Gazprom Neft Board of Directors reviews various aspects of the company’s activities

Press-release Efficiency

The Gazprom Neft Board of Directors has reviewed the outcomes of the company’s programme for ongoing and better utilisation of associated petroleum gas (APG) in H1 2017, as well as future plans for 2018 — 2020.

Gazprom Neft implemented a range of major projects directed at improving APG utilisation between 2010 and 2017, including commissioning the Yuzhno-Priobskoye gas processing plant (GPP) in the Khanty-Mansiysk Autonomous Okrug, a compression station at the Eti-Purovskoye field in the Yamalo-Nenets Autonomous Okrug, a gas pipeline in the Orenburg Oblast, and others. The company’s implementation of a portfolio of projects at assets with developed gas infrastructure has allowed Gazprom Neft to maintain its dynamic growth in APG usage — the level of APG usage at Gazpromneft-Noyabrskneftegaz and Gazpromneft-Khantos, in particular, reaching 96 percent in 2017, and 98 percent at Gazpromneft Muravlenko. Together with the implementation of the Urmano-Archinsky project in the Tomsk Oblast, which includes the planned construction, by 2019, of a booster compressor station and a gas pipeline system running to a total length of more than 100 kilometres, APG utilisation throughout the company’s key assets is expected to reach 95 percent by 2020.

The main priority now is to manage APG usage at new assets, primarily those — such as the Novoportovskoye field — with a high gas—oil ratio (HGOR). Pre-launch testing of the first phase of a complex gas treatment facility for gas flooding has now been started at the field. The commissioning of the compressor station at the Vostochny (Eastern) block of the Orenburg oil and gas condensate field in 2018 will, in turn, mean increasing volumes of gas can be delivered to the Orenburg GPP by Gazprom Dobycha Orenburg.

The Board of Directors was also provided with information on key outcomes of the refining division’s production activities in 2016, as well as initiatives to improve the division’s operational efficiency.

Gazprom Neft’s work towards systematically improving the production efficiency of its refining assets, while also optimising costs, has resulted in cumulative savings in the order of more than RUB40 billion between 2010 and 2016.

Year-end results for 2016 show refining volumes at Gazprom Neft and the company’s joint refining facilities throughout Russia totalling 38.7 million tonnes — an optimum level in an environment of maturing demand and competitive pricing for oil and oil products. The company has maintained its market-leading position in the Russian oil industry, however, in terms of two key operational efficiency metrics — yield of light oil products and management of irrecoverable losses.

Gazprom Neft continued its implementation and development of innovative solutions and technologies in oil refining throughout 2016, securing 18 patents and fling 26 patent applications by the end of the year. Company specialists, together with Russian scientists, have developed new catalytic cracking gasoline hydrotreatment catalysts, as well as reforming and oligomerisation catalysts. The company began production of new-generation catalytic cracking catalysts, whose improved characteristics have allowed greater production of components for high-octane Euro-5-standard gasolines, at its Omsk Refinery. The key event last year — part of a national project on developing catalyst production, being implemented by Gazprom Neft in the interests of Russia’s oil refining industry — was the opening of the Gazprom Neft Engineering Centre for testing catalysts for secondary refining processes.

Throughout 2016, the company also continued its major programme of modernising its oil refining facilities, expected to run to 2020. Key projects currently in active construction at the Moscow Refinery include the Euro+ combined refining facility and the “Biosphere” biological treatment facilities, while construction of a combined oil refining unit (CORU) was initiated at the Omsk Refinery. Completing the programme for the modernisation of Gazprom Neft’s oil refining assets will further enhance the company’s financial performance, as well as achieving those strategic goals approved by the Board of Directors.

The Board of Directors also considered information on priority projects and tools for Gazprom Neft’s continued development in exploration and production.

The system for managing innovative development within the company’s Upstream Division has, since 2014, been based around the company’s Technology Strategy, covering all priority areas of activity. Eighty-four projects are currently being implemented under this strategy, across nine technological areas, including enhanced oil recovery (EOR), development of non-traditional reserves, oil-leg reservoirs, and carbonate and fractured reservoirs. Key competencies in all areas are concentrated in the Gazprom Neft Science and Technology Centre, which provides specialist project support. The total effect of implementing projects under the Technological Strategy is expected to result in more than 20 million tonnes of additional production and 100 million tonnes of additional reserves under development by 2025 — comparable to commissioning a major new field.