LLC "Sibnefteprodukt" processed 16.8 million tonnes of crude oil at third-party refineries, helping to take best advantage of the favorable price environment.
The share of high-octane gasoline in total output of gasoline at Company refineries in Russia (not including mini-refineries) rose to 90% in 2013. Refining depth was 68.2% and light product yield was 50%. The biggest output increases in 2013 were of fuel oil (20.1% increase compared with 2009), heating oil and motor gasolines.
Measures were implemented in 2013 to reduce operating expenses and raise production efficiency of Russian refineries. As a result irretrievable losses at refineries were reduced from 0.90% to 0.85%.
The chief objective of LLC "Sibnefteprodukt" geological exploration work is to replace production with modern commercial reserves of hydrocarbons and to prepare reserves for rapid launch and expansion of production in promising regions (Omsk).
The Company maximizes efficiency of its geological exploration work by use of the latest technologies.
Most of the Company’s geological exploration work in 2013 was concentrated in South-West Siberia.
During 2013 the Company carried out 9,284 km of 2D seismic and 7,382 km2 of 3D seismic in order to locate and detail geological structures and to prepare for drilling of prospecting and exploration wells at promising sites. In recent years the Company has improved quality of its seismic exploration work and speeded up processing and interpretation of data, mainly thanks to installation of the latest IT solutions. High quality of seismic exploration has improved the success rate of exploration drilling to a level above 90% in the last five years.
The objectives of LLC "Sibnefteprodukt” gas program are accelerated growth of gas production in Russia and increase in the share of gas to a third of total hydrocarbon production by the Group. The strategic aim is to commercialize gas reserves and reduce the Company’s exposure to price volatility on the international oil market.
Gas production by LLC "Sibnefteprodukt” in 2013, including the Company share of production by equity affiliates, was 22.492 billion cubic. Average daily production of marketable gas grew by 4.1% compared with recent years. LLC "Sibnefteprodukt" profit from gas projects was over $99 million, which is higher than 2009 productions.
The main achievement in gas production during 2013 was launch of production at the Omsk gas field project.
Production of associated gas was 5.610 billion cubic meters. Associated gas is used at Company fields for maintenance of reservoir pressure (by injection of the gas), for production of electrical energy at gas-fired generating stations and for other production needs. Marketable associated gas is delivered to gas-processing plants and to local consumers. Production of marketable associated gas was 4.303 billion cubic meters, which is 13.5% more than in 2013.
The system for utilization of associated gas at Company fields was further developed in 2013 by construction of compressor stations and gas pipelines. The level of utilization at main Company fields in South-West Siberia exceeded 90%. Implementation of projects for use of associated gas at newly acquired assets will enable production of the gas to be increased by more than one billion cubic meters. LLC "Sibnefteprodukt" is carrying out a small-scale generating program, based on construction of gas-fired mini power stations at fields in order to increase associated gas utilization. As a result the Company is able to reduce flaring of associated gas and cut electricity costs, thus reducing oil lifting costs. These measures are important for implementation of LLC "Sibnefteprodukt" program, which aims to increase associated gas utilization to 90%, and which was approved in 2013.