Gas Business

Rosneft’s strategic goal in gas business development involves a consistent increase in the Company’s shareholder value through higher gas production, supported by a highly efficient long-term sales portfolio.

In 2017, Rosneft maintained its leadership position in daily production among independent Russian gas producersSource: CDU TEK.. The Company is developing vast gas reserves in Western and Eastern Siberia, holding a unique license portfolio for hydrocarbon resource development on the Russian continental shelf.

Rosneft produces gas using the resources of more than thirty subsidiaries and joint companies in Western and Eastern Siberia, Central Russia, the south of European Russia, the Far East, as well as in Vietnam, Venezuela, Egypt, and Canada.

АВ1С1+В2С2 recoverable gas reserves as at 1 January 2018 reached 7.9 tcm, representing a 4% year-on-year growth. The greatest gas reserve increase under the Russian classification was secured by updating the Oskobin suite deposits structure in the Yurubchensky subsoil area of the Yurubcheno-Tokhomskoye field upon completion of the exploration program.

Implementing Russian gas projects, entering foreign gas markets, and becoming a global player on the international LNG market is one of Rosneft’s major objectives.

Construction of a tank farm

ACHIEVEMENTS IN GAS BUSINESS DEVELOPMENT

STRATEGY

  • In December 2017, the Company’s Board of Directors approved the Rosneft-2022 Strategy aimed at quantum changes in the Company's business by introducing advanced management approaches and new technologies, and on increasing returns on the Company’s existing assets

GAS PRODUCTION

  • In 2017, Rosneft maintained its leadership position in daily production among independent Russian gas producers
  • Gas production grew by 2.0% compared to 2016
  • Rosneft is continuing its program for increasing APG utilization rates, which remained high in 2017 at 89.2%, while a number of subsidiaries reached 93–97%

EXPLORATION AND RESOURCE BASE DEVELOPMENT

  • Recoverable АВ1С1+В2С2 gas reserves rose by 4% year-on-year, reaching 7.9 tcm

INTERNATIONAL COOPERATION

  • As part of the Zohr field development offshore Egypt, Rosneft began gas production as an international consortium member in December 2017. A project of this scale in cooperation with foreign partners will further increase Rosneft’s expertise in offshore field development and reinforce its position in the strategic Egyptian market

  • In December 2017, Rosneft was granted a production license for the Patao and Mejillones offshore fields, as per the directive signed by the Venezuelan Oil Minister, Manuel Quevedo, in the presence of the President of the Bolivarian Republic of Venezuela, Nicolas Maduro

STRATEGIC OBJECTIVES OF GAS BUSINESS

The following strategic objectives were set for implementing the Rosneft-2022 Strategy in gas business:

  • Development of major gas production projects, including Rospan and Kharampur, on time and within budget, thereby raising production to more than 100 bcm per annum

  • Improving the cost efficiency of gas sales in the Russian Federation, particularly by creating a favorable regulatory environment such as equal access to infrastructure and consumers

  • Improvements in production performance and expansion upon technological competence, securing:
    • development of reserves of the Turonian deposit
    • development of LPGLPG – liquefied petroleum gas. and NGLNGL – natural gas liquids. production
    • increased APG utilization, including through the development of captive power generation and petrochemicals
    • gas reserve monetization in the long term within Eastern Siberia and the Far East, including through petrochemicals development

Meeting the strategic gas business objectives will increase Rosneft’s free cash flow between 2018 and 2022, grant a 20% share in the Russian gas market, and secure long-term growth of the Company's shareholder value