Energy Conservation and Efficiency

Energy conservation and improving consumption efficiency at the Company’s assets are top strategic priorities for Gazprom Neft. In 2013 Gazprom Neft approved a new energy policy. The policy, aimed at cutting the Company’s environmental impact, reducing the consumption of resources, and improving energy efficiency at Gazprom Neft, is based on the ISO 50001 international standard. Gazprom Neft has taken advantage of the leading international and domestic practices to efficiently manage consumption of energy resources through the implementation of modern production management tools.

Gazprom Neft is an industry leader in terms of energy consumption per ton of oil produced.

The Company has employed a corporate Energy Policy since 2013. In accordance with this Energy Policy, Gazprom Neft management carries out a systematic review and works towards the following key objectives:

• allocate necessary resources to introduce, maintain and continuously improve the Company’s energy management system;
• consistently improve energy efficiency indicators;
• set benchmarks that correspond to the best global standards;
• implement legislative requirements related to the use and consumption of energy and improvement of energy consumption efficiency.

In 2016, the Upstream Division’s Energy Efficiency Program exceeded its targets. The Division’s energy savings were 433 mln kWh, equivalent to RUB 1.251 billion.

The Company has fully introduced the information management system to register contaminated and disturbed lands.

Key areas for improving energy efficiency within the Upstream Division include:

• using enhanced-performance electric submersible pump units;
• using energy-efficient AC electric motors;
• using downhole equipment in intermittent operation;
• conserving produced water and reinjecting this into strata (in closing down unprofitable well stock and in undertaking well workovers);
• selecting optimum standard sizes and replacements for pumping units at cluster and boosting pumping stations and preliminary water discharge units;
• installing frequency controlled drives for pumping equipment; and
• installing temperature controls to optimise electric heating systems.

In 2015, the Company approved a comprehensive program for improving the reliability of power supply for oil refineries in 2016-2018. In order to address the most critical challenges of each particular asset and facility the program has been developed to systematize and standardize energy saving efforts in the Upstream Division, which had previously been made on a point-by-point basis.

As a direct result of measures taken to improve energy efficiency, consumption costs in the logistics, refining and marketing Block have decreased by RUB 528.9 million. The combined total of heat, electricity and fuel saved equalled 2,369.9 TJ.

Gazprom Neft is currently exploring and investigating opportunities for using alternative energy sources. Serbian company NIS, in which Gazprom Neft owns a 56.5% share, is actively developing the use of renewable energy sources.NIS’ energy development strategy today envisages using geothermal water, wind, coal and oil shale as energy sources. The company is now using energy from thermal waters for heating, with eight geothermal systems having been created at 11 wells, and a further 20 wells under development. Wind generation is also helping to reduce CO₂ environmental emissions. In 2016, the company completed site clearance for construction of its own 100 MW-capacity wind farm in Planidishte, comprising 40 wind turbines, expected to go into operation in 2018.