Nail Maganov: ‘Tatneft will have its own gasoline next year’

'The company went through all trails'

Not only members of the board of directors of the company and numerous shareholders (2,836 shareholders and their representatives were registered there) but also bank partners, heads of oil districts, students and workers of Almetyevsk State Oil Institute were invited to the meeting of Tatneft. President of the Republic of Tatarstan Rustam Minnikhanov, the chairman of the board of directors of Tatneft (he was re-elected chairman at the end of the meeting), confirmed the presence of the necessary quorum and opened the event. Director general Nail Maganov presented his report first.

The speaker reminded the people who were at the meeting that Tatneft had to work under uneasy conditions. The 2015 was quite tricky for all hydrocarbon raw material producers against the background of the geopolitical tense and tough crisis.

'Nevertheless, the company not only went through all trials but also fulfilled all production plans, provided a quality growth of financial and economic results in almost all business segments,' Maganov emphasised. It confirmed once again the correctness of the chosen strategy aimed at the reduction of the level of costs, increase of its effectiveness, augmentation of production volumes, expansion of highly-viscous oil and development of refinery in Taneco.'

Rustam Minnikhanov: 'Mainly the stable work of Tatneft guaranteed the economic stability of the republic. The success of the republic is the success of our working collectives. Our petroleum industry is No.1'.

Rustam Minnikhanov also noted the uneasy situation of Tatneft last year.

'This year the work was carried out under conditions of the negative dynamics of oil prices, actions of sanctions, start of the appliance of the principles of the big tax manoeuvre. The retardation of growth rates of the world economy and decrease in the demand for energy resources led to a stronger competition in the main export markets. But oil workers of Tatarstan met this challenge,' President stated.

According to Minnikhanov, good results of the company are reflected in quantitative indicators: the extraction volume has exceeded 34m tonnes for the first time in the history of Tatarstan. In 2015, Tatneft's corporate tax payment accounted for 32% in the regional budget and its share in the consolidated budget was 15%.

'Mainly the stable work of Tatneft guaranteed the economic stability of the republic. The success of the republic is the success of our working collectives. Our petroleum industry is No.1. It is the people who work in the petroleum sector,' Minnikhanov concluded.

Year of highly-viscous oil and austerity

In 2015, Tatneft Group of Companies extracted 27m 249k tonnes of oil in total. Oil extracted by means of tertiary and hydrodynamic methods of oil recovery accounted for 44%. Maganov noted they increased the volume of production drilling to maintain the high level of extraction. The sinking was 738,000 metres last year. 352 new extracting wells with an average extraction of 10 tonnes per day were put into operation.

520 wells were drilled, and over 1m 200k tonnes of oil was extracted in Ashalchinskoye Field. Photo: prav.tatar.ru

The greatest growth of the extraction of the strategic resource of the company – highly-viscous oil – was also remarkable in 2015. For instance, there were extracted over 376,000 tonnes in Ashalchinskoye Field. Generally speaking, 520 wells were drilled, and over 1m 200k tonnes of oil was extracted there.

'In 2015, there were created functional strategies on purchases of services whose fulfilment will enable to save 5,5bn rubles from 2015 to 2017. Moreover, resource saving programme is carried out: last year, about 60,000 tonnes of oil equivalent were saved up,' Maganov told. 'As for the plans on extraction, we plan to produce 30m tonnes of oil in 2025.'

Tatneft's own capital exceeded 500bn rubles

The financial statement of the oil company for 2015 was one of the most interesting topics of Nail Maganov's report. The director general started with the total price of the Tatneft assets: in 2015, it increased by 11% to 640bn rubles. The price of consolidated assets was 799bn rubles.

'The company's equity was over 545bn rubles at the end of 2015, and it covers the assets of the joint-stock company by 85%. Debts of all types of loans and credits for 2015 was reduced by 7,9bn rubles. Gross revenue made up 599bn rubles,' Maganov reported.

It should be noted the shares of Tatneft are on demand in the stock market, and the number of the shareholders of the company is about 44,000 juridical and natural around the world.

The chain of petrol stations also was very profitable for Tatneft. 692 stations appeared last year. Photo: iselyatino.ru

'At the end of 2015, a common share of Tatneft was estimated at 315 rubles due to which the market capitalisation of the company reached 717bn rubles, which is a twofold growth in the recent 5 years,' the director general of the company stated.

The chain of petrol stations also was very profitable for Tatneft. 692 stations appeared last year. Over 2,4m tonnes of fuel were sold retail.

Will there gasoline be in Taneco next year?

The good financial state enables the company to invest in strategic directions for Tatneft: the total sum of investments in 2015 was 97,2bn rubles. By the way, Taneco is one of these directions. 24,5bn rubles were invested in its construction.

'We processed over 8,6m tonnes of oil in Taneco in 2015. A unique basic oil production unit was put into operation. The assortment of oil products is expanded. Production of Euro-5 diesel fuel reached 1,4m rubles,' Maganov told.

Answering a question of Realnoe Vremya, the director general of Tatneft told about the start of gasoline production in Taneco.

'Gasoline components that guarantee the production of Euro-5 gasoline will be produced next year. And we will provide our colleagues from TAIF with these components. Next year Tatneft will have its own gasoline. It will produce about 1m tonnes and allow us to close our chain of petrol station by 60-70%, and we will completely close it in 2018 – we will increase to 1,8m tonnes,' the head of Tatneft stated.

Nail Maganov: 'Next year Tatneft will have its own gasoline. It will produce about 1m tonnes and allow us to close our chain of petrol stations by 60-70%'.

According to director general of Taneco PJSC Leonid Alekhin who also presented his report at the meeting, an active work on import substitution and reduction of costs was carried out in his company.

'The economy is reached by means of events on the substitution of reagents and auxiliary material with analogues made in Russia. Import substitution of spare parts for pump and compressor equipment is in the process. This work gives tens of million rubles of profit every year. So, only the substitution of reagents and auxiliary materials allowed to economise 49m rubles,' Alekhin said.

Rustam Minnikhanov, in turn, noted the share of export significantly has reduced since the launch of Taneco.

Iran will compensate lost markets of Syria and Lybia

Nail Maganov noted that Tatarstan was and is the priority development area for the company. However, Tatneft prefers not to focus on one region or country only.

'We searched and explored the raw material in the Republic of Kalmykia, Orenburg, Samara, Ulyanovsk Oblasts, Nenets Autonomous Okrug,' Maganov stated. 'Tatneft also continues offering high-tech services on oil extraction and increase of oil recovery in Turkmenistan. Our projects in Syria and Libya stopped for well-known reasons, but we are ready to renew them under favourable conditions. At present we think about participation in project Irana where Tatneft's experience can be in demand.'

The director general of Tatneft admitted prospective projects abroad are needed to increase the added value of the company. And the Tatarstan oil workers are ready to deal with them both to gain experience and export their services.