Gazprom Neft’s strategic development reviewed by the company’s Board of Directors

The Gazprom Neft Board of Directors has reviewed information on the Company’s implementation of its development strategy to 2030.

Gazprom Neft’s current long-term strategy, approved by the Board of Directors in November 2018, outlines the key objectives in the company’s strategic development to 2030, and the means for achieving these in the light of a changing global economy and new challenges for the industry.

Gazprom Neft’s objective for 2030 is to build a “new generation” company, and to become a benchmark for other companies in the industry in terms of efficiency, safety and technological advancement. Gazprom Neft is committed to consolidating its position among the world’s top-10 oil and gas companies in terms of liquid-hydrocarbon production, maintaining production growth ahead of market trends, and maximising added value with every barrel produced. Most production growth between 2020 and 2030 is expected to come from existing and soon-to-be-commissioned assets. In addition to this, Gazprom Neft plans to move into new production zones and bring new classes of reserves into development, including Bazhenov Formation reserves and Domanic and Paleozoic deposits, as well as developing offshore projects in the Russian Arctic and offshore from Sakhalin Island.

The company’s strategy outlines a range of strategic priorities including developing its resource base in the Yamal Peninsula, bringing the uniquely large liquid hydrocarbon reserves of the Nadym-Pur-Tazovsky district into production, developing technologies for the viable development of non-traditional reserves, increasing conversion rate and light product yield, developments in petrochemicals, and more. Through effective management of its asset and project portfolios Gazprom Neft plans to become a global leader by return on average capital employed (ROACE), achieving a level of at least 15 percent.

The company’s activities in 2019, as well as its short-term business development plans, are fully consistent with its long-term objectives as outlined in this strategy. In exploration and production the company remains focussed on maximising profitability in bringing reserves into development, by introducing new technologies, together with project development — including, specifically, continuing drilling in the Nadym-Pur-Tazovsky district, building new surface infrastructure and facilities at the Tazovskoye, Severo-Samburgskoye, En-Yakhinskoye and Pestsovoye fields, and undertaking seismic works at the Kheisovsky and Severo-Vrangelevsky license blocks on the Arctic Shelf. The company has also increased its resource base, winning licensing rounds for geological prospecting and exploration and production at a range of blocks in the Yamalo-Nenets Autonomous Okrug, the Khanty-Mansi Autonomous Okrug, and the Orenburg Oblast. Gazprom Neft has also obtained licenses at the Blizhnenovoportovskoye field, and for geological prospecting at blocks in the west of the Taymyr Peninsula.

Gazprom Neft has been successfully using machine learning in its search for additional oil reserves, with neural networks using geological data to identify blocks with potential oil reserves. The company plans to use this new digital tool, going forward, at fields in the Noyabrsk Region — the potential of which is estimated at three million barrels of oil.

Gazprom Neft has continued improving efficiency in value-chain management throughout 2019, increasing the conversion rate and light product yield, developing its petrochemicals sector, and maintaining its market-leading position in existing — and expanding market share in new — retail product markets.

Construction of a crude oil distillation unit, and hydrocracking and delayed coking units, is ongoing at the company’s Omsk Refinery, with the modernisation of the filtration system for a small cat-cracking unit now complete — all part of the wide-ranging technological and environmental programme forming part of Gazprom Neft’s full-scale modernisation of its refining facilities. Construction of the Euro+ combined oil refining unit (CORU) at the Moscow Refinery is now coming to completion, and a new light-oil products road-transport loading facility has been built. Construction of a delayed coking unit at the NIS Pančevo refinery is now in its final stages. Construction of Russia’s first modern oil-refining catalyst production facility has begun, part of Gazprom Neft’s development of its catalyst business in Omsk. Together with SIBUR Gazprom Neft consolidated 100 percent of the charter capital in the Poliom LLC polypropylene plant in Omsk: the integration of refining and petrochemicals assets allowing the company to improve efficiency by using refinery feedstocks to produce high-value-added products.

Gazprom Neft continues to develop its own sales and distribution network, and continues to expand its product range. The new “Gladkoye” fuel terminal in the Leningrad Oblast has been commissioned as part of the company’s integrated development of fuel-supply infrastructure. Gazprom Neft is continuing its implementation of a project to develop LPG bunkering in the Baltic Basin, aimed at developing a new bunkering market sector in Russia. The total number of airports at which Gazpromneft-Aero (operator of the Gazprom Neft aviation refuelling business) has a presence now stands at more than 280. The Gazpromneft Bitumen Materials product range has been expanded, as has its geographic coverage in terms of production and supply. A company subsidiary has been established in Singapore to develop the company’s international marine-lubricants business.