GAZPROM NEFT AT A GLANCE

2020 highlights

Gazprom Neft is a vertically integrated oil company, an important part of Russia’s energy industry and a significant player in the global energy market.

2 123 mtoe
of proved hydrocarbon reserves 34% year-on-year
96.06 mtoe
of hydrocarbon production Flat year-on-year
40.39 mt
of refining throughput 2.6% year-on-year
485.2 billion
adjusted EBITDA
For more details on Strategy 2030, see Gazprom Neft’s Annual Report 2020
Key priorities in sustainable development

Gazprom Neft is embedding sustainability in all current and future operations.

  • Care for natural ecosystems
  • Improving the quality of life in the regions of operation
  • Safe production
  • Customer care
  • Protection of employee health
REDUCTION OF ENVIRONMENTAL IMPACT

The company has committed itself to operate at zero harm to the environment.

9.7%
reduction in greenhouse gas emissions (Scope 1 + Scope 2)
28%
reduction in internal water consumption
IMPROVED OCCUPATIONAL SAFETY

The company made considerable progress towards its Target Zero. Zero harm to people, the environment, or property in our operations.

0
fatalities among company employees
0
industrial accidents
CONTRIBUTION TO REGIONAL DEVELOPMENT

New social and economic agreements with the governments of constituent entities of the Russian Federation have been signed. Despite the difficulties of 2020, Gazprom Neft maintained spending on culture, sports and other events that improve quality of life. Many events were held online or postponed until 2021.

6.4 billion
of social investments
37,000 +
activists participating in company social projects
A TEAM UNITED BY COMMON VALUES

The company’s achievements were brought about by its people. Gazprom Neft once again ranked among the top Russian employers thanks to its unique corporate culture and work environment, which empower its people to realise their potential.

82 960 people
employed as at 31 December 2020
Staff turnover down 3.1 percentage points
Key challenges in 2020

In 2020 Gazprom Neft and the entire oil industry faced unprecedented challenges:

  • COVID-19 pandemic;
  • lockdowns and restricted mobility of populations;
  • global decline in demand for energy;
  • falling crude and petroleum product prices in the global and domestic markets; and
  • OPEC+ production cuts.

Amid the COVID-19 pandemic, Gazprom Neft ensured the continuity of all operational processes. Its flexibility, human focus, new organisational approaches and active process digitisation helped the comapny protect the health of its employees across company offices and sites.

ANTIVIRUS, Gazprom Neft programme to fight COVID-19

Gazprom Neft was the first oil company in Russia to take an open and transparent stance on working under the COVID-19 pandemic. In March 2020, the company launched the ANTIVIRUS programme, with a package of measures to protect employee health and ensure the operational continuity and financial stability of its business. An important feature of the programme was the comprehensive support it provided to health workers and volunteers across Russian regions.

The company set up new coordination bodies: the ANTIVIRUS Response Centre headed by Alexander Dyukov, Chairman of the Management Board, took the lead on Health, Production and Finance; while two functional corporate programmes covered Regions and Communications.

A company committed to sustainable development

Gazprom Neft is consistently integrating sustainability into its strategy and operations. The goal of the Gazprom Neft Strategy to 2030 is to become a benchmark for global industry peers in terms of efficiency, safety and technological advancement.

  • We produce resources for the future, enriching the world with the energy, knowledge, and technology to advance.

The company generates economic and social benefits for a wide range of stakeholders, and makes a significant contribution to the economic development and improvement in the standard of living for people in Russia and abroad. In catering for the needs of society, Gazprom Neft assesses and seeks to minimise any current and future negative impact from its operations on the social and economic environment and on ecosystems.

  • We create new areas of growth in the regions in which we operate, and boost the quality of their development.

Sustainability values have become an integral part of the company’s corporate culture. The Gazprom Neft Corporate Code of Conduct, which is based on its Mission, Vision and Values, outlines the priorities for ethical and responsible business conduct.

  • We think in terms of responsible ownership and careful management of our resources.

Key practices adopted by the company

  • Target Zero strategic priority: zero harm to people, the environment, or property in our operations
  • Safety Framework, based on key risks and safety barriers
  • Development of a safety culture
  • Digital platform for operational risk management
Environmental protection
For more details
  • Environmental management system
  • Biodiversity conservation programme
  • Greenhouse gas emissions accounting and monitoring
  • Increasing utilisation of associated petroleum gas (APG)
Personnel development
For more details
  • A single incentive model for employees
  • Partnership with trade unions
  • Training, leadership and career development programmes
Customer care
For more details
  • Integrated quality management system
  • Comprehensive quality control solution (SMOTR)
  • Gazprom Neft Neftekontrol digital system
  • Integrated Customer Support Centre (ICSC)
  • The Quality 360˚ integrated programme to engage with retail customers
Well-being of local communities
For more details
  • Home Towns social investment programme
  • Support for health workers and volunteers amid the COVID-19 pandemic
  • Support for the indigenous minorities of the Russian Far North
  • Import substitution and local sourcing programmes
  • Corporate volunteering
Corporate governance
For more details
  • A corporate governance system comprised of the core elements intrinsic to public companies with good governance practices
  • Compliance with legal requirements and the Listing Rules of PJSC Moscow Exchange
  • Distribution of roles in managing sustainability and related risks among the company’s governing bodies
Technological development
For more details
  • Adoption of safety and performance enhancing solutions
  • Digitisation of core operating processes
  • Systemic management through innovation centres
  • Active development of import substitution
Participant of the UN Global Compact

In October 2020, Gazprom Neft joined the United Nations’ Global Compact — the largest international corporate social responsibility (CSR) and sustainable development initiative.

The company is aligning its business strategy, decision-making processes and operational activities with the Global Compact’s 10 principles on human rights, labour relations, environmental protection and fighting corruption, with a particular focus on developing partnerships and technological innovation.

Supporting initiatives and membership of associations

Gazprom Neft recognises the special role of business in sustainable development. The company contributes to a sustainable future by joining efforts with the public, government, partners and other stakeholders.

  • Gazprom Neft is a signatory to the UN Global Compact supporting the UN Sustainability Development Goals (UN SDGs)
  • The company supports the implementation of the Paris Agreement and the Concept to Form the System of Monitoring, Reporting and Verifying Greenhouse Gas Emission Volumes in Russia
  • Gazprom Neft participates in the Carbon Disclosure Project (CDP)
  • Gazprom Neft has joined the Anti-Corruption Charter of Russian Business
  • Gazprom Neft and WWF have signed a Memorandum of Understanding
  • The company has joined and actively supports the Scientific and Technical Council of the Russian Federal Service for Supervision of Natural Resources (Rosprirodnadzor)
  • The company’s approach to sustainability and corporate social responsibility is based on ISO 26000 (Guidance on social responsibility)
  • Gazprom Neft continues its engagements with RSPP and other NGOs
Highest CDP score among Russian oil companies

Gazprom Neft ranks among the leaders of the international Carbon Disclosure Project (CDP) rating — the world’s leading environmental disclosure and performance rating system. According to the results of an independent evaluation, Gazprom Neft received a rating of category “B” (on a scale from “A” to “D”) — the highest among Russian oil and gas companies.

Business model

BALANCED PRODUCTION
  • Projects to boost APG utilisation
  • Tree-saving Green Seismic technology
  • Building infrastructure for safe waste management
  • Biodiversity conservation programmes across production regions
MODERN REFINING CAPACITY
  • Refinery modernisation programme to reduce environmental footprint
  • Enhanced energy efficiency
  • Biosphere high-tech treatment facility
  • Participation in the Clean Air federal project
  • Converting refinery energy sources to renewables
  • Digital monitoring of process safety and emissions
QUALITY PRODUCTS
  • High-quality services
  • Environmentally-friendly products that comply with the strictest standards
  • A wide range of online digital services

Creating value for stakeholders

Gazprom Neft’s business is driven by its corporate mission and an understanding of its responsibility to current and future generations.

Our Mission

“Evolving, to change the world. Creating, to be proud of our creations.” We are producing resources for the future, enriching the world with the energy, knowledge, and technology to advance.

Our Objective

To become one of the world’s leading industrial companies, driving industry progressive transformation, making the impossible a reality, and inspiring our peers in Russia and beyond.

Company strategy and sustainable development

Why ESG is growing in importance

Society’s demand for businesses to be socially responsible continues to grow. Companies around the world are required to comply with an increasing number of requirements and guidelines from regulators to be environmentally and socially responsible An increasing number of international institutional investors are applying responsible-investment principles and promoting the ESG agenda through participation in various initiatives (PRI,PRI — Principles for Responsible Investment IIGCC,IIGCC — The Institutional Investors Group on Climate Change. ClimateAction100+, etc.)

The COVID-19 pandemic has reaffirmed the need to join forces to support sustainability. Protecting the health of employees and customers has become more important for companies. The crisis caused by the pandemic has had an impact on corporate margins, with companies forced to optimise their costs or rethink their business models. Human rights topics such as equal access to healthcare, food, water, sanitation, work, education and entertainment have grown more important while climate change challenges remain crucial.

Regulation and climate agenda

The lower global energy consumption in 2020 is estimated to have reduced anthropogenic greenhouse gas emissions by 5%—7%. This offers an opportunity to get closer to the emission curve envisioned by the Paris Agreement, provided that other countries also make sustained efforts.

Renewable energy and transport development

Despite the challenging environment in 2020, global investments in renewable energy remained flat at $300 billion, as in the past few years. In 2020, more solar and wind capacity was added in absolute terms, with per-unit costs gradually decreasing. Major new wind energy projects in Europe supported these figures amid sharply falling investments in the USA and China, the latter remaining the undisputed leader in renewable capacity additions.

The total size of the global low-carbon energy market, by some estimates, reached an all-time high of $500 billion, spearheaded by the growth in electric vehicles (EV).

Scenario-based strategy

Gazprom Neft’s Development Strategy to 2030 provides for a scenario-based approach that takes into account uncertainties around the future of global energy. The company assesses the resilience of its project portfolio under various scenarios and regularly updates its structure.

The company uses alternative energy development scenarios:

Volatility

In the Volatility scenario, oil glut and shortages alternate, leading to large swings in oil prices. The saturation of vehicle markets, competition between fuel types and improved fuel efficiency are leading to a gradual slowdown in oil demand growth.

Expansion

The Expansion scenario assumes a rapid global economic growth driven by the consumer goods sector. The growing demand for energy cannot be fully covered by renewables or offset by energy efficiency initiatives, which warrants a sustained increase in the consumption of conventional energy resources. Strong demand for oil will support consistently high prices and, accordingly, will make developing hard-to-recover reserves more viable.

New World

The New World scenario assumes a fast-track global transition to lowcarbon and renewable energy, with peak oil consumption reached in this decade and oil prices declining over a long period of time.

The company updates the scenarios that will be available in the 2021 Sustainability Report

Key sustainability priorities

The company’s key sustainability priorities include ensuring maximum operational safety, reducing the environmental footprint, developing employees and fostering regional development while catering for the interests of stakeholders.

Gazprom Neft’s priorities and related targets are aligned with global trends and the UN SDGs adopted by the UN General Assembly and endorsed by world leaders as the global 2030 agenda for sustainable development

The UN SDGs guide governments, business communities and other stakeholders in advancing a sustainable development agenda. Gazprom Neft embraces the UN SDGs and strives to contribute to their achievements. The company’s activities contribute to all 17 UN SDGs, with Gazprom Neft capable of having a direct positive impact on some of them, or mitigating its negative impacts on others, given the nature of its business.

UN SDGs prioritised by the company:

In developing its HSE practices, Gazprom Neft is focused on reducing work-related injury, occupational disease and industrial accident rates and minimising its negative environmental impacts.

The company provides access to energy for consumers in Russia and in other countries, with a focus on driving energy efficiency across key business areas while maintaining reliability, safety and performance achieved through technology innovation. The company builds up renewable generation capacity at assets where it brings economic and environmental benefits.

Gazprom Neft is fostering a unique corporate environment and culture in which employees can unlock their full individual potential through working towards common goals. The company seeks to create a working environment free from bullying and harassment, and prohibits discrimination on the grounds of ethnicity, gender, age, background and so forth.

Gazprom Neft embraces the goals of the Paris Agreement that supports action against climate change. The company acknowledges that if no decisive action is taken today, then dealing with the consequences of climate change will require significantly more effort and costs in future.


Strategy 2030

Gazprom Neft has made remarkable progress in the last 25 years, and is now a major player in the global oil and gas sector. Adopted in 2018, the key objective of the company’s new Development Strategy to 2030 (Strategy 2030) is to build a next-generation company and to become a benchmark for both Russian and international industry peers.

Responsible leadership strategy

Strategy 2030 is not confined to achieving financial and operational targets, but is also designed to make the company a leader in terms of safety and reliability, as well as environmental performance, efficiency and the use of advanced technological solutions in production processes.