Gazprom Neft Board of Directors approves 2025 development strategy

The Gazprom Neft Board of Directors has approved the company’s 2025 development strategy. The 2025 strategy uses the 2020 strategy as a foundation taking into account both the changing industry environment and the state of the global economy. The document outlines the company’s goals in key business areas such as hydrocarbon production, refining and sales. The company will continue to focus on increasing shareholder value.

As part of its strategy beyond 2020, Gazprom Neft will focus on new sources of business growth areas, efficient development of legacy fields and maximum return of the investment for the new projects. Gazprom Neft plans to maintain production at 100 million tonnes of oil equivalent annually. The company intends to maintain the reserve level at 20 years which, given Gazprom Neft’s production plans, requires an increase in reserves of 1.2-1.7 billion tonnes of oil equivalent.

Gazprom Neft’s main production priorities are to ensure the most efficient development of its current reserves, to retain its leadership position in the northern part of the Yamalo-Nenets region (YNAD), to develop shelf projects, to increase the company’s presence internationally and to use innovative technologies to explore unconventional reserves.

The company’s priority in refining is leadership in operational efficiency and modernization of the refining assets. The refining yield is expected to reach 95% by 2020. While refining volumes will stay the same, the use of secondary processes will allow Gazprom Neft to boost motor fuel production by 17%. The company will almost cease production of fuel oil at this point. Gazprom Neft was one of the first companies in Russia to switch its refineries to Euro 4 and Euro 5 standards in motor fuel production. By 2025 the company’s Russian refineries will be on a par technologically with major international competitors following an extensive modernisation programme.

The company’s main retail sales objective is to maximise returns by sole use of its own distribution channels for all petroleum products. This process may involve the use of franchising and increasing Gazprom Neft’s commercial presence in key customer markets. In 2025 the target retail sales volume for Gazpromneft fuelling stations network in Russia and the CIS is 15 million tons of fuel. The company will tend to occupy up to 30% of the sales market of aviation fuel, bunkering and bitumen materials.

Gazprom Neft will continue to develop internationally with plans in place to ensure that at least 10% of overall oil production takes place outside Russia. The company will continue to focus its efforts on the Middle East, West Africa, the Balkans, Latin America and North Africa. Gazprom Neft will concentrate on refining operations in Europe and South East Asia.

Alexey Miller, Chairman of Gazprom Neft’s Board of Directors, said: ”Gazprom Neft continues to be one of the most efficient players in Russia’s oil industry and aims to retain this position in the future. The 2025 strategy outlines Gazprom Neft’s business’ goals and challenges and establishes a firm foundation for future growth and geographical expansion. It allows the Company to become the industry leader in refining yield, to significantly grow shareholder value and to secure sustainable development through to 2025.”