Commerce and logistics
Crude Oil Sales
Rosneft pursues a policy aimed at ensuring a balanced mix of oil monetization channels, including sales under long-term contracts, through tender-based spot transactions, and domestic market sales, as well as refining at its own facilities in Russia, Germany, and India.
The Company continuously monitors the cost efficiency of its oil monetization channels to maximize the share of high-margin channels in its overall sales structure.
In the reporting year, the Company supplied about 103.3 mmt of oil to Russian refineries, a 3% growth year-on-year.
In addition to the oil supplies shipped to its own refineries in Russia during 2018, the Company shipped 4.6 mmt of own oil to German refineries partially owned by the Company, a 2% growth year-on-year.
The total sales of crude oil shipped to third parties in 2018 totaled 129.1 mmt, including 5.4 mmt of oil sold domestically.
Oil Exports to FSU and Non-FSU Countries
Rosneft’s FSU and non-FSU oil exports totaled 123.7 mmt. Economically, eastbound exports such as pipeline supplies to China and sales via the Kozmino and De-Kastri ports are the most attractive oil export destinations for the Company. In 2018, supplies to eastern countries were 59.2 mmt, up 24% year-on-year.
In addition, the Company exported 55.8 mmt of oil to Northwestern, Central, and Eastern Europe, the Mediterranean, and other destinations outside the CIS, while exports to the CIS totaled 8.7 mmt.
The bulk of the Company’s crude oil exports are transported via the Transneft system, including the trunk pipeline network and ports. In the reporting year, the Company primarily exported crude oil via the following:
- transportation by pipeline: approximately 108.3 mmt, accounting for 87.5% of total oil exports to FSU and non-FSU Countries, including a further 42.3 mmt via ports and about 66.0 mmt via pipeline to China, Belarus, and Central and Eastern Europe;
- transportation by rail and mixed transport: 1.9 mmt, accounting for 1.6% of total exports. These exports were mainly supplies via the Caspian Pipeline Consortium (CPC) which runs from the Tengiz oil field in Western Kazakhstan to the port of Novorossiysk;
- others, including supplies via the De-Kastri oil export terminal: 4.1 mmt.
And about 9.4 mmt of third-party oil was exported outside the CIS via the Company’s trading entities.
- In 2018, eastbound oil supplies grew 24% to 59.2 mmt
- The Company’s oil supplies to China, including international trading, grew 27% and amounted to almost 50 mmt
- Supplies to China under long-term contracts grew 33% to 40.0 mmt
Oil Supplies under Long-Term Contracts
As part of the Agreement between the Government of China and the Government of the Russian Federation on expanding the cooperation in trading of crude oil dated 22 March 2013, starting from 2018, the oil supplies to CNPC were increased by 10 mmtpa year-on-year.
In 2018, the Company continued supplies as part of an additional agreement signed between Rosneft and China National Petroleum Corporation (CNPC), entailing the increase of oil supplies to China via Kazakhstan and an extension of the existing contract between the parties, effective since 2013, until the end of 2023. Under the Agreement, supplies to China will reach 91 mmt over 10 years, further supporting scheduled supplies to Rosneft’s strategic market. Supplies to CNPC totaled 40 mmt in 2018, including 10 mmt via Kazakhstan.
As part of a long-term contract with the CEFC China Energy Company, over 10 mmt of oil were supplied in 2018.
Expanding Cooperation with End Consumers of Oil and Petroleum Products
The Company continued its focus on end consumers during 2018, with exports amounting to over 73 mmt, up 12% year-on-year.
The Company renewed its contracts with Shell, Eni S.p.A., and TOTSA for oil supply via the Druzhba oil pipeline to Germany in 2018, which ensured the Company’s stability amid unfavorable international market conditions.
As part of the contract with PTT Company (Thailand), the first delivery of Sokol oil was made in 2018.
The Company also continues to develop cooperation with end consumers as part of its supplies of petroleum products. During 2018, Rosneft supplied 0.8 mmt of stable natural gasoline to JX Nippon Oil & Energy Corporation.
For the first time, the Company made a deal to supply vacuum gas oil on the domestic market of the Russian Federation for further processing at the TANECO refinery, with a total of 37.4 thousand tonnes of products delivered under this contract during 2018.