(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Revenues | |||
Sales | 1,517,067 | 1,291,596 | 17.5 |
Less export duties and excise tax | (286,801) | (261,793) | 9.6 |
Total revenue | 1,230,266 | 1,029,803 | 19.5 |
Costs and other deductions | |||
Purchases of oil, gas and petroleum products | (430,485) | (314,199) | 37.0 |
Production and manufacturing expenses | (123,367) | (107,523) | 14.7 |
Selling, general and administrative expenses | (66,115) | (51,430) | 28.6 |
Transportation expenses | (93,813) | (81,935) | 14.5 |
Depreciation, depletion and amortization | (58,461) | (55,799) | 4.8 |
Taxes other than income tax | (251,128) | (208,196) | 20.6 |
Exploration expenses | (3,263) | (2,105) | 55.0 |
Total operating expenses | (1,026,632) | (821,187) | 25.0 |
Other (loss) / gain, net | (4,891) | 925 | — |
Operating profit | 198,743 | 209,541 | (5.2) |
Share of profit of equity accounted investments | 28,281 | 6,874 | 311.4 |
Net foreign exchange gain | 953 | 740 | 28.78 |
Finance income | 3,174 | 1,956 | 62.3 |
Finance expense | (11,160) | (11,446) | (2.5) |
Total other income / (expense) | 21,248 | (1,876) | — |
Profit before income tax | 219,991 | 207,665 | 5.9 |
Current income tax expense | (30,085) | (33,728) | (10.8) |
Deferred income tax expense | (5,754) | (6,268) | (8.2) |
Total income tax expense | (35,839) | (39,996) | (10.4) |
Profit for the period | 184,152 | 167,669 | 9.8 |
Less: Profit attributable to non-controlling interest | (7,856) | (7,307) | 7.5 |
Profit attributable to Gazprom Neft | 176,296 | 160,362 | 9.9 |
Revenues
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Crude oil | |||
Export | 195,567 | 153,272 | 27.6 |
Export sales | 346,213 | 304,758 | 13.6 |
Less related export duties | (150,646) | (151,486) | (0.6) |
International markets | 1,740 | — | — |
Export to CIS | 29,783 | 36,259 | (17.9) |
Domestic | 12,988 | 2,052 | 532.9 |
Total crude oil revenue | 240,078 | 191,583 | 25.3 |
Gas | |||
International markets | 6,281 | 5,366 | 17.1 |
Domestic | 17,540 | 12,809 | 36.9 |
Total gas revenue | 23,821 | 18,175 | 31.1 |
Petroleum products | |||
Export | 240,381 | 210,612 | 14.1 |
Export sales | 349,049 | 287,753 | 21.3 |
Less related export duties | (108,668) | (77,141) | 40.9 |
International markets | 69,876 | 66,672 | 4.8 |
Sales on international markets | 92,725 | 91,424 | 1.4 |
Excise | (22,849) | (24,752) | (7.7) |
CIS | 54,539 | 38,394 | 42.1 |
Export sales and sales in CIS | 59,177 | 46,808 | 26.4 |
Less related export duties | (4,638) | (8,414) | (44.9) |
Domestic | 571,020 | 478,172 | 19.4 |
Total petroleum products revenue | 935,816 | 793,850 | 17.9 |
Other revenue | 30,551 | 26,195 | 16.6 |
Total revenue | 1,230,266 | 1,029,803 | 19.5 |
Sales Volumes
| 2012 | 2011 | Change, % |
---|---|---|---|
Crude oil, (MMtonnes)
| |||
Export | 14.12 | 13.08 | 8.0 |
Sales on international markets | 0.07 | — | — |
Export to CIS | 2.50 | 2.99 | (16.4) |
Domestic sales | 1.23 | 0.20 | 515.0 |
Total crude oil sales | 17.92 | 16.27 | 10.1 |
Gas, (bcm)
| |||
International markets | 0.46 | 0.44 | 4.5 |
Domestic sales | 10.50 | 9.31 | 12.8 |
Total gas sales | 10.96 | 9.75 | 12.4 |
Petroleum products, (MMtonnes)
| |||
Export | 14.13 | 12.63 | 11.9 |
Sales on international markets | 2.40 | 2.43 | (1.2) |
Export and sales in CIS | 2.35 | 2.05 | 14.6 |
Domestic sales | 25.10 | 24.29 | 3.3 |
Total petroleum products sales | 43.98 | 41.40 | 6.2 |
Average Realized Sales Prices
| 2012 | 2011 | Change, % |
---|---|---|---|
Crude oil, (RUB per tonne)
| |||
Export | 24,519 | 23,300 | 5.2 |
Export and sales in CIS | 11,913 | 12,127 | (1.8) |
Domestic sales | 10,559 | 10,260 | 2.9 |
Petroleum products | |||
Export | 24,703 | 22,783 | 8.4 |
Sales on international markets | 38,635 | 37,623 | 2.7 |
Export and sales in CIS | 25,182 | 22,833 | 10.3 |
Domestic sales | 22,750 | 19,686 | 15.6 |
Crude Oil Export Sales
- The 13.6% increase in crude export sales year-on-year was driven by a 5.2% increase in realized oil prices and an 8.0% increase in sales volumes resulting from market expansion.
- The year-on-year decrease in crude export and sales in the CIS was the result of the reallocation of crude oil from export to refining at Mozyr.
- Domestic crude oil sales increased following the acquisition of a subsidiary in Orenburg in 4Q 2011.
Petroleum Products Exports
| 2012 | 2011 | Change, % | |||
---|---|---|---|---|---|---|
RUB million | MM tonnes | RUB million | MM tonnes | RUB million | MM tonnes | |
High octane gasoline | 9,827 | 0.32 | 3,444 | 0.13 | 185.3 | 146.2 |
Low octane gasoline | 5,585 | 0.20 | 800 | 0.03 | 598.1 | 566.7 |
Naphtha | 33,809 | 1.19 | 27,479 | 1.00 | 23.0 | 19.0 |
Diesel | 117,812 | 3.93 | 126,351 | 4.66 | (6.8) | (15.7) |
Fuel oil | 129,435 | 6.66 | 110,607 | 6.15 | 17.0 | 8.3 |
Jet fuel | 7,545 | 0.22 | 4,660 | 0.15 | 61.9 | 46.7 |
Other | 45,036 | 1.61 | 14,412 | 0.51 | 212.5 | 215.7 |
Total | 349,049 | 14.13 | 287,753 | 12.63 | 21.3 | 11.9 |
- Gasoline export volumes increased more than three times year-on-year driven by growing refining throughput at the Mozyr refinery.
- Fuel oil export volumes increased 8.3% driven by growing refining throughput combined with decreased domestic sales.
- Jet fuel export volumes increased 46.7% driven by the growing jet fueling network: 35 new airports in 11 countries – Croatia, Ethiopia, Latvia, the Maldives, Nicaragua, Portugal, the Seychelles, Uganda, the United Kingdom, the United States and Vietnam.
- Diesel export volumes decreased 15.7% due to growing domestic demand.
Petroleum Products Sales on International Markets
Sales of petroleum products on international markets increased 1.4% year-on-year driven by a 2.7% increase in prices.
Petroleum Products Export and Sales in CIS
| 2012 | 2011 | Change, % | |||
---|---|---|---|---|---|---|
RUB million | MM tonnes | RUB million | MM tonnes | RUB million | MM tonnes | |
High octane gasoline | 18,928 | 0.65 | 15,564 | 0.57 | 21.6 | 14.0 |
Low octane gasoline | 4,785 | 0.19 | 4,401 | 0.23 | 8.7 | (17.4) |
Naphtha | 1,012 | 0.06 | 2,396 | 0.11 | (57.8) | (45.5) |
Diesel | 14,346 | 0.54 | 14,055 | 0.58 | 2.1 | (6.9) |
Fuel oil | 2,842 | 0.23 | 952 | 0.08 | 198.5 | 187.5 |
Jet fuel | 9,074 | 0.23 | 2,696 | 0.11 | 236.6 | 109.1 |
Other | 8,190 | 0.45 | 6,744 | 0.37 | 21.4 | 21.6 |
Total | 59,177 | 2.35 | 46,808 | 2.05 | 26.4 | 14.6 |
- Fuel oil volumes sold in the CIS increased nearly threefold driven by increased sales in Kazakhstan.
- Jet fuel volumes sold in the CIS more than doubled because of an expanded sales network.
Domestic Sales of Petroleum Products
| 2012 | 2011 | Change, % | |||
---|---|---|---|---|---|---|
RUB million | MM tonnes | RUB million | MM tonnes | RUB million | MM tonnes | |
High octane gasoline | 214,569 | 7.71 | 180,123 | 7.11 | 19.1 | 8.4 |
Low octane gasoline | 9,147 | 0.37 | 16,771 | 0.74 | (45.5) | (50.0) |
Diesel | 183,501 | 7.38 | 139,954 | 6.66 | 31.1 | 10.8 |
Fuel oil | 21,000 | 1.91 | 44,119 | 3.72 | (52.4) | (48.7) |
Jet fuel | 62,019 | 2.65 | 49,305 | 2.50 | 25.8 | 6.0 |
Other | 80,784 | 5.08 | 47,900 | 3.56 | 68.7 | 42.7 |
Total | 571,020 | 25.10 | 478,172 | 24.29 | 19.4 | 3.3 |
- Domestic sales volumes increased 3.3% driven by increased refining throughput.
- The 50.0% and 48.7% decrease in volume of sales of low octane gasoline and fuel oil, respectively, were caused by the reallocation of volumes to export due to decreasing domestic demand for these products.
Other Revenue
Other revenue includes, primarily, revenue from transport, construction and other services.
The increase in other revenue of 16.6% was primarily driven by changes in volumes sold.
Purchases of Oil, Gas and Petroleum Products
Purchases of oil, gas and petroleum products increased 37.0% primarily due to an increase in volume of crude oil purchased on international and domestic markets.
Production and Manufacturing Expenses
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Upstream expenses | 50,911 | 47,795 | 6.5 |
RUB per toe of production | 1,263 | 1,262 | 0.0 |
USD per boe | 5.54 | 5.86 | (5.5) |
Downstream expenses | 32,737 | 27,010 | 21.2 |
Refining expenses at own refineries | 17,602 | 15,815 | 11.3 |
RUB per tonne | 521 | 478 | 9.1 |
USD per boe | 2.29 | 2.22 | 3.1 |
Refining expenses at equity associates' refineries | 10,530 | 7,897 | 33.3 |
RUB per tonne | 1,099 | 1,069 | 2.9 |
USD per boe | 4.82 | 4.96 | (2.8) |
Lubricants manufacturing expenses | 4,605 | 3,298 | 39.6 |
Transportation expenses to refineries | 21,946 | 17,786 | 23.4 |
Other operating expenses | 17,773 | 14,932 | 19.0 |
Total | 123,367 | 107,523 | 14.7 |
- Upstream expenses include expenditure on raw materials and supplies, maintenance and repairs of extraction equipment, labor costs, fuel and electricity costs, activities to enhance oil recovery, and other similar costs at the Group's Upstream subsidiaries.
- Upstream expenses increased 6.5% year-on-year due to increased hydrocarbon production and the acquisition of the Orenburg assets.
- Refining expenses at our own refineries include expenditure on raw materials and supplies, maintenance and repairs of production equipment, labor and electricity costs, and other similar costs.
- Refining expenses at our own refineries increased 11.3% year-on-year primarily due to natural monopolies charging higher tariffs, the launch of new processing units at Omsk, and scheduled maintenance at the primary refining unit in Moscow (performed every two years).
- Refining expenses at equity associates' refineries increased 33.3% year-on-year due to higher throughput at the Yaroslavl and Mozyr refineries.
- Lubricants manufacturing expenses increased 39.6% year-on-year due to differences in maintenance schedules at the Omsk lubricants plant, and increased production of packaged lubricants.
- Transportation expenses to refineries increased 23.4% year-on-year due to 7.0% higher refining throughput and increases in tariffs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include general business expenses, wages, salaries (except wages and salaries at our production and refining subsidiaries), insurance, banking commissions, legal fees, consulting and audit services, allowances for doubtful accounts and other expenses.
- Selling, general and administrative expenses increased by 28.6% year-on-year due to business expansion, including higher premium sales, and inflation.
Transportation Expenses
Transportation expenses include costs to transport crude oil and petroleum products to end customers. These costs consist of pipeline transportation, sea freight, railroad, shipping, handling, and other transportation costs.
- The increase in transportation expenses year-on-year was driven by higher tariffs and increased sales volumes.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization expenses include depreciation of oil and gas properties, refining and other assets.
- Depreciation, depletion and amortization expenses increased 4.8% year-on-year in line with the increase in depreciable assets driven by capital expenditure.
Taxes Other than Income Tax
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Mineral extraction taxes | 156,164 | 133,335 | 17.1 |
Excise | 76,408 | 58,308 | 31.0 |
Property tax | 7,029 | 6,140 | 14.5 |
Other taxes | 11,527 | 10,413 | 10.7 |
Total taxes other than income tax | 251,128 | 208,196 | 20.6 |
- Mineral extraction tax (MET) expenses increased 17.1% year-on-year due to higher tax rates for both gas and crude oil:
- The MET rate for gas doubled from January 1, 2012; and
- The MET rate for crude oil increased in proportion to oil prices, and the base rate also increased from 419 RUB/tonne to 446 RUB/tonne.
- Excise tax expenses increased 31.0% year-on-year due to the introduction of higher rates on January 1, 2012. Excise rates on gasoline increased 31%, naphtha 28%, diesel 55% and lubricants 30%.
Share of Profit of Equity Associates
| 2012 | 2011 | Change, % |
---|---|---|---|
Share of profit / (loss) of Slavneft | 12,229 | (140) | — |
Share of profit of Tomskneft | 7,078 | 2,972 | 138.2 |
Share of profit of SPD | 8,436 | 3,188 | 164.6 |
Share of loss of SE | (170) | (294) | (42.2) |
Share of profit of other companies | 708 | 1,148 | (38.3) |
Share of profit of equity accounted investments | 28,281 | 6,874 | 311.4 |
- The Group’s share of profit of equity investments increased more than fourfold due to the adoption of the 60/66 tax regime in 4Q 2011 (the regime reduced export duty rates for crude oil from 65% to 60%), which resulted in higher domestic crude oil prices and consequently an increase in the profit of associated entities selling crude oil domestically.
Other Financial Items
- Foreign exchange gains/losses were mainly driven by a revaluation of the portion of the Group’s debt portfolio that is denominated in foreign currencies.
- Finance income increased year-on-year due to more efficient cash management.
- Finance expenses declined 2.5% year-on-year as a result of the Group’s success in reducing its effective interest rate.
Liquidity and Capital Resources
Cash Flows
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Net cash provided by operating activities | 231,073 | 180,871 | 27.8 |
Net cash used in investing activities | (166,615) | (142,289) | 17.1 |
Net cash used in financing activities | (16,032) | (45,505) | (64.8) |
Net increase/(decrease) of cash and cash equivalents | 48,426 | (6,923) | — |
Net Cash Provided by Operating Activities
(RUB million) |
2012 |
2011 | Change, % |
---|---|---|---|
Net cash provided by operating activities before changes in working capital | 259,034 | 277,321 | (6.6) |
Net changes in working capital | (9,179) | (57,302) | (84.0) |
Income tax paid | (25,361) | (43,047) | (41.1) |
Interest paid | (11,302) | (9,657) | 17.0 |
Dividends received | 17,881 | 13,556 | 31.9 |
Net cash provided by operating activities | 231,073 | 180,871 | 27.8 |
- Net cash provided by operating activities increased 27.8% year-on-year due to a 9.9% increase in profit and improved working capital management.
Net Cash Used in Investing Activities
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Capital expenditures | (158,102) | (130,788) | 20.9 |
Acquisition of subsidiaries and shares in equity affiliates | (2,261) | (17,745) | (87.3) |
Net changes in deposits | (4,239) | 3,395 | — |
Other transactions | (2,013) | 2,849 | — |
Net cash used in investing activities | (166,615) | (142,289) | 17.1 |
- Net cash used in investing activities increased 17.1% year-on-year RUB million due to:
- 20.9% increase in capital expenditure;
- Decreased cash used in M&A activities. In the 4Q 2011 the Company acquired the Orenburg assets, but did not make similar expenditures in 2012; and
- Increased volume of cash deposited in banks (there were net withdrawals in 2011).
Net Cash Used in Financing Activities
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Net changes in debt | 25,418 | 8,334 | 205.0 |
Payment of dividends to shareholders | (34,433) | (29,157) | 18.1 |
Acquisition of non-controlling interest in subsidiaries | (5,572) | (23,722) | (76.5) |
Other transactions | (1,445) | (960) | 50.5 |
Net cash used in financing activities | (16,032) | (45,505) | (64.8) |
- Net cash used in financing activities decreased 64.8% year-on-year mainly due to the acquisition of non-controlling interests (mostly in NIS and Sibir Energy) during 2011 to the amount of RUB 23,722 million. There were no significant transactions in 2012.
Capital Expenditure
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Exploration and production | 90,812 | 70,606 | 28.6 |
Refining | 41,844 | 31,227 | 34.0 |
Marketing and distribution | 16,224 | 16,259 | (0.2) |
Others | 9,802 | 7,102 | 38.0 |
Subtotal capital expenditure | 158,682 | 125,194 | 26.7 |
Change in advances issued and material used in capital expenditures | (580) | 5,594 | — |
Total capital expenditure | 158,102 | 130,788 | 20.9 |
- Capital expenditures for Exploration and Production increased 28.6% year-on-year mostly due to the development of the Orenburg assets. The focus on drilling more expensive horizontal wells also led to increased capital expenditures.
- Capital expenditure for refining increased 34.0% year-on-year mostly due to the construction of the isomerization unit and catalytic cracking gasoline hydrotreating unit and the reconstruction of the diesel hydrotreating unit at the Moscow refinery.
Debt and Liquidity
(RUB million) | 2012 | 2011 | Change, % |
---|---|---|---|
Short-term loans and borrowings | 66,195 | 44,330 | 49.3 |
Long-term loans and borrowings | 166,417 | 176,979 | 6.0 |
Cash and cash equivalents | (76,012) | (29,435) | 158.2 |
Short-term deposits | (7,495) | (246) | 2,946.7 |
Net debt | 149,105 | 191,628 | (22.2) |
Short-term debt / total debt, % | 28.5 | 20.0 | 8,5 pp |
Net debt / EBITDA | 0.51 | 0.71 |
- The Group has a diversified debt structure that includes pre-export financing, syndicated and bilateral loans, bonds, and other instruments.
- The average maturity of the Group’s debt increased from 2.68 years in 4Q 2011 to 3.81 years in 4Q 2012 as a result of the USD 1.5 billion 10-year Eurobonds issued in September 2012. However, this also resulted in a slight increase in the average interest rate to 3.48% as at December 31, 2012.