Gazprom Neft’s Board of Directors has reviewed the latest data on the company’s investment programme from the first half of 2015. The investment programme is in line with the previously approved plans and will contribute towards the company achieving its medium and long-term strategic objectives.
In the first half of 2015 hydrocarbon production at Gazprom Neft increased by 19.4 percent year-on-year, to 38 million tonnes of oil equivalent (mtoe). The increased production volumes are associated with the development of the SeverEnergia project, consolidation of shares in NorthGas, increased production at Prirazlomnoye, the start of oil shipments to the Badra project in Iraq, greater utilisation of associated petroleum gas (APG), and the successful application of cutting-edge technologies at mature fields. In the first half of 2015, total refining volumes across Gazprom Neft refineries totalled 21.3 million tonnes. Sales through premium retail channels increased by one percent year-on-year, reaching 12.3 million tonnes, predominantly due to increased sales through the company’s filling station network, and expanding their refuelling operations in airports throughout Russia and internationally.
Higher production volumes and increased sales through premium retail channels delivered a
The Board of Directors has approved changes to the 2015 investment programme, increasing the previously agreed budget by 10 percent, to RUB379.5 billion. The increase was predominantly driven by currency fluctuations and greater investment in oil production across the company’s new and established assets.
Throughout 2015 the company has continued to increase its competencies and experience in horizontal drilling, which is essential for the development of hard-to-recover (“tight”) reserves. Horizontal drilling is expected to account for more than 57 percent of all drilling operations in 2015.
The company is continuing to develop major new projects in the north of the Yamalo-Nenets Autonomous Region. During the first winter season at the Novoportovskoye field Gazprom Neft completed the first shipments of oil by sea and started construction of a gas processing facility. The company also commenced production drilling at the Vostochno-Messoyakskoye field, as well as continuing production at the Prirazlomnoye project — the first such project on the Russian Arctic Shelf.
The company’s investments in oil refining were directed at bringing the second stage of its refinery modernisation programme on stream to increase production depth and output of light oil products. Investment was also made into a new-generation integrated refining facility at the Moscow Refinery, and in addition, the company commenced reconstruction of the catalytic-cracking complex. Reconstruction of major production facilities will continue at the Omsk Refinery throughout 2015, including reconstruction of a residue-reduction facility (for the deep refining of heavy oil (mazut)), and a primary crude distillation unit. The company is also implementing a range of environmental initiatives throughout its refineries, as well as projects aimed at improving energy efficiency.
The Board of Directors also reviewed reports on the work of the company’s internal audit department (responsible for monitoring the effectiveness of internal controls over the company’s various business processes, as well as conducting detailed investigations into its financial and business activities, and confirming the security of subsidiary assets).
The department conducted 46 internal audits in the first half of 2015. The company’s “anti-corruption” hotline remains in operation. Work in risk management was focussed on improving the methodological basis for risk assessment, as well as developing procedures for identifying, analysing and evaluating risks throughout the company’s major upstream investment projects.
More broadly, the Board of Directors also reviewed the company’s activities in environmental protection, including natural resources management, waste reduction and recycling, and the optimum location of its exploration and production activities in terms of the natural environment and the protection of unique natural ecosystems and habitats.
The implementation of environmental initiatives will enable the company to achieve a two-fold reduction in total atmospheric emissions in 2015, in comparison with 2012 levels. One of the most important ecological initiatives implemented by the company in 2015 was the installation of a system to automatically monitor atmospheric emissions at the Moscow Refinery. The only system of its kind at any of Russia’s refineries, this system carries out real time monitoring of air quality throughout the plant and its surroundings.
This year Gazprom Neft also began developing a strategy for drilling and production waste management, by designing and installing its own technology to produce safe base coatings from drilling wastes (drill slurry) through sump reclamation: a technique which has now been approved under an environmental impact assessment by the Federal Service for Environmental Control.
As the first company to begin operating on the Russian Arctic Shelf, Gazprom Neft is actively involved in programmes directed at protecting the ecosystem of the Russian Arctic. Since 2009 Gazprom Neft, together with the Marine Mammal Council and the World Wildlife Fund (WWF Russia) has been implementing a programme on the study of Arctic fauna, which has, throughout 2014 and 2015, allowed collaborative field research to be undertaken on the Atlantic walrus and reclaimed key glacial habitats of this species.
A further major initiative in 2015 has been the establishment of a corporate programme directed at protecting the biodiversity of the flora and fauna of the marine ecosystems of the Russian Arctic. This programme has been developed at the instruction of the President of the Russian Federation, with input from environmental experts, the Ministry of Natural Resources, WWF and the Global Environment Facility.