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01.09.2015

Ranking

Solvency ratio of oil and gas industry

Information agency Credinform prepared a ranking of companies in oil and gas industry.

Companies with the highest volume of revenue were selected for this ranking according to the data from the Statistical Register for the latest available period (for the year 2013). The enterprises were ranked by decrease in solvency ratio.

The solvency ratio (x) is equity capital to total assets. It indicates the dependence of the company on external loans.

The recommended value is >0,5.

The lower value shoes the dependence on external sources of financing and possible instability therefore.

However, sometimes the companies are able to be stable with the value lower than 0,5. They are first of all companies with high assets turnover, stable demand, established supply and distribution channels, low fixed costs (for example, trade and intermediary organizations).

The value of the solvency ratio above the optimum level indicates a high solvency.

The recognition of the company insolvent does not mean the business is automatically determined as pre-bankruptcy organizations. This is just a recorded financial instability. Therefore, the regulatory value of the criteria is established in such a way as to provide operational control of the entity's financial position and to implement the insolvency prevention measures in advance, as well as to stimulate the company for self-getting out the crisis.

For the most comprehensive and fair view on the company’s financial condition it is necessary to pay attention not only to the average values in the industry, but also to the whole presented set of financial indicators and ratios.

**Table 1. Revenue, solvency ratio and solvency index GLOBAS-i® of the major enterprises of oil and gas industry (top-10)**
№	Name	Region	Revenue, mln. RUB, 2013 г.	Solvency ratio, (х)	Solvency index GLOBAS-i®
1	SURGUTNEFTEGAS OPEN JOINT STOCK COMPANY INN 8602060555	the Khanty-Mansi Autonomous Okrug - Yugra	814 187,8	0,9	189 the highest
2	LUKOIL-WEST SIBERIA LIMITED INN 8608048498	the Khanty-Mansi Autonomous Okrug - Yugra	631 009,8	0,8	187 the highest
3	PJSC RN Holding INN 7225004092	the Tyumen region	688 008,2	0,8	253 high
4	PJSC «Tatneft» INN 1644003838	the Republic of Tatarstan	363 531,3	0,8	185 the highest
5	PJSC GAZPROM INN 7736050003	Moscow	3 933 335,3	0,8	156 the highest
6	LLC GAZPROM MEZHREGIONGAZ INN 5003021311	Moscow	867 412,1	0,6	251 high
7	PJSOC Bashneft INN 0274051582	the Republic of Bashkortostan	517 486,7	0,5	196 the highest
8	JSC Gazprom Neft INN 5504036333	Saint-Petersburg	1 178 063,8	0,4	188 the highest
9	ROSNEFT OIL COMPANY INN 7706107510	Moscow	3 544 443,1	0,3	209 high
10	OIL TRANSPORTING JOINT STOCK COMPANY TRANSNEFT INN 7706061801	Moscow	704 714,0	0,2	166 the highest

The solvency of the Top-10 companies engaged in oil and gas industry (the major industry in Russia in terms of export and annual revenue) is unevenly distributed. The solvency ratio of SURGUTNEFTEGAS OPEN JOINT STOCK COMPANY is close to 1, that indicates the low dependence on external loans. At the same time, the ratio of OIL TRANSPORTING JOINT STOCK COMPANY TRANSNEFT (0,2) may indicates the expansive financial policies stimulated by foreign loans.

oil and gas industry

Picture 1. Solvency ratio and turnover of the largest oil and gas companies (top-10)

Annual revenue of the largest oil and gas companies (Top-10) according to the latest published annual financial statements (2013) amounted to 13 242.2 bln. RUB, which is by 9.8% higher than in the previous period.

PJSC Gazprom, the market leader with the value of 0,8, is in "the green zone" of low dependence on external sources of financing.

Gazprom is a global energy company. Its major business lines are geological exploration, production, transportation, storage, processing and sales of gas, gas condensate and oil, sales of gas as a vehicle fuel as well as generation and marketing of heat and electric power.

Gazprom holds the world’s largest natural gas reserves. The Company’s share in the global and Russian gas reserves makes up 17 and 72 per cent respectively. Gazprom accounts for 12 and 72 per cent of the global and Russian gas output accordingly. At present, the Company actively implements large-scale projects aimed at exploiting gas resources of the Yamal Peninsula, Arctic Shelf, Eastern Siberia and the Far East. Gazprom is the only producer and exporter of liquefied natural gas in Russia.

The Company is among Russia’s five largest oil producers and it is the largest owner of power generating assets in the country. These assets account for 15 per cent of the total installed capacity of the national energy system; is the only producer and exporter of liquefied natural gas in Russia.

All Top-10 companies got high and the highest solvency index. This indicates the ability to timely and fully fulfil the liabilities with minimum default risk.