Kazan, November 9 - Neftegaz-RU.
The General Director of Tatneft Nail Maganov
and top management of the company held a virtual meeting with institutional investors and analysts. More than 50 portfolio managers of international and Russian investment firms as well as investment banks' analysts participated in the meeting.
Despite substantial decline in oil prices associated with the global pandemic Tatneft remained profitable and procured free cash flow generation from its core production activities. Due to the OPEC
+ restrictions Tatneft had to decrease its production to the current circa 500 000 barrels per day, but has all the resources required to rapidly restore and grow the production if the restrictions are eased or lifted altogether.
The development of oil refining segment as one of the strategic areas of Tatneft not just supported the profitability during the difficult period of the crisis triggered by the pandemic, but remains the source of future growth. This year the completion of the middle distillates hydrotreating and the catalytic cracking at TANECO are planned, which would allow to increase the production of high quality diesel fuel and automobile gasoline to over 6 million tonnes and 1.3 million tonnes respectively in 2021.
Upon the completion of the 2nd delayed coker unit, expected in the course of next year, the total processing of crude oil at TANECO can be increased to over 15 million metric tonnes without the output of substantial quantities of heavy refined products.
The company's management reiterated its targets to grow the shareholders value through the implementation of effective investment projects, including new ones identified in an environment of energy markets transformation. The management also pointed out its commitment to the dividend policy, which provides for the payment in the form of dividends of free cash flow generated after the fulfilment of obligations, including social ones, and the financing of investment projects creating value for the shareholders.
Just over the past 5 years, and that is after the period of heavy investment into the development of TANECO
complex, Tatneft invested approximately half a trillion RUB in the expansion of its business, while total payments to the government budgets during the same period exceeded 1.5 trillion RUB. In reliance on tax incentives Tatneft
invested over 105 billion RUB into the project of developing highly viscous oilfields – an area which many of its industry peers considered risky from technological challenges and economic parameters perspective.
In the opinion of Tatneft's management the said positive experience of the support for production projects, which, inter alia, has substantial multiplier effect for the national economy through the creation of new manufacturing capability and jobs, innovation breakthrough, despite the recent changes in the industry taxation, acts as the basis for identifying effective methods for incentives by the government with the considerable potential for, amongst other things, higher tax revenues.
Tatneft aims to continue constructive dialog with the executive and legislative authorities on the issues of creating respective conditions as well as fine-tuning of the excess profit tax regime, which can now be applied to a number of the company's oilfields, required for the effective operation at such producing oilfields.
In the course of the meeting Tatneft's management presented to investors the preliminary assessment of greenhouse gas (GHG) emissions of Tatneft for 2019 under all 3 scopes – direct from operating activities, indirect through the use of electric and steam energy and indirect throughout the value chain, mostly the use of the company
's products. Total estimated GHG emissions of Tatneft Group in 2019 were 120.5 million tonnes of CO2-equivalent, out of which 92% (111 million tonnes) attributed to Scope 3.
In accordance with the resolutions the targets were set to decrease direct emissions by Tatneft by 10% and 20% by 2025 and 2030 respectively. In light of the Sustainable Development Goals, providing for carbon neutrality by 2050, as well as Tatneft's commitments as a member of the UN Global Compact, the company is working on a complex of measures aimed at decreasing its carbon footprint. The main focus in this area is on compensatory measures, including planting of trees, carbon capture and storage technologies, production of low carbon products.