Gazprom Neft Board of Directors has reviewed the report of the company's management on the performance of the investment program and the budget in 2011. The results of the past year are the best in Gazprom Neft history. Almost all major indicators significantly surpassed the level of 2010 as well as original and adjusted budget.
Gazprom Neft’s production volume was 57.3 million tonnes of oil equivalent, which is not only almost 8% higher than the results for 2010, but a 2% increase over the approved target indicator. Refining volume rose nearly 7% compared to 2010, and was 2% higher than planned. The highest growth was achieved in the premium product sales segment: sales totalled 19.5 million tonnes, which is a 37% increase relative to 2010 and 12% higher than planned.
Based on its performance in 2011, Gazprom Neft remains one of the leaders of the oil industry and ranks first by growth dynamics in operating profit (EBITDA) and the level of aggregate income for shareholders. In 2011, the company has once again proven its efficiency, demonstrating the industry's smallest increase in operating costs per barrel of oil equivalent production.
Investments in the company’s refining assets in 2011 amounted to RUB 18.3 billion, which is 32% more than in 2011. More than 50% of its capital investment in refining Gazprom Neft spent to implement its priority program to improve the quality of motor fuels. Currently, the construction of a diesel fuel and gasoline hydrotreatment facility is in the final stage at the Omsk Oil Refinery, and the modernisation and renovation of the Moscow Oil Refinery continues. The company plans to produce Class 4 petroleum products only (conforming to Euro-4) at the Omsk Oil Refinery as early as 2012, and at the Moscow Oil Refinery — in 2013, significantly ahead of the deadlines set by technical regulations on requirements for fuel. Investment in exploration and production of oil and gas in 2011 was RUB 61.5 billion, which is 12% lower than in 2010. 20 fuelling stations were built and 113 purchased in 2011 — 9% more than planned.
Increased production figures, along with favourable market conditions and actions of the management aimed at improving the company’s efficiency, optimising the structure of sales and reducing costs have led to an increase in operating profit (EBITDA) by 40% (to $10.16 billion) compared to 2010 and in net profit by 70% (to $5.35 billion). Due to the small increase in debt, the total debt to EBITDA ratio decreased by 29% in 2011 compared with 2010 and amounted to 0.75.
Based on the Gazprom Neft results for 2011, the Board of Directors recommended that shareholders approve dividends of RUB 34.61 billion at the Annual General Meeting of Shareholders, which represents 22% of the company’s net consolidated profit by US GAAP standards. This is 65% higher than the level of dividend payments in 2010. Each share will be credited with RUB 7.3.
The Board of Directors has decided that the Annual General Meeting of Gazprom Neft Shareholders will be held at 11:00 am on 8 June 2012 at the central office of JSC Gazprom (ul. Nametkina, 16). The list of persons eligible to participate in the Annual General Meeting of Gazprom Neft Shareholders and receive dividends for 2011 will be compiled according to the register of registered securities holders on 24 April 2012.
Agenda of the JSC Gazprom Neft Annual General Meeting of Shareholders
- Approval of the JSC Gazprom Neft Annual Report for 2011.
- Approval of the annual financial statement of JSC Gazprom Neft for 2011, including the profit and loss statement.
- Distribution of JSC Gazprom Neft profits for 2011.
- Amount, timing and method of payment of dividends for 2011.
- Election of members of the Board of Directors of JSC Gazprom Neft *.
- Election of members of the Internal Audit Commission of JSC Gazprom Neft.
- Approval of the external auditor of JSC Gazprom Neft for 2012.
- Remuneration of members of the Board of Directors of JSC Gazprom Neft.
- Remuneration of members of the Internal Audit Commission of JSC Gazprom Neft.
* Candidates nominated for the Board of Directors:
- Alexey Borisovich Miller
- Valery Alexandrovich Golubev
- Andrey Vyacheslavovich Kruglov
- Nikolay Nikolayevich Dubik
- Elena Vladimirovna Mikhailova
- Vsevolod Vladimirovich Cherepanov
- Kirill Gennadievich Seleznev
- Vladimir Ivanovich Alisov
- Aleksandr Leonidovich Mikheyev
- Aleksandr Valerievich Dyukov
- Aleksandr Vyacheslavovich Kalinkin
- Marat Marselevich Garayev