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Gazprom Neft Board of Directors reviews associated gas utilization, gas production, and environmental and staffing policies

The Gazprom Neft Board of Directors has reviewed issues of implementing the company’s policies designed to make the company an HSE leader in the industry.

In all its operations, Gazprom Neft has progressed from cleaning up damage, to the preliminary assessment of environmental risks and the prevention of negative environmental impacts from production processes. The company’s management and production processes are organized in such a way so as to minimize environmental impact. After the most recent certification inspection, JSC Gazprom Neft’s environmental management system was declared to be in compliance with the requirements of the advanced international standard ISO 14001:2004.

The company is constantly developing and putting in place environmental programs, upgrading its equipment, and introducing new technologies. In particular, Gazprom Neft is implementing oil refining projects with the use of modern closed-type mechanical wastewater treatment facilities and upgrading its production units. These measures help reduce oil refineries’ industrial emissions even while production volumes are growing. Furthermore, all Gazprom Neft refineries converted to the production of Euro 5 grade fuels in summer 2013, two and a half years ahead of the requirements of the Technical Regulations. This will make it possible not only to provide consumers with products that meet international quality standards, but also will cut the hazardous substances content in automotive exhaust significantly and thereby improve environmental conditions.

In aneffort to minimizeits environmental impact, the company is carrying out associated gas utilization projects. Gazprom Neft has demonstrated stable growth in its level of associated gas utilization. Over the past five years, the percentage of the company’s utilization of associated gas grew by over 1.6 times, and is expected to reach 80 percent in 2013. The company is one of the industry leaders in terms of its associated gas utilization rates, while the company’s volume of production of associated gas during the same period grew by 50 percent.

At present, pre-commissioning work is underway at the compressor station at Yuzhno-Priobskoye field, Gazprom Neft’s biggest asset in Khanty-Mansi Autonomous Okrug. The compressor station, which Gazprom Neft and Sibur built together, began taking in gas for the first time in summer 2013. Once the station begins operating at its full capacity, it will be processing up to 600 million cubic meters of associated gas per year. In Orenburg Oblast, Gazprom Neft is building and expanding infrastructure for the transportation of associated gas to the Orenburg Gas Processing Plant. The companyseeks tofurther grow its production capacity in that region; its plans include, among other things,bringing in new fields, which will result in bigger volumes of associated gas production. An associated gas utilization project was launched in the summer 2013 in the Tomsk region. Gazpromneft East began constructing a gas turbine electric power plant where associated gas will be sent from Shinginskoye and Zapadno-Luginetskoye fields. When all the necessary infrastructure isup and running in 2016, including gas pipelines, a compressor unit and two vacuum compressor stations, the level of associated gas utilization at those fields will reach 95 percent.

The Gazprom Neft Board of Directors also reviewed information on the prospects for the supply of the company’s gas to the unified gas transportation system with account for developing capacities for the production and processing of feedstock. As assigned by the Board of Directors, the company has looked at the prospects for developing the gas component of Novoport field, and is planning both to build infrastructure to inject raw gas back into the formation and an external gas transportation system to the Yamburgskaya compressor station. In 2014, work will be underway for the preparation and completion of long-term contracts for the sale of Novoport field gas.

The Gazprom Neft Board of Directors took note of the company’s progress in its staffing policies. The key task of those policies is to employ and develop highly-qualified specialists who are needed to perform the strategic goalsfacing Gazprom Neft. The priorities in personnel management are to further perfectcandidate selection methods, which should help identify bestcandidates with unique competencies, to develop employees’ skills, and to improve organizational effectiveness.