Investor presentation 1Q 2020 IFRS financial results

June 2020 CAUTIONARY STATEMENT 2

The information contained in this presentation has been This presentation does not constitute an offer to sell, or solicit prepared by the Company. The conclusions presented here are any offer of subscription to, or purchase of any securities. It is based on general information collected at the time of preparation hereby understood that no provision of this presentation shall of the material, and are subject to change without notice. The create the basis of any contract or obligation of any nature. Company relies on information obtained from sources that it The information contained in this presentation should not for any considers reliable; however, it does not guarantee its accuracy or purpose be relied upon as complete, accurate or impartial. The completeness. All indicators in this document are presented with information in this presentation is subject to review, finalization rounding, and therefore the sum of rounded indicators may differ and modification. The content of this presentation has not been from the rounded amount of actual indicators. verified by the Company. Accordingly, we did not and do not give These materials may contain statements regarding future events on behalf of the Company, its shareholders, directors, officers or and explanations representing a forecast of such events. Any employees, or any other persons, any assurances or guarantees, statements in these materials that are not a statement of whether expressed or implied, regarding the accuracy, historical facts are forward-looking statements, with known and completeness or objectivity of the information or opinions unknown risks, uncertainties and other factors, in connection contained herein. None of the directors of the Company, its with which our actual results, results and achievements may shareholders, officers or employees, or any other persons shall differ significantly from any future results, results or be liable for any losses of any kind that may be incurred as a achievements, reflected or implied by such forward-looking result of any use of this presentation or its content, or otherwise statements. The Company does not undertake any obligation to in conjunction with this presentation. update any forward-looking statements contained herein so that The English version of the presentation was translated from the they reflect actual results, changes in assumptions or changes in original version in Russian. In case of any discrepancies, the factors affecting such statements. version in Russian language has priority. COMPANY OVERVIEW 3

Global leader in oil transportation by pipelines Shares outstanding*  51.05 thousand kilometers of oil pipelines, 16.45 thousand Ordinary shares 5,694,468 78.55% kilometers of petroleum products pipelines, more than 24 million Preferred shares 1,554,875 21.45% cubic meters of storage tanks and over 500 pumping stations Total number of shares 7,249,343  Transportation of 83% of crude oil and 31% of light petroleum * Only preferred shares are traded. 100% of products produced in Russia ordinary shares are owned by the Russian  Oil pipelines link major Russian oilfields with refineries and export Government represented by the Federal Agency for markets in Europe and Asia, either directly or through sea State Property Management. Preferred shares of Transneft are included in the terminals. Petroleum products pipelines link refineries with key tier 1 list of the Moscow Exchange. consumption centers, sea ports, and other domestic and export In accordance with Transneft’s Articles of distribution markets Association, DPS per 1 preferred share may not be less than DPS per 1 ordinary share.

A natural monopoly Credit Ratings  The monopoly operator of Russian network of oil and petroleum Moody’s Baa2 / Stable products pipelines S&P ВВB- / Stable Tariffs for services of oil and petroleum products transportation  RAEX ruAAA / Stable are set by the Federal Antimonopoly Service (FAS) of Russia KEY INFRASTRUCTURE ASSETS OF TRANSNEFT GROUP 4 Length, thousand km

Oil trunk pipelines 51.05

Petroleum products trunk 16.45 pipelines Diagnostics and replacement of pipelines, tkm Year Diagnostics Replacement 2018 41.5 1.02 2019 55.4 1.00 1Q 2020 9.8 0.097 Plansfor replacement of pipelines in 2020-2024 At least 1 thousand km per year

*

* Classified as associate (7% - indirect ownership, 24% - held in trust by the Company) TABLE OF CONTENTS 5

01. RECENT DEVELOPMENTS

02. KEY OPERATING AND FINANCIAL RESULTS

03. KEY FACTORS OF INVESTMENT ATTRACTIVENESS

04. ENVIRONMENTAL, SOCIAL AND GOVERNANCE ASPECTS (ESG)

05. APPENDIX. SEGMENT BREAKDOWN OF KEY FINANCIAL RESULTS 01. Recent developments KEY EVENTS 7

2019 June AGM decision on dividends. 51.2% of normalized consolidated 2018 net profit under IFRS were allocated to dividends (total amount of dividends – RUB 77.6 bln)

July Connection of Komsomolsk refinery to the ESPO pipeline system

September Commissioning of the plant for manufacturing drag reducing agents in the Alabuga Special Economic Zone (the Republic of Tatarstan, Russia)

November Completion of the expansion of the ESPO pipeline system to its maximum capacity

December Approval of Development Strategy for NSCP (entity controlled by Transneft)

2020 February Moody’s and S&P reaffirmed credit ratings for Transneft with a Stable outlook

April OPEC+ countries including Russia agreed to limit oil extraction starting from 1 May 2020, which could lead to a decline in Transneft’s turnover by about 11% relative to the plan for 2020

The Russian Government extends the powers of Transneft President Mr. Nikolay Tokarev for 5 years

AGM – Annual General Meeting ESPO – East Siberia – Pacific Ocean OPEC – Organization of the Petroleum Exporting Countries SETTLING THE INCIDENT AT THE DRUZHBA OIL PIPELINE 8 MEASURES TAKEN: on the operation side  Crude oil transportation resumed at all of the directions  Transneft completed the Road Map of the Incident Recovery signed with the Belarus party and completed transportation of nonconforming crude oil out of Belarus  Crude oil quality control for organic chloride contents upgraded to a daily procedure on settling the consequences of the incident with shippers (Russian oil companies)  On 24 July 2019, Transneft’s Board of Directors approved the compensation procedure for shippers’ losses caused by unlawful actions of third parties resulting in the ingress of nonconforming crude oil into the system and agreed on a payment cap for shippers under oil transportation services contracts on the basis of USD 15 per 1 bbl of nonconforming crude on condition that shippers provide documentary proof of property losses  Transneft signed agreements with LUKOIL, shippers (oil companies) from Kazakhstan, Surgutneftegas and Gazprom Neft about the settlement of incident consequences  Within the framework of agreements on out-of-court settling of the consequences of the incident, payments were made to the shippers in the amount of RUB 8.2 bln (including RUB 3.3 bln in Q4 2019 and RUB 4.9 bln in Q1 2020). on evaluation of the damage caused by the incident for Transneft and its disclosure in financial statements The IFRS financial statements of Transneft PJSC contain the provision for settlement of the consequences of the incident with shippers within the framework of signed contracts for the provision of oil transportation services, subject to documentary justification of their losses and confirmation of the relevant negative consequences and their size on the legislation improvement side Transneft prepared proposals on measures required for increasing of the quality control over crude oil delivered for transportation to Transneft pipeline system. Transneft’s proposals have been submitted to the Government of the Russian Federation, the Ministry of Energy, the Ministry of Economic Development and other interested authorities and organizations IMPACT OF OPEC+ DEAL 9

 The OPEC+ deal implicates a reduction in Russia’s 2020Y oil production from the planned level of 560 MMT to 480-500 MMT, therefore the resulted annual decrease in both oil throughput via the Transneft system and in tariff revenue may amount to over 10%  Additional indexation of the tariff for oil transportation compensating decrease in oil throughput is not currently planned by the Federal Antimonopoly Service (FAS) of Russia  Transneft plans to implement measures to reduce additionally and postpone costs to a later periods  Taking into account the directions set by the main shareholder and the need to upgrade, revamp and overhaul the existing infrastructure, Transneft plans to maintain capital expenditures at the level of 2019  The budget stress scenarios were worked out and proposals were sent to the Russian Government to exclude the risk of deficit of funds for financing capital expenditures 02. Key operating and financial results KEY FINANCIAL RESULTS 11

2019 2018 YoY 1Q20 1Q19 YoY

RUB bln

Revenue 1,064 980 ▲9% 263 260 ▲1%

EBITDA* 486 433 ▲12% 134 130 ▲3%

Profit attributable to shareholders of Transneft 179 224 ▼20% 57 50 ▲13%

NetOperating cash flows cash from flow operating activities 361 346 ▲4% 128** 76 ▲70%

(minus) CAPEX***** -268 -268 ►0 -59 -59 ►0

Free cash flow 93 78 ▲19% 69 ** 17 ▲by 4.1х

Total debt at the end of the period 637 673 ▼5% 652 668 ▼2%

* Less crude oil sale and purchase operations under contracts with Rosneft and China National United Oil Corporation ** Strong performance of operating and free cash flow in 1Q 2020 was mainly due to the decrease in trade and other receivables relating to operating activity and VAT assets by RUB 27 billion compared to the increase of this item by RUB 24.8 billion in 1Q 2019 *** Purchase of property, plant and equipment adjusted for proceeds from sale of property, plant and equipment Key financial results breakdown by Transneft segment and NCSP segment is provided in the appendix (section 5 in the presentation) ANALYSIS OF OIL AND PETROLEUM PRODUCTS TRANSPORTATION 12 Oil transportation, mln tonnes Petroleum products transportation, mln tonnes

19.6% 20.0% 51.0% 52.5%

Domestic market 119.1 +0.9% 120.2 9.7 +8.2% 10.5 MLN TONS MLN TONS MLN TONS MLN TONS Export

49.0% 47.5% 80.4% 80.0%

1Q19 1Q20 1Q19 1Q20

In 1Q 2020 In 1Q 2020 Transneft Group transported Transneft Group transported

83 % of oil produced in Russia 31 % of light petroleum products produced in Russia

Oil exports breakdown by destination Petroleum products intake in 1Q 2020, mln tonnes and exports in 1Q 2020, mln tonnes Oil export to China Non-CIS oil exports Intake of petroleum by destination 2.4 via Kazakhstan products by type Export of petroleum products Russia/China border 56 7.5 via sea ports 0.5 10 0.5 13 Oil export via sea ports 0.6 Vysotsk Jet Kero 1.4 Novorossiysk 7.4 Ust-Luga 9.6 33 Gasoline Primorsk Kozmino 5.1 8.2 Gas oil 6.4 Novorossiysk China 11.2 Primorsk Druzhba PS Sea ports PORT BUSINESS: NCSP GROUP CARGO TURNOVER 13

The normalized* cargo turnover of NCSP Group for the 1st quarter of NCSP Group structure of 2019/2020 (adjusted by sale of NGT LLC), thsd tonnes cargo turnover 1Q Change 2019 2020 thsd tonnes % Cargo turnover, total 33,800 34,092 292 0.9% Liquid cargo, total 26,540 28,307 1,767 6.7% Crude oil Crude oil 16,429 17,645 1,216 7.4% 48.6% 51.8% Petroleum products 9,838 10,355 517 5.3% Other 273 308 35 12.7% Bulk cargo, total 1,601 1,579 -22 -1.4% Iron ore 783 997 214 27.3% Coal 379 341 -39 -10.2% Other 439 241 -197 -45.0% 29.1% Petroleum General cargo, total 4,092 2,895 -1,197 -29.3% 30.4% products Ferrous metals 3,755 2,553 -1,202 -32.0% Other 337 342 5 1.5% 4.7% Bulk cargo Containers 1,509 1,215 -295 -19.5% 4.6% Containers 1,509 1,215 -295 -19.5% 12.1% General cargo 8.5% Containers Containers, thsd TEU 161 134 -26 -16.3% 4.5% 3.6% 1.2% Other cargo 58 97 39 66.3% 1.0% 1Q19 1Q20 Other cargo categories

* The grain turnover through NGT LLC and Berth No. 3 from 1 January 2019 to 31 March 2019 are not taken into account in the transshipment volume IMPACT OF NCSP SEGMENT ON TRANSNEFT’S FINANCIALS 14

NCSP consolidation

. The financial results of NCSP and 2019 1Q20 Key indicators, its subsidiaries have been RUB bln NCSP Transneft Share of NCSP Transneft Share of recognized in the consolidated segment Group NCSP segment segment Group NCSP segment figure of the Transneft Group starting from the end of 3Q Revenue 56.1 1,063.8 5.3% 13.3 263.3 5.1% 2018, since the acquisition of control . In 2Q 2019 NCSP Group sold EBITDA 40.0 486.3 8.2% 8.8 133.7 6.6% 99.9968% share in Novorossiysk Grain Terminal (NGT), the Profit / (loss) attributable to terminal carries out 23.9 179.4 13.3% -2.7 56.7 х shareholders of Transneft transshipment of grain and oil seeds . In 1Q 2020 the financial results Free cash flow 18.5 93.0 19.9% 6.9 69.4 9.9% were largely influenced by the recognition of foreign exchange Total debt loss of RUB 12.8 billion on 49.9 637.4 7.8% 62.8 651.8 9.6% at the end of the period foreign currency liabilities of NCSP Group

NCSP segment includes NCSP PJSC and its subsidiaries. The segment is presented for analytical purposes in addition to segment information disclosed in the IFRS financial statements TARIFF REGULATION 15

. The tariffs for Transneft oil transportation services are set on the Indexation of Transneft’s tariffs for oil transportation territory of Russia by the state regulatory authority – the Federal services, % * Antimonopoly Service (FAS) and are denominated in rubles

. The company annually submits to the state regulator information about its upcoming expenses and investment program for 5.50% 6.75% 5.76% determining tariffs for the next year 3.6% 3.95% 3.87% 3.42% . In accordance with Transneft’s Strategy, the growth rates of from from from from from from from tariffs for oil transportation services shall not exceed the rate of 11/2012 01/2015 01/2016 01/2017 01/2018 01/2019 01/2020 inflation. For further information on tariff discussion, see the presentation "Transneft Tariffs" (in Russian only) at * Tariff growth rates denominated in roubles https://www.transneft.ru/about/development-system/ Average per-unit oil transportation tariff of Transneft compared to foreign peers (as of December 31, 2019)

USD/100 tkm 4 JANAF (Croatia) 3.42 MERO (the Czech Republic) Caspian Pipeline Consortium 2.87 3 2.73 2.55 Transnafta (the Republic of Serbia) Transpetrol (Slovakia) KazTransOil (Kazakhstan) 2 1.69 Ukrtransnafta (Ukraine) 1.40 1.38 1.35 Median 1.38 MOL (Hungary) 1.05 0.95 1 0.89 0.84 Przyjaźń (Poland) TAL Pipeline (Italy, Austria, Germany) Transneft (Russia) 0 Gomeltransneft Druzhba (Belarus) ANALYSIS OF TRANSNEFT GROUP REVENUE 16

Revenue structure for 1Q 2020, % Factor analysis of changes in revenue of Transneft Group, RUB bln

+13.4 +1.0 15.3% 260.1 263.3 -2.5 -6.2 - 2,5

3.1%

4.7% 263.3 8.2% RUB BLN

+1.2% 68.7%

Revenue Oil Petroleum Stevedoring, Export sales of Other Revenue 1Q19 transportation products additional port crude oil revenue* 1Q20 Oil transportation services transportation services and fleet services Petroleum products transportation services

Stevedoring, additional port services and fleet services * Other revenue includes revenue from domestic oil sales and petroleum products sales, from oil compounding services, oil and Export sales of crude oil petroleum products storage services, communication services, diagnostic services, construction services, services of technological connection to pipeline system, information services related to oil transportation, rent services, resale of goods, organisation of Other revenue* transporting of cargos, revenue from provision of other services FACTOR ANALYSIS OF TRANSNEFT GROUP EBITDA* DYNAMICS, RUB BLN 17

+14.4 -2.5 +1.5 133.7 129.8 -2.5 -3.9 -0.5 -2.7

Increase in revenue* by RUB 9.4 billion Increase in OPEX* by RUB 5.5 billion

+3.0%

EBITDA* Revenue from oil and Revenue from Other revenue Transneft segment NCSP segment Inter-segment Operating expenses EBITDA* 1Q19 petroleum products stevedoring, operating expenses operating expenses transactions in inflation 1Q20 transportation additional port services (inflated) (inflated) operating expenses services and fleet services (inflated)

* Less crude oil sale and purchase operations under contracts with Rosneft and China National United Oil Corporation FACTOR ANALYSIS OF TRANSNEFT GROUP OPERATING EXPENSES* DYNAMICS, RUB BLN 18

+0.3 +0.2 +3.5 +0.9 +0.4 +0.8 86.5 89.3 -3.0 -0.2

+3.2%

Operating Salaries, insurance Pension Energy Repair and Taxes (other than Cost of domestic Cost of Other operating Operating expenses contributions and expense maintenance of income tax) oil and other goods expenses expenses 1Q19 social expenses** relevant technical petroleum for resale sold 1Q20 (inflated to 2020) condition of products sales pipeline

* Nеt of export crude oil sales, depreciation and amortisation. The inflation rates used are based on the prepared by the Ministry of Economic Development forecast of social-economic development of the Russian Federation for 2020 and forecast periods of 2021 and 2022 ** Increase of salaries, insurance contributions and social expenses was mainly caused by improvement of payroll system of oil transportation subsidiaries in order of compliance with the labor legislation regarding minimal wage OPEX AND ITS OPTIMIZATION 19

Structure of oil transportation unit costs Structure of petroleum products transportation unit costs 1Q19 1Q20 1Q19 1Q20 Petroleum products volume Oil turnover, bln tkm 9.7 +8.2% 299.5 +3.7% 310.5 turnover, mln tonnes 10.5

Operating unit costs, Operating unit costs, RUB per 100 tkm 19.16 -0.3% 19.10 RUB per ton 646.87 -6.5% 605.00

Salaries, insurance contributions 32.7% Salaries, insurance contributions and social expenses 35.7% and social expenses 35.0% 38.5%

Security services 8.0% 7.8% 13.5% Security services 13.2% Telecommunication services 13.3% 12.7% Telecommunication services 9.0% 8.4% 13.3% Fuel and energy resources 23.6% 23.3% Fuel and energy resources 14.4% Operating, maintenance Operating, maintenance 17.8% 14.5% and diagnostics costs 12.2% 11.3% and diagnostics costs Other 10.2% 9.2% Other 11.4% 11.0% 1Q19 1Q20 1Q19 1Q20 (inflated to 2020) (inflated to 2020)

For more than 10 years Transneft has been actively working to control operating costs in the company’s main business lines Unit costs are calculated using operating expenses indicator based on aggregated RAS data (excluding depreciation, tax expenses and new facilities expenditure) which considers the previous year data adjusted for conditions of the reporting period ANALYSIS OF CHANGES IN PROFIT GENERATED BY TRANSNEFT GROUP, RUB BLN 20

+32.3

-14.5 +1.0 -4.9 -0.1 +6.6 56.7 -0.2 -8.5 -0.1 50.1 -4.9

Transneft segment

+13.3%

Profit attributable EBITDA Depreciation and Income tax Net foreign Share of results Provision for Other income/ Non-controlling Factors related to Inter-segment Profit attributable to shareholders of amortisation expense exchange gain from associates reimbursement to expenses, net interests NCSP segment** transactions to shareholders of Transneft and jointly consignors of Transneft 1Q19 controlled entities material losses* 1Q20

* Provision presents the management’s estimate of probable expenditure for settlement of incident related to ingress of oil not complying with the GOST standards into the Druzhba oil trunk pipeline in April 2019 (note 14 «Provisions for liabilities and charges» of condensed consolidated interim financial statements for the three months ended 31 March 2020) ** Factors related to NCSP segment includes EBITDA in the amount of RUB -3.1 billion, income tax expense in the amount of RUB +4.0 billion, net foreign exchange loss in the amount of RUB -15.9 billion, non-controlling interests in the amount of RUB +5.3 billion and other items ANALYSIS OF FREE CASH FLOW GENERATED BY TRANSNEFT GROUP, RUB BLN 21

Free cash flow in 1Q 2019, RUB billion Free cash flow in 1Q 2020, RUB billion

+22.5 -24.1 131.1 -31.1 129.9 128.3 -58.9

-24.5 75.5 -58.5 69.4

17.0

Operating Changes in Payment of Net cash CAPEX Free Operating Changes in Payment of Net cash CAPEX Free profit before working income tax flows from cash flow profit before working income tax flows from cash flow changes in capital* expense and operating 1Q19 changes in capital** expense and operating 1Q20 working interest activities working interest activities capital and 1Q19 capital and 1Q20 provision provision 1Q19 1Q20

* Including the increase in trade and other receivables relating to operating activity and VAT assets by RUB 24.8 billion during 1Q 2019 ** Including the decrease in trade and other receivables relating to operating activity and VAT assets by RUB 27 billion during 1Q 2020 ANALYSIS OF CASH FLOW GENERATED BY TRANSNEFT GROUP, RUB BLN 22

128.3

+24.9

69.4 +0.3 -58.9 -24.6 41.8 -28.2

Net cashOperating flows from CAPEX Free Proceeds from loans Repayment of Received Other investment and Net operatingcash activitiesflow cash flow and borrowings* loans and dividends financing activities** cash flow 1Q201Q20 1Q20 borrowings* 1Q20

Transneft Group 128.3 *** -58.9 69.4 +24.9 -24.6 +0.3 -28.2 41.8

Transneft segment 120.6 -58.3 62.3 +0.3 - +0.3 -28.6 34.3

NCSP segment 7.6 -0.7 6.9 +24.6 -24.6 - +0.6 7.5 Inter-segment 0.2 - 0.2 - - - -0.2 - transactions * In January 2020 the Group refinanced part of its financial liability in the amount of USD 400 mln which allowed to improve loan terms as well as lower the interest rate ** Including net outflow from purchase-and-sale transactions of debt securities and allocation-closure of deposits in the amount of RUB 45.4 billion, cash inflow from escrow account in the amount of RUB 12.8 billion, interest received in the amount of RUB 3.7 billion and other items *** Operating profit before changes in working capital and provision was equal to RUB 129.9 billion, changes in working capital and provisions was equal to RUB 22.5 billion (mainly due to the decrease in trade and other receivables relating to operating activity and VAT assets by RUB 27 billion), cash flows from income tax expense and interest were equal to minus RUB 24.1 billion CAPEX ANALYSIS OF TRANSNEFT GROUP (EXCL. NCSP GROUP) 23

Financing of capital expenditures, RUB bln Structure of CAPEX into technical upgrading and revamping, %

Linear Mechanical- Technical upgrading Period New projects Period sections of Storage tanks process and Other* and revamping pipelines power equipment

2018 63.8 194.8 2018 44% 13% 18% 25% 2019 38.1 244.5 2019 52% 14% 16% 18% 2020 (plan) 3.6 236.8 2020 (plan) 48% 12% 19% 21% 2021–2024 (plan) 8.8 917.5 2021-2024 (plan) 49% 9% 21% 21% 2019 New projects: over 80% of financing of new projects CAPEX (RUB 31.1 bln) was allocated to the ESPO expansion, which was completed in 2019, and the rest to the projects of the Development of a Corporate Data Network for Building a Unified Information System of Transneft (the UIS project), the Reconstruction of Trunk Oil Pipelines for Oil Transportation to the Refineries of Krasnodar Territory (in 4Q 2019 commissioned the oil pipeline connection to Ilsky refinery), and other projects Technical upgrading and revamping: 66% of financing of of technical upgrading and revamping CAPEX (RUB 160.9 bln) was allocated to sectional replacement of 1,002 km of trunk pipelines, construction and reconstruction of 80 tanks; the rest was allocated to revamps of mechanical-process and power equipment and to revamps of automated control systems, buildings, structures and other equipment

2020 New projects: the on-going implementation of the UIS project (commissioning is planned for 2025), which financing takes 70% of (plan) financing of new projects CAPEX, the expected completion of the Reconstruction of Trunk Oil Pipelines for Oil Transportation to the Refineries of Krasnodar Territory and connection of Afipsky refinery Technical upgrading and revamping: to ensure safe and smooth operation of the trunk pipeline system, priority is assigned to work aimed at maintaining a sufficient technical level of the equipment and systems being operated in oil and petroleum products transportation, therefore the main part of technical upgrading and revamping CAPEX is allocated to sectional replacement of 1,005 km of trunk pipelines, construction and reconstruction of 75 tanks, the rest is allocated to revamps of mechanical-process and power equipment and to revamps of automated control systems, buildings, structures and other equipment

* Automated control systems for technology of production, oil quality measurement systems, etc. KEY DEBT METRICS OF TRANSNEFT GROUP 24

Principal debt breakdown by maturity*, RUB bln Total debt / EBITDA ** 2 1.8 1.6 1.4 1.2 1 0.8 1.4 1.4 1.3 1.3 1.3 90.2 72.0 0.6 70.8 79.0 270,0 69.0 0.4 0.2 0 2020 2021 2022 2023 2024 2025 - 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 2028

Cost of debt (weighted-average rates), % FX structure of principal debt*,%

8.29 8.28 7.87 7.85 7.85 6.60 6.38 6.05 5.83 4.69 RUB debt 89% 90% 89% 91% 89% Russian ruble FX debt US dollar

11% 10% 11% 9% 11% 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 * Net of IFRS adjustments ** EBITDA in the ratio is calculated for the last 12 months before the reporting date including the figures of NCSP Group 03. Key factors of investment attractiveness PREFERRED SHARES OF TRANSNEFT: KEY FEATURES 26

Ordinary shares of Preferred shares of Comparative analysis Transneft Transneft Voting rights √ - The presence of a shareholder holding 100% of ordinary √ √ shares Dividends linked to IFRS net profit √ √ DPS not lower than DPS per ordinary share - √ Liquidity - √

In case of Daily average Transneft preferred shares turnover Moscow Exchange, RUB mln (as of 05/29/2020) - the presence of a shareholder holding 100% of ordinary shares 800

- dividends linked to IFRS net profit 600

- DPS per preferred share not lower than DPS per ordinary share 400 - comprehensive disclosure requirements in accordance with the Code of 200 Corporate Conduct 0 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 preferred shares of Transneft are a close alternative to ordinary shares. Daily average Transneft preferred shares turnover was equal to RUB 246 mln in 2019 and RUB 483 mln since the beginning of 2020 EU AND US FINANCIAL SANCTIONS HAVE LIMITED EFFECT ON TRANSNEFT GROUP 27

SUBJECT IMPACT ON THE GROUP

US OFAC Directive 2 under Executive Order 13662:

 Activities prohibited for US person or within the US – NEUTRAL for reasons: issuance of a new debt on or after November 28, 2017, all transactions in, provision of, financing for, and other 1) Moderate level of debt burden and high dealings in in such new debt with a maturity exceeding degree of financial stability Transneft 60 days 2) Sustainably positive free cash flow Group (RUB 78 bln in 2018 and RUB 93 bln in 2019) Council Regulation (EU) No 960/2014, Article 5 (2) (b): 3) No need to attract equity financing or  Restrictions on debt and equity financing if issued after debt financing on foreign markets September 12, 2014 with a maturity exceeding 30 days

Sanctions do not restrict investors’ opportunity to purchase Transneft preferred equity, as well as NCSP equity DIVIDENDS AND KEY FINANCIAL RESULTS 28

Profit for the reporting period, capital Dividends on preferred shares (RUB per share) expenditures, free cash flow and dividends and dividend payout ratio

400 14,000 11,454 60% 51.2% 50% 50% %

12,000 OF NORMALIZED PROFIT 233 225 50% 184 192 197 200 158 10,000 143 40% 100 78 93 60 8,000 7,578 30% 20 6 21 (**) 6,000

0 SHARE PER RUB 18.3% 10,706 11,200 -5 -8 -3 -13 -2 20%

-38 -31 4,000 (***) . -82.5 -77.6 8.9% 10% 2,000 5.0% 5.0% 4,296 3,875

-200 DIVIDENDS,

RUB BLN RUB -197 724 758 823 -223 0 0% -268 -268 2013 2014 2015 2016 2017 2018 2019 -311 -323 -320 -306 -400 7.9 2.9 12.8 30.6 82.5 77.6 ≈ 81 2012 2013 2014 2015 2016 2017 2018 2019 Profit for the reporting period (including non-controlling interests) Interim dividend, RUB per 1 pref. share, for relevant year Capital expenditures Annual dividend, RUB per 1 pref. share, for relevant year Free cash flow Transneft PJSC dividend payments, RUB bln, for relevant year Total Transneft PJSC dividend payments, for relevant year* Payout ratio for all types of shares, % of normalized profit under IFRS*, right axis

To elaborate a recommendation on dividends, profit is normalized on key non-monetary items * In 2012-2015 dividends were calculated as a share of Transneft PJSC profit under RAS ** Final dividend for the year 2017 *** The preliminary guidance was announced at the conference call on 30 April 2020. Management presumes that 50% would be paid this year and the remaining part within 3 years INVESTMENT CASE 29

• Unique assets and market position. One of the largest infrastructure companies in Russia and in the world. We transport 83% of Russian crude and 31% of light petroleum products. In terms of key metrics* Transneft is among the most efficient pipeline operators in the world • Transformation from an exclusively pipeline company to an integrated infrastructure player. With the consolidation of control over Novorossiysk Commercial Sea Port in 2018, Transneft in addition to control over the pipeline business became #1 port operator in Russia and one of the largest port operators in Europe • Increase of dividends. In 2019, the Company completed its pipeline system expansion program, and shifted focus on maintenance for the 2020-2024 period. For the year of 2018 Transneft has paid out more than 50% of normalized IFRS net income in the form of dividends (DY over 7%, covered by FCF) • Improvement in corporate governance and investor relations. This includes approval of Corporate Governance code, improvements in transparency and establishment of the dialogue with analysts and investors. Starting from 2017, the adjustments to the Articles of Association were introduced pegging DPS on prefs to DPS on ords • Value creation potential. Current discounts to P/E and EV/EBITDA multiples of peers – 70-80% to pipeline companies from developed markets. The company focuses on further improvement of efficiency and cost control, increase of free cash flow, integration and development of acquired assets • A low-beta stock. Transneft beta according to Bloomberg is 0.4-0.6 in the last 5 years

* Including metrics related to operational efficiency and safety FCF – free cash flow, DY – dividend yield, DPS – dividend per share Environmental, social and 06. corporate governance aspects (ESG) 2019 ESG RESULTS AND PLANS FOR 2020 31

As part of the efforts to improve the sustainable development indicators including Sustainability Ratings Growth corporate governance improvement, the following actions were implemented in 2019:  Board of Directors:  The number of independent directors represented in the Committee on Strategy,  In 2019, two ESG agencies, Investments and Innovation increased from 1 to 2 Sustainalytics and RA Expert, raised  On 20 September 2019, the Transneft Board of Directors approved the Corporate Transneft ratings Governance Code in accordance with the Corporate Governance Code recommended by the Bank of Russia. The document is published on the  In January 2020, Company's website in Russian and English ISS agency raised the  Communication with Investors: Company's rating  Sustainability dialog was organized between the Company’s management, investor relations officers and members of the investor community. A series of meetings PLANS FOR 2020 with investors in countries of mainland Europe was held with the participation of an independent member of the Board of Directors Mr. Alexander Korsik  During these meetings, participants actively discussed sustainable development . Transneft plans to continue active issues, including investors' proposals on ESG activities improvements in corporate practices, disclosing of information in the field of  Information Disclosure ESG, and to further develop a dialogue Sustainable Development Report based on GRI standards issued (disclosed since  with investors and ESG agencies on these 2016) issues  Transneft Anti-Corruption Policy and Ethics and Professional Conduct Code were published on the Company’s website . In the area of corporate governance, an external assessment of the Board of Information on ESG topics was included in the presentation for investors published  Directors is planned to be held in 2020 on the Company's website COMMUNICATION WITH ESG AGENCIES 32

Key ESG agencies  The activities of COMMUNICATIONS covering Transneft Transneft Group are analyzed in detail by the largest and well-known ESG data  ESG agencies disclosure

 Transneft group ESG rating provides data and disclosures to ESG methodology  agencies subject to discussion current Russian non- financial disclosure Analytical comments on regulation  ESG reports  The Company maintains an active Comments to agencies on communication with ESG agencies controversial events  covered in the media BOARD OF DIRECTORS 33

Alexander Novak Minister of Energy of the Russian Federation Chairman of the Board of Directors of Transneft

Matthias Warnig Maxim Sokolov CEO of Nord Stream 2 AG (Switzerland) Vice-Governor of Saint-Petersburg 2012-2018 – Minister of Transport of the Russian Federation

Kirill Dmitriev Nikolay Tokarev CEO of Russian Direct Investment Fund Chairman of the Management Board, the President of Transneft

Ilya Klebanov Valery Shantsev Member of the Board of Directors of Sovcomflot In 2005-2017 Governor of the Nizhny Novgorod Region In 2003-2011, Plenipotentiary Representative of the President of the Russian Federation to the North-Western Federal District Independent director Genadii Shmal Alexander Korsik President of the Union of Oil and Gas Producers of Russia President and Management Board Chairman of Bashneft Independent director (From April 2011 till October 2016) Independent director 1 ൗ3 of the Board of Directors are independent directors

Additional information is available at: https://en.transneft.ru/about/management/board-directors/ BOARD OF DIRECTORS COMMITTEES 34 Human Resources and Committee on Strategy, Audit Committee Investment, and Innovation Remuneration Committee Kirill Dmitriev 100% of independent directors 100% of independent directors Head of Сommittee on Strategy, Investment, and Innovation Ilya Klebanov Alexander Korsik Head of Audit Сommittee Head of Human Resources and Remuneration Matthias Warnig Independent director Committee Independent director

Alexander Korsik* Alexander Korsik Ilya Klebanov Independent director Independent director Independent director

Maxim Sokolov Genadii Shmal Genadii Shmal Independent director Independent director Nikolay Tokarev

Valery Shantsev

Genadii Shmal Independent director

* Since July, 2019 Additional information is available at: https://en.transneft.ru/about/management/board-directors/457/ MANAGEMENT BOARD 35

Nikolay Tokarev Chairman of the Management Board President of Transneft

Maksim Grishanin Boris Korol Vyacheslav Skvortsov First Vice-President Vice-President Vice-President

Sergey Andronov Mikhail Margelov Rashid Sharipov Vice-President Vice-President Vice-President

Larisa Kalanda Pavel Revel-Muroz Sergey Shotsky Vice-President Vice-President Vice-President

Additional information is available at: https://en.transneft.ru/about/management/board/ ECOLOGY AND ENVIRONMENTAL PROTECTION 36

Transneft sets the task of environment protection and Oil vapor recovery unit ensuring high level of environmental safety of operating facilities as its utmost and unchangeable priority. Transneft is applying the uniform Policy of Labour, Industrial, Environmental Safety and Energy Efficiency. The Environmental Management System (EMS) is developed, adopted and is constantly being improved. Measures undertaken by the Company:

 ecological monitoring Specific emissions of air Discharge of insufficiently treated pollutants*, kg/tonne wastewater, thsd cubic m  additional biomonitoring of marine areas  reducing specific emissions of air pollutants 0.153  precluding discharge of insufficiently treated 0.1514 114 -3% 110 -3% wastewater into water basins 107  implementing biodiversity programs within the 0.14102 -100% areas of Transneft Group operation

0

2017 2018 2019 2017 2018 2019 2020E * target indicator decrease in 2020 – 1%, in 2021 – 0,7% ENVIRONMENTAL MANAGEMENT SYSTEM 37

As of today, the Environmental Management System (EMS) is developed, adopted and certified in the Company. Back in 2004, Transneft subsidiaries were certified internationally for the compliance with ISO 14001 standard. Annual audits to confirm the EMS compliance with the requirements of the ISO 14001 international environmental standard are conducted in Transneft subsidiaries. Within 2019, EMS audits were conducted in Transneft PJSC and 27 Transneft subsidiaries. Within 1Q 2020, EMS audit was conducted in 1 Transneft subsidiary. The audits’ results confirmed the EMS compliance with the requirements of ISO 14001:2015 international environmental standard. ENVIRONMENTAL CONTROL SYSTEM 38

All industrial facilities of the Company established an efficient system of industrial environmental control for atmospheric air, water and soil. The control is carried out by 53 ecology analysis laboratories certified by the Federal Service for Accreditation (Rosaccreditation). The labs are manned with highly qualified specialists and equipped with modern analytical equipment. Environmental and analytical control is carried out in accordance with schedules agreed with regulatory authorities. Implementation of measures for construction and revamping of environmental facilities and procurement of environmental equipment ensures that Transneft production facilities comply with international agreements of the Russian Federation, legislative requirements of the Russian Federation, standards and rules in the field of environmental management, protection and safety. ENERGY SAVING 39

Parameters for Transneft’s Energy Saving and Energy LED lighting Specific consumption Efficiency Enhancement Program for 2019 – 2024 (oil transportation) are: Electricity kWh / th. tkm  rate of reducing specific electricity consumption Max 34.0 for crude oil and petroleum products transportation, transshipment, intake, loading, 18.2 unloading and delivery 11.9  rate of reducing consumption of energy resources Min 8.9 (boiler and furnace fuels, thermal energy, electricity, fuels and lubricants) by the Company’s Solar panels All energy resources internal processes related to the provision of toe / mln tkm services of oil and petroleum products transportation via trunk pipelines Max 5.5  the share of LED lights at production facilities 3.0  rate of reducing greenhouse gas emissions 1.7 achieved by implementing energy-saving Min 1.4 measures Transneft Group  the share of natural gas vehicles Average for foreign peer group companies

toe – tonnes of oil equivalent SOCIAL POLICY, OCCUPATIONAL AND INDUSTRIAL SAFETY 40

Personal insurance: TRANSNEFT GROUP’S MAIN PRINCIPLES IN THE FIELD OF Voluntary health Protecting OCCUPATIONAL SAFETY insurance, insurance employees’ life and against accidents and illnesses health, as well as priority of employees’ life and health over the Promoting mass ensuring safe labor 1 athletics and result of industrial activities Support to non-working healthy life style conditions is retirees considered a priority by Transneft the right of each employee to suspend works and Group. 2 their duty to refuse to carry out the work which does not meet safety requirements Main vectors The Group has of the social adopted an involvement of all employees in the prevention of policy 3 occupational safety occupational injuries and diseases management system according to Non-governmental Residential support the requirements of leading role of managers at all levels in ensuring pension 4 the international safe working conditions standard BS OHSAS Growing awareness on occupational safety and Health resort and recreation 18001: 2007. 5 health measures programs for employees and their children COUNTERING CORRUPTION 41

Key aspects Organisational structure of countering corruption  Transneft adheres to high ethical standards of Board of Directors conducting fair business by openly declaring Audit Committee zero tolerance to corruption in all its forms of Transneft and manifestations Commission for Countering President  The anti-corruption provision is stipulated in Corruption the Transneft Anti-Corruption Policy, as well as in the Code of Ethics and Official Conduct of Management Board of Transneft and Transneft Subsidiaries’ Transneft Business units Employees Key measures  Continuous awareness raising and training for employees  Functioning of the Anti-Corruption Hotline1 in order to inform the management about possible facts of corruption, as well as rapid response to received alerts  Development of a specialized section on the corporate website in order to ensure transparency on Transneft activities in preventing and countering corruption Transneft Anti-Corruption Hotline 1. Electronic form on corporate website: Linked by QR-code: http://www.transneft.ru/protivodeistvie- korrypcii/elektronnaya-forma-obrasheniya/ 2. E-mail box for whistleblowers: [email protected]

Additional information is available at: https://en.transneft.ru/protivodeistvie-korrypcii/goryachaya-liniya/?re=en Appendix. 07. Segment breakdown of key financial results KEY RESULTS BY SEGMENTS* (1/2) 43

2019 2018 YoY 1Q20 1Q19 YoY

RUB bln Revenue 1,064 980 ▲9% 263 260 ▲1%

Transneft segment revenue 1 013 965 ▲5% 251 245 ▲2% NCSP segment revenue 56 16 ▲by 3.5х 13 16 ▼19%

EBITDA** 486 433 ▲12% 134 130 ▲3%

Transneft segment EBITDA** 448 424 ▲6% 125 118 ▲6% NCSP segment EBITDA 40 10 ▲by 4.0х 9 12 ▼25%

Profit attributable to shareholders of Transneft 179 224 ▼20% 57 50 ▲13%

Transneft segment profit 154 223 ▼31% 59 44 ▲34% attributable to shareholders of Transneft NCSP segment profit / (loss) 24 2 ▲by 12.0х -3 6 х attributable to shareholders of Transneft

Total debt at the end of the period 637 673 ▼5% 652 668 ▼2%

Transneft segment total debt 587 603 ▼3% 589 603 ▼2% NCSP segment total debt 50 70 ▼29% 63 65 ▼3%

* There are inter-segment transactions between Transneft segment and NCSP segment ** Less crude oil sale and purchase operations under contracts with Rosneft and China National United Oil Corporation KEY RESULTS BY SEGMENTS* (2/2) 44

2019 2018 YoY 1Q20 1Q19 YoY

RUB bln OperatingNet cash flows cash fromflow operating activities 361 346 ▲4% 128** 76 ▲70%

Transneft segment operating cash flow 337 339 ▼0,6% 121 67 ▲81%

NCSP segment operating cash flow 24 7 ▲by 3.4х 8 8 ►0

(minus) CAPEX***** -268 -268 ►0 -59 -59 ►0

Transneft segment CAPEX***** -263 -265 ▼1% -58 -58 ►0

NCSP segment CAPEX***** -5 -3 ▲67% -1 -1 ►0

Free cash flow 93 78 ▲19% 69** 17 ▲by 4.1х

Transneft segment free cash flow 74 73 ▲1% 62 9 ▲by 6.9х

NCSP segment free cash flow 19 5 ▲by 3.8х 7 8 ▼13%

Net cash flow -13 13 х 42 -3 х

Transneft segment net cash flow -28 1 х 34 -4 х

NCSP segment net cash flow 15 13 ▲15% 8 1 ▲by 8.0х

* There are inter-segment transactions between Transneft segment and NCSP segment ** Strong performance of operating and free cash flow in 1Q 2020 was mainly due to the decrease in trade and other receivables relating to operating activity and VAT assets by RUB 27 billion compared to the increase of this item by RUB 25 billion in 1Q 2019 *** Purchase of property, plant and equipment adjusted for proceeds from sale of property, plant and equipment Contacts: Address: 4 bld. 2, Presnenskaya embankment Investor Relations Moscow, 123112 Telephone: +7 (495) 950-81-78 Telephone: +7 (495) 950-84-54 Fax: +7 (495) 950-89-00, +7 (495) 950-81-68 E-mail: [email protected] E-mail: [email protected]