Value chain

An integrated business model allows Gazprom Neft to maximise the effective use of the Company’s resources, increase the value of business and create value for stakeholders during each stage of activities. This enables the Company to maintain its leading positions and competitiveness in the long term.

The foundation of the Company’s activities is the Gazprom Neft Development Strategy until 2025, which was approved by the Board of Directors in 2013 and updated during the reporting year. Despite the ongoing instability in the external environment, the Company is still on pace to achieve its key strategic priorities prior to 2025.

Business

Exploration and production

The volume of hydrocarbons extracted by the Company increases each year, thereby making it possible to meet the market’s demand for oil and gas. The growth in production can be attributed to the large-scale development and introduction of innovations. The Company has increased production at mature fields in Western Siberia and introduced two new brands of Arctic crude oil to the international market – ARCO from the Prirazlamnoye field and Novy Port from the Novoportovskoye field. Gazprom Neft continues to study opportunities to extract hard-to-recover and unconventional reserves. A balanced project portfolio helps to effectively manage production in rapidly changing market conditions.

Refining

The Company remains one of the industry leaders in oil refining efficiency while reliably meeting the demands of the domestic market. The high proportion of refining is a significant factor in ensuring the Company’s economic efficiency. The Company achieves such results by continuously improving its operating efficiency, modernising oil refineries and implementing projects to increase the depth of refining and produce light petroleum products. Production facility modernisation programmes enable the Company to not only enhance the quality of its products, but also improve the environmental performance of motor fuels as well as minimise the environmental impact of its refineries.

Sales

The Company has an effective sales network to sell petroleum products to industrial consumers and motor fuel to end consumers via retail and small wholesale channels. Gazprom Neft develops a filling station chain in Russia and CIS countries. To improve the effectiveness of petroleum product sales to industrial consumers, the Company has separated the following businesses: aircraft refueling, bunkering and sales of lubricants and bitumen materials and petrochemical products.

Creation of value

Meeting the needs of customers for oil, gas and high-quality petroleum products



Dividends for shareholders



Tax revenue for all budget levels



Orders placed with local suppliers



Manufacturing of innovative products with reduced environmental impact during consumption



Jobs, stable salaries and social support for personnel. Employee development and career growth programmes



Innovative activities that contribute to the industry’s development



Contribution to the socioeconomic stability of the regions and their development, improving the lives of local communities and promoting growth in the population’s social activity and social entrepreneurship



Nature conservation and contribution to the preservation of biodiversity

Strategic outlook for 2025

100 million TOE – Hydrocarbon production volume

15 years – Availability of proven reserves (Total Proved / Production)

100% – annual replacement ratio of proven and probable reserves (2P) excluding acquisitions

In order to achieve these goals, Gazprom Neft strives 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. The Company plans to set up a new production centre in the northern Yamalo-Nenets Autonomous District and is considering unconventional reserves as significant potential for growth.



40 mn t – oil refining in Russia

95% – oil refining depth in Russia

80% – yield of light petroleum products in Russia

Continuing the modernisation of refining facilities and further enhancing operational efficiency remain a strategic priority for developing Gazprom Neft’s oil refining business in Russia. The Company will continue to implement key projects to increase the depth of refining and the yield of light petroleum products. Gazprom Neft continues work on projects to improve operational efficiency and projects that aim to mitigate its environmental impact.

In the long term, the Company’s own sales channels should sell 100% of the petroleum products manufactured at its oil refineries in Russia.

In the motor fuel segment, Gazprom Neft intends to increase overall sales in Russia and the CIS to 19 million tonnes by 2025. The Company plans to expand its filling station network in Russia and the CIS to 1,650 stations by 2025, including franchising filling stations to achieve this goal.

In the segment for the sale of petroleum products to industrial consumers, the Company intends to increase sales to 13.3 million tonnes per year by 2025