Profitable stability

TNK-BP reported record revenue

Last year was the most successful for TNK-BP. Despite the fact that net profit in 2008 remained at the level of 2007 - $5.3 billion, the company received record revenue - $51.9 billion according to US GAAP. As stated by the acting Chief Executive Officer Tim Summers, grew by 5% and reached a maximum level and EBITDA of $10.1 billion.

TNK-BP divides the past year into two periods. "The first ended in July when oil prices peaked, causing record revenue," said the company's chief financial officer, Jonathan Muir. The mechanism for forming the export duty also affected the company's income. As is known, it was calculated on the basis of two months of monitoring, which, in conditions of rapid growth in quotations, allowed TNK-BP to earn about $1.2 billion. “But when prices went down, the second period began: the spring worked in the other direction, because taxes began to be levied on based on prices that are higher than real prices,” Mr. Muir continued. “The state has made things easier for companies by changing the methodology.” Nevertheless, TNK-BP still ended the fourth quarter with a loss, which, according to the management of the consortium, amounted to more than $1 billion. The devaluation of the ruble was also a negative factor for the company’s financial results: due to the revaluation of ruble assets and liabilities, it lost 300 million dollars profit. At the end of last year, the cash balance was $1.7 billion, and by the end of the first quarter of this year it had grown to $1.9 billion. TNK-BP’s net debt is $6.4 billion. “The company pays all debts on time "We have already repaid the $700 million short-term loan we took out in the fourth quarter," Mr. Muir said. The net profit of TNK-BP Holding, which includes the company's Russian assets, is expected to be $6.4 billion, and EBITDA, according to Mr. Summers, will be approximately $9.8 billion. Dividend payments are expected to be used about 40% of net profit, the final decision will be made at the shareholders meeting in June.

Along with record financial results, production also reached a peak. TNK-BP's total production last year was 601 million barrels of oil equivalent, and oil production was 70.45 million tons. “Production volume increased by 2.6% over the year. We expect this figure to continue this year,” said Mr. Summers. Capital investments last year amounted to $4.4 billion. This year it is planned to invest about $3 billion. The company calls the launch of the Uvat group of fields, where they plan to produce approximately 2.5 million tons of oil this year, a special breakthrough.

TNK-BP continues to work on the efficient use of APG. Its production volume increased last year by 14.7%, to 9.72 billion cubic meters, while the level of utilization reached 80% (in 2007 - 68%). Investments in APG utilization projects amounted to $600 million. “In 2009-2012, about another $700 million will be invested in utilization projects, and by 2012, utilization will be 95%,” said Mr. Summers.

At the same time, the company’s president never showed up: the contract with Tim Summers, whose powers expired on June 1, was extended. “The appointment of the head of TNK-BP is a matter for shareholders. Both blocks of shareholders note that the company is currently performing at its best. This gives them time to calmly, without haste, select the right person for the post of president of TNK-BP,” Mr. Summers said, adding that he is “not focused on the future of the position and is focused on the current work of the company.”

Kirill MELNIKOV