Strategy

The Company’s activities are based on the Gazprom Neft PJSC development strategy until 2025, which was approved by the Board of directors in 2013 and updated in 2015 and 2016. Despite the continued instability in the external environment, the Company’s key strategic priorities until 2025 remain relevant.

GEOLOGICAL EXPLORATION WORK AND PRODUCTION

STRATEGIC OBJECTIVES:

100 mn TOE hydrocarbon production volume
15 availability of proven resources(ТР/production)
100% annual replacement ratio of proven and probable reserves (2P category)excluding acquisitions1

Gazprom Neft intends to increase hydrocarbon production to 100 million TOE per year by 2020 and maintain this level until 2025. The Company plans to maintain a 15-year ratio of proven reserves to production. In order to achieve these goals, Gazprom Neft will strive to employ the most cost-effective methods to recover the remaining reserves from the current resource base by utilising the best practices for optimising field development, reducing the cost of proven technologies as well as acquiring and introducing new technologies. Gazprom Neft is considering unconventional reserves as a growth opportunity and will develop this class of assets as a key component of its portfolio.

OIL REFINING

STRATEGIC OBJECTIVES:

40 mn t volume of Oil refining in Russia
95% refining depth in Russia
80% output of light petroleum products in Russia

Implementing programmes to modernise oil refining facilities as well as growth in operating efficiency remain strategic priorities for Gazprom Neft as it develops its oil refining business in Russia. The Company has completed the first stage of the extensive modernisation of its oil refineries, which aims to improve the quality of the petroleum products it manufactures. All the motor fuels it produces correspond to fifth-class emission standards. The Company continues to implement key projects in the second stage of the modernisation programme, which aims to increase oil refining depth and expand the yield of light petroleum products. Work is also being continued on projects to improve operating efficiency and to mitigate the Company’s environmental impact.

SALES

STRATEGIC OBJECTIVES:

100% volume of products manufactured at the Company’s Russian oil refineries sold via its high-margin sales channels

Gazprom Neft has two main sales segments: the sale of motor fuels via the Gazpromneft filling station network and Small-scale wholesale channels as well as the sale of petroleum products to industrial consumers. Specialised goals have been set for each segment. The target scale of Gazprom Neft’s sales business should ensure the ability to sell 100% of the petroleum products it manufactures on the market via its own sales channels for maximum coverage of the entire value chain in the oil business.

MOTOR FUEL SALES

STRATEGIC OBJECTIVES:

19 mn t premium sales in Russia and the CIS
1,650 number of retail network stations in Russia and the CIS, including franchises

Gazprom Neft plans to increase the total volume of motor fuel sales in Russia and the CIS by 2025 primarily due to growth in the retail sales channel.

SALE OF PETROLEUM PRODUCTS TO INDUSTRIAL CONSUMERS

STRATEGIC OBJECTIVES:

5.5 mn t sales of jet fuel in Russia and on the global market
3.4 mn t sales of bunker fuel in Russia and on the global market
2.3 mn t sales of bitumen in Russia and on the global market
1.37 mn t sales of petrochemical products in Russia and on the global market
0.75 mn t sales of lubricants in Russia and on the global market

In an effort to improve the efficiency of petroleum product sales, Gazprom Neft has spun off separate business units to sell jet and marine fuel, lubricants and bitumen materials, and petrochemical products and LPG.

The Company plans to further increase sales in the business units and boost its market share. In addition, Gazprom Neft plans to introduce new products to the market and also develop its distribution capacity.