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Sustainable Environment

Gazprom Neft, as one of the major domestic oil and gas producers, is fully aware of its responsibility for nature conservation to present and future generations. The Company seeks to comply with all requirements of environmental legislation, meet license obligations, and provide maximum compensation for any human impact on the environment. The Company's environmental strategy is focused on minimising any possible environmental impact, the sustainable use of natural resources, and the elimination of the environmental "heritage" of the past years.

Focusing on resource conservation allows the Company to not only minimise the environmental impact but also improve its financial performance. On the upstream side, Gazprom Neft employs a variety of enhanced oil recovery methods to achieve a high hydrocarbon recovery rate with minimal environmental impact. As a result of the constant modernization of refining facilities, the Group's companies boast high conversion rates, making their products more environmentally friendly and conserving considerable amounts of raw materials

Gazprom Neft companies constantly work on reducing pollutant emissions into the atmosphere. One of the top priorities in this area is a high level of utilisation of associated petroleum gas (APG). The Company has developed and is implementing a Gas Programme to bring the level of APG utilization at the Company's facilities from 48 per cent to 95 per cent by 2012.

Energy efficiency is another area of concern for Gazprom Neft. The Company carries out energy audits on a regular basis and is introducing energy management and conservation procedures. In 2009 the energy efficiency programme translated into savings of RUB 1.071 bln.

The Company's units take steps to utilize water resources in the best possible way: produced water is injected back into wells to maintain reservoir pressure during oil production operations and water recirculation systems are used for cooling in the downstream sector. The level of water recycling in the downstream sector exceeds 97.5 per cent.

Conserving Natural Resources

The main Gazprom Neft fields currently under development are located in the north of Russia, in Khanty-Mansyisk Autonomous District and Yamalo-Nenets Autonomous District. The tundra ecosystem is extremely sensitive and the Company plans its operations in the region to avoid any adverse impact on regional biodiversity and not disturb its unique nature.

The Company's plans also include the Environmental Impact Assessment looking at all factors related to oil and gas production and their possible effect on the ecosystem. Environmental management in the region takes into account vegetation periods, spawning seasons, as well as bird and animal migration.

The Company decreases the area of lands disturbed by human activity by employing pit less drilling. Lands are restored using up-to-date chemical bioagents (Fare Zyme) designed for oil destruction. They are based on mineral components which artificially feed the natural micro flora and facilitate land rehabilitation. Biological remediation also involves seeding large batches of area-specific grasses and perennials.