On 1 November 2012 Rosneft published its consolidated IFRS financial statements for Q3 2012 and 9M 2012.

Operating and financial highlights

Hydrocarbon production (including production by subsidiaries and share in production by affiliated companies) increased 3.4% over the first nine months of 2012 compared to the same period last year to 2,662 th. boepd. Daily crude oil production grew 2.1% in line with the revised plan to boost production 2% in 2012. This increase in daily production was largely thanks to higher output at Vankorneft and Verkhnechonskneftegaz fields. Gas production (including share in the joint venture with Itera) totalled 11.02 bcm, a 19.0% increase on the same period last year.

Throughput at Rosneft’s Russian and international refineries was 45.56 million tonnes in the first nine months of the year. This 8.6% increase in throughput is attributed to the acquisition of a 50% share in Ruhr Oel GmbH in May 2011. Refinery throughput in Q3 2012 rose 13.8% to 15.98 million tonnes on the back of the completion of scheduled repairs in Q2 at the Achinsk and Kuibyshev refineries in Russia and the Gelsenkirchen refinery in Germany.

Revenues for the 9-month period were up 16.1% at RUB 2,268 billion thanks to higher prices for the Company’s products and greater sales volumes. The improvement on the global oil and petroleum product markets and an increase in petroleum product sales volumes in Q3 2012 helped drive an 11.7% increase in revenues, which totalled RUB 802 billion for the quarter.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for 9M 2012 fell 10.6% to RUB 445 billion rubles. This indicator was negatively impacted as the Company began to pay standard rate MET and export duties for oil produced at the Vankor field in H1 2011 and also by the higher base MET rate and transport tariffs introduced in January 2012.

EBITDA more than doubled in Q3 2012 compared to the previous quarter to total RUB 191 billion. This was driven by effective cost control in production and improved efficiency in the Company’s commercial activities domestically and on the international market. As prices for oil and petroleum products rose in Q3 2012, Rosneft also benefited from an export duty time lag.

Rosneft’s 9M 2012 net profit grew 15.4% to RUB 285 billion. This net profit figure includes the gain recognition in Q3 2012 of income of RUB 65 billion from the acquisition of 51% in Itera. Net profit in Q3 2012 reached a 5-year high of RUB 181 billion.

Free cash flow for 9M 2012 was RUB 32 billion, which is lower than the same period in 2011 due to increased investment in refining. Rosneft generated free cash flow of RUB 53 billion in Q3 2012. Taking into account dividend payments, the Company reduced net debt from RUB 658 billion to RUB 625 billion.

Commenting on Q3 2012 results, Rosneft President Igor Sechin said: “The Q3 results reflect the beginning of broad-reaching transformations within the Company to cut costs and improve efficiency, which have already yielded strong results in production and sales. This allows us to improve the Company’s financial standing and build stronger foundation for efficient implementation of our strategic projects.”

November 1, 2012
Rosneft Information Division
Tel.: + 7 (495) 411 54 20
Fax: +7 (495) 411 54 21

These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.