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  • Statement on the Egyptian Oil Industry

    Following the circulation of documents originating from intergovernmental meetings between the Russia Federation and Egypt, Rusneftegaz can confirm that we are considering new potential opportunities that are available in the North African nation. This is a continuation of the strategy that has in recent times seen our organization begin talks to enter the oil and gas industry of Algeria, another country that has strong potential for rapid growth in this sector. Despite the fact that Egypt is not a member of the Organization of the Petroleum Exporting Countries, otherwise known as OPEC, the Arab Republic maintains one of the largest fossil fuel industries in Africa. This component of their economy continues to hold significant reserves of crude yet to be extracted, and is a net exporter of refined products. However, it should be noted that their identified hydrocarbon reserves are largely depleted, and existing wells are becoming increasingly challenging to extract from. Consequently, the Egyptian petroleum sector requires considerable financial investment and technical expertise, similar to what is also required in Algeria. Therefore, as a large and successful corporation, we have accrued extensive experience and knowledge working on unconventional wells in remote regions of Russia that face extreme climatic conditions, making our organization an ideal partner for our Egyptian counterparts and contemporaries. In response to the prospect of our potential expansion into the region, Deputy Chief Executive Officer Aleksandr Filyurin stated: 

    “We are looking at a number of different proposals at the moment in a number of different countries. Since we started this process, we have already determined that there are too many challenges for us to expand into the American and European markets. But after we did more research into developing and emerging regions, we found that the oil industries in these countries usually require large amounts of investment, and this could provide some good opportunities for us. Bearing this in mind, when we were given the opportunity to look at projects in countries like Algeria and Egypt, we quickly decided to seize the opportunity. We have put a lot of work into this over the past few months, I really hope that we will have something positive to announce soon.” 

    Thus, our management has concluded that the preliminary research fund designated to investigate projects in Algeria should be sufficient to also include any inquiries for schemes in Egypt, although this sum will be expanded if necessary. Likewise, our board of directors also believes that our organization possesses adequate resources to engage in these potentially lucrative projects, which may ultimately deliver greater return on investment regardless of location. Rusneftegaz continues to be appreciative of the effort made by ministers, officials and public servants to ensure that our interests are represented at the highest levels possible, and we are delighted to report that our organization will send a delegation to attend another intergovernmental meeting shortly. We will continue to endeavor to provide updates regarding our international expansion plans, and will make any relevant announcements at an appropriate time.

  • Rusneftegaz to Pursue Projects in Algeria

    As per the statement made by the Minister of Energy, Aleksandr Novak, last week at an intergovernmental commission, Rusneftegaz can confirm that our organization is interested in and has been actively pursuing new projects in Algeria. Whilst this is a significant divergence from our established policy of expanding further into the Russian oil and gas industry, in the early months of the year, our board of directors opted to change our existing business strategy. This ultimately entails engaging further with the prospect of international expansion into new and potentially lucrative markets. In this particular case, the North African country has one of the largest petroleum industries in the world, with oil products accounting for almost all exports from the nation. However, the Algerian hydrocarbon economy requires a considerable amount of new investment and foreign expertise to develop expansive reserves and increase production rates from current levels. As a consequence, Rusneftegaz has been invited to contemplate working in partnership with the largest company in Africa, Sonatrach, to expedite the expansion of the largest industry in Algeria. This arrangement may also involve us collaborating with other Russian entities, including Gazprom Neft, Lukoil, and Tatneft, to work on the proposed schemes and realize mutual benefits accordingly. In response to the possibility of commencing operations outside the Russian Federation for the first time, Deputy Chief Executive Officer Aleksandr Filyurin stated: 

    ​“The prospect of working with a large state-owned company in a country that produces over 1,5 million barrels per day was simply too good to ignore. We have been reviewing all this for some time now, and it is fair to say that some very interesting proposals have been presented to us. Although there is a lot more still to do and to look at, I am positive about the work we have been doing for the past few months, and I hope we are able to announce something more definitive about this soon.” 

    Therefore, Rusneftegaz can also announce that we have reserved an appropriately-sized provision of funds to facilitate a preliminary investigation of the plans available to us, and will expand this sum accordingly if necessary. Similarly, we can also disclose that Rusneftegaz is also engaging with potential business opportunities in other OPEC member countries in addition to Algeria. However, our board of directors intends to review all viable options available to our organization at this present time, and will make any relevant announcements in due course.

  • Production Data for the Second Quarter

    Rusneftegaz can announce production results for the second quarter of the year as of and for the three months ended 30 June. These were prepared in accordance with all relevant standards but have not been externally audited. The full results are available to review via the associated section of our website:

    Oil and Gas: 

    • The total oil production during the period was 1.490.216 barrels. 
    • The average daily production of oil was 16.376 bpd (barrels per day). 
    • The peak daily production through the month was 17.622 bpd. 

    Electricity:​ 

    • The total amount of electricity produced was 2,30 TWh. 
    • At the end of the reporting period, we maintained a power generation capacity of 1.860 MW.  
    • The installed capacity utilized during the period was 56,6%. 

    The details in this article are current at the date of this report and are believed by Rusneftegaz to be accurate and true. All information is disclosed as a summary and does not purport to be entirely complete. The material published is derived from our internal operational reports, with the data that these documents are reliant upon obtained from sources believed by our management to be reliable. However, our organization cannot wholly guarantee the accuracy or completeness of such information and will not be held liable for any errors that have arisen, nor will any of our employees, directors, officers, agents, partners, subsidiaries, or affiliates. 

  • Changes to Business Strategy

    Following an extensive review of our current operations by the board of directors since taking office in January, our management has concluded that it is in the best and long-term interest of Rusneftegaz to diverge from our existing commercial strategy. Whilst our organization has previously undertaken business in multiple areas and invested in numerous industries, it has been perceived that existing operations focus too narrowly on oil production. It has also been resolved that our company maintains the intellectual and financial resources necessary to expand further within the broader scope of the wider petroleum and energy markets. Therefore, the development plan that is to be enacted in the years ahead should enable Rusneftegaz and our partners to not merely fulfill our potential, but also to enhance our revenues and profit accordingly. Following the publication of the new approach, Deputy Chief Executive Officer, Aleksandr Filyurin, commented: 

    “Since we joined Rusneftegaz earlier this year, the other directors and I immediately began to think of how we can improve this business. I think it is fair to say that the company has been expanding rapidly over the course of the past decade. But as we began to examine everything more closely and learned how things worked, it became apparent that there is a lot of potential to grow the business from its current foundations. When you look at what we do now, our upstream business is in excellent health, but we are missing out on extra profit by not developing our midstream or downstream operations. The same can be said for our power plants, they are old and aging. If we were to invest in all this properly, it will not only grow our revenues, but it will also grow our profits substantially. With this new strategy, we will be able to grow Rusneftegaz sustainably, not only for the long-term benefit of the company, but also for the long-term benefit of our staff too.” 

    The new strategy has two primary areas of focus, oil and electricity, and will be implemented in phases over the next five years, in unison with our current investment program. Whilst our intentions to overhaul our existing generation assets has been previously publicly documented and will be conducted in the immediate future in due course, in the longer-term the revised scheme will also entail acquiring coal power plants across the world to expand our production portfolio by 2020. In this instance, Rusneftegaz will aim to purchase stations at a nominal price that have either retired or are approaching the end of their useful lives. Our company will then utilize our capital and skills to overhaul the sites and restore them to function at maximum capacity, while also renewing their environmental and economic credentials. These affairs, which form the later parts of the wider strategy, will be simultaneously undertaken with a major expansion of our petroleum trading business into new markets. We plan to increase international petroleum sales via a new global hub, dealing in not only our own crude and refined products, but also cargoes that do not necessarily originate in the Russian Federation. This particular project should grow our turnover significantly, allowing Rusneftegaz to commence commercial activities in new and expanding markets, such as Asia, with a view to further undertakings in these regions in the near future. Although this scheme will not be implemented until the end of the decade, primarily due to the volume of prior research required, the board of directors believes the scope to grow our existing oil operation within Russia is now limited. Whilst this is due to a number of both domestic and foreign factors, namely the restrictions on accessing the equipment needed to upgrade the efficiency and productivity of our petroleum business, this proposal should enable Rusneftegaz to form new, international partnerships with other companies and institutions to enable our future success. Further details regarding these changes will be circulated to all affected personnel at a suitable time. Any questions should be directed via the usual channels, and we necessitate your cooperation and understanding with these matters. 

  • 2015-2019 Investment Program Published

    Rusneftegaz can announce that we have devised a new, five-year investment program for the period between 2015 and 2019, which is currently in the process of being implemented by our management. This current plan has been significantly expanded from the previous version, which ultimately resulted in substantial sums being expended on both new assets and infrastructure for our petroleum activities. However, whilst the latest scheme shall continue to develop our domestic fuel production business, it also accounts for major structural revisions to our broader commercial strategy, which will be disclosed at a later date. These changes should yield considerable growth for all our existing undertakings, in conjunction with a wider expansion into new areas of operation. Thus, Rusneftegaz can divulge that for the first time in our corporate history we have apportioned a budget to fund speculative proposals until the end of the decade. Initially, a small amount of the allocated capital will be utilized to conduct further research on hypothetical projects, with the majority of the monies being preserved until a suitable course of action becomes available. In response to this statement, the Deputy Chief Executive Officer, Aleksandr Filyurin, stated: 

    “I am very pleased that we can publish this comprehensive plan, which will enable us to fulfill our growth plans long into the future. I have only worked here for a few months now, but I have been very impressed by what I have seen so far. However, in this business, we cannot stand still. In fact, staying the same in this industry is the same as regressing. That is why it is crucial for us to expand on what we are already doing. Now, I understand that Rusneftegaz has tried to expand before, and there may be some trepidation because of it, but this time it will be different. We will focus our efforts in areas where we already have expertise. We will not repeat the same mistakes as our predecessors. Obviously, before we arrived, there were already plans to invest in new oil equipment, but we wanted to build on this as a basis, rather than thinking that was the final set of plans. That is why in a few weeks time we will be setting out our proposals to transform Rusneftegaz. I hope that the period of our leadership will be marked by continual success and growth, and I hope that all of those that work for Rusneftegaz will join us in making these efforts.” 

    The investments that are planned over the next five-year period exceed, in terms of value, our entire expenditure on assets since the year 2000, including when inflation is accounted for. This is partially due to the retention of all the proposals made by the previous administration to develop our petroleum business, which will enable Rusneftegaz to maintain continuity in this division of our organization and continue its growth in a financially sustainable and organic manner. The new scheme also accounts for the potential and ongoing challenges of acquiring infrastructure and equipment from certain countries, namely those in Europe and North America. Whilst our management does not believe there will be any deterioration in the geopolitical situation in the near or distant future, the board of directors has elected to prioritize the purchase of goods and services of Russian origin. Although our company shall always endeavor to procure the best and most suitable products available, it is necessary to consider the practical implications of sourcing beyond our borders. For instance, any further restrictions placed on importing or exporting to or from the Russian Federation could impact our capacity to have our equipment and assets serviced and maintained by companies located in foreign nations. By making this commitment, Rusneftegaz is also supporting Russian businesses and industry at this challenging time, befitting our status as a large and prosperous enterprise. Despite the fact that our organization has no intention of distributing this document beyond a small pool of executives, stakeholders and affiliates, the matters that have been set forth in this article should yield a significant expansion in revenues and profits by the end of the decade. As a result, we will not be accepting queries regarding these updates, and will disclose further information at the relevant time.