Rusneftegaz can announce production results for the second quarter of the year as of and for the three months ended 30 June. These were prepared in accordance with all relevant standards but have not been externally audited. The full results are available to review via the associated section of our website:
Oil and Gas:
Electricity:
The details in this article are current at the date of this report and are believed by Rusneftegaz to be accurate and true. All information is disclosed as a summary and does not purport to be entirely complete. The material published is derived from our internal operational reports, with the data that these documents are reliant upon obtained from sources believed by our management to be reliable. However, our organization cannot wholly guarantee the accuracy or completeness of such information and will not be held liable for any errors that have arisen, nor will any of our employees, directors, officers, agents, partners, subsidiaries, or affiliates. Rusneftegaz can today issue an urgent warning regarding the most aggressive fraud scheme that we have learned of in the history of our enterprise. Whilst we are regularly informed about duplicate and twin websites that are designed to create the impression of a genuine company, we were recently notified of a scam whereby potential customers met fake representatives of our corporation at an office in Moscow. This was arranged following numerous emails exchanged between multiple parties, during which the target was sent a draft contract, an irrevocable corporate purchase order, and a bank reference letter. Throughout the dialogue, the aspirant buyers were offered a broad range of petroleum products at substantially below market prices in vast quantities, far greater than we could extract or source. Likewise, the victims were also afforded the opportunity to have the oil delivered to a port of their choice without perquisites or preconditions, in spite of the fact that the location chosen would not have had the capacity to process such volumes. When the formal negotiations were held in the Russian capital, the buyer met with three individuals who introduced themselves as senior directors of our firm. The purchaser was then presented with a number of forged business cards and documents to give a veneer of legitimacy and competence, which ultimately gave the customer the confidence to begin contractual talks with the criminals.
In the midst of these discussions, the imposters exerted no direct pressure to finalize the acquisition at that time, but told the prospective clients that the return on their investment would be considerable. Upon traveling back to their home country, the only communications that took place between both sides were electronic, through which the supposed sellers began to demand payment for additional services necessary to settle the non-existent arrangement. It was only at this stage that the plot was foiled after the client conducted due diligence and discovered that the account the funds were set to be disbursed into was in the name of an individual, instead of that of a corporate entity. Subsequently, it also emerged that these fees were also partially required to have the deal authorized by the authorities, which there is no need for under federal law. Similarly, upon further inspection, it was also noticed that the contact information used by the charlatans, including the registered address, telephone numbers, and email address, did not correspond to any businesses in Russia or abroad. In response to the scale of this deception, our Deputy Chief Executive Officer, Aleksandr Filyurin, remarked: “I am very pleased that we managed to discover this fraud just in time before large financial losses could occur. It just emphasizes how important it is for anyone trying to buy oil to be vigilant against fraud. It is easy to attack the victims in all of this for their naivety and lack of research, but it could happen to anyone at any time. Fraudsters are getting better at committing these crimes; they are adapting to all the changes we make to prevent fraud, and are becoming more cunning and clever. There are obviously some schemes that are so basic that they are designed to trick only the most ignorant of buyers, but increasingly we are seeing new schemes that have obviously been premeditated and specifically created to target established companies. Personally, as someone who spends a lot of time researching fraud, I would recommend that anyone who wishes to buy oil products does plenty of research before they do anything they will later regret. Anyone looking to do a deal like this needs to work with an established broker to buy what they want directly from one of the major commodity exchanges.” As per the quote from our esteemed colleague, we continue to strongly advocate that all parties seeking to buy significant quantities of crude or refined petroleum should do so via an approved broker who maintains the capacity to work with a commodities exchange. This is due to the fact that as a corporation, neither Rusneftegaz nor any of our subsidiaries, partners, or affiliates will proactively send or initiate offers to sell such goods under any circumstances. Moreover, we do not utilize the services of any agents or intermediaries to market these fuels on our behalf, and we suggest that all those in receipt of such proposals report these groups or individuals to us as soon as possible. All potential clients must be acutely aware that criminals will typically use falsified documents with doctored contact details, and thus corroborating this with the materials published on our website serves as a convenient method to clarify if such files are authentic. Perhaps more concerning are the progressively bold attempts by the culprits to extort approximately two to five percent of the value of the deal from the victim prior to the settlement of the contract. In most cases, this payment pertains solely to the acquisition of the hydrocarbons, but we have also observed several instances where an outlay is demanded to meet transportation, storage, or notarization fees. We advise any individual who holds suspicions about someone claiming to represent us to approach our organization via any of the usual channels with utmost urgency. We necessitate your cooperation and understanding with this matter. Rusneftegaz can announce production results for the first quarter of the year as of and for the three months ended 31 March. These were prepared in accordance with all relevant standards but have not been externally audited. The full results are available to review via the associated section of our website:
Oil and Gas:
Electricity:
The details in this article are current at the date of this report and are believed by Rusneftegaz to be accurate and true. All information is disclosed as a summary and does not purport to be entirely complete. The material published is derived from our internal operational reports, with the data that these documents are reliant upon obtained from sources believed by our management to be reliable. However, our organization cannot wholly guarantee the accuracy or completeness of such information and will not be held liable for any errors that have arisen, nor will any of our employees, directors, officers, agents, partners, subsidiaries, or affiliates. At the culmination of what has been an exceptional year for us, we convened our Annual General Meeting on 7 April, which was attended by a plethora of executives, managers, and other delegates associated with our organization. Throughout the course of affairs, the attendees deliberated on the results of our 2022 Consolidated Financial Statements, which were published in the days prior. This document was ultimately prepared in accordance with the latest International Financial Reporting Standards, otherwise known as IFRS, and was audited in due course. As a result, it was later unanimously approved by a vote of our stakeholders, in conjunction with the corresponding annual report. Similar motions were passed in relation to the reelection of each member of our board of directors, and to retain the current composition of our audit committee. On the other hand, our shareholders resolved to appoint a new external auditor on the recommendation of our leadership, following the dissolution of its predecessor in May last year. As per previous congresses, all those involved opted to forego a dividend for another twelve months, with consensus amongst attendees that it is in the best interests of Rusneftegaz to continue to reinvest all funds we accrue. Such a decision will allow us to further expedite our revised 2020-2024 investment plan, the implementation of which has been significantly delayed as a result of the coronavirus pandemic.
Despite this, we can disclose that our organization has registered record revenues for the last financial year, with a total of $703,6 million being earned in the past twelve months. This figure marks the first time our organization has amassed in excess of $700,0 million within such a timeframe in our corporate history, and represents a 43,3% increase upon the $491,0 million accrued during 2021. However, whilst these numbers are perceived as a major success by our management, this was not emulated in our earnings, which registered a nominal 7,9% decline. Overall, Rusneftegaz can announce a pre-tax profit of $235,1 million, down from the $255,3 million attributable to last year, but up on the $110,0 million gained twelve months before. Whilst these results are generally positive, our company continues to be affected by adverse conditions beyond our control or that we can attempt to mitigate. Foremost, the immediate improvement in our financial reporting on an annual basis is largely due to the minimal effect coronavirus and pandemic-related restrictions have had on our operations in recent times. It should be noted that in 2021, the year in which we are comparing our results for this period, our business was still heavily impacted by stringent regulations. For instance, the board of directors agreed in August 2021 that remote working practices would have to continue beyond their anticipated end date. Such lasting success is ultimately attributable to numerous factors, although the primary determinant was the end of the recent health crisis. This is exemplified by the announcement we made in mid-February, when Rusneftegaz published a comprehensive strategy to end remaining virus mitigation measures within three months. Thus, our organization managed to return all our administrative personnel to their respective offices and workstations full-time in May, fully abolishing remote working practices entirely, in conjunction with the removal of all distancing measures. The implementation of this program resulted in our organization being able to fully realize the benefits of the investments made over the past decade. Such spending has yielded production conducted with greater efficiency through the utilization of modern equipment, contemporary best practices, and renovated units. Whilst it was clear internally to managers and engineers, our economic data from the past two years was considerably weighted by the costs of managing a pandemic, including having to purchase expensive screening and protection apparatus and deploying policies in the best interests of employee health, rather than the technical and financial progress of Rusneftegaz. As a result, our board of directors also announced in February that our five-year investment program had been revised, and that a new plan was due to be executed at the start of the second quarter. Consequently, our organization spent $159,4 million on new assets between April and June of this year, with management aiming to recover the lost days that have occurred since the advent of the decade. Our total outlays on new infrastructure last year ultimately equated to $274,8 million, another corporate record, with this particular sum inflated by additional spending to have all works completed at a faster rate than would typically be organized. This was a considerable increase on the $54,4 million expended in 2021, and as a result, a far greater percentage of this figure is the value of labor costs than would conventionally be recognized. Similarly, it is also important to note that all this new spending has derived from the capital our enterprise accrued and retained during the pandemic years, and therefore we have not relied upon any external investments to accommodate these disbursements. For clarification, this includes injections of equity from third parties, and any loans or borrowings. However, despite the fact that this is fundamentally positive for our company, there are still critical matters of serious concern that may have a lasting impact on our business. The unexpected deterioration in diplomatic relations between Russia and Western nations since the beginning of 2022 necessitated a comprehensive revision of our broader trading strategy, which was outlined in September of last year. Relations have deteriorated to such an extent that we were compelled to undertake additional security measures in May last year to protect our business from external threats, chiefly originating from the internet, following attacks against other Russian companies and organizations. Whereas prior to the events that have unfolded, our organization maintained extensive relationships with corporations across the globe, Rusneftegaz is now largely reliant on the domestic market for petroleum sales. Moreover, the subsequent imposition of restrictions on Russian crude and refined products by the European Union, which have taken full effect since the beginning of February, severely undermines our expansion plans for the months and years ahead. This is particularly acute in areas where we have significant numbers of commercial partners headquartered in what are now adversarial countries. Although in the longer term our management will seek to expand our attention to the East Asian market, until the necessary agreements have been reached, our options to sell our products in Europe have been reduced by embargoes and other constraints, both de jure and de facto. Nevertheless, our management has had adequate time to prepare for such constraints, and has therefore executed a comprehensive plan to mitigate the effects of these punitive measures. Primarily, this includes varying our sources of petroleum supply for our international trading operation, and focusing on developing our presence in new and emerging markets, such as East and Southeast Asia. Our executive leadership is also particularly interested in doing business in the Indian subcontinent, where numerous opportunities have emerged in recent times. Despite the fact that trading solely within the borders of the Russian Federation has not restricted our turnover, it has resulted in our organization becoming less able to mitigate the risks associated with fluctuations in the value of currency. A plurality of our transactions were completed using the Russian ruble in the last twelve months, which despite showing indicators of depreciation in the first half of 2022, eventually stabilized and recovered from the historic lows of earlier this year, strengthening against the legal tender of other countries at a record rate and finishing the period at the strongest it has been in almost a decade. Correspondingly, broader economic conditions are also generally in our favor. Commodities prices continue to be high, and are forecasted to remain in excess of pre-pandemic values for the foreseeable future, or until those nations who have disavowed Russian petroleum are capable of adequately replacing the easily accessible supplies of refined products elsewhere. Whilst commodity prices at the end of the period were lower than in the first six months, such figures were eminently higher than at the same time the year prior. Nonetheless, it should be noted that since the conclusion of the fourth quarter, petroleum values have continued to recede further, and this may influence our financial reporting for 2023. In the immediate term, these factors have been mitigated by utilizing futures contracts to counteract the falls in prices. Such agreements have also abated the effects of declines in our production rates since the end of June, with oil extraction totaling 5,94 million barrels in the last year. This number marks a 6,1% gain on the 5,60 million barrels lifted in the twelve months prior, with overall production peaking at 17.625 barrels per day (bpd). Generally speaking, this equates to a daily average of 16.274 bpd, with our rate of extraction at its greatest in the first months of the year and declining incrementally thereafter. To demonstrate this, during the first quarter of the year we produced approximately 16.698 bpd, which then declined to 16.425 bpd in the second, before falling again to 16.032 bpd and 15.694 bpd in the third and final periods of 2022, respectively. On balance, our executive leadership is satisfied with these totals, and retains the capability to expand the volume of hydrocarbons we lift at short notice if necessary. Likewise, there were similar changes in the amount of electricity we generated, which also improved in alignment with the corresponding gains in other areas of our enterprise. By the end of the year, we created a total of 10,31 TWh of energy for our customers, a 9,2% rise on the 9,44 TWh that was produced in the twelve months prior. Unlike with our oil extraction activities, the peak of our power operations occurs in the final quarter of the year, with generation equating to 3,90 TWh over the ninety-two-day span. There was, however, greater volatility in this particular part of our enterprise, with production volumes fluctuating throughout the course of the year. For example, between January and the end of March, we produced 2,01 TWh of energy. This then ascended to 2,31 TWh in the second period, before decreasing to 2,09 TWh in the quarter that ended on 30 September. Whilst in broad terms, variability is not considered conducive to success, our leadership continues to correctly forecast our generation rates for the year ahead within the margin of error. For instance, our electricity production is always forecasted to peak in the fourth quarter due to annual peaks in demand, as it has done so since our corporate records began. Upon consideration of the wider circumstances, our board of directors remains wholly positive regarding our future. At present, not all trends are favorable in the immediate term, but there are numerous reasons to be optimistic for the months ahead. We continue to retain the services of a talented pool of personnel, who have been crucial to many of our achievements. As a consequence of this, our organization hosted an awards ceremony at the end of November to mark these individual accomplishments. The major prizewinners on the evening itself were Artem Shaparov and Artur Denisov, who were chosen as employee and young employee of the year, respectively. Both of whom have registered an excellent personal performance throughout the last twelve months, with the former project managing technical projects in the field, with the latter making strong progress since he first joined Rusneftegaz in 2021. Likewise, we continue to maintain sufficient resources to circumvent any challenges our entity may face, and retain the capability to be proactive to issues that may arise. We frequently demonstrated these skills last year, particularly when it was necessary for us to respond as quickly as possible to changes in circumstances, such as when we comprehensively enhanced our cybersecurity within a seventy-day timeframe, or when we executed amendments to our trading strategy. Although these are undoubtedly the greatest strengths that our organization possesses, there remains a great degree of uncertainty pertaining to our immediate future. As a result, our management believes it is currently too difficult to competently project how we shall fare in the weeks and months ahead, due to the ongoing volatility in both the commodity and currency markets. This has been exacerbated by an ever-deteriorating geopolitical situation, which is not showing any signs of abating in the short term. It is the intransigent belief of many in our organization, including our leadership, that reliable projections will be problematic until this matter is suitably resolved. Despite this, there is no reason to believe that our profits will significantly diminish in 2023, with our company beginning its transition into new markets and territories with strong prospects for growth in the decades ahead. Moreover, while the events of the past twelve months have undermined our global expansion plans, we remain determined to realize these projects in full, with our executives having no intention of reducing the scope of our ambition. Such aspiration has been the foundation of our success over the past two decades, and we wholeheartedly believe that it is fundamental to our progress from this moment onward. Rusneftegaz can today publish the latest incarnation of our website, which has been radically revised to improve the user experience of the site and offer additional information pertaining to our corporation and its commercial operations. The changes, which have gone live with immediate effect, have resulted in a substantial redesign of each of our webpages in a more minimalist style, primarily to suit a more modern aesthetic. This initiative, which was instigated at the behest of the staff at our international office, should also be a significant upgrade to the mobile edition of the website and the speed at which both it and the main desktop version load. While this is unquestionably a major enhancement over all prior renderings, it must be noted that this has not been at the expense of the content we issue. Hence, none of our preexisting features have been removed to facilitate these improvements, ensuring that all relevant maps, images, and tables have been retained for later use. In fact, this update has yielded a notable amount of new resources being added, mostly related to career opportunities with us and further details regarding our corporate structure. As before, we shall endeavor to provide routine updates via the news section, which maintains an extensive archive of all our affairs over the course of the past decade. We believe that this, in conjunction with all the other materials we have disclosed, actively demonstrates our enduring commitment to trading in an orderly and transparent manner. Following this transformation in our online presence, our Deputy Chief Executive Officer, Aleksandr Filyurin, commented:
“As a growing and ambitious company, Rusneftegaz is always looking to hire the best candidates for the job and looking for new partners to work with, so it is always very important to make a good first impression in this business. Using this principle, a good website is very important for a company of our stature. I have been very impressed by the work done by my colleagues in the technology department; they understand these principles in their entirety. What makes it an even greater achievement is that Kuznetsov implemented this himself; he was proactive and did all this work alongside the regular demands of his job. I am very proud of him. It is men like him that make this such a great company.” The new site has been designed and built internally by our Director of Information Technology, Mikhail Kuznetsov, who created the previous iteration of this website five years ago. To do this, he utilized the architecture of the earlier rendition to ensure that the modifications only took six weeks to implement from project commencement to completion. Once again, he will bear responsibility for the ongoing management and maintenance of this, and all associated matters, on a permanent basis for the foreseeable future. However, although this modernization has undoubtedly been a considerable improvement to our online identity, we can also simultaneously disclose that we are currently forming plans to work with a third party to develop a new site in the months ahead. Our leadership has been contemplating this proposal for some time, and now believes that it is in our long-term interests to establish a platform that illustrates our continued success. Whilst an announcement as to which firm we have opted to partner with will be forthcoming at the pertinent time, we will work diligently regardless to guarantee that this website remains the best resource available with respect to Rusneftegaz and our activities. Any queries about these amendments, or any other questions referring to our enterprise and its digital media, should be directed via the usual channels if necessary. |
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