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13. Investments in Associates and Joint Ventures

The Group has several investments in associates and joint ventures. The carrying value of the most significant investments as of December 31, 2012, December 31, 2011 and January 1, 2011 are summarised below:

Ownership percentage

December 31, 2012

December 31, 2011

January 1,
2011

Slavneft

Joint venture

49.9

78,831

72,681

77,642

Tomskneft

Joint venture

50.0

33,741

31,284

33,516

SPD

Joint venture

50.0

45,703

43,316

40,129

SeverEnergy

Associate

25.5

24,285

24,599

26,209

Others

2,527

3,435

1,805

Total investments in associates
and joint ventures

185,087

175,315

179,301

The reconciliation of carrying amount of investments in associates and joint ventures as at the beginning of the reporting period and as at the end of the reporting period is shown below:

2012

2011

Carrying amount as of January 1

175,315

179,301

Share of profit of associates and joint ventures

28,281

6,874

Dividends declared

(18,565)

(12,364)

Fair value of net assets of associates and joint ventures acquired

1,506

Other changes in cost of associates and joint ventures

56

(2)

Carrying amount as of December 31

185,087

175,315

The Group’s share of the profit of equity accounted investments increased to RUB 28,281 million for the year ended December 31, 2012 as compared to RUB 6,874 million for the year ended December 31, 2011 due to the adoption of the 60/66 tax system in the end of 2011 financial year (under which export duty rates on crude oil sales decreased from 65% to 60%), which lead to increases in the domestic price of crude oil. The tax change resulted in an increase in the profit of associated entities selling crude oil domestically.

JSC Slavneft

The Group’s investment in JSC Slavneft and various minority stakes in Slavneft subsidiaries (“Slavneft”) are held through a series of legal entities. The control over Slavneft is divided equally between the Group and TNK-BP.

The following table summarises the financial information of Slavneft as of December 31, 2012, December 31, 2011 and January 1, 2011. Revenue and net income are shown for the year ended December 31, 2012 and 2011:

December 31, 2012

December 31, 2011

January 1, 2011

Current assets

49,939

30,181

35,898

Non-current assets

219,681

209,368

199,910

Total liabilities

118,183

100,047

83,014

Revenues

199,401

157,421

Net income/ (loss)

23,981

(3,230)

JSC Tomskneft VNK

In December 2007 the Group acquired a 50% equity interest in JSC Tomskneft VNK (“Tomskneft”) and its subsidiaries from a subsidiary of OJSC Oil Company Rosneft (“Rosneft”). As part of this transaction, the Group and Rosneft agreed to jointly manage the business operations of Tomskneft and to each purchase their respective share of Tomskneft’s annual production.

The following table summarises the financial information of Tomskneft as of December 31, 2012, December 31, 2011 and January 1, 2011. Revenue and net income are shown for the year ended December 31, 2012 and 2011:

December 31, 2012

December 31, 2011

January 1, 2011

Current assets

22,623

19,462

19,860

Non-current assets

79,335

82,719

81,236

Total liabilities

63,380

61,957

61,797

Revenues

109,497

96,610

Net income

14,156

5,945

Salym Petroleum Development N.V.

As part of the acquisition of Sibir Energy in September 2009 the Group acquired a 50% equity interest in Salym Petroleum Development N.V. (“SPD”). SPD is owned 50% by Sibir and 50% by Shell Salym Development B.V., a member of the Royal Dutch/Shell group of companies. The operations of SPD relate to the development of the Salym group of oil fields located in the Khanti-Mansiysky autonomous region of the Russian Federation.

The following table summarises the financial information of SPD as of December 31, 2012, December 31, 2011 and January 1, 2011. Revenue and net income are shown for the year ended December 31, 2012 and 2011:

December 31, 2012

December 31, 2011

January 1, 2011

Current assets

10,286

12,512

8,971

Non-current assets

27,174

28,670

28,465

Total liabilities

11,864

19,914

24,331

Revenues

76,529

63,366

Net income

17,723

6,437

SeverEnergy LLC

In December 2010 Yamal Razvitie LLC (a 50%:50% joint venture between the Group and JSC Novatek) acquired a 51% equity interest in SeverEnergy LLC (SeverEnergy) from JSC Gazprom. The respective purchase price paid by the Group comprised RUB 28,123 million. SeverEnergy is developing through its subsidiaries the Samburgskoye and Evo-Yakhinskoye oil fields and some other small oil and gas fields located in the Yamalo-Nenetskiy autonomous region of the Russian Federation.

The following table summarises the financial information of SeverEnergy as of December 31, 2012, December 31, 2011 and January 1, 2011. Revenue and net income is shown for the year ended December 31, 2012 and 2011:

December 31, 2012

December 31, 2011

January 1, 2011

Current assets

5,217

5,029

4,923

Non-current assets

184,657

166,165

142,353

Total liabilities

80,558

60,686

37,536

Revenues

5,099

Net loss

(1,231)

(3,703)

Notes in Consolidated Statements:

Consolidated Statement of Financial Position as of December 31, 2012
Consolidated Statement of Cash Flows for the Year Ended December 31, 2012 Back to list

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