Moscow, 26 June 2001; Sibneft more than doubled its net profits in 2000 to $674.8 million, under full-year US GAAP results released today. Net profits were 114% higher than the $315.1 million achieved in 1999, while earnings before interest, tax, depreciation and amortization (EBITDA) rose 88% to $1.027 billion from $547.1 million the previous year.
Sibneft's record financial performance resulted from a combination of higher global oil prices and productivity gains flowing from the successful restructuring of its exploration and production operations. Sibneft succeeded in capping rises in operating expenses to just 15%, a significant achievement in an environment of rising costs. Direct production costs totaled $1.75 per barrel ($12.60 per tonne), one of the lowest levels in the industry.
Sibneft also achieved a strong operating performance in 2000, boosting crude output by 5.4% to 338,000 barrels per day (17.2 million tonnes). Production growth accelerated over the course of last year, and output is set to grow twice as fast in 2001, rising 10.5% to a target of 375,000 barrels per day (19 million tonnes).
Other highlights of the company's 2000 financial results include:
- Total revenues up 37% to $2.398 billion (1999 - $1.746 billion)
- Profit before tax up 133% to $753.2 million (1999 - $323.6 million)
- Return on capital employed up to 17.9% from 7.0% in 1999
- Continued low level of debt with gearing of 5.9% (1999 ?4.9%)
- Substantially reduced minority interest resulting from consolidation
- Sibneft pays first dividends of $50 million
Sibneft is radically increasing investment in exploration and production to $595 million in 2001, while investment in refining is rising almost five times to $52 million and investment in the retail sector is growing to around $20 million. Sibneft plans to continue its focus on improving productivity, by making greater use of technology supplied by oilfield service companies, such as Schlumberger, Pride International and BJ Services.
Sibneft president Eugene Shvidler welcomed the company's record financial results. "While strengthening global oil prices were certainly a key driver behind our strong financial performance, improvements in productivity also made an important contribution to our bottom line. These efficiency gains will carry added significance in the more competitive environment resulting from lower prices this year. This year, we aim to achieve sustainable growth in production, while at the same time building on our recent gains in productivity."
Notes to editors:
Sibneft currently produces 380,000 barrels per day from fields in Western Siberia with total proven reserves of 4.6 billion barrels. Refinery runs at the company's Omsk refinery last year totaled 247,000 barrels per day. Sibneft was the first vertically-integrated Russian oil company to produce accounts to US GAAP standards. This is Sibneft's fifth year of US GAAP accounts, which are audited by Arthur Andersen. In July 1998, Sibneft became the first Russian company to publish an international standard corporate governance charter.