Gazprom Neft Board of Directors reviews preliminary 2012 report and adopts 2013 investment program

24 December 2012

The Board of Directors reviewed a preliminary report on performance of Gazprom Neft's investment program and budget in 2012 and its plans for 2013. In 2012, the company became the industry leader in terms of production growth and unit operating profit per barrel produced.

Gazprom Neft's aggregate production for 2012 is expected to total around 59.7 million tons of oil equivalent, which is 4.1 percent higher than the 2011 level. The total volume refined will reach 43.5 million tons of oil, which is 7 percent higher than the preceding year's level.

In 2013, the company is planning to raise its total investments to 240 billion rubles. That will mean an increase of approximately 25 percent, which is attributable to the development of new large-scale projects in Russia and abroad both on land and on the continental shelf, the development of reserves in regions where the company's presence has long been well-established, and the conduct of geological exploration in Eastern Siberia. At the Moscow Oil Refinery (ссылка откроется в новом окне), the program for improving the quality of motor fuels will continue, while at the Omsk Oil Refinery, automation and production efficiency enhancement programs will continue, as will preparation for the next stage of modernization: raising the oil refining depth.

"Last year was yet another year of records for Gazprom Neft. The company leads the industry in terms of operating profit per barrel and rates of production growth. And we're still one of the best in terms of the level of return on capital investment. Gazprom Neft is increasing its production, upgrading its refining techniques at rates that are overtaking its competitors, and will convert to the production of Euro 5 standard petroleum products. The company's retail network is actively developing both in Russia and abroad. In 2012, the company made yet another confident step toward the achievement of its strategic target performance values," noted Alexey Miller, JSC Gazprom Chairman of the Management Committee.

The Board of Directors has also reviewed progress reports on the program for utilizing and improving the efficiency of use of associated petroleum gas (APG). One of the biggest projects in 2012 was the completion of phase 1 of the Noyabrsk Integrated Project (NIP), which Gazprom Neft implemented jointly with SIBUR. The two companies simultaneously built and reconstructed facilities for the transport and processing of gas, making it possible to utilize an additional 1.1 billion cubic meters of APG per year. A second major project will be launched in 2013: the commissioning of the Yuzhno-Priobskaya compressor station, the purpose of which is to direct gas produced at that field for processing. This will bring the average APG utilization rate at Gazprom Neft up to 80 percent. Gazprom Neft will continue developing and implementing projects to raise the level of the beneficial use of gas.