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Gazprom Neft Board of Directors reviews progress on strategy


Gazprom Neft’s Board of Directors has reviewed progress against the company’s corporate strategy. Gazprom Neft’s long-term development plans involve reaching production levels of 100 million tonnes of hydrocarbons per year by 2020. The amount of oil refined in Russia is expected to remain stable at around 40 million tonnes annually. The company is also looking into options for obtaining access to refining capacity overseas in the range of 25–30 million tonnes of oil per year. With regard to distribution, Gazprom Neft will steadily increase sales of refined products to end customers.

In May 2013, Gazprom Neft defined the parameters for its development beyond 2020, setting out the objectives it plans to achieve by 2025. The company intends to maintain its production level at 100 million tonnes of oil equivalent per year and its existing level of reserves at 20 years. Given the plans for production growth, this will require an additional increase in reserves of 1.2–1.7 billion tonnes of oil equivalent. Yield at the company’s refineries will reach 95%. When it comes to technology, Gazprom Neft’s refineries will be on a par with the world’s best.

The financial results and production figures for 2013 show that Gazprom Neft is well on the way to achieving its objectives. The volume of hydrocarbons produced by the company reached 62.3 million tonnes, up by 4.3% compared with last year. Gazprom Neft’s production growth rates were among the best in the industry. Over the last two years, it has increased its overall proportion of high-tech wells from 4% to 35%, becoming one of the leading Russian oil companies in this sector. It has proven hydrocarbon reserves of 1.34 billion tonnes of oil equivalent according to international standards, almost 12% more than at the end of 2012. These results show that the company has not only replenished all of its production volume, but has also significantly grown its resource base. Following large-scale modernization, all Gazprom Neft refineries have been converted to producing fuels that meet emissions standard 5 (currently the most stringent) with ultra-low sulphur content, and have been doing so since 2013, well in advance of the deadlines set by the Russian Government.

Sales of refined products through premium high-margin sales channels have risen by almost 5%, reaching 23.9 million tonnes in 2013. The main growth segments were bunkering and sales of jet fuel, motor oils, and lubricants. Another key indicator is the shift away from small wholesale to retail sales. In Russia, average daily sales at Gazprom Neft filling stations grew by 8% to 19 tonnes, a record for the country’s oil sector.

Gazprom Neft’s priorities going forward remain the same: working on hard-to-recover and reserves, developing technical expertise so that remaining reserves can be developed as profitably as possible, and implementing offshore projects, particularly in the Arctic. Having completed a programme to improve fuel quality in 2013, Gazprom Neft has embarked upon the second major phase of refinery modernization, aimed at increasing the refining depth.