GAZPROM NEFT PRODUCTION FACILITIES IN Belarus Russia 1 Moscow 14 Rostov Oblast 2 Arkhangelsk Oblast 15 Ryazan Oblast Romania 3 Irkutsk Oblast 16 Smolensk Oblast 4 Kaliningrad Oblast 17 Tomsk Oblast Head o€ce 5 Krasnodar Krai 18 Tyumen Oblast Serbia Saint Petersburg 6 Krasnoyarsk Krai 19 Khanty-Mansi 7 Moscow Oblast Autonomous Okrug – Yugra 8 Murmansk Oblast 20 Yamalo-Nenets Autonomous Okrug 22 9 Nenets Autonomous Okrug 21 Yaroslavl Oblast 10 Nizhny Novgorod Okrug 22 Barents 8 11 Omsk Oblast 23 Pechora Sea Bosnia and Herzegovina 4 2 23 12 Orenburg Oblast 24 13 Sakha Republic (Yakutia) 25 16 26 21 9 7 1 10 20 15 19 5 14 Italy 12 18 Iraq 11 6 24

GEOGRAPHICAL FOOTPRINT 17 3 13 25 Gazprom Neft and its upstream subsidiaries are engaged in oil and gas Angola exploration, development and production in Russia, Iraq and Serbia. The company’s main rening facilities are located in Russia and Serbia. The company’s retail network throughout Russia, the CIS and the has a total of 2,131 lling stations. Kazakhstan THE GEOGRAPHIC RANGE UPSTREAM 26 OF THE COMPANY’S PRESENCE ASSETS

110 COUNTRIES IN 6 COUNTRIES

PRODUCTS SOLD PRODUCTION FACILITIES Singapore Subsoil rights Hydtocarbon Rening Lubricants production > 1 — Including Russia. IN100 COUNTRIES IN 6 COUNTRIES Bitumen products Petrochemicals Marine fuel Блендинг blending смазочных материалов GAZPROM NEFT PRODUCTION FACILITIES IN RUSSIA Belarus Russia 1 Moscow 14 Rostov Oblast 2 Arkhangelsk Oblast 15 Ryazan Oblast Romania 3 Irkutsk Oblast 16 Smolensk Oblast 4 Kaliningrad Oblast 17 Tomsk Oblast Head o€ce 5 Krasnodar Krai 18 Tyumen Oblast Serbia Saint Petersburg 6 Krasnoyarsk Krai 19 Khanty-Mansi 7 Moscow Oblast Autonomous Okrug – Yugra 8 Murmansk Oblast 20 Yamalo-Nenets Autonomous Okrug 22 9 Nenets Autonomous Okrug 21 Yaroslavl Oblast 10 Nizhny Novgorod Okrug 22 8 11 Omsk Oblast 23 Pechora Sea Bosnia and Herzegovina 4 2 23 12 Orenburg Oblast 24 East Siberian Sea 13 Sakha Republic (Yakutia) 25 Chukchi Sea 16 26 Sea of Okhotsk 21 9 7 1 10 20 15 19 5 14 Italy 12 18 Iraq 11 6 24

GEOGRAPHICAL FOOTPRINT 17 3 13 25 Gazprom Neft and its upstream subsidiaries are engaged in oil and gas Angola exploration, development and production in Russia, Iraq and Serbia. The company’s main rening facilities are located in Russia and Serbia. The company’s retail network throughout Russia, the CIS and the Balkans has a total of 2,131 lling stations. Kazakhstan THE GEOGRAPHIC RANGE UPSTREAM 26 OF THE COMPANY’S PRESENCE ASSETS

110 COUNTRIES IN 6 COUNTRIES

PRODUCTS SOLD PRODUCTION FACILITIES Singapore Subsoil rights Hydtocarbon Rening Lubricants production > IN100 COUNTRIES IN 6 COUNTRIES Bitumen products Petrochemicals Marine fuel Блендинг blending смазочных материалов 34% year-on-year Gazprom Neft at a glance 2,123mtoe proved hydrocarbon Gazprom Neft PJSC1 is a vertically integrated oil company. reserves (PRMS)

Its core activities include exploration, production

and sale of oil and gas, refining, and production and flat year-on-year distribution of petroleum products.

Gazprom Neft proved liquid hydrocarbon reserves under PRMS2 classification are comparable to those of global 96.1 mtoe oil majors. hydrocarbon production

AN INDUSTRY LEADER IN TECHNOLOGY

For more details, see pages 122–135

By 2030, thanks to leading-edge technology, Gazprom Neft intends to halve the time to first oil, to speed up the implementation of major oil and gas projects by 40%, and to reduce production management costs by 10%.

Digital technologies in exploration • Digital twins of process units and Enhanced hydrocarbon recovery and production facilities technologies • Artificial intelligence to analyse geological • Gazpromneft-Industrial Innovations R&D • The Asset of the Future programme data and search for new oil deposits centre • Technologies for the production of hard- • Digital twins of oilfields and a digital Smart logistics to-recover oil (Bazhenov Formation, platform to enhance the effectiveness of Achimov Formation and oil rims at gas • A pioneering -specific logistics seismic surveys condensate fields) management system • Unmanned aerial vehicles to carry out • Expertise in operations on the Arctic shelf • Automated systems for loading and remote data analysis dispatching petroleum products Comprehensive innovation Unique achievements in delivering • Digital management of the company’s management major projects own fleet of fuel trucks, refuellers and • A science and technology cluster • Prirazlomnoye: the first – and so far bitumen trucks comprising 14 innovation centres the only – oil production project on the • Digital logistics spaces: automated (St Petersburg) Russian Arctic shelf warehouses and unmanned vehicles for • Dedicated research centres and • Novy Port: a unique logistics strategy freight transport technology parks to ensure year-round transportation of Digitisation of the distribution • Active development of import substitution Arctic oil system • Messoyakha: associated petroleum gas • Petroleum-product quality control system reinjection project, now implemented deployed throughout the value chain High-tech oil refining • Development of digital services and • Euro+ combined oil refining unit (CORU) petroleum product sales services

1 — Hereinafter referred to as the “company” or “Gazprom Neft”. 2 — Petroleum Resources Management System. 6 Annual Report 2020 Our response to the challenges of 2020

By targeting fast responses and leveraging teamwork and new technologies, the company protected the health of its Company profile employees and ensured operational continuity while securing the financial stability of its business. The measures taken have enabled us to end 2020 without loss of efficiency.

For more details, see pages 62–117

Strategic –2.6% year-on-year 4.0% year-on-year report

40.4 mt 43.6 mt refining sales of petroleum Performance throughput products review

A COMPANY COMMITTED A FORWARD- Technological TO SUSTAINABLE LOOKING BUSINESS development DEVELOPMENT

For more details, see pages 230–263 For more details, see pages 16–59

Governance Gazprom Neft is consistently integrating principles of sustainability The company’s strategy is to become a system into its strategy and operations. Our priorities include care for natural leader in priority technologies: increasing ecosystems, safe production, the protection of employee health, and the oil recovery factor at mature fields, improving the quality of life in the where we operate. developing multi-phase deposits and low- permeability reservoirs, undertaking cost- HSE Personnel development effective and safe shelf operations in ice • Strategic priority: Target Zero1 • A single incentive model for conditions, upgrading oil refining facilities, and developing cutting-edge catalysts. Sustainable • Development of a safety culture employees development • Automation of HSE management • Partnership with trade unions processes • Training, leadership and career Gazprom Neft will be able to produce tens of development programmes millions of tonnes of incremental volumes and Environmental protection boost refining efficiency by implementing a • Environmental management system Well-being of local number of major initiatives, in particular: cutting • Biodiversity conservation communities lifting costs at new production projects in the programme • Home Towns social investment Yamalo-Nenets Autonomous Okrug, developing a • Greenhouse gas emissions range of technologies to unlock unconventional programme Appendices accounting and monitoring • Support for the indigenous reserves, facilitating the viable deployment of • Implementation of the Programme minorities of the Russian Far North surfactant-polymer (SP) flooding and miscible gas on utilisation and more effective use • Import substitution and local displacement technologies, and building a high- of associated petroleum gas (APG) sourcing programmes tech catalyst plant.

1 — Zero harm to people, the environment, or property in our operations.

7 The goal ₽1,503 billion of the Gazprom Neft market capitalisation Strategy to 2030 as at 31 December 2020

To strengthen our market position and become a benchmark for global industry peers in terms of efficiency, safety and technological advancement. ≥ 50% of net profit1 – target Managing the value chain as a single asset dividend payout

An agile investment decision-making framework GAZPROM NEFT INVESTMENT CASE INVESTMENT NEFT GAZPROM Investment grade credit ratings Highly efficient refining achieved through a refinery modernisation programme ACRA Extensive resource base AAA(RU) Stable outlook An operational efficiency and HSE system covering all areas of the company’s business MOODY’S Baa2 Growth in dividend payments Stable outlook

Digitising the entire production chain FITCH to improve performance BBB Stable outlook Organisational, operational, cultural and digital transformations across the company S&P Target Zero – zero harm to people, BBB– the environment, or property in our operations Stable outlook

Following the best available environmental practices 1 — In accordance with the Gazprom Neft PJSC Dividend Policy Regulation (new version dated 29 December 2020). Net profit is calculated taking into account adjustments for foreign exchange gain (loss), foreign exchange rate differences on operating items, impairment loss on fixed assets and assets under construction, revaluation of financial investments and a number of other indicators.

8 Annual Report 2020

The company’s standing in the industry No. 1 No. 2 No. 3 Company profile 24.3% adjusted EBITDA ₽323.2 EBIT per barrel of 96.1 mtoe hydrocarbon margin oil produced production

1 6.2% ROACE ₽4,128.3 lifting cost per 60.5 mt of oil and oil barrel of oil produced condensate production 16.97 tonnes per day – Strategic average daily retail sales report

Thanks to our balanced approach to asset management, we have delivered three consecutive quarters of net profit growth, giving us a stable financial position to justify the payment of an interim dividend. Performance review

Production profile, mtoe Net profit, ₽ billion Share of adjusted IFRS net profit, % 35.6 60.5 22 28 82 25 28 35 45 50

GasGas CrudeCrude oil, oil, condensate condensate and and NGLs NGLs Technological development Exploration and production: projects with a relatively high share of gas in our portfolio allowed us to balance our production profile to ensure OPEC+ compliance. 2016 2017 2018 2019 2020 1Q Governance 2020 system Refining: with the Gazprom Neft The new dividend policy sets a refinery modernisation programme 2Q 3Q 4Q target payout ratio of at least 50% of 2020 2020 2020 in its final stages, the company adjusted IFRS net profit. is well-positioned to be a key beneficiary of refining margin –14 recovery. Sustainable development Operational strengths Creating sustainable value for shareholders 147.4 111.6 115.6 86.1 100.2 • Driven by our commitment to increased openness 61.5 and transparency, we joined the UN Global Compact 48.1 43.0 44.5 31.2 and obtained the highest climate score from the CDP Appendices Investment costs (Carbon Disclosure Project) initiative 4Q 1Q 2Q 3Q 4Q • The company has achieved a 9.7% reduction in 2019 2020 2020 2020 2020 Urals Scope 1 and Scope 2 GHG emissions • The investment programme responds flexibly to • Gazprom Neft is seeking to minimise its changes in the market environmental footprint, considering alternative • Lifting costs per barrel were optimised despite the energy sources to support own assets, and is macroeconomic headwinds performing environmental emergency-response • The company retains the potential to increase current drills in the Arctic production • Zero fatal accident rate (FAR) has been achieved

1 — Return on average capital employed. 9 10 2020 HIGHLIGHTS MODERNISATION PROGRAMME SUCCESSFUL REFINERY PRODUCTION STABLE HYDROCARBON GROWTH CONTINUOUS RESERVES agreements. Gazprom PJSCfieldsdeveloped underlong-term riskoperatorship and Neocomian-Jurassicgascondensate depositsat (+34%) was driven by farm-inreserve additionsat oilrims 2020. Thissignificantincrease intheGroup’s proved reserves Gazprom Neftcontinuedtoactively develop itsresource basein production ofhigh-octane gasolinesby 5.1% anddieselfuelsby 5.7%. modernisation projects have enabledthecompanytoboost launch ofRussia’s firstEuro+ combined oil refining unit. Refinery environmental impact. InJuly, theMoscow Refinery celebrated the depth andefficiency, as wellasfurther reducingthecompany’s to develop itsrefining facilities,aimed at increasing refining In 2020,Gazprom Neftcontinuedimplementingitsprogramme field inthe Yamalo-Nenets Autonomous Okrug. starting upthenew gastreatment unitat theVostochno-Messoyakhskoye increased APGutilisation at fieldsinthe Tomsk andOrenburg Oblasts,and Novoportovskoye field,launchingadditionalproduction capacitythat achieved by commissioningnew wells at theArcticgas fieldsand at the secured anincrease ingasandcondensate production. Theincrease was Under theOPEC+ agreement, thecompanycutoilproduction but manufacturing” onpage81 For more details,see “Refining and production” onpage 62 For more details,see“Resource baseand Hydrocarbon production,mtoe mtoe Proved hydrocarbon reserves, Refining throughput, mt 2016 2016 2016 1,514 86.2 41.9 1,522 2017 2017 2017 89.7 40.1 1,564 2018 2018 2018 92.9 42.9 2019 2019 2019 96.1 41.5 1,583 2,123 2020 2020 2020 on-year year- at 40.4 96.1 34% 2.6% Annual Report 2020

The year 2020 confirmed 2020 highlights that we can rely on our flexible, distributed governance model, which In 2020, Gazprom Neft ensured a high level of enabled important decisions Company profile COVID-19 protection for its employees, partners to be made in a timely fashion, with Gazprom Neft and customers; maintained the continuity of adapting fast to a rapidly- all operating processes and retained financial evolving environment. stability; significantly increased its hydrocarbon Many employees are reserves and sustained stable production levels. willing to take ownership of issues, proactively Strategic proposing a course of action report to managers, rather than waiting for orders from above.

Performance FIGHTING COVID-19 review TOGETHER ALEXANDER DYUKOV Chairman of the Management Board, CEO, Gazprom Neft PJSC Amid the COVID-19 pandemic, we ensured the continuity of all operational processes. Production assets did not halt operations for a minute. In addition to protecting the health of our employees and partners, Gazprom Neft helped hospitals and volunteers, as well as local communities across our footprint. Technological development Our flexibility, human focus, new organisational approaches and active process digitisation helped us accomplish the most challenging of tasks with maximum efficiency.

million items For more details, see “2020 Challenges” on 2.7+ page 28 of PPE donated to Governance system doctors

RESPONSIBLE ATTITUDE

TO THE ENVIRONMENT Sustainable development

As part of the consistent implementation of its sustainability policy, in 2020, Gazprom Neft joined the UN Global Compact, the largest 10 principles of the voluntary international initiative for sustainable development and corporate social responsibility. Gazprom Neft has also achieved the UN Global Compact highest score among Russian oil companies in the Carbon Disclosure Project (CDP), the world’s leading environmental disclosure and are embedded in the Appendices performance rating system. company’s business strategy and operations

For more details, see “Sustainable development” on page 230

11 LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS company’s long-term strategy. with theobjectives outlinedunderthe Neft’s development continuedinline in theglobaloilandgasmarket,Gazprom and thesubsequentsharpdeterioration imposed undertheCOVID-1 global economy. Despitetheconstraints 2020 was achallenging year fortheentire Dear shareholders andinvestors, oil refining. refining depthto99%–oneofthehighestrates inthe world was putintooperation. Thisallowed ustoincrease theoil (the Gazprom NeftSerbianasset),adelayed cokingcomplex at theMoscow Refinery. InPancevo, at theNIS refinery 2020, theuniqueEuro+ oilrefining complex was launched programme tomoderniseandupgradeitsrefining assets.In The companyiscontinuingitsimplementation ofamajor Formation (anassetwithcolossalresource potential). to commenceprofitable oilproduction at theBazhenov strata –deployment ofwhichwillallow thecompany a prototype forworking withhydrocarbons inBazhenov successes inworking withhard-to-recover oil,developing peninsula are goingat fullspeed.Gazprom Neftsaw major Bovanenkovskoye andKharasaveyskoye fieldsonthe Yamal for developing liquidhydrocarbons at theGazprom Tomsk Oblast–gointofull-scaledevelopment. Preparations the Khanty-Mansi Autonomous Okrug–Yugra andthe This year saw amajornew hydrocarbon cluster–covering operation ofGazprom Neft’s fieldsandfacilities. wellbeing, andtoensure theconsistentuninterrupted was quicklyputinplacetoprotect employees’ healthand for operating underthepandemic.Aseriesofinitiatives communicating clearlyandopenlywhat thestrategy was Gazprom Neftwas thefirstRussianoilcompanytostart hydrocarbon production 96.1 flat year-on-year mtoe 9 pandemic reserves and probable hydrocarbon increase inproved + importance totheentire oilindustry. will maintainitsimpetusindelivering projects ofstrategic achieving thecompany’s long-term strategic goals,and Gazprom Neftwillcontinueitsconsistentprogress in considerable uncertainty. Ihave every confidencethat financial andoperational stabilityinthefaceof adapt toanyeconomicsituation quickly, maintaining The companyhas,onceagain,confirmeditsabilityto dividend payout to50%ofnetprofit. business’s ongoingsustainabilityandincreasing the recorded astrong financialperformance,ensuringthe In thefaceofavery challengingyear Gazprom Neft survey. in theprestigious Climate Disclosure Project (CDP)2020 receiving thehighestrankingofallRussia’s oilcompanies development was confirmed by Gazprom NeftPJSC The effectiveness ofthecompany’s work insustainable company’s projects includesanenvironmental element. operational objectives. For whichreason, every oneofthe environmental friendlinessinpursuingitsstrategic The companyremains committedtoensuringmaximum into operation in2021. floated inDecember2020.The vessel is expected togo environmentally-friendly LNG–having beensuccessfully designed forrefuelling freight andpassengervessels with is reaching completion,withtheDmitryMendeleev – Construction ofRussia’s first ever LNG-bunkering vessel America, aswell asprojects inScandinavia andtheBaltic. construction ofstrategic transportcorridorsinSouth bitumen materials –supplyingproducts foruseinthe its geographiccoverage fordeliveries ofhigh-tech development, withthecompany significantly expanding Gazprom Neft’s retail operations saw someproactive 36.6% Annual Report 2020

Company profile

Strategic report

Performance review

Technological development

Governance system

Sustainable development

Appendices increase in proved and probable hydrocarbon reserves

Chairman of the Board ALEXEY of Directors MILLER Gazprom Neft PJSC

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