The General Meeting of Shareholders is the Company’s supreme governing body.
Rosneft secures the right of its shareholders to participate in management of the Company affairs. Shareholders have the right to participate in management of the Company affairs, taking decisions in the key areas of Company business at the meetings of shareholders.The Company has adopted a number of internal documents, providing for the shareholders’ legitimate right to request convening of a general meeting of shareholders and to propose any business to be included on the agenda, to duly prepare for participation in the meeting and to exercise a voting right.
In accordance with clause #9.1.2 of the Company’s Charter, The General Shareholders Meeting (in the form of joint presence of shareholders) shall be conducted in the city of the Company’s location – Moscow, or in cities St. Petersburg, Krasnodar, Sochi, Stavropol, Saratov, Orenburg, Tyumen, Krasnoyarsk, Khabarovsk, Vladivostok, Krasnogorsk (Moscow Region).
The procedure for the call of an Extraordinary General Meeting of Shareholders is stipulated by Paragraph 9.7 of the Rosneft Charter and by the Regulation on the General Meeting of Shareholders .
Information Note on the Annual General Shareholders Meeting of OJSC Rosneft Oil Company, June 20, 2012
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| Rosneft President and Chairman of the Management Board Igor Sechin |
On June 20, 2012 a regular Annual General Meeting of Rosneft shareholders was held in St Petersburg. Holders of 97.19% of the Company’s shares participated in the meeting.
Alexander Nekipelov, Chairman of Rosneft’s Board of Directors, opened the meeting. The agenda was as follows:
- Approval of the Company’s annual report.
- Approval of the Company’s financial (accounting) statements, including profit and loss reports (profit and loss statements).
- Approval of the distribution of 2011 Company profits.
- The size of dividends for 2011 and payment procedure and timeframe.
- Remuneration and compensation for expenses for members of the Company’s Board of Directors.
- Election of members of the Board of Directors.
- Election of members of the Internal Audit Commission.
- Approval of the Company’s auditor.
- Approval of related party transactions.
Rosneft shareholders were given the good news at the beginning of the meeting that Russia’s largest oil company plans to pay additional dividends for 2011. In his presentation, Rosneft President and Chairman of the Management Board Igor Sechin told shareholders that the company will be able to pay additional dividends for last year and that total payments will reach the level recently recommended by Russian President Vladimir Putin of 25% of IFRS net profit.
At the AGM, it was proposed that Rosneft shareholders approve 2011 dividends at 3.45 rubles per share, which is 25% more than was paid in 2010. This corresponds with a total pay-out of 36.564 billion rubles or 11.6% of IFRS net profit. The value of additional dividends could be a further 43.2 billion rubles. As such, total dividends could reach 79.8 billion rubles or 7.53 rubles per share.
Rosneft IFRS net profit rose 9% in 2011 to 316 billion rubles. According to US GAAP, it grew 19.7% to 12.425 billion. In line with RAS, net profit rose 24% to 236.819 billion rubles, or a consolidated 9.5% growth to 384 billion rubles.
Through these pay-outs, Rosneft will pioneer large dividend payments. For example, Gazprom is planning to pay 25% of RAS net profit, which totalled 879.6 billion rubles, while IFRS net profit was significantly higher at 1.307 trillion rubles. Sberbank shareholders approved 2011 dividends at 15% of IFRS net profit or 15.3% of RAS, while VTB will pay out 38% of RAS net profit or just some 10% of IFRS net profit.
In discussing the Company’s results and plans for the future, Mr. Sechin noted that Rosneft's proved oil reserves of 1.96 billion tonnes will ensure stable production growth through 2020. He also highlighted that Rosneft’s recoverable resources are currently estimated at 28 billion tonnes of oil equivalent, which positions the Company as the undisputed leader by this indicator. A large part of Rosneft’s resources are concentrated in the Kara and Barents Seas. “We plan to take further steps to increase our resource base,” Sechin added.
Offshore projects will make a significant contribution to production growth. Mr. Sechin recalled that the Company has already concluded agreements with US major ExxonMobil, Italy’s Eni and Norway’s Statoil, under which the foreign companies will secure access to Russian offshore fields and Rosneft will obtain stakes in international projects.
As part of the agreement with Eni, Rosneft is reviewing the possibility of joining the Italian company’s projects in Algeria.
Within three years, Rosneft could increase gas production to 20 billion cubic metres. Rosneft’s President explained that this increase will be secured through implementation of the Company’s gas programme, which envisages greater associated petroleum gas (APG) utilisation. In 2012, Rosneft will complete a large project to obtain 6 billion cubic metres a year of APG from the Vankor group of deposits.
The meeting also approved the Annual Report, the accounting statements and distribution of Rosneft’s 2011 net profit.
It was decided to distribute RUB 36,563.7 mln (RUB 3.45 per ordinary share) to pay 2011 dividends on Rosneft shares. The dividends will be paid simultaneously to all shareholders no later than August 19, 2012.
The Company also sent a request to the Russian Government on the preparation of instructions to pass decisions to increase 2011 dividend payments to 25% of the Company’s IFRS net profit.
In addition, the shareholders elected members to the new Board of Directors comprised of 9 members, namely:
- Matthias Warnig, Managing Director, Nord Stream AG
- Mikhail V. Kuzovlev, President, Chairman of the Board, Bank of Moscow
- Nikolai P. Laverov, Vice President, Russian Academy of Sciences
- Alexander D. Nekipelov, Vice President, Russian Academy of Sciences
- Hans-Joerg Rudloff, Chairman, Barclays Capital
- Eduard Yu. Khudainatov, First Vice President, Rosneft
- Sergei V. Shishin, Senior Vice President, VTB Bank
- Dmitri E. Shugaev, Deputy General Director, Russian Technologies
- Ilya V. Scherbovich, President, United Capital Partners (UCP) Group.
The Meeting also approved the Company’s new Internal Audit Commission comprised of 5 members, approved ACG Business Systems Development as Auditor for Rosneft’s 2012 RAS annual financial statements and passed the decision to pay remuneration to members of the Board of Directors, as well as approved a number of related party transactions.
The first meeting of the newly elected Company’s Board of Directors took place following the AGM. Alexander Nekipelov was elected Chairman of the Board. The following were appointed as his deputies on the Board of Directors at Rosneft:
- Nikolai P. Laverov
- Hans-Joerg Rudloff
- Sergei V. Shishin.
The Board of Directors also approved the composition of its three committees each headed by an independent director. Hans-Joerg Rudloff was elected to lead the Audit Committee; Sergei V. Shishin to lead the HR and Remuneration Committee; and Nikolai P. Laverov to lead the Strategic Planning Committee.
Information (materials) to be submitted to shareholders of OJSC Rosneft Oil Company in preparation for the annual (based on 2011 results) General Shareholders' Meeting:
Information notice on the annual general shareholders’ meeting (includes Agenda)
Annual Report 2011 (first item of the Agenda )
Annual Accounting Statements of the Company - appendix to the Annual Report 2011 (second item of the Agenda)
Opinion of the Company Auditor - appendix to the Annual Report 2011 (second item of the Agenda)
Assessment of the opinion of the Auditor by the Audit Committee of the Board of Directors (second item of the Agenda)
Opinion of the Internal Audit Commission on the results of the audit of the Annual Accounting Statements (second item of the Agenda)
Opinion of the Internal Audit Commission on the reliability of data contained in the Annual Report (first item of the Agenda)
Recommendations of the Board of Directors (based on 2011 results) on distribution of profits, including the amounts, timing and form of payment of the dividends for 2011 (from minutes of the Board of Directors meeting), including information on the availability of preconditions for dividend payment (third and fourth items of the Agenda)
Information on Nominees to the Board of Directors, including availability of the written consent to be elected (sixth item of the Agenda)
Information on Nominees to the Internal Audit Commission, including availability of the written consent to be elected (seventh item of the Agenda)
Information on the candidate for the Company Auditor (eighth item of the Agenda)
Information on related party transactions (ninth item of the Agenda)
Draft resolutions of the Annual General Shareholders’ Meeting
Information Note on the Annual Shareholders' Meeting of OJSC Rosneft Oil Company, June 10, 2011
On June 10, 2011, the annual general meeting of Rosneft shareholders took place in Krasnodar. The meeting was attended by holders of 97.39 percent of shares in the Company.
As last year, Yuri Petrov, head of the Federal Property Agency, opened the meeting. Shareholders were invited to 10 items on the agenda.
- Approval of the annual report of the company.
- Approval of annual financial statements, including profits and losses accounts of the Company.
- Approval of distribution of profits based on the result of 2010.
- Size, timing, and form of payment of dividends for 2010.
- Remuneration and expenses of members of the Board of Directors.
- Election of members of the Board of Directors of the Company.
- Election of the Internal Audit Committee.
- Approval of the external auditor of the Company.
- Amendments to the charter of the Company
- Approval of related party transactions.
Rosneft President Eduard Khudaynatov addressed the first and sixth issue; Chief Accountant Sun Ne Kim spoke on the second; First Vice President Pavel Fedorov addressed the third, forth, fifth, and eighth items; and Vice President Larisa Kalanda informed shareholders on the seventh, ninth, and tenth items.
President of Rosneft Eduard Khudaynatov spoke of the results of the Company’s activities and of its plans, noting that the future of any company in the oil and gas industry depends on the size and quality of its resource base. According to an international audit, at the end of 2010, Rosneft reserves amounted to the equivalent of 3.123 billion tons of oil.
“The oil reserves as they stand today are enough to keep the company going for 21 years at the current level of production. No other public company in the global oil and gas industry can match this. Rosneft’s significantly surpasses ExxonMobil and ChinaOil in terms of reserves of liquid hydrocarbons,” the president stressed.
In 2010, Rosneft Investorsed 22.5 billion rubles in exploration and received 25 licenses for the discovery of new deposits. The company currently has 572 licenses for exploration and production, of which 17 sites are located on Russia’s continental shelf. Gas reserves to Russian reporting standards are upwards of 3.115 trillion cubic meters.
The growth of Rosneft reserves at the end of 2010 exceded output by 6 per cent. Khudaynatov noted that the growth of reserves to Russian reporting standards had reached 163 million tons of oil and 66 billion cubic meters of gas.
The president also pointed out that last year Rosneft had discovered two major oil and gas fields in the Irkutsk Region: Sanarskoye and named after Lisovsky with reserves of 171 million tons of oil.
Khudaynatov paid special attention to the issue of Rosneft capitalization, which could increase by $100 billion in the medium-term. “There is potential for $200 billion, it is obvious, so we are building our strategy on this,” he said. Attaining this goal will require achieving four priority tasks: increasing oil and gas production, introducing an advanced business model, upgrading refineries and developing our petrochemical capacity as well as increasing the efficiency of sales of crude oil and petroleum products. This year alone, Investorsments will reach 507.1 billion rubles. “Successful implementation of the plans to upgrade refining facilities that would allow Rosneft to achieve compliance with Euro 5 production standards by 2015 may have a positive impact on the company’s capitalization. Upgrading the refineries will have a dramatic effect on our economics,” the president said.
Additionally, the implementation of development projects in the Arctic will be of great importance to the company. “Drilling just one well in the Arctic could fundamentally change the view of our company and its valuation. This is what say not only our geologists but also those from around the world,” Khudaynatov said.
The president stressed that successful completion of the tasks the company set out to achieve will allow Rosneft to become a global energy corporation.
The meeting approved the Annual Report and Accounts and the distribution of Rosneft’s net profit for 2010. It was decided to allocate 15.2% of non-consolidated net income – that is, 29,251 million rubles (2.76 rubles per ordinary share) – towards the 2010 dividend. The approved dividend payment was 20% higher than for 2009. Dividends will be paid simultaneously to all shareholders no later than August 9, 2011.
Shareholders also elected a new nine-member Board of Directors:
- Vladimir Bogdanov, General Director of Surgutneftegaz;
- Andrei Kostin, President and CEO of VTB Bank;
- Alexander Nekipelov, Vice President of the Russian Academy of Sciences;
- Yuri Petrov, Head of the Federal Agency for State Property Management;
- Hans-Joerg Rudloff, Chairman of Barclays Capital;
- Nikolai Tokarev, President and Chairman of Transneft;
- Eduard Khudaynatov, President of Rosneft;
- Sergei Shishin, Senior Vice President of VTB Bank;
- Dmitry Shugayev, Deputy Director General of Rostekhnologii;
The meeting also approved the composition of the Company's five-member Internal Audit Committee, nominated CJSC Audit consulting Group Business Systems Development as auditor of the Company's 2011 RAS Annual Accounts and decided to remunerate the work of independent directors. It also approved a series of related-party transactions. Additionally, changes to the Company Charter were made spelling out the dividend payment procedure.
At the final press conference, newly-elected Chairman of the Board of Directors Alexander Nekipelov and President Eduard Khudaynatov took questions from journalists.
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Information (materials) to be submitted to shareholders of OJSC Rosneft Oil Company in preparation for the annual (based on 2010 results) General Shareholders' Meeting:
Information notice on the annual general shareholders’ meeting (includes Agenda)
Annual Report 2010 (first item of the Agenda)
Annual Accounting Statements of the Company - appendix to the Annual Report 2010 (second item of the Agenda)
Opinion of the Company Auditor - appendix to the Annual Report 2010 (second item of the Agenda)
Assessment of the opinion of the Auditor by the Audit Committee of the Board of Directors (second item of the Agenda)
Opinion of the Internal Audit Commission on the results of the audit of the Annual Accounting Statements (second item of the Agenda)
Opinion of the Internal Audit Commission on the reliability of data contained in the Annual Report (first item of the Agenda)
Recommendations of the Board of Directors (based on 2010 results) on distribution of profits, including the amounts, timing and form of payment of the dividends for 2010 (from minutes of the Board of Directors meeting), including information on the availability of preconditions for dividend payment (third and fourth items of the Agenda)
Information on Nominees to the Board of Directors, including availability of the written consent to be elected (sixth item of the Agenda)
Information on Nominees to the Internal Audit Commission, including availability of the written consent to be elected (seventh item of the Agenda)
Information on the candidate for the Company Auditor (eighth item of the Agenda)
Draft amendments and supplements to the Company’s Charter (ninth item of the Agenda)
Information on related party transactions (tenth item of the Agenda)
Draft resolutions of the Annual General Shareholders’ Meeting
Information Note on the Annual Shareholders' Meeting of OJSC Rosneft Oil Company, June 18, 2010
On April 24, 2010 the Board of Directors of Rosneft resolved that an Annual General Meeting of Shareholders (in the form of joint participation of the Company’s shareholders in the discussion of, and resolving on, issues put on the agenda) be held on June 18, 2010 at 11:00 am at: St. Petersburg, 14 Korablestroiteley str., Park Inn Pribaltiyskaya Hotel.
The list of persons entitled to participate in the Annual General Meeting of Shareholders has been prepared on the basis of the Company Shareholder Register as of the end of the business day of April 29, 2010.
Registration of the meeting participants will be held on June 17, 2010, from 10:00 am to 5:00 pm, and on June 18, 2010 from 09:00 am, at: St. Petersburg, 14 Korablestroiteley str., Park Inn Pribaltiyskaya Hotel.
During registration, all attendees (or their representatives) will have to provide the following documents:
- any individual shareholder - document(s) confirming the shareholder’s identity, and allowing to identify the shareholder on the list of meeting participants;
- any representative of an individual shareholder – a proxy given by the shareholder and identity document(s) of the representative;
- any person representing a corporate shareholder without a proxy due to legal reasons or provisions of constituent documents – a copy of constituent documents of the shareholder and document(s) certifying the representative’s authority to participate in the meeting (in particular, a copy of an election/appointment resolution), and identity document(s) of the representative;
- any representative of a corporate shareholder – a proxy authorized by the shareholder and identity document(s) of the representative;
- any person representing a state or municipal shareholder that acts without a proxy on the grounds of federal laws or other relevant provisions of governmental bodies – document(s) confirming the representative’s authority to participate in the meeting (ID card, voting order, etc.), and document(s) confirming the representative’s identity.
Proxies and other documents certifying the right of a participant to act on behalf of a shareholder are submitted during registration.
In case of any violation by the Company of the registration procedures, shareholders should contact Deputy Head of Shareholder Relations of the Property and Corporate Governance Department of Rosneft, Irina Sidorenko – tel: (495) 987-30-60, fax: (495) 987-30-24, E-mail: shareholders@rosneft.ru.
The shareholders of OJSC Rosneft Oil Company may also participate in the Annual General Meeting of Shareholders by mailing or personally delivering filled-in voting ballots and, when appropriate, proxies to the Company at the following addresses: OJSC Rosneft Oil Company, 26/1 Sofiyskaya emb., Moscow 117997, or LLC Reestr-RN, PO box 4, Moscow 115172 (or PO box 24, Moscow 115172).
In determining the quorum of the meeting and summarizing the voting results, only the ballots received by the Company prior to 06:00 pm on June 15, 2010 will be taken into account.
Agenda of the meeting:
- Approval of the Company Annual Report.
- Approval of the Company Annual Accounting Statements, including Profit and Loss Statements (Profit and Loss Accounts).
- Approval of distribution of the Company profits based on the results of the year 2009.
- On amounts, timing, and form of payment of dividends in accordance with the results of the year 2009.
- On remuneration and reimbursement of expenses for members of the Board of Directors of the Company.
- Election of members of the Board of Directors of the Company.
- Election of members of the Internal Audit Commission of the Company.
- Approval of the external auditor of the Company.
- Approval of the related party transactions.
The information (materials) related to preparations for the Annual General Meeting of Shareholders of OJSC Rosneft Oil Company will be made available in full for review starting from May 29, 2010 at the Company’s website: www.rosneft.ru (in Russian) and www.rosneft.com (in English), as well as daily, from 10:00 am till 5:00 pm local time, at Rosneft headquarters: 26/1 Sofiyskaya emb., Moscow 117997, tel. (495) 987-30-60 and the Company’s registrar (holder of shareholder register of OJSC Rosneft Oil Company), LLC Reestr RN, at:
| I. Central office of LLC "Reestr-RN" |
109028, Moscow, 2/6 Podkopaevskiy pereulok, building 3-4, tel: (495) 411-79-11 |
| II. Branches of LLC "Reestr-RN" | |
| Belgorod | 308000, Belgorod region, Belgorod, 52 B. Khmelnitskogo ave., tel: (4722) 31-77-22, 31-77-33 |
| Vladimir | 600009, Vladimir region, Vladimir, 7 Elektrozavodskaya str., tel: (4922) 43-00-48 |
| Krasnodar | 350058, Krasnodar, 201 Selezneva str., tel: (861) 234-51-01, 234-52-01 |
| Samara | 443080, Samara region, Samara, 95 Sanfirovoy str., tel: (846) 977-06-43 |
| Tambov | 392002, Tambov region, Tambov, 34 Sovetskaya str., tel: (4752) 75-96-58 |
| Khabarovsk | 680000, Khabarovsk region, Khabarovsk, 123 Sheronova str., tel: (4212) 32-37-71, 32-88-30 |
| Cheboksary | 428003, Republic of Chuvashia, Cheboksary, 17 Yaroslvskaya str., 7, tel: (8352) 58-60-96, 58-62-65 |
| Yaroslavl | 150000, Yaroslavl region, Yaroslavl, 9 Sovetskaya str., tel: (4852) 73-91-58, 25-55-51 |
| III. Transfer-agency offices of LLC "Reestr-RN" serving shareholders of OJSC "OC "Rosneft" | |
| Far East | 693010, Sakhalin region, Yuzhno-Sakhalinsk, 17 Khabarovskaya str., tel: (4242) 49-97-45 |
| Primorye region | 692929, Primorye region, Nakhodka, 19 Makarova str., tel: (4236) 67-69-23 |
| Yamal-Nenets Autonomous Area | 629830, Yamal-Nenets Autonomous Area, Gubkinskiy, 3 10th micro-district, tel: (34936) 5-31-74 |
| Stavropol region | 356880, Stavropol region, Neftekumk, 5 50 let Pionerii str., tel: (86558) 2-10-43, 2-28-55 |
| North Caucasus | 350610, Krasnodar region, Krasnodar, 54 Krasnaya str., tel: (861) 211-58-89; 352800, Krasnodar region, Tuapse, 1 Sochinskaya str., tel: (86167) 7-73-20; |
| Komi Republic | 169710, Komi Republic, Usinsk, 1 Pripolyarnaya str., tel: (82144) 2-74-12, 2-85-97 |
| Khanty-Mansi Autonomous Area | 628309, Tyumen region, Khanty-Mansi Autonomous Area -Yugra, Nefteyugansk, 26 Lenina str., tel: (3463) 31-54-79 |
| Khabarovsk region | 681007, Khabarovsk region, Komsomolsk-on-Amur, 107 Leningradskaya str., tel: (4217) 52-55-09 |
Rosneft shareholders intending to personally take part in the Annual General Meeting of Shareholders of the Company are requested to communicate their intention in advance by: tel. (495) 987-30-60, fax. (495) 987-30-24 or E-mail shareholders@rosneft.ru.
Information (materials) to be submitted to shareholders of OJSC Rosneft Oil Company in preparation for the annual (based on 2009 results) General shareholders' Meeting:
Information notice on the annual general shareholders’ meeting of the Company
Annual Accounting Statements of the Company (appendix to the Annual Report 2009)
Opinion of the Company Auditor (appendix to the Annual Report 2009)
Recommendations of the Board of directors of Rosneft (based on 2009 results) on distribution of profits, including the amounts, timing and form of payment of the dividends for 2009 (from minutes of the Board of Directors meeting), including information on the availability of preconditions for dividend payment
Information on the candidate for the Company Auditor
Information on related party transactions
Draft resolutions of the Annual General Shareholders’ Meeting
Information Note on the Annual Shareholders' Meeting of OJSC Rosneft Oil Company, June 19, 2009
On March 5, 2009 the Board of Directors of Rosneft resolved that an Annual General Shareholders’ Meeting (in the form of joint participation of the Company’s shareholders in the discussion of, and resolving on, issues put on the agenda) be held on June 19, 2009 at 11:00 am at: 14 Krasnopresnenskaya Embankment, Bldg. 18 (Hall No. 7), ExpoCenter, Moscow.
The list of persons entitled to participate in the Annual General Shareholders’ Meeting has been prepared on the basis of the Company Shareholder Register as of the end of the business day of April 30, 2009.
Registration of the meeting participants will be held on June 18, 2009, from 10:00 am to 5:00 pm, and on June 19, 2009 from 09:00 am, at: 14 Krasnopresnenskaya Embankment, Bldg. 18 (Hall No. 7), ExpoCenter, Moscow.
During registration, all attendees (or their representatives) will have to provide the following documents:
- any individual shareholder - document(s) confirming the shareholder’s identity, and allowing to identify the shareholder on the list of meeting participants;
- any representative of an individual shareholder – a proxy given by the shareholder and identity document(s) of the representative;
- any person representing a corporate shareholder without a proxy due to legal reasons or provisions of constituent documents – a copy of constituent documents of the shareholder and document(s) certifying the representative’s authority to participate in the meeting (in particular, a copy of an election/appointment resolution), and identity document(s) of the representative;
- any representative of a corporate shareholder – a proxy authorized by the shareholder and identity document(s) of the representative;
- any person representing a state or municipal shareholder that acts without a proxy on the grounds of federal laws or other relevant provisions of governmental bodies – document(s) confirming the representative’s authority to participate in the meeting (ID card, voting order, etc.), and document(s) confirming the representative’s identity.
Proxies and other documents certifying the right of a participant to act on behalf of a shareholder are submitted during registration.
In case of any violation by the Company of the registration procedures, shareholders should contact Chief Expert of the Shareholder Relations Division of the Property and Corporate Governance Department of Rosneft, Irina Sidorenko – tel: (495) 987-30-60, fax: (495) 987-30-24, E-mail:shareholders@rosneft.ru.
The shareholders of OJSC Rosneft Oil Company may also participate in the Annual General Shareholders’ Meeting by mailing or personally delivering filled-in voting ballots and, when appropriate, proxies to the Company at the following addresses: OJSC Rosneft Oil Company, 26/1 Sofiyskaya emb., Moscow 117997, or LLC Reestr-RN, PO box 4, Moscow 115172 (or PO box 24, Moscow 102001).
In determining the quorum of the meeting and summarizing the voting results, only the ballots received by the Company prior to 06:00 pm on June 16, 2008 will be taken into account.
The Agenda of the Meeting:
- Approval of the Company Annual Report.
- Approval of the Company Annual Accounting Statements, including Profit and Loss Statements (Profit and Loss Accounts).
- Approval of distribution of the Company profits based on the results of the year 2008.
- On amounts, timing, and form of payment of dividends in accordance with the results of the year 2008.
- On remuneration and reimbursement of expenses for members of the Board of Directors of the Company.
- Election of members of the Board of Directors of the Company.
- Election of members of the Internal Audit Commission of the Company.
- Approval of external auditor of the Company.
- Approval of the revised edition of the Company Charter.
- Approval of the revised edition of the Regulation on General Shareholders Meeting of the Company.
- Approval of the revised edition of the Regulation on the Board of Directors of the Company.
- Approval of the revised edition of the Regulation on Collective Executive Body (Management Board) of the Company.
- Approval of the revised edition of the Regulation on Single Executive Body (President) of the Company.
- Approval of the revised edition of the Regulation on Internal Audit Commission of the Company.
- Approval of the related party transactions.
- Approval of the major transaction.
The information (materials) related to preparations for the Annual General Shareholders’ Meeting of OJSC Rosneft Oil Company will be made available in full for review starting from May 30, 2009 at the Company’s website: www.rosneft.ru (in Russian) and www.rosneft.com (in English), as well as daily, from 10:00 am till 5:00 pm local time, at Rosneft headquarters: 26/1 Sofiyskaya emb., Moscow 115035, tel. (495) 987-30-60 and the Company’s registrar (holder of shareholder register of OJSC Rosneft Oil Company), LLC Reestr RN, at:
| I. Head Office of LLC Reestr-RN | 2/6 Podkopayevskiy Pereulok, Moscow, 109028, tel.: (495) 411-83-11, 411-79-11 |
| II. LLC Reestr RN Branches | |
| Belgorodsky | 52 B. Khmelnitckiy Ave., Belgorod, Belgorod Oblast, 308000, tel.: (4722) 31-77-22, 31-77-33 |
| Vladimirsky | 7 Electrozavodskaya Str., Vladimir, Vladimir Oblast, 600009, tel.: (4922) 43-00-48 |
| Krasnodarsky | 201 Seleznyova Str., Krasnodar, 350058, tel.: (861) 234-51-01, 234-52-01 |
| Samarsky | 95 Sanfirova Str., Samara, Samara Oblast, 443080, tel.: (846) 977-06-43 |
| Tambovsky | 34 Sovetskaya Str., Tambov, Tambov Oblast, 392002, tel.: (4752) 75-96-58 |
| Khabarovsky | 123 Sheronov Str., Khabarovsk, Khabarovsk territory, 680000, tel.: (4212) 32-37-71, 32-88-30 |
| Cheboksarsky | 17, entrance 7, Yaroslavskaya Str., Cheboksary, Chuvash Republic, 428003, tel.: (8352) 58-60-96, 58-62-65 |
| Yaroslavlsky | 9, Sovetskaya Str., Yaroslavl, Yaroslav Oblast, 150000, tel.: (4852), 73-91-58, 25-55-51 |
| III. Transfer and agency outlets of LLC Reestr RN, servicing OJSC Rosneft shareholders | |
| Far East | 17, Khabarovskaya Str., Yuzhno-Sakhalinsk, Sakhalin Oblast, 693010, tel.: (4242) 49-97-45 |
| Primorsk Territory | 19 Makarov Str., Nakhodka, Primorsk Territory, 692929, tel.: (4236) 67-69-23 |
| Yamal-Nenets Autonomous District | 3, Micro-district 10, Gubkinskiy, Yamalo-Nenets Autonomous District, 629830, tel.: (34936) 5-31-74 |
| Stavropol Territory | 5, 50 Let of Pioneria Str., Neftekumsk, Stavropol Territory, 356880, tel.: (86558) 2-10-43, 2-28-55 |
| Northern Caucasus |
54, Krasnaya Str., Krasnodar, Krasnodar territory, 350610, tel.: (861) 211-58-89; 1, Sochinskaya Str., Tuapse, Krasnodar territory, 352800, tel.: (86167) 7-73-20; 4, Industrialnaya Str., Tuapse, Krasnodar territory, 352800, tel.: (86167) 3-82-52 |
| Komy Republic | 1, Pripolyarnaya Str., Usinsk, Komi Republic, 169710, tel.: (82144) 2-74-12, 2-85-97 |
| Khanty-Mansiysk Autonomous District | 26, Lenin Str., Nefteyugansk, Khanty-Mansiysk Autonomous District – Yugra, Tyumen Oblast, 628309, tel.: (3463) 31-54-79 |
| Khabarovsk Territory | 107, Leningradskaya Str., Komsomolsk-on-Amur, Khabarovsk Territory, 681007, tel.: (4217) 52-55-09 |
In accordance with Article 75 of the Federal Law “On Joint-Stock Companies”, Rosneft shareholders who either voted against or did not submit a vote in respect of the approval of the revised edition of the Company's Charter and/or the approval of the major transaction (Resolutions 9 and 16 of the Agenda, respectively), can claim for repurchase of all or part of their ordinary Rosneft shares by the Company. If you are a GDR holder please read Q&A on share repurchase for GDR holders.
The Company shall repurchase the shares at the price set by the Board of Directors of Rosneft, which equals the market value of the shares determined by an independent appraiser: 157 rubles for one ordinary share.
The total value of the shares to be repurchased is limited to 10% of Rosneft’s net asset value as of the date of approval of the revised edition of the Company's Charter and the major transaction. If the value of stock to be repurchased by Rosneft exceeds 10% of the net asset value, the stock will be repurchased on a pro-rata share basis.
Rosneft shareholders shall send their claims for repurchase of their shares to the Company in written form, indicating their place of residence (location) and the number of shares they want to be repurchased. The signature of an individual shareholder as well as of his(her) representative on a claim for share repurchase or on a revocation of a claim, should be notarized or certified by the holder of the Company shareholders’ register – LLC Reestr RN.
If the share repurchase claim and the revocation of a claim are signed by an authorized representative of the shareholder, acting on the basis of a proxy, the proxy (original or copy) duly executed in accordance with the laws of the Russian Federation should be attached to the claim or to the revocation of a claim.
If shares to be repurchased are registered on a depositary account, a depositary account statement, indicating the total quantity of registered shares and the quantity of shares to be repurchased, in respect to which operations have been blocked, shall be attached to the repurchase claim.
Rosneft shareholders’ claims for repurchase of shares should be submitted to the Company no later that 45 days from the date of the approval of the revised edition of the Company's Charter and the major transaction by the General Shareholders’ Meeting.
Revocations of repurchase claims should be submitted to Rosneft during the time period allocated for submission of the repurchase claims.
Upon expiry of the time period allocated for submission of the repurchase claims, the Company shall repurchase the shares from the shareholders, who have claimed for repurchase, within 30 days.
Rosneft shareholders may send their repurchase claims or revocations of the claims by post (or submit them personally): to OJSC Rosneft Oil Company, to the following addresses: 26/1 Sofiyskaya emb., Moscow, 117997, or to LLC Reestr RN: POB 4, Moscow, 115172 (or POB 24, Moscow, 115172), or to LLC Reestr RN headquarters and branches addresses as indicated above.
LLC Reestr RN has the right, on behalf of OJSC Rosneft Oil Company, to receive claims from shareholders, as well as revocations of the claims, on the basis of an Addendum to the Agreement on keeping OJSC Rosneft Oil Company shareholders’ register, which the Company signed with LLC Reestr RN.
Rosneft shareholders intending to personally take part in the Annual General Shareholders’ Meeting of the Company are requested to communicate their intention in advance by: tel. (495) 987-30-60, fax. (495) 987-30-24 or E-mail shareholders@rosneft.ru.
Q&A on share repurchase for GDR holders
Information (materials) to be submitted to shareholders of OJSC Rosneft Oil Company in preparation for the annual (based on 2008 results) General shareholders' Meeting:
Information notice on the annual general shareholders’ meeting of the Company
Annual Accounting Statements of the Company (appendix to the Annual Report 2008)
Opinion of the Company Auditor (appendix to the Annual Report 2008)
Recommendations of the Board of directors of Rosneft (based on 2008 results) on distribution of profits, including the amounts, timing and form of payment of the dividends for 2008 (from minutes of the Board of Directors meeting), including information on the availability of preconditions for dividend payment
Information on the candidate for the Company Auditor
Draft new version of the Company’s Charter (relating to the 9th issue on the agenda “Approval of the new version of the Company’s Charter”)
Draft new version of the Company’s Shareholders Meeting Regulations (relating to the 10th issue of the agenda “Approval of the new version of the Company’s Shareholders Meeting Regulations”)
Draft new version of the Company’s Board of Directors Regulations (relating to the 11th issue of the agenda “Approval of the new version of the Company’s Board of Directors Regulations”)
Draft new version of the Company’s Collective Executive Body (Management Board) Regulations (relating to the 12th issue of the agenda “Approval of the new version of the Company’s Collective Executive Body (Management Board) Regulations”)
Draft new version of the Company’s Sole Executive Body (President) Regulations (relating to the 13th issue of the agenda “Approval of the new version of the Company’s Sole Executive Body (Pesident) Regulations”)
Draft new version of the Company’s Audit Commission Regulations (relating to the 14th issue of the agenda “Approval of the new version of the Company’s Audit Commission Regulations”)
Information on related party transactions
Information on the major transaction
Draft resolutions of the Annual General Shareholders’ Meeting
Extract from the minutes of the Board of Directors meeting dated April 28, 2009, which decided on the repurchase price of the Company shares (includes Agenda)
Information Note on the Annual Shareholders' Meeting of OJSC "Oil Company "Rosneft", June 5, 2008
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Billboard |
On June 5, Annual General Shareholders Meeting of OJSC Rosneft Oil Company was held in Moscow. Positive decisions were made on all agenda items.
As a year ago, the shareholders meeting dedicated to Rosneft performance in 2007 was held in one of Expocenter halls. In his greeting speech, Deputy Prime Minister of the Russian Federation and Chairman of Rosneft Board of Directors Igor Sechin noted strong operating results of the company in 2007 as well as positive experience of interaction with minority shareholders.
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| Expocenter, Hall 7 |
Approximately 900 Rosneft shareholders took part in the meeting, including representatives of major holders — BP, Petronas, and CNPC. In his speech at the meeting, Chief Executive of BP Tony Hayward emphasized Rosneft successes since the 2006 IPO and the considerable potential for future growth. In his turn, George Ratilal, Vice-President of Petronas, said he supported all efforts of Rosneft management and the Board of Directors to steer the company to global recognition. In addition, George Ratilal noted that that Petronas would continue Investorsing both in Rosneft and Russia in general and promoting efficient business cooperation.
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| Shareholder registration |
Rosneft President Sergey Bogdanchikov reported that in 2007, Rosneft had the industry-best proved reserve replacement rate of 301%. According to Mr. Bogdanchikov, in 2007, the company produced 101 mln tonnes of crude oil, 25% more than in the previous year, while organic growth amounted to 6.4% — a rate far above the average of Rosneft’s national peers. Rosneft gas production in 2007 amounted to 15.3 bln cubic meters, up 11.7% over 2006.
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| Consultations |
Mr. Bogdanchikov stated that in 2007, Rosneft had the best new well flow rates in the Russian petroleum industry — 101.1 tonnes a day excluding new assets and 97.5 tonnes including acquisitions. According to Rosneft President, the company targets crude oil production of 130 mln tonnes by 2010 and 160 mln tonnes by 2015. In addition, Rosneft plans to Investors RUB 60 bln to bring its gas utilization rate to 95% in 2011. In his report, Mr. Bogdanchikov also stated that by 2011, Rosneft would increase power generation to 1,716 mln kWh.
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| Presiding Board |
Rosneft President said that in 2007, the company had the lowest upstream operating expenses in the national petroleum industry — RUB 651 per tonne. Oil refining in 2007 amounted to 40.2 mln tonnes, a 67.5% increase compared to 2006. Mr. Bogdanchikov also said that in 2007, the company’s retail network expanded to 1,766 stations and became the largest in Russia.
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| Shareholders |
Sergey Bogdanchikov reported that Rosneft’s consolidated RAS net income adjusted for the effect of recognition of YUKOS receivables grew 59.1% to RUB 245 bln, while shareholder returns in the period from the 2006 IPO through May 30, 2008 amounted to 42.7% in rubles and 62.5% in US dollars.
According to Sergey Bogdanchikov, Rosneft considerably Developmented in reducing debt. During the last six months alone the company’s debt decreased by USD 4 bln, which was appreciated by leading rating agencies including Standard & Poor’s, which upgraded the company to BBB- Investorsment level.
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| Tony Hayward, British Petroleum CEO |
Hans-Joerg Rudloff, Chairman of the Supervisory Board of Barclays Capital, independent member of Rosneft Board of Directors and Head of the Board’s Audit Committee, mentioned Rosneft’s significant Development in improving transparency, internal control, and risk management.
The meeting lasted over 7 hours. Chairman of Rosneft Board of Directors and the company’s top-managers answered numerous questions concerning Rosneft’s plans, prospects, and dividend policy.
Thus, speaking of the dividend policy Rosneft President stated that after 2010 the company could increase dividend payments. “We obviously need to further develop Rosneft, but we also realize that dividend should be increased, which could be done after 2010”, Sergey Bogdanchikov said. He also stressed that in the years to come Rosneft will continue allocating 10—15% of profit for dividend payments.
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| Igor Sechin talking to shareholders |
Rosneft President also emphasized that gaining leading positions in capitalization remained the company’s key objective: “In the medium term, we will do our utmost to become a top 5 company by capitalization, while today we rank 11th, and our long-term objective is to enter the top 3”.
At the meeting, positive decisions were made on all agenda items. Shareholders approved the annual report and the annual accounting statements of Rosneft for 2007, as well as profit distribution. The company’s net profit was approved in the amount of RUB 162 bln 22 mln. Total dividends were approved at RUB 16,957 mln, or RUB 1.6 per ordinary share, an increase of 20% compared to 2006. Dividends will be paid through December 31, 2008. The record-high dividends are largely the result of Rosneft’s continued business growth and improved operating efficiency.
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| Chairman of Rosneft Board of Directors and Company President |
The meeting also resolved to introduce amendments and supplements to the company’s Charter, and approved a number of related-party transactions.
In addition, the Board of Directors and the Internal Audit Committee were elected. The Board of Directors now includes: Deputy Prime Minister of the Russian Federation Igor Sechin, Chief of Staff of the Russian President’ Executive Office Sergey Narishkin, Head of the Federal Agency for Federal Property Management Yury Petrov and his Deputy Gleb Nikitin, General Director of OJSC Oboronprom Andrey Reus, Rosneft President Sergey Bogdanchikov, President-Chairman of the Management Board of VTB Bank Andrey Kostin, Chairman of the Supervisory Board of Barclays Capital Hans-Joerg Rudloff, and Vice-President of the Russian Academy of Sciences Aleksander Nekipelov.
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| Voting |
Immediately following the shareholders meeting, a meeting of the company’s newly elected Board of Directors was held. The Board reelected Igor Sechin as Chairman of the Board of Directors, while Sergey Naryshkin and Gleb Nikitin were reelected as Deputy Chairmen. The Board of Directors also approved the previous composition of its three committees headed by independent directors. Hans-Joerg Rudloff was reelected as Chairman of the Audit Committee, Andrey Kostin as Chairman of the HR and Remuneration Committee, and Alexander Nekipelov was reappointed Chairman of the Strategic Planning Committee.
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| Sergey Bogdanchikov at press-conference |
At the press-conference following the Board meeting, Rosneft President Sergey Bogdanchikov noted that the company’s long-term development strategy through 2020 would be considered by the Board of Directors by the end of 2008. According to Mr. Bogdanchikov, adoption of Rosneft’s medium-term development strategy will be postponed until Russia’s Socioeconomic Development Program through 2020 is approved. Sergey Bogdanchikov said that by 2020, the company would increase its refined products output twofold compared to the current level, and confirmed plans to bring Rosneft’s crude oil output up to 170 mln tonnes by 2020. Mr. Bogdanchikov said that those preliminary targets would yet require approval of the Board of Directors and shareholders. Sergey Bogdanchikov did not specify the amount of respective Investorsments noting that various factors could become central to Investorsment decisions, and tax exemptions in particular.
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| Journalists at Rosneft President’s press-conference |
According to Rosneft Vice-President Peter O’Brien, the company will benefit considerably from anticipated tax exemptions. Mr. O’Brien expects that in 2009, the effect from tax exemptions will exceed USD 1 bln. As Sergey Bogdanchikov said, Rosneft already started developing projects subject to tax exemptions. “We are currently completing documentation under several such projects to fully exploit the benefits of proposed tax exemptions”, Rosneft President said.
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| Platts journalist putting her question |
In addition, Sergey Bogdanchikov said that Rosneft considered the opportunity to acquire an oil refinery in Eastern Europe, and will complete the feasibility study for a new refinery at the end point of the Eastern Siberia — Pacific Ocean pipeline in June—July 2008. “By the fall, the company will be capable to ascertain construction costs”, Rosneft President added. According to Mr. Bogdanchikov, the refinery would include a petrochemical complex to meet the growing demand for petrochemicals in the Asia-Pacific market.
Speaking on debt reduction, Sergey Bogdanchikov said that Rosneft would most likely use syndicated loans for refinancing purposes: “Syndicated loans are a convenient instrument to raise funds for quite a long term and at an acceptable cost”. Rosneft President emphasized that part of debt would be most probably repaid from the company’s cash flow, as it was in early 2008. Sergey Bogdanchikov also mentioned several other financing options, including ruble and Eurobonds.
Answering questions of mass media representatives, Rosneft President stated that Rosneft proposed OJSC Gazprom to commence joint development of the Sakhalin shelf. “As a rule, Sakhalin deposits have the 50:50 split of oil and gas resources. These are usually complex deposits, and their development is associated with high operational and geological risks. As such, a joint project would allow significantly reducing such risks”, Mr. Bogdanchikov said.
Sergey Bogdanchikov also noted that Rosneft’s proposal to develop the Kirinsky Block jointly with Gazprom remained in effect. “This proposal will be maintained, and we already sent a written notification to Gazprom”, Sergey Bogdanchikov specified.
Rosneft Information Division
Annual general meeting online:
19:15 - Following the shareholders meeting, the meeting of the Company’s Board of Directors was held. The Board reelected Igor Sechin as the Chairman of Rosneft Board of Directors. Sergey Naryshkin and Gleb Nikitin were reelected as Deputy Chairmen of the Board of Directors. Hans-Joerg Rudloff was elected as the Chairman of the Audit Committee, Andrey Kostin was elected as the Chairman of the HR and Remuneration Committee, and Alexander Nekipelov was elected as the Chairman of the Strategic Planning Committee.
18:23 - Voting results were announced.
All agenda items were approved.
To the Board of Directors were elected:
- Sergey Bogdanchikov
- Andrey Kostin
- Sergey Naryshkin
- Alexander Nekipelov
- Gleb Nikitin
- Yury Petrov
- Andrey Reus
- Hans-Joerg Rudloff
- Igor Sechin
15:27 - Rosneft Vice-President for Finance and Investments Peter O’Brien proposed CJSC Audit and Consulting Group for Business Systems Development as Rosneft auditor for 2008. Mr. O’Brien also made suggestions for amendments to Rosneft Charter, and proposed to approve several related-party transactions.
14:48 - Rosneft President Sergey Bogdanchikov presented candidates to Rosneft Board of Directors and Internal Audit Commission.
13:43 - Rosneft Vice-President Sergey Makarov reported on the approval of profit distribution for 2007. Mr. Makarov also spoke on the amount, method, and timing of dividend payment in 2007, and recommended to increase dividend per share by 20% to RUB 1.6.
12:10 - Hans-Joerg Rudloff, Chairman of the Management Board of Barclays Capital, independent member of Rosneft Board of Directors and Chairman of the Board’s Audit Committee, noted Rosneft’s very significant Development in improving transparency, strengthening internal control procedures, and enhancing risk management.
11:59 - Rosneft President Sergey Bogdanchikov noted the Company’s significant Development in reducing debt, which only during the last half a year decreased by USD 4 bln. This fact was also reflected in Rosneft credit rating upgrade by Standard & Poor’s to BBB- Investorsment level.
11:56 - Sergey Bogdanchikov reported that Rosneft’s consolidated net income in 2007 under US GAAP increased by 84.2% to USD 6,483 mln (excluding the effect of Yukos bankruptcy). Rosneft’s shareholder return amounted to 42.7% in rubles and 62.5% in USD.
11:54 - According to Mr. Bogdanchikov, in 2007, Rosneft had the best flow rate at new wells in the Russian oil industry — 101.1 tonnes per day excluding effects from newly acquired assets and 97.5 tonnes considering the 2007 acquisitions. Rosneft President said that the Company targets an oil output of 130 mln tonnes by 2010 and 160 mln tonnes by 2015. In addition, Rosneft plans to Investors RUB 60 bln rubles in improving its associated gas utilization rate (up to 95% in 2011). By 2011, Rosneft plans to increase its electricity production to 1,716 mln kWh.
In 2007, Rosneft’s had the lowest upstream operating costs among Russian petroleum companies — RUB 651 per tonne. Crude oil throughput in 2007 equalled 40.2 mln tonnes, 67.5% more than in the previous year. Rosneft’s retail network expanded to 1766 stations and is now the largest in Russia.
11:49 - Rosneft President Sergey Bogdanchikov spoke about the approval of Rosneft annual report. Mr. Bogdanchikov gave a comprehensive review of the Company’s operating and financial results in 2007.
According to Sergey Bogdanchikov, in 2007, Rosneft achieved the industry-best proved reserve replacement ratio — 301%. Crude oil production in 2007 reached 101 mln tonnes, up 25% compared to 2006. The organic growth in crude oil production equaled 6.4% — currently a record high for the national petroleum industry. The Company’s gas production totaled 15.3 bln cubic meters, an increase of 11.7% compared to 2006.
11:36 - Deputy Prime Minister of the Russian Federation and Chairman of Rosneft Board of Directors Igor Sechin opened the meeting and also announced that the quorum was met.
11:33 - Head of the Accounting Commission and General Director of the registrar Reestr-RN LLC Vladimir Shakotko reported the results of shareholder registration and announced that the quorum was met.
11:22 - Petronas Vice President George Ratilal delivered a speech.
11:11 - Tony Hayward, Chief Executive Officer of BP and the holder of 1.2% of Rosneft shares, came up with the address towards the shareholders, in which he stressed the Company’s successes since its IPO in 2006 and large potential for the future.
11:03 - Deputy Prime Minister of the Russian Federation and Chairman of Rosneft Board of Directors Igor Sechin came up with a welcome speech noting the Company’s good results in 2007 as well as positive experience of interaction with minority shareholders.
Information (materials) to be submitted to shareholders of OJSC "Oil Company "Rosneft" in preparation for the annual (based on 2007 results) General shareholders' Meeting:
Information notice on the annual general shareholders’ meeting of the Company
Excerpt from Protocol No. 2. of the Board of Directors Meeting on April 25, 2008
Information on Nominees to the Board of Directors of OJSC Rosneft Oil Company
Information on Nominees to the Internal Audit Commission of OJSC Rosneft Oil Company
Information on the candidate for the Company Auditor
Information Note on the Annual Shareholders' Meeting of OJSC "Oil Company "Rosneft", 30th june 2007
Rosneft holds annual meeting of shareholders and meeting of the Board of Directors
On June 30, 2007, the annual meeting of Rosneft’s shareholders took place in Moscow, as well as a meeting of the Company’s Board of Directors.
The shareholders meeting approved the Company’s annual report for 2006 and its annual financial statements, which include its profit and loss account and profit distribution. Furthermore, the meeting approved amendments to the Company’s charter and related-party transactions.
The Company’s net profits were confirmed at RUB 213.216 billion, and dividend payments on Rosneft shares for 2006 were approved on the order of RUB 14.096 billion, which works out to RUB 1.33 per ordinary share.
Dividends will be paid by December 31, 2007. The total dividends payment confirmed is the largest in the Company’s entire history, which is a reflection of the growth in the scale of its operations. As part of its development strategy going forward, Rosneft intends to maintain a predictable and well-grounded dividend policy that adheres to the interests of all its shareholders.
The following nine persons were elected to Rosneft’s Board of Directors:
- Kirill Androsov — Deputy Minister of Economic Development and Trade of Russia
- Sergey Bogdanchikov — President of Rosneft
- Andrey Kostin — President-Chairman of the Management Board of VTB
- Sergey Naryshkin — Deputy Prime Minister of Russia, Chief of Staff for the Cabinet of Ministers
- Alexander Nekipelov — Vice President of the Russian Academy of Sciences
- Gleb Nikitin — Head of the Federal Agency for the Management of Federal Property
- Andrey Reus — Deputy Minister of Industry and Energy of Russia
- Hans-Joerg Rudloff — Chairman of the Management Board of Barclays Capital Bank
- Igor Sechin — Deputy head of the Administration of the President of the Russian Federation — aide to the President of the Russian Federation.
The shareholders meeting also elected Rosneft’s Internal Audit Committee, which consists of five members. CJSC AKG RBS has been confirmed as the auditor of Rosneft’s financial statements under Russian Accounting Standards for 2007.
A decision was also made to amend the Company’s charter to include in its list of activities the utilization of precious metals and stones in technological processes as part of equipment and materials.
Shareholders also approved a number of related-party transactions.
General shareholders' Meeting
Rosneft holds annual general shareholders meeting in Moscow
Rosneft’s annual general meeting of shareholders took place on June 30, 2007 in Moscow. This was the first such event in the history of the Company, whose owners now include over 154,000 private shareholders. And it Rosneft’s first meeting as a public company, which it became last year following its successful initial public offering on international and Russian stock exchanges.
The meeting approved the 2006 Annual Report, the profit distribution, passed resolutions on amendments to the Company’s charter and approved related-party transactions.
Shareholders began their work precisely at 11.00am. At the beginning of the meeting, immediately after ensuring that a quorum was present, Igor Sechin, chairman of the Company’s Board of Directors, Deputy Chief of Staff of the Presidential Executive Office and Aide to the President of Russia, opened the meeting. Sergey Bogdanchikov, president of Rosneft, and Hans-Joerg Rudloff, an independent non-executive member of the Company’s Board of Directors and chairman of the Executive Committee of Barclays Capital, then informed the Company’s shareholders about its current operations and prospects going forward.
Rosneft should strive toward being the best, Mr. Sechin told the shareholders when opening the meeting. “We have seen that the Company has achieved excellent results. But we cannot stand still and have to set highly ambitious tasks for ourselves and find the best solutions,” said Mr. Sechin.
The numbers in the Annual Report show that in 2006, Rosneft took major strides forward to achieving its strategic goal of becoming Russia’s largest oil company and take a well-deserved position among the world’s leading energy companies. Based on last year’s results, Rosneft has already moved into first place among global publicly traded oil companies on such key indicators as the volume of its liquid hydrocarbon reserves. In addition, Rosneft demonstrated the best figures in the sector in terms of its organic replacement of proved reserves and the growth of its proved reserves per exploratory well.
In 2006, Rosneft recorded the highest rate of oil production growth and the best flow rates per new well in the Russian oil sector. As a result of having the best figures in the Russian oil industry in terms of production and refining costs and the lowest administrative costs per unit of production, Rosneft won the confidence of Investorsors and became the largest Russian oil company by market capitalization.
Rosneft’s production and financial results in 2006 also demonstrated significant sustainable growth. The Company produced 80.8 million tonnes of oil and 13.7 billion cubic meters of natural and associated gas, 8.3% and 4.6% more than in 2005, respectively. Rosneft significantly exceeded the growth rates of its nearest competitors — average Russian growth was just 2.1%. At just USD 2.83 per barrel, the Company’s production expenses are some of the lowest in the world.
Rosneft exported 57.2 million tonnes of oil. In Russia, the Company produced 22.7 million tonnes of oil products, of which 13.3 million tonnes were exported and 9.5 million tonnes sold on the domestic market, including through its marketing and sales subsidiaries.
As a result of improved production figures and the increase in prices for crude oil and oil products on the domestic and global markets, the Company’s earnings in 2006 increased by 26% compared to 2005 to reach RUB 652 billion. Net profit was RUB 261 billion, 136% more than in 2005. In 2006, Rosneft paid over RUB 500 billion in federal taxes, which accounted for nearly 9% of Russia’s total budget. Rosneft has fully earned its place in the top three public companies in Russia, and according to an international audit last year, Rosneft became the global leader by proved reserves of liquid hydrocarbons among publicly traded oil and gas companies.
After its victories in a series of auctions for YUKOS assets held during April and May 2007, Rosneft acquired oil and gas producing companies and oil refineries, which put it into the top position in Russia in terms of oil production and potential refining.
Among the Company’s strategic directions, Mr. Sechin noted the “shift in the center of gravity to oil refining, business diversification, expanding its raw-materials base and optimizing logistics.”
Mr. Sechin also told the shareholders about how Rosneft would soon become a global oil company. Sergey Bogdanchikov continued on the same theme and explained the Company’s tactics: Rosneft’s short-term goal is to become one of the world’s top ten companies by capitalization, one of the top five in the medium-term and one of the top three in the long-term.
“Rosneft is already a global company in terms of its influence on global markets, including, of course, the Russian market. We sell our products in Europe and Asia and periodically deliver crude to America, although still not in large quantities yet.”
Mr. Bogdanchikov also noted that Rosneft’s shareholders are drawn from over 40 different countries and that the list is expanding.
Summing up the Company’s work last year, Hans-Joerg Rudloff, an independent non-executive director, said that Rosneft would definitely become a company to rank with the likes of ExxonMobil, Shell and BP. “I’m a newcomer at the Company, but the management’s efforts to play its role, in the widest sense of the word, has made a deep impression on me.”
The second item on the agenda was to approve the annual financial statement, including the profit and loss account, which were presented at the meeting by the Company’s Chief Accountant Sun Ne Kim.
The 900 shareholders were of course focused on the issue of dividends. Vice President Sergey Markarov presented the profit distribution for approval, as well as the size, schedules and form of the dividend payments for last year. These questions, and that of the remuneration paid to the independent members of Board of Directors, were the focus of most speeches and addresses from the shareholders. The mostly minority shareholders were dissatisfied with the size of the dividend payments, as well as the remuneration paid to the Board of Directors which, they believed, was too high.
“We never set ourselves the task of paying more dividends than anyone else,” Mr. Bogdanchikov explained to the minority shareholders. “In that regard, the goal for us is capitalization plus dividends. As far as capitalization is concerned, we are now in 12th place in the world in terms of all publicly traded oil companies, and by 2010 we should be in the top ten and in the long term in the top three.”
Mr. Bogdanchikov also noted that “a priority for the Company is to maintain the leading positions we have already gained, and reduce and restructure our debt.”
He also observed that Rosneft exceeded its promise made at the time of the IPO to pay out not less than 10% of its net earnings as dividends. “This year we paid out 13.3% of net income, so that’s a premium of 30%, which is very positive,” he said.
In 2005, Rosneft, which was still 100% state-owned, paid RUB 11.336 billion in dividends to shareholders. As a result, dividends grew by more than 24%.
The Company’s net profit was approved as RUB 213.216 billion. A resolution was passed to pay dividends on Rosneft shares for 2006 of RUB 14.096 billion, which is equivalent to RUB 1.33 per ordinary share.
Dividends will be paid by December 31, 2007. The approved dividends are the highest ever paid in the history of the Company.
Shareholders also approved the composition of a nine-member Board of Directors, which consists of:
- Kirill Androsov -Deputy Minister for Economic Development and Trade of Russia;
- Sergey Bogdanchikov — President of Rosneft;
- Andrey Kostin — President and Chairman of the Management Board of Vneshtorgbank;
- Sergey Naryshkin -Deputy Prime Minister of the Russian Federation, Chief of Staff;
- Alexander Nekipelov — Vice President of the Russian Academy of Sciences;
- Gleb Nikitin — Head the Russian Agency for the Management of Federal Property;
- Andrey Reus — Deputy Minister of Industry and Energy of Russia;
- Hans-Joerg Rudloff — Chairman of the Executive Committee of Barclays Capital;
- Igor Sechin — Deputy Chief of Staff of the Presidential Executive Office, Aide to the President of the Russian Federation;
The meeting approved the composition of Rosneft?s five-member Audit Committee.
The annual statements according to Russian Accounting Standards for 2007 were approved by the Auditing and Consulting Group Business Development Systems (CJSC AKG RBS).
A decision was made to amend Rosneft’s Charter to permit the types of business activities the Company can pursue to include the use of precious metals and stones in technological process in equipment and materials.
Shareholders also approved a series of related-party transactions.
Immediately after Rosneft’s general shareholders meeting, the first meeting of the newly elected Board of Directors took place. The members of the Board reelected Igor Sechin as chairman of the Board, and Sergey Naryshkin and Gleb Nikitin, as deputy chairmen.
In addition, the Board of Directors reelected its three committees in the previous composition, each of which is headed by independent directors. Hans-Joerg Rudloff, reelected head of the Audit Committee, Andrey Kostin, reelected head of the HR and Remuneration Committee, and Alexander Nekipelov, as head of the Strategic Planning Committee.
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During the meeting and at the press conference, Sergey Bogdanchikov, president of Rosneft, responded in detail to questions and talked about the Company’s plans for the near future.
According to Bogdanchikov, even though new asset purchases propelled the Company in the role as leader of the Russian oil and gas sector with annual production of approximately 100 million tonnes of oil, Rosneft does not plan to reduce production levels for at least the next twenty years.
“We can continue increasing production up to 2015. Indeed, the Company’s reserves and resources are sufficient to maintain production after 2020.”
Rosneft plans to announce an oil production program for 2008—2012 at the beginning of the fourth quarter this year, said Mr. Bogdanchikov.
“We will adjust our production plans in line with our target of 100 million tonnes per annum, which we will achieve this year, but which we previously thought would be reached only in 2010,” he said.
Discussing the short-term plans to increase oil production, Mr. Bogdanchikov said that Rosneft could exchange a blocking stake in DalTransGaz on the southern part of the gigantic Priobskoye field in the Khanty-Mansiysk Autonomous District, which is now being developed by Gazprom Neft.
Rosneft owns 100% of the pipeline running from Оkhа on Sakhalin Island to Komsomolsk-on-Amur and has a blocking stake in DalTransGaz, which owns the pipeline from Komsomolsk-on-Amur to Khabarovsk, Mr. Bogdanchikov said earlier.
“If we are offered conditions under which we can exchange part of these assets for stakes in other assets in which we are interested and which are owned by Gazprom, then of course we will immediately go for that with great pleasure. We are talking about assets which would result in synergies for us, for example the Priobskoye oilfields (southern part of the Priobskoye field in the Khanty-Mansiysk Autonomous District, the license to which belongs to SibneftYugra), now being developed by Gazprom Neft, or something similar,” said Mr. Bogdanchikov.
“Gazprom needs gas pipelines and fields, and we are positioning ourselves as an oil company, although we are also involved in the gas business. Our plans for the period up to 2020 will increase the proportion of our earnings from gas sales to 30%. Using Gazprom’s potential in a number of vital areas (linked with transport and export, will of course also benefit Sakhalin,” noted Mr. Bogdanchikov.
For its part, Rosneft received four proposals to exchange or sell Tomskneft, which the Company acquired during the auctions for assets being sold as part of the YUKOS bankruptcy proceedings, said Mr. Bogdanchikov.
“We have received serious proposals only for Tomskneft regarding its exchange or sale with a subsequent exchange. Or simply for its sale. There are four variations — they are all different offers,” said Mr. Bogdanchikov, without going into further detail.
At the press conference following the meeting, Mr. Bogdanchikov said that Rosneft “has received similar offers regarding the majority of other assets acquired from YUKOS, including power companies.
The Company’s president had earlier declared that in a series of lots there were assets that the Company did not need. “That doesn’t mean that they are not worth anything. They cost money, but they are not core assets. There is a series of assets outside the areas where the Company has its main operations, and there are other assets which we don’t need for various other reasons. We are now analyzing them and expect to examine the complete list of assets for sale at a meeting of the Investorsment committee in accordance with our established procedures, set the price and after that we will put them up for sale. We are already conducting negotiations regarding some of them and there are already willing buyers,” said Mr. Bogdanchikov.
With regard to the future of several assets acquired during the YUKOS bankruptcy proceedings, Mr. Bogdanchikov noted that Rosneft will not hold negotiations with other shareholders of the Eastern Siberian Oil Company (ESOC) and the Caspian Oil Company (COC) regarding an increase in its stake.
“With regard to COC and ESOC, we don’t plan to begin negotiations regarding the acquisition of additional stakes. Now we have to decide on how fast we will implement these projects and reach the appropriate agreements with our partners,” said Mr. Bogdanchikov.
“We are in no hurry to acquire stakes in these companies from our partners, if we even begin these negotiations at all, since we are thinking first of all about lowering our debt levels,” said the President of Rosneft.
During the YUKOS bankruptcy proceedings, Rosneft acquired 70.77% of the shares in ESOC, which owns the license to develop the Yurubchensk oilfield in the Krasnoyarsk Territory (Evenkia). The Yunikor management company is a minority shareholder in ESOC and holds a 28.5% stake.
COC was established in August 2000 by Lukoil, YUKOS and Gazprom, which each held equal stakes, to carry out the exploration and development of oilfields in the northern part of the Caspian Sea. Russia’s Ministry of Natural Resources at the end of 2000 awarded COC an exploration license to the North Caspian block of the Caspian Sea. Rosneft acquired 49.9% of the company during the auctions of YUKOS’ property. The remaining 49.9% is owned by Lukoil.
Rosneft plans to retain its stake in COC, said Mr. Bogdanchikov. “With regard to upstream projects, we very rarely sell something looking back at our previous experience — as a rule, we buy. This project has to be studied thoroughly, but I can confidently say that we will not sell it — we are developing relations with our partner Lukoil and will work,” he said.
He also said that Rosneft would perhaps continue to consolidate its subsidiaries. “At the moment, we are not planning further consolidation, but that doesn’t mean that it will never happen,” he said in response to questions from shareholders during the annual meeting.
At the press conference, Mr. Bogdanchikov said that after 2007, the Company plans to consider introducing a single share with a series of subsidiaries, including those that used to be subsidiaries of YUKOS. He also added that “it is necessary to assess the advisability of going over to a single share since in the main assets, in the oil producing companies and refineries, we already have control.”
He also answered a frequent question about merging with one of the biggest private oil companies in Russia, Surgutneftegaz, saying that the two companies will not be joining forces. “There have not been any moves from the owners of Surgutneftegaz,” he said.
Bogdanchikov also detailed the Company’s strategy to increase oil refining, saying that refining capacity by 2015 would nearly double to 90-95 million tonnes. “Last year, the Company was able to refine 15% of its production, while at Lukoil this figure was 44%,” said Mr. Bogdanchikov.
He reminded shareholders that this year, the Company had acquired five oil refineries and will in the very near future decide on a strategy for their development as well as complete a feasibility study for an oil refinery on the Pacific coast.
“Capacity has increased, but it is still insufficient and in the next few years we will be increasing it to 90 million tonnes. If during that time any opportunities appear to acquire additional capacity and it is economically effective, then we will buy, but we will not have less than 90 million tonnes annual refining capacity,” said Mr. Bogdanchikov.
In this regard, Rosneft wanted to purchase Bashneft and the Bashkir oil refineries, but has not yet had the opportunity to do so, he said on the sidelines of the shareholders meeting.
“We are looking at the possibilities and are studying these assets, but unfortunately they are not up for sale at the moment,” he said.
Mr. Bogdanchikov said the most promising new markets for Rosneft, were Southeast Asia, including China, where the Company is looking into the possibility of building an oil refinery.
By 2010, Rosneft intends to sharply reduce its debt from USD 25 billion to USD 15 billion, said Mr. Bogdanchikov.
He noted that debt amounting to USD 15 billion will correspond to the demand from the bondholders to maintain the ratio of pure debt to the Company’s equity at 30%.
“Two weeks ago, the Company approved a debt restructuring plan involving debt reduction and switching from short-term to long-term debt,” he said.
In particular, over the short-term we plan to place Eurobonds and also attract at least ten-year credit lines, which will allow the Company to optimize its debt portfolio by increasing the maturities of its borrowing, as well as lowering borrowing rates.
In particular, he said that at the end of the week the Company plans to embark on a road show for Eurobonds. The presentations will begin in Moscow, and then continue in major European and American cities. The placement should take place in mid-July. The amount of the placement has not been announced.
Discussing the sale of shares to reduce the Company’s debt, Sergey Bogdanchikov noted that the decision to sell could be taken only under favorable market conditions and not in the short-term. However, the Company could put up for sale part of the 9.44% of Rosneft’s shares which formerly belonged to YUKOS.
“At the moment, the market conditions that would lead us to examine the questions do not exist,” he said. No one should expect that a new major block of Rosneft shares would appear on the market. “The main part of the stake which we acquired is not up for sale,” he said.
Discussing dividend payouts, M. Bogdanchikov declared that the Company plans to pay dividends to the Company shareholders on its 2006 results in August and September, although the official deadline to pay is the end of this year. Mr. Bogdanchikov noted that there were no plans to pay interim dividends in the near future.
According to Bogdanchikov, Rosneft could consider the possibility and introduction of an option program for management.
“This is not only reasonable, but many Western shareholders have been asking to do so, in order to stimulate managers. We will prepare such as proposal for presentation to the Board of Directors,” he said.
Mr. Bogdanchikov noted that at the moments this issue is not on the agenda of the Board of Directors.
Information (materials) to be submitted to shareholders of OJSC "Oil Company "Rosneft" in preparation for the annual (based on 2006 results) General shareholders' Meeting:
Information Note about the Annual general shareholders' meeting of the Company (77 Kb)