Market overview and competitive environment

Hydrocarbon Exploration and Production

Rosneft is the largest oil and gas company in Russia and a leader in terms of reserves and hydrocarbon liquid production among global peers whose shares or depositary receipts trade on international stock exchanges. Efficient reserves management and resource sustainability, including the reserves-to-production ratio, organic reserves growth, and cost of organic reserves growth are among the key investment highlights of an oil and gas company.

Under the SEC (U.S. Securities and Exchange Commission) classification, Rosneft’s proved hydrocarbon reserves totalled 38,644 mmboe (5,221 mmtoe) as at 31 December 2020After acquisitions/divestments, including fuel gas., while its proved reserve life amounted to more than 20 years and proved organic reserve replacement ratio (RRR) to more than 150%. The life-of-field audit of the reserves was performed by DeGolyer & MacNaughton.

Proved hydrocarbon reserves (SEC)
Reserve replacement and F&D costs

Source: company reports.
Global oil production, kbpd

Source: Wood Mackenzie.

As at 31 December 2020, the Company’s reserves under the PRMS (Petroleum Resources Management System) standards, according to DeGolyer & MacNaughton, totalled 43,484 mmboe (5,884 mmtoe) in the 1P category, 83,761 mmboe (11,308 mmtoe) in the 2P category, and 126,216 mmboe (17,028 mmtoe) in the 3P category. In 2020, Rosneft’s PRMS 3P reserves at existing assets (before acquisitions/divestments) increased by over 700 mmtoe as a result of successful exploration and production drilling and the use of advanced recovery enhancement techniques to extract hard-to-recover reserves, among others. The key contributors to the reserves base were the fields of RN-Yuganskneftegaz, RN-Nyaganneftegaz, Rospan International, Verkhnechonskneftegaz, and RN-Purneftegaz. The reserves at Vostok Oil assets also grew significantly.

Reserves-to-production ratio (SEC) in 2020, yearsIncluding associates and joint ventures. PetroChina data does not include associates or joint ventures.

Source: company reports.
Organic reserves growth (SEC), bboeIncluding associates and joint ventures. PetroChina data does not include associates or joint ventures.

Source: company reports.
Exploration and production of hydrocarbons

Exploration activities in 2020 helped discover 208 deposits and 19 fields with a total of over 2 btoe in AB1C1+B2C2 reserves. Appraisal drilling in the Kara Sea resulted in the discovery of two unique Arctic fields – the Zhukov gas field and the Rokossovsky gas condensate field, with reserves of 1.3 tcm and 55 mmt, respectively. As part of the Vostok Oil project, a unique Zapadno-Irkinskoye field was discovered on the Taimyr Peninsula, with more than 600 mmtoe in C1+C2 hydrocarbon reserves.

Rosneft is Russia’s leading petroleum company in terms of launching new projects. In recent years, we have put on stream a number of large fields, including Suzunskoye, Yurubcheno-Tokhomskoye, Kondinskoye, Tagulskoye, Russkoye, Srednebotuobinskoye (Phase 2), Zapadno-Erginskoye, Vostochno-Messoyakhskoye and Kuyumbinskoye. The third quarter of 2020 saw the launch of a high-pressure oil pipeline to the Priobskoye field, marking the start of the Erginsky license area’s full-scale development (a key asset of the Erginsky cluster). In the fourth quarter of 2020, a pipeline to the Verkhnechonskoye field was put on stream to transport oil from the Severo-Danilovskoye field. In the medium term, we plan to enhance the productivity of mature fields and develop new high-potential oil and gas projects, including the Vankor, Erginsky and Danilovsky clusters, Rospan, Kharampurskoye and Severo-Komsomolskoye fields, to increase the output through organic growth. In compliance with the Russian President's instruction to increase the cargo flow along the Northern Sea Route, we have embarked on a large-scale hydrocarbon production project, which will set the stage for a comprehensive development of the new oil and gas province in the Krasnoyarsk Territory’s north (Vostok Oil project). Together with our partners, we will build a unique world-class oil and gas cluster in this location.

Oil and gas condensate production in Russia, mmb per day

Source: CDU TEK

In line with its plans, the Company continues to run production projects outside Russia.

For years, Rosneft has invariably maintained a high reserve replacement ratio (reserve replacement cost in 2018–2020 was USD 0.3 per boe). In 2021–2022, we intend to replace no less than 100% of our hydrocarbon production. The Company also plans to fast-track the development of new reserves by reducing preparation timelines, accelerate viability-based resources to reserves conversion, and make exploration drilling in Russia more successful.

The Company accounts for around 40% of the total oil production of Russia and approximately 6% of the global oil output. On top of that, we boast the highest 10-year average production growth among peers.

Hydrocarbon production in 2020, mmboe per day

Source: company reports for 2020.

To ensure production growth in the long run, we create an optimal portfolio of major greenfield projects, while also using advanced production technologies at our existing fields. Technology advance is a key focus area of the Rosneft–2022 Strategy and a powerful driving force behind our competitiveness.

Average hydrocarbon production growth over 10 years, %
Rosneft 7.5%
PetroChina 2.8%
Chevron 1.1%
Petrobras 0.9%
Shell 0.2%
Gazprom 0.1%
LUKOIL –0.7%
BP –1.0%
ExxonMobil –1.7%

Sources: company reports; Wood Mackenzie (Gazprom, PetroChina).
Exploration and production of hydrocarbons