SIBUR IN ASIA Potential for future development June 2014
VERTICALLY INTEGRATED MODEL WITH MULTIPLE EMBEDDED EARNINGS SUSTAINABILITY DRIVERS (1) Oil producers Oil & Gas producers X% External sales represent c. 84% of Feedstock & Energy segment gross revenue Oil-based feedstock (APG) Gas-based feedstock (NGLs) - Share of available for sale volumes Notes: (1) All figures based on FY 2013 financials. Feedstock & Energy segment 9 production sites Gross sales: RR 171.5 bln EBITDA margin: 45.2% Methanol 100% 71% 100% NGLs 29% Natural gas NGLs MTBE Dominant share of feedstock for petrochemicals segment is sourced internally Petrochemicals segment 18 production sites Gross sales: RR 128.3 bln EBITDA margin: 5.9% Basic polymers (PP, PE) Synthetic rubbers Plastics and organic synthesis Intermediates and other chemicals Other third-party feedstock Earnings Sustainability Drivers Integration into APG processing secures stability of feedstock supply Economics of raw NGL fractionation limits exposure to oil & oil derivative price volatility Net seller position of energy products hedges against increases in prices for petrochemical feedstock Prices for petrochemical products are only partially correlated with oil & oil derivative prices 2
SIBUR AT A GLANCE Revenue, USD bln EBITDA, USD bln Petchem SIBUR Revenue Breakdown (2013) By Product Other 43 4.0 0.8 3 6.2 1.9 Energy products 8.5 8.7 8.5 By Region CIS Other Asia 6 1 Russia 9 % % 54 57 27 Europe 2.9 2.6 2.5 2009 2010 2011 2012 2013 EBITDA margin 20% 31% 35% 30% 29% Net debt/ EBITDA Financial Performance (1) 1.6x (2) (2) 0.7x 0.8x 1.0x 1.2x Unique integrated gas processing & petrochemicals company Leader in both gas processing and petrochemicals industries in Russia Diverse range of products sold to multiple geographies and customers Prudent and disciplined financial policy, sustained in the market downturn One of the highest rated private companies in the region Shareholders with established track record in international capital markets Key Facts 27 production sites in Russia Over 27,000 employees Russia s largest APG processor with a 56% (3) share of total processed volumes Russia s largest LPG producer with a 32% (4) share of total country s production Russia s largest MTBE producer with a 36% share of total country s production (4) Sibur is among TOP 10 global rubber producers with diversified technology portfolio 37% (4),(5) of polypropylene and 41% (4) of Russia s total LDPE production Currently rated Ba1 (Moody s) / BB+ (Fitch) with no history of downgrades throughout 2008/09 crisis Notes: (1) All financial figures for SIBUR in this presentation for the years of 2009-2012 are based on combined financial information, which excludes the results of the mineral fertilisers and tyres businesses, which were divested by SIBUR in December 2011. (2) SIBUR s reporting currency is Russian rouble. Figures have been translated from RR to USD at average FX rates for the respective periods. (3) Central Dispatch Department of the Fuel & Energy Complex, for FY 2012. (4) Petromarket, Kortes, Market Report, Alliance Analytics, Russian Association of Synthetic Rubbers Producers, company data, for FY 2012. (5) Including 100% of NPP Neftekhimia production. 3
EXTENSIVE ASSET BASE THROUGHOUT RUSSIA Ust-Luga Transshipment Facility SIBUR-PETF BIAXPLEN (Moscow region) Headquarters (Moscow) Plastic-Geosintetika BIAXPLEN (Kursk) Voronezhsintezkauchuk RusVinyl (2)(3) SIBUR-Neftekhim (4) NPP Neftekhimia (1) Yuzhno-Priobskiy GPP (1)(2) SIBUR GEOSINT (Surgut) BIAXPLEN (Nizhniy Novgorod region) Nyagan GPP SIBUR-Khimprom Uralorgsintez SIBUR- Kstovo BIAXPLEN (Samara region) Togliattikauchuk Tobolsk-Polymer Polief Tobolsk-Neftekhim BIAXPLEN (Tomsk) Tomskneftekhim Gubkinskiy GPP Vyngapurovskiy GPP Muravlenkovskiy GPP Belozerniy GPP Nizhnevartovskiy GPP Yuzhno-Balykskiy GPP Krasnoyarskiy ZSK (5) SIBUR GEOSINT (Kemerovo) Revenue Split by Product, 2013 Processing Intermediates & services, trading other chemicals & other sales Basic polymers 7 3 9 Synthetic LPG rubbers 12 23 % Plastics 15 & organic synthesis 3 10 products 7 Raw NGL MTBE & other fuels 10 Naphtha Natural gas Notes: (1) JV with Gazprom Neft Group. (2) Investment project. (3) JV with SolVin Holding Nederland B.V. (4) Including three production sites. (5) Under JV with SINOPEC. Feedstock & Energy segment Petrochemicals segment Production sites with joint operations of Feedstock & Energy and Petrochemicals segments Non-consolidated JVs 4
NATURAL GAS DEAL BETWEEN RUSSIA AND CHINA GIVES GROUND TO A NEW JOINT VENTURE BETWEEN SIBUR AND GAZPROM 1 PRODUCTION AND TRANSPORTATION (objects and capacities)* Chayanda field (up to 25 bcm, 2019) Kovykta field (up to 35 bcm, 2021) Pipeline Power of Siberia (up to 60 bcm) Pipeline Kovykta Chayanda (up to 35 bcm) 2 GPPs & GFU* Processing plants* (up to 60 bcm) С2 (up to 3.4 mmta) С3+ (up to 2.3 mmta) Methane (up to 54 bcm) Helium (up to 60 mmcm) Tentative year of the launch of GPP is 2019 and of GFU is 2022 The largest Russian gas producer Sustained growth in production of gas with high С2+ content Expertise in E&P and pipeline projects, sales and marketing of energy resources Production Chayandinskoye 1 Kovyktinskoye Pipeline Kovykta Chayanda Irkutsk Pipeline Power of Siberia 2 Transportation, GPP and GFU Skovordino 3 Belogorsk PCC Blagoveshchensk China 3 PETROCHEMICAL COMPLEX* 1 st stage*: Tentative year of the launch is 2022 Ethylene 1200 kta Polyethylene (HDPE) 800 kta Polyethylene (LLDPE) 400 kta 2 nd stage*: Tentative year of the launch is 2024 Ethylene 1200 kta Polyethylene (HDPE) 800 kta Polyethylene (LLDPE) 400 kta Expertise in design, construction and operation of gas processing plants, gas fractionation units, and petrochemical capacities Expertise in marketing and sales of various petrochemical products HIGH POTENTIAL FOR SUCCESSFUL PARTNERSHIP BASED ON MUTUAL BENEFICIAL MONETIZATION OF ETHANE (BY-PRODUCT FOR GAZPROM) * Estimations, configuration and commissioning dates could change 5
STRONG POSITION ON THE GLOBAL PE AND PP COST CURVES Global Polyethylene Cost Curve Global Polypropylene Cost Curve LDPE Delivered to Western European Customers (2013) bcm (USD per tonne) 2100 1850 1600 1350 1100 850 600 350 100 1850 1600 1350 1100 850 600 350 100 Source: IHS Chemical ME avg. SIBUR NA avg. Russia avg. WE avg. NEA avg. 0 5000 10000 15000 20000 25000 Cumulative capacity ( 000 tonnes) (USD per tonne) LDPE Delivered to China Port (2013) NA avg. ME avg. SIBUR Russia avg. ME Middle East, NA North America, NEA Northeast Asia, WE Western Europe ME Middle East, NA North America, NEA Northeast Asia, WE Western Europe NEA avg. WE avg. 0 5000 10000 15000 20000 25000 Cumulative capacity ( 000 tonnes) 2100 1850 1600 1350 1100 850 600 350 100 PP Delivered to Western European Customers (2013) (USD per tonne) 2100 1850 1600 1350 1100 850 600 350 100 ME avg. SIBUR = Russia avg. WE avg. NEA avg. NA avg. 0 15000 30000 45000 60000 75000 Cumulative capacity ( 000 tonnes) (USD per tonne) ME avg. PP Delivered to China Port (2013) SIBUR = Russia avg. ME Middle East, NA North America, NEA Northeast Asia, WE Western Europe ME Middle East, NA North America, NEA Northeast Asia, WE Western Europe NEA avg. NA avg. WE avg. 0 15000 30000 45000 60000 75000 Cumulative capacity ( 000 tonnes) 6
SIBUR DEVELOPS ITS ACTIVITIES IN ASIA Jamnagar* Assets and offices in Asia* Tianjin Qingdao Shanghai** Ningbo Guangzhou SIBUR presence in Asia Representative office in Beijing SIBUR International Trading (Shanghai) Co., Ltd. with representative offices in: - Tianjin - Guangzhou - Qindao Regional warehouses in China - Shanghai - Qingdao - Ningbo - Guangzhou - Tianjin JV s with Asian partners - Jamnagar* (JV with Reliance) - Shanghai** (JV with Sinopec) Warehouses Offices of SIBUR International JV s with Asian partners * - SIBUR and Reliance established a jointly owned company, to built a butyl rubber plant in Jamnagar. Construction is started ** - SIBUR and Sinopec signed a contract to establish a joint venture for the construction of NBR plant at the Shanghai Chemical Industry Park Source: SIBUR 7
ASIAN MARKET IS EXTREMELY IMPORTANT FOR NEW WORLD- SCALE CAPACITIES OF SIBUR Project Tobolsk - Polymer Description Capacity : - dehydrogenation : 510 kmtpa of propylene - PP production: 500 kmtpa Completed in 2013 Planned Sales in Asia*, % of project capacity ZapSib-2 (Petrochemical complex in Tobolsk) 1 Capacity: - Cracker: 1.5 mmtpa - PE: 1.5 mmtpa - PP: 500 kmtpa Petrochemical complex in Russian Far East 2 SIBUR and Gazprom signed a Memorandum of cooperation for a gas processing project in Russian Far East Gazprom is considering construction of GPP, SIBUR of petrochemical complex Ethane is a main feedstock for this complex China is considered a major market for the project * - projected share of sales on the Asian market (1) The project is at the FEED stage. The final investment decision is expected in 2014 (2) The configuration and timeline of the project s implementation are to be determined at a later stage 8
SIBUR PARTNERSHIPS WITH SINOPEC AND RELIANCE WILL SERVE THE GROWING NEEDS OF ASIAN INDUSTRY JV #1 (SINOPEC): NITRILE RUBBER (NBR) PRODUCTION IN KRASNOYARSK (RUSSIA) The JV is established on the basis of Krasnoyarsk Synthetic Rubber Plant Sinopec acquired 25% plus 1 share in the Krasnoyarsk plant Plant capacity is 42,500 mt per year Current status: The deal was approved by Russian and Chinese regulators. SIBUR and Sinopec entered into a joint venture developed on the site of the Krasnoyarsk Synthetic Rubber Plant JV #2 (SINOPEC): NBR PRODUCTION IN SHANGHAI The JV is established to set NBR production facilities in Shanghai area Plant capacity is 50,000 mt per year The JV will use the patents and technologies of SIBUR SIBUR owns 25.1% of JV, Sinopec owns 74.9% Current status: SIBUR and Sinopec signed a contract to establish a joint venture for the construction of NBR plant at the Shanghai Chemical Industry Park JV #3 (RELIANCE): BUTYL RUBBER (IIR) PRODUCTION IN JAMNAGAR (INDIA) SIBUR and Reliance established a jointly owned company Reliance Sibur Elastomers Private Limited, where SIBUR owns a 25.1% stake Construction of a butyl rubber production facility based on SIBUR s technology in Jamnagar Plant capacity is 120,000 mt per year Current status: Construction is started. The butyl rubber plant construction is part of the Jamnagar-3 project implemented by Reliance and its completion will also depend on the timeline of the Jamnagar-3 project execution 9