ROSNEFT OIL : Q1 2024 IFRS RESULTS

• HYDROCARBON PRODUCTION AMOUNTED TO 66.6 MLN TOE
• LIQUID HYDROCARBON PRODUCTION AMOUNTED TO 47.1 MLN TONS
• GAS PRODUCTION TOTALLED 23.7 BCM
• EBITDA AMOUNTED TO RUB 857 BLN
• NET INCOME ATTRIBUTABLE TO ROSNEFT SHAREHOLDERS AMOUNTED TO RUB 399 BLN
• NET DEBT/EBITDA WAS 1.0X AT THE END OF Q1 2024
• UNIT LIFTING COSTS REMAINED SUSTAINABLE AT $2.6/BOE

Rosneft Oil Company (hereinafter - Rosneft, the Company) publishes its results for Q1 2024, prepared in accordance with the International Financial Reporting Standards (IFRS).

	Q1 2024	Q4 2023	%change
	RUB bln (except for %)
Revenues from sales and equity share in profits of affiliates and joint ventures	2,594	2,551	1.7%
EBITDA	857	602	42.4%
Net income, including	486	252	92.8%
Net income, attributable to Rosneft shareholders	399	191*	>100%
CAPEX	269	388	(30.7)%
Adjusted free cash flow	316	270	17.0%

* Adjusted for finalized purchase price allocation in 2022-2023

Igor Sechin, Chairman of the Management Board and Chief Executive Officer of Rosneft, said:

"In the reporting quarter, despite market price volatility and increased external pressure, including new sanctions by the unfriendly countries, as well as the impact of OPEC+ agreement on operating performance, Rosneft achieved growth in key financial indicators - revenue, EBITDA, net income, and free cash flow. Cost control remains our continuing priority - in Q1 2024, unit lifting costs remained at USD 2.6/boe.

At the same time, high interest rates and limited liquidity available on the country's financial market put pressure on the financial performance, which forces the Company to switch to loans in alternative currencies. Current market conditions in Russia have already resulted in a significant incremental cost of debt. In Q1 2024, for example, the Company's average quarterly debt service cost reached its maximum in the 21st century. Higher financing cost leads to extended timelines of project delivery and payback periods and adversely affects the net income, which is the basis for determining the dividend amount.

The oil industry makes the main contribution to the federal budget revenues. Thus, in January-April 2024, the amount of oil revenues doubled year-on-year, reaching RUB 3.3 trillion.

The Company, as the country's largest taxpayer and the industry leader, interacts with the Government of the Russian Federation regarding the stabilization of the tax regime with a view to securing the shareholder returns, including the returns received by the state. Rosneft has prepared its proposals on the effective improvement of the industry tax burden, the highest compared to other Russian industries, with the size of this tax burden negatively impacting its development opportunities.

Shareholders' interests remain a focus of Rosneft's attention. On May 23, the Board of Directors recommended that the General Shareholders Meeting make a resolution on paying a final dividend of 29.01 rubles per share or a total amount of 307 billion rubles."

Operating performance

Exploration and production

In Q1 2024, the Company's hydrocarbons production amounted to 66.6 mtoe (5,435 th. boe/day), including 47.1 mln tons (3,848 th. bbl/day) of liquids production.

In Q1 2024, the Company's gas production amounted to 23.7 bcm (1,587 th. boe/day). Greenfield projects in the Yamal-Nenets Autonomous District that were commissioned in 2022 account for over a third of the Company's gas production

In Q1 2024, production drilling footage amounted to 2.8 mln meters, while 697 new wells were put into operation, 72% of which were horizontal wells.

Vostok Oil Project

As part of the flagship Vostok Oil project, 0.7 th. linear km of 2D seismics and 0.4 th. sq. km of 3D seismics were completed in Q1 2024. Drilling of 3 wells was completed, while testing of 2 wells and preparation for testing of 3 more wells is underway.

Pilot development of the Payakha, the Ichemminskoye and the Baikalovskoye fields is in progress: production drilling footage amounted to about 16 th. meters, and 3 production wells were completed in Q1 2024.

Work is underway at the 'Vankor - Paiyakha - Sever Bay' trunk oil pipeline. As of the end of Q1 2024, more than 61,000 piles were installed and more than 250 km of pipes were welded. The underwater crossing of the pipeline is under construction - a section in the channel part of the Yenisei River has been installed and tested.

The Company is building logistics infrastructure, constructing hydraulic structures, shore reinforcement, and expansion of coastal and berthing infrastructure. In the reporting quarter, the Company started construction of an oil loading berth at the Sever Bay Port terminal. As part of the construction, about 400 large-size piles with a diameter of over 2.5 meters and a total weight of over 100 th. tons will be manufactured.

Refining

In Q1 2024, the Company processed 19.9 mln tons. Certain decrease in refining volumes was attributable to the repairs at refineries due to force majeure circumstances The oil conversion ratio increased to 77.0%, while the light oil product yields reached 59.1%.

The Company has been consistently developing local technologies and import substitution. In particular, Rosneft provides its refineries with its own catalysts, which are essential for the production of high-quality motor fuel. In Q1 2024, more than 600 tons of catalysts for hydrotreatment of diesel fuel and gasoline fractions, as well as protective layer catalysts were manufactured. Rosneft also produced 70 tons of gasoline reforming catalysts and about 90 tons of catalysts and adsorbents for hydrogen production units. More than 350 tons of catalysts for hydrotreatment of diesel fuel were regenerated.

Sustainable supply of high-quality motor fuel to Russian consumers is one of Rosneft's key priorities. In Q1 2024, the Company sold 10.6 mln tons of petroleum products on the domestic market, including 3.1 mln tons of gasoline and 4.3 mln tons of diesel fuel.

The Company is an active participant of trading activities at the St. Petersburg International Mercantile Exchange (SPIMEX). In Q1 2024, Rosneft sold 2.2 mln tons of gasoline and diesel fuel on the exchange, which is twice as high as the required volume. The Company's share in the total volume of exchange sales of gasoline and diesel fuel was 35%.

Financial performance

Operating performance and the current macroeconomic environment combined with management decisions determined the trend of the Company's key financial indicators. In Q1 2024, Rosneft's revenue¹ amounted to RUB 2,594 bln, while EBITDA reached RUB 857 bln.

Unit lifting costs in the reporting period remained at USD 2.6/boe.

In Q1 2024, net income attributable to Rosneft shareholders increased to RUB 399 bln, which was mainly driven by the EBITDA growth.

In Q1 2024, capital expenditures amounted to RUB 269 bln, which was due to the implementation of scheduled activities in the Upstream segment. At the same time, adjusted free cash flow² in the reporting period reached RUB 316 bln.

At the end of Q1 2024, the Net Debt/EBITDA ratio amounted to 1.0x.

ESG

In the reporting period, the Company continued to implement measures to achieve sustainable development goals under the 'Rosneft-2030: Reliable Energy and Global Energy Transition' strategy.

Rosneft uses the latest technologies and state-of-the-art production methods to create a safe working environment and minimize the risk of occupational injuries and occupational illness. In Q1 2024, the Lost Work Incident Rate (LWIS) decreased by almost 70% year-on-year, and the Total Lost Time Injury Frequency Rate (LTIF) decreased by 3%.

In Q1 2024, no cases of gas and oil spills (release of oil, gas or water to the surface) during well drilling were recorded at the Company's facilities. As part of efforts to minimize oil and petroleum products spills, field pipelines replacement activities are underway.

In February 2024, Rosneft presented a new program for study and conservation of biological indicator species of the Arctic region. The research will take place between 2024 and 2027 in the north of the Krasnoyarsk region. During the expeditions organized by Rosneft, specialists from Russia's leading scientific organizations will for the first time conduct an aerial survey of polar bears in the Kara Sea, monitor wild reindeer and study the fish of the Yenisei River estuary, as well as build maps of the ecological sensitivity of the shores of the Yenisei Bay and the adjacent Kara Sea area, checking nesting sites of valuable bird species. Information on animal populations will allow scientists to draw conclusions about the state of their habitats and develop measures to conserve biodiversity in the Arctic region.

¹ Includes sales revenue and income from associated organizations and joint ventures.
² Adjustment for prepayments under long-term oil supply contracts, including accrued interest payments thereon, net change in operations of subsidiary banks, and operations with trading securities.

Department of Information and Advertising
Rosneft Oil Company
May 30, 2024

These materials contain statements regarding future events and expectations that are forward-looking estimates. Any statement in these materials that is not historical information is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by these forward-looking statements. We assume no obligation to adjust the data contained herein to reflect actual results, changes in underlying assumptions or factors affecting the forward-looking statements.