Geologic exploration and production of hydrocarbons (upstream)

The 2018 revenue level was 45% higher than for the previous year. The main factor behind the increase of this indicator was the growth of the average oil price (in 2017 – 16 thous.RUB/t, in 2018 – 23.3 thous.RUB/t) and the increase in sales from the main Russian assets – LLC JV RUSVIETPETRO and LLC ZARUBEZHNEFT Dobycha Kharyaga. On the part of JV “Vietsovpetro”, the significant growth of revenues is due to the increase of the contract price to 75 USD/bbl from May to November 2018 which resulted in a decrease of the JV’s share retained for costs recovery and, therefore, in profit growth.

In 2018, Zarubezhneft Group of Companies owned 16 licenses, of which 9 were for prospecting and exploration of hydrocarbons, 2 licenses - for prospecting and evaluation of hydrocarbon deposits and 5 licenses - for geological survey, exploration and production of hydrocarbons. In the reporting year, the licenses of ULN 09135 NE of Slavkinskoye, ULN 14582 NE of Kondakovskoye were renewed for 20 years and NRM 16129 NE of Kharyaga field – for 15 years.