Rosneft expects 2020 liquids output at least flat on 2019

Moscow — Russia's largest crude producer, Rosneft, expects its 2020 liquids production to be at least flat on 2019, Rosneft's Vice President Eric Liron said Wednesday, during a conference call on the company's fourth quarter and full-year 2019 results.

"Plans for liquid hydrocarbons production in 2020 are not less than last year's and will depend on conditions and options to extend the limitations under the OPEC+ agreement," Liron said.

Earlier Wednesday Rosneft said that its liquids output in 2019 was flat on the year at around 4.67 million b/d.

The company said that output remained "at the level of the 12 months of 2018 in the context of renewal of the OPEC+ agreement, and temporary oil intake limitations by the Transneft pipeline system," in management analysis released alongside the results.

Rosneft's Q4 average liquids output was down 2.5% year on year, but up 0.3% quarter on quarter at 58.03 million mt, or around 4.67 million b/d.

Rosneft said that the quarter-on-quarter output increase was "mainly as a result of increased production at Yuganskneftegaz fields and other assets."

Production from fields launched since 2016 accounted for 397,000 b/d, or 8.5%, of Q4 output.

These projects include Suzunskoye, Vostochno-Messoyakhskoye, Yurubcheno-Tokhomskoye, Kondinskoye, Tagulskoye, Russkoye, Kuyumbinskoye fields, stage 2 of Srednebotuobinskoye field and Zapadno-Erginskoye.

No interruption to China deliveries

Speaking separately during the call, Rosneft Vice-President for commerce and logistics, Otabek Karimov, said that the company had not experienced any disruptions to oil supply to China as a result of the coronavirus outbreak.

"Regarding oil supplies to China, I want to note that we have had no interruptions to supplies in this direction. But of course, the company has the logistical flexibility to redirect volumes if necessary," he said

Rosneft's crude production contributed to daily average hydrocarbon output of 5.81 million b/d of oil equivalent in Q4, down 2.1% year on year and up 1.3% quarter on quarter.

The company said that the quarter-on-quarter growth was "mainly driven by the introduction of advanced technologies to engage hydrocarbon reserves from low-permeable reservoirs into active development, along with the oil recovery coefficient increase."

Production also grew at new large projects, including Srednebotuobinskoye, Vostochno-Messoyakhskoye and Kuyumbinskoye.

Total hydrocarbons output for the whole of 2019 was 5.791 million boe/d, down 0.1% year on year.

Gas, refining results

Rosneft's gas production totaled 17.22 Bcm in Q4, down 0.5% year on year and up 5.6% quarter on quarter.

"The quarter-on-quarter increase was mainly attributable to the scheduled preventive repairs conducted in Q3 2019 both at the company's own production facilities and at the Sibur gas processing plants, along with a seasonal increase in demand in the autumn-winter period," Rosneft said.

Rosneft's refining throughput fell 4.1% year on year in Q4, totaling 28.33 million mt. This was down 5.8% quarter on quarter, primarily due to Rosneft's operations in Russia, where refining fell 4.8% on year in Q4.

"The reduction in throughput volumes at the company's refineries in Russia was caused by scheduled maintenance work and processing-unit optimization under the current petroleum products demand," Rosneft said.

Rosneft refined 2.82 million mt of oil at refineries outside Russia in Q4, up 2.9% year on year.

A reserves audit carried out by DeGolyer and MacNaughton indicated that Rosneft's SEC proven hydrocarbons reserves as of December 31 increased by 1% to 42 billion boe, with a proven hydrocarbons replacement ratio of 129%.