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Gazprom Neft increases net profit by 29% in H1 2019

Aug 9, 2019
Gazprom Neft increases net profit by 29% in H1 2019
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  • Net profit for H1 2019 of RUB215.0 billion — a 29.2% increase year-on-year
  • Adjusted EBITDA* up 10.8% year-on-year, reaching RUB408.1 billion
  • Net debt to EBITDA ratio as at end H1 standing at 0.54x

Gazprom Neft today announces its consolidated IFRS financial results for the first six months (H1) and second quarter (Q2) of 2019.

Gazprom Neft’s revenue in the first six months of 2019 totalled RUB1.215 trillion, an increase of 6.8% year-on-year, with higher production growth at major projects (the Novoportovskoye and Vostochno-Messoyakhskoye fields), a more favourable pricing environment, and effective management initiatives delivering adjusted EBITDA growth of 10.8% year-on-year, at RUB408.1 billion. Net profit attributable to Gazprom Neft PJSC shareholders totalled RUB215 billion, a 29.2% increase year-on-year. Higher operating cash flow resulted in a positive free cash flow of RUB125.2 billion in H1 2019.

Hydrocarbon production, including Gazprom Neft’s share in joint ventures, rose to 47.4 million tonnes of oil equivalent (mtoe) in H1 2019, a 5.6% increase year-on-year, as a result of higher production levels at the Novoportovskoye and Vostochno-Messoyakhskoye fields, as well as in the Orenburg region, together with a greater ownership interest in Ar§ăti§ăgas.

Refining volumes at Gazprom Neft’s own and joint-venture refining assets amounted to approximately 20 million tonnes in H1 2019: these volumes being impacted by planned repairs at the Company’s Pančevo and Yaroslavl refineries.

As part of its development of its petrochemicals business, as envisaged under the Company’s long-term development strategy, Gazprom Neft, together with SIBUR, consolidated 100 percent of the charter capital in the Poliom LLC polypropylene plant in Omsk: the integration of refining and petrochemicals assets allowing the Company to improve efficiency by using refinery feedstocks to produce high-value-added products. The Company also increased sales of oil products through premium channels in H1 2019, with sales of bitumen materials, in particular, increasing by more than 15%, sales of lubricants by 6.7%, and sales of bunkering fuels by more than 22%.

Financial highlights

Q2

Q1

∆, %

 

6 months

∆, %

2019

2019

2019

2018

628,315

586,359

7.2

Sales (RUB millions)

1,214,674

1,137,736

6.8

189,939

179,052

6.1

EBITDA (RUB millions)

368,991

330,579

11.6

210,367

197,688

6.4

Adjusted EBITDA* (RUB millions)

408,055

368,200

10.8

18.15

17.42

4.2

$/boe

17.78

18.63

(4.6)

107,145

107,894

(0.7)

Profit attributable to Gazprom Neft PJSC shareholders (RUB millions)

215,039

166,475

29.2

134,509

168,596

(20.2)

Operating cash flow

303,105

210,289

44.1

34,184

91,000

(62.4)

Free cash flow

125,184

47,534

163.4

0.54

0.59

(8.5)

Net debt / EBITDA

0.54

1.01

(46.5)

 

Operational highlights

Q2

Q1

∆, %

 

6 months

∆, %

2019

2019

2019

2018

179.60

171.67

4.6

Hydrocarbon production including Gazprom Neft share in joint ventures (mboe)

351.27

333.06

5.5

24.19

23.24

4.1

Hydrocarbon production including Gazprom Neft share in joint ventures (mtoe)

47.43

44.92

5.6

10.03

9.96

0.7

Refining volumes at the company’s own and joint-venture facilities (million tonnes)

19.99

20.57

(2.8)

*Adjusted EBITDA includes the share of EBITDA of associates and joint ventures accounted for under the equity method.


Source: 
https://www.gazprom-neft.com/press-center/news/3378745/

GAZPROM NEFT AND SIBUR TO JOINTLY DEVELOP THE POLIOM POLYPROPYLENE PLANT IN OMSK

Jul 26, 2019
GAZPROM NEFT AND SIBUR TO JOINTLY DEVELOP THE POLIOM POLYPROPYLENE PLANT IN OMSK
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Gazprom Neft and SIBUR have consolidated 100 percent of the charter capital in the Poliom LLC polypropylene plant in Omsk, with the Gazprom Neft—SIBUR joint venture — Sibgazpolymer JSC — signing an agreement on the acquisition of a 50-percent interest in the charter capital of Poliom LLC, owned by the Titan Group.
 
Following the completion of all corporate and registration procedures, Sibgazpolymer JSC has become the sole participant in Poliom LLC, which will be managed jointly by Gazprom Neft and SIBUR.
 
Launched in 2012, Poliom is one of Russia’s largest polypropylene producers. In 2014, Poliom became the basis for a joint venture between Gazprom Neft (25 percent), SIBUR (25 percent) and the Titan Group (50 percent). The plant has capacity to produce 218,000 tonnes of high-technology product every year, with a range covering 100 brands of polypropylene. The key feedstock for production — propane-propylene fraction — is sourced from the Gazprom Neft Omsk Refinery, with SIBUR managing the distribution of end-products throughout Russia and the CIS. The facility is certified as complying with international standards, and deploys best-practice R&D solutions and technologies to ensure waste-free production.
 
Levan Kadagidze, Head of the Commercial Directorate at Gazprom Neft, commented: “Increasing our interest in Poliom marks an important milestone in implementing Gazprom Neft’s long-term strategy, a key element of which involves developing petrochemical production. Integrating assets in the refining and petrochemical sectors will allow us to improve efficiency in using refinery feedstocks to produce high value-added products, while also boosting our competitive edge both domestically and internationally through stronger technological ties with SIBUR”.
 
Sergey Komyshan, Executive Director and a member of the Management Board, SIBUR, added: “SIBUR is committed to developing its polymer business as demand in Russia and all over the world keeps growing, ahead of the global economy. Thanks to their superior qualities, synthetic materials are well on the way to replacing their traditional counterparts, while also offering new opportunities in transportation, healthcare, robotics and other areas. This acquisition of a majority interest in Poliom LLC will allow us to focus on its development, as well as on product distribution. SIBUR has unique expertise that will allow it to expand the facility’s polymer range, as well as meeting demand from businesses in various sectors, by bringing streamlined product solutions to market. I would also like to thank the Titan Group for our long-standing and successful cooperation.”
 
Mikhail Sutyaginsky, Chairman of the Board of Directors, Titan Group, commented: “The Titan Group’s vast expertise in building complex industrial facilities, and the standard of its technological solutions and production engineering, have made the Omsk polypropylene plant an enticing and valuable asset for two of Russia’s major companies — Gazprom Neft and SIBUR. Poliom has robust process control systems, meaning its products are fully compliant with the standards of the world’s top polymer goods manufacturers. I would stress that the Titan Group will continue developing its own industrial assets, including putting in place production facilities to increase the conversion factor in hydrocarbon refining, and producing a wide range of organic chemical products to replace imported alternatives. Gazprom Neft and SIBUR will remain our strategic partners on both new and existing projects”.

 
 
NOTES FOR EDITORS

Gazprom Neft PJSC is a vertically integrated oil company, primarily involved in oil and gas exploration and production, refining, and the production and sale of oil products. Gazprom Neft’s corporate structure comprises more than 70 production, refining and sales subsidiaries throughout Russia, the CIS, and abroad.
 
Gazprom Neft is one of the world’s Top-10 public companies by proven liquid hydrocarbon reserves, and a global leader in its rapidity in reserves replacement. In terms of production and refining volumes it stands among the top three largest companies in Russia. Total production in 2018 reached 92.9 million tonnes of oil equivalent (mtoe), with refining volumes of 42.9 million tonnes.
 
Net profit at Gazprom Neft reached RUB376.7 billion in 2018, a 49-percent increase by 2017. The company is a market leader in terms of both financial growth and various efficiency metrics, including its Return on Average Capital Employed (ROACE).
 
SIBUR leads Russia’s petrochemicals industry, and is one of the largest companies in this sector worldwide, with more than 26,000 employees. The company’s integrated business model allows SIBUR to produce highly competitive products used in the production of consumer goods as well as in the automotive, construction, energy, petrochemicals and other industries in 80 countries worldwide.
 
SIBUR processes the by-products of oil and gas production, thus helping to reduce the CO2 emissions that arise from their combustion. SIBUR processed 22.3 billion cubic metres of associated petroleum gas (APG) in 2018, reducing greenhouse emissions by 72 million tonnes — equal to the annual CO2 emissions of an average European country.
 
In 2018, SIBUR reported revenue of USD9.1 billion and EBITDA of USD3.2 billion.



Source: https://www.gazprom-neft.com/press-center/news/3310701/

Product Testing: Extended Oil Drain Interval with Gazpromneft Diesel Premium 15W-40 CI-4 Heavy Duty Engine Oil

Jul 23, 2019
Product Testing: Extended Oil Drain Interval with Gazpromneft Diesel Premium 15W-40 CI-4 Heavy Duty Engine Oil
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Origin Auto Parts PLT is working closely with Oily Lubricants Malaysia Sdn Bhd to perform product testing on one of the most well-received products in Gazpromneft Lubricants range - Gazpromneft Diesel Premium 15W-40 CI-4 Heavy Duty Engine Oil. The main purpose of this testing is to examine how well does the oil perform in a vehicle subjected to Malaysia climate of high humidity and high ambient temperature.
 
 
Picture 1: Engine oil condition at around 4000km (left) and 8000km (right).
 
Picture 2: Engine Oil Condition at around 10,000km.

The test vehicle is a Toyota Hilux 2.5L D-4D using Gazpromneft Diesel Premium 15W-40 CI-4 and has travelled over 10,000km in a mixture of off-road and federal roads driving in about 3 months. Engine oil was visually checked for colour change at around 4000km, 8000km and 10,000km. Oil filter were changed around 5000km interval as well. The engine oil sample is extracted from the engine at 10,564km interval and bottle containing oil sample is sealed before sending it to an independent laboratory for used oil analysis. Used oil analysis is a routine yet important activity to understand oil condition and operating condition of a lubricated machine.

 
           
Picture 3: Oil sample extraction via dipstick hole (Left). Oil sample in bottle (Right).

Oil analysis result (Picture 4) showed no abnormalities in the oil after running in the Toyota Hilux’s engine under severe condition. Minimal amount of wear metals and contaminant were detected in the oil sample including the amount of soot. Total Base Number (TBN) is a measurement of oil alkalinity – an indication of oil to neutralise acidic contaminants which is corrosive to engine parts. Measured TBN of 7.71 mgKOH/g of the oil sample after 10,000km indicating exceptional acid neutralisation and TBN retention capabilities of the engine oil, due to its advanced additive technology which has high detergent and dispersant properties.
 
Picture 4: Test result of Gazpromneft Diesel Premium 15W-40 CI-4 after 10564km.

Based on historical data, engine oil change is necessary when TBN has depleted over 60% from starting TBN with considerable safety margin in place. Using Gazpromneft Diesel Premium 15W-40 CI-4 Heavy Duty Engine Oil as an example, this oil has a starting TBN of 10.0 mgKOH/g. In other words, the oil needs to be changed when its TBN has depleted to 4 mgKOH/g. By calculation, this engine oil only used up 38.2% of its service life and it is projected to be able to last up to 20,000km or more without compromising engine reliability.
 
Optimum lubricant selection for respective machine application is an engineering process which would make big difference in lubricant cost saving and machine reliability. Some lubricants are cheap to own but need to be changed at much shorter interval, hence incurring higher lubricant cost . Simply extending oil changing interval without considering quality of lubricant poses high risk of premature lubricant failure and might cause expensive damages. Changing oil too early means higher lubricant cost and downtime while changing oil too late would cause damage to engine lead to expensive repair costs and much longer downtime. This is why used oil analysis is a valuable tool to determine optimum oil drain interval which could help reducing operating cost and boost revenue.

Consult us on your lubricant needs HERE.

Gazpromneft-Lubricants to present new hydraulic oils line formulated with DYNAVIS® unique technology

Jul 9, 2019
Gazpromneft-Lubricants to present new hydraulic oils line formulated with DYNAVIS® unique technology
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Gazpromneft-Lubricants in cooperation with Evonik, a German specialty chemical company, has developed a new line of synthetic hydraulic oils, G-SPECIAL POWER HVLP, intended for use in mining, construction, forestry, agricultural machinery and industrial equipment.

G-Special Power HVLP hydraulic oils are developed with use of DYNAVIS® unique technology of Evonik. The oils ensure a wider temperature operating range for the equipment, give better protection for the hydraulic system and increase drain intervals due to the high shear stability of the DYNAVIS® formulated new fluids from Gazpromneft-Lubricants. Furthermore, higher productivity and improved fuel efficiency increase the overall efficiency and the service life of the hydraulic equipment. 

During long-term bench and field tests, G-SPECIAL Power HVLP hydraulic oils showed better results compared to the reference oil: increase in the number of loading cycles per shift by 12%, increase in equipment performance by 15-25%, fuel economy up to 6%, reduction in the risk of failure of the hydraulic system.

The official presentation of the new product line was held within the framework of “The Russia’s Coal and Mining-2018” exhibition at the special stand of Gazpromneft-Lubricants. The exhibition guests, the representatives of 626 industrial companies from 27 countries of The CIS, Europe, Asia and Northern America, had a chance to know more details about the new high-tech product and ask Russian developers and their German colleagues the questions on the application of G-SPECIAL POWER HVLP various equipment.

Roman Zimovets, Deputy General Manager for Marketing and Strategic Development, Gazpromneft-Lubricants:

“Efficiency is one of the main priorities for our company’s operation and the key benefit of G-Special Power HVLP. The new product market launch is the result of a long partnership in creating oils that meet the highest requirements of world’s OEMs. We used advanced technologies and unique market expertise to offer our customers the modern product that can increase the productivity of the equipment”. 

Rolf Fianke, Global Marketing Manager DYNAVIS®, Evonik: 

We, as Evonik, are proud to have one of the regional market leaders as our business partner to introduce high shear stable hydraulic fluids with a high viscosity index formulated with DYNAVIS® technology. The benefits for fleet owners in Russia will be significant, because they will experience better cold start behaviour, better equipment availability, longer drain intervals and on top they can work more but will spend less energy for the achieved work. We are looking forward to many satisfied users of G-Special Power HVLP formulated with Evonik’s DYNAVIS® technology.

Source: 
http://www.gazpromneft-oil.com/clients/gpn.nsf/all/e02s?opendocument&stype=357CBA0BA82C96CE432582AD005B1033

NEW SYNTHETIC GAZPROM NEFT G-ENERGY OILS SECURE APPROVAL FROM MERCEDES BENZ

Jul 1, 2019
NEW SYNTHETIC GAZPROM NEFT G-ENERGY OILS SECURE APPROVAL FROM MERCEDES BENZ
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Gazpromneft Lubricants, operator of the Gazprom Neft lubricants business, has been awarded the Daimler AG MB-Approval 229.3 (Mercedes Benz) for its G-Energy Synthetic Long Life 10W-40 oil.
 
This product, from the new G-Energy Synthetic range, has been developed from the company’s own synthetic API Group III base oils, giving greater corrosion resistance, meaning lubricants retain their performance characteristics for longer retain their performance characteristics for longer.
 
This new motor oil has been tested over a period of six months at cutting-edge accredited independent laboratories in Europe and the United States, under a programme involving engine and laboratory bench-testing, as well as physical and chemical tests — all of which have confirmed the product’s high quality, on a par with the best international alternatives.
 
Alexander Trukhan, CEO, Gazpromneft-Lubricants, commented: “Developing products, technologies, and joint initiatives with leading automotive and industrial equipment manufacturers are priority areas in our company’s work. We follow new trends in lubricants production closely, and take these into account in developing our own new products. Securing Mercedes Benz’ endorsement for our new G-Energy Synthetic range recognises the successful work not just of the specialists at our Science and Technology Centre, but of the entire team involved in developing this new line and bringing it to market.”

Source: https://www.gazprom-neft.com/press-center/news/2512055/

G-ENERGY SYNTHETIC OIL SUCCESSFULLY PASSED THE EUROPEAN FUEL ECONOMY TEST STANDARD

Jul 1, 2019
G-ENERGY SYNTHETIC OIL SUCCESSFULLY PASSED THE EUROPEAN FUEL ECONOMY TEST STANDARD
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Gazpromneft-Lubricants received positive test results on G-Energy Synthetic Super Start 5W-30 that successfully passed NEDC (the New European Driving Cycle) fuel economy/emissions test standard. The main feature of the study is that the testing procedure is carried out in a real car with the reconstruction of various road situations: acceleration/braking in urban environment, start/stop, high-speed performance and etc. The obtained results allow to estimate fuel economy in the real conditions.
 
The NEDC test was conducted at the ISP Testing Institute in Germany, one of the world’s leading testing centers used by Gazpromneft-Lubricants for the new products development.
 
G-Energy Synthetic Super Start 5W-30 high efficiency results for the car owners into fuel costs reduction in comparison with the reference sample (up to 2%), that is relevant for active motorcyclists and large fleet owners.
 
Nikolay Doroshenko, Head of Product Management and Development Department:
“Our expertise allows us to launch complex products, developing the most up-to-date offers for consumers. Every year our product portfolio expands with innovative products that guarantee not only the stable equipment exploitation, but also increases the operational efficiency.”

Source: http://g-energy.org/en/press-center/news/maslo_g-energy_synthetic_viderzhalo_evropeyskiy_test_na_toplivnuyu_ekonomichnost___.html



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