Tatneft board approves new strategy-2030
MOSCOW. Aug 22 (Interfax) - The board of directors of Tatneft at its meeting on Monday approved the company's new strategy through 2030 and instructed the company's executive bodies to implement it, the Russian oil company said in a statement.
The details of the document were not disclosed.
"Despite the change in the external environment and the exit from the tyre manufacturing business, the company maintains a strong position. Resource potential, technological competencies, business diversification in crude oil refining and petrochemicals production allow supporting the status. The goals in the crude oil production segment are also planned to be achieved through strengthening competencies and developing the oilfield service unit, which allows significantly reducing the non-productive time, reducing per unit costs and improving the quality of the work performed and the accuracy of fulfilling the plans of internal customers," Tatneft said in a press release following the board meeting.
Tatneft adopted its strategy by 2030 in September 2018. At the end of 2020, the company announced plans to update the document amid the significant market changes caused by the coronavirus pandemic, among other factors. Approval of the strategy was put off twice since then.
The board decided in March 2022 that once external conditions have stabilized, the company would update its macroeconomic prerequisites and portfolio of strategic projects, develop the possibility of forming new investment projects, focusing on the domestic market, import substitution, as well as building production chains to the end consumer and developing in global regions with favorable conditions.
The board of directors approved the priority of developing petrochemicals. The company's executive directorate has been instructed to develop projects for the sustainability of petrochemical projects amid sanctions restrictions, and take the appropriate investment decisions.
Tatneft had envisaged three scenarios for capitalization growth in the approved 2030 Strategy, namely, the baseline oil price being $61 per barrel and the exchange rate being 75 rubles/$1 that assumed growth in capitalization to $36 billion. Under the scenario of low oil prices at $52 per barrel and the exchange rate at 80 rubles/$1, the company envisaged a rise in capitalization to $31 billion. Under the scenario of high oil prices at $78 per barrel and the exchange rate at 73 rubles/$1, Tatneft assumed an increase in capitalization to $50 billion.
Tatneft had estimated the volume of investments until 2030 at 1.2 trillion rubles, a record for the company. The company planned to invest 799 billion rubles in exploration and production. The peak of investment was to be in 2021.
Tatneft had intended by 2030 to boost oil output to 38.4 million tonnes, with a 100% replacement of reserves. The bulk of the oil produced, at 31.4 million tonnes, was envisaged to be in traditional oil produced in Tatarstan. An additional 1.5 million tonnes was to be produced outside the republic, including 1.4 million tonnes at the fields in the Nenets Autonomous District, with 2.1 million tonnes being super-viscous oil. However, these goals did not take into account possible restrictions as part of the OPEC+ deal.