Oil Refining

KEY ACHIEVEMENTS IN OIL REFINING
The Company’s continued refinery upgrade programs in Russia included:
  • Completion of a major overhaul and retrofitting of the atmospheric distillation unit AT-6 at the Ryazan Refinery.
  • Commencement of high-purity Group III base oils production to supply feedstock for manufacturing advanced synthetic and semi-synthetic oils at the Yaroslavl Refinery
  • The delivery of large-capacity equipment for the hydrocracking complex and the methyldiethanolamine (MDEA) regeneration unit at the Novokuibyshevsk Refinery.
  • Installation of large-capacity equipment for the ongoing construction of the diesel fuel hydrotreating unit at the Angarsk Refinery
Continued effective integration of Bashneft’s refining assets with the Company’s unified plant production chain
Ongoing efforts to improve performance across the Company’s plants and reduce operating costs

KEY STRATEGIC PRIORITIES:
Safety (high Health, Safety, and Environmental standards)
Long-term competitiveness of assets (achieved through excellent refinery configuration, high margins, and technology leadership)
Performance (operational excellence, production, and cost optimization, reduction of fuel consumption and losses, and digital transformation)

Rosneft is the largest oil refiner in Russia, controlling oil refineries with a combined throughput capacity of 116.5 mmt of oil per year in key regions of Russia. The average Nelson Index of the Company’s refineries in Russia is approximately 7.0.

The Company also owns several mini-refineries in Russia, the largest of which is Nizhnevartovsk Oil Refining Association.

In addition, Rosneft owns a number of refining assets abroad.

In Germany, the Company holds stakes ranging from 24% to 54% in three refineries through its subsidiary, Rosneft Deutschland GmbH, controlling over 12% of oil refining capacities and ranking third by oil refining capacity in the country. The average Nelson Index of the Company’s refineries in Germany is 9.1.

In Belarus, Rosneft indirectly owns 21% of shares in the Mozyr Refinery. The Company works with partners in the Asia-Pacific Region to explore opportunities in building new oil refineries in both China and Indonesia.

OUTCOMES OF INTEGRATING BASHNEFT’S REFINING ASSETS

In 2017, the Company successfully implemented a comprehensive plan to integrate and develop Bashneft’s business assets. For the refining business, the plan is focused on integrating production operations management, business planning, development and capital construction management, technical assessment and procurement processes, quality management and continuous improvement systems, and operational efficiency improvement process.

Preliminary estimates show that the synergetic action plan’s implementation granted savings of approximately RUB 4 bln in 2017 through the following initiatives:

  • directing high-octane components produced by Bashneft to the Company’s refineries to produce additional volumes of high-margin products
  • implementing Rosneft’s continuous improvement system across all integrated Bashneft refineries.

In 2017, investment decisions were made following assessments on the Company’s major investment projects for the maintenance and development of its Integrated Refining Complex.

The projects were integrated with Bashneft’s updated refining strategy and their investments have been included in the 2018–2022 Business Plan.

Certain projects in the Company’s investment portfolio require further assessment throughout 2018 to ascertain their feasibility.

Cost savings were achieved by optimizing the product mix and implementing initiatives to save energy and reduce general and administrative expenses, as well as developing an active program to reduce fuel consumption and losses.