• HYDROCARBONS PRODUCTION AMOUNTED TO 269.8 MLN TOE IN 2023
• LIQUID HYDROCARBONS PRODUCTION IN 2023 AMOUNTED TO 193.6 MLN TONS
• GAS PRODUCTION TOTALLED 92.7 BCM^* IN 2023
• 2 DEPOSITS AND 133 ACCUMULATIONS OF OIL AND GAS DISCOVERED IN 2023
• 2023 EBITDA AMOUNTED TO RUB 3 TRLN
• NET INCOME ATTRIBUTABLE TO ROSNEFT SHAREHOLDERS AMOUNTED TO RUB 1.3 TRLN IN 2023
• NET DEBT/EBITDA WAS 0.9X AT THE END OF 2023

Rosneft Oil Company (hereinafter – Rosneft, the Company) publishes its results for 12 months of 2023, prepared in accordance with the International Financial Reporting Standards (IFRS).

* Not including gas for process needs.
** Adjusted for royalty effect in the Sakhalin-1 project.
*** Adjusted given the final evaluation of purchase of Angaraneft and Sakhalin-1.

Igor Sechin, Chairman of the Management Board and Chief Executive Officer of Rosneft, said:

“In the reporting year Rosneft continued its systematic work on increasing efficiency and building up its production potential, primarily in the gas business due to external restrictions on oil production.

Key financial indicators – revenue, EBITDA, profit, cash flow – demonstrated growth in 2023. Thanks to the strict cost control and efficiency improvement efforts, unit lifting costs decreased to $2.6/boe in 2023.

Following the increase in interest rates in the second half of the year, the Company focused its efforts on debt burden reduction – the total amount of net financial debt and prepayments was reduced by RUB 0.7 trillion. At the same time, Rosneft’s interest expenses increased due to, among other things, the rise in the Bank of Russia key rate as well as further growth in banks’ interest margins leading to the record-high annual profit of the banking sector. In particular, the Company’s interest expenses for Q4 2023 increased 1.5 times compared to the same indicator for Q4 2022.

I should note that in the reporting year the Government of Russia accepted the Company’s tax proposals taking into account the current economic environment.

In February 2024, the Company completed the payment of interim dividends totalling to RUB 326 billion, which corresponds to 50% of IFRS net income attributable to shareholders for 1H 2023. I should note that in the last six months the number of individual shareholders of Rosneft has increased by a quarter to 1.13 mln people, which is another evidence of investor confidence in the Company.”

Operational performance

Exploration and production

The Company's hydrocarbons production amounted to 269.8 mln toe in 2023 including liquids production of 193.6 mln tons.

Rosneft’s gas production amounted to 92.7 bcm in 2023.

In 2023, Rosneft tested 73 exploration wells onshore with a 90% success rate and discovered 2 deposits and 133 new accumulations of hydrocarbons with reserves of 0.1 bln toe (the AB1C1+B2C2 category).

According to the results of the reserve audit under the international PRMS system (the Petroleum Resources Management System), the Company's 2P hydrocarbons reserves as of the year-end amounted to 11.4 bln toe. The 2Р reserves replacement ratio was in excess of 100%.

Production drilling footage amounted to 12.0 mln meters in 2023. The Company commissioned 3.2 th. new wells, 71% of which were horizontal wells.

Vostok Oil Project

In 2023, the Company completed over 2.4 th. linear km of 2D seismics and 1.6 th. square km of 3D seismics as part of the flagship Vostok Oil Project. The acquired data interpretation is in progress. Rosneft tested 4 exploration wells with a 100% success rate, and drilled 4 wells with 3 more wells being tested.

Pilot development of the Payakha, the Ichemminskoye and Baikalovskoye fields is in progress. In 2023, the Company drilled about 50 th. meters and completed drilling of 12 production wells.

The Company continues construction of the ‘Vankor – Payakha – Sever Bay’ trunk oil pipeline: more than 29,000 piles have been mounted and about 230 km of pipes have been welded. Construction of the pipeline underwater section, which will be laid by way of trenching along the Yenisei River bottom, is in progress. Dredging works have been completed and a fit-for-purpose site is being developed for the subsequent laying of the pipeline. Technologies and materials used in the construction of the crossing are Russian-made.

Construction of logistics infrastructure, hydraulic structures, shore reinforcement, and expansion of coastal and berthing infrastructure is underway.

In December 2023, Rosneft started winter delivery of cargoes via the Northern Sea Route and winter roads. A record 700,000 tons of construction materials, machinery and equipment are planned to be delivered to the project facilities during the season. This is almost 20% more than the volumes delivered last year over the same period.

Refining

In 2023, the volume of oil refining in Russia amounted to 88.0 mln tons. Light product yields increased to 58.6%, and the depth of oil refining amounted to 76.2%.

The Company has been consistently developing local technologies and import substitution. In 2023, more than 900 tons of diesel hydrotreating catalysts and protective layer catalysts, more than 200 tons of reforming catalysts and about 160 tons of catalysts and adsorbents for hydrogen production units were manufactured.

The Company continues to introduce diesel hydrotreating catalysts with restored activity at its refineries - over 1,000 tons of spent diesel hydrotreating catalysts were regenerated and reactivated. Successful operation of integrated catalytic systems including hydrotreating, dewaxing and hydrofinishing catalysts was launched, which enabled the Company to increase its manufacture of winter grades of diesel fuel.

In 2023, the Company sold 42.4 mln tons of petroleum products on the domestic market, including 13.0 mln tons of gasoline and 17.2 mln tons of diesel fuel.

Sustainable supply of high-quality motor fuel to Russian consumers is one of Rosneft's key priorities. The Company is an active participant of trading activities at the St. Petersburg International Mercantile Exchange (SPIMEX). In 2023, the Company sold 8.7 mln tons of motor fuel on the exchange, which is more than twice the required volume. The Company's share in the total volume of exchange sales of gasoline and diesel fuel was 40%.

The price dynamics at the Company's filling stations on the domestic market remain below the inflation rate.

Financial performance

In 2023, the Company’s revenue¹ amounted to RUB 9,163 bln, and EBITDA totalled RUB 3,005 bln. Unit lifting costs amounted to $2.6 / boe for the year.

Net income, attributable to Rosneft shareholders in 2023, amounted to RUB 1,267 bln, driven by EBITDA growth and dynamics of non-cash items.

Capital expenditures in 2023 reached RUB 1,297 bln due to planned operations in the Upstream segment. The adjusted free cash flow² in the reporting period totalled RUB 1,427 bn.

Implemented measures aimed at maintaining financial stability allowed the Company to reduce the level of net financial debt and prepayment debt by RUB 0.7 trln compared to early 2023. The Net Debt / EBITDA ratio at the end of 2023 amounted to 0.9x (in USD terms) compared to 1.3x at the end of 2022.

ESG

During the reporting period, the Company continued to implement measures to achieve sustainable development goals under the 'Rosneft-2030: Reliable Energy and Global Energy Transition' strategy.

Rosneft is consistently developing the system for managing the integrity of production facilities and equipment to achieve zero accidents by 2030 or earlier. In 2023, the frequency of incidents involving loss of containment (LOC) of equipment with severe consequences (Tier 1 incidents, PSER-1) decreased by 40% compared to 2022, while the frequency of Tier 2 industrial incidents (PSER-2) decreased by 35%.

In the reporting year, the Company's facilities did not record a single case of gas, water and oil shows (gas, oil or water release to the surface) during well drilling, with the number of failures decreasing sixfold. As part of efforts to minimize oil and petroleum products spills, field pipelines replacement activities are underway.

In 2023, more than 80 hectares of contaminated ‘legacy’ lands were remediated under the Environmental ‘Legacy’ Remediation Program in 2023.

In 2023, Rosneft confirmed its leading position in sustainable development in the Russian and international oil and gas industry. The Company was included in the Moscow Exchange - RAEX 'ESG Balanced' Index, consisting of 15 constituents with the highest ESGranking from ‘RAEX-Analytics’, the largest provider of non-credit ratings.

Rosneft became the best Russian oil and gas company in the World Benchmarking Alliance international rating for sustainable development, which evaluates the contribution of the world's 100 largest companies to the achievement of the UN Sustainable Development Goals every two years, and was ranked among the top 10 companies by a number of indicators.

In 2023, Rosneft joined the group of companies with high social ratings (top 2) from ISS (one of the largest international providers of services in the field of sustainable development and responsible investments).

¹ Includes sales revenues and equity share in profits of affiliates and joint ventures.
² Adjustment for prepayments under long-term oil supply contracts, including accrued interest payments thereon, net change in operations of subsidiary banks, and operations with trading securities.

Department of Information and Advertising
Rosneft Oil Company
February 19, 2024

These materials contain statements regarding future events and expectations that are forward-looking estimates. Any statement in these materials that is not historical information is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by these forward-looking statements. We assume no obligation to adjust the data contained herein to reflect actual results, changes in underlying assumptions or factors affecting the forward-looking statements.