Performance Results

Production of Liquid Hydrocarbons

The Company produced 4.67 mmb per day (230.2 mmtpa, 81% of total hydrocarbon production), flat year-on-year. This was achieved despite such external restrictions as compliance with the OPEC+ agreement along with the temporarily limited oil acceptance by Transneft’s trunk pipelines. As the Company achieved the planned production in 2019, it greatly contributed to Russia’s new post-Soviet oil production record (560.3 mmt).

24 December 2019 was marked by a new milestone in Rosneft’s history, as the Company produced its 2.5 billionth tonne of liquid hydrocarbons.

The production drilling totalled 10.0 mln m year-on-year with over 2.9 thousand wells commissioned. The number of horizontal wells was up 1% year-on-year, with a 9 p. p. increase – to 57% of all new wells in commercial operation. The production per horizontal well was some 9 kt, up 11% year-on-year or 2.4 times higher than per directional well.

Production of Liquid Hydrocarbons

Rosneft is Russia’s leading petroleum company in terms of launching new high-margin projects. In 2019, the Company's share in the total production of liquid hydrocarbons as part of major projects launched since 2016 totalled 18.9 mmt (384 kbpd), up 27% year-on-year. At the same time, their share in the total production of liquid hydrocarbons increased by 8%.

Rosneft also gives high priority to brownfield development: 2019 saw RN-Yuganskneftegaz’s largest asset hit an all-time high in terms of daily production with more than 198 kt per day. Investment incentives helped the Samotlor field to overcome the trend of decline in production, which previously demonstrated an average annual decrease of 5%. In 2018–2019, the Company reduced the production decline to some 1%, reaching 18.4 mmt at the year end. The production trend changed greatly in RN-Nyaganneftegaz with a production increase by 17%, reaching around 7 mmt.

Innovative technologies for stable production

Commissioning of new wells

The Company’s key driver for maintaining stable levels of production is the production drilling, which is responsible for more than 8% of the Company's crude oil and gas condensate output.

Rosneft is focused on high-tech wells: 57% out of the 2.9 thousand wells commissioned in 2019 were horizontal vs 48% in 2018. 986 new horizontal wells drilled using multi-stage hydraulic fracturing techniques were commissioned, with their share reaching 34%. During the first year of operation, the production per horizontal well was some 9 kt, 11% year-on-year or 2.4 times higher than per directional well.

Advanced planning, drilling, and development technologies facilitated new wells’ average annual flow rate of 44.8 t per day, up 10.6% year-on-year, and 19.6 mmt of incremental production.

In 2019, RN-Yuganskneftegaz commissioned more than 1 thousand new wells producing over 6.5 mmt and reached the five-years maximum average annual flow rate of new wells (39 t per day). These results were attributable to innovative technologies and streamlined development systems. For example, the percentage of horizontal wells in production drilling increased by ca 50% (from 26% in 2018 to 39% in 2019). In 2019, the Group Subsidiary continued to pilot horizontal drilling and completion technologies, commissioned 35 wells with multi-stage hydraulic fracturing and horizontal sections of 1.3–1.6 km, and successfully expanded the use of multilateral wells.

2.9 thousand new wells
commissioned in 2019 of which 57% were horizontal

In 2019, Samotlorneftegaz commissioned 383 new wells, which resulted in 1.2 mmt of incremental oil production. The Group Subsidiary makes consistent efforts to pinpoint hidden deposits at the Samotlor field, including through the implementation of its appraisal sidetracking and well deepening programme. Due to these efforts, 14 horizontal wells were commissioned in Jurassic deposits (YuV1 formation) with an average initial oil flow rate of 84 t per day, which is two times higher than the average of the field’s new wells for the period.

Verkhnechonskneftegaz also succeeds in implementing horizontal and multilateral drilling. In 2019, the Group Subsidiary commissioned 46 high-tech wells with an average annual oil reserve increase of 80 t per day (up 17% year-on-year). The unique expertise gained when developing complex collectors of the Verkhnechonskoye field will be further applied to drilling and developing new licence areas in Eastern Siberia.

In 2019, RN-Uvatneftegaz continued extensive drilling across the Uvat group of fields. For optimising the development of hard-to-recover reserves, the subsidiary supports a consistent transition to horizontal drilling with multi-stage hydraulic fracturing (the share of horizontal wells reached 71% in 2019) with the average flow rate of new wells up year-on-year, totalling 82 t per day.

Varyeganneftegaz improved the horizontal well design by raising the number of multi-stage hydraulic fracturing stages per well from five to seven and optimised drilling locations, reaching a five-years maximum annual average flow rate of 40.9 t per day, up 21% year-on-year.

In 2019, Orenburgneft expanded its horizontal drilling programme and commissioned eleven horizontal wells, including five with multi-stage acid fracturing and two with multi-stage proppant fracturing. These technologies make such wells highly productive, with horizontal wells having an initial flow rate of 63.3 t per day, which is almost 1.5 times higher than the average for production wells drilled in 2019 (46.7 t per day).

Vostsibneftegaz commissioned 39 horizontal wells vs 21 wells in 2018. Due to the optimised strategy of horizontal well placing and updated geological structure concept of the Riphean formation in the Yurubchenskaya deposit, new wells produced the field's all-time highest average oil flow rate of 186 t per day, up 21% year-on-year.

Multilateral wells

Multilateral wells are applied to improve the recovery and reservoir penetration quality for projects with high geological complexity. This method of pay zone penetration was successfully piloted and implemented at the Company’s fields with 135 multilateral wells commissioned in 2019, up 84% year-on-year.

To increase well productivity and scope of reserves under development, RN-Yuganskneftegaz introduced fishbone wells at the Moskovtsev and Sorovskoye fields. The Group Subsidiary commissioned seven wells with three and four sidetracks. The average increase in the initial flow rate was +159% compared to horizontal wells drilled in similar conditions.

In 2019, RN-Vankor commissioned 54 multilateral wells, a record number for the Vankor cluster since the beginning of its development, up 38% year-on-year.

At the Srednebotuobinskoye field, Taas-Yuryakh Neftegazodobycha drilled the longest multilateral well having 15 horizontal sidetracks with a total drilling length exceeding 10 km across a pay zone. The subsidiary successfully replicates this technology with 27 multilateral wells drilled at the field in the reporting year.

Infill drilling

Along with drilling in new areas, the Company conducts infill drilling to augment production by transforming and expanding the development system.

In 2019, RN-Yuganskneftegaz continued its infill drilling programme at the Priobskoye and Prirazlomnoye fields and drilled 77 wells with an average initial flow rate of 82.6 t per day, including 42 horizontal wells drilled using multi-stage hydraulic fracturing techniques (five ports per well on average). The Group Subsidiary has plans to expand the programme at the Priobskoye and Prirazlomnoye fields, as well as implement similar programmes at its other fields (Malobalykskoye, Ombinskoye, and Vostochno-Surgutskoye fields).

To maintain production and improve the quality of reserves recovery at the Samotlor field, Samotlorneftegaz continues its infill drilling programme. 235 infill wells were commissioned in 2019 (65% of all wells commissioned at the field). In addition, horizontal wells with multi-stage hydraulic fracturing are constructed.

The Vankor field has been successfully implementing its infill drilling programme. As at the end of 2019, the incremental production attributable to the commissioning of 41 new infill wells totalled 910 kt. In harsh geological conditions, advanced drilling and horizontal well completion technologies ensured an average flow rate of 136 t per day, which is three times higher than the average well flow rate across the Company.

Tomskneft VNK pilots the transformation of a Jurassic deposit development system (YuV1 formation) at the Krapivinskoye field. To enhance oil recovery, infill horizontal wells are drilled at the field, using multi-stage hydraulic fracturing. In 2019, 18 wells of the kind with an average flow rate of 28 t per day were commissioned with new wells to follow in future.

Use of inflow control device in wells

To minimise the risks of early gas blowout from the gas cap or underlying water, the Company uses inflow control devices to restrict fluid inflow to certain horizontal well sections. In 2019, Taas-Yuryakh Neftegazodobycha successfully piloted inflow control devices in horizontal and multilateral wells at the Srednebotuobinskoye field.

In 2019, the Group Subsidiary continued to use autonomous inflow control devices and completion systems with shiftable sleeves in horizontal wells of SevKomNeftegaz (joint project with Norway’s Equinor) as part of pilot development of PK1 formation at the Severo-Komsomolskoye field. The pilot development also involved the commissioning of 28 wells, including 25 with inflow control devices.

Sidetracking

For increasing production and achieving target oil recovery factor, the Company carries out sidetracking operations in existing wells. In 2019, such operations covered 1.3 thousand wells, up 3.5% year-on-year, resulting in an incremental production of 3.3 mmt of crude oil. Improving the design of sidetracks due to increasing the share of horizontal drilling to 71% vs 68% in 2018 helped to maintain the average well flow rate after well workover by sidetracking at the level of 2018.

Innovative approaches make sidetracking effective for brownfields. Horizontal sidetracks enable extraction from formation intervals that have not been reached by previously drilled directional wells.

At RN-Yuganskneftegaz’s fields 394 sidetracking operations were carried out in 2019, including 298 sidetracks with horizontal completion. The active application of horizontal sidetracks at mature fields, for example in Cretaceous formations of the Mamontovskoye and Ust-Balykskoye fields, results in high initial oil flow rates of up to 300 t per day, though these fields have a more than fifty-year history of development. Due to the use of advanced technologies, the average annual well flow rate totalled 22.9 t per day, up 8% year-on-year.

In 2019, Samotlorneftegaz commissioned 424 wells following a workover by sidetracking, a record number for the whole Company. It is also a five-year high for the subsidiary, up 14% year-on-year. These measures resulted in an additional crude oil production of 0.8 mmt, up 30% year-on-year.

 RN-Nyaganneftegaz continues to pilot and implement the technology of horizontal sidetracking with MSHF and liner packer systems. Following the programme roll-out in the Talinsky licence area (YuK2-9), 14 wells were commissioned with an average initial flow rate of 27.9 t. In 2020–2024, the subsidiary plans to use similar technique for drilling 100 wells that are expected to produce 1.8 mmt.

Horizontal drilling also has a noticeable effect from well workover in one of Russia’s oldest oil-producing regions, the Island of Sakhalin. Following the drilling of horizontal sidetracks to increase well productivity, RN-Sakhalinmorneftegaz's doubled its incremental production resulting from these operations as compared to 2018. In the next five years, the subsidiary intends to replicate this approach across its assets. For eleven fields, it will be the first well workover with sidetracking.

Drilling geological support centre

In 2019, Rosneft's drilling geological support centre, the first in the Russian oil and gas industry, celebrated its 10th anniversary. Under its supervision the Company drilled over 11 thousand horizontal wells and horizontal sidetracks. To improve employees’ professional skills, Rosneft held its first geosteering championship (championship in geological support of high-tech horizontal drilling). 20 subsidiaries of the Company joined the event to compete in the virtual “drilling” of three horizontal wells with different difficulty levels and penetrate an oil reservoir as far as possible. All the participants did their best to cope with the task and gain unique experience in supporting horizontal drilling in different real geological environments across the Company’s footprint.

Well interventions for incremental (besides new well commissioning and sidetracking) and recovered production

In line with its approved strategy, the Company keeps improving the efficiency of its well interventions. In 2019, the Company increased the number of well interventions for incremental production (besides drilling) to 4,913, up 9.6% year-on-year. The well interventions translated into 5.7 mmt of incremental oil and gas condensate production (up 3.8% year-on-year).

The growth of well interventions in 2019 was mainly attributable to an increase in the number of hydraulic fracturing jobs to 2,657, up 20.6% year-on-year. In 2019, the incremental production due to hydraulic fracturing was 3.4 mmt, up 17.5% year-on-year.

RN-Yuganskneftegaz, Bashneft-Dobycha, and Samotlorneftegaz are the Group Subsidiaries with the most noticeable hydraulic fracturing growth in 2019. In 2019, RN-Yuganskneftegaz carried out 907 hydraulic fracturing jobs, up 31.8% year-on-year, with an incremental production of 1,465 k t, up 27.3% year-on-year, hitting a seven-year high. For the first time over the last four years, Bashneft-Dobycha carried out 640 hydraulic fracturing jobs, up 23.4% year-on-year, with an incremental production of 570 kt, up 37.4% year-on-year. Udmurtneft, Samaraneftegaz, and RN-Severnaya Neft, among others, actively deploy acid and proppant fracturing techniques in carbonate formations of their fields.

Over 10 thousand well interventions were performed in 2019, resulting in a recovered production of 12.2 mmt. The production per well attributable to basic production recovery was up 9.8% year-on-year, from 1,055 to 1,158 t per well.

The key production recovery efforts include bottom-hole zone treatment and well optimisation.

In 2019, the number of bottom-hole zone treatment and well optimisation operations hit a seven-year high. More specifically, the Company performed 4,168 bottom-hole zone treatment operations (up 13.3% year-on-year) with a total production recovery of 3,233 kt (up 25.3% year-on-year) and 4,042 well optimisation operations (up 12.4% year-on-year) with a total production recovery of 6,405 kt (up 20.7% year-on-year).

The Company enhanced the use of physical and chemical methods of enhanced oil recovery by a half compared to 2018. This included five pilot projects involving the technology. Samotlorneftegaz piloted sediment generating agents and gellants, which had previously proved to be efficient, in its three new projects. The injection of cross-linked polymer composition was successfully piloted at the Suzunskoye field. Samaraneftegaz used a Russian-made innovative polymer composition, which resulted in a quadrupled increase in technological performance compared to compositions used previously.

For the first time in Russia, Group Subsidiaries operating in the Volga-Urals Region deployed the proppant hydraulic fracturing technology using acid gel to deliver the acid to a significant distance from the borehole for creating a set of fractures and fixing them with proppant in a carbonate formation. Following successful piloting of the technology in directional wells, Orenburgneft effectively drilled carbonate Devonian deposits (initial flow rates exceeded 100 t per day). After testing the technology, Udmurtneft prepared areas for horizontal drilling with multi-stage acid and proppant hydraulic fracturing. Bashneft-Dobycha started to apply acid-gel hydraulic fracturing at Bashneft-Dobycha's fields.

In 2019, the Company continued its multi-stage hydraulic refracturing operations in previously drilled horizontal wells to increase the performance of low-permeability structurally complicated pay zones. For example, RN-Yuganskneftegaz carried out 23 jobs of the kind with an average initial incremental oil rate of 25 t per day, 33% higher than the incremental rate in directional wells.

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