Left with supplies

TNK-BP decreased net profit by almost 6%

TNK-BP's net profit for 2009 according to US GAAP standards amounted to $5 billion, which is only 5.7% lower than in 2008. This was announced yesterday by the holding's chief operating officer, Bill Schrader. True, the company sacrificed its investment program, reducing it by almost a third.

Acting TNK-BP Chief Executive Officer Mikhail Fridman called 2009 “an important milestone for the company.” “Despite economic instability, TNK-BP implemented its growth strategy and continued to fulfill the four main commitments that we made when we created it. These commitments relate to production growth, technology transfer, corporate governance and social responsibility,” says Mr. Friedman. One of the key events for TNK-BP last year was the change in the corporate management system after the end of the shareholder conflict. Now the consortium has a new shareholders agreement, new independent directors, and, finally, a leader has been identified - Maxim Barsky, who will take up this position early next year.

As stated in the report, the revenue of TNK-BP International, which is the parent company of the holding, in 2009 amounted to $34.75 billion (in 2008 - $51.88 billion). TNK-BP explains the decrease in this indicator by 33% by the fact that over the past year the average price of oil fell by 36%. But its production increased by 2.9%, which “helped smooth out the effect of falling prices.”

“Naturally, the company’s net profit was affected not only by the decline in oil prices, but also by the devaluation of the ruble. However, TNK-BP managed to ensure an increase in production, and the decrease in profits was not so large,” Dmitry Lyutyagin, an analyst at Veles Capital, told Vremya Novostei. At the same time, based on the cost optimization strategy, TNK-BP last year reduced its investment program by a third, from 4.68 billion to 3.13 billion dollars. In 2009, the holding produced 1.69 thousand barrels per day, and in 2008 -- 1.64 thousand barrels. In addition, the company managed to save $700 million on tax incentives that were in effect last year - a reduced mineral extraction tax and a new procedure for calculating export duties.

Last year, TNK-BP also had to reduce operating expenses: from 5.24 billion to 4.14 billion dollars. EBITDA also decreased: if in 2008 it was 10.09 billion dollars, then in 2009 - - $9 billion, which is explained by the “overall effect of a decrease in revenue, taxes and expenses.” Thus, according to Bank of Moscow analyst Denis Borisov, EBITDA per barrel of oil was about $15, which is $3 less than Rosneft, but “still a good indicator.” In addition, TNK-BP managed to reduce its net debt over the past year - from 6.37 billion to 5.97 billion dollars. This year the company plans to raise 0.7-1 billion dollars, its chief financial director said Jonathan Muir. “Everything will depend on the level of activity of the company and the price environment. The funds can be used to refinance the company’s current debt, as well as to purchase assets,” he said.

This year, TNK-BP achieved a record reserve replacement rate according to the PRMS standard - 329%. Thus, the average replacement rate over the past six years was 193%, which, as the company explains, is “one of the best results in the industry.” And it was obtained, according to Mr. Schrader, after analyzing 3D seismic data from 2006 to 2008, when the company was “doing a lot of exploration.” At the same time, TNK-BP's production plans for this year remain the same - the chief operating director expects production growth of 1-2%, mainly due to the Verkhnechonskoye field and the Uvata fields.

Kirill MELNIKOV