Business Model

GRI: 102-6, 201-1, OG1

Dynamics of current recoverable reserves (АB1+C1+2Р) of Zarubezhneft Group taking into account participating interest, Ktoe
Dynamics of current recoverable reserves (АB1+C1+2Р) of Zarubezhneft Group taking into account participating interest, Ktoe

In 2019, Zarubezhneft JSC’s hydrocarbon (HC) reserves share increased by 3.6 MM RUB due to new projects in the Socialist Republic of Vietnam, Egypt, and Uzbekistan, as well as exploration activities and re-assessment of active assets reserves.

Reserves structure as of January 1, 2020, %
Reserves structure as of January 1, 2020, %

37% of А+В1+С1 reserves are JC RUSVIETPETRO LLC reserves. The primary share of HC reserves is concentrated at the Severo-Khosedayuskoye and Zapadno-Khosedayuskoye fields.

The share of JV Vietsovpetro reserves is 33%, primarily concentrated at the White Tiger and Dragon fields.

Zarubezhneft JSC is a diversified public oil and gas holding acting for the benefit of the State. 30 subsidiaries and joint ventures in three segments: upstream, downstream, service and other assets

Production structure in 2019
Production structure in 2019

Taking into account the share of Zarubezhneft JSC, HC production in 2019 was 4,770 Ktoe, which is 7.4% less than in the previous year. The planned indicator (4,515 Ktoe) was exceeded by 5.6%. Production decline was caused by JV Vietsovpetro’s large fields, the White Tiger and the Dragon, entering the complex final stage of development.

Consolidated revenue of Zarubezhneft Group, billon RUB

In 2019, Zarubezhneft Group maintained the high level of consolidated revenue achieved in 2018.

Aggravating macroeconomic conditions and reduction of global oil prices resulted in decreased EBITDA and FCF indicators in 2019. Despite that, stabilizing measures supported a high level of operational performance.

Tax and other compulsory payments to the Russian Federation budget, MM RUB.
Tax and other compulsory payments to the Russian Federation budget, MM RUB.

The total amount of tax and other compulsory payments to the Russian Federation in 2019 was 55.683 MM RUB, which was 24% higher than in 2018, with 72% of the payments going to the Russian Federation federal budget (FB), 24% to consolidated budgets (CB) of constituents, and 4% to extra-budgetary funds (EBF).

The substantial tax payment increase in 2019 was, first of all, related to the growth of expenditures on mineral extraction tax (MET) under the current tax policies. Furthermore, in 2019 a new damper mechanism was implemented, which increased the tax burden by more than 250 RUB per ton on average, in case of no Downstream segment in the Company.

Бизнес-модель
In 2019, the Company paid dividends to the state in the amount of
5.9  billion RUB,
31% more than in 2018, when the amount was 4.5 billion RUB.