INVESTMENT PORTFOLIO MANAGEMENT SYSTEM

In 2019, the development of the investment planning system was mainly focused on optimizing processes to improve the quality and speed of decision-making amid the constantly increasing volume of information.

A separate area of development is to optimize the comprehensive appraisal process within the context of monitoring existing projects and entering into new ones. In 2019, vectors for further elaboration of project appraisal tools were identified.

The ELMA BPM system was introduced in the corporate center to increase the efficiency of the investment process. This system enables continuous optimization of the business process along with its automation, using a single information field for operation, monitoring execution, and receiving the necessary analytics.

As part of updating and monitoring processes, high results were achieved in terms of reducing process effort and increasing the level of automation:

The sphere diameter demonstrates the level of labor intensity of the process, FTE

Based on the results in the corporate center, the decision was made to replicate the system for the subsidiaries of the Group.

Monitoring is the main tool for investment portfolio management during elaboration and implementation of investment projects. It is mainly intended to obtain accurate information on investment projects’ results and prospects for justified and timely management decisions. All projects approved by the Company’s Investment Committee are subject to monitoring.

The existing investment decision-making system with high requirements for elaboration of each project allows achieving the maximum possible accuracy of costs planning at each stage of investment project implementation.

The results of updated investment projects within the framework of a forecast for implementing the Zarubezhneft LDP show that the positive dynamics of the net present value in the current Zarubezhneft Group investment portfolio are maintained.

NPV dynamics of Zarubezhneft Group, MM RUB
NPV dynamics of Zarubezhneft Group,  MM RUB

Apart from investment project monitoring, the Company carries out regular implementation control of well interventions (WI) on a monthly basis. Each WI is subject to rapid evaluation according to the investment analysis principles. The specified interventions provide for mandatory determination of the minimum viable oil price for a zero economic outcome for each project and initial screening out of projects not capable of positive implementation under the targeted macroeconomic conditions.

Additionally, the exchange rate and oil prices are regularly monitored, compared with approved indicators, and assessed on how they impact the investment project portfolio in order to manage the macroeconomic parameter rate risk.

Combined application of the tools presented allows for achieving the maximum performance of the Company’s investment activities at each stage of the investment planning process.

INVESTMENT PORTFOLIO MANAGEMENT SYSTEM