2021 Third quarter IFRS (Analysis (MD&A))

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED

SEPTEMBER 30, 2021 AND JUNE 30, 2021 AND FOR NINE MONTHS

ENDED SEPTEMBER 30, 2021 AND 2020

Management's discussion and analysis of financial condition and results of operations of Rosneft in the third quarter of 2021 and in the nine months of 2021 and 2020

The following discussion of Rosneft's financial condition and results of operations is based on, and should be read in conjunction with, the Company's financial statements and the notes thereto for the periods ended September 30, 2021 and 2020, and June 30, 2021 (the "Interim Consolidated Financial Statements"). In the disclosure of indicators such terms as "Rosneft", "Company" and "Group" in their different forms in this report mean PJSC Rosneft Oil Company, its subsidiaries and its equity share in associates and joint ventures, unless otherwise specified.

Except as otherwise indicated, oil and gas reserves are presented pro-rata for associates and joint ventures and 100% for fully consolidated subsidiaries.

Except as otherwise specified, all amounts are provided in billions of RUB. All figures are rounded, however, figures per unit of production are provided based on the actual data.

To convert tonnes of liquid hydrocarbons (except gas condensate of JSC "Rospan International") to barrels a 7.404 ratio is used. To convert Rospan gas condensate to barrels a 8.3 ratio is used. To convert a thousand of cubic meters of gas to barrels of oil equivalent a 6.09 ratio is used.

This report contains forward-looking statements that involve risks and uncertainties. Rosneft's actual results may materially differ from those discussed in such forward-looking statements as a result of various factors.

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Management's discussion and analysis of financial condition and results of operations of Rosneft in the third quarter of 2021 and in the nine months of 2021 and 2020

Overview.........................................................................................................................................	5
Financial and operating highlights ...................................................................................................	5
Events in the reporting period ..........................................................................................................	6
Events after the reporting date .........................................................................................................	6
Macroeconomic factors affecting results of operations.....................................................................	7
Changes in Crude Oil, Petroleum Product and Gas Prices ...............................................................	7
USD/RUB and EUR/RUB Exchange Rates and Inflation ................................................................	8
Mineral Extraction Tax, Export Duties and Excise Taxes ................................................................	8
Changes in Transport Tariffs of Pipeline and Railway Monopolies..................................................	9

Consolidated statement of profit or loss for the three months ended September 30, 2021 and June

30, 2021 and for the nine months ended September 30, 2021 and 2020, respectively. ....................	10
Business Segments and Intersegment Sales....................................................................................	11
Upstream Operating Results ..........................................................................................................	12
Upstream EBITDA.................................................................................................................	12
Operating indicators.....................................................................................................................	13
Production of liquid hydrocarbons ..........................................................................................	13
Production of Gas...................................................................................................................	14
Financial indicators......................................................................................................................	15
Equity share in financial results of upstream associates and joint ventures................................	15
Upstream production and operating expenses ..........................................................................	15
Exploration Expenses .............................................................................................................	15
Mineral extraction tax (MET) and Excess profit tax.................................................................	16
Downstream Operating Results......................................................................................................	17
Downstream EBITDA ............................................................................................................	17
Operating indicators.....................................................................................................................	18
Petroleum Product Output.......................................................................................................	18
Financial indicators......................................................................................................................	19
Revenues and equity share in profits of associates and joint ventures .......................................	19
Financial result of associates and joint ventures .......................................................................	24
Downstream production and operating costs............................................................................	25
Cost of Purchased Oil, Gas, Petroleum Products, Goods for Retail and Refining Costs.............	26
Transportation Costs and Other Commercial Expenses ............................................................	28
Excise Taxes ..........................................................................................................................	29
Export Customs Duties ...........................................................................................................	29
"Corporate and others" segment operating results ..........................................................................	29
Separate indicators of the consolidated financial statements...........................................................	30
Costs and Expenses......................................................................................................................	30
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Management's discussion and analysis of financial condition and results of operations of Rosneft in the third quarter of 2021 and in the nine months of 2021 and 2020

General and Administrative Expenses .....................................................................................	30
Depreciation, Depletion and Amortization...............................................................................	30
Taxes Other than Income Tax .................................................................................................	30
Finance Income and Expenses ................................................................................................	30
Other Income and Expenses....................................................................................................	31
Foreign Exchange Differences ................................................................................................	31
Income Tax ............................................................................................................................	31
Net Income ....................................................................................................................................	31
Liquidity and Capital Resources .....................................................................................................	32
Cash Flows..................................................................................................................................	32
Net cash provided by operating activities ................................................................................	32
Net cash used in investing activity ..........................................................................................	32
Net cash provided/(used) in financing activities .......................................................................	32
Capital Expenditures....................................................................................................................	33
Financial liabilities and liquid funds .............................................................................................	34
Key consolidated financial highlights (in RUB terms) ...................................................................	35
Calculation of EBITDA ...............................................................................................................	35
Calculation of Free Cash Flow .....................................................................................................	36
Calculation of EBITDA Margin ...................................................................................................	36
Calculation of Net Income Margin attributable to Rosneft shareholders .........................................	36
Calculation of Current ratio ..........................................................................................................	36
Consolidated financial highlights (in USD terms) ..........................................................................	37
Consolidated statement of profit or loss ........................................................................................	37
Key consolidated financial highlights (in USD terms) ...................................................................	37
Calculation of Free Cash Flow .....................................................................................................	38
Calculation of EBITDA Margin ...................................................................................................	38
Calculation of Net Income Margin ...............................................................................................	38
Calculation of Current ratio ..........................................................................................................	38
Attachment 1: Risks and opportunities associated with climate change..........................................	39
Attachment 2: Taxation................................................................................................................	41
Attachment 3: EBITDA by segment .............................................................................................	47
Attachment 4: Average monthly RUB/USD exchange rates, calculated using the Bank of Russia
data .............................................................................................................................................	48

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Management's discussion and analysis of financial condition and results of operations of Rosneft in the third quarter of 2021 and in the nine months of 2021 and 2020

Overview

Rosneft is a vertically integrated oil and gas company with core activities and assets located principally in Russia. The Company is primarily engaged in exploration and production of hydrocarbons, oil refining and product marketing mainly in the Russian Federation. Rosneft is the first Russian company to publicly confirm its commitment to the 17 UN Sustainable Development Goals, which are integrated into the corporate strategy. The Company annually reports on its contribution to the implementation of the goals, two of which, "Clean and affordable energy" and "Countering climate change", are priorities.

Rosneft was the first Russian company to adopt a Carbon Management Plan for the period until 2035, which provides for the prevention of the absolute volume of greenhouse gas emissions (20 million tons of CO2-eq.), reducing specific emissions in the exploration and production sector by 30% and achieving zero routine flaring of associated petroleum gas.

According to oil, condensate, NGL and marketable gas reserves information prepared by DeGolyer and MacNaughton, independent reservoir engineers, proved hydrocarbon reserves reached 39 billion boe per SEC classification and 43 billion boe per PRMS classification as of December 31, 2020.

Financial and operating highlights

	For 3 months ended		For 9 months
	%	ended September 30,	%
	September 30,	June 30,	change	2021	2020	change
	2021	2021
Financial results, RUB billion
Revenues and equity share in profits of associates and					4,2361
joint ventures	2,320	2,167	7.1%	6,224	46.9%
EBITDA	638	571	11.7%	1,654	845	95.7%
Net income/loss attributable to Rosneft shareholders	314	233	34.8%	696	(177)	-
Capital expenditures	227	237	(4.2)%	689	569	21.1%
Free cash flow2	375	315	19.0%	880	352	>100%
Operational results
Hydrocarbon production (th. boe per day)	5,088	4,973	2.3%	4,943	5,232	(5.5)%
Liquids production (th. barrels per day)	3,979	3,898	2.1%	3,876	4,193	(7.6)%
Liquid hydrocarbons production (mln tonnes)	49.3	47.8	3.1%	142.6	155.0	(8.0)%
Gas production (th. boe per day)	1,109	1,075	3.2%	1,067	1,039	2.6%3
Gas production (bcm)	16.76	16.07	4.3%	47.81	46.75	2.3%
Crude oil processing at refineries in Russia (th. tonnes
per day)	262	258	1.6%	263	255	3.1%
Production of petroleum products and petrochemical
products in Russia (mln tonnes)	23.29	22.70	2.6%	69.23	67.76	2.2%
Production of petroleum products and petrochemical
products outside Russia (mln tonnes)	3.04	3.00	1.3%	8.45	8.53	(0.9)%

1Revenues of oil, gas, petroleum products and petrochemicals and the cost of purchased oil, gas, petroleum products, retail go ods and processing services in the first quarter of 2020 in the part of trading operations were adjusted by RUB 7 billion according to IAS 15 "Revenue from Contracts with Customers".

2Free cash flow estimation includes interest expenses on the prepayment on long-term oil and petroleum products supply agreements. Interest expenses on the prepayment on long-term oil and petroleum products supply agreements are composed of interests accrued for the reporting period and offset against crude oil supply under the contracts in the amount of RUB 10 billion and interests paid of RUB 1 billion in the third quarter of 2021; offsetting of RUB 10 billion and interests paid of RUB 1 billion in the second quarter of 2021; offsetting of RUB 32 billion and interests paid of RUB 3 billion in the nine months of 2021 and offsetting of RUB 17 billion and interests paid of RUB 12 billion in the nine months of 2020.

3Calculated based on unrounded data.

For reference only: Financial highlights in USD terms

Financial results, USD billion1

Revenues and equity share in profits of associates and joint ventures

EBITDA

Net income/(loss) attributable to Rosneft shareholders

For 3 months ended	%	For 9 months	%
ended September 30,
		change	change
September 30,	June 30,	2021	2020
2021	2021
32.2	29.8	8.1%	85.9	62.6	37.2%
8.7	7.7	13.0%	22.4	12.4	80.6%
4.3	3.1	38.7%	9.4	(2.1)	-

Capital expenditures	3.2	3.1	3.2%	9.3	8.0	16.3%
Free cash flow	5.1	4.4	15.9%	12.0	5.4	>100%

1Calculated using average monthly USD exchange rates based on the Bank of Russia data for the reporting periods (Attachment 4).

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