JSC Gazprom Neft’s Board of Directors conducts wide-ranging review

JSC Gazprom Neft’s Board ofDirectors has carried out areview ofthe company’s licence agreements relating tosubsurface mineral resources inRussia. JSC Gazprom Neft and its subsidiaries have the operating rights for 70licence blocks inthe Yamalo-Nenets and Khanty-Mansi Autonomous Areas, the Tomsk, Omsk, Tyumen, Irkutsk, and Orenburg Regions, the Sakha Republic (Yakutia), and onthe Pechora Sea shelf.

JSC Gazprom Neft isworking proactively tominimize potential risk inits licence operations, including anautomated system tomonitor compliance with its licence obligations. All subsidiary companies have standing committees chaired bytheir CEOs, which manage risk with respect tolicence obligations. The company isdeveloping athree-year geological exploration investment programme based onits licence obligations. Moreover, procedures for updating technical documentation associated with hydrocarbon development and production are planned three years inadvance, taking into account licence end dates. JSC Gazprom Neft successfully extended nine licences in2013.

Information onmanaging risks associated with corruption was also presented tothe Board ofDirectors. JSC Gazprom Neft has developed and introduced anintegrated risk management system. This takes into consideration all types ofcorporate risk: production, commercial, service-related, and corruption risks.

JSC Gazprom Neft has azero-tolerance policy onall types and instances ofcorruption and fraud, and has developed awarning system for these types ofrisk. The company upholds aconsistent anti-corruption policy which isintegral tothe overall risk management system. The important principles governing this work are constant monitoring ofexisting and potential risks, and timely identification and objective assessment ofrisks.

Procedures are inplace toprevent potential opportunities for fraudulent and corrupt activity from arising.

These include measures such asdue diligence checks onentities and individuals providing orplanning toprovide services for and onbehalf ofthe company. JSC Gazprom Neft takes all steps necessary toensure that all company employees, affiliates, and contractors are informed ofthe anti-corruption policy requirements.