Gazprom Neft increases exchange trade in petroleum products

26 September 2013

Gazprom Neft isconsistently increasing its exchange trade inpetroleum products. The company plans tobring its exchange sales oflight petroleum products upto480,000 tons inthe third quarter of2013. This will amount toa20percent increase over the second quarter. The light petroleum products inquestion include gasoline, diesel fuel, and aviation kerosene.

Over the first eight months of2013, Gazprom Neft increased its light petroleum products exchange sales to1,159,000tons, which exceeds the sales volume for the first eight months of2012 by104,000tons.

The company isplanning totrade onexchanges atleast 10percent ofits monthly gasoline production, 8percent ofits diesel fuel, and 10percent ofits aviation kerosene. This meets the requirements ofthe Decree ofthe Russian Federal Antimonopoly Service and Ministry ofEnergy which establishes the minimum quantities oftraded petroleum products.

Inkeeping with the Decree aswell asapproved criteria for the regularity and consistency ofcommodity trading, Gazprom Neft will continue todevelop exchange trade and develop new bases, forms, and tools. Inparticular, inorder tofully supply the domestic market with petroleum products and meet the demand ofend consumers across the country, the company isalso planning tosell the products atregional balance sites based onthe principles ofnondiscriminatory access.

Gazprom Nefts practice ofkeeping reserves oflight petroleum products that can betraded onexchanges incase ofaseasonal rise indemand helps increase sales and maintain consistency ofexchange trade. Furthermore, the company’s schedule ofautumn refinery maintenance and repairs takes into account apossible increase ofmarket demand during seasonal consumption peaks.

Gazprom Neft isanactive player inthe promotion ofexchange trade. In2012, the company sold over 2.09 million tons ofpetroleum products onthe SPIMEXexchange, which made the company the leader among other market players. Gazprom Neft was the first company toachieve the status ofaSPIMEX guaranteed supplier for futures contracts, and inJune 2013it became the first company onthe market toregister OTC crude oil transactions onSPIMEX.

Inaneffort toensure maximum transparency ofits sales activities, Gazprom Neft coordinated petroleum products trade practice rules with Russia’s Federal Antimonopoly Service inFebruary 2013. The trade practice rules define the basic principles ofpetroleum products sale, including the priorities ofsupplies tothe domestic market, equal access and equal trading terms for all counterparties, and streamlined price setting methods. Inkeeping with the principles ofestablished trade practices, Gazprom Neft has begun reorganizing its system ofregional sales, which involves the separation ofwholesale and retail business. The reorganization isstill underway, and the company plans toreview the first lessons learnt inearly 2014.