Bashneft has released its preliminary operating results for the third quarter and the nine months of 2015.

3Q 2015 vs. 3Q 2014:

  • Average daily oil production grew by 11.7% to 55.8 thousand tonnes.
  • Production at brownfields added 1.9%.
  • New assets in Timan-Pechora and Western Siberia accounted for 17.4% of oil production
  • Oil production at Burneftegaz increased by a factor of almost 2.5.
  • Gasoline output grew by 16.7%.
  • The share of light products increased to 68.7%, while refining depth reached 87.3%.
  • 100% of motor gasoline and almost 100% of diesel fuel meet the Euro 5 standard.

In the third quarter of 2015, the Company produced 5,134 thousand tonnes of oil, which is 11.7% more than in the third quarter of 2014. Production growth was driven mainly by Bashneft-Polyus and Burneftegaz, which accounted for 17.4% of total oil production as against 9.4% in the third quarter of 2014.

For instance, Bashneft-Polyus boosted production by 65.4% year on year (to 349 thousand tonnes), including due to more active development of the A. Titov field following the commissioning of a pipeline connecting it with the R. Trebs field. In the third quarter of 2015, Burneftegaz produced 546 thousand tonnes of oil, which is 144.8% more than during the same period in 2014. Production growth was driven by efficient implementation of the production drilling programme involving drilling highly productive horizontal wells.

Production growth in the third quarter of 2015 was also supported by a 1.9% increase in oil production at brownfields, mainly due to commissioning of new wells and highly efficient geological and engineering operations in Bashkortostan.

During the nine months of 2015, Bashneft produced 14,674 thousand tonnes of oil, which is 12.1% more than during the same period in 2014. During the nine months of 2015, production at brownfields gained 3.0% year on year. During the nine months of 2015, Bashneft-Polyus produced 963 thousand tonnes of oil, which is 68.4% more than during the nine months of 2014. During the same period, production at Burneftegaz totalled 1,232 thousand tonnes, which is 132.3% more than during the nine months of 2014.

In the third quarter of 2015, Bashneft's refining complex processed 5,120 thousand tonnes of oil, which is 7.3% less than in the third quarter of 2014. During the nine months of 2015, refining fell by 12.3% year on year (to 14,313 thousand tonnes). Given the current macroeconomic and tax conditions, this level of refining enables the Company to maximize the value of its product mix by increasing the output of light products.

Due to the reduction in refining, in the third quarter of 2015, the output of commercial products decreased by 7.2% year on year (to 4,692 thousand tonnes); during the nine months of 2015, it declined by 12.1% (to 13,204 thousand tonnes). At the same time, completion of a number of refinery upgrade projects in 2014 enabled the Company to improve its product mix considerably. Thus, in the third quarter of 2015, the share of light products increased to 68.7% as against 59.2% in the third quarter of 2015; during the nine months of 2015, it stood at 68.6% compared to 60.1% during the same period last year.

Despite the reduction in refining, in the third quarter of 2015, gasoline output increased by 16.7% year on year (to 1,364 thousand tonnes); during the nine months of 2015, it grew by 4.3% (to 3,752 thousand tonnes). In the third quarter of 2015, the output of diesel fuel gained 3.7% year on year (to 1,950 thousand tonnes); however, during the nine months of this year it remained almost flat (5,612 thousand tonnes).

Furthermore, in the third quarter of 2015, 100% of motor gasoline and almost 100% of diesel fuel produced by the Company met the Euro 5 standard. During the nine months of this year, the share of Euro 5 gasoline and diesel fuel in the total output amounted to 95.5% and almost 100% compared to 92.1% and 37.5% respectively during the same period in 2014.

In the third quarter of this year, Bashneft continued to reduce the output of low-margin heavy petroleum products. For instance, the Company did not produce vacuum gas oil; at the same time, it reduced the output of fuel oil by 25.3% compared to the third quarter of 2014 (to 578 thousand tonnes), while during the nine months of 2015 the output of fuel oil decreased by 19.6% (to 1,862 thousand tonnes).

PRELIMINARY OPERATING RESULTS FOR THE THIRD QUARTER AND THE NINE MONTHS OF 2015
Thousand tonnes 9M
2015 		9M
2014 		Change,
% 		Q3
2015 		Q3
2014 		Change,
%
Oil production, including 14,674 13,085 12.1% 5,134 4,596 11.7%
LLC Bashneft-Dobycha 12,479 12,116 3.0% 4,239 4,162 1.9%
LLC Bashneft-Polyus 963 572 68.4% 349 211 65.4%
LLC Burneftegaz* 1,232 397 210.0% 546 223 144.8%
Average daily oil production 53.8 47.9 12.1% 55.8 50.0 11.7%
LLC Bashneft-Dobycha 45.7 44.4 3.0% 46.1 45.2 1.9%
LLC Bashneft-Polyus 3.5 2.1 68.4% 3.8 2.3 65.4%
LLC Burneftegaz 4.5 2.1 210.0% 5.9 2.4 144.8%
Crude oil distillation 14,313 16,323 -12.3% 5,120 5,524 -7.3%
Petroleum product output 13,204 15,015 -12.1% 4,692 5,056 -7.2%
Gasoline, including 3,752 3,598 4.3% 1,364 1,169 16.7%
Motor gasoline 3,452 3,389 1.8% 1,266 1,106 14.4%
Euro 5 3,296 3,120 5.6% 1,266 1,047 20.9%
Diesel fuel 5,612 5,629 -0.3% 1,950 1,881 3.7%
Euro 5 5,604 1,923 191.4% 1,948 706 176.1%
Fuel oil 1,862 2,315 -19.6% 578 774 -25.3%
VGO 27 1,348 -98.0% 0 460 -100.0%
Other 1,951 2,126 -8.2% 800 772 3.4%
Refining depth, % 86.0% 84.9% 1.1 p. p. 87.3% 85.0% 2.3 p.p.
Share of light products, % 68.6% 60.1% 8.5 p. p. 68.7% 59.2% 9.4 p.p.

*- LLC Burneftegaz as from March 27, 2014

Oil production by oil and gas province
Thousand tonnes 9M
2015 		9M
2014 		Change,
% 		Q3
2015 		Q3
2014 		Change,
%
Volga-Urals* 12,300 11,912 3.3% 4,181 4,095 2.1%
Timan-Pechora** 963 572 68.4% 349 211 65.4%
Western Siberia*** 1,411 601 159.9% 603 290 107.9%
Total: 14,674 13,085 12.1% 5,134 4,596 11.7%

*- LLC Bashneft-Dobycha
**- LLC Bashneft-Polyus
***- LLC Bashneft-Dobycha and LLC Burneftegaz

distributed by