1. 1 Q 2009 US GAAP
Financial and
Operating Results
June 18, 2009
2. Disclaimer
This presentation contains forward-looking statements concerning the financial condition, results of
operations and businesses of Gazprom Neft and its consolidated subsidiaries. All statements other than
statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking
statements are statements of future expectations that are based on management’s current expectations
and assumptions and involve known and unknown risks and uncertainties that could cause actual
results, performance or events to differ materially from those expressed or implied in these statements.
Forward-looking statements include, among other things, statements concerning the potential exposure
of Gazprom Neft to market risks and statements expressing management’s expectations, beliefs,
estimates, forecasts, projections and assumptions. These forward-looking statements are identified by
their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’,
‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’,
‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future
operations of Gazprom Neft and could cause those results to differ materially from those expressed in
the forward-looking statements included in this presentation, inclusively (without limitation): (a) price
fluctuations in crude oil and oil products; (b) changes in demand for the Company’s products; (c)
currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market and
industry competition; (g) environmental and physical risks; (h) risks associated with the identification of
suitable potential acquisition properties and targets, and successful negotiation and completion of such
transactions; (i) economic and financial market conditions in various countries and regions; (j) political
risks, project delay or advancement, approvals and cost estimates; and (k) changes in trading
conditions.
All forward-looking statements contained in this presentation are expressly qualified in their entirety by
the cautionary statements contained or referred to in this section. Readers should not place undue
reliance on these forward-looking statements. Each forward-looking statement speaks only as of the
date of this presentation. Neither Gazprom Neft nor any of its subsidiaries undertake any obligation to
publicly update or revise any forward-looking statement as a result of new information, future events or
other information.
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3. Management Participants in Today’s Call
Vadim Yakovlev
Deputy Chairman of the Management Board and CFO
Boris Zilbermints
Deputy Chairman of the Management Board,
Deputy CEO for Exploration and Production
Anatoly Cherner
Deputy Chairman of the Management Board,
Deputy CEO for Logistics, Processing and Sales
Yuri Kalner
Head of Strategic Planning Department
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4. 1Q 2009 Highlights
Macro
• Brent 19% down Q-o-Q to US$ 44/bbl from US$ 55/bbl and Y-o-Y 54% down
from US$ 97/bbl
1Q 2009 Headline numbers – recovery in progress
• Revenue 16% down Q-o-Q; Y-o-Y 47% down
• EBITDA up 362% Q-o-Q to US$ 942 MM; Y-o-Y 53% down
• Adjusted EBITDA* up 131% Q-o-Q to US$ 945 MM; Y-o-Y 56% down
• Net Income Q-o-Q up to US$ 335 MM; Y-o-Y 76% down
• Operating Cash Flow Q-o-Q
Costs Performance
• Operating Costs down 12% Q-o-Q;10% down 10% Y-o-Y
• Export Duties Q-o-Q 52% down; Y-o-Y 62% down
• Taxes other than Income Tax Q-o-Q 5% up; Y-o-Y 50% down
Asset Portfolio Expansion
• 51% stake in NIS (February 2009)
• 34% stake in Sibir Energy (April-June 2009)
• Gazprom Neft Marine Bunker - #2 Bunkering Co in Russia,
• Gazprom Neft Avia – presence in 11 airports across Russia
• Gazprom Neft Lubricants – Acquisition of Lubricants Plant in Italy (Bari)
Adjusted EBITDA includes the Company’s share in its equity affiliates (Slavneft and Tomskneft) EBITDA
Source: Company data 4
5. Key Macroeconomic Factors
Crude pricing, RUR/USD Rate (eop) relation Crude Export Profitability ($/bbl)
140
36 Average freight
$120 Straits demurrage/port dues, insurance, port handling, customs fees, other
Transneft tariff
Crude export duty
MET
Crude export netback less MET in Western Siberia
100 $90 Average crude export netback less MET in Western Siberia since 2001
32
Urals (cif Novorossiysk)
$60
60
28
Brent, $/bbl (lhs) $30
RUR/USD rate (rhs)
$0
20 24 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09
Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Export duties formula amended Current taxation regime*
0 * Effective from January 1, 09 MET threshold price raised from 9
($30) to $15/bbl
• Low crude pricing environment was the major driver for revenue decrease in 1Q09. However sharp
taxes cuts were the main reason for profitability recovery in 1Q09
• Pricing fall was partially compensated by drastic Russian Ruble devaluation which dragged costs
down, but also had a negative impact on domestic revenues denominated in rubles
Source: Platt’s, Federal Statistics Service, Company data, Central Bank of Russia, Argus 5
6. Gazprom Neft Financial Results (US$MM)
(48%) • Oil prices were the core drivers
(16%) for revenue decrease in 1Q 2009
$10 085
• Rouble devaluation stressed
$9 957
Revenues* $8 045
$4 988 domestic revenues in dollar terms
$4 185
1Q08 2Q08 3Q08 4Q08 1Q09
(54%) • Significant Tax Cuts determined
+362%
Financials recovery in 1Q 2009
$3 093
$2 642 • Costs reduction through Rouble
$2 026
EBITDA $942
devaluation
$204
1Q08 2Q08 3Q08 4Q08 1Q09
(76%) • Recovery in quarterly financials
N/A
• Non-cash foreign exchange
$2 196
$1 411 $1 594 loss of $166 MM eroded
Net Income $335 non-operating income and
reduced bottom line profitability in
-$543 1Q 2009
1Q08 2Q08 3Q08 4Q08 1Q09
Source: Company data * Revenues for 2-3Q08 were adjusted for excise tax that was previously excluded (2Q08 - $0.3B; 3Q08 - $0.8B)
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7. 1Q09 Factor Analysis
FCF (US$MM)
Revenue Breakdown (%)
397 -643
Gas Sales Other
1% 3%
CrudeNon-
Products
CIS Export
Domestic
35%
28%
Crude CIS
Export
3%
Products
CIS Export Crude
4% Domestic
Products 1% 373
Non-
CISExport
24%
99 186
-38 70
FCF 4Q08 Price Fx Tax Export Cost Work. Cap. Other FCF 1Q09
Rate Changes MET Reduction
Duty Lag
threshold
price
231
179
-482
Source: Company data
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8. Financial Performance
Revenues (US$MM) EBITDA (US$MM) Net Income (US$MM)
$8 045 $2 026
$1 411
$4 988 -48%
-16% $4 185 -54% -76%
$942 $335
+362%
$204
4Q08 N/A 1Q09 1Q08
4Q08 1Q09 1Q08 4Q08 1Q09 1Q08 -$543
Adjusted EBITDA* (US$MM) Adjusted EBITDA* per barrel ($/bbl) Adjusted EBITDA* Margin (%)
$2 195 $26 27%
23%
-4 p.p.
-57% -54% +15 p.p.
$945 $12
8%
+131% +140%
$409 $5
4Q08 1Q09 1Q08 4Q08 1Q09 1Q08 4Q08 1Q09 1Q08
*Adjusted EBITDA includes the Company’s share in its equity affiliates (Slavneft and Tomskneft) EBITDA
Source: Company data 8
12. Organic Capex Breakdown
Capex Dynamics (US$MM)
$885
• 1Q09 Capex down 46%
70
Q-o-Q from US $885 MM in
$782 23 4Q08 to US $480 MM in
88 20 1Q09
265 254
-46% -39%
$480
43 • Total exploration and
72 production accounted for
more than 75% of Capex in
181 1Q09
462 485
184
• Nearly 90% of Capex is
4Q08 1Q09 1Q08 RUR denominated
Production - Brown Fields Production - Green Fields Refining Marketing & Distribution
4Q08 1Q09 1Q08
Upstream $10.5/bbl $6.9/bbl $10.4/bbl
Brown Fields $8.3/bbl $4.6/bbl $8.3/bbl
Green Fields $20.0/bbl $13.5/bbl $19.4/bbl
Source: Company data
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14. Upstream
Oil Production (MM Bbl)
86.6 85.3 85.3 83.8 80.5
10,4 10,3 10,2 10,3 9,7
18,0 17,8 17,7 17,7 17,0
0,7
58,2 57,2 57,4 55,9 53,1
1Q08 2Q08 3Q08 4Q08 1Q09
Gazprom Neft NIS Slavneft Tomskneft
Source: Company data
Note: Including our share in equity investees
Number of New Wells Launched*
203
162
132 123 122
74,6 65,7 40
51,6 44,3
1Q08 2Q08 3Q08 4Q08 1Q09
Average flow at new wells, Tonnes per day
Gazprom Neft Production by Field*
4Q08 1Q09 • NIS – 1% in overall production in 1Q09
Sugmutskoye Sugmutskoye • Organic production decline driven by accelerating rate of depletion at the
Others 31,6% 13,1% Others 30,8% 13,9% Sugmutskoye and Sporyshevskoye fields in Western Siberia and their transition to
the 3rd level of the production cycle
Priobskoye Priobskoye • Priobskoye (+3 580 bbl a day) and Vyngayakhinskoye (+2 565 bbl a day) are
24,6% 23,8%
Krapivinskoye Krapivinskoye leaders in terms of extraction growth
3,5% 3,8%
Muravlenkovsk
Vyngapurovsko
Muravlenkovsko • 126* new wells drilled
oye 2,4% ye 2,4% Vyngapurovsko
Sutorminskoye Sporyshevskoy ye 11,1% Sutorminskoye Sporyshevskoye ye 11,1% • Drilling program cut was due to overall cost cutting programme
7,8% e 5,9% 8,1% (434* M Meters drilled – 60* M Meters – down from the level of 4Q08)
6,0%
Source: Company data
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*Gazprom Neft data not including its share in equity affiliates (Slavneft , Tomskneft) and NIS
15. Maximizing Netbacks & Enhancing Operational
Efficiency through Oil Flows Distribution
1Q2008 Netback (US$ per bbl) 1Q2009 Netback (US$ per bbl)
• Refining Netbacks
%, volume %, volume
Decreased In 1Q 2009 unlike
$57,4 the same period of 2008
$50,6
$45,7 $44,4 $43,8 • Refining Cover remained on
the same level
$24,3 $23,8 $23,0 $22,5
$21,7
• Sales in Russia and export to
CIS had insignificant
changes
36.3% 21.4% 8.9% 10.5% 22.9% 37.0% 20.8% 8.7% 7.9% 25.7%
Omsk MNPZ & Russia & Export Export Omsk MNPZ & Russia & Export Export • Export Sales were limited by
refinery YANOS CIS Sales Pipelines Seaports refinery YANOS CIS Sales Pipelines Seaports
Transneft export schedule
Crude Balance (%)
• Netbacks of Export through
Seaports do not exceed
Refining Netbacks
46%
59% 58% 58%
• Rouble devaluation had a
negative impact on Refining
54%
42% 42%
and Marketing Netbacks
41%
1Q06 1Q07 1Q08 1Q09
Crude Sales (Export & Domestic) Refining & Products Sales (Domestic & Export)
Source: Company data
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16. Downstream
Refining Throughput (MM Tonnes) Oil Products Slate, % (1Q09) Capacity Utilization (1Q09)
7.1 7.6 7.1 7.5
6.6 Other Diesel
1,6 1,9 1,7 ONPZ
1,7 9% 33% 91%
1,6 Lubes
0,6 0,9 0,8
0,9 0,6 1%
0,8 +12%
+3% YANOS 88%
4,9 +42% 4,8 Fuel Oil
4,2 +5%
4,5 4,4
22%
Gasoline
Jet Fuel 28% MNPZ 82%
1Q08 2Q08 3Q08 4Q08 1Q09
7%
Omsk NIS Moscow Yaroslavl
Source: Company data Source: Company data Source: Company data
Refining Conversion Ratio, % (1Q09)
88,3% 86,1%
Oil Refining
82,7% 80,9% 78,5%
79,5% 76,1% 72,5% 70,3% 66,5% 65,5% 63,4% • NIS acquisition leads to growth of
refining volumes
• Depth of refining is one of the highest
at Omsk Refinery
Nov o- Omsk Volgograd Perm Ufa Ukhta Angara Saratov MNPZ Ry azan Kirishi Yanos • Maximizing netbacks through high
Ufimskiy Refinery value added oil products
NPZ
Source: INFOTEK
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17. Oil Products Marketing in Russia
Oil Products Sales in Russia (MM Tonnes)
4,2 4,5 -22%
3,5 +7% 3,5 3,5
0%
+20%
1Q08 2Q08 3Q08 4Q08 1Q09
Oil Products Distribution Through
retail network (MM Tonnes)
0,7 0,8 -13%
0,6 0,6 0% 0,6
+14%
+17%
Refineries
Distribution sites
1Q08 2Q08 3Q08 4Q08 1Q09
Central Asia
Retail
Number of Active Gas Stations
Retail – Most Efficient Downstream Segment
865 876 • Domestic retail market is still underpenetrated
777 782
673 +1%
+1% +11% • Retail sales through owned gas stations – most efficient downstream
+15% segment
2005 2006 2007 2008 1Q09 • Rebranding of petrol stations is under way
• New retail segments – bunkering, aero fueling and lubricant business
Source: Company data
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19. 2009 Perspectives – Three aspects to deal with
Revenues Opex $ Capex Financial Situation
• Lower tax burden •Strong cash flow
•Upstream impacted by generation levels allow
oil prices • $230 M saving plan to continue with our
- natural monopoly investment commitments
tariffs optimization
•Ruble devaluation is a - reducing prices of
constraint for domestic materials and services
revenues - cutting administrative
and headcount expenses •Goal to maintain a
comfortable financial
•Contracts renegotiation position
•Refining margins are to (decrease in contractor
improve prices by 10-30%)
• Prioritizing Capital
expenditures
* Source: Company data 19
21. Acquisition of Naftna Industrija Srbije AD,
Novi Sad, Serbia (“NIS” AD)
Achieved Results
• On February 3, 2009 Gazprom Neft completed the acquisition of 51% of shares in Serbia’s NIS
• Acquisition properties:
• Purchase price of NIS A.D. - Euro 400 million
• Financing an investment program (reconstruction and modernization) - Euro 547 million
• NIS A.D. is a vertically integrated oil company specializing in exploration and production of
crude oil and natural gas as well as processing and marketing of crude oil and oil products
• Increased refining capacity
– Capacity of NIS A.D. Refineries (Pancevo and Novi Sad) is 7.2 MM Tonnes per annum
• Increased resource base
– NIS oil reserves (ABC1) amount to 142.2 MM Tonnes, 52.2 MM Tonnes of which
are recoverable
– In 2008, oil production equalled to 0.6 MM Tonnes
• A leading supplier of oil products in the Serbian market, the company produces about
85% of domestically consumed oil products
– NIS has its own distribution chain of 485 gas stations and oil tank farms
Source: Company data
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22. Sibir Energy Overview
Upstream business
Reserves
- 120 MM Tonnes (C1 reserves)
Production
- 4.8 MM Tonnes in 2009E
Downstream business
Moscow Refinery
(joint venture with Gazprom Neft )
- 10 MM Tonnes of refining throughput
(capacity 12 MM Tonnes )
- 133 filling stations
- One of the leading position in Moscow and
Moscow region market of oil products
Source: Company data,
Public sources 22