Message from the chairman of the board of directors

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Alexey Miller Chairman of the Board of Directors Gazprom Neft PJSC

Gazprom Neft PJSC continued its progressive development in 2016. The 8.2% increase in hydrocarbon production was the best in the Russian oil industry. The Company launched the full-scale development of major fields in Yamal and on the Gydan Peninsula – Novoportovskoye and East Messoyakha – and increased the number of its refueling complexes at Russian airports. The Gazpromneft filling station chain is firmly in first place in terms of the average daily sales of petroleum products and continues to expand.

While successfully meeting its production objectives, Gazprom Neft respects the principles of sustainable growth. The Company pays close attention to the introduction of personnel development programmes, the implementation of social projects in the regions where it operates, the sustainable use of natural resources and improving the level of environmental and industrial safety.

Specifically, advanced technical solutions were used to develop fields in the Arctic in order to minimize the burden on the fragile northern ecosystem. The useful utilisation of association petroleum gas is growing consistently and reached 95% at the Company’s fields in the Noyabrsk region in 2016.

As part of the ‘Native Towns’ comprehensive social investment programme, Gazprom Neft PJSC is creating conditions to improve the population’s quality of life by investing in the construction and maintenance of social infrastructure, improving urban areas and promoting the development of education, culture and sports in the Company’s regions of operation. Gazprom Neft PJSC implemented 165 projects under the auspices of the ‘Native Towns’ programme and carried out 287 charitable and volunteer events involving Company employees in 2016.

The ‘Multiplying Talent’ intellectual oil and gas-themed tournament for high school students generated a high level of interest last year. Some 1,800 students from different Russian cities took part in the tournament, a 50% increase from 2015. With Gazprom Neft’s support, Serbia hosted the Russian musical festival ‘Bolshoi’ – a landmark cultural event for both countries that is traditionally attended by students from Russian and Serbian music schools – for the fourth time. The KHL Gazprom Neft Cup international hockey tournament among youth teams – the biggest children’s hockey competition in Europe – entered its second decade.

Gazprom Neft’s achievements were primarily made possible by the efforts of its effective team of employees. I am confident that the Company will continue to successfully meet the objectives set by shareholders and progress towards achieving its strategic goals.