FY 2012 - Investor Relations - NIS

BusinessStructureReviewNIS j.s.c.Expert ServicesUpstreamOil and GasProductionForeignRepresentative OfficesMarketing,Sales andBusinessDevelopmentOil and GasReserveManagement NAFTAGAS –Oilfield Services*Oil and GasReservoirEngineeringManagementInfrastructureand OperationalSupportStrategy andComplexProjectsSTC NIS -NAFTAGAS*Oilfield services Refining Sales & DistributionNAFTAGAS– TechnicalServices*NAFTAGAS -Transport *Oil Refining Marketing Renewable EnergySourcesTechnological WholesaleSupportGas and EnergyRetailTradeReception of rawmaterials, blendingpetroleumproductsand loadingtransportationmeansTechnicalMaintenance andEquipment RepairIncreasingEfficiency inRefiningDispatchOperations* In 2012 individual subsidiary companies were established out of the business structure of the CompanyLogistics andSupplyProduction ofLubricantsDevelopmentof the“Sales andDistribution”Business“Sales andDistribution”ProjectsManagement“Sales andDistribution”CapitalConstructionEnergyDevelopment in theEnergy AreaThermalRegenerationProvision ofEnergy-GeneratingProduct to“Refining”Business OperationNaftna Industrija Srbije (NIS) is among major vertically-integratedenergy companies in the South East Europefor exploration, extraction and refining of crude and naturalgas as well as distribution and sale of a wide range of oilproducts. Company’s HQ and main production facilities arebased in the Republic of Serbia, a Balkan hub of trade andinvestments due to its geographic position. In 2012 NISdistributed its business activities in five blocks:Five blocks• Block Upstream• Block Oilfield Services• Block Refining• Block Sales and Distribution• Block Energypartly decentralised functions/directorates• Function for Strategy and Investments• Function for Finance, Economics Planning andAccounting• Function for Material and Technical and ServiceSupport and Capital Construction• Function for Organisational Affairs• Function for HSEand centralised functions• Function for Legal and Corporate Affairs• Function for Corporate Security• Function for External and Governmental Relations• Function for Internal Audit• Function for Public Relations and CommunicationUpstream Block (Exploration and production) operatesin the area of exploration and production of oil andgas, including the following activities: exploration, production,infrastructure and operational support, oil andgas reserves management, oil and gas field engineeringmanagement, major exploration and production projects,management of processes in the scientific and technologicalcentre. In 2012, NIS entered in 3 production sharingagreements related to crude oil in Angola (PSA, ProductionSharing Agreement):• PSA, Block 3/05• PSA, Block 3/05А• PSA, Block 3/91As of 2010, oil and gas exploration and production activitiesexpanded to the region. Jadran Naftagas, a limitedliability company for exploration and production of crudeoil, was established in Republika Srpska. This is a jointventure by NIS and Neftegazincor, a Zarubezhneft subsidiary.A seismic survey was conducted in Posavina andSemberija regions in 2012. The joint survey agreement forKelebija exploration block was signed in 2012 in Hungarywith RAG. In 2012, the Romanian government approvedthe licence for exploration block ЕX-2 in Romania. Thejoint survey agreement was signed with Moesia for explorationblock EX-12, and an agreement was signed withZeta Petroleum for field development in Jimbolia.Oilfield Services Block provides main support in explorationand production in all oil and gas upstream activities,from geophysical services, through drilling andoverhaul of wells, to the transportation of the machineryand manpower, machinery maintenance as well as constructionand maintenance of oil and gas systems andfacilities. Oilfield Services Block expanded its operationsinto the foreign markets. Contracts were concluded fordrilling services in the territory of Turkmenistan; workover of wells in Bosnia-Herzegovina for Jadran Naftagas,pipeline testing and inspection of tank for oil productsstorage in the territory of Romania.Refining Block produces petroleum products. NIS producesa full range of petroleum products - engine fuels, rawmaterials for petrochemical industry, engine oils and otherpetroleum products. The annual average refining volume inthe previous two years was around 2.5 tons of crude oil. Themaximum capacity of refining facilities (in Pancevo and NoviSad) is approximately 7 million tons of crude oil a year.Sales and Distribution Block covers foreign and domestictrade, wholesale and the retail of all oil derivatives,and accessory merchandise. As of 31.12.2012 NIShas 350 operating retail facilities (338 petrol stations: 333operational, 1 under reconstruction and 4 internal petrolstations, 6 loading stations for LPG, 6 LPG cylinders salespoints, 6 products storages (5 of them in operation: NoviSad, Smederevo, Belgrade, Nis, Prahovo, and 1 out of operation:Elemir), 6 operational LPG storages (Novi Sad,Belgrade, Zrenjanin, Subotica, Cacak and Nis) and 3 activestorage facilities (Cacak, Jakovo and Sabac). NIS’ subsidiaryNIS Petrol from Bulgaria (100% owned by NIS) boughtproduct storage for liquefied products in Kostin Brod inBulgaria in October 2012.Energy Block was established in 2011 with thegoal to produce and sell of electrical and thermal energyfrom various resources including traditional coalgas,renewable resources (biomass, wind, geothermalresources) The Energy Block performs analysis andevaluation of investment and preliminary projects inthe Serbian energy sector with the goal identifying NISstrategic partnerships.26 • Company profile Annual report 2012Annual report 2012Company profile • 27