Import Content in Gazprom Neft’s Purchases Not to Exceed 10%

Press-release

As of the end of 2010, domestic producers account for more than 90% of the money appropriated by Gazprom Neft and its subsidiaries (except for Slavneft, Tomskneft and Sibir Energy) for purchasing materials and equipment. Offshore purchases were made when domestic supplies could not meet the technical requirements imposed by the company or if the needed equipment was not manufactured in Russia. First of all, this refers to supplies for implementing a number of investment projects regarding refinery modernization, in particular, compressors (about 60% of total import volume) and pumps (about 23% of total import volume).

"Gazprom Neft has come to almost full import substitution; moreover, we involve Russian suppliers in work with our foreign enterprises, for example, Serbian NIS. Reorientation toward the Russian producer is explained by production and economic factors. First, the quality of equipment offered has improved. Second, domestic companies have preferences over their foreign competitors in matters of logistics and absence of customs payments. We believe that increase in the share of product consumption by domestic producers may further continue on a market and competitive basis, with Russian plants being still motivated to manufacture the equipment which is more adaptable to streamlined production methods" – noted Director of Gazprom Neft Logistical Support and Capital Construction Directorate Abdulla Karaev.