Gazprom Neft Board of Directors reviews the company’s sales of crude oil and petroleum products

Press-release

The Gazprom Neft Board of Directors has reviewed data on current exchange sales of crude oil and petroleum products on the Russian market, as well as the outlook for future development. Exchange sales of petroleum products totalled 2.51 million tonnes in 2015, matching last year’s levels. Exchange sales of motor gasolines were up six percent year-on-year, to 1.05 million tonnes.

The company is fully compliant with all regulation governing exchange sales, with Gazprom Neft recognised as a benchmark company in ensuring consistency in exchange sales and being honoured by the St Petersburg Mercantile Exchange (SPIMEX) for its work in 2015.

Gazprom Neft is actively involved in the development of exchange trading in petroleum products in Russia, and is currently part of a SPIMEX working group on developing international benchmarks for Urals crude.

The Board of Directors also considered the current viability and potential development of direct and retail sales of petroleum products.

The Gazprom Neft retail network currently comprises 1,432 filling stations throughout Russia and the countries of the CIS. Sales volumes through the company’s directly‑owned retail network totalled 9.3 million tonnes in 2015, an increase of two percent on 2014. Participation in the company’s On Our Way loyalty programme increased 17 percent over the past year, reaching 6.1 million people, with sales on loyalty cards, moreover, comprising 75 percent of the company’s total retail sales. The company has also implemented loyalty programmes across its own-brand filling station networks throughout the CIS, in Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan.

The process of reorganising the company’s retail business was initiated in 2013, with the company making the transition from a regionally based to a “functional” management system though the separation of its wholesale and retail divisions, and the establishment of new specialist enterprises — Gazpromneft-Terminal, Gazpromneft-Transport, and the Gazpromneft-Laboratory network. The company was one of the first in the Russian market to place petroleum-product sales to corporate clients within a separate subsidiary company, Gazpromneft Corporate Sales. A further initiative to improve efficiency saw the introduction of online processing of corporate fuel-card sales in 2015, with total fuel sales to corporate clients exceeding three million tonnes in that year. Improvements to the company’s crude oil-supply (tank farm) infrastructure from 2013 through 2015 has resulted in a six-percent increase in transhipments of petroleum products, and a 27-percent improvement in turnaround times.

Better quality control remains a key focus in the development of the retail network, with the establishment of the Gazpromneft-Laboratory network in 2014 (a network of approximately 40 mobile and stationary testing facilities responsible for monitoring fuel quality throughout the Gazprom Neft retail chain) being a means to that end.

The further development of the Gazprom Neft filling station network, and better efficiency in the direct and retail sale of petroleum products, is planned through the construction of further directly-owned stations (including self-service stations), through the greater frequency of filling stations on federal highways, and the introduction of new filling-station formats with modernised designs optimising retail space.