The Gazprom Neft Board of Directors reviews the interim results of the company’s 2018 investment programme

Press-release Efficiency

The Gazprom Neft Board of Directors has reviewed the implementation of its 2018 investment programme and budget based on the company’s performance in 1H 2018.

Gazprom Neft demonstrated considerable improvement in its operational and financial performance in 1H 2018, with the company’s net profit (IFRS) showing a 1.5-fold increase year-on-year, at RUB166.4 billion, and adjusted EBITDA increasing by 49.8 percent— to RUB368.2 billion. The company’s improved operating cash flow, together with the completion of essential infrastructure investments at new upstream projects, resulted in a positive free cash flow (FCF) in the order of RUB47.5 billion. One of the Russian oil industry’s leading companies in production growth, the company maintains its leading position in terms of efficiency and in the rate of improvement in key financial indicators.

Hydrocarbon production at Gazprom Neft in 1H 2018 showed a two percent increase year-on-year, to 44.9 million tonnes of oil equivalent (mtoe) — this growth being the result of higher production at new fields (Novoportovskoye and Vostochno-Messoyakhskoye), as well as the company increasing its interest in Arktikgaz, from 46.6 to 50 percent. The company has returned to previous refining volumes following the completion of a planned repair and refurbishment programme throughout its refineries in 1H 2017, and continues its implementation of the second phase of modernising its refining facilities. Improvements in refining efficiency have seen Gazprom Neft increase production of light petroleum products ahead of schedule, as well as increasing sales through premium channels, with volumes increasing 6.4 percent year-on-year, to 12.8 million tonnes.

The effective fulfilment of its investment programme means Gazprom Neft is able to maintain its planned implementation of key projects in production, refining and sales, as well as achieving its medium- and long-term strategic objectives. The company is expected to exceed planned performance indicators in increasing hydrocarbon reserves, in further increasing conversion rate, and in sales of oil products, in 2018.