A meeting of the Board of Directors of Gazprom Neft has taken place at the company's offices in St Petersburg. During the meeting preparation of the Annual General Meeting (AGM) of shareholders and ongoing operations were examined.
Gazprom Neft's AGM is scheduled to take place at 11:00 on 9 June 2011 at Gazprom's head office (16, Nametkina Street). A list of individuals who are eligible to participate in the AGM and are eligible for 2010 dividend payment will be established according to the share register as at the end of 25 April 2011.
The Board of Directors approved the agenda for the shareholders' meeting (see Reference), and gave its preliminary approval to the Company's Annual Report and Accounts for 2010 before submitting them for shareholders' review. Once approved on the AGM, an electronic version of the Annual Report can be accessed from the Company's corporate website: www.gazprom-neft.ru.
The Board recommended to the AGM that it approve a dividend of 4.44 rubles per share for 2010. Altogether, a payout of approximately 21.05 billion rubles to shareholders was proposed, which amounts to 22% of Gazprom Neft's net profits earned during 2010 according to US GAAP standards. The dividends will be remitted to shareholders during the 60 days following their approval at the AGM. In 2009, Gazprom Neft's shareholders received 3.57 rubles per share. Therefore payments to shareholders in 2010 could amount to an increase of 25% compared to the previous year.
PriceWaterhouseCoopers Audit was recommended to carry out Gazprom Neft's audit in 2011.
Following recommendations received from shareholders prior to the AGM, the Board approved the list of candidates for election to the Board of Directors at the AGM:
- Vladimir Alisov, First Deputy Head of the Legal Department at Gazprom;
- Marat Garayev, Deputy Head of the Marketing, Gas Processing and Liquid Hydrocarbon department at Gazprom and Head of the Industrial Products Marketing Department;
- Valery Golubev, Deputy Chairman of the Management Committee;
- Nikolai Dubik, Member of the Management Committee, Head of Legal Department;
- Alexander Dyukov, Chairman of the Management Board of Gazprom Neft;
- Alexander Kalinkin, Head of Gas, Gas Condensate and Oil Production of Gazprom;
- Andrei Kruglov, Deputy Chairman of the Management Committee, Head of the Department for Finance and Economics;
- Alexei Miller, Deputy Chairman of Gazprom's Board of Directors, Chairman of Gazprom's Management Committee;
- Alexander Mikheev, First Deputy Head of Marketing, Gas and Liquid Hydrocarbons Refining Department of Gazprom;
- Olga Pavlova, Member of the Management Committee and Head of the Asset Management and Corporate Relations Department;
- Kirill Seleznev, Member of the Management Committee and Head of the Gas and Liquid Hydrocarbons Marketing and Processing Department;
- Vslevod Cherepanov, Member of the Management Committee and Head of the Gas, Gas Condensate and Oil Production Department.
Remuneration for members of the Board of Directors is decided in accordance with the Regulations governing procedures for determining remuneration and compensation levels to members of Gazprom Neft's Board.
The Board of Directors also reviewed the implementation of Gazprom Neft's 2010 investment programme and its largest subsidiaries. The overall investment in oil and gas production amounted to 63.9 billion rubles. Amongst the new projects implemented in 2010 were projects to commission the Cenomanian gas pools in the Muravlenkovsky and Novogodni deposits, where production of around 4 billion cubic metres of gas per year is planned. Start-up and adjustment work was also completed at the second-stage South Preobsky GTPP, whose power was raised to 96 megawatts. The completion of the station allowed the successful resolution of the problem of uninterrupted provision of electricity to the Preobsky manufacturing entities and production costs to be lowered by reducing the cost of electricity. 720 new wells were introduced in 2010, an increase on 2009's activities of 10%; more than 320 km of overhead electrical power lines were installed, and almost 580 km of pipeline were laid.
8.2 billion rubles were invested in developing Gazprom Neft's sales network. One of the main results from the implementation of the investment programme was the completion in 2010 of the transfer of all petrol stations to the Gazprom Neft brand, with the exception of those recently purchased.
The overall investment in developing refining amounted to 13.9 billion rubles. A programme for improving the quality of motor fuel remains a priority for investment. Construction of diesel-fuel hydroforming upgrade and petrol catalytic cracking complex began at the Omsk refinery in 2010. A light petrol fraction isomerisation plant, the largest in its class in Europe, was brought into operation in October 2010. The construction of a light oil isomerisation plant began at the Moscow refinery in 2010. This is the first project in a large-scale programme of reconstruction and modernisation at the factory. The current status of implementation of Gazprom Neft's programme to improve the quality of motor fuel at the Omsk and Moscow refineries allows the requirements of the Technical Regulations to be met - namely, the transition to Class 4 motor fuel emissions in 2012. In addition, the construction of a hydrogen cracking plant has begun at the refinery in the northern city of Panchevo (the factory comes under the umbrella of the Serbian company, NIS, where Gazprom Neft has a 56% stake), which will allow motor fuel produced to conform with European standards and improve oil refining profitability.
Investment in large projects (including international) was approximately 49 billion rubles. These funds were used for acquiring shares in SeverEnergiya, Sibir Energy and STS-Service, as well as the development of new products for Gazprom Neft outside of Russia (Iraq, Venezuela and Equatorial Guinea).
The agenda for Gazprom Neft's AGM includes the following items:
- The approval of Gazprom Neft's Annual Report for 2010.
- The approval of Gazprom Neft's Annual Accounts for 2010, including the Profit and Loss Statement.
- The distribution of Gazprom Neft's profits for 2010.
- The amouns, conditions and form of dividend payments for 2010.
- The election of members to the Board of Directors of Gazprom Neft.
- The election of members to the Auditing Committee of Gazprom Neft.
- The approval of Gazprom Neft's auditors for 2011.
- The remuneration of members of the Board of Directors of Gazprom Neft.
- The remuneration of members of the Auditing Committee of Gazprom Neft.
- The approval of Gazprom Neft's revised Corporate Code of Conduct.
Notice of the Annual General Meeting of shareholders will be sent to each of the Company's shareholders and will also be issued to the media and published on Gazprom Neft's corporate website.
Completed shareholder ballot papers can be sent to the following address: Gazprom Neft, Building 125A, Profsoyuznaya Street, 117647, Moscow.