 1.86 billion ¾ Current Slavneft Market Capitalization – USD 2.377 billion, assu
Slide 22: Valuation Comparisons
Valuation Comparisons EV/ Reserves EV/ Production** EV/ EBITDA** USD/ bbl. USD/ bbl. USD LUKoil 1.00 28.70 3.80 YUKOS 1.30 36.60 4.00 Surgut 1.00 26.83 3.40 TNK 0.90 24.60 3.10 Sibneft 2.40 57.90 6.30 Russian Top 5 1.32 34.93 4.12 Petrobras 2.80 42.90 4.20 Petrochina 2.60 51.50 3.40 NewCo (BP reserv
Slide 23: The New Sibneft
The New Sibneft Russia’s fastest-growing oil producer. ¾ Reserves up 24% 9 6.057 billion b.o.e. vs. 4.887 billion b.o.e. before Slavneft acquisition ¾ Production - No. 5 oil producer in Russia 9 Estimated 2003 production of 41 mln. tons (810,000 bpd) 9 56% increase from 26.3 mln. tons for Sibneft in
Slide 24: Slavneft Acquisition
Slavneft Acquisition Slavneft is 14 –15 mln. tons of production, about 700 mln. tons of ABC1 reserves, 12 mln. tons of refining throughput in Russia and 6 mln. tons in Belarus, about 550 filling stations in the European part of Russia.
Slide 25: Reserve Position
Reserve Position (mln. bbl. of proved oil reserves) Rosneft Tatneft Sibneft + 50% Slavneft* SurgutNG NewCo (BP-TNK) YUKOS LUKoil 0 2000 4000 6000 8000 10000 12000 14000 16000 * Slavneft reserves taken as 50% of ABC1 (Russian) reserves
Slide 26: Production Position (mln. tons, 2002)
Production Position (mln. tons, 2002) Bashneft Rosneft Tatneft Sibneft + 50% Slavneft SurgutNG NewCo (BP-TNK) YUKOS LUKoil 0 10 20 30 40 50 60 70 80
Slide 27: Refining Throughput (mln. tons, 2002)
Refining Throughput (mln. tons, 2002) Rosneft Moscow NPZ SurgutNG BashNKhimzavody NewCo (BP-TNK) Sibneft + 37% MNPZ + 50% Slavneft YUKOS LUKoil 0 5 10 15 20 25 30 35
Slide 28: Retail Position
Retail Position (number of filling stations, own and franchise, Russia only) Surgut Tatneft Slavneft NewCo (BP-TNK) Sibneft + 50% Slavneft YUKOS LUKoil 0 200 400 600 800 1000 1200 1400 1600
Slide 29: Slavneft Strategy for Next 2 Years
Slavneft Strategy for Next 2 Years ¾ Our target in Slavneft production management is to cut total drilling and substitute it with more sophisticated FDPs (Field Development Plans), including seismic, hydrodynamic modeling, etc. ¾ We will apply horizontal drilling and reservoir stimulating operations
Slide 30: Slavneft Acquired at Attractive Valuation
Slavneft Acquired at Attractive Valuation ¾ Investors set a higher value per barrel for Sibneft reserves and production because they believe Sibneft can transform through lower costs and faster growth. We believe Sibneft can realize similar potential in Slavneft. ¾ We believe that there is: 9 unreal
Slide 31: Room for Improvement – Sibneft's Upside
Room for Improvement – Sibneft’s Upside Lifting Costs ($/bbl) ¾ Lifting Costs 2.5 2 9 Slavneft’s lifting costs 1.5 were about $2.2/bbl in 1 2002, compared to 0.5 $1.7 for Sibneft. 0 2001 2002 2003e Sibneft - Slavneft Well Productivity (tons/well/day) ¾ Well Productivity 100 80 9 Sibneft well 60 prod
Slide 32: Daily Production, thousand ton per day
Daily Production, thousand ton per day 01 .0 1. 29000 30000 31000 32000 33000 34000 35000 36000 37000 38000 39000 01 98 .0 3. 01 98 .0 5. 01 98 .0 7. 01 98 .0 9. 01 98 .1 1. 01 98 .0 1. 01 99 .0 3. 01 99 .0 5. 01 99 .0 7. 01 99 .0 9. 01 99 .1 1. 01 99 .0 1. 01 00 .0 3. 01 00 .0 5. Progress Already S
Slide 33: Building a New Slavneft: Same Approach – New Company
Building a New Slavneft: Same Approach – New Company Modern oil company Breaking through to where Sibneft is now … Restructuring Taking control Portfolio of legacy assets 2002 - 2003 2003 - 2005 2005 - …
Slide 34: Maximizing Returns for Both Companies
Maximizing Returns for Both Companies PLANNING RESERVOIR PEOPLE MANAGEMENT OUTSOURCING TECHNOLOGIES OF SERVICES
Slide 35: Any statement made or opinion expressed in the presentation by Sibneft, including any slides
Any statement made or opinion expressed in the presentation by Sibneft, including any slides shown, are those of Sibneft only and not Brunswick UBS Warburg. Brunswick UBS Warburg was not involved in the preparation of these materials and Brunswick UBS assumes no responsibility for the presentation.
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