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Gazprom Neft’s Board of Directors confirms the company’s development strategy to 2030

Press-release Efficiency

Gazprom Neft’s Board of Directors has reviewed and confirmed the company’s development strategy to 2030. The new document continues current strategy to 2025, which envisages achieving production at 100 million tonnes of oil equivalent (mtoe) per year while, concurrently, maintaining the proved (1P) reserves-to-production ratio of at least 15 years and ensuring a 100-percent reserves replacement every year. The strategy also envisages continued improvements in conversion rate, to a level of 95 percent, and increasing the light product yield to 80 percent through the modernisation of refining assets.

Gazprom Neft’s new development strategy is expected to see it become a benchmark in efficiency, technological advancement and safety for other market players worldwide. The company’s focus will be on consolidating its position among the top-10 largest public oil and gas companies globally in terms of liquid hydrocarbon production, and on maximising added value with every barrel. The main contribution to production growth over the 2020–2030 period is expected to be from new assets, both pre-existing and those expected to be commissioned in the near future, with the remaining production portfolio expected to comprise unconventional and hard-to-recover reserves — such as the Bazhen Formation, Domanic and Paleozoic deposits — and through the development of offshore projects.

By 2030, Gazprom Neft expects to become a global market leader in terms of Returns on Average Capital Employed (ROACE), driving this to a level of 15 percent through effective management of the company’s asset and project portfolio. In exploration and production this will be based around efficiency improvements in exploration activities, the development and equipping of production facilities at new fields, and the exploitation of currently productive fields. In its downstream sector, the company plans to secure a two-fold increase in operating profit per tonne at its own refining facilities by optimising its product range following the completion of projects to increase conversion rate, the introduction of innovative new production technologies, and operational improvements.

Gazprom Neft’s development strategy to 2030 is predicated on optimising opportunities for operational efficiency improvements and growth by developing and implementing cutting-edge technological solutions. The company is committed to exploring the potential of new market niches by developing innovative products, continuing its organic growth in developing markets for oil products, and maintaining its market leadership in terms of the efficiency of its Russian retail network. Gazprom Neft also plans to secure a 70-percent domestic market share in catalysts for key secondary refining processes, as well as becoming the market leader in LNG bunkering in Russia. In terms of developing premium sectors, its objective is to become a top-10 global company in the aviation sector, in lubricant production, and in innovative bitumen products.

The company is committed to transforming its management system in order to achieve the strategic objectives set. This includes digital transformation, extracting added value from data throughout the entire value chain, from exploration to end-consumer fuel sales. Through this digital transformation Gazprom Neft will become the first oil company in the industry to ensure fully integrated business management and decision making, based on data and digital twins of production facilities. Cultural and organisational transformation at Gazprom Neft will ensure managerial flexibility, as well as facilitating faster decision making. The company also sees the development of a “partnership ecosystem” as one of the most important transformational objectives in implementing its strategy, allowing Gazprom Neft to further improve key competencies by involving partners in jointly developing R&D, human and intellectual potential at all levels of engagement with business, government and society.

Alexei Miller, Chairman of the Gazprom Neft Board of Directors, stressed: «Gazprom Neft’s long-term strategy outlines the company’s development trajectory beyond 2025, in line with emerging trends driving the future global energy market. Gazprom Neft’s task, in the face of a constantly changing external environment, is to realign the company in a way that will withstand any developing scenario of the oil market and at the same time coordinating its work in line with Gazprom PJSC’s strategic priorities. Gazprom Neft’s goal is to become a benchmark for Russian and international market players in terms of safety, efficiency and technological advancement. I have no doubt that this new development strategy will ensure consistent growth in shareholder value allowing Gazprom Neft to become one of the leaders of the oil industry, worldwide.»