Sustainability Report 2019

CREATING THE FUTURE TOGETHER SUSTAINABILITY REPORT 2019 CONTENTS # # 2 Message from the Chairman of Rosneft’s Board of Directors 5 6 4 Message from the Chief Executive Officer 6 Strategically Important UN Sustainable Development Goals 106 EMERGENCY 114 R&D AND DIGITAL TRANSFORMATION RISK MANAGEMENT 8 Business Model and Strategically Important UN Sustainable Development 116 Innovation Management Goals 109 Emergency Risk Management 118 Key Achievements in Innovative Development 10 About the Report 110 Emergency Prevention 121 Energy Saving and Energy Efficiency 14 Key Sustainability Indicators 112 Emergency Response 123 Digital Transformation 113 Employee Training in Emergency Response 127 Development of R&D Capabilities 136 Exploration of the Arctic Shelf and Operational Safety on Shelves of Freezing Seas #1 #2 #7 #8 16 SUSTAINABLE DEVELOPMENT 46 CLIMATE ACTION 138 PERSONNEL 164 SUPPORTING SOCIAL AND ECONOMIC DEVELOPMENT 18 Strategic Vision of Sustainable Development 48 Carbon Management Goals and Approaches 140 Management Framework and Personnel Profile 23 Sustainability Management 50 Development of Global Energy Markets 144 Personnel Training and Development 166 Supporting Social and Economic Development 30 Stakeholder Engagement 53 Climate-related Risks and Opportunities 154 Social Policy 179 Support for Indigenous Minorities of the North 35 Approaches to Promoting Human Rights 54 Achievement of Climate Goals in 2019 38 Compliance Framework Development 57 Climate Cooperation 59 Carbon Resilience Ratings #3 #9 #10 60 ENVIRONMENTAL CONSERVATION 182 RESPONSIBLE BUSINESS PRACTICE 196 APPENDICES

62 Managing Our Environmental Impacts 184 Customer Engagement 198 Independent Assurance Report on Rosneft’s 2019 67 Reducing Air Emissions 191 Supplier and Contractor Relationship Management Sustainability Report 69 Conserving Water Resources 200 Appendix 1. Key Sustainability Indicators 74 Prevention of and Response to Oil Spills 206 Appendix 2. Report’s Compliance with International 75 Land Remediation and Waste Management Standards 78 Biodiversity Conservation 225 Appendix 3. Stakeholder engagement in 2019: round table 83 Public Consultations meetings in the Company’s regions of operation 229 Appendix 4. Abbreviations 230 Contact Details #4 86 OCCUPATIONAL HEALTH AND SAFETY

88 Industrial and Labour Safety Management 91 People safety 98 Industrial and Process Safety 103 Transport safety Go to our website: www.rosneft.ru SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Message from the Chairman of Rosneft’s Board of Directors

2019 was another year when Rosneft established a cross-functional Carbon Our rating rose by 11 percentage made significant strides towards Management Subcommittee to lead points to 32.7%, one of the highest the achievement of the Company’s core efforts to reduce the Company’s carbon growth rates in the extractive industries strategic goals, including–increased footprint through an approved Carbon globally. profitability, completion of key projects, Management Framework. In line and transformation of its organizational with our development strategy, we seek Rosneft, as an oil and gas industry and technological capability. to become one of the industry’s leading leader, reaffirms its commitment In addition, a number of projects aimed companies, ranking competitively to the 17 UN Sustainable Development at employee development, expanding among leading global peers Goals and the core principles of the UN contribution to the social welfare in terms of per unit GHG emissions Global Compact since they both will of local communities, and minimising performance. We have already seen play a fundamental role in overcoming our environmental footprint, tangible results from this focus, serious global sustainability challenges are in progress. and last year we reduced known vented by respecting human rights; combatting methane emissions by more than 70%. corruption; decreasing the rate Last year Rosneft maintained its status of climate change and minimising as one of the world’s leading public oil As part of this low-carbon agenda, climate and environmental impacts. and hydrocarbon liquids producers Rosneft is also boosting natural gas The Company therefore aligns with total production reaching 285.3 output and marketing new, more its activities in support of these mmtoe. The Company is also one eco-friendly products. The Company goals and ensures that its future of the largest international oil and gas is also actively introducing its own growth will be built on sustainability companies when ranked by proven innovative technologies for emissions principles and in line with stakeholder SEC hydrocarbons liquids reserves, reduction. One example is progress expectations. which currently stand at 42 bboe, linked with associated petroleum gas As part of this low-carbon with a replacement ratio of 129% (APG) utilisation both through reservoir agenda, Rosneft is also in 2019. injection as well as for electricity Gerhard Schroeder boosting natural gas generation. Over the past five years, Chairman of Rosneft’s Board output and marketing As we continue to explore and develop we have invested over RUB 125 of Directors new, more eco-friendly new oil and gas fields, last year was very bln in this area with the average products. successful one for Rosneft with 258 APG utilisation rate reaching 93.8% new discoveries in established fields at our mature assets. This project will and 23 new greenfield discoveries, help the Company avoid the release bringing total hydrocarbon reserves of 8 million tonnes (mmt) of GHG Gerhard Schroeder to 352 mmtoe. emissions by 2022. Chairman of Rosneft’s Board In 2019, the Company joined other Investing in human resources plays of Directors international oil and gas industry a leading role in our development leaders and other global stakeholders strategy. In 2019, Rosneft was as a member of the Methane Guiding recognised as the best performing Principles initiative that aims to reduce Russian company in the CHRB methane emissions along the natural (Corporate Human Rights Benchmark) gas value chain. The Company also international human rights index.

2 2019 / Sustainability Report of Rosneft 3 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Message from the Chief Executive Officer

In 2019, Rosneft reaffirmed its The reporting year saw us achieve As we pursue the Rosneft–2022 commitment to the UN Sustainable considerable financial success. Net Strategy, our management Development Goals and made income attributable to shareholders team will continue to streamline impressive progress in driving forward increased by 29% during the year. financial and operational efficiency, its environmental agenda. Last year, taking further action to advance through our persistent efforts in carbon On top of that, Rosneft paid a record the sustainable development management, we consolidated dividend for 2019. These dividends, of the Company and secure Our strategic goal our position as an industry leader including the interim payout for the first our position as an industry leader is to become one with low unit carbon dioxide emissions. half of the year, will total RUB 354.1 bln, for years to come. or 50% of IFRS net income attributable of the world’s In addition, Rosneft joined the Guiding to shareholders. leading oil and gas Principles on Reducing Methane Igor Sechin producers when ranked Emissions across the Natural Gas Value Our strong financial performance Chairman by key environmental Chain, making another step towards enabled us to increase the final of the Management Board and industrial safety minimising anthropogenic impact dividend payout much sooner than Chief Executive Officer metrics. on the environment. expected. Dividend yield based on the year’s average share price was Last year, according to the CDP’s 8%. The Company remains the nation’s international climate change and water largest taxpayer. As at the year-end, Igor Sechin security ratings, Rosneft was recognised Rosneft paid around RUB 3.6 trln as Russia’s best performing oil of taxes on its domestic operations. Chairman and gas company. In December 2019, of the Management Board the Company became a constituent In the reporting year, the Company Chief Executive Officer of the FTSE4Good Emerging Markets confirmed its status as one of Russia’s Index thanks to its strong performance leading employers. Rosneft provides in key environmental, social a competitive salary, social guarantees and governance indicators. and offers opportunities for career growth and personal fulfilment. Furthermore, Rosneft outperformed At present, the Company’s headcount most of its global competitors in terms exceeds 330 thousand people. of disclosure transparency according to Bloomberg and Refiniv. As Russia’s leading oil producer, Rosneft seeks to create a safe working Our strategic goal is to become environment for its employees one of the world’s leading oil and contractors by eliminating and gas producers when ranked by key accidents in the production environmental and industrial safety process and minimising injuries via metrics. The Company’s consistent implementing international best contributing to joint international practice in relation to health, safety, efforts will certainly facilitate this goal. and environment.

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SOME HIGH-PRIORITY SUSTAINABILITY PERFORMANCE Strategically Important UN Sustainable INDICATORS ARE PART OF MANAGEMENT KPIS Development Goals

Rosneft is committed to leadership The Company places a special focus 35 billion roubles >93 thousand employees Good health in occupational safety, zero toler- on occupational safety and com- A transport safety mobile app launched and well-being ance of accidents in operations, pro- fortable working environment for its Green investment in 2019 had training in occupational health (for details, see p. 103) tecting health of local people living employees and contractors and safety in 2019 in the regions where the Company >52 thousand vehicles operates, and minimising environmen- are equipped with on-board Live Longer! programme promoting tal footprint. monitoring systems healthy living, gathers more participants (for details, see p. 159)

Rosneft seeks to improve energy Rosneft recognises its role and respon- mln GJ efficiency across all business lines sibility for timely and reliable energy 14% 26 Group Subsidiaries receive energy Affordable and clean certification (for details, see p. 122) energy and spotlights leadership in innovation supplies to consumers (including energy efficiency improvement of fuel and energy saved as a major development factor. to emerging markets) on equal terms in recent two years and at competitive prices Employees undergo energy efficiency training (for details, see p. 121)

Rosneft contributes to the sustainable and contractors, and to the anchor 74% 1.9 times Rosneft creates new digital services Decent work growth of the economy and its mod- order system for customers (for details see p. 186) and economic ernisation as well as creating new pro- of the headcount covered the average monthly salary growth duction facilities and highly efficient On top of that, the Company is com- by collective bargaining agreements in the Company exceeds The Company and the Group Subsidiaries mitted to providing socially security initiated more than 102 thousand jobs, and making high value-added the Russian average to its employees and their families, pre- procurement procedures with a total initial products by moving to long-term 2.6 trillion roubles (maximum) value of over RUB 2.1 trln (for contracts with consumers, suppliers serving jobs, and protecting human details, see p. 191) rights. spent on goods, works and services procured from third parties Specialised class programmes supported by Rosneft Group Subsidiaries were launched (for details see p. 153)

In the medium term, the Company’s • mitigating environmental impact mmt of CO eq. strategic targets factor in the public’s and improving efficiency of produc- 1.7 2 73% In 2019, the Company joined Climate Action the initiative to reduce methane growing needs and environmental con- tion facilities; reduction in greenhouse gas reduction of fugitive methane emissions (for details, see p. 53) cerns and include: • creating, launching and rolling out emissions in 2019 emissions in Exploration • ramping up production of natural gas new products contributing to lower and Production as a lower-carbon energy source; emissions and higher fuel efficiency The Company’s project to minimise associated petroleum gas flaring • running refinery development pro- received an environmental award (for jects to boost the output of prod- details, see p. 59) ucts in high demand and feedstock for the petrochemical industry;

Rosneft recognises the importance The Company shares the principles Rosneft 16 round-table discussions Rosneft and its foreign peers held Partnership of the global energy sector’s sustain- of Russian and international decla- a carbon management workshop (for for the goals ability and responsible business prac- rations, statements and initiatives best Russian company in the CHRB held in the regions of operation details, see p. 49) tices of the industry majors in the field of fundamental human (Corporate Human Rights to address the sustainability rights, elimination of inequality, Benchmark) international human agenda and environmental protection rights index In the key regions of operation, the Company held round table discussions with stakeholders (for details, see p. 231)

6 2019 / Sustainability Report of Rosneft TARGETS AND INDICATORS (B) 7 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Business Model and Strategically Important UN Sustainable Development Goals

MODERN EXTENSIVE LOGISTICS WORLD-CLASS REFINERIES AND DISTRIBUTION REVENUE Capital1 RESOURCE BASE NETWORK Capital (resources) AND EFFICIENT (results) PRODUCTION inancial ASSETS inancial

0.9 RUB trln 2,105 RUB bln 708 RUB bln1 investments TOTAL EBITDA net income USD bln 25 % 283 RUB bln2 of foreign investments 24 8,676 dividends since 2014 OIL PETROLEUM PETROLEUM RUB bln EBITDA margin REFINING PRODUCTS PRODUCTS Social In Russia: In Russia: SALES Social and reptational and reptational 100 mmt 97 mmt 3.5 RUB trln 35 RUB bln 23 PRODUCTION Abroad: Abroad: In Russia: Abroad: 3,897 taxes allocated for social countries of operation projects 230 mmt 10 mmt 11 mmt 42 mmt 70 mmt RUB bln 621 kt 12 filling stations 116 млн т petroleum products and petrochemicals 282 млн т production retail sales of of crude oil of Euro 6 gasoline compressed natural gas with enhanced Hman environmental 3 mmt 100 properties petrochemicals RUB bln 335 thousand qualiﬁed employees2

9 mmt Hman petroleum products purchase 1.9х #1 Crude oil OIL SALES Intellectal salary vs. employer In Russia: Abroad: 4,234 the country’s in Russia’s oil 27 6 mmt 149 mmt RUB bln average industry R&D and design institutes 52 mmt purchase 170 mmt Intellectal

Other, including JVs 700 11 RUB bln Natral patents issued innovations impact 15 mmt 35 RUB bln ca. 19 % green investment share of gas in the total hydrocarbon production Natral Gas GAS SALES 90 % 1,7 mmt of CO2 eq. Prodctive In Russia: Recycled water reduction of GHG 57 bcm emissions 13 refineries 6 refineries Abroad: In Russia Abroad 67 bcm 259 –3 % PRODUCTION 5 bcm RUB bln atmospheric emissions other than GHG #1 #1 74 bcm of gas public company largest INTERNAL CONSUMPTION, worldwide by integrated 5 Prodctive production oilfield services ETC.4 Other volume3 7 bcm purchase 185 % 88 % 12 bcm 186 reserve high success rate of RUB bln replacement ratio onshore exploration drilling in Russia 42 mmt 1 Definition and list of capitals as per the In 2019, unless otherwise specified 4 Including reservoir pressure maintenance motor fuels output International Integrated Reporting Framework 5 Including auxiliary services and other sales, published by the International Integrated income from joint ventures and associated Reporting Council (IRCC). businesses. 2 Headcount as at 31 December 2019 3 Listed on Western stock exchanges.

1 Net income attributable to Rosneft shareholders 2 8 2019 / Sustainability Report of Rosneft Dividends paid to Rosneft's shareholders in 2019 9 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

All Reports are available About the Report on the Company’s official website Report content GRI 102-46

In 2019, Rosneft continues To select the most relevant sus- and reviewed the sustainability inquir- The Report prioritised the topics to disclose its non-financial metrics tainability metrics and topics ies received during the reporting period of combating climate change and pro- on the annual basis and releases under the GRI standards, Rosneft com- and feedback on the report for 2018. tecting human rights. GRI 102–44 its 14th Sustainability Report (the pared the ESG reports of the Russian and foreign oil and gas majors The final list of material topics is based Report). GRI 102–50 GRI 102–52 and took into account significant events on the results of this analysis and takes and trends in the sustainable develop- into account the principles of com- ment of the industry. pleteness, materiality, and internal and external stakeholder engagement, To identify material topics, the Company along with the sustainability agenda conducted a benchmarking in the industry.

In 2019, for the fourth time in a row, Rosneft became one of the leaders MATERIALITY MATRIX GRI 102–47 of the RSPP Responsibility and Transparency and Sustainability Vector indices reflecting the degree of disclosure about the Company’s sustainability and ESG performance. The indices are based on public corporate reports, • Asset integrity, process safety (safety • Economic performance including annual and non-financial reports. procedures and number of accidents) • Indirect economic impact • Strategic targets of sustainable • Procurement practices (including local development suppliers) • GHG emissions • Risks and opportunities related to climate change (physical aspects) • Compliance with environmental legislation (regulatory aspects) • Occupational health and safety The Report seeks to inform a wide Reporting Principles The 2019 Report was independently range of Rosneft’s stakeholders, includ- GRI 102–54 verified by EY. For the report, see ing employees, shareholders and inves- p. 198. GRI 102-56 tors, communities in the regions The Report was prepared in accord- • Government • Combating corruption and non- • Energy of operations, public associations, cus- ance with the Sustainability Reporting The information on Rosneft’s con- policy competitive practices • Water tomers and partners. GRI 102-40 Standards of the Global Reporting tribution to the UN Sustainable • Compliance with social and economic • Effluents and waste Initiative (GRI Standards, core option). Development Goals, including those requirements • Biodiversity • Alternative fuels and innovations • Emergency preparedness The Company receives feedback prioritised by the Company, is tagged • Amount of type of proved reserves • Rights of indigenous people and minorities from different sources – comments The Company also relied on the meth- in the Report by the relevant icons. and production • Employment and labour/management and suggestions on sustainability odology of the following: • Diversity and equal opportunity, relations STAKEHOLDERS FOR reports can be submitted by phone ▪ GRI Oil and Gas Sector Disclosures; non-discrimination • Emissions of NOx, SOx and other pollutants • Customer health and safety • Training and Education or to the e-mail address in the Contacts ▪ UN Global Compact principles; section. All messages are reviewed ▪ International Financial Reporting and taken into account when preparing Standards (IFRS); the next Report. ▪ recommendations of the Task

Force on Climate-Related Financial MATERIALITY In order to avoid overlaps, some Disclosures (the TCFD1); information is included in the Report ▪ 2016 IPIECA/API2 voluntary guidance • Customer • Market foothold • Comparison to the 2018 Sustainability Report as a reference to the Company’s for the oil and gas industry; privacy • Human rights protection matrix 2019 Annual Report or other public ▪ International Integrated • Materials documents. Reporting Framework3. • Product and service labelling • Evaluation of suppliers by sustainability criteria • Freedom of association and collective bargaining • Emissions of ozone-depleting substances

1 Task Force on Climate-Related Financial Disclosures. 2 International Petroleum Industry Environmental Conservation Association / American Petroleum Institute 3 Rosneft’s business model was developed using the concept of capitals MATERIALITY OF THE COMPANY’S IMPACT

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Reporting Boundaries GRI 102-45 GRI 102–48 GRI 102–49

Rosneft’s Sustainability Report is prepared on the corporate level and includes consolidated information about the Group Subsidiaries. It covers subsidiaries that are consolidated under the IFRS fully or proportionally to the stake, unless the notes indicate otherwise.

Occupational health and safety, and environmental protection (HSE), along with HR indicators of the Group Subsidiaries that should be consolidated propor- tionately under the IFRS, are accounted for in this Report in full.

Definitions

In this Report, the terms Rosneft and the Company refer to Rosneft PJSC, including its Head Office, and Group Subsidiaries.

The term Group Subsidiaries refers to Rosneft’s subsidiaries and affiliates.

Disclaimer: Forward-Looking Statements

The Report contains forward-looking statements regarding the Company’s future sustainability performance. Plans and intentions depend on the changing political, economic, social and regulatory environment in Russia and globally, which means that the actual results presented in subsequent reports may deviate from the projections.

12 2019 / Sustainability Report of Rosneft 13 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Key Sustainability Indicators

ECONOMIC PERFORMANCE PERSONNEL

Dividends1, RUB bln Total procurement, RUB bln Procurement from SMEs, RUB bln Headcount at year-end, Payroll7, RUB bln Social payments fund, Training hours, mln (contractual volume) thousand employees RUB bln man-hours

201 201 2019 201 201 2019 201 201 2019 201 201 2019 201 201 2019 201 201 2019 201 201 2019

ENVIRONMENTAL PERFORMANCE CUSTOMER RELATIONS

Actual fuel and energy savings, Contaminated land at the end Disposal of contaminated Oil sales, mmt Sales of petroleum products, mmt Gas sales, bcm mln GJ of the year, ha wastewater2, mmcm

201 201 2019 201 201 2019 201 201 2019 201 201 2019 201 201 2019 201 201 2019

Non-GHG emissions into Share of water recycled 8 atmosphere, kt and re-used, % Direct economic value generated and distributed , RUB bln GRI 201-1

Metric 2017 2018 2019 Direct economic value generated (income) 5,951 7,968 8,670 Direct economic value distributed, including: 5,279 7,059 7,502 201 201 2019 201 201 2019 Opex 1,967 2,270 2,917 Payments to providers of funds 346 521 585 Personnel expenses, excluding compulsory insurance premiums 269 296 327 OCCUPATIONAL HEALTH AND SAFETY Insurance premiums 61 67 75 Accrued taxes and duties 2,614 3,879 3,576 Expenditure on health and safety, Share of work-related injuries4 Controlled and uncontrolled including fire safety and blowout flows of gas, oil and water6 during Community investments 22 26 22 3 prevention, RUB bln the construction of exploration Economic value retained 672 909 1,168 and production wells, number of cases

5 5 5 The figures for 2018–2019 are presented in accordance with the IFRS accounts and the new calculation methodology, which does not include injuries as a result participation in sports events, unlawful activities of third parties and road accidents caused by third parties in the total injury rate. The indicators for 2017 cover a wider range of subsidiaries. The injury rate includes injuries as a result of participation in sports events, unlawful activities of third parties and road accidents caused by third parties. LTIF for 2018 and 2019 calculated in accordance with the methodology used 201 201 2019 201 201 2019 201 201 2019 by the Company until 2018 would be LTIF – 0.41 and 0.38, respectively. 6 Including benefits and one-off bonuses as part of the payroll and annual remuneration. 7 Data for 2017–2019 reflects more accurate calculation of payments to providers of funds, personnel expenses, and community investments under GRI 201-1. 1 Dividends paid to Rosneft's shareholders in the calendar year. 2 Disposal through the Company’s centralised discharge systems 3 The costs are driven by different dates of launching and completing HSE projects as well as set periods for current expenses. 4 Including fatalities and lost-time injuries of the Company's employees in relation to 1 mln man-hours (LTIF)

14 2019 / Sustainability Report of Rosneft 15 “The Company is committed to supplying the world economy with energy resources to ensure balanced social and economic development and improve the quality of life. As one of the world’s largest hydrocarbon producers, we realise our responsibility for solving global problems, including climate change. Rosneft’s initiatives in sustainable development and environmental protection are aimed at reducing the Company’s environmental footprint and promoting energy-saving technologies. The Company has repeatedly scored high in major international ratings, which testifies to our effective performance in these areas."

Igor Sechin Chief Executive Officer, Chairmanof the Management Board, Deputy Chairman of the Board of Directors

3 Strategic Vision of Sustainable Development SUSTAINABLE 8 Sustainability Management 15 Stakeholder Engagement 20 Approaches to Promoting Human Rights DEVELOPMENT 23 Compliance Framework Development SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Strategic Vision of Sustainable Development

Rosneft–2022 Strategy Approved in December 2017, the Rosneft–2022 Strategy STRATEGIC INITIATIVES BASED ON NATIONAL PRIORITIES: ifocuses on increasing the Company’s profitability and returns on existing assets, implementation of major projects, as well as organisational and technological transformation. These priorities should go hand in hand with ensuring global leadership in accident-free operations, safe workplace conditions, protecting health of local residents in the regions where the Company operates, ROSNEFT – CITY EMPLOYEE DEVELOPMENT SOCIAL DEVELOPMENT DIGITAL ROSNEFT and minimising the environmental footprint. GRI 103-1 OF THE FUTURE • Leader of the Future programme • Modern Medicine Programme: healthcare • Enhancing and facilitating a transparent • New services at filling stations facilities at production sites, telemedicine, interaction between the Company with the offering of non-fuel goods • Cooperation in education (from school and a brand new programme for preventive and external counterparties. to university) and expansion of mentoring medical examination Rosneft’s Strategy and its major ten- In 2019, Rosneft continued its efforts and services considerably expanded, including digital and green services programmes • Creating a digital cluster ets are in line with the principles to integrate sustainable development • Active Longevity Programme: support of sustainable development, efforts principles into the Company’s strategy • Widespread use of energy- • Long-term incentives to boost productivity for pensioners, healthcare services efficient solutions and renewables for retired employees in excess to create a favourable social and envi- and programmes. We also contributed of compulsory medical insurance ronmental conditions, and objec- to the UN sustainable development at the Company's facilities tives under Russia’s national projects, goals by implementing them as part including Presidential Executive of our core business and supporting Order No. 204 On National Goals various projects aimed at improving and Strategic Objectives of the Russian the quality of life across our footprint Federation through to 2024 dated and promoting health care, science, 7 May 2018. In 2018, the Strategy was education, culture, and environmental expanded to include initiatives in social, protection. human resource and urban infrastructure development, regional growth The Company has approved its stra- and environmental protection. tegic guidelines and public statement “Rosneft: contributing to imple- As part of its commitment mentation of the UN Sustainable to the sustainable development Development Goals” which is avail- of natural resources, the Company able on the Company's official web- is implementing large-scale projects site. The statement complements in oil and gas production and expand- the Company Policy on Sustainable ing production and refining capaci- Development and complies ties to reduce environmental impact with the principles of openness, trans- by producing modern, environmentally parency and information disclosure friendly fuels. to shareholders, investors and other stakeholders. GRI 102-16 The Rosneft–2022 Strategy sets equally high standards in sustainable production, social responsibility and HSE across all of the Company’s business segments.

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Contribution to UN Sustainable Development Goals1 Support for Sustainability Initiatives

The Rosneft–2022 Strategy and the Company's climate change initiatives are in line with the UN Sustainable Development Goals. The Company’s mission, values, goals, In 2010, Rosneft joined the UN Global Compact, and strategic priorities are consistent with the 17 United Nations Sustainable Development the most far-reaching international social responsibility Goals. Five of these goals have been adopted as strategic priorities of Rosneft. initiative bringing together more than 13,000 companies from over 160 countries.

STRATEGICALLY IMPORTANT UN SUSTAINABLE DEVELOPMENT GOALS

The Global Compact encourages its participants to support the UN Sustainable Development Goals as a way to improve the well-being of the present and future • Protecting health • Increasing energy • Contributing and ensuring a safe efficiency in all operating to the sustainable generations. working environment; segments; development • implementing • creating conditions and diversification The Company adheres to ten Global the environmental policy; to improve energy efficiency when of the national economy; Compact principles in the areas • risk and incident management; using Company products; • protecting employee health and safety; • ensuring road traffic safety; • ensuring access to energy and reliable • contributing to the health and safety of human rights, labour, environ- • fostering a favourable social energy supplies to consumers, of suppliers and contractors; ment and anti-corruption, all of which environment. including in the emerging markets; • creating a favourable social are integrated into the Rosneft–2022 • innovative activities. environment; Strategy and given consideration • supporting family and children; • ensuring freedom of association on both strategic and operating levels. and collective bargaining; • productivity growth and efficiency improvement; • using education as a means of integrating young people into the energy sector; • establishing a sustainable procurement • Managing risks related • Participation in global system along the entire value chain; to climate change; initiatives; • Improving energy efficiency in all • improving energy • contributing operating segments; efficiency in all operating to the sustainable energy • creating decent living and labour segments; development; conditions in remote regions. • creating conditions to improve energy • establishing effective partnership efficiency when using Company with state organisations, the business, products; and the society. • implementing the environmental policy; • innovative activities.

IN JUNE 2019, ROSNEFT JOINED THE INITIATIVE TO REDUCE GOALS INTEGRATED INTO CURRENT METHANE EMISSIONS LAUNCHED BY LEADING INTERNATIONAL ACTIVITIES OIL AND GAS COMPANIES.

For details, see our public statement “Rosneft: contributing For more details on the Company’s to implementation of the UN Sustainable Development Goals” participation in the methane reduction initiative, see the Contribution to International Initiatives section 1 UN Sustainable Development Goals (adopted by the resolution of the UN General Assembly on 25 September 2015) seek to achieve a meaningful of this Report. progress in addressing global economic, social and environmental challenges.

20 2019 / Sustainability Report of Rosneft 21 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

ESG Investing Sustainability Management

The development of ESG1 invest- In 2019, we cooperated with 16 Recognition ing is supported by Igor Sechin, CEO, ESG rating agencies and maintained in Sustainable Sustainability Policy who has repeatedly proclaimed regular communication with investors Development social and environmental responsi- participating in Climate Action 100+. bility as a key value of the Company The Company held nearly 50 negotia- In 2019, Rosneft’s leadership in sustain- The Company has put in place The Company works to foster its tions with investors on ESG matters. able development received interna- a Sustainable Development Policy investor relations, takes part in vari- tional recognition. The Company was that articulates its vision and intro- ous rankings and discloses ESG per- In June 2019, Rosneft became included in the FTSE4Good Emerging duces a uniform approach to sustain- formance in line with the current the first Russian company Index of companies with top ESG, able development. Rosneft's goals Care for people, Maximum adaptability the environment and moral of the business model while guidance on responsible investment to take part in an ESG workshop transparency and disclosure met- and objective under the Policy values transitioning to the low-carbon and recommendations of LSEG2, TCFD3 in Copenhagen attended rics. Rosneft boasts high ESG scores include, among others, supporting economy under the G20's Financial Stability by the representatives from Bloomberg, Refinitiv, and SAM the Company's strategy and efforts • Safety culture and safe conduct Board, CDP4 and others. of 31 investment funds, and ESG Corporate Sustainability Assessment to achieve industry leadership, increas- of business • Flexible business model • Working space and benefits • Balanced investment portfolio score providers – Sustainalytics (S&P Global) as well as in the CHRB ing shareholder value, facilitating for employees • Strong performance and value creation and ISS-Ethix. human rights ranking5. GRI 103-3 professional and personal growth • Human, business and asset security irrespective of the oil business cycle of employees, making better use of nat- • Energy security ural resources, and establishing effective and transparent communication with stakeholders. GRI 103-2 Ranking Position in 2019 Fair and responsible business The Company topped in the Governance category, which takes into account gov- practices ernance, risk management and anti-corruption metrics. We are ahead of most par- The Company Policy on Sustainable Development 6 ticipants (83 %) in the ICB's international oil and gas supersector. is posted on the Company. official website. • Business and production integrity • Transparency and information disclosure Fostering social and economic • Respect for human rights development Following an independent assessment, Rosneft received a “B” in the Climate • Ethics, compliance with procedures, Change category, outperforming its Russian peers. The Company’s water man- Strategic Targets and combating corruption • Direct and indirect support agement activities were rated “B–”, indicating the effectiveness of our environ- • Risk management of economic development mental policy. Along with the five priority UN • Development of suppliers, contractors, and related industries; employment In 2019, Rosneft improved its CHRB score by 11 p. p. to 32.7 %, surpassing other Sustainable Development Goals pur- Russian companies. This is one of the highest growth rates among international and staff training sued by Rosneft as part of its core • Industrial and social infrastructure mining companies. Our rating is above the industry average, and we work to inte- • Availability of energy resources, novel grate relevant principles and approaches in all our operations with a view to fur- operations, the Company formalised its products and solutions ther improving our human rights performance. strategic principles in this area. Efficient environmental impact The Company has an “A” rating, which places us among Top 5 oil and gas management producers. • Leadership in environmental protection Bloomberg assigned Rosneft an ESG score of 65.15, which puts us in a leading • Water resource management position ahead of most of our global peers. • Ecosystems and biodiversity

Rosneft improved its ranking in the S&P Global's SAM Corporate Sustainability Assessment by 12 notches (57th line). Response to climate change risks

• Corporate governance with a stronger focus on climate change • Lower GHG emissions Partnership with stakeholders • Monitoring of production-related energy consumption • Efficient partnerships • More eco-friendly products • Respect for human rights • Right to work, comfortable working conditions, and social protection 1 Environmental, Social, Governance means matters of environmental protection, social aspects (including operational health and safety, relationship of employees with suppliers, contractors, and indigenous peoples, etc.), and corporate governance. • Company’s values for suppliers 2 London Stock Exchange Group. and contractors 3 Task Force on Climate-Related Financial Disclosures. 4 Carbon Disclosure Project. 5 Corporate Human Rights Benchmark. 6 Industry Classification Benchmark.

22 2019 / Sustainability Report of Rosneft STRATEGY (B) 23 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Corporate Governance

Reliant on the best Russian and international practices, the Company's corporate governance framework keeps developing taking into account external changes and the needs of shareholders and other stakeholders. All its components are involved For details on the corporate governance framework, see the 2019 Annual Report and the official website. in and contribute to ongoing sustainability management. GRI 102-18 GRI 102-20 GRI 102-22

appointment GENERAL SHAREHOLDERS MEETING BOARD OF DIRECTORS

Rosneft’s supreme governing body responsible for decision-making on key matters of the Company’s business; • Provides strategic management of the Company’s activities; • providing for a strong Board of Directors. election • accountable to the General Shareholders Meeting; • The Company offers its shareholders equal and fair opportunities to exercise their legal rights and sustainable dividend growth1. • acts on behalf and for the benefit of all shareholders within its remit; • is made up of eleven Board members, with four of them independent; • one of the key priorities is to articulate and oversee the implementation of the Company's sustainable development policy by the management.

reporting reporting

appointment

MANAGEMENT BOARD CHIEF EXECUTIVE STRATEGY HR AND REMUNERATION AUDIT COMMITTEE OFFICER AND SUSTAINABLE COMMITTEE (CONSISTS (FULLY CONSISTS The Management Board DEVELOPMENT OF INDEPENDENT OF INDEPENDENT manage day-to- is a collective executive body Sole executive body, which day operations responsible for decision-making • acts as the Chairman COMMITTEE (INCLUDING DIRECTORS BY 2/3) DIRECTORS) and are accountable on key matters of the Company’s of the Management Board; ONE INDEPENDENT business: to the Board of Directors • provides for implementing DIRECTOR)2 • Analyses the Company's • Reviews the management's and the General • defining key strategic areas; and follows up on the collective current and anticipated needs proposals on improving the risk Shareholders Meeting. • drafting and submitting governing bodies’ decisions, with respect to the qualifications management and internal control proposals on strategic priorities including those related • Takes part in developing of governing body members system and an acceptable risk to the Board of Directors; to sustainable development corporate and business line and top managers taking into level; • strategy reporting. strategies and oversees account its interests and strategic • reviews draft corporate their implementation; goals; governance codes and internal • reviews draft internal regulations • reviews draft codes of business regulations (policy level) (policy level) on sustainable and corporate ethics and internal on the risk management development, innovations, regulations (policy level) on HR and internal control system, external communications, and social matters, including corporate governance and information policy; human rights. and conflicts of interest; • reviews the Company's • checks accuracy sustainability reports and other and completeness of financial ESG-related public reports; BODIES GOVERNING EXECUTIVE statements and other reports, • analyses ensures reliability and informs the Board of Directors and effectiveness of internal on the risks and opportunities control and risk management related to climate change, systems, compliance, internal environment (including water audit, and corporate governance. COMMITTEES OF THE BOARD OF DIRECTORS OF THE BOARD OF COMMITTEES resource management) and Rosneft's social responsibility (including respect for human rights)2

1 For details on shareholder engagement, see the 2019 Annual Report. 2 Strategic Planning Committee before April 2020. In charge of reviewing sustainability reports instead of the HR and Remuneration Committee.

24 2019 / Sustainability Report of Rosneft GOVERNANCE (A) 25 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Performance in 2019

General Shareholders ▪ social development Age Diversity Meeting Board of Directors Number of items reviewed Management Board of the Company’s regions of opera- on the Management Board, by the governing bodies breakdown tion. GRI 102-29 The dividend decisions made As part of the sustainability risk Key sustainability decisions made by the General Shareholders management process, the Board by the Management Board: 2 Meeting in 2019 are in line of Directors did the following: 126 ▪ approved the expansion of a retail Key sustainability with the Dividend Policy designed ▪ reviewed the report on the sta- 111 distribution network of compressed performance indicators to balance the Company's and its share- tus of the Comprehensive Plan natural gas to be used as motor fuel; holder interests. They seek to boost for the Enhancement of the Risk 69 ▪ approved seven charity transac- To propel the Company towards the Company's investment appeal Management and Internal Control tions aimed at implementing social its 2022 strategic goals, the Board and shareholder value: System; 33 projects; of Directors annually approves KPIs 19 20 ▪ the target payout ratio is at least ▪ reviewed the HSE report; ▪ approved the following Company's for the Management Board and top 2017 2018 2019 50 % of the Company’s IFRS net ▪ approved the report on the iden- internal regulations, including executives, which include the following income; tification of company-wide finan- Sustainability atters their updates and amendments: sustainability performance metrics: ▪ dividend payouts are to be made cial and operational risks for 2020. ter – IT Policy; ▪ implementing strategic objectives at least twice a year. GRI 102-29 – Regulations on the Energy Efficiency and initiatives; Commission; ▪ achieving environmental targets, ner years Dividends paid to the Company's share- – Standard on Insurance including the reduction of emissions Every holders in 2019 totalled RUB 283 bln.1 In June 2019, the Board of Directors of Corporate Risks, Regulations and discharges, waste and the area years welcomed a new member Hamad on the Technological Council of contaminated lands; years Rashid Al-Mohannadi who has of Rosneft; ▪ reducing the injury rate; or oer matter5th an extensive expertise and administra- – Regulations on the Conflict ▪ fuel and energy saving; tion experience in the oil and gas indus- Resolution Commission; ▪ making innovative activities more 283 considered by the Board try, as well as in strategic, risk and HR – Standard on Staff Skill Assessment effective; billion roubles of Directors or the Management ▪ of dividends paid Board in 2019 was related management. and Development. enhancing labour productivity; ▪ delivering on personnel train- Gender Diversity to the Company's shareholders to the Company's sustainable on the Management Board, % in 2019 development. For details on the experience In 2019, the Management Board ing targets and integrating profes- and expertise of the Board members, focused on the following sustainability sional standards in the Company's GRI 405-1 see Rosneft’s Annual Report 2019 objectives: operations; and sustainability reports for the previ- ▪ enhancing IT management, includ- ▪ educating stakeholders 18% ous periods. ing the automation and digitalisation on the Company's sustainable devel- of all recommendations of business processes; opment initiatives. issued by the Board ▪ improving the corporate-wide risk For details on the experience and expertise of Directors committees focused of the Board members, see Rosneft’s 2019 Annual management system (CWRMS); on sustainable development Report. ▪ upgrading the staff skill assessment and development system; ▪ developing eco-friendly In 2019, every fifth matter con- technologies; sidered by the Board of Directors ▪ boosting energy efficiency or the Management Board was related and energy saving; to the Company's sustainable development. The share of the Board commit- en tees’ recommendations on sustainable development stood at 18 %. oen

Over the year, the Board of Directors, its committees and the Management Board reviewed 378 items, with 72 (19 %) of them pertaining to sustainable development.

1 Dividends paid to Rosneft's shareholders in 2019 in line with the resolutions of the Annual General Shareholders Meeting (for 2018) and the Extraordinary General Shareholders Meeting (for the first six months of 2019).

26 GOVERNANCE (A) 2019 / Sustainability Report of Rosneft 27 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Sustainability Risk Management

The objectives of the Risk Management and Internal Control System (RM&ICS) are set out in the Company’s Policy on the Risk Management and Internal Control System drawing on recommendations of international firms engaged in risk management, internal control and audit services. GRI 102-15

For details on the RM&ICS, see Rosneft’s 2019 Annual Report.

Key risks inherent levels: units, Group Subsidiaries, ▪ Risks related to climate change in the Company’s businesses and the Company; and carbon regulation (energy Protecting Health and Staying Efficient business ▪ HR and social risks: based transition): the Company analy- on the assessment the Company ses climate-related risks as part Rosneft was one of the first busi- and engaged mobile medical Integrated in the CWRMS, sustainabil- identifies risks related to honour- of the CWRMS, with the results sub- nesses to respond to the new cri- teams to perform ad-hoc exam- ity risk analysis relies on the relevant ing its social commitments and tal- mitted to the Board of Directors’ sis and related challenges. We inations in dormitories at shift took urgent measures to prevent camps and production sites. Our corporate methodology. The follow- ent shortage in certain niche areas. Audit Committee and the Company's the spread of the COVID‑19, protect experts developed various scenar- In these unprecedented ing sustainability risks are classified Rosneft manages these risks management; our employees, their families, local ios to evacuate people from remote circumstances we did our best as strategic: through a variety of measures, as set communities, customers and con- shift camps, including acute to protect our people's health ▪ toughening of environmental reg- down in its HR and social strategy, tractors and ensure the continuity cases. We introduced longer shifts and prevent the spread ulations: government regulation, designed to recruit and retain highly of all production processes. to reduce staff rotations and travel of the coronavirus, while also For details on climate-related risks, see the Climate- associated with a risk of contagion. promoting energy saving standards qualified personnel, and devel- related Risks and Opportunities section ensuring business continuity Within the shortest possible time, In most regions employees stay and initiatives; ops and improves the existing pol- of this Report. and maintaining high efficiency we rolled out a number of initia- under pre-shift medical observa- ▪ health, safety, and environment icies and procedures covering HR tives to reduce the risk of contagion of business processes. Our tion for a fortnight prior to going team showed a high degree (HSE) risks: these risks are managed management, social development, at our production sites and shift to the oil field. throughout the facility life cycle, and corporate culture. camps. These include restrictive of responsibility in dealing with new challenges. Every day, including design, construction, oper- ▪ human rights-related risks: if identi- The Company also adapts organisational and epidemiological We pay special attention to disease measures, longer shifts, setting up prevention at our sites and offices. they proved capable of acting ation, reconstruction, re-engineering, fied by the management, these risks to new coronavirus-caused isolation wards, introducing addi- We introduced contactless tem- fast on any problem, promptly development, mothballing and shut- are subject to assessment and miti- challenges and takes steps tional health checks, and maintain- perature measurements, installed and effectively dealing with all down. At each stage, the results gation as part of the RM&ICS; to prevent the spread ing virus vigilance. We increased touchless hand sanitiser dispens- difficulties and helping those are documented in reports of infection. the number of medical staff dur- ers in all areas (site gates, floors, in need to ensure social stability described in the Company's internal ing shifts and created more mobile entrance lobbies and shared facili- and security.” regulations. The HSE risk manage- teams, while also providing our pro- ties), arranged for daily disinfection duction staff with ample supplies of premises and other protective ment system covers at least four For details on the observance of human rights, see the Approaches to Promoting Human Rights section of personal protective equipment measures. Alexey Artemyev of this Report. (gloves, masks and respirators). Working spaces and corporate Importantly, despite some real dif- Vice President for HR and Social vehicles are subject to frequent ficulties caused by the lockdown Policy of Rosneft disinfection, and our staff undergo and the industry's slowdown, regular temperature screening. we managed to retain all our staff, timely pay salaries in full and hon- We toughened control our our commitments to partners. over pre-shift medical check-ups

28 STRATEGY (B), RISK MANAGEMENT (B) 2019 / Sustainability Report of Rosneft 29 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Stakeholder Engagement Key Stakeholders and Interaction Highlights for 2019 GRI 102-15

Rosneft is focused on building a transparent, productive and mutually beneficial partnership with a wide range of stakeholders and sees Points of Interest it as the basis for accomplishing strategic goals and growing the business. Over 97 thousand individual Increase in capitalisation, and corporate shareholders growth and sustainable devel- GRI 102-43 and more than 500 GDR opment of Rosneft, transparency Shareholders holders. of operations. and investors In its relations with stakeholders the Company is guided by the law and high Achievements in 2019 business ethics standards. Rosneft has in place the Company Policy on Sustainable Interaction • In 2019, the Company’s capitalisa- • Strategic speeches by the CEO tion added +17 % (LSE); Development and the Code of Business and Corporate Ethics. The Company organises at major international investment • dividend payouts amounted its dialogue with stakeholders around various formats and mechanisms that forums; to RUB 283 bln1; • participation in one-on-one • inclusion in FTSE4Good Emerging are geared towards the effective achievement of sustainable development goals. and group meetings, including Index; those on ESG matters; • leading positions in interna- • conference calls involving tional ESG ratings among Russian heads of finance, economics, oil and gas companies CDP, and operations; Bloomberg, CHRB. • publication of press releases, presentations, reports, GRI 102–40 Stakeholders and material facts on resolutions of the Company’s Board For details, see the subsections of Directors and Management Shareholder Relations (p. 251) Board on the corporate website; and Institutional Investor Relations • work with rating agencies on ESG. (p. 254) of the 2019 Annual Report.

ROSNEFT

Shareholders and investors Government Agencies

As a major Russian taxpayer, Rosneft Points of Interest helps ensure budget stability • Compliance with laws; and contributes to the nation's social • timely tax payments; and economic development. • investments in regional Government Agencies development; Interaction • generation of jobs for the region; • Production operations; • development of urban Regions of operation Suppliers and contractors NGOs • payment of taxes to the federal infrastructure. and local communities and regional budgets; • cooperation with regional Achievements in 2019 authorities; • Presence in 78 regions; • supplying fuel to strategic govern- • RUB 3.6 trln total amount of taxes, ment functions; fees and duties; • legislative improvement efforts. • Rosneft is the sole fuel and lubri- cant supplier for the majority of government-owned companies.

Employees Clients Mass Media

30 2019 / Sustainability Report of Rosneft 31 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Interaction Achievements in 2019 Interaction The event is hosted by the Russia – • Round tables and public • 16 round-table discussions held Rosneft takes active part Land of Opportunity autonomous discussions; in the regions; in social, scientific, sport non-profit organisation. • charity and sponsorship • 13 community meetings on off- and education development, collab- • Institute of Oil and Gas Regions of operation programmes; shore projects; NGOs orates with educational, non-profit Technology Initiatives autono- • support of environmental • RUB 7,138 mln spent on social pro- and non-governmental organisations, mous non-profit organisation and local communities GRI 102-13 initiatives; jects in the regions of operation; and works with environmental NGOs. established; • development of infrastructure • RUB 1,842 mln spent on sponsor- The Company is also a member • the Company’s employees won across the regions of operation. ship activities; of a number of professional associa- prizes in six out of eight catego- • 1 mln trees planted as part of for- tions and business unions. ries of the national WorldSkills Points of Interest est conservation initiatives; • Social initiatives; championship; Jobs, development of local communi- • RUB 2,265 mln allocated to chari- • stewardship support of educa- • Vankorskoye UTT (a subsidi- ties, social support. table aid in education and science; tional organisations and cultural ary of Rosneft) was included • RUB 2,312 mln invested and sports institutions; in the National Gas Vehicle in the development of infrastruc- • partnership with the Leaders Association; ture across regions, districts of Russia competition; • Rosneft is among and municipalities; • cooperation with associa- the leaders of RSPP’s1 Sustainable • help with transport infrastructure tions of indigenous peoples Development Vector index; development; of the North; • For a third time running, Rosneft • RUB 404 bln in tax payment • membership in professional asso- was named the best social- to regional budgets. ciations and unions. ly-oriented company as part of a Russian Ministry of Energy Points of Interest competition; • Attention to socially important • over 2.5 thousand visitors issues, including sustainable use attended the ECOARCTIC environ- of natural resources; mental forum staged by Rosneft • support of social and cultural in the Nenets Autonomous Region; Interaction Achievements in 2019 domains; • The Company took part • Consistently high volumes of pro- • RUB 2.6 trln – the volume • corporate social responsibility. in the Earth Hour campaign: curement of goods, works and ser- of procurement; external lighting was turned off vices from small and medium • 18 workshops for SMEs (jointly Achievements in 2019 at the Company’s headquarters Suppliers enterprises (SMEs); with SME Corporation); • Six employees and at administrative buildings and Contractors • implementation of category man- • SMEs account for 76 % of potential of Group Subsidiaries made of 177 Group Subsidiaries; agement, development of cate- suppliers accredited with Rosneft; it to the finals and three became • The Company made and pub- gory and procurement strategies; • over 102 thousand procure- winners of the nationwide Leaders lished atlas titled Russian Arctic. • improvement of contractors’ com- ment procedures initiated of Russia competition that honours Space, Time, Resources. petencies, including in terms by the Company; the best managers in the country. of occupational health and safety; • the Company’s health • рosting workshops and safety requirement apply and round tables for suppliers to counterparties; and contractors. • the project to establish a Shared Service Centre in Samara entered Points of Interest the active phase – regional inven- Responsible business practice; tory management and quality • openness; control functions have been trans- Interaction • 19 million man-hours of training; • competitiveness ferred from the Company's Head • Ensuring occupational safety; • 74% of the headcount cov- and effectiveness; Office to the centre; • providing remuneration; ered by collective bargaining • proper performance • Corporate Internet Shop for minor • organising education, training agreements; under agreements; purchases (up to RUB 500 thou- Employees and professional development; • 56% of staff represented by trade • compliance with ethical standards sand) was launched on the TEK- • social policy implementation: unions2; and non-discrimination. Torg electronic trading platform; establishing optimal workplace • more than 330 thousand employ- • over RUB 2 bln – completed pro- conditions, voluntary insurance, ees of Rosneft and Group curement through the Corporate development of the health protec- Subsidiaries covered by personal Internet Shop, with over 14 thou- tion system and pension plan. insurance programmes; sand registered suppliers (more • over 280 thousand employees than 10 thousand being SMEs). Points of Interest covered by the corporate pension Stable and competitive salary, profes- plan; sional growth, social protection. • over 290 heads of Group Subsidiaries’ social and HR func- Achievements in 2019 tions participated in an annual • RUB 88,609 – average monthly conference, which was also salary; attended by the Company’s over- • RUB 18,7 bln – the amount of social seas partners. payments, benefits and one-off bonuses included in the payroll;

1 Russian Union of Industrialists and Entrepreneurs. 2 Of those Group Subsidiaries that have trade unions.

32 2019 / Sustainability Report of Rosneft 33 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Approaches to Promoting Human Rights Interaction • development of customer value • Sales of petroleum products proposition; and associated complementary • expansion of the range of goods goods through a filling station and services around filling Retail Chain Customers chain, wholesale of petroleum stations. Human rights are rights Respecting human rights and free- Human rights were officially products from oil depots; • a comprehensive solution for busi- Achievements in 2019 inherent to all human beings, doms is the fundamental principle approved by the Universal nesses with cashless payment • Over 3 thousand filling stations1 whatever their nationality, of any business guided by sustainability Declaration of Human Rights functionality; in Rosneft’s retail network across place of residence, sex, and the UN Sustainable Development dated 10 December 1948. • Rosneft loyalty programmes; Russia; ethnic origin, colour, religion, Goals. Aware of the impact its oper- Family Team, BP Club, • Leading position on one of the key language or any other status ations may have on the rights and Bashneft loyalty programme; regional markets thanks to growth • development of remote fuel pay- at over 100 filling stations is. All people are equally of the employees, customers, busi- ment services for individuals; in St Petersburg and the Leningrad entitled to their human rights ness partners, and local communities, • В2В fuel payment service via Region; without discrimination. These Rosneft strives to adhere to the best • The number of Family Team, a mobile app. rights are all interrelated, corporate practices and procedures BP Club and Bashneft loy- 1 Points of Interest alty programme members interdependent and indivisible . in everything it does. GRI 102-15 • Uninterrupted supply; reached 13.6 mln people; GRI 103-1 • fuel supplies to remote and poorly • higher sales of complementary accessible areas; goods at filling station shops • guaranteed petroleum product and cafés – over 45 mln cups quality control; of hot drinks sold; • simplified business processes • Rosneft stations provide com- for legal entities; pressed gas refilling for nearly Respecting Generally Accepted Principles • loyalty programme for individuals; 2.5 thousand vehicles daily; • higher service speed at filling • 12 charging stations for electric stations; vehicles. • high customer service standards; Rosneft recognises and respects the importance and value of the fun- KEY INTERNATIONAL DOCUMENTS ON HUMAN RIGHTS THAT damental human rights and freedoms THE COMPANY USES AS A GUIDANCE: set forth by international declarations and conventions on human rights, including freedom of association and collective bargaining, labour rights, right to a healthy environment, right Universal Declaration United Nations Declaration Interaction • contribution to the social and eco- of Human Rights on the Rights of Indigenous • Ensuring high transparency nomic development of local to health care, and rights of indigenous Peoples of information in accordance communities. minorities. with the Company’s Information Mass Media Policy2; Points of Interest • discussions of topical issues Regular updates with reliable, rele- Rosneft operates UN Global Compact OECD Guidelines at round table meetings vant and complete information. for Multinational Enterprises in the regions of operation; in strict compliance • discussions at public events (con- Achievements in 2019 with the Constitution and laws ferences, forums); • More than 400 news items of the Russian Federation and press releases published • publications on the website and adheres to socially and official social media accounts; on the Company's website; • the Company’s statements • media representatives responsible business practices in response to media publications; invited to round table meet- as set out by the Social Charter • website posts containing official ings on sustainable develop- of the Russian Business. Declaration on Fundamental ILO Right to Organise Principles and Rights at Work and Collective Bargaining reports and the Company’s posi- ment in the Company’s regions The Company also complies tion on various issues. of operation; of the International Labour Convention No. 98 • updating the public statement with applicable laws across Organisation (ILO) Content of website publications: “Rosneft: contributing to imple- the countries and territories • rational use of APG; mentation of the UN Sustainable it operates in. • technology and innovation; Development Goals”; • environmental protection • publication of Rosneft’s 2018 activities; Sustainability Report; ILO Freedom of Association ILO Discrimination • energy saving and energy • strong presence in social net- and Protection of the Right (Employment and Occupation) efficiency; works (Twitter, VK, Facebook, to Organise Convention No. 87 Convention No. 111 • credit and ESG ratings; Instagram). • HR and social matters; • financial and operating performance;

1 Oil depot. 1 For details, see the website of the United Nations Office of the High Commissioner for Human Rights: https://www.ohchr.org/RU/Issues/Pages/ 2 Rosneft’s Information Policy is posted on the website: https://www.rosneft.com/upload/site2/document_file/BP3-01-04_P-01_V-3-00_UL-001_ENG. WhatareHumanRights.aspx pdf

34 2019 / Sustainability Report of Rosneft 35 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Human Rights Management Tools to Respond to Violations of Human Rights

The Company’s human rights manage- and create favourable social conditions The Company has the necessary ment practices are in line with the prin- and a healthy environment; Personal Data tools to collect and process com- The best Russian company in the CHRB (Corporate ciples and approaches stipulated ▪ supporting family and children; Management plaints and claims relating to human Human Rights Benchmark) international human rights by high-level public documents: Code ▪ respect for cultural heritage, tra- rights. The Company’s employees index of Business and Corporate Ethics ditions and rights of indigenous In December 2019, the Company and any stakeholders, including those of Rosneft and the Company Policy peoples. approved its Policy on Personal from the Company’s regions of opera- In 2019, the Corporate Human Principles on Business and Human Data Processing aimed at pro- on Sustainable Development. The docu- tion abroad, may contact the Security Rights Benchmark not for profit Rights. In 2019, a total of 200 com- tecting human and civil rights company (CHRB) improved panies were benchmarked. ments are published on Rosneft’s web- The public statement also describes Hotline or the Ethics Hotline (writ- and freedoms, including Rosneft’s score on human rights site and are binding on all the employees the role of the compliance and anti-cor- the right to privacy, in this area. ten requests are accepted in all local by 11 p.p. to 32.7%. This is one regardless of their level or position. ruption system, details methods of risk languages across the footprint). of the highest growth rates among The document is bind- management relating to human rights The Company guarantees confiden- international and Russian mining ing on the Group’s business companies. The Company now Principles of respecting human rights protection, and provides information units and controlled Group tiality and security of any requests ranks above the industry average, are also detailed in the Company’s on feedback mechanisms and aware- Subsidiaries and applies to any it receives. outperforming Russian peers. internal regulations, are integrated ness raising in this area. processing of personal data, into corporate business processes even if it took place before Matters related to human rights can CHRB recognised the Company’s and apply to all controlled Group Rosneft is committed to promot- the Policy was implemented. also be raised by the Company’s transparency and responsibility Subsidiaries. ing human rights across the supply employees with Rosneft’s Council in respecting human rights through- chain. The Company has a roadmap for Business Ethics and ethics cham- out its operations. Also, in 2019, Rosneft started devel- on implementing approaches to pro- pions available in most of the Group The benchmarking is based on pub- oping its public statement on human moting human rights as part of inter- Subsidiaries. licly available information and its rights, which covers the key aspects action with suppliers of goods, works compliance with the UN Guiding of the area: and services. As part of the roadmap, The Company investigates all the cases ▪ respect for the freedom of associa- the Declaration on Respecting Human and takes measures to rectify violations The Company’s Personal Data Processing tion and collective bargaining; Rights was developed to be used when Policy is posted on the Company's official whenever any are identified in the area website. ▪ respect for the equality interacting with suppliers of goods, of human rights. GRI 103-3 of human rights and freedoms works and services throughout pro- and non-discrimination; curement, with phased awareness ▪ unacceptability of child and forced raising and training activities planned Personnel Training on Human Rights labour; for suppliers and contractors. GRI 103-2 ▪ health protection efforts, measures Trained, total to provide a safe working environment For its employees, the Company pro- In 2019, training programmes vides regular training on human rights on human rights included the following matters, with respective modules key focuses: integrated into a variety of corporate ▪ human rights: approaches, terms 42.4 training courses. The training covered and definitions; thousand 42.4 thousand employees (577.3 thou- ▪ civil society and rule of law; employees sand man-hours). ▪ human rights protection;labour law; ▪ cross-cultural communication; or ▪ business ethics; ▪ cultural change management; ▪ designing effective social communi- 577.3 cations. GRI 412-2 thousand man-hours

36 2019 / Sustainability Report of Rosneft 37 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Compliance Framework Development PRIORITIES OF ROSNEFT’S COMPLIANCE FRAMEWORK1 ARE APPROVED BY THE COMPANY’S COUNCIL FOR BUSINESS ETHICS

Compliance Framework

Rosneft recognises the importance of maintaining high professional and ethical standards of doing business and improving transparency of its Anti-corruption compliance Procurement compliance Anti-trust compliance (Federal Antimonopoly operations. GRI 103-1 Service2)

The corporate compliance framework is a system of pre- COMPONENTS OF AN EFFECTIVE COMPLIANCE FRAMEWORK: ventive actions and pro-active measures aimed at ensuring no Anti-fraud compliance Trade sanctions Stock exchange and listing violations of applicable laws, compliance compliance (London Stock Exchange Group ethical industry legislation and inter- principles) nal regulations of the Company with a view to setting high professional and ethical standards, #1 #8 minimising compliance risks, Key internal documents governing ethics management and compliance activities General tone set Compliance framework and avoiding major financial by the senior assessment losses or reputational damage. management GRI 102-15 Policy on Combating Regulations Regulations Corporate Fraud on Coordinating Anti- on the Procedure and Involvement Fraud and Anti-Corruption for Charitable Activities The corporate compliance system in Corruption Activities Processes is designed to make sure the Company succeeds in the long run by: ▪ acting as a guarantee #2 #7 of the Company’s reputation; ▪ enhancing the Company’s invest- Function / compliance Monitoring and reporting unit (including the hotline) ROSNEFT’S CODE ment case; Regulations on Managing Regulations on Sponsor Conflicts of Interest OF BUSINESS Support ▪ preventing and minimising compli- AND CORPORATE ETHICS ance risk; ▪ establishing clear and reasonable rules of the game, enabling the personnel to do their job effectively and with confidence. Regulations on the Procedure Confidential Data Regulations #3 #6 for Verifying Information Protection Standard on the Procedure Received Through for Exchange of Corporate Gifts and Hospitality Compliance risk Training the Security Hotline Channels Rosneft’s corporate compliance management and communications system relies on ISO 19600:2014 Compliance Management Systems and ISO 37001:2016 Anti-Bribery Management Systems and contains all Rosneft’s Council for Business Ethics Ethics. The body is composed of sen- of corporate compliance rules the basic components. is a standing collegial body. As part ior managers responsible for respec- is the responsibility of senior managers of its activities, the Council reviews mat- tive areas and managers overseeing and heads of functions and business #4 #5 ters of ethical behaviour, human rights related areas. The Council for Business units. GRI 103-2 and conflicts of interest and monitors Ethics develops the methodology Programme Policy and procedure compliance activities and adherence and corporate position on business of compliance activities development to the Code of Business and Corporate ethics and compliance. Enforcement

1 As per Rosneft’s corporate compliance risk matrix. 2 Approved by Presidential Executive Order No. 378 dated 29 June 2018.

38 2019 / Sustainability Report of Rosneft 39 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Countering Corporate Fraud and Corruption The Company has a system in place Measures as part of the Comprehensive CORRUPTION RISK to control the contracting, pricing Anti-Fraud and Anti-Corruption AREAS IDENTIFIED and discounting procedures. This Programme for 2019–20201: included: As a party to the UN Global Compact In addition, the Council for Business The Company’s Security Service BY THE COMPANY ensures efficiency in identifying signs ▪ drafting the Concise Guide guided by its principle to work against Ethics held four meetings in 2019, con- oversees the entire anti-fraud and facts of affiliation, personal inter- to Compliance, including anti-fraud corruption, the Company continued its sidering, inter alia: and anti-corruption process. All est, or potential corruption schemes. and anti-corruption provisions gov- efforts in 2019 to improve the efficiency ▪ report on the progress against of the Company’s subsidiaries The Company investigated 163,813 pro- erning, including exchange of corpo- of its existing anti-fraud and ant-corrup- the Consolidated Corporate operate in line with the Policy spective bidders and turned down rate gifts and hospitality. The Guide tion framework. In line with the National Compliance Programme (Roadmap) on Combating Corporate Fraud 5,975 of them. was communicated to all employees; Anti-Corruption Plan for 2018–20202, for 2018–2019; and Involvement in Corruption Conflict of interest ▪ quarterly updating the Company’s this commitment covers all levels ▪ report on implementation, exe- Activities. GRI 103-2 risk Rosneft encourages counterparties employees on typical violations of the Company’s governance: cution and operating efficiency and JV partners to adhere to similar of anti-fraud and anti-corruption ▪ strategic management of RM&ICS procedures in anti-fraud measures to prevent corporate fraud rules (including the management is the responsibility of Rosneft's and anti-corruption areas for 2018; and involvement in corruption activities. of conflicts of interest). In May 2019, Board of Directors (Audit ▪ approval of the review of ethical the Company developed meth- Committee); declarations submitted by Rosneft’s Bribery risk The Company continues its odology support on frequently ▪ current day-to-day management officers during 2018. ongoing efforts to identify asked questions related to conflicts of the framework is within the remit commercial schemes based of interest. The materials were cir- of the Company’s executive bod- In the reporting period, Rosneft’s Chief on abuse, including abuse culated to employees of Rosneft ies (Management Board and Chief Executive Officer approved internal doc- of power, by the Company’s and the Group Subsidiaries; Executive Officer) and the Council uments that included the Company’s management and third parties. ▪ drafting recommendations on anti- for Business Ethics; Regulations on Coordinating Anti-Fraud Counterparty risk and risk fraud and anti-corruption meas- ▪ heads of businesses, functions and Anti-Corruption Processes provid- of ultimate beneficiary Under the 2013 Agreement ures and communicating the same non-identification and units are responsible for opera- ing for: on Cooperation with the Ministry to the Group Subsidiaries and joint tional management; ▪ assessing corporate fraud and cor- of Internal Affairs, Rosneft engages ventures; ▪ an independent and unbiased ruption risk; in joint efforts as part of five-year action ▪ conducting ongoing anti-corruption annual review of the risk manage- ▪ protecting employees who reported plans to help reduce the crime rate audits of draft internal regulations; ment and internal control perfor- on corporate fraud and corruption in the regions of the Company’s opera- ▪ publishing the All about Compliance mance in the area of anti-corruption cases; Commercial tion and improve the efficiency of meas- information bulletin on a quarterly efforts is carried out by the Internal ▪ reporting on violations showing bribery ures to identify, prevent, expose, basis. GRI 205-2 Audit Service. signs of corporate fraud and corrup- and investigate crimes in fuel production, and checking these reports; ing industries. In 2019, law enforce- The key documents1 and princi- ▪ organising trainings and commu- ment agencies initiated 739 criminal ples of preventing corporate fraud nications on countering corporate cases based on materials compiled and involvement in corruption activi- fraud and corruption; by the security functions of the Group ties are approved by Rosneft's Board ▪ monitoring and controlling the pro- Facilitation payments Subsidiaries. of Directors, which also reviews cess of countering corporate fraud the efficiency of efforts in this area and corruption. GRI 103-2 All new hires and employees appointed on a regular basis. In 2019, the Board to new positions sign an anti-cor- of Directors considered and approved ruption clause, which forms part the results of a review of the anti-cor- of their employment contracts. ruption risk management and internal Risk associated The clause specifies a number of lim- control process. with inappropriate use itations, prohibitions and require- of funds ments aimed at preventing conflicts of interest.

Risk associated with third parties failing to comply with anti- corruption laws

1 The Company’s Policy on Combating Corporate Fraud and Involvement in Corruption Activities was approved by resolution of Rosneft's Board of Directors on 21 May 2018 (Minutes No. 19 dated 21 May 2018). 1 2 Approved by Rosneft’s Council for Business Ethics (Minutes No. 7 dated 10 December 2018). Minutes No. 19 dated 1 April 2019 (resolution dated 29 March 2019).

40 2019 / Sustainability Report of Rosneft 41 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Security Hotline provides regular updates to its employ- Ethics Management Framework Development ees about how the Security Hotline 35,106 The Company operates a 24/7 Security is performing. calls Hotline to report on cases of cor- In 2008, Rosneft introduced a Code Results of the Ethics received by the Security Hotline MAIN OBJECTIVES porate fraud and corruption, which The Company has a practice of reward- in 2019 of Business and Corporate Ethics. Hotline helped to identify and prevent a total ing whistleblowers. AND VALUES In 2015, the Company adopted a new of RUB 40.46 mln of damage in 2019. version of the Code aligned with best The Company has the Ethics Rosneft guarantees confidentiality domestic and global practices. GRI 102-16 Hotline in place to collect feedback Members and Chairman of all whistleblowers, whether employ- on ethics issues. All queries are reg- of the Company’s Board of Directors ees or not, and protection of any other The Code is a common reference doc- istered, analysed and sent for review are updated on the Security Hotline form of pressure, prosecution or dis- ument that sets out the standards to the Company's relevant units. performance on a quarterly basis. Also, crimination. GRI 102-17 LEADERSHIP of behaviour expected from employ- In 2019 the ethics hotline received to prevent wrongdoings, the Company ees in their routine work and criteria 51 queries relating mostly to eth- We strive for leadership in all of good practices in cases of ethi- ics or human rights violations (21%), aspects of our business. In planning cal risk. It applies to each and every requests for additional information the future of the Company, we employ employee, regardless of their level about business ethics (18%) and com- the most novel ideas and bleeding- or position. pliance with labour laws (19%). Other edge technology and avoid any damage to people and the environment. themes included living and working PERFORMANCE OF THE SECURITY HOTLINE In the reporting year, the Company con- conditions, social programmes, corrup- tinued to build awareness of the Code tion and conflict of interest, feedback, by translating it into the languages etc. GRI 102-17 of the countries of operation: German, Kyrgyz, Portuguese, Spanish, Ukrainian Calls received by the Security Areas of violations and Vietnamese. In 2019, hotline received Hotline INTEGRITY 0 40.46 million roubles We take on responsibility for everything we do and say. We act openly 51 of damage identified/prevented and consistently towards our colleagues, The Code of Business and Corporate Ethics queries 20 is posted on the Company’s official website. clients and partners, strictly honouring our commitments.

The Code is Rosneft's fundamental doc- calls violations ument underlying its corporate culture and compliance framework.

Ethics champions are a key element of the system that puts the Code , 2 EFFECTIVENESS of Business and Corporate Ethics to life. They have the following duties:explain- planations/onsultation rau/orruption/ebeleent We achieve the targets we set proie and undertake new ambitious tasks ing the requirements of business ethics tial stanars labour las relying on professionalism, discipline documents, principles, policies and pro- nuiry/orporate inestiation conﬂict of interest and teamwork and ensure an appropriate cedures to employees; onute balance of interests between each Retail sales of petroleu ▪ providing employees with advisory prouts employee and the Company. support on the implementation roureent proeures and application of the Code; ▪ resolving ethical conflicts; ▪ organising the registration of business ethics messages; ▪ informing employees about business ethics decisions made; SAFETY ▪ developing feedback mechanisms.

Our highest priority is to preserve life and health and ensure the safety of work and the environment.

42 2019 / Sustainability Report of Rosneft 43 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Personnel Training

Rosneft runs ongoing corporate training programmes in the field of coun- ROSNEFT 'S TRAINING PROGRAMMES IN COMBATING CORPORATE TRAINING Training Programme for Ethics Champions tering corporate fraud and corruption, CORRUPTION, COMPLIANCE, AND BUSINESS ETHICS EVENTS FOR EMPLOYEES compliance and business ethics. IN ANTI-CORRUPTION, In 2019, we held a discussion ses- CEOs responsible for personnel COMPLIANCE sion on today's business ethics chal- and social programmes. lenges of the Company and the role We held an employee survey on com- AND BUSINESS ETHICS of ethics champions. The session Based on the feedback received, bating corporate fraud and corruption was organised as part of the annual a programme to build an effective that showed that the overwhelm- conference for the leaders in charge system of applying Rosneft’s Code ing majority of employees know of personnel and social pro- of Business and Corporate Ethics was designed. Its three modules the contents of the key local regula- grammes at the Group Subsidiaries, include: tions and requirements in this area, with BP representatives among 2,591 2,762 attendees. • establishing a system to respond and understand what needs to be done employees employees to challenging ethical situations; should any violations be detected. The event saw discussions on cur- • communication skills of eth- rent business ethics challenges ics champions and feedback In 2019, more than 18 thou- Countering Corruption Business Ethics and a presentation on business eth- management; and Fraud distance course Compliance: Managing sand employees of Rosneft and Group ics and compliance (E&C) from BP. • developing business ethics Conflicts of Interest At the end of the event, the par- in the Company and creating Subsidiaries completed internal training distance course A corporate training programme on building an effective system ticipants proposed to organise an expert community. GRI 103-3 programmes either in class or online. of applying Rosneft’s Code a comprehensive training for ethics of Business and Corporate Ethics champions at the level of deputy In the reporting period, the Company was organised for 147 ethics held in-person trainings for the repre- champions in 125 Group Subsidiaries sentatives of the Group Subsidiaries in Brazil in Anti-Corruption Compliance: Managing Conflicts of Interest 8,751 1,961 in the context of local anti-corruption employees employees laws. On top of that, we staged a panel discussion on compliance to discuss approaches to combating corruption, Business Ethics Systemic Approach Compliance: Corporate to the Compliance including the management of conflicts Gifts and Hospitality Function classroom A lecture to review anti-fraud of interest. The event took place as part distance course course and anti-corruption activities of a joint conference with BP, our strain the Group Subsidiaries was delivered to 119 employees tegic business partner.

Employees of Rosneft regularly take part in training programmes and conferences arranged by third parties in the area of anti-corruption, fraud >18 and compliance. GRI 205-2 thousand employees2,006 employees at Rosneft and Group Subsidiaries A multimedia training course completed internal training on countering corporate fraud Managing Conflicts programmes in the field of Interest classroom and corruption was updated course of anti-corruption, compliance and business ethics either in person or online in 2019.

44 2019 / Sustainability Report of Rosneft 45 “We understand our responsibility as one of the world’s largest energy producers to incorporate sustainability principles across our operational activities. In 2019, Rosneft strengthened its carbon management governance processes at the Executive level. These have been supported by a dedicated carbon management subcommittee which has been established to develop further actions to minimise the Company’s overall carbon footprint. Our partnership with other oil and gas producers as a member of the Methane Guiding Principles initiative will also help to drive industry best practices in methane management across our value chain.”

Didier Casimiro First Vice President, Chairman of the Carbon Management Subcommittee

33 Carbon Management Goals and Approaches 35 Development of Global Energy Markets 38 Climate-related Risks and Opportunities The photo features a red-breasted goose, a rare species CLIMATE from the family Anatidae, protected by the IUCN 39 Achievement of Climate Goals in 2019 and regional red lists, as well as several international conventions on environmental protection. The species 42 Climate Cooperation is also documented in the Red Data Book of Evenkia 44 Carbon Resilience Ratings published in 2020 as part of the grant programme ACTION of East Siberian Oil and Gas Company SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Carbon Management Goals and Approaches Carbon Management Governance GRI 103-2

The Company established a Carbon Management Subcommittee led by Didier Strategic Targets to Prevent Climate Change Casimiro, First Vice President of Rosneft Exchange of Carbon Management Experience to focus delivery on the carbon-reduction goals embedded in the Rosneft–2022 In 2019, Rosneft held a seminar The participants included on corporate carbon management the Company’s top managers, As part of the Rosneft–2022 Strategy, ▪ Delivering company education Rosneft has taken a number Strategy. The Subcommittee is made practices, which focused President of BP Russia David the Company announced its programs on carbon-management; of steps to reduce both up of the Company’s top management on strategic GHG and methane Campbell, President of Equinor commitment to the United Nations ▪ Strengthening partnerships on carbon- direct and indirect GHG and heads of operations, as well as heads reduction initiatives, energy Russia Elizabeth Birkeland Kvalheim Sustainable Development Goals, which management approaches; emissions generated by its of energy, economic and environmental efficiency programmes, and vice presidents of relevant include two Goals which are directly ▪ Understanding climate-related risks operations or through the use functional units. and technological developments functions at these companies2. linked to energy management, and opportunities for the Company. of the Company’s products. in carbon management. emissions reduction and management The Subcommittee is responsible of physical climate risks. These are: GRI for developing the Company’s position 103–1 GRI 103–2 These GHG reduction targets on reducing the carbon footprint ▪ SDG 7 Affordable and Clean Energy: are supported by an internal ‘Green of its assets, overseeing the development The Company’s Policy on Health, Safety enabling access to clean energy, and Environment is posted on the Company’s Investments’ capital investment program of relevant annual and longer- increasing the share of renewables official website which includes funding for projects term plans and tracking progress and enhancing energy efficiency. to reduce associated petroleum gas on existing programmes, such as the Gas ▪ SDG 13 Climate Action: integrating (APG) flaring and energy efficiency Investment Programme and Energy climate measures into strategies, projects. The total expenditure for ‘Green Saving Programme. The Subcommittee reducing emission intensities, Strategic GHG Reduction Investment’ projects for the period has held several meetings in 2019, and strengthening resilience to climate- Targets and Performance of 2018–2022 will be around 300 billion delivering a carbon management related risks. Indicators rubles2 which will also include funding framework and a carbon management for pipeline reliability, water management plan, which was reviewed by the CEO These priority UN Goals clearly We also set relevant targets and KPIs and land remediation projects. ‘Green as well as the Strategy and Sustainable articulate Rosneft’s ambition to drive these improvements: investment’ expenditure between 2020 - Development Committee of the Rosneft to continue to contribute to meeting ▪ Growing the Company’s natural gas 2022 will average around 7% of the annual Board of Directors.1 the world’s growing energy demands production to over 100 bcm per capital investment budget. but doing so with a commitment annum ; The Company has also strengthened its to significantly reduce GHG emissions ▪ Reducing per unit GHG emissions internal capabilities in the area of carbon across the value chain. by 5% by 2022; management by recruiting highly ▪ Avoiding 8 mmt of СО2 equivalent qualified and experienced professionals. These commitments are underpinned emissions by through the Gas In particular, we introduced the position by actions across ten elements Investment Programme and the Energy of an advisor to Vice President for HSE of Rosneft’s carbon management Saving Programme; on sustainable development and climate framework: ▪ Achieving a top quartile indicator action. ▪ Сarbon management governance; in GHG emissions intensity (Upstream ▪ Supporting the energy transition oil and gas production, t CO2 eq. / direction by growing natural gas production, kt) comparable with leading production; global peers; ▪ Reducing operational CO2 emissions ▪ Developing and producing new and improving energy efficiency; products that allow consumers ▪ Reducing operational methane to reduce emissions through the use emissions; of the Company’s more eco-friendly ▪ Aligning GHG indicators and metrics products. for the ongoing industry benchmarking; ▪ Monitoring GHG performance and targets; ▪ Improving carbon management For details on the management system disclosure; and guidelines on combating climate change, see the Company’s website

1 Due to its chemical composition, natural gas produces the lowest amount of carbon dioxide when burned compared to other hydrocarbons. 1 Strategic Planning Committee before April 2020. 2 Over USD $4 billion 2 For details on the seminar, see the Company’s website https://www.rosneft.com/press/news/item/197983/

48 RISK MANAGEMENT (C), TARGETS AND INDICATORS (B) 2019 / Sustainability Report of Rosneft MANAGEMENT (B) 49 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

after which it will decline by 3% World primary energy consumption3 Development of Global Energy Markets by 2040. The consumption of non- fossil energy in 2040 will increase 2.1 2% 6% 9% times compared with 2018, with energy 9% 17% 10% 10% consumption from renewable sources 3% 3% 5% 5% 3% 12% growing nearly eight-fold to reach 6% Scenario Forecasts Related to the Global Energy 27% 4% almost 17%. Thus, even under the SDS, 22% 20% 9% Transition and Climate Action with the expected technological 11% and economic limitations, fossil energy 23% 25% 25% 24% sources are projected to remain the backbone of the global energy 31% 29% 27% industry, with their share hitting 58% 23% «Rosneft considers various outlooks of renewable sources in global energy by 2040, though associated with much 2018 Base-case Low-carbon SDS-2040 and projections of global energy consumption will increase from 2% SCENARIOS lower GHG emissions. scenario-2040 scenario-2040 demand, and develops long-term in 2018 to 6% in 2040. global economic and energy scenarios yropoer for the strategic and business planning In the low-carbon scenario, global iui yroarbons process. The development and analysis energy consumption will increase as ioassinlbiofuel of forecast scenarios is part of the KPIs by almost 23% to 2040 compared BASE CASE: oal ter reneables for the Company’s top management. with 2018. In 2040, global demand the forecast is based ulear enery The Rosneft 2022 strategy was tested for fossil energy sources will increase on the study of existing energy using three key scenario forecasts. by a mere 9% from 2018 levels demand patterns, impact with consumption of non-fossil energy of technological progress, The forecast results indicate that surging by more than 80%. However, globalisation and the energy Given the forecast of energy markets and product demand, policy the Company’s business model fossil fuel sources will still retain the Company continues to grow its gas production while also for the period until 2040 for both a dominant role in global consumption improving the quality and range of its products and marketing more products and geographical spread of primary energy (72%). In total, liquid environmentally friendly products. are expected to be stable and resilient hydrocarbons and gas will account to the challenges assessed. for more than half (52%) of the energy mix. Consumption of renewable LOW-CARBON SCENARIO: Projections based on the base- sources in 2040 will increase five-fold the forecast is based case and low-carbon scenarios against 2018 with a share of 9%. on the assumption that 1 imply an increase in global demand the maximum shift towards Carbon Dioxide Emissions Global CO2 emissions from burning fossil fuels, bt CO2 for primary energy up to 2040. The Sustainable Development low-carbon technologies Scenario (SDS): the IEA SDS (set out and renewable energy will Scenario projections show that global not exceed the total effect According to the base-case scenario, in the 2019 World Energy Outlook) CO emissions are expected to increase of national contributions 2 40 by 2040, global energy consumption focuses on efforts to limit temperature made by the Paris Agreement under the base-case scenario, while 35 will increase by 29% from the level growth to 1.8°C and achieving member countries2. in the low-carbon scenario they will of 2018. The share of fossil fuels will other sustainable development start decreasing after 2030. 30 decrease from 81% in 2018 to 76% goals. It assumes that a decrease 25 20 in 2040 with a shift in primary energy in the global economy’s energy The SDS assumes that СО2 emissions consumption towards a larger share intensity will accelerate at more will decrease by over 2.1 times to 2040 15 SUSTAINABLE of gas (from 23% in 2018 to 25% than twice the rate of 2000–2018. compared with 2018. 10 DEVELOPMENT SCENARIO: in 2040) and a smaller share of coal Global primary energy consumption 5 (from 27% to 22%). The share of liquid is expected to reach its peak in the near 0 hydrocarbons in global energy future, with a subsequent decrease the scenario is based on the International Energy 2000 2005 2010 2020 2025 2030 2035 2040 consumption will decrease from 31% by 7% by 2040 against 2018. Global Agency forecast on the global in 2018 to 29% in 2040, but will remain consumption of liquid hydrocarbons power industry development, asease senario eelope in Rosneft which seeks to limit global the largest among all energy resources. and coal will go down by 32% and 61%, oarbon senario eelope in Rosneft At the same time, the total share respectively, compared with 2018. Gas temperature growth to 1.8°C, and achieve other SS of liquid hydrocarbons and gas will consumption is projected to increase UN Sustainable Development remain flat at around 54%. The share and then stabilise by 2025–2030, Goals.

1 The scenario assumes limiting global warming to 1.8°C above pre-industrial levels by 2100 (66% probability), which is in line with the Paris Agreement goal of holding the increase in the global average temperature to “well below 2°C … and pursuing efforts to limit [it] increase to 1.5°C.” https://www.iea.org/commentaries/understanding-the-world-energy-outlook-scenarios 3 Sources: actuals – International Energy Agency (IEA), forecast – estimates of Rosneft and IEA. 2 Paris Agreement member countries have identified their climate impact mitigation commitments in the form of voluntary national contributions.

50 СТРАТЕГИЯ (C) 2019 / Sustainability Report of Rosneft 51 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

International Agency Forecasts Climate-related Risks and Opportunities GRI 102-15 GRI 103-2 GRI 103-3

The comparison of the Company base-case CAGR of global primary energy consumption towards 2040 1 The Company takes steps scenario with similar ones from the world’s to understand potential strategic OVERVIEW OF POTENTIAL STRATEGIC THREATS RELATED leading agencies and industry peers threats and opportunities associated TO CLIMATE CHANGE AND THE COMPANY’S ACTIONS showed that the Company’s projections with climate change and the global do not contradict those of international energy transition and reviews climate- 1.22 1.17 agencies. Our basic forecast takes into 1.10 1.14 related risks as part of the annual 1.04 Introduction of Greenhouse Gas Emissions Charges account trends in energy demand, 0.98 0.96 corporate-wide risk management consumption and development of energy 0.92 process. These risks are assessed 0.80 • Active participation in the working group on carbon regulation under the Russian markets in the coming decades. for possible negative impacts Ministry of Economic Development on the Company’s strategic indicators. • Monitoring and analysis of international legislative initiatives related to the regulation According to experts, global energy The results are submitted to the Audit of greenhouse gas emissions demand will increase from 18% to 28% Committee of the Board of Directors • Testing a medium-term business plan using various greenhouse gas emissions by 2040. They assume a 1.0% CAGR and the senior management. charges for all sources, with the lowest and highest • Implementation of the Energy Saving Programme, Gas Investment Programme rates of 0.8% and 1.2% projected When considering the risks and the Programme to Monitor and Optimise Losses and Energy Consumption in the ExxonMobil scenario and the BP IHS BP Plc IEEJ OPEC IEA Rosneft Exxon- EIA ИНЭИ and opportunities associated • Adoption of a corporate target to reduce unit greenhouse gas emissions and Rosneft forecast, respectively. Markit Mobil РАН with climate change, • Development and implementation of a carbon management plan the Company is guided by recommendations issued by the Task Force on Climate- related Financial Disclosures Increase in air temperature and sea level, permafrost thawing, extreme weather phenomena (TCFD). • Infrastructure design and operation based on hydrometeorological and climate data The Company supports climate and production safety measures research and has organised • Climate research in the regions of operation more than 20 large-scale Arctic expeditions since 2012. These provided a much deeper insight into the climate and the environment Changes in the structure of energy consumption due of this unique region. In 2019, the Kara- to technological breakthroughs Summer 2019 research expedition • Monitoring of technologies affecting the global energy mix conducted hydrometeorological • Implementation of the Innovation Development Programme observations in the Barents, • Upgrade of the corporate production and energy consumption framework Kara, Laptev and Chukchi seas, • Digitalisation and accelerated technical development across operations with Atlases of Russian Arctic Seas published following the research.1 Hydrometeorological and climate information is used to design offshore oil and gas platforms and ensure Investor and other stakeholder sentiment towards investment the safe navigation and operation in the oil and gas industry of these facilities. • GHG emission reduction (Gas Investment Programme, Energy Saving Programme and the Programme to Monitor and Optimise Losses and Energy Consumption) Further assessment of physical climate • Transparent disclosure, integration of climate change issues into corporate

1 risks in related to the production governance The comparative analysis relies on the following basic forecasts from the leading energy agencies and oil and gas producers (company-forecast-source): facilities and activities of the Company • Active interactions and communications with the key audiences IHS Markit. IHS Rivalry Scenario (2019–2040) – IHS Markit // 2019 Energy outlook to 2050. will also be done taking into account the National Action Plan adopted BP. BP Evolving Transition Scenario (ET) (2018–2040) – BP // BP Energy Outlook 2019. in Russia in December, 2019 outlining IEEJ – The Institute of Energy Economics, Japan. IEEJ Reference Scenario (2018–2040) – The Institute of Energy Economics, Japan // Global Energy Supply and Demand Outlook 2019. the first stage of climate change adaptation to 2022 2. OPEC. OPEC WOO (2019–2040) – The only scenario – Organisation of the Petroleum Exporting Countries // 2019 World Oil Outlook 2040. For details on our research activities, see the Scientific Research in the Arctic section of this Report. IEA – International Energy Agency (IEA). IEA Stated Policies Scenario (SP) (2019–2040) – International Energy Agency // World Energy Outlook 2019. Rosneft Base Case (2019–2040) – Rosneft // Rosneft Energy Outlook 2020. ExxonMobil (ЕМ). ExxonMobil (2018–2040) – The only scenario – ExxonMobil // 2019 Outlook for Energy. EIA US – U.S. Energy Information Administration. EIA Reference Case (2019–2040) – U.S. Energy Information Administration // International Energy Outlook 2019. 1 Energy Research Institute of the Russian Academy of Sciences (ERI RAS), SKOLKOVO Energy Centre. ERI RAS Conservative scenario (2016–2040) – For details on the Atlases of Russian Arctic Seas, see: https://www.rosneft.ru/press/news/item/197449 2 ERI RAS, SKOLKOVO // Global and Russian Energy Outlook 2019. Resolution of the Russian Government No. 3183-r dated 25 December 2017.

52 STRATEGY (C) 2019 / Sustainability Report of Rosneft RISK MANAGEMENT (A), STRATEGY (A) 53 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Achievement of Climate Goals in 2019 APG Utilisation

In 2019, the Company continued As at the end of 2019, Greenhouse gas emissions reduction to implement its Gas Investment the APG utilisation rate averaged Programme. Capital investment 93.8% for mature assets (up 1.0% in the construction of gas infrastructure year-on-year), and 77.8% including The UN Sustainable Development Goal 13 The increase of the absolute emissions GHG emissions, t CO2 eq. / ktce exceeded RUB 22 bln. One of the key fields under development (Suzunskoye Climate Action is a priority goal for Rosneft. in 2019 was largely due to increased GRI 305-4 investment areas is the utilisation and Srednebotuobinskoye) To achieve this goal, the Company flaring of APG at greenfield sites where of Associated Petroleum Gas (APG). and greenfield projects at early “Rosneft places a special runs two large-scale programmes: the APG utilisation infrastructure has focus on improving efficiency stages of development (Tagulskoye, the Gas Investment Programme focused not yet been commissioned. GRI 305-5 of using associated petroleum The programme to increase APG Vostochno-Messoyakhskoye, 0.1195 on reducing APG flaring, and the Energy 0.131 0.120 gas (APG). Bashneft pursues utilisation helps to reduce GHG Yurubcheno-Tokhomskoye, Severo- Savings Programme aimed at curbing In 2019 Rosneft reduced methane its strategy and made great emissions (both CO2 and СН4) through Komsomolskoye, and Trebs and Titov). GHG emissions by over 8 mmt (СО2 emissions by 18% compared with 2018, progress in this area in 2019. reduced flaring, and improves the air equivalent) by 2022. GRI 103-2 with fugitive4 emissions in oil and gas At Bashneft-Dobycha, the APG quality in producing regions. Actions 0.129 0.140 In 2019, the Company’s capital production down 73% due to improved 0.123 utilisation rate topped 95% include the use of cutting-edge with over 40% of the produced investment in the construction The Company has historically processes. technologies that allow for gas injection of gas infrastructure exceeded disclosed greenhouse gas 2017 2018 2019 APG used in the subsidiary’s to maintain reservoir pressure, its own processes. Furthermore, emissions as recommended accumulation in underground storage il an as proution Rosneft’s Gas Programme by the TCFD 1. facilities for further use, and utilisation (including oilﬁeld services) enabled the Company for electricity generation and supply >22 Oil reﬁning, gas processing to use APG to enhance RUB bln In 2019, GHG emissions an petroeials recovery and generate heat to processing plants and consumers. from the Company’s operations and electricity. 14% of APG totalled 81.2 mmt (CO2 equivalent), produced by Bashneft becomes with direct emissions2 and indirect feedstock for the petrochemical Rational use of APG GRI OG6 emissions from electricity and heat Direct GHG emissions, kt Total Company GHG emissions, industry.” procurement accounting for 59.4 mmt t СО2 eq. / thousand boe Period 2017 2018 2019 and 21.8 mmt (CO2 equivalent), Sergey Nonyava APG utilisation capex, RUB bln 20.1 16.3 21.5 respectively3. Indirect (Scope 3) emissions from the use of products manufactured CEO, Bashneft-Dobycha APG production in Russia (resource), bcm 41.6 41.8 44.3 164 134 24.5 24.4 26.1 by the Company in 2019 were 243.0 mmt 303 APG production in Russia, excluding flared 37.1 35.3 34.5 (CO2 equivalent), based on petroleum 46,464 50,629 56,035 gas (use), bcm product sales. GRI 305-1 GRI 305-2 GRI 305-3 APG utilisation rate, % 89.2 84.4 77.87

2017 2018 2019 2017 2018 2019

Carbon dioxide (СО2

Methane (СН

Natural Gas Production

6 The Rosneft–2022 Strategy targets ▪ Improving the economics of domestic Natural gas production, bcm an increase in gas production to 100 gas sales, among other things bcm per annum to achieve a 20% by implementing projects on time 68.41 67.26 66.95 share of domestic sales. Expanding and budget; the Company’s gas production is in line ▪ Improving gas production processes 36.83 34.93 34.18 1 The established targets for reducing greenhouse gas emissions cover the entire perimeter of the Company in line with the recommendations with the global trend of utilising gas and technological competences. of the Task Force on Climate-Related Financial Disclosures (TCFD). 2 as a low-carbon energy source. Scope 1 as defined in the GHG Protocol Corporate Accounting and Reporting Standard developed by the World Business Council on Sustainable Development (WBCSD) and World Resources Institute (WRI). In 2019, gas production totalled 66.95 3 31.58 32.33 32.77 Scope 2 as defined in the GHG Protocol Corporate Accounting and Reporting Standard developed by the World Business Council on Sustainable The Company has also identified bcm , including 32.77 bcm of natural Development (WBCSD) and World Resources Institute (WRI). 4 Atmospheric CH and CO emissions from stationary and fugitive sources resulting from production, transportation, storage and processing of oil and natural the following strategic objectives gas and 34.18 bcm of associated gas (see Order No.4 300 of2 the Russian Ministry of Natural Resources and Environment dated 30 June 2015). related to its gas production: petroleum gas, which is generally in line 5 The 2018 metric was adjusted following the update on fuel consumption by certain Group Subsidiaries. 2017 2018 2019 6 with the previous year’s figures. Excluding flared gas and gas used in liquid hydrocarbon production. 7 atural as Including fields under development and greenfield projects at early stages of development. ssoiate petroleu as

54 ЦЕЛИ И ПОКЗАТЕЛИ (B) И (C) 2019 / Sustainability Report of Rosneft 55 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

A year-on-year reduction in the APG ▪ 18 MW gas turbine power plant ▪ Other APG gathering, treatment utilisation rate in 2019 was due to: commissioned at Kondaneft’s and transportation facilities. Climate Cooperation ▪ An increase in APG production Zapadno-Erginskoye field; at greenfield sites (Suzunskoye, ▪ A compressor station In 2020–2024, the Company plans Tagulskoye, Vostochno- and a vacuum compressor station to complete the construction Messoyakhskoye,Yurubcheno- at the Dvurechenskoye field and commissioning of natural gas Tokhomskoye,Severo- operated by Tomskneft VNK; power plants and injection facilities Paris Climate Agreement Komsomolskoye, ▪ A compressor station at the Yurubcheno-Tokhomskoye, and Trebs and Titov) where at the Pravdinskoye field; Srednebotuobinskoye, and Trebs the gas infrastructure is still a low-stage compressor station and Titov fields. These projects The Paris Agreement Rosneft is a party to the UN Global under construction; at the Malobalykskoye field; are crucial for delivering on the strategic Compact and supports the government’s ▪ Oil production cuts and a low-stage compressor goals of increasing APG utilisation The Paris Agreement was levels”, and achieve a balance efforts at the national level following at Brownfield sites as part station at well pad 354 and reducing GHG emissions. adopted in December between anthropogenic emissions the ratification of the Paris Agreement 2015 at the 21th session by sources and removals of the Company’s commitment of the Priobskoye field operated in September 2019. of the Conference of the Parties by sinks of greenhouse gases under the OPEC+ agreement by RN-Yuganskneftegaz; to the UN Framework Convention in the second half of this century. and limited oil acceptance on Climate Change held in France. 189 Parties have ratified or acceded The Company’s contribution to reducing by Transneft’s Druzhba pipeline. Its purpose is to hold global to the Agreement1. Together greenhouse gas emissions and adapting average temperature increase with governments, more than 18 to climate change will assist the Russian In planning new developments KEY ACHIEVEMENTS UNDER APG UTILISATION IMPROVEMENT “well below 2°C above pre- thousand representatives of cities, Federation in meeting its commitments and greenfield infrastructure, Rosneft PROJECTS IN 2019 industrial levels, pursue efforts regions, the business and the civil under the Paris Agreement. to limit the temperature increase society participate in implementing fully integrates the required solutions to 1.5°C above pre-industrial the Paris Agreement2. at the engineering and design documentation stage to maximise APG utilisation. Bashneft-Dobycha achieved RN-Vankor delivered a 95% utilisation rate the 30 billionth cubic meter In 2019, the Company completed of gas to the Unified Gas the construction of 23 APG utilisation Supply System of Russia after the launch of the Vankor field facilities, including: Stakeholder Engagement on the Climate Agenda GRI 103-3

The global scale of the climate action ▪ The Working Group on Energy In 2019, the Company’s calls for an extensive cooperation Efficiency and Greenhouse Gases subsidiaries planted around 1 at the national, international of the Committee on the Energy million trees as part of forest Energy Saving and Energy Efficiency and industry levels. Strategy and Fuel and Energy restoration initiatives, including Development under Russia’s around 5 thousand trees as part The Company actively interacts Chamber of Commerce and Industry. of the Green Spring-2019 Rosneft is one of artificial lift and ground Rosneft’s energy efficiency with government agencies nationwide clean-up campaign. of Russia’s major consumers of fuel infrastructure; performance has improved and sits on various interdepartmental In 2019, Rosneft and the Ministry and energy resources. Its Energy ▪ In oil refining, gas processing by 14% over the past two years, consulting and coordinating bodies of Natural Resources and Environment Saving Programme includes initiatives and petrochemicals by optimising which helped prevent 3.1 mmt on climate change, including: signed a cooperation agreement that help reduce energy consumption thermal processes and electrical CO -equivalent emissions. ▪ The Interdepartmental Working to implement the climate action agenda 2 For details on the cooperation with the Ministry and cut GHG emissions in the following load and enhancing fuel efficiency; Group on the Economic Aspects as part of the national Environment of Natural Resources and Environment, business segments: ▪ In marketing and distribution of Environmental Protection project. see the Preservation of Biological Diversity of this Report. ▪ In oil and gas production and in-house services and Regulation of Greenhouse by using energy efficient equipment by using energy saving technologies Gas Emissions under the Ministry Rosneft pays great attention For details on energy saving and energy efficiency, and optimising the operation and equipment in supplying heat see the R&D and Digital Transformation chapter of Economic Development; to reforestation, thus improving On the industry level, Rosneft joined and electricity to production of the Energy Saving and Energy Efficiency section. ▪ The Working Group biodiversity, reducing forces with BP and Equinor to support and administrative facilities. on Energy and Environment our environmental footprint efforts to take action on climate change

of the Interdepartmental and supporting the removal of CO2 as part of environmental protection Commission to Support Russia’s from air. working groups. G20 Participation under the Ministry of Energy;

1 United Nations Framework Convention on Climate Change, данныепо состояниюна 09 июля 2020 года: https://unfccc.int 2 The Non-state Actor Zone for Climate Action (NAZCA): https://climateaction.unfccc.int

56 2019 / Sustainability Report of Rosneft 57 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Joining the Guiding Principles on Reducing Methane Emissions Carbon Resilience Ratings across the Natural Gas Value Chain

Minimising emissions is the key priority Rosneft’s efforts in sustainable development of the Rosneft–2022 Strategy. We aim GUIDING PRINCIPLES and carbon management received high recognition from national ON REDUCING METHANE to become one of the global energy and international rating agencies. companies with the lowest carbon EMISSIONS ACROSS footprint and rank in the first quartile THE NATURAL GAS VALUE 2 among global peers in terms of unit CHAIN GHG emissions. To achieve this goal, CDP Rating we also focus on reducing methane “In 2019, Rosneft signed emissions from our operations. These the Guiding Principles on Reducing Methane emissions can contribute over 28 times CDP (formerly the Carbon Disclosure Emissions across the Natural the atmospheric warming of carbon Gas Value Chain – an initiative Project) is the most reputable non- dioxide. of oil and gas majors. We profit organisation that assesses will continue to implement Continually reduce methane the processes and initiatives In 2019, we joined the Methane Guiding advanced technologies, emissions in managing a company’s carbon Principles industry initiative , to show including those allowing footprint and resilience to climate our commitment to strengthening for remote methane related risks, as well as its forest In 2019, Rosneft received a “B” CDP rating in the Climate Change industry partnerships on methane detection, quantification, and water stewardship, and energy category, which is the best score among Russian oil and gas management. Other participants and leakage prevention. transitioning. Following an independent producers and two notches higher than the average score from among oil and gas companies We will also organise assessment, Rosneft received a “B” of European members. relevant training for our staff. include BP, Equinor, Eni, ExxonMobil, rating in the Climate Change category 1. As one of the world’s largest Advance strong performance Shell, Total, and Gazprom. Eric Liron, hydrocarbon producers, across gas value chains Vice President for Internal Services Rosneft understands at Rosneft, is Rosneft’s representative the contribution For details on the Company’s ESG ratings, see Our ESG news is posted on the Company’s official on the Steering Committee of anthropogenic sources the Strategic Vision of Sustainable Development website. of this partnership initiative. of methane to climate change section of this Report. impacts and will do its part This industry partnership will enable to reduce methane emissions the parties to share best practices from its operations.” Improve accuracy of methane in methane management, align emissions data metrics and reporting, apply detection Eric Liron and quantification technologies Vice President for Internal and harmonise approaches Services, official Rosneft to the global methane policy. representative in the Steering “Commersant Initiatives Award” in the Environment Category The Company and other industry Committee of the Methane players also agreed on a number Guiding Principles of actions related to remote Advocate sound policies In 2019, Rosneft’s large-scale identification of methane sources, and regulations on methane project to reduce APG flaring won development of methane intensity emissions an annual “Commersant Initiatives indicators and workforce training Award” in the Environment category. in methane management. In 2020, In the past five years, Rosneft has we plan to have the Reducing Methane made APG utilisation one of its top Emissions Best Practice Guides environmental priorities, with relevant translated into Russian, with training investments exceeding RUB 125 bln. to be provided to both management and field specialists. Increase transparency

1 CDP works with 525 institutional investors managing USD 96 trillion worth of assets. In 2019, over 8.4 thousand companies, including 62

1 from Russia, with more than 50% of the global market capitalisation disclosed environmental data through CDP. www.cdp.net For details see: https://www.rosneft.com/press/news/item/195339/ 2 For details on the Commersant Initiatives Award, see https://www.rosneft.ru/press/news/item/198031/ 2 Подробнее о Руководящих принципах на сайте инициативы: https://methaneguidingprinciples.org/methane-guiding-principles/

58 2019 / Sustainability Report of Rosneft 59 "Rosneft focuses on minimising environmental impacts during the design of new projects and applying best available technologies using our green investment programme to continuously improve the environmental performance of existing facilities. The Company also works closely with stakeholders to support resource conservation and biodiversity protection across its operations to align with its sustainable development commitments.”

Christoph Nehring Vice President for Health, Safety and Environment at Rosneft

47 Managing Our Environmental Impacts 52 Reducing Air Emissions 54 Conserving Water Resources ENVIRONMENTAL 59 Prevention of and Response to Oil Spills 60 Land Remediation and Waste Management

Rosneft implements a series of measures aimed 63 Biodiversity Conservation at preserving and restoring forests. In 2019, the Company planted about 1 mln seedlings. 68 Public Consultations CONSERVATION For details, see p. 84 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

In 2019, this HSE IMS was Across the Group, the selection When planning and implementing Managing Our Environmental Impacts again independently assessed of subsidiaries to be certified against production processes, Rosneft is guided as being in conformance the requirements of ISO 14001:2015 by the principles of sustainable use with the requirements of ISO is based on the specific type of natural resources as well as reducing The Company has the dual accountability of providing energy to global populations 14001:2015 “Environmental of business activities. The criteria include the level of environmental impact. These to drive socio-economic development as a means of improving the quality of life Management System”. the nature of environmental risks, as well principles are enshrined in the Company’s for many, while being guided by the principles of sustainable development. as the requirements of investors, partners, Policy on Health, Safety and Environment. The requirements of the HSE Integrated customers and other stakeholders. Management System (IMS) apply to all The number of certified companies within Group Subsidiaries and employees as well the Group increases annually increased as to contractors working at the Company’s from 57 to 63 in 2019. As a member of the United Nations The Company therefore works Rosneft has also developed its production facilities. Employees Rosneft’s Policy on Health, Safety and Environment Global Compact (UNGC), Rosneft has to identify and avoid or minimise any 2022 environmental goals based are trained to improve their knowledge is available on the official website of the Company committed to support the achievement negative impacts to the environment on the ongoing implementation and understanding of the ISO 14001:2015 of the United Nations Sustainable from its activities as part of its 2025 Environmental Efficiency requirements. Development Goals (UN SDGs) with its of this commitment to maintaining Improvement Programme. This environmental protection activities sustainable operations. programme consists of four focus and initiatives linked to the following areas each with an annual delivery UN SDGs: GRI 103–1 GRI 103–2 One of the most important areas plan with actions across all Group Environmental Protection Monitoring GRI 103-3 ▪ SDG 3 – Good health and well-being of this work is the interaction Subsidiaries. ▪ SDG 6 – Clean water and sanitation and cooperation with key stakeholders ▪ SDG 11 – Sustainable cities including local communities, The implementation of improvement In accordance with the legislative Across various levels of the Company, and communities state authorities, environmental actions to achieve environmental goals requirements of the Russian Federation, from special divisions to top management, ▪ SDG 12 – Responsible consumption organizations and scientific is carried out within an Integrated HSE evaluation of potential environmental performance against the Company’s and production institutions to incorporate feedback, Management System (IMS), which has impacts is required when planning environmental goals is reviewed ▪ SDG 13 – Climate action recommendations and sound been in place across Rosneft and Group business activities including the nature to determine the level of progress ▪ SDG 14 – Life below water scientific guidance for carrying out Subsidiaries since 20061. and frequency of impact to ecosystems achieved and to identify risks to delivery. ▪ SDG 15 – Life on land the Company’s projects and activities. and biodiversity, including animals, birds, This review of environmental performance ▪ SDG 17 – Partnership for the goals. fish, and flora. At each stage in the project trends, external and internal risk factors life cycle, compliance with applicable and best international practices guides international, national and regional decision-making at management levels. legislation is monitored including those ROSNEFT’S 2022 ENVIRONMENTAL GOALS processes conducted by contractors The Company continually invests for Rosneft. in professional and technical capability development of its environmental The Company carries out monitoring specialists, keeping informed Reduction Minimisation of environmental impacts, Implementation to assess the effectiveness of changes in environmental of greenhouse of measures including the introduction of the best available of environmental controls regulation and discussing the most gas (GHG) technologies to improve environmental for ecosystem emissions as part performance at operational sites, waste conservation and to determine the level of actual urgent environmental issues. One of the Company’s handling, effective wastewater treatment, and biodiversity environmental impact. This is done of the mechanisms for these discussions climate change and through the systematic implementation protection, restoring by conducting field measurements is through an annual corporate management agenda of ecological investment projects natural resources, including remediation to analyse air emissions environmental congress which of contaminated soil and the quality of surface and ground is attended by prominent experts and key water, as well as to monitor potential stakeholders. impacts to soil and biodiversity, including the preservation of animal migration Environmental Efficiency Programme (to 2025) routes.

KEY FOCUS AREAS OF PROGRAMME

• Reduction in APG flaring; reduction of specific absolute air emissions • Increase in the percentage of recycled water; improved treatment of produced water from oil production; upgrading wastewater treatment systems • Reduction in oil-contaminated areas and accumulated waste, including sludge pits, drilling and sludge waste resulting from the activities of third parties at the Company’s facilities • Delivery of environmental obligations and requirements arising from the current projects and activities of the Company (land reclamation, removal of sludge pits, and waste handling) 1 The HSE Management System is regulated by the Company’s Standard on Integrated Health, Safety, and Environment System No. P3-05 S-0009, version 3.00, approved by resolution of Rosneft’s Management Board and put into effect by order No. 647 dated 16 October 2018.

62 ЦЕЛИ И ПОКАЗАТЕЛИ (С) 2019 / Sustainability Report of Rosneft 63 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Environmental Protection Investments Congress of Ecologists

In December 2019, Rosneft management activities and best practices were Every year, the Company invests in reducing environmental risks through its ‘green investments’ hosted the 6th annual of the Company. A special session presented for waste management Congress of Ecologists. It was on carbon management was held (recycling), drilling waste injection programme which targets both long-term capital construction projects aimed at environmental attended by environmental and included discussions on climate- and beneficial uses for drilling protection and projects which reduce environmental impacts from existing operations. As part leaders and specialists related risks; a carbon management and oil refining waste by both of implementation of the Rosneft–2022 Strategy, around RUB 300 bln have been allocated to these from the corporate office framework for the Company the Company itself and third parties. and from 135 Group Subsidiaries, and best practices for managing ‘Green investments’ to drive improvements. as well as representatives emissions from associated A number of proposals to improve environmental of Rosneft’s international partners – petroleum gas (APG) flaring During the period from 2020 to 2022, Green investments will represent around 7% Equinor and BP. and reducing methane emissions. practices at operational sites and to assist decision making of the Company’s annual capital expenditure. GRI 307–1 During eight thematic sessions, As part of the Congress, on the management of emerging presentations were made a Technology Conference was also environmental risks were developed on the key aspects of environmental held where emerging technologies from the Congress.

• Target indicators KPIs of top managers and middle of the Rosneft–2022 Strategy managers. in ecology defined. • Activities • Ecological indicators are integrated to achieve the Environmental goals into the Company’s management are integrated, planned and funded Management system system and included in annual under the Environmental Efficiency Improvement Programme.

• Gas Investment Programme. • Investment projects to build • Energy saving programme. infrastructure facilities for improving • Pipeline Reliability Enhancement environmental performance Programme. Programmes, CAPEX events1

• Land remediation. • Development of environmental • Oily waste management. protection documentation and obtaining environmental permits. OPEX Events2

Over the last three years, Rosneft has completed a number of major environmental projects, including those actively rolled out as part of the Year of Environment in 2017. This, coupled with rescheduling of some projects under the Gas Investment Programme, contributed to reducing the volume of green investment as at the end of 2019.

Environmental Cooperation Investments in environmental protection, RUB mln GRI 307-1

Rosneft collaborates with state and Ecology of the Interdepartmental Period 2017 2018 2019 authorities to assess the impact Commission for participation For details on this cooperation Agreement Investments in fixed assets for environmental protection 67,240 45,605 34,544 of draft regulations on environmental of the Russian Federation in the Group with the Ministry of Natural Resources management. The Company actively of Twenty (G20), etc. and Environment of the Russian Federation, see Current environmental protection opex 28,642 31,697 29,244 the section Preservation of Biological Diversity. participates in a number of discussions Payments to budgets at all levels related to environmental protection 4,199 4,741 4,338 within coordinating bodies In 2019, Rosneft and the Ministry and ecological management, including: of the federal government and public of Natural Resources and Environment Environmental permits 913 1,159 1,348 organizations. These organizations of the Russian Federation signed In December 2019, Rosneft and the Ministry of Natural Resources and Environment of the Russian Federation include the Scientific and Technical a cooperation Agreement to support signed a cooperation Agreement to support a number Environmental compensation 1,705 1,040 1,296 of environmental projects under the framework Council of Rosprirodnadzor a number of environmental projects of the national Environment project. Accumulated fines for environmental pollution 258 290 200 and the Working Group on Energy under the framework of the national Non-financial sanctions, number of cases 0 1 0 Environment project.

64 2019 / Sustainability Report of Rosneft 65 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Fines related to environmental impact of production processes and drive Investments in fixed assets decreased by 31% compared with 2018 the implementation of measures aimed for environmental protection, Reducing Air Emissions showing the improvement in meeting at the conservation of groundwater, RUB mln compliance with environmental Rosneft is also developing a number legislation. of technologies to increase water- ,2 One of the priority areas of Rosneft’s environmental agenda is to reduce flooding efficiency and reduce , air quality impacts resulting from air emissions released during In 2019, investments in R&D linked the volume of water required operational activities. with environmental improvements to maintain formation pressure. totalled RUB 242.7 mln. For example, a target innovative project is currently underway to develop high- Rosneft has introduced an innovative viscosity oil reserves of the Pokurskaya Investments project for the development suite formations in Western Siberia. The Company achieved a 3% Also, in 2019, work on the construction Last year, the Company continued of a corporate hydrogeological To this end, the Company is developing reduction in non-GHG emissions of a gas treatment unit in the East the construction of a desulphurisation information system. This is expected polymer flooding technologies which in 2019. Urengoy licence area continued plant and production of granular to become a comprehensive can potentially reduce reused water 2,2 under an Agreement between Rosneft, sulphur as part the construction solution for planning the withdrawal consumption by more than a half. the Russian Ministry of Natural of the hydrocracking complex and use of groundwater as well Resources and Environment, at Achinsk Refinery. The open oil as for monitoring and minimizing arete oloial roraes and Rosprirodnadzor, at a cost of more separator of the reverse water supply For more information on this subject, see the impact on underground water apital onstrution of failities the Climate Action chapter than RUB 11 bln. This construction system at Saratov Refinery was sealed bodies. This will improve the efficiency related to environmental ﬁxed is planned to be completed in December 2019 to reduce emissions assets and commissioned in Q4 2020. by 85 tonnes/year. aterials an euipent ssoiate inestents In addition to its contribution In oil refining, gas processing ter to greenhouse gas reductions and petrochemicals, atmospheric by decreasing the quantity of APG emissions decreased by 1% due that is flared, the Gas Investment to the implementation of a number 3 % Programme also contributes of controls including installation reduction in non-GHG air to the reduction of other gaseous of pressurised aluminium internal emissions in 2019 emissions into the atmosphere. floating roofs on tanks at Syzran GRI 103–1 GRI 103-2 Refinery and Novokuibyshevsk Refinery. In 2019, floating roofs were mounted As part of the Gas Investment on three tanks. It is planned to install Programme, three compressor another eight vertical steel tanks stations were completed with floating roofs in 2020. at RN-Yuganskneftegaz.

1 Structure of non-GHG emissions into atmosphere , kt GRI 305-7

Period 2017 2018 2019 Gross air emissions, including: 1,846 1,835 1,773 solids 82 87 85

sulphur dioxide (SOx) 87 86 86 carbon monoxide (CO) 743 822 841

nitrogen oxide (NOx) 57 60 66 hydrocarbons (without volatile organic compounds) 500 379 303 volatile organic compounds 355 391 384 benz(a)pyrene 0.00003 0.00002 0.00002 THE COMPANY IMPLEMENTS NEW TECHNOLOGIES FOR other 22 9 8 INTEGRITY CONTROL, INCLUDING THE USE OF UNMANNED AERIAL VEHICLES TO MONITOR REMOTE SECTIONS

1 Сумма цифр может не совпадать с общим итогом вследствие округления.

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Overall across air emissions, there were significant reductions in non- Conserving Water Resources VOC hydrocarbons (20%); benz(a) pyrene emissions (18%) and other air emissions (12%) but increases The environmental efficiency improvement programme Rosneft strives to minimise in the emissions of carbon monoxide drives an increase in the percentage of recycled water, the water resources consumed, and nitrogen oxides because of greater improvements in the treatment of produced water from oil used and discharged to reduce quantities of flared APG (for details see the impact on the aquatic production as well as upgrades of wastewater treatment chapter Climate Action). environment and ecosystems systems. GRI 103–1 GRI 103–2 in the areas where the Company operates.

Specific air emissions by type, t/ktce Rosneft complies with regulations Most of the Company’s operations The Company ensures that it does on the use of water resources, are carried out in areas with sufficient not violate the right of any local and the Company takes measures fresh-water resources, though inhabitants and other stakeholders to protect fresh water bodies some international operations to fresh-water access and also invests 1.04 0.97 by increasing the efficiency of water are in areas of water stress, in a number of infrastructure initiatives 1.03 usage; employing best available as classified by the Aqueduct to improve the local water supply treatment technologies for produced programme. Despite this, the actions in support of regional populations 1.80 1.56 1.35 water; increasing the percentage taken to reduce demand and conserve in areas of its footprint. of recycled and re-used water fresh-water are similar whether 0.134 0.139 0.146 0.10 0.10 0.11 and introducing modern wastewater the region is classified as water scarce In Brazil, RN-Brazil, a Rosneft subsidiary, 0.48 0.46 0.46 treatment systems. or not. Within the Russian Federation, there are strict operational controls 0.055 0.052 0.06 2017 2018 2019 access to water bodies for direct to ensure the sources of water withdrawn The Company assesses environmental or indirect use by the Company and the quality of waste-water discharged

Specific SO emissions risks, including water resource is carried out in accordance are in compliance with local discharge oil an as proution risks. The assessment methodology with the country’s legislation regulations. The monitoring of waste- oil refining, gas processing and is based on the ISO 31000 standard; and approval of local regulatory bodies. water discharges from these operations petroeials baseline conditions of water GRI 303–2 confirm that there is no adverse impact Specific NO emissions bodies and ecosystems in regions on the Amazon river system. oil an as proution of the Company’s footprint, and laws oil refining, gas processing and of the Russian Federation. In 2019, petroeials For details on the Company’s support of regional among risks related to water bodies, Specific hydrocarbon emissions initiatives for providing locals with fresh water, see the assessment identified accidental chapter Community Engagement. (including volatile organic Rosneft was ranked among the best oil and gas compounds) pollution risks, including risks companies in the Water Resources category of the Global CDP Rating. oil an as proution of pipeline failure. To mitigate the risks, oil refining, gas processing and comprehensive management solutions petroeials are being implemented including the reconstruction, overhauls, diagnosis, inhibition and cleaning of pipelines.

68 2019 / Sustainability Report of Rosneft 69 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Water Consumption The volume of reused water Volume of recycled and reused increased by 9% year-on-year water GRI 303-3 >90 % to 2,496 mmcm due to improvements of water used in the Company’s In 2019, fresh water consumption The increasing volume of water-use Use of water from all sources, in the quality of wastewater treatment operations was reused increased by 3% compared with 2018. is due to the associated increase mmcm and the upgrades of waste-water 94 and recycled, minimising This was mainly due to an increase in production and in addition higher systems. 93 93 Rosneft’s fresh water intake in water withdrawn from surface withdrawal rates to maintain reservoir 1,846.8 1,813.0 1,855.6 sources. pressure. 2,496 The volume of reused water 2,260 2,280 was up IGroup Subsidiaries reduced water Fresh water withdrawal, mmcm consumption and water withdrawal GRI 303-1 from natural sources by implementing 2017 2018 2019 the following improvements: 381.2 394.6 407.5 9 % ▪ Treatment and reuse of water 8.4 olue of reyle an reuse year-on-year 12.2 7.6 from individual petrochemical 41.3 ater 48.9 47.9 plants of Angarsk Petrochemical olue of reyle an reuse Company and section No. 1 of CHP-9 242.9 water, % 218.6 222.8 of Irkutskenergo; 2017 2018 2019 ▪ Increase in the share of recycled and reused water for the Kuibyshev 101.5 116.3 115.0 Refinery and reconstruction of Volga water conduit sections; 2017 2018 2019 Water Disposal ▪ Reduction of the water intake roun ater due to the recycled water supply The most significant potential ▪ Reconstruction of mechanical ▪ Decreasing disposal of industrial Surfae ater of produced water by RN-Severnaya impact from waste-water discharges and biological wastewater treatment effluents to surface water bodies irparty ater supply netors Neft; is from their discharge into surface plants at the Ryazan Refinery. by 4%, ▪ Installation of water meters Rain ater water bodies with around 68% ▪ Decreasing contaminated for the purpose reducing water of the Company’s total water discharges The total costs for the modernisation wastewater discharges by 4%. consumption. into these systems in 2019. To minimise of treatment facilities at the Company’s this potential impact, the Company has refineries in 2019 exceeded RUB 626 implemented a series of improvement mln with the Company making good measures including investments progress in this area by: Contaminated wastewater in the upgrade of treatment facilities ▪ Increasing the volume of water discharges in 2019 reduced by at the Company’s refineries. These disposed for reuse into the network include: of other organisations by 16%, ▪ Construction of a unit ▪ Decreasing domestic wastewater for neutralising acidic and alkaline disposed by 5%, 4 % effluents at the Kuibyshev Refinery;

Formation water treatment Total water disposal, thousand cub m GRI 306-1

Period 2017 2018 2019 Period 2017 2018 2019 Total produced water, mmcm 1,587.8 1,588.1 1,658.3 Domestic wastewater discharges 75,731 74,937 71,511 Injection into formation without treatment, mmcm 26.5 13.6 189.3 Industrial wastewater discharges, including: 193,161 186,883 184,366 Injection into formation with treatment, mmcm 1 426.0 1 471.6 1 356.2 into surface water bodies 133,192 127,904 122,666 Disposal of formation water, mmcm, including: 98.4 97.7 110.04 into formations 59,870 58,881 61,654 discharge into formations 98.4 97.7 110.02 into soils 99 98 45 discharge into soils 0.043 0.054 0.026 Total hydrocarbons in waste formation water, kt 16.54 22.36 17.63 Industrial wastewater discharges, thousand cub m GRI 306-1

Indicator 2017 2018 2019 Standard-treated and standard-clean wastewater 110,152 108,715 109,060 Polluted and insufficiently treated wastewater 83,009 78,168 75,305

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Wastewater discharges into third-party networks for reuse, thousand cub m GRI 306-1 IN 2019, THE BASHNEFT-UFANEFTEKHIM BIOLOGICAL 10,380.2 TREATMENT PLANT COMPLEX REACHED ITS DESIGN 8,938.86 THROUGHPUT TARGETS.

290.39

2017 2018 2019

A number of measures for the construction and reconstruction of wastewater treatment plants in the Group Subsidiaries were implemented in accordance with the tripartite Agreement concluded between Rosneft, the Russian Ministry of Natural Resources and Environment, and Rosprirodnadzor as part of commitments made in 2017 – the Year of the Environment.

This facility has a capacity WATER CONSERVATION PROJECTS UNDER THE AGREEMENT ON COOPERATION of 84 thousand cub m Rosneft received a “B-” rating in the “water resources” WITH THE MINISTRY OF NATURAL RESOURCES OF RUSSIA AND ROSPRIRODNADZOR per day and has reduced category of the international CDP ranking the volume of water intake from water bodies by 250%. In 2019, Rosneft received According to the United Nations, This is not only one of the key a «B-» rating based on its CDP fresh water accounts for only 2.5% Water submission (previously of total water resources and by 2030 environmental investment Carbon Disclosure Project). global water scarcity can reach reconstruction construction of a complex construction projects of the Company A total of 2,435 companies were 40%. In this context, the CDP rating of the unified complex of facilities for the disposal of a post-treatment but also the largest facility rated from their submissions in the water category is becoming of biological wastewater of treated wastewater unit at the existing in Eurasia among those in this category including increasingly important to investors. treatment plants from the Valanginian treatment facilities at Bashneft-Ufaneftekhim deposit of the Vostochno- of Novokuibyshevsk implemented using membrane 109 oil and gas companies It also stimulates companies, (commissioned) Urengoysky licence area Refinery bioreactor technology. from 28 countries. Rosneft’s financial markets and governments (startup in progress) (commissioned) Biological treatment facilities rating is equivalent to the global to ensure continued growth without international average ranking compromising fresh water supplies can significantly improve among global oil and gas majors and to assess water scarcity when the quality of wastewater and showed that the company’s making project investments. Also, treatment, as well as increase water conservation activities were Rosneft implements a number the use of purified water continuing to identify and manage of infrastructural initiatives in technological processes. water scarcity risks. to improve the local water supply construction construction reconstruction in support of regional populations of local treatment facilities of a wastewater of a sewage treatment in areas where the Company and cooling water supply treatment plant plant of production operates. GRI 103-3 unit for additive production for industrial and storm and storm sewage at Novokuibyshev Oils sewage on the left bank discharged into and Additives Plant of RN-Morskoi Terminal the Nobitsky bay (commissioned, startup Tuapse (to be completed in 2026) in progress) (to be completed in 2023) For details on regional initiatives to improve water supply, see the Supporting Social and Economic Development of the Regions section

72 2019 / Sustainability Report of Rosneft 73 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Prevention of and Response to Oil Spills Land Remediation and Waste Management

The Company assesses the extent of its ecological footprint across the areas where it operates and, as a result, takes Land Remediation a number of actions to both prevent oil spills, as well as to reduce the severity of environmental impacts if any When planning and executing production activities, the Company strives spills occur. to improve its environmental environmental performance and reduce potential environmental impacts, taking the necessary measures to remediate any disturbed or contaminated land and using the most The existing corporate Oil Spill Response and the first phase resulted in a 30% applicable waste treatment technologies. GRI 103-1 GRI 103–2 System is designed to mitigate potential decrease in the rate of pipeline environmental impacts. Rosneft strictly failures compared with 2013. adheres to a policy of immediate The volume of oil spilled from pipeline The Company has a Remediation The rate of land remediation decreased and transparent reporting and closely failures across the Company also and Waste Management Standard in 2019 due to new legislative changes cooperates with relevant state reduced by 2% in 2019. in place to regulate land remediation, and the enactment of Decree No. 800 authorities. GRI 103-3 sludge pits and waste handling. Timely of the Government of the Russian The total volume of spilled oil across “RN-Yuganskneftegaz implementation of these procedures Federation of 10 July 2018 (as the Company showed a continuous prioritises environmental safety is one of the goals of the Environmental amended on 7 March 2019) On Land The Syzran Refinery has reduction from 2017 to 2019. and protection and invests Efficiency Improvement Programme. Reclamation and Conservation”, commissioned a digital system in state-of-the-art equipment which introduced new approval for monitoring pipelines. and sustainable technologies. In 2019, these measures resulted requirements and permits for land This digital equipment Daily 24-hour drone monitoring in a 14% reduction of the contaminated remediation projects. Nevertheless, allows operational personnel Total volume of spilled oil and oil has become an important step land area compared with 2018. the Company continued its efforts towards improving the reliability to accurately identify the location products across the Company, and progress towards reducing of production facilities, primarily of pipeline ruptures and halt tonnes GRI 306–3 pipelines. They currently cover the area of contaminated land. the pumping of hydrocarbon all field pipeline transport products if any failure is detected. 730 network of the asset. This 663 652 improved the ability to detect process upsets and incidents, Area of contaminated lands, ha GRI 304-1 A number of measures were taken and significantly reduced to improve the reliability of production response times. It also enhanced Period 2017 2018 2019 monitoring of protected areas facilities and equipment. These include: Area of contaminated land at the beginning of the year 3,617 3,738 1 3,219 ▪ Improvement of the corporate system of the Company’s assets.” Area of contaminated land specified during the pre-project survey 306 123 183 for the localisation and elimination of oil and petroleum product spills; Igor Tabachnikov Newly contaminated land 321 204 232 ▪ Completion of the Pipeline Reliability CEO, RN-Yuganskneftegaz Area of contaminated land at the end of the year 3,348 3,219 2,710 Enhancement Programme for 2015– 2017 2018 2019 2019; Area of natural restoration of disturbed lands 157 86 202 This Programme is now in its second Rosneft actively cooperates with its Area of remediated land 19,866 19,001 17,471 5-year phase from 2020 to 2025 international oil and gas strategic and covers the activities of 28 Group partners, BP International and Equinor, For details on the Pipeline Reliability Enhancement Programme, see the Equipment Integrity section oil and gas producing subsidiaries. with the aim of sharing experience of this Report It uses a risk-based approach and best practices as well as application aimed at ranking and identifying of best available technologies critical processes with potentially for preventing oil spills. In April 2019, high environmental impact. It a three-day workshop on best practices targets over 120 thousand km in the area was conducted jointly of the Company’s pipeline network with BP International.

1 Data for 2018 reflect the area of land contaminated by bottom water.

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Minimisation of newly generated When handling waste, the Company adheres to the principle Land Remediation in the Khanty-Mansi Autonomous Area waste and the continuous reduction of sustainable use of natural resources and preservation of accumulated waste are key principles of the environment. To this end, the following initiatives are being The Khanty-Mansi Autonomous Autonomous District. Annually, reclamation. Given the high of waste management. The increase implemented District – Yugra is strategically in licence areas of the Khanty- water levels and boggy areas in accumulated waste in 2019, important to Rosneft’s activities. Mansi Autonomous District, of the region, the winter reclamation The Group Subsidiaries that it is estimated that around 400-500 method is more practical however, was due to a reduction operate in this region strive ha of disturbed lands are restored. for cleaning these areas, which in waste handling caused by extended to reduce their environmental A number of Company’s cannot be accessed in the warmer procurement procedures which impact and coordinate annual operations in the district, seasons. Using the winter are being improved. environmental protection such as the Nizhnevartovsk Oil restoration method allows INITIATIVES programmes and Gas Producing Company the increase in volumes of soil that In 2019, the Group Subsidiaries and ecological restoration and Varyeganneftegaz, have can be accessed and remediated activities with the regional office remediated 100% of land which was every year. This process involves implemented the following of Rosprirodnadzor. The approach historically contaminated by third an integrated approach, using improvements as part of the waste used by Rosneft is to remediate parties. amphibious excavators, large- management process: contaminated lands at the same capacity all-terrain vehicles, floating ▪ Acquisition of a mobile oil Reuse Separate accumulation In 2019, the Company remediated and storage time as introducing pipeline swamp buggies, snowmobiles, sludge disposal unit at Bashneft- integrity improvements. This over 800 ha of land in its licence and mini-all-terrain vehicles. of materials which were generated Ufaneftekhim branch of Bashneft; reduces the risk of new leaks areas in the Khanty-Mansi during production, work, services of waste in designated areas and ensures there is an improved Autonomous District. According ▪ Recycling of oil-containing or in the process of consumption in compliance with environmental, spill reporting and response system to decisions of Yugra Prirodnadzor, wastes of the Kuibyshev Refinery sanitary, epidemiological laws 763.4 ha of land was certificated and other applicable regulations to minimise the potential for future and construction of a spent contamination. as excluded from the list of contaminated lands. sulphuric acid recovery unit In 2018–2019, Rosneft invested continues to progress. Once An effective method of carrying For details on Rosneft’s environmental initiatives over RUB 35 bln in environmental commissioned this unit will out work in the Khanty-Mansi in the Khanty-Mansi Autonomous District – protection and remediation Yugra, see our website. Autonomous District is winter stop spent sulphuric acid activities in the Khanty-Mansi from being transferred to third Waste transfer At the design stage,

parties for treatment; to special points for decontamination selection of technological processes ▪ Construction of concrete paved and disposal that generate the lowest quantities and fenced platforms on all of waste possible production sites of RN-Lubricants Waste Management and a platform for the recycling of oil-contaminated soils delivered from Samaraneftegaz; One of Rosneft’s activities aimed Rosneft pays close attention ▪ Acquisition at minimising its environmental to waste management by both of facilities for the decontamination footprint is waste management. Every Group Subsidiaries and third-party of production and consumption year, oil sludge and drill cuttings supervisors. wastes of RN-Severnaya Neft. are disposed, decontaminated, recycled GREEN OFFICE and safely buried. These practices The Company builds new are regulated by the Company’s Waste and reconstructs existing industrial “As early as in 2017, Management Standard. waste landfills, furnishes facilities Varyeganneftegaz became with modern oil sludge treatment the region’s first producing In pursuance of the Green Office refineries, RN-Volgograd, RN-Morskoi equipment. company to eliminate “legacy” Principles, the Group Subsidiaries Terminal Tuapse, Tomsknefteprodukt lands which were contaminated arranged for the separate accumulation VNK, RN-Rostovnefteprodukt, during the Soviet period of field and storage of waste in designated Saratovnefteprodukt, RN-GRP, development in Western areas for subsequent disposal. VNIPIneft, and others use the method Waste management, kt GRI 306–2 Siberia. Nevertheless, In particular, the Syzran and Achinsk to collect and recycle paper waste. protection of environment refineries, RN-Morskoi Terminal Tuapse, The Company also has a process Period 2017 2018 2019 is still one of the key Bashneft-Roznitsa, and others have for the decontamination and disposal aspects of our operations, this process in place for plastic waste; of hazardous waste (batteries, ink Waste at the beginning of the year as adjusted 14,122 14,374 15,642 and as of today we have shifted the Achinsk and Novokuibyshevsk cartridges, etc.) generated by its offices. Waste generated and accepted (from third parties) 8,769 7,167 6,097 to drilling waste disposal during the year directly from the rig.” Waste used during the year 4,355 4,339 3,612 Waste neutralised and recycled 533 504 445 Alexey Sinyakov Waste buried 499 451 420 CEO, Varyeganneftegaz Waste transferred in ownership to third parties 3,439 1,312 592 Waste at the end of the year 14,064 14,934 16,670

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At all stages of the life cycle of operational Biodiversity Conservation processes, the Company carries out BIODIVERSITY CONSERVATION MEASURES environmental monitoring and takes measures to prevent environmental impacts, protect ecosystems Managing the Company’s Biodiversity Conservation Efforts and habitats. These monitoring results are used for scientific purposes and are taken into account when development of methodological development of instructions planning further environmental approaches and environmental to minimise the impact protection measures. All employees programmes for monitoring of economic activity during The Company takes all possible measures to preserve These programmes are aimed of the Company and contractors and conservation of biodiversity exploration ecosystems and biodiversity across its operating areas at protecting certain species are banned from hunting and fishing and has worked together with scientific and environmental of animals and birds with a focus in the areas of the Company’s projects. nationally and internationally GRI 103-3 organisations to develop the most effective biodiversity protected, as well conservation programmes. GRI 103-1 GRI 103-2 as replenishing the biological comprehensive field research monitoring of the health resources of ecosystems of ecosystems, including methods of aviation, ship Rosneft’s Policy on Health, Safety and Environment Rosneft strictly complies from authorised bodies, including projects of the Company are assessed is available on the official website of the Company and coastal surveys with the environmental legislation state ecological experts, for potential environmental impacts, of the Russian Federation and the public. The Company is also with action plans being developed and implements biodiversity guided by international recommendations to minimise such impacts. conservation projects subject and standards that govern production research and development to expert guidance and approvals and economic activities. All new

Using the results Implementation Environmental impact of environmental monitoring of the Company’s assessment for scientific purposes Biodiversity Conservation in the Arctic Region and the development projects of environmental measures The Arctic ecosystems are known To build on the Programme of marine In the period from 2015 to 2019, to be highly sensitive and vulnerable, ecosystem biodiversity conservation the Company allocated more and the Company focuses on activities in the licence areas of Rosneft than RUB 870 mln to implement aimed at preserving biological diversity in the Arctic zone of the Russian the Programme of marine Environmental monitoring Development in this region. Federation, the Company plans ecosystem biodiversity and implementation of action plans to reduce to implement a large-scale target conservation in the licence environmental impacts In the period from 2015 to 2019, innovative project to assess stability areas of Rosneft in the Arctic the Company implemented a marine of Arctic ecosystems based on studies zone of the Russian Federation ecosystem biodiversity conservation to understand the health of key Programme in the licence areas indicator species populations between of Rosneft in the Arctic zone 2020–2023. The research will be carried Obtaining approval Obtaining permissions, Obtaining public approval from state ecological approvals of authorised of the Russian Federation, with the main out under the Agreement between experts bodies focus to ensure the safe development the Company and the Russian Ministry of the Arctic and biodiversity of Natural Resources and Environment conservation. The Company as part of the national Environment engaged specialised Institutes project. and scientific organisations to render environmental support for exploration, The project is focused on assessing R&D and methodological work, the current condition, size, and dynamics environmental monitoring of indicator of populations of indicator species such species of Arctic ecosystems as wild reindeer and species from the Red and their habitats. Over the five years, Data Book of Russia – white gull, Atlantic more than RUB 870 mln were allocated walrus and polar bear. These provide to implement this work. an indication of the health and stability of the Arctic’s marine and terrestrial ecosystems.

78 2019 / Sustainability Report of Rosneft TARGETS AND INDICATORS (A) 79 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

For its part, the Russian Ministry The data obtained from such Research and Monitoring of Indicator AS PART OF ITS NEW of Natural Resources and Environment expeditions are used to prepare PROJECT TO ASSESS will provide scientific, methodological environmental atlases of Russian Species of Ecosystem Health STABILITY OF ARCTIC and data analytical support seas published by the Company since ECOSYSTEMS IN 2020, THE for this Programme. The Company 2016. The atlases contain extensive COMPANY PLANS TO: will use the project deliverables information on oceanography Polar Bear Evenki Reindeer Black Sea Dolphin for safe operations in the Company’s and biodiversity in the regions. They licence areas and for assessing are unique regional reference books During field expeditions Monitoring the state of the Taimyr- In 2019, scientific research of mammals the environmental impact of planned for Russia which highly appreciated and ship voyages, polar bear sightings Evenki deer population as the main of the Black Sea continued with scientists operations, as well as to develop by the scientific and expert community. are recorded and biological samples biological resource of the Arctic from the Institute of Oceanology monitoring methodologies for these The Company has published collected to contribute to scientific territory is extremely important of the Russian Academy of Sciences species. the following atlases: studies. Bears are tagged with satellite for science and the local indigenous conducting studies on more than 2 Develop a comprehensive ▪ Kara Sea. Environmental Atlas transmitters and identification numbers population. In 2019, specialists thousand dolphins within the territorial research programme in 2016, for tracking. of the Siberian Federal University waters from Sochi to Anapa. for the study and monitoring The Company plans to allocate ▪ Laptev Sea. Environmental Atlas recorded new data on the condition of key species as indicators approximately of the stable health of marine in 2017, In 2019, two expeditions were arranged of the Taimyr-Evenki wild reindeer They used detailed digital photography Arctic ecosystems (polar ▪ Marine Mammals in Russia’s Arctic in the licence areas of the Company population. The main objective to collect extensive scientific data bear, walrus, white gull) and Far East in 2017, on the Arctic shelf. The Russian of the expedition was to compare data and photos across more than and ecosystems of the northern ~295 ▪ Black Sea and Sea of Azov. Academy of Sciences (RAS ) evaluated obtained from satellites with ground- 1000 km of the marine route territories of Siberia (wild reindeer) RUB mln Environmental Atlas in 2019. the habitats and conditions of polar based observations and previous and also compiled photo and acoustic to this Programme. bears in three licence areas. population numbers. catalogues of the Black Sea cetaceans of this region. In addition, coastal The Central Siberian Reserve The scientists used modern satellite studies were also conducted Since 2012, the Company regularly also conducted studies technologies to show that the increase and samples taken for further For details on the environmental atlases published conducts comprehensive research in 2019, see the section Research and Monitoring on the size and distribution of polar in migration distances together laboratory studies. Prepare a review of materials expeditions to study the health of Indicator Species of Ecosystem Health. bear populations, their habitats with the significant shift of the start to assess the scientific of marine Arctic ecosystems. Particular and food sources within and around and end dates of seasonal animal Data collected from these studies knowledge of key species attention is paid to rare and protected the Company’s licence areas. migrations have had a significant effect indicates that increasing anthropogenic species, including those listed The research is also focused on the population size of this species. impacts have made the Black Sea in the Red Data Book of the Russian on the seasonal distribution of polar dolphins very vulnerable. Scientists Federation, regional Red Books, bears on islands during an ice-free are preparing recommendations and the Red List of the International period, and also on the population on measures to preserve these unique Union for Conservation of Nature of bears in the Yamalo-Nenets animals, as some of them are listed Conduct further field research and Natural Resources. Autonomous Okrug. in the Red Data Book of Russia.

Laptev Walrus In 2019, the research on the Laptev walrus was carried out in the Pechora Sea together with specialists Conference on Environmental Safety of Offshore Operations from the Nenetsky State Nature Reserve. The daily activities of walruses In September 2019, with the support The Conference addressed Participants of the conference were monitored by installing 13 of RN-Exploration - a subsidiary the issues of ensuring safe work shared experiences, discussed autonomous photo recorders. of Rosneft, a scientific and practical in Southern seas. In particular, priorities, developed solutions Species composition and population Conference titled ‘Conference topics of marine seismic surveys and approaches to ensure the safe abundance were assessed visually both on Environmental Safety of Offshore were discussed; meeting HSE development of the Russian Sea in the rookery and in the waters around Operations’ was held in Astrakhan. requirements; elimination of oil shelf. At the end of the event, the island. The event was attended by over 50 spills, environmental studies, etc. the Conference participants representatives of the scientific and city residents released sturgeon and business community. fingerlings in the river of Volga to contribute to maintaining the sturgeon population in the Caspian Sea.

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ACTIVITIES FOR THE REPRODUCTION OF AQUATIC BIOLOGICAL RESOURCES Public Consultations

Every year, Rosneft takes measures to both conserve and support the increase Conducting Public Discussions on the Results of Environmental in natural populations of aquatic species. Impact Assessment of Planned Activities

In 2019, in support of this objective, 29 Group Subsidiaries released more In accordance with Russian legislation, Rosneft ensures that stakeholders than 37 mln fingerlings of peled, actively participate in discussions about the Company’s new developmental sturgeon and other fish into the waters projects and plans for constructing new operational facilities to provide input of the regions where the Company and feedback. These discussions take place at the design stage of the project operates. The largest peled fingerling releases were held at Kondaneft (5 mln), and contribute to the environmental impact assessments for these activities. RN-Purneftegaz (8.2 mln), Sorovskneft (2.5 GRI 103-3 GRI 413-1 mln), and RN-Yuganskneftegaz (2.6 mln). Around 2 mln sturgeon fingerlings were released at RN-Yuganskneftegaz, while around 2.7 mln whitefish fingerlings were released at Sibneftegaz. THESE STAKEHOLDER In 2019, 226 consultations In 2019, 13 meetings with stakeholders CONSULTATIONS were held with representatives were held regarding work scheduled of the local population with assistance in licence areas situated in the Barents, ARE ORGANISED TO: Environmental Atlases Prize, established by the Russian from regional and municipal Pechora, and Kara seas, and the Sea of Russian Seas Geographical Society. The Atlas governments. The events were of Okhotsk. The following issues provides original data on the condition organised in 21 regions where were the most important for public Together with the Foundation of the environment, which were the Company operates including stakeholders: for Support of Scientific and Project obtained in the course of many years the Yamal-Nenets and Khanty-Mansi ▪ Compensation for damage Activities of Students, Graduate of research on the marine ecological Inform the local population autonomous districts, the Republic to aquatic biological resources Students and Young Scientists “National state in the licence areas of Rosneft. about the planned project of Bashkortostan, Buryatia, Tatarstan, (raised at three meetings); “Environmental initiatives Intellectual Development”, the Company or activity of the Company Sakha (Yakutia) and the Chechen ▪ Experience and practice have long been an integral publishes environmental atlases The atlas titled Russian Arctic. Space, part of our corporate culture. Republic, Krasnodar, Krasnoyarsk, of the Company in implementing of the Russian seas. Time, Resources includes 15 thematic The Company places emphasis Primorye and Khabarovsk Territories, similar projects (raised at three sections and is a collection of scientific on the safety of environment, as well as in the Arkhangelsk, Astrakhan, meetings); In 2019, the Environmental Atlas data on physical geography, ecology, environmental compliance, Murmansk, Samara, Saratov, Sakhalin, ▪ The impact of work on soil cover of the Black Sea and the Sea of Azov research history and economic and encouraging responsible Tomsk and Tyumen regions. and fish resources (raised at four approach to nature. Review project documentation was published. This is the fourth potential of the Arctic zone (project documentation, G&G meetings). volume in a series, which was of the Russian Federation. The Volga is a symbol of Russia, programmes, etc.) to get nominated for the Crystal Compass and we are committed feedback from local inhabitants Following these consultations, Discussions were held in the following to protecting and preserving the Company provides regions: the Sakhalin, Astrakhan, its biodiversity. In 2019, responses to questions asked Arkhangelsk, and Murmansk regions, Samaraneftegaz released over 80 thousand fry including specific questions the Yamal-Nenets Autonomous of sterlet, hypophthalmichthys, on the environmental impact District, and the Krasnoyarsk Territory. and common carp. Similar Consider specific concerns, assessment. The Company then The documents from these meetings activities are also scheduled needs and interests modifies the documentation were submitted to state ecological for 2020. of stakeholders to be in alignment with agreed experts where three had a positive incorporated into the planning changes requested prior outcome. The projects also received and design stage to receiving approval the support of the public. Sergey Anzhigur for carrying out the planned CEO, Samaraneftegaz work.

Provide explanations and detailed responses to questions from the public about these activities

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Improving Environmental Leader, a regional project conducted Bashneft-Polyus RN-Yuganskneftegaz is rolling out Acknowledgement Group Subsidiaries actively contribute Awareness by the Achinsk Refinery’. This was contributed significantly the Keeper of the Cedar Forests of the Group Subsidiaries’ to environmental protection the first stage of a long-term programme to the implementation of the Khanty-Mansi Autonomous Area Achievements in the regions of their operational Rosneft strongly supports the rational use to improve the environmental awareness of environmental protection – Yugra, a target programme where more footprint and initiate their own actions of natural resources and environmental of the Achinsk community by developing measures on the territory than 475 thousand seedlings of Siberian to improve environmental well-being conservation and continuously a natural resource conservation mind- of the Nenets Autonomous pine (cedar) were planted in 2019. and awareness, while also supporting works to build the environmental set and deepening research skills among District and also held extensive For these purposes, the Company Green Spring-2019 initiatives of regional and local awareness of its employees. As a result schoolchildren who were also involved educational programmes allocated more than RUB 70 mln. nationwide clean-up authorities. a number of Company environmental in environmental lessons and discussions on environmental protection. campaign initiatives are implemented, including on public environmental initiatives. The company actively Tomskneft planted approximately In 2019, Samotlorneftegaz, environmental education programmes participated in the Russian 28 thousand seedlings in Strezhevoy In 2019, Rosneft employees Samaraneftegaz, Tomskneft, Achinsk and involvement of employees, Rosneft conducts various events environmental campaigns in honour of the Russian Environmental took part in Green Spring-2019 Refinery, Angarsk Petrochemical nation-wide clean-up campaign. contractors and local people to improve the level of environmental “Clean Shores to Our Rivers Protection Day. Siberian pine seedlings Company, RN-Komsomolsk Refinery, Over 15 thousand employees in environmental activities. awareness among employees and Lakes!” and «Forest, Live!» were also planted in the territory from more than 80 Group and Novokuibyshevsk Refinery took of the Company and contractors, as well which was highly appreciated of the Izluchensky natural boundary Subsidiaries took part in these an active part in the competition Group Subsidiaries initiate as among young people. The Ryazan by the Governor of the Nenets of the Nizhnevartovsk forestry as part activities. Company employees for environmental activities and participate in regional projects Refinery initiated an environmental Autonomous District, who of activities to restore cedar plantations. planted trees, cleaned up and received awards and certificates to improve environmental literacy, lesson for pupils of school No. 47 thanked the Company formally garbage, and improved urban as winners of the 15th Jubilee Russian not only among employees in the village of Turlatovo. The event for its efforts in conducting Annually, Group Subsidiaries join areas and production facilities. contest Leader of Environmental In total, more than 930 ha were of the Company and contractors, but also was timed to coincide with the Earth these events. the Russian Forest Planting Day. Activities in Russia 2019. cleaned up, which is equivalent among young people and children. Day, and young ecologists, together As part of this activity, employees to 1,870 football pitches; nearly 1 An example of such a programme with employees of the Ryazan Refinery, of RN-Uvatneftegaz and the Tyumen thousand tonnes of garbage was The School of the Ecological Leader, was the School of the Ecological planted spruce seedlings. Oil Research Centre took part removed, and about 5 thousand a project conducted by the Achinsk ~1 in the programme for the restoration trees were planted. Refinery, became the first stage mln trees of the Uspenskoye forestry which For participation of employees of a long-term programme to improve were planted by Group was ravaged by fire in 2015. in the event, Rosneft was the environmental awareness Subsidiaries in 2019 as part As part of the campaign, more than 75 awarded with a commemorative of the Achinsk community. For details, of forest conservation initiatives. thousand seedlings were planted. badge For the Initiative see the Improving Environmental and Significant Contribution Awareness section. Employees of the Koltsovo refueling to the Environmental Protection. Green Office facility contributed to the preparation Samotlorneftegaz took part of the Universiade-2023 in the Sverdlovsk in removing oil contamination The Group Subsidiaries region, by planting large seedlings from the bottom of water bodies are actively implementing of pine and spruce in the forestry using the new Aeroshchup contactless the principles of the Green Office, area in the vicinity of the Novosverdlovsk flotation technology as part which are aimed at the sustainable CHP in Yekaterinburg. Employees In 2019, Rosneft was awarded of the International Project Ecological consumption of resources; reducing of Bratskekogaz took part in the planting the Kommersant Initiative Award Culture, Peace and Concord, as well in the Ecology nomination. For details, see heat and electricity usage, improving of Siberian pine on the territory, which the Carbon Ratings section as in the landscaping of Nizhnevartovsk. the quality of working conditions was destroyed in a recent fire in the Bratsk The Company was awarded certificates and environmental enhancement. District of the Irkutsk Region. and prizes for both projects. Subbotniks (Saturday clean-ups) are held to improve the ambiance of the territory, and annual competitions are held for landscaping industrial sites at the Company’s operating facilities.

Reforestation Efforts Rosneft highlights its commitment to achieving the UN Sustainable Development Goals by implementing a series of measures including those aimed at preserving and restoring forests. In 2019, the Group Subsidiaries planted about 1 mln seedlings. In total, over 60 Subsidiaries planted trees in the regions where the Company operates.

84 2019 / Sustainability Report of Rosneft 85 The goal of the Company is to ensure a safe working environment for all employees and contractors, delivered through an Integrated Health, Safety and Environmental management system which is built on robust operating processes aligned with industry best practices, and with clear accountabilities and priorities.”

Zeljko Runje First Vice President, Oil&Gas and Offshore Business Development, Rosneft

OCCUPATIONAL 90 Industrial and Labour Safety Management 93 People safety 100 Industrial and Process Safety For details on safety 105 Transport safety HEALTH AND SAFETY culture, see p. 91 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Industrial and Labour Safety Management The Company’s Health, Safety of the Rosneft–2022 Strategic goal. and Environment Policy clearly GRI 103-2 For details on the governance structure see articulates its strong stand on HSE the “Sustainable development management” section and sets out the goal, commitments The Company has an HSE Committee, of this Report. and common HSE principles that a standing collective body made up Strategic guidelines GRI 103–1 are in place across all Rosneft’s of a number of senior executives operations for all employees in charge of the production More information on labour safety management and contractors. and support functions. Representatives system can be found at our site As a leader of Russia’s oil industry and one of the largest global energy of an Inter-regional Trade Union companies, Rosneft recognises the nature and scale of its business influence HSE governance is provided organisation also take part and its responsibility to provide a safe working environment for its employees, by the Strategy and Sustainable in this Committee’s meetings. Development Committee partners and contractors and to maintain the smallest possible environmental of the Board of Directors The Committee reviews key HSE risks, footprint across all spheres of business activity. and Rosneft’s Executive Team HSE programms implementation, who guide the delivery of strategic follows up on the corrective improvement programmes towards actions in case of repeated continuous improvement of HSE incidents, recommendations The Company’s ambition performance and the achievement and solutions to improve safety culture, HSE STRATEGIC OBJECTIVE AND ITS PRIORITY of incident-free operations communications, personnel motivation IMPLEMENTATION AREAS GRI 102-15 is driven by implementing and HSE performance. GRI 403-4 GRI 103-3 the highest process safety, personal safety and environmental management standards To become a global leader HSE priority areas: with a strategic HSE objective, Health, Safety and Environment Integrated in HSE peformance, ensuring indicators and priority development a safe working environment • Leadership and Safety Culture Management System GRI 103-2 for employees, conducting • Competency and Capability areas set out in Rosneft–2022 Strategy. incident-free operations, Development preserving health • Safety Management System of population in the regions • Internal Controls Rosneft’s HSE Integrated Management The certification of Group Subsidiaries Costs of labour safety, industrial, of the Company’s operations, • Risk and Integrity Management System (IMS) was developed to deliver to the requirements of the OHSAS blowout and fire safety, RUB bln and minimising • Reporting and Performance the Company’s Analysis the goals, commitments and intent Standard 18001:2007 is prioritised environmental footprint of the Company’s HSE Policy through on the basis of the type of operations, the implementation of industry best including hazard class of the production 56 56 55 practices and standards. facilities, as well as the requirements of investors, partners, clients and other In 2019, the Company’s HSE stakeholders. IMS was once again certified to the requirements of the International Rosneft and 63 Group OHSAS 18001:2007 standard Subsidiaries are certified DEVELOPMENT OF THESE HSE PRIORITY AREAS IMPROVES GRI 103-2 “Occupational Health and Safety to OHSAS 18001:2007 Management Systems – Requirements”. “Occupational Health The requirements of the HSE IMS apply and Safety Management 2017 2018 2019 to all Company subsidiaries as well Systems – Requirements”. as to all contractor staff who provide In 2019, the Company invested services at corporate production The Company has developed facilities. Staff are trained in knowledge a multi-pronged approach to safety of and compliance with the standard. management, placing major emphasis Personal Facility and Process Driving and Transportation ~55 on strengthening industrial or process safety Safety safety RUB bln In 2019, the number of certified Group safety barriers, developing safety in its process and personal safety Subsidiaries increased from 57 to 63. management programmes consistent programme development. with higher risk activities and increasing staff competence and capability on safe practices and controls. Over RUB 55 bln were allocated to these activities in 2019.

1 Prior to April 2020, Strategic Planning Committee of Rosneft’s Board of Directors.

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Managing Health, Safety and Environmental Risks People safety

Safety culture The Company is implementing on managing process, integrity The outcomes of this work are inputs procedures and regulations on HSE risk and transportation risks as well for prioritising and planning for risk management with specific focus on: environmental and occupational health mitigation efforts across operating As one of the foundation blocks of improving and sustaining HSE performance ▪ Risk identification; risks. assets including budgets. In 2019, towards the strategic goals, strong focus is placed on strengthening the Company’s ▪ Risk assessment; this process was implemented across safety culture based on the commitments and principles outlined in the HSE Policy. ▪ Planning and risk management The main goal of the Company’s HSE 72 Group Subsidiaries. actions; and risk assessment and management ▪ Monitoring and analysis process is to take adequate, proactive The priority of the Company is to take proactive actions based on the belief that all and resourced measures for identifying, accidents can be prevented. Work has also continued to implement quantifying and managing identified risk management best practices risks as well as strengthening risk barriers.

The Golden Safety Rules have been Overseas subsidiaries of the Company THE COMPANY’S SAFETY one of the most effective means successfully apply best international CULTURE IS BASED to communicate this personal practices to support safety RISK «BARRIERS» PREVENT OR REDUCE NEGATIVE EVENTS OR RISK FACTORS ON THE PRINCIPLE and collective accountability across interventions in their operations, THAT ALL EMPLOYEES the Company since they are simple for example, RN-BVK, RN-Vietnam, ARE ACCOUNTABLE and user-friendly requirements RN-Brazil and other companies use FOR SAFETY, AND EACH for mitigating risks associated STOP cards (may have different names EMPLOYEE HAS PERSONAL with performing the most hazardous in other subsidiaries). A STOP card ACCOUNTABILITY FOR IT activities. These Rules have been is a standardised form used by all communicated to all employees employees for recording their safety and training programmes are ongoing, observations including equipment Risk Implications with over 83 thousand employees condition, PPE use and compliance factor INITIATING for people, trained in 2019. with Golden Rules of safety. If EVENT assets, an employee is able to stop or eliminate environment, Each employee is accountable for: a hazardous situation, this is recorded and reputation «YOU ARE SAFE» ▪ Knowing and applying the Rules; on this form. Employees use this STOP LEADING BARRIERS LAGGING BARRIERS LAGGING Corporate accountability ▪ Suspending operations where these system to ensure that the situation Rules are not being observed; is resolved and corrective actions ▪ Immediately reporting hazardous are implemented. situations. This practice also helps «I AM SAFE» Since sector contractors carry to identify safe practices out work for oil & gas companies contingencies and highlight Personal accountability across Russia and their workforce minor violations before they Industrial safety control system is relatively constant, the Company escalate. believes it will be beneficial to launch an initiative jointly with BP and other As part of HSE Control Department systems at Group Subsidiaries with inspection reports provided oil and gas companies in the country a separate unit was created and also develops corrective to the leadership of Group Subsidiaries. to develop a common Golden Rules to implement consistent actions for achieving systemic HSE These reports highlight any «WE ARE SAFE» of Safety standard across this industry. and independent HSE control improvements. identified inconsistencies with HSE This will have the positive effect Collective accountability procedures and methodologies. requirements, actions to mitigate of reducing injuries at the federal level. This unit carries out random audits In-process control Commissions operational and environmental risks to assess the extent of successful made 80 scheduled inspections and recommendations for improving implementation of HSE controls as well of Group Subsidiaries in 2019 the HSE Management System. as the efficiency of HSE management thousand>83 employees were trained in Golden Safety Rules in 2019

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Leadership and safety culture Contractor interaction provide. This is the reason why Rosneft and engage contractors committed made the important decision to include to improved HSE performance, As outlined in the principles the HSE performance indicators related a new contractor safety management Rosneft places special focus on improving the direct communication between of the Company’s HSE Policy, Rosneft’s to contractors and subcontractors procedure was approved leadership and employees to create a safe working environment. Senior approach to ensuring safe operations in the strategic HSE goals. and implemented in 2019. This executives of the Company and Group Subsidiary leaders are the driving does not differentiate between procedure included strengthened Company employees and contractor Rosneft maintain high- HSE qualification and selection force in promoting a strong safety culture by personally demonstrating employees as HSE expectations grade requirements criteria and audits for specific work appropriate safe behavior. and requirements are the same to the transparency level activities; the need for mandatory for anyone performing operating of contractors’ reporting. risk assessments; clarification activities at the Company facilities. Reporting of all incidents, of contractor capability requirements whether minor or significant, and the conduct of control activities A significant number of contractor is a mandatory requirement and performance reviews. One In 2019, the Company’s senior Being a major employer, the Company and subcontractor employees work for all contractors. important capability provision executives took on personal has partnered with the state, as well at the Rosneft production and refining included in all Rosneft contracts safety leadership commitments as public and commercial organisations, facilities; contracted entities As part of the process to implement is the requirement for contractors that were earlier taken to develop joint solutions for creating vary in terms of their headcount a systematic approach to improve to train all of their employees on General Directors of Group a safe working environment. and the range of services that they contractor management standards in the “Golden Safety Rules”. Subsidiaries Commitments Representatives of the Company are based on the following participate in the Petroleum “ The use of best practice principles: Complex Facility Safety Section and modern standards of the Research and Development and, most importantly, ▪ Belief - holding “safety minutes” prior Board of the Federal Service the principles to starting operational meetings, for Environmental, Technological of responsibility and care participation in employee behavioral and Nuclear Supervision, for the lives and well-being Initiation of an agreement Qualification of a contractor Entering into safety audits of Group Subsidiaries and in the Industrial Safety Committee of each and every employee, with a contractor a contract and contractors; of the Russian Union of Industrialists is key to Samatlorneftegas JSC ▪ Authority - personal participation and Entrepreneurs. strategy.” in various commissions, including in-process control commissions; In cooperation with other stakeholders, Valentin Mamayev leading by example in observing representatives of the Company SYSTEM OF INTERACTION Director General, safety rules; review draft H&S legislative acts WITH CONTRACTORS IN Actions cover the entire cycle Samotlorneftegas of the customer-contractor interaction ▪ Action - holding HSE meetings for subsequent modification THE FIELD OF HSE with teams of employees and approval, participate in off- or contractors, employee polls site meetings to share experience regarding HSE actions; or to visit industrial production facilities ▪ Support - motivating and rewarding of the leaders of the petroleum employees who prevented incidents, industry. suspended unsafe operations or achieved excellence in H&S performance.

Summarizing contractor Delivery Contractor mobilization performance of a contractual scope

An implementation plan to 2022 was site safety leadership and HSE >3,200 developed for each element. Meetings performance. Over 29 thousand employees were also held with contractor contractor audits were carried attended the Company’s “HSE company leaders to discuss out in 2019 to verify compliance leadership” training programme these requirements and also with state rules and regulations as well in 2019. agree ways to improve contractor as the Company’s HSE requirements.

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Health and Safety Arranging a dialogue with contractors training HSE TRAINING

Prior to starting turnaround health and safety issues with over 40 certification and preparation, timely Developing a strong, proactive operations, representatives contractor companies who provide issuance of work permits, unification and mature safety culture requires of Rosneft and Angarsk Polymer services to the Angarsk Cluster. of preventive maintenance activities highly capable and competent Plant held a “Turnaround 2019. The discussion included topics on sites. Operations management and safe such as PPE standards, contracts employees and contractors. The Company’s investment in HSE 725 performance” meeting to discuss performance, equipment HSE in-house coaches trained training for its employees has been HSE in-house coaches over 93 thousand employees increasing each year, with 725 in-house in 2019 coaches conducting additional programmes for over 93 thousand employees at its Headquarters COURSES: and Group Subsidiaries in 2019.

The training principles Golden Rules Investigation of the Safety Academy make of Safety of safety events it possible to efficiently “The Company’s leadership link theory with practice does not differentiate between contractors and employees in the operations; apply on its operational sites. individual approaches The life, safety and health to the learning process of every person working and ensure maximum at the Company’s facilities, engagement of leaders HSE risks HSE Leadership irrespective of the company in the process. management to which they belong, is the most important priority More than 1,100 employees were valued as a priceless resource.” trained on improved incident investigations techniques linked Vyacheslav Kurenkov to an updated “Incident investigation procedure’’ in place. This will help Director of Downstream HSE THE MAIN OBJECTIVES FOR PARTICIPANTS TO: Department, Rosneft to improve learning from incidents and reduce repeat accidents.

A number of Group Subsidiaries have been actively introducing a “Safety Academy”, an open platform for training, communicating and sharing knowledge and experience related to Health and Safety. Courses Learn to systemically use Prevent non-compliance the H&S training and control with labour safety rules provided through the academy assist tools and requirements participants to develop and exhibit their safety leadership qualities and to build the leadership culture at their sites, with the main objectives for participants to:

Master the HR management Understand and incorporate methods related to H&S approaches to risk assessment thousand>93 employees have taken part in health and safety training in 2019.

For details on the Сompany’s engagement with contractors see the “Contractor Cooperation” section of this Report.

94 2019 / Sustainability Report of Rosneft 95 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Health and Safety performance results Accident Rate among Rosneft’s Employees GRI 403–2 Period 2017 2018 2019 Ratio of the number of lost-time work-related injuries (including fatalities) 0.36 0.341 0.361 2019 injury rate The number of high severity The Company has targeted preventive of the Company’s employees to one (1) mln man-hours worked (LTIF) incidents among the Company measures and programmes to reduce Ratio of the total number of the Company’s work-related fatalities to one hundred 1.87 2.471 1.041 The Company recognises its employees has decreased by 23%, accidents associated with fall (100) mln man-hours worked (FAR) responsibility for the safety of both resulting from the implementation from heights and road accidents (Road Ratio of the number of lost-time work-related injuries (including fatalities) and work- – 0.96 0.78 its employees and the contractor of strategic Health and Safety Safety Concept (BDD)-2022), which related injuries of the Company’s employees involving medical treatment or first aid workforce while conducting work at its programmes, including those focused are two of the identified high risk areas. to one (1) mln man-hours worked (TRIR) operations. The Company’s views any on safety leadership and strengthening These programmes are based on a risk- Total number of employees suffering from work-related injuries 211 1901 2081 injury as being unacceptable and has the Company’s safety culture. oriented approach, identifying risk 1 1 set clear strategic goals to reduce At the same time, the employees factors for each area and strengthening including fatalities 11 14 6 injury rates to top quartile industry have shown improved awareness technical or organisational risk- Ratio of occupational diseases (total number of professional diseases identified 0.11 0.061 01 performance levels. in reporting even low severity prevention barriers and controls to one (1) mln man-hours worked) injuries, appreciating the importance associated with these risks. As a result, each Group Subsidiary of the steps the Company is taking works to eliminate operating to analyse and prevent such incidents. In the area of road safety, a number risks and hazardous conditions Consequently, the Company’s Lost of controls including speed monitors at sites, improve the competencies Time Incident Frequency in 2019 was and new requirements were introduced Accident rate among contractors GRI 403–2 of employees and implement 0.36 (compared to the previous year’s to reduce driving speed by 10 km/h Period 2017 2018 2019 programmes and measures to reduce 0.34), primarily due to the increase lower than the established speed limit. the risk of injuries. The new contractor in reporting of low severity injuries This was designed for specific high Ratio of the number of lost-time work-related injuries (including fatalities) – – 0.38 management procedure will also be resulting from slips, trips, and minor risk road sections during hazardous of the contractors’ employees to one (1) mln man-hours worked (LTIF) critical to assist in improving HSE road accidents. conditions including darkness, rainfall Ratio of the total number of the contractors’ work-related fatalities to one hundred – – 4.14 performance of existing and new and reduced visibility. (100) mln man-hours worked (FAR) contractors working at Rosneft’s sites Ratio of the number of lost-time work-related injuries (including fatalities) and work- – – 1.11 each year. related injuries of the contractors’ employees involving medical treatment or first aid to one (1) mln man-hours worked (TRIR) Total number of contractors’ employees suffering from work-related injuries 140 1352 1482 including fatalities 13 282 162

1 The figures for 2018–2019 are presented in accordance with the IFRS accounts and the new calculation methodology, which does not include injuries as a result of participation in sports events, unlawful activities of third parties, and road accidents caused by third parties in the total injury rate. The indicators for 2017 cover a wider range of subsidiaries. The injury rate includes injuries as a result of participation in sports events, unlawful activities of third parties, and road accidents caused by third parties. LTIF for 2018 and 2019 calculated in accordance with the methodology used by the Company until 2018 would be 0.41 and 0.38, respectively, with a FAR of 3.00 and 1.04 respectively; total number of employees suffering from work-related injuries – 219 and 220 respectively, including 18 and 6 fatalities respectively; ratio of occupational diseases – 0.06 and 0 respectively. 2 The figures for 2018–2019 are presented in accordance with the IFRS accounts and the new calculation methodology, which does not include injuries as a result of participation in sports events, unlawful activities of third parties, and road accidents caused by third parties in the total injury rate. The indicators for 2017 cover a wider range of subsidiaries. The injury rate includes injuries as a result of participation in sports events, unlawful activities of third parties, and road accidents caused by third parties. LTIF for 2018 and 2019 calculated in accordance with the methodology used by the Company until 2018 would be 138 and 150 contractors’ employees suffering from work-related injuries respectively, including 29 and 16 fatalities respectively.

96 2019 / Sustainability Report of Rosneft 97 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Industrial and Process Safety Field Pipeline failures and associated oil spills in the Upstream Block index 2017 2018 2019 Spilled oil and gas condensate volume as a result of pipeline failures, tonnes 684.3 647.2 642.9 Spilled oil and gas condensate volume as a result of pipeline failures per 1 million 3.00 3.005 2.98 Integrity of equipment tonnes of produced oil and gas condensate

The Company applies internationally recognised standards and industry best practices to maintain the technical integrity of operational facilities and equipment and manage Pipelines in Upstream Block, km the risks of internal and external factors that could increase equipment failures. index 2017 2018 2019 Total length of existing production pipelines at the end of the period (excl. inner 82,513 83,155 83,563 wellpad pipelines) Equipment integrity assurance, Additionally, a new Company regulation Field pipelines corrosion inhibition 27,319 25,326 25,842 defined operational standards – “Procedure for the organisation ACHIEVEMENTS and timely decommissioning and implementation of work on energy IN THE AREA OF EQUIPMENT Pigging of pipelines 13,703 14,305 15,337 of production facilities all significantly sources isolation” – has been put INTEGRITY Reconstruction and repair of field pipelines 1,426 1,584 1,607 increase the level of protection in place for controlling work on isolating Diagnostics and safety expert evaluation of field pipelines (excl. inner wellpad 23,998 24,825 26,490 from major process safety accidents energy sources. pipelines) and reduce the risk of serious injuries and negative environmental impacts. There were no well control Pipeline Programme events and blowouts during Integrity management programmes exploration and development are therefore risk-based to focus implementation drilling over the past 2 years In the Group Subsidiaries of the Oil Pipeline monitoring Scanning is carried out in the visible on the critical “safety barriers”. GRI 103-1 Due to the success of the previous with a continuous reduction Refining and Petrochemicals Business technologies and thermal imaging ranges with live video in workover and sidetracking GRI 103-2 5-year Pipeline Reliability Programme Blocks, pipeline integrity programmes transmission to the operator’s mobile incidents as well. which ended in 2019, a new delivered a number of improvements The Company is actively introducing station for detection of infrastructure In 2019, the Company started Programme has been approved in 2019: new pipeline monitoring technologies failures. Illegal tie-ins are identified the first year of accounting and analysis by the Upstream Business Block ▪ 166 of the most critical pipelines to examine hard to access, dangerous by thermal illumination of the image using of process safety events and tracking to continue this work for the period There have been no were replaced; areas and to avoid the exposure artificial intelligence technologies. specific PSE-11 and PSE-22 indicators 2020–2025. process safety incidents ▪ 496 dead-end sections of workers at hazardous locations. in accordance with ANSI / API RP 7543 across over 61,000 units of technological pipelines were Use of the advanced analytical platforms of vessels and devices operating recommendations and IOGP report The Objectives of the Pipeline Reliability under excess pressure eliminated; As part of implementation makes it possible to quickly map emerging No. 4564. Following analysis of PSE-1 Programme are to: ▪ 4,244 units of elements of the Comprehensive Accelerated situations, monitor changing dynamics and PSE-2 results for 9 months 2019, ▪ Reduce failures and incidents with reduced material performance Digitalisation Plan under the Rosneft–2022 of the situation, guide search teams the safety barrier approach and risk related to field pipelines; were replaced; Strategy, the first tests of unmanned aerial on actions required, monitor progress assessment were used to develop ▪ Increase in-line pipeline inspections; No accidents occurred across ▪ U-bends in 26 furnaces were vehicles for refinery pipeline integrity and conduct forecast analysis taking into and include into the 2020 business plan ▪ Select, test and incorporate new 7,200 tank units eliminated. control were successfully carried out account spatial and temporal factors. a set of activities based on practical technologies and materials that at Syzransky Oil Refinery Plant. recommendations for improvement provide protection against corrosion In 2019, survey and design work was in safe operations, integrity and technical failures; and performed for 14 Group Subsidiaries Data processing is carried out on modern and reliability of operational facilities. ▪ Develop and implement tools The risk of depressurisation of the Regional Sales block making advanced analytics platforms, which (leaks) of tube bundles GRI 103-3 GRI OG 13 for operational control and analysis up the first phase of the special allow rapid detection of pipeline issues of feedstock heat exchangers For details on using drone monitoring in Exploration of pipeline condition. of hydrotreatment units has programme for equipping oil tanks and prevent the occurrence of major and Production, see p. 189 of the 2019 significantly decreased with hydrocarbon vapour meters emergency situations on pipeline routes. Annual Report and ventilation systems. The installation of the equipment is scheduled for 2021.

1 PSE (Process Safety Event) is a reportable man-made incident resulting from an uncontrolled, unregulated and unintended release of any material (including non-toxic) and energy from primary containment. PSEs are categorised into 4 tiers: from Tier 1 incidents with severe consequences to Tier 4 hazard IDs when it is not an incident but a certain pre-condition that is reported. 2 PSER (Process Safety Event Rate) shows how efficient are the steps taken to ensure system integrity and process safety with respect to on-site management of hazardous substances. It is calculated by dividing the number of incidents categorised as PSE-1 or PSE-2 by millions of man-hours worked. 3 ANSI/API RP 754 is the second edition of API Recommended Practice “Process Safety Performance Indicators for the Refining and Petrochemical Industries” issued in April 2016. 4 IOGP Report 456 – Process safety – recommended practice on key performance indicators, November 2011. 5 2018 data changes are due to changes in calculation methodology

98 2019 / Sustainability Report of Rosneft 99 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Accidents at the facilities Integrity Management System Seminar

HSE risk assessment at BP as well as the experience • Hazard assessment and production Implementation of the pipeline integrity and reliability programme and integrity are the priority areas and lessons learned during risk management (life cycle, of the Rosneft–2022 Strategy the process. They also presented mechanisms, methods is aimed at preventing equipment and pipeline failures. implementation. a vision for organising a similar and tools of risk assessment system at Rosneft. and management, risk matrix); In June 2019, Rosneft together • The structure of regulations, with BP held a seminar focused Experts discussed a number of topics standards and practices In 2019, across more than 261,000 The information is posted on the development of an Integrity including: of integrity management. equipment units in the Company’s in places accessible to employees CORRECTIVE ACTION management system for production • The key elements SYSTEM INCLUDES facilities and equipment. of the production management operations, there were 7 accidents and communicated at meetings of all The participants improved system and their relationship which were mainly related units of subsidiaries. In 2019, priority THE FOLLOWING their understanding of the Integrity with process safety and integrity to depressurisation of individual activities and “Lessons learned” COMPONENTS: Management System implemented management; elements. These accidents were included the following areas of work: contained and did not result ▪ Unscheduled inspections in production process shutdowns. Each of technological sites; of these accidents was investigated ▪ Development of design and detailed “Lessons learned” were documentation for the technically prepared and incorporated into obsolete equipment replacement “Lessons learned” revised safety standards and updated to include instruments and control are developed procedures. GRI 103-3 systems that ensure the process and communicated shutdown or transfer to a safe to employees mode in the event of a critical Accidents deviation from parameters provided at Rosneft facilities by the technological regulations; ▪ Additional analyses of operating Number of accidents, cases conditions, state of equipment corrosion, tightness, technological Investigations with not only parameters measurement; direct, but also systemic 11 causes identified ▪ Analysis of emergency response plans for descriptions of personnel 7 actions in emergency situations 6 and safe implementation of work.

Interaction with design organisations to update the design documentation and improve equipment 2017 2018 2019 performance

Additional process safety training and certification of employees

Extraordinary inspections of the equipment condition

100 2019 / Sustainability Report of Rosneft 101 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Activities of Emergency rescue teams Transport safety

The Company has a sufficient amount of resources and a high level Transport safety is one of the main areas of safety management of preparedness and mobilisation to immediately respond to accidents. in the Company since employees are driving about two billion kilometers per year. The risk of road accidents is managed through approved Company procedures, defensive driving training, provision of technical safety and speed monitoring equipment in vehicles and close interaction with state authorities. Blowout safety Across the Company’s facilities, more than 10,000 training Drilling activities and operation sessions and drills were held of wells may pose a number of risks to respond to localised fires, ~400 including gas, oil, water inflows, accidents and other emergency fire teams The Company’s vehicle safety Specific actions to reduce the number ▪ Regional forums which under certain conditions, situations. provide round-the-clock fire management system is aimed of road traffic accidents at the Group on road traffic safety. These can turn into dangerous open gas protection at the Company’s at reducing risks for employees, Subsidiaries include: were held in Nefteyugansk, Ufa and oil blowouts. These complications facilities contractors and third parties and it sets ▪ The improvement of vehicle models and Samara with the participation occur in many fields of the country, Fire safety the requirements for both Company used to provide a higher degree of representatives of the Group but their frequency of occurrence Rosneft and its Group Subsidiaries and Contractor vehicles as well of protection; Subsidiaries, contractors, road traffic depends on the specific technical take consistent steps to ensure as for drivers. More than 50,000 drivers ▪ Implementation of a number police and the administration of state and technological details of the drilling fire safety at production facilities have been trained under the defensive of targeted preventive programmes vehicular control. Presentations process and the geological situation in strict accordance with legislation >50,000 driving programme and more than such as “Safe road - 2019”, “We reported about current results of the region. and the Company’s regulations. inspections 52,000 vehicles have been equipped are for road traffic safety - 2019”, in transport safety and best of compliance with the fire with on-board speed monitoring “Winter road”, “Caution, children!”; practices in this area. To address this issue, the Company The Company continues safety requirements were carried systems. ▪ The display of road safety has developed a blowout safety to implement the 2018–2021 out by fire protection teams information for pedestrians management system to manage these programme «Main areas of fire and the Group Subsidiaries and drivers at all Group Subsidiaries; risks using the approved Company protection at the Company’s Regulation “Prevention and liquidation facilities» to modernise of gas, oil, water inflows and open and re-equip the technical blowouts”. The document defines: fleet and reconstruct fire ▪ Staff competencies; stations to improve the working “Dome” Innovative Digital Transport Safety System in Uvatneftegaz ▪ Work design and planning conditions of staff. procedure; In 2019, specialists of Tyumen the mobile application, the drivers The application connects ▪ Internal and external control system; In 2019, the Company facilities were Oil Research Center developed also receive up-to-date maps to the on-board systems and commissioned the “Dome” and alerts about changes in the road of more than 2,000 vehicles, ▪ Target cost financing; equipped with fire-fighting vehicles which is an innovative mobile traffic situations as it accumulates which send signals to a single ▪ Requirements for the gas, oil, and equipment in accordance application for improving drivers’ data on the road traffic situation data center. All motor vehicles and water inflows liquidation with the planned performance safety. and the weather conditions. These on the road or working in the fields activities. indicators including the purchase updates help to reduce downtime are displayed on the data center This application allows dispatchers of 46 fire trucks and 497 units of fire- and can provide detours which monitors. In the event of a loss of the data center at any time are especially helpful during of signal from the vehicle, speeding Approximately 7,000 persons fighting equipment with enhanced to know both the condition who are part of the Company’s technical specifications. These will the winter and flood months and can or unauthorised driving on a winter of the driver and the vehicle as well also prevent drivers from traveling road, an incident is recorded emergency rescue teams provide improve the ability to respond to fires as the road traffic situation. It can to high risk areas where weather on the system. operational readiness and response and eliminate them in a shorter time, also transfer data, if necessary, conditions are changing. to any incidents. At all Company thereby improving worker protection to the technical assistance services, facilities associated with hazardous and reducing company losses. to inform drivers about the location of important stopping areas operations, Emergency Response Plans or to help find necessary solutions and Emergency Oil Spill Response Plans to emergency situations. Through have been developed and approved. The Company’s personnel receive the necessary training including emergency drills, to respond to different situations.

102 2019 / Sustainability Report of Rosneft 103 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Air flights safety “Caution, children!” preventive days

In order to prevent injuries The Group Subsidiaries took Teams and schoolchildren attended Air transportation of personnel is an important part of the Company’s to children from road traffic an active part in this programme meetings with the Road Traffic transportation logistics and to avoid aviation accidents, the Company accidents from August to September with leaflets, brochures Police of Russia, where they were 2019, the Group Subsidiaries held and memos issued with a reminder able to refresh their knowledge continuously analyses the causes of industry accidents, reviews lessons learned the traditional preventive days called of the importance of observing on the basic requirements of road and develops solutions to prevent such accidents within Rosneft. “Caution, children!”. the speed limit when driving near and vehicle safety. children’s pre-school and general education institutions and courtyards.

Rosneft strictly ensures that Contractor The following are the key tasks Work in the employees have the necessary training of this new Committee: committee will allow and skills in flight safety. ▪ Integration of the best global flight the helicopter service customers safety risk management practices; to collect and analyse data that In 2019, Rosneft joined the new ▪ Provision of pricing transparency; is not available in the public Customers Committee of the Russian ▪ Development of common space, but necessary for making Helicopter Industry Association. approaches for customers strategically important Management of the Association to interact with the helicopter decisions while working includes airline heads, aircraft division services market; with the helicopter industry. heads – experienced and honored ▪ Creation of uniform requirements pilots, representatives of major for provision of services enterprises. The Committee was and technical specifications created to support the work of the flight of helicopters and level of personnel safety, technical, flight and economic training, as well as infrastructure committees. requirements.

Transportation of shift crews to fields of the Uvat group

Rosneft has been consistently Every month, about 3,000 shift flight-navigation system with display implementing a policy to improve personnel from RN-Uvatneftegaz indication, an increased power the aviation safety across its and contractors are carried unit with a digital control system, business in service of its operating to the fields by helicopters enhanced transmission, as well facilities. The Company has set from the cities of Surgut, Tyumen as an effective tail rotor and a new higher standards for both aviation and Tobolsk. rotor with all-composite blades equipment and the qualifications of an improved aerodynamic layout. and training for aviation personnel. In 2019, new domestic Mi-171A2 These features allow an increase The Company’s aim is to have class helicopters launched flights in helicopter flight speed, expansion the most modern domestic aviation for transportation of the shift of the scope of application equipment equivalent to high global personnel to the fields of the Uvat and reduction in the cost of flight standards, capable of providing group of RN-Uvatneftegaz LLC. hours. the quality of services required The Mi-171A2 class at a competitive price. is equipped with a modern digital

104 2019 / Sustainability Report of Rosneft 105 The Company has put in place a comprehensive emergency prevention and response system and adheres to the highest corporate safety standards to eliminate even the slightest risk of emergency.

Christoph NEHRING Vice President of Rosneft for Health, Safety and Environment

EMERGENCY 111 Emergency Risk Management 112 Emergency Prevention 114 Emergency Response RISK MANAGEMENT 115 Employee Training in Emergency Response SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Emergency Risk Management To achieve production safety, it is essential to minimise the risk of accidents that can escalate into emergencies. Emergencies may result from natural hazards (natural disasters) seriously affecting the Group Subsidiaries, such In 2019, the Company-wide Emergency prevention and response On the corporate level, the Emergency as wildfires, hurricanes, heavy rains, floods (freshets), snowstorms, abnormal emergency reserves exceeded activities are part of the corporate risk Response Centre is in charge frosts, and earthquakes. GRI 102-15 GRI 103-1 management system. of coordinating emergency prevention and response activities. The Group A two-tier regulatory framework Subsidiaries have set up perma- 2 plays an important role in emergency nent units responsible for protecting RUB bln risk management. At the corporate employees and the business in case level, we have introduced compa- of emergencies. These units operate ROSNEFT’S EMERGENCY PREVENTION AND MANAGEMENT ny-wide requirements, approaches as part of the corporate emergency OBJECTIVES INCLUDE: and objective to implement, coordinate management subsystem and respective and put aside financial and non-finan- and improve emergency prevention on-site teams. cial reserves for emergency prevention and response measures. The Group and response. These reserves are chan- Subsidiaries take all steps to ensure The Group Subsidiaries’ on-site teams nelled to carry out rescue and other compliance with these requirements. report to emergency prevention response activities, organise and main- and response and fire safety commis- tain accommodation and food supply One of the Company’s priorities sions, with duty dispatch services also for accident victims, provide one-off is to update and align its internal put in place for the day-to-day man- financial aid and take other urgent regulations on emergency preven- agement, 24/7 situation monitoring measures to ensure stable operations Mitigating emergency risks Maintaining the guaranteed level Ensuring the life safety tion and response with the Russian and a timely response to any aris- in case of an emergency. GRI 103-2 at the Company’s sites of staff safety in case of a potential of local communities across or actual emergency the Company's footprint laws and regulations. We also ing threats. In doing so, they may be in case of a potential or actual arrange for a timely revision of SOPs, assisted by temporary bodies (task emergency as required by Federal forms and timelines for submitting forces and teams). Law No. 68-FZ on Protection the required information. Financial and non-financial of Population and Territories from Natural and Man-Made Emergency (incident) response oper- reserves for emergency Disasters dated 21 December 1994 The Company has put in place all ations are carried out by the on-site prevention and response, RUB mln the essential regulations to iden- teams' constant readiness forces repre- tify and assess potential threats, sented by specially equipped in-house and develop measures to mitigate and outstaffed professional squads. Making the Company’s Minimising emergency 1,998.7 2,005.5 assets and environment consequences, including related and eliminate them. 1,891.0 better protected against damage and losses To provide information support emergencies The Company manages emergency of the corporate emergency man- risks using a corporate subsystem agement subsystem, the Company made up of the Group Subsidiaries' operates communication, alarm on-site teams. The subsystem is part and automated management systems. of Russia's Single State Disaster We use corporate satellite connection Management System. to ensure prompt and reliable commu- Results of 2019 nication with the Group Subsidiaries The head of the corporate subsystem through telephone and video channels. As a result of the efforts is Rosneft’s Chief Executive Officer. All Group Subsidiaries have set up local taken, the Company’s sites On-site teams are headed by CEOs and on-site alarm systems 2017 2018 2019 had no natural or man-made of the respective Group Subsidiaries. emergencies.

108 2019 / Sustainability Report of Rosneft 109 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Emergency Prevention Prevention of Man-Made Disasters

In 2019, the Company’s sites took ▪ employee training in emergency pre- ▪ furnishing production units the following key steps to mini- vention and response; with automatic systems to moni- In 2019, the Company put into effect ▪ effective use of information As part of the Company’s social guar- mise the risk of accidents and pre- ▪ keeping emergency containment tor the accidental release of hydro- an action plan to make its employees, resources for emergency prevention antees in case of an emergency, all vent their escalation into man-made and fire-fighting equipment in con- gen sulphide, hydrogen chloride equipment and assets and the environ- and response; employees of the Group Subsidiaries disasters: stant readiness; and organic substances. ment better protected in case of emer- ▪ set-up, training and certification have compulsory and voluntary acci- ▪ assessing potential threats of man- ▪ upgrade of technical infrastructure, gencies. The steps include: of in-house and outstaffed profes- dent insurance. made accidents to take preven- engineering networks and equip- ▪ updating the Company’s internal sional rescue teams in the Group tive actions and mitigate the impact ment, routine preventive repairs regulations on emergency preven- Subsidiaries; The reporting year saw on Company’s assets; of the core equipment; tion, management, and prompt ▪ establishing and ensuring the oper- the creation and launch ▪ ongoing monitoring of compliance response in case of a potential ability of local and on-site alarm sys- of the Emergency Response with process flow requirements; or actual emergency; tems to inform Group Subsidiaries Centre’s risk management ▪ mitigating the potential risks of fatal- employees about potential information system. ities and negative effects of emer- and actual emergencies; gencies, fire prevention, introducing ▪ strengthening communica- Four Group Subsidiaries are running advanced fire-fighting and rescue tions between the Group a pilot project to integrate their dis- Prevention of Natural Disasters techniques; Subsidiaries' on-site emergency patchers into a shared crisis response ▪ improving staff knowledge and skills teams and the management bod- service. and ensuring emergency prepar- ies and units of the functional Every year, the Group Subsidiaries take The Group Subsidiaries created flood Thanks to the preventive measures, edness of the relevant emergency and regional emergency subsystems. a number of preventive and mitigating response bodies, implemented pre- the Group Subsidiaries had no acci- response bodies and on-site teams steps to ensure accident-free operation ventive action plans to get ready dents during the flood season. of the Group Subsidiaries; of assets, preparedness and prompt for the accident-free operation in spring response of relevant bodies to natural freshets, updated the list of facilities In 2019, the Group Subsidiaries disasters. most exposed to floods, and estab- developed and implemented meas- lished communications with regional ures to ensure fire safety and timely During the 2019 spring flood and municipal commissions for emer- prevention of wildfires near oilfields season, Rosneft and the Group gency prevention, response and fire and production sites. They also teamed Subsidiaries planned preventive safety. They also checked the prepared- up with Russia’s local forest pro- measures, prepared ness of the relevant bodies and on-site tection squads to monitor fire risks EMERGENCY RESPONSE river breakup outlooks teams, reviewed financial and non-fi- in the Group’s regions of operation. CENTRE by federal district, developed nancial reserves and arranged The Group Subsidiaries’ facilities were and distributed the guidelines for a proactive build-up of resources kept safe from wildfires in 2019. to mitigate the effects at locations with high flood risks. of summer and autumn freshets. In March 2019, the Company organised tabletop exercises and training for the emergency management bodies and on-site teams of the Group Subsidiaries to prevent accidents and protect employees, production sites and other facilities against spring freshets.

110 2019 / Sustainability Report of Rosneft RISK MANAGEMENT (B) 111 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Emergency Response Employee Training in Emergency Response

The Group Subsidiaries took the follow- ▪ provided for the set-up, certification In 2019, the Group Subsidiaries The Company focuses on staff The participants reviewed the report- The Company’s Head Office consistently ing steps to ensure a prompt and effec- and operation of 71 emergency res- responded fast to the warnings training in emergency response ing year's emergency prevention monitors the measures taken to elim- tive response to potential emergencies: cue squads; from municipal dispatch and ensuring the preparedness and response activities and defined inate the identified gaps and provides ▪ updated action plans on emergency ▪ signed agreements with external services by transitioning its of the Group Subsidiaries' dedicated short-term objectives. methodological support to relevant prevention and response based professional response teams to pro- specialist forces and teams into bodies and teams. Nearly 300 thousand units. The reporting year also saw on the study of natural and man- tect facilities that have no dedicated high alert mode, which helped employees took the training in 2019. To improve their professional knowl- the audits of emergency prevention made risks; in-house services. prevent on-site emergencies. edge, they also took part in a training and response systems in 36 Group ▪ improved the alarm systems To assess the emergency preparedness, session on the best practices in main- Subsidiaries. GRI 103-3 designed to notify the Group Both in-house squads and emergency the Company held 79 comprehensive, taining the facilities ready for use Subsidiaries' response teams response contractors have all the nec- 264 tabletop and 205 tactical training and theoretical classes on the response and constant readiness forces essary vehicles, equipment and tools exercises, along with 42,605 on-site to various emergencies. in case of an emergency; in place to ensure an effective response training sessions. In the reporting year, to any emergency as required by fed- Every year, the Company holds com- eral laws. June 2019 saw the Company petitions to recognise and award hold an instructional meeting the achievements of its subsidies on civil defence, emergency pre- in civil defence, emergency prevention 155 vention and response meas- and response. facilities ures in Samara. The event was took part in the competition attended by ca. 200 heads In 2019, the Russian Ministry for Civil of civil defence and emergency units Defence, Emergencies and Elimination from the Group Subsidiaries as well of Consequences of Natural Disasters as heads of the Company’s sites located conducted 25 audits of the Group THE COMPANY IS IMPROVING THE ALARM SYSTEMS DESIGNED in the Samara Region. Subsidiaries’ emergency prevention TO NOTIFY THE GROUP SUBSIDIARIES’ RESPONSE TEAMS and response activities, with gaps iden- IN CASE OF AN EMERGENCY tified only with respect of two sites (no penalties imposed).

IN 2019, ABOUT 300 THOUSAND EMPLOYEES OF ROSNEFT WERE TRAINED IN EMERGENCY PREVENTION AND RESPONSE

112 2019 / Sustainability Report of Rosneft 113 “Developing new technologies and implementing digital innovations is key to boosting the efficiency of all business processes, from production and refining to sales to the end consumer. As part of its development strategy, Rosneft is undergoing a full- fledged transformation aimed at increasing its competitiveness in the oil market.”

Andrey Shishkin Vice President for Informatisation, Innovation and Localisation, Chairman R&D of the Energy Efficiency Commission 118 Innovation Management 120 Key Achievements in Innovative Development 123 Energy Saving and Energy Efficiency AND DIGITAL 125 Digital Transformation 129 Development of R&D Capabilities

The Company implements innovative 138 Exploration of the Arctic Shelf and Operational projects in various areas, including Safety on Shelves of Freezing Seas oil and gas production, oil refining, and petrochemicals. For details, see TRANSFORMATION p. 118 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Innovation Management Technological Council

In 2018, Rosneft set up a Technological development strategy and ensure tech- members of the Board of Directors, Council to manage its innovative ini- nological growth in key areas. GRI 103-3 researchers, industry experts, and top Strategic Objectives in Innovative Development tiatives. The Council reviews prom- managers of the Company. ising technologies and oversees The Council comprises heads their effective implementation to help of Rosneft’s shareholder companies Rosneft carries out its innovative activities in accordance with the Innovation the Company deliver on its innovative and technology partners, including Development Programme approved by its Board of Directors. The Programme aims to achieve the Company’s strategic goals drawing on its priorities, such as efficiency, sustainable growth, transparency, social responsibility, and innovations. GRI 103–1 Implementation of Advanced Technologies

The Company uses the Programme to deliver on its innovation strategy. Key The reporting year saw 22 Group viability of proposed solutions, and pre- Rosneft spent RUB 3.2 bln to build a portfolio of innovative pro- projects are selected from the TIP port- Subsidiaries test 152 technologies. pared plans for their roll-out. to deploy and roll out jects, with every new technology devel- folio for approval by the Company’s Over the year, the Company conducted 6.7 thousand solutions. oped under a separately financed Scientific and Technical Council.GRI 103-2 a total of 511 tests as part of pilot pro- In 2019, the Company implemented target innovative project (TIP). TIP jects, which yielded 299 kt in incre- and rolled out 116 new technologies is the main tool used by the Company mental oil production. We reviewed which proved their viability following the results, assessed the economic prior tests.

OBJECTIVES OF THE INNOVATION DEVELOPMENT PROGRAMME

Testing and adoption of innovations in 2019

Area Number Total incremental oil Total economic effect, of technologies production, kt RUB mln Technology testing 297 130 463 Technology roll-out 78 283 659 In 2019, Rosneft’s R&D costs Development and deployment Development, production, amounted to RUB 30.05 bln, of new technologies and launch of new world-class including RUB 3.4 bln spent innovative products on target innovative projects. As part of implementing Target Innovative Projects, the Company 152 For details on software suites, see the Long-term signed over 50 licence and subli- new technologies tested Leadership in Mathematical Modelling section cence agreements for the transfer of this Report. of its software and solutions (RN-KIN, RN-GRID SS) worth over RUB 90 mln, among other things to provide train- Support to the Company’s Enhancement of the Company’s ing to students at the industry-related shareholder value and competi- modernisation and techno- 116 RN DIGITAL, Rosneft's reservoir engineering tive edge in the global market logical advancement through 30.05 departments of the leading Russian technologies implemented software high-impact improvements RUB bln. universities. and rolled out in 2019 in key performance indicators spent on R&D in 2019 for business processes In 2019, the combined proven economic effect from the innovative technologies implemented over the last three years exceeded RUB 36 bln. RUB bln>36 combined proven economic effect from the innovative projects implemented over the last three years

1 Software suite.

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Key Achievements in Innovative Development New software modules were added RN-Geosim added software mod- to RN-SMT, an integrity monitoring ules for building vertical and tilted system for oilfield pipelines. faults for structural surfaces, visual- ising seismic cubes, multipoint sta- Efficient Implementation Research-intensive The Company issued more than tistics, basic reports on geological Technology Software 30 commercial licences and over 40 models, and parallel computations. The Company implements innovative projects in various fields, including oil trial licences to 25 oilfield service RN-Geosim is anticipated to cover and gas production, refining and petrochemicals. companies and oil and gas companies up to 80% of the Company’s needs as well as over 140 academic licences for geological modelling. to four partner universities. RN-Simtep added software mod- In 2019 , the Company devel- ules for modelling oil and gas pro- oped an RN-KIM version that allows duction processes. Going forward, 63 61 735 for a quick modelling of oil and gas RN-Simtep will cover up to 80 % patents applications patents condensate fields that require compu- of the Company’s needs for produc- received in 2019 for patents and software recorded on the Company's tation-intensive analysis. As a result, tion process modelling. certificates submitted balance sheet in 2019 about 80 % of digital field modelling works were performed using RN-KIM. The Company developed a concept for RN-PetroLog, a corporate software suite for interpretation of core samples and well log data.

ACHIEVEMENTS IN KEY AREAS OF INNOVATIVE DEVELOPMENT IN 2019

The Company tested the technol- Rosneft partnered with the National ogy for using horizontal production Intellectual Development Foundation and injection wells with multi-stage to test the integration technology Exploration hydraulic fracturing to develop for multi-scale studies of the Jurassic and Production low-permeability reservoirs high-carbon formation. Tyumenneftegaz obtained initial data The Novokuibyshevsk Oils at a pilot area of the Prirazlomnoye required to procure the equipment and Additives Plant commissioned field. The solution proved The Company developed technolo- for a modular preliminary water dis- a water recycling unit and a wastewa- to be effective. RN-Yuganskneftegaz gies for core analysis on hard-to-re- charge unit. ter treatment plant. continued to deploy cover reserves. Once implemented, HSE Technologies the technology at the Priobskoye field, the technology is expected to deliver at the Company’s Sites At Bashneft-Ufaneftekhim, the bio- The Syzran Refinery conducted with over 80 wells drilled in total. an economic effect of over RUB 10 bln logical treatment facility with a mem- the first tests of unmanned aerial for gas and gas condensate depos- brane bioreactor was ramped up vehicles for pipeline integrity Rosneft developed a technology its in the Yamalo-Nenets Autonomous to design capacity, reaching the high- monitoring. to tap into the Berezovskaya suite Area and the Khanty-Mansi est productivity in Europe. and submitted the respective intellec- Autonomous Area – Yugra. tual property application. The tech- The Saratov Refinery sealed the open nology was tested to localise deposits oil separator of the water recycling at the Berezovskaya suite. As a result, system. the Company booked over 150 bcm of in-place reserves and 60 bcm of recoverable reserves of natural gas at the Berezovskaya suite.

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Energy Saving and Energy Efficiency Rosneft developed a laboratory-level to design, manufacture and deliver GTL1 technology which allowed a pilot APG desulphurisation plant for mixing synthetic and mineral oil based on microporous membranes to produce commercial petroleum for the preliminary water discharge Associated products compliant with the existing facility. Rosneft is one of Russia’s major con- of the energy management system quality standards. Petroleum Gas sumers of fuel and energy. In 2019, is Rosneft’s Energy Saving Programme Monetisation 8 Rosneft partnered with the National it consumed a total of 612 million GJ drafted for every five-year period technical audits of the quality Intellectual Development Foundation of energy worth RUB 240 bln. GRI 302–1 and updated annually. GRI 103-2 of power facility management GRI 103-1

Due to high consumption volumes, the Company pays much atten- The Company’s Energy Efficiency and Energy Saving tion to reducing and optimising Policy is available on its website 908 remedial actions completed the use of fuel and energy resources. Rosneft's energy management system is based on principles and approaches Every year, the Company takes steps set forth in the Company’s Energy to ensure reliable and uninterrupted Efficiency and Energy Saving Policy. energy supply of the existing and pro- 5% In 2013, the Company established spective production assets. reduction in oil production its Energy Efficiency Commission, shortages caused by power which implements advanced solu- 41 Group Subsidiaries accounting failures tions and approaches to energy effi- for over 95 % of the Company’s total GRI 103-3 ciency management and development energy consumption were certified of the energy management system to ISO 50001 for Energy Management Rosneft developed a laboratory-level Rosneft developed a laboratory-level in line with ISO 50001. The cornerstone Systems technology to regenerate xylenol technology to produce isopropylben- and butylated fire-resistant oil wastes zene using heterogeneous catalysts. Oil Refining, intended for high-powered turbines, Gas Processing including at nuclear power plants. It also developed the composition Energy consumption, mln GJ and Petrochemicals and a process to produce heteroge- GRI 302-1 Employee Training in Energy Efficiency The Company successfully tried neous catalysts for benzene alkylation the hydrogenation technology with propylene and transalkylation. To increase awareness The training programmes are deliv- for converting acetone into iso- 636.0 598.0 612.2 about energy efficiency and energy ered through Rosneft-Termneft (a saving among the Company’s work- subsidiary of Rosneft), which pos- propanol at its pilot testing facility Rosneft ran endurance tests force, four corporate training pro- sesses the expertise, competen- and ran endurance tests on a catalyst on a pilot batch of hydrotreating cata- 44.7 128.9 130.6 grammes were launched in 2019 cies and practical skills in improving batch used in the process. lysts for diesel mixtures. 151.2 at Group Subsidiaries: energy efficiency, and regularly 180.9 185.4 • Maintaining formation pres- inspects all Group Subsidiaries cer- The Company arranged The Company developed and pat- sure in a more energy-efficient tified to ISO 50001 for energy effi- for independent tests at its refineries ented Russia’s first-ever additive pack- 440.1 manner; ciency. The Company plans to train 288.2 with a view to streamlining dispersant age for all-season hydraulic oils. 296.3 • Improving energy efficiency ca. 500 employees of the Group of the systems for gathering, Subsidiaries annually. and depressor additives for diesel 2017 2018 2019 treatment, and transport of pro- fuels. It also developed the composi- The Company developed its own duction fluids; tion thereof and a process to produce line of guard catalysts and materials otal onsuption of reneable • Better energy efficiency for oil the same. for catalytic reactors an nonreneable enery refining and gas processing soures proess fuel facilities; letriity onsuption • Enhanced energy efficiency eat onsuption of the energy supply, heat supply and power generation facilities.

1 Gas-to-Liquid.

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Digital Transformation

WHAT STEPS WERE TAKEN DURING THE REPORTING PERIOD TOWARDS SAVING FUEL AND ENERGY AND DEVELOPING THE ENERGY MANAGEMENT SYSTEM GRI 302-4 Accelerated Digital Transformation Programme

Technological advances, improved As part of the Rosneft–2022 SUCCESSFUL DEVELOPMENT DEVELOPMENT workplace safety, accident-free oper- Strategy, the Company approved its IMPLEMENTATION OF ROSNEFT'S ENERGY AND IMPLEMENTATION ations, and low environmental impact Comprehensive Accelerated Digital OF THE ENERGY SAVING SAVING PROGRAMME OF NEW COMPANY are crucial for the Company's sustaina- Transformation Plan, which is currently PROGRAMME FOR 2020–2024 REGULATIONS ble operational performance. GRI 103-1 deployed across the Group Subsidiaries and expanded to new businesses • 877 ktce or 26 mln GJ of fuel • 2.69 mln tce or RUB 38.8 bln • Regulations on Planning and functions. and energy were actually saved, expected to be saved and Measuring the Actual Energy 14% above the target approved on fuel and energy within the next Saving Effect from Energy Saving by Rosneft's Board of Directors five years Programmes at In-House Service for 2019 and Marketing and Distribution • RUB 10.9 bln – in energy savings Group Subsidiaries and Marine • RUB 2.05 bln – spent Terminals ROSNEFT: DIGITAL TRANSFORMATION MAP on the programme

Digital field Digital Central Digital Digital INTERNAL ENERGY ESTABLISHMENT ISO 50001 refinery Dispatch Office filling supply EFFICIENCY ASSESSMENT OF CORPORATE TRAIN- CERTIFICATION station chain ING CENTRE FOR ENERGY • 19 Group Subsidiaries assessed EFFICIENCY • Six Group Subsidiaries were in both upstream and downstream certified: Sorovskneft, Bashneft- Polyus, Ufaorgsintez, branches • 352 employees of the Group of Bashneft – Ufaneftekhim, Subsidiaries trained Bashneft-Novoil, and Ufa Refinery • 20 employees of Rosneft • 41 Group Subsidiaries accounting completed energy efficiency for over 95% of the Company’s internships at China National total energy consumption in 2019 Petroleum Corporation (CNPC) were certified to ISO 500050001

As part of technical audits, will be covered by the Programme. the Company also checks if its sites The Company plans to reduce energy operate equipment in compliance consumption by streamlining its pro- with health and safety requirements. cesses and using energy efficient equipment and technologies in its core Rosneft's Energy Saving Programme operations. for 2019–-2023 provides for saving more than RUB 49 bln on fuel and energy resources with RUB 16 bln invested. 81 Group Subsidiaries

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Group Subsidiaries develop and imple- Within the cluster, around 20 prod- Digital transformation Key Achievements in 2019 ment end-to-end technologies, includ- uct teams work across the whole and UN Sustainable ing predictive analytics, advanced range of end-to-end technologies. Development Goals visualisation, machine learning, big There is also an acceleration plat- data, and industrial internet of things, form for interacting with the innova- Rosneft is guided by the UN Sustainable applicable to all Company's processes. tive start-up market. Eight external Development Goals and takes them Artificial intelligence was tested management software. The system start-ups shifted to the prototype into account when developing to analyse video stream from produc- will autonomously monitor infrastruc- Powered by an internal IT inte- and testing phase as part of digital and implementing its digital solutions. tion facilities of the Varyeganneftegaz ture facilities and oil pipelines, thus grator, Rosneft operates a Digital transformation programmes for func- Exploration and RN-Yuganskneftegaz drilling sites. significantly reducing human involve- Transformation Centre and Digital tions and businesses. To support the Company's climate and Production The monitoring promotes discipline, ment. It relies on a computer vision Cluster created to enable digital pro- change targets (SDG 13 Climate action), protects life and health of employees, technology to automatically scan programme implementation by search- In 2019, the Company participated we work hard to develop solutions helps to comply with technical regula- tected areas to identify whether peo- ing and assessing innovative products, in major digital transformation events for safe and accident-free operation tions and reduce environmental risks. ple or machinery are present there, adapting solutions to business needs, and presented its digital solutions of our productions facilities. For exam- and notify of petroleum product spills and testing them at Group Subsidiaries. at key industry and technology fora. ple, the Gas business started piloting A drone monitoring system suc- and methane leakages. GRI 103-2 In particular, the 23rd St Petersburg an initiative to prevent natural gas – pri- cessfully passed flight tests International Economic Forum saw marily methane – leakages. at RN-Krasnodarneftegaz The Digital Cluster consists of: analytical Rosneft presenting its ten develop- and Varyeganneftegaz, includ- centre to monitor trends in the Russian ments which will be piloted by Group Working towards SDG 3 Good health ing in winter conditions. It consists and international technology and solu- Subsidiaries. and well-being, the Company is devel- of a proprietary unmanned aerial tion markets; oping comprehensive digital HSE solu- vehicle which can be equipped ▪ prototyping site facilitating faster With clear progress on its digital matu- tions. For example, Group Subsidiaries with a video camera, IR imager deployment and testing of proprie- rity journey, in 2019 the Company have already piloted technologies that and laser gas sensor for meth- For details on drone monitoring in Exploration tary and partners’ solutions; updated the initial range of digital sce- use computer vision and neural net- and Production, see p. 189 of the 2019 Annual ane leakages, as well as a charging ▪ in-house digital development narios to intellectualise the Group works to find people in hazardous Report and storage station and flight mission centres; Subsidiaries' existing operations, cre- areas, track PPE availability and alert ▪ partnership centre; ate digital products within a short to dangerous situations. ▪ acceleration and customer experi- timeframe, and assess the effect ence design centre; of their implementation for decid- ▪ business transformation cen- ing whether they should be rolled out tre responsible for target process in other Group Subsidiaries. design and culture transformation Sibneftegaz installed a multi-func- ROSPAN INTERNATIONAL started test- when implementing digital solutions; Today, the digital transformation pro- tional device with an IR imager ing of a solution for remote monitor- ▪ digital development showroom gramme offers more than 120 sce- at a gas well cluster for remote ing of abandoned and suspended to display digital solutions for inter- narios factoring in the nature Gas monitoring and gas leak control. wells. The Company expects to use acting with customers and partners. and management maturity of the Group This solution helps to prevent dan- this solution to monitor well pressure, Subsidiaries to be digitalised. gerous accidents and breakdowns detect dangerous gas concentra- as well as provides efficient con- tions in areas adjacent to its facili- On average, 70 % of the key trol over emissions of methane, one ties and significantly reduce the need digital programmes were of key greenhouse gases generated for engaging its staff and helicopters completed with a 23 % increase by hydrocarbon production. for regular inspections of isolated in 2019, laying groundwork assets for successful delivery Sibneftegaz has been piloting on all of the Company's digital a machine learning-based solution transformation targets. for online interpretation of telem- etry data collected from a gas well and for determining whether any extra survey is required.

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Development of R&D Capabilities Rosneft piloted a system ▪ A pilot project to improve for optimised blending of petro- the efficiency of process equip- leum products at the Syzran Refinery ment performance manage- Oil Refining and initiated its rolling out at other ment is in progress at Ryazan Oil Corporate Research and Design Complex Group Subsidiaries. Refining Company.

Technologies were tested for the fol- Technologies tested: Rosneft's corporate research and design cluster boasts powerful lowing projects: ▪ drone-based monitoring of refin- infrastructure and research capabilities with its products covering all ▪ using IR imagers to monitor ery perimeters and product business areas – from field development to retail operations. equipment; leakages; ▪ robotised oil tank cleaning; ▪ energy efficiency monitoring; ▪ mobile solution for inspections ▪ energy balance and optimisation. in the course of maintenance and repair; RANGE OF SERVICES AVAILABLE AT THE CORPORATE RESEARCH AND DESIGN CLUSTER For details on the use of unmanned aerial vehicles by the Refining Business, see ▪ comprehensive staff monitoring the Pipeline Inspection Technologies section (inspections of operators, contrac- of this Report. tor tracking) with wearable devices and beacons.

SCIENCE IN EXPLORATION DESIGN IN EXPLORATION DIGITAL SERVICES (IT AND PRODUCTION AND PRODUCTION SERVICES) Novokuibyshevsk Petrochemical parameters (air temperature Company tested a safety monitor- and atmospheric pressure), moni- • Laboratory research • Conceptual design • Design automation ing and employee control technol- toring of production routines such • Exploration • Engineering survey • Import substitution of research intensive specialist software Petrochemicals ogy using a combination of computer as regular inspections of process • Design and support of hydrocarbon • Design and working documentation development • Advanced data analysis methods (Big vision, neural networks and conven- equipment and production facilities • Construction • Drilling support Data) tional video analytics. This solution both inside and outside helps to identify risks of incidents. • Production engineering

Ufaorgsintez piloted a prototype hardware and software solution for the comprehensive monitoring of production staff, including employee tracking on site, monitoring of employees’ physical condition, measurement of environmental SCIENCE IN OIL REFINING, DESIGN IN OIL REFINING, GAS PROCESSING GAS PROCESSING AND PETROCHEMICALS AND PETROCHEMICALS

• Petrochemicals • Feasibility study Information Security • Oil Refining • Pre-FEED • Gas processing and conversion • Engineering services • R&D support • 3D engineering Recognising the current information The Company has developed Another important task is to promote • Consulting security challenges and threats posed and is implementing a set of pro- corporate culture, awareness, and skills • Improving economics of oil refining, by accelerated automation and digital jects geared towards delivering on its related to information security. All gas processing and petrochemicals transformation of the business and pro- information security strategy. One in-house users are updated about exist- duction processes, Rosneft at all times of the Company’s priorities is to roll out ing computer threats, while the IT staff keeps focus on ongoing improvement a mechanism of proactive response are trained in prompt computer incident of information security management, to and prevention of cyberattacks. response. In 2019, over 1.5 thousand real-time monitoring and assessment employees of both Rosneft and Group of its IT assets security. Subsidiaries took part in IT staff drills.

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GEOGRAPHY >15 >100 OF THE CORPORATE thousand customers RESEARCH AND DESIGN highly skilled employees CLUSTER 29 43 corporate R&D and design specialised institutes institutes

The corporate research and design cluster unites 29 corporate research and design institutes. The corporate research and design institutes provide the entire scope of engineering, field, and in-office support to the Company’s oil, gas, oil refining, and petrochemical assets from exploration to commercial end-products. The institutes employ over 15 thousand highly ST PETERSBURG3 skilled professionals (geologists, developers, designers, chem- ists, physicists, and programmers) of whom about 4% hold PhD or Post- Shared information space Flexible pricing system Doc degrees. TVER2

MOSCOW1

Unified technical policy Shared staff development programme

IZHEVSK9

NIZHNEVARTOVSK11 SAMARA6 KRASNODAR4 NOVOKUIBYSHEVSK7 TYUMEN10 5 VOLGOGRAD UFA8 YUZHNO-SAKHALINSK15 TOMSK12

KRASNOYARSK13

ANGARSK14

Exploration and Production, Shelf • VNIPIneft1 • Rosneft-NTC4 • SibNIINP gas • VNII NP • VNIKTIneftekhimoborudovaniye5 • NizhnevartovskNIPIneft11 • RN-TsIR • SamaraNIPIneft6 • TomskNIPIneft12 Construction • INiRGI • Samaraneftekhimproekt VOIG and RGI • RN-KrasnoyarskNIPIneft13 Laboratory research supervision • Burovaya Technika • SaNIINP7 • Angarskneftekhimproekt14 • ANTs • RN-BashNIPIneft8 • RN-Sakhalin15 Oil Refining, Gas Processing Process equipment • RN-Stroykontrol • Bashgiproneftekhim • NIPImoreneft SNGT and Petrochemicals • TsIR • INNTs9 • RN-MTsIR (Doha, Qatar)16 • Slavneft-NPTs2 • TNNTs10 • Sapphire3 • Giprotyumenneftegaz

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Rosneft manages its research institutes. Specialised institutes focus Standard Design and Standardisation and design institutes in a centralised on developing niche technologies, manner. Lead institutes are in place including research, development, test- for each of the Compaфny’s businesses ing, and commissioning of new technol- Standard design solutions Standardisation System to monitor and improve R&D activities ogies and design solutions. In 2019, the system at the corporate research and design Rosneft is deploying a system of stand- of standard design In 2019, the Company contin- ard design solutions to improve solutions helped ued to contribute to the devel- efficiency of capital investments to achieve opment of the oil and petroleum and design processes by using the best the following targets: product standardisation system. SamaraNIPIneft – corporate institute specialising in ecology possible solutions, technologies, mate- Working hand in hand with techni- rials, and equipment. cal committees for standardisation Since 2016, Rosneft has been oper- • feasibility studies were devel- safety, important law enforcement at the Federal Agency on Technical ating a corporate institute spe- oped to support the use of cer- trends, and improvement of environ- The system of standard design solu- 83% Regulation and Metrology (Rosstandart), cialising in ecology to facilitate tain technologies and methods mental practices. The conference tions reduces costs and minimises risks 83% of the Company’s oil the Company's experts reviewed the Company's target of minimising of managing waste generated was attended by 105 represent- and gas production facilities its environmental impact across its by construction and installa- atives of 40 Group Subsidiaries, of project delay, improves the qual- over 120 draft regulations and stand- ity, reliability and safety of installations covered by standard design ards, both national and international. footprint. In 2019, the following was tion operations at the Kuibyshev including seven corporate R&D solutions completed: Refinery; institutes. The participants dis- and equipment, increases the level • a drilling waste volume estima- • development of comprehen- cussed some of the most pressing of mechanisation and automation, In 2019, the Company took part tion methodology was developed sive environmental permits issues related to new environmen- and reduces operating expenses. in an initiative to establish an indus- to underpin the Company’s guide- was launched for the Group’s tal law requirements and enforce- try-wide system for voluntary certi- lines introduced in the report- upstream Subsidiaries such ment mechanisms; the Company's One of the objectives pursued fication of products and suppliers ing year. Applicable to all Group as RN-Yuganskneftegaz, scientific and practical waste 65% of the Company’s centralised Subsidiaries, the document sets Samaraneftegaz, management solutions; regional by the system is to set technical in the Russian Federation. The initiative inventory requirement algorithms used to estimate drill- and Orenburgneft. environmental agenda and com- requirements for equipment used prioritises process safety in oil and gas standardised ing waste volumes when drafting prehensive resource management. by the Company's diverse operations. industry, reducing the percentage The institute also delegated its design and environmental compli- The guests described the discus- In addition to studying and analys- of counterfeit products, and stream- experts to Rosprirodnadzor's ance documentation; sions and exchanges as highly useful, maximum standardisation Scientific and Technical Council task ing equipment and inventory used lining SMEs’ access to the market of oil • quantitative assessment and appreciated the practical aspect by the Company or the Company’s degree achieved and gas sector suppliers. of the Company’s GHG emissions forces engaged in updating environ- of the conference. need for them, this means minimising for storage tanks: was carried out; mental regulations. In addition, SamaraNIPIneft hosted the risks of lobbying any specific sup- The following events were successfully the 2nd conference on environmental pliers/manufacturers by stating any implemented in 2019: specific parameters or manufacturing 83 % ▪ jointly with the Russian Ministry techniques. of Industry and Trade, propos- and for modular units: als were prepared for the concept of regulating the voluntary compli- CENTRALISED MANAGEMENT SYSTEM OF CORPORATE RESEARCH AND DESIGN INSTITUTES ance certification; 80 % ▪ as a result of the initiative, Institute of Oil and Gas Technology Initiatives was established jointly with the Russian Ministry of Energy and other vertically integrated petro- LEAD INSTITUTES leum companies; ▪ a scientifically validated evi- OF THE CORPORATE Science in exploration Science in oil refining, RESEARCH AND DESIGN and production gas processing dence base was built with respect CLUSTER BROKEN and petrochemicals to changes in hydrogen sulphide DOWN BY SEGMENTS content in marketable oil to reduce deposits on heat exchangers of refining facilities. 43 specialised institutes Design in exploration Design in oil refining, and production gas processing and petrochemicals

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Automation of Planning and Surveying Machine Learning Open

Working towards the targets set by Rosneft–2022 Strategy The Corporate Research and Design Seismic Challenge, Russia's largest proposed solutions for automating Complex strives to establish part- machine learning open champion- manual processes in seismic explo- for the use of digital solutions, the сorporate research and design nership with leading research ship with the focus on seismic data ration where cognitive services cluster rolls out the Digital Technologies for Institutes programme teams, including numerical mod- interpreting. of corporate software will carry out aimed to facilitate automation. elling of physical processes. monotonous tasks. In 2019, the Company held Rosneft The event attracted about 500 teams from nine countries. The contestants

Import Substitution ▪ RN-SMT is a prototype and a set THE FOLLOWING EFFORTS and Software Range of software modules of an integrity ARE MADE TO AUTOMATE Optimisation monitoring system for oilfield pipe- THE DESIGN OF CAPITAL lines, a promising information sys- CONSTRUCTION FACILITIES: To promote import substitu- tem for monitoring and controlling tion, RN-BashNIPIneft developed the Company’s oilfield pipelines a research-intensive specialist software with a real-time decision-making for the areas including geology, explo- support system, which assesses ration of gas and oil fields, oil and gas the technical condition of pipe- production. lines, generates pipeline reliability improvement programmes, TomskNIPIneft works to create a unified and automates production software range to be used for design processes; Import substitution automation. ▪ RN-GRID is a next generation and software range optimisation hydraulic fracturing simulator, which In 2019, 80% of software provides the most precise picture (over 20 items) was Russian. of hydraulic fracture geometry; ▪ RN-Geosim is an integrated geological modelling platform building full-scale geological models based Long-term Leadership on high-performance computing. in Mathematical The platform includes up-to-date vis- Development of integrated Modelling ualisation tools to assist a modelling design automation geologist and display components technologies (upgrading The Company develops and imple- of the geological models in 1D (cor- to 3D design and information ments proprietary software for field relation pattern), 2D, and 3D projec- modelling solutions) modelling, hydraulic fracturing design, tions. The software suite will cover management of field development, drill- up to 80% of the Company’s geologi- ing operations of any complexity, etc. cal modelling needs by 2020; ▪ additional software modules were A wide range of corporate software was developed for RN-Simtep import developed, including: substituting software to model pro- ▪ RN-KIN, a workplace for special- cesses of transportation and prepa- ists in geology and oil and gas field ration of production fluids; Development of geodata development. The software suite has ▪ RN-PetroLog prototype was cre- management solutions an edge over its international peers, ated as part of import substituting provides production data, and con- petrophysical software to interpret ducts proxy modelling from calcula- well logging and carry out laborato- ROSNEFT SEISMIC tion of well interventions to surface ry-based core analysis. CHALLENGE ATTRACTED network components; ABOUT 500 TEAMS ▪ RN-KIM is a reservoir simulator, FROM NINE COUNTRIES. a comprehensive high-performance solution for digital 3D modelling RN DIGITAL, Rosneft's reservoir engineering of hydrocarbons development software with a 77 % increase in the use for modelling the Company’s hydrocarbon fields over the last five years;

132 2019 / Sustainability Report of Rosneft 133 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Integrated Design Drilling Support The development of in-house geological International Cooperation of the Corporate Research Automation Technologies Technologies support of well drilling had a positive effect on both operational and eco- and Design Complex The Company leverages digital technol- The Company keeps develop- nomic efficiency of drilling. In 2019, ogies to design major construction pro- ing its in-house high-tech service the in-house geosteering services The Corporate Research and Design Complex cooperates with major jects. Currently, all projects with capex of well drilling (geosteering). In 2019, helped to drill 750 new wells and com- international engineering companies. exceeding RUB 1 bln are based on 3D the Corporate Research and Design plex sidetracks, adding to a total modelling. Complex introduced geomechanical of more than 11 thousand wells. modelling to minimise drilling accidents In 2019, RN-TsIR and Germany’s into an agreement with Rosneft the construction of EP-600 olefin The target innovative project for devel- and started the piloting of automatic The high-tech services helped ART Photonics signed a memoran- International Centre for Research production complex at the request oping design automation technologies geosteering and use of drill bits to study the Company to drill its deepest dum of cooperation in the develop- and Development QSTP-LLC for devel- of Linde, a German company. produced the following results in 2019: lithology based on machine learn- multilateral well of 12,792 m ment and implementation of remote oping a polyketone synthesis stand ▪ 17 unified automated designer ing. These focus areas complement at the Srednebotuobinskoye process control devices and meth- at the Qatar Science and Technology workplaces for disciplines support- the existing services of geosteering, log field. ods. In addition, RN-TsIR entered Park. In 2019, VNIPIneft continued ing the 3D design technology, thus data interpretation, and geotechnical reducing the time for carrying out survey during well drilling. certain design operations by a half; ▪ information modelling technology Therefore, the comprehen- for the design stage, including mod- sive approach and available tech- Proprietary Technologies elling modules for FEED, and techni- nologies ensure a 24/7 support cal and economic feasibility study; for all of the Company’s horizontal ▪ geotechnical monitor- and multilateral wells, and for priority Autonomous Preliminary Azimuth Thruster Oilfield Chemicals ing system for assets located directional wells. Water Discharge for Icebreakers and Large in the permafrost zone. and Power Generation Capacity Ice-Class RN-BashNIPIneft developed a range System Vessels of oilfield chemicals that includes a corrosion inhibitor, a scale inhibitor, a tar To prepare greenfields for pilot pro- Sapphire developed an electric 7.5 MW and paraffin sedimentation inhibitor, duction and streamlined opera- azimuth thruster for multi-purpose sup- etc. Oilfield tests demonstrated that Corporate Training Centre tion, Sapphire Applied Engineering ply icebreakers currently under con- the chemicals have a higher perfor- and Training Centre (Sapphire) devel- struction at the Zvezda Shipyard. mance than any of their known peers. oped a solution for the autonomous In-house manufacture of chemicals will Sapphire Applied Engineering Number of programmes Number of students preliminary water discharge and power The Centre also developed a 15 MW reduce the cost of chemicals required and Training Centre was established generation system using separated azimuth thruster for large capacity high in production processes by 15 %. to facilitate Rosneft’s projects using associated petroleum gas, with its first ice-class tankers and LNG carriers. a wide array of General Electric prod- batch of equipment manufactured ucts and technologies, including basic 54 1,799 in 2019 and pilot operation planned technical solutions, equipment locali- 49 for 2020. 1,538 sation, and training of oil and gas professionals. In the premises of Sapphire Applied Engineering and Training Oil Refining Catalysts Resin-Coated Proppant Centre, the Company created a licens- 19 589 for Hydraulic Fracturing ing and training centre. In 2019, RN-TsIR corporate institute developed 6 the centre rolled out 54 training pro- 112 hydrotreating catalysts for produc- Ultra-lightweight resin-coated prop- grammes covering over 1.9 thousand ing Euro5 diesel fuel. All proprie- pant was piloted at the Samotlor field. employees of the Company. 2016 2017 2018 2019 2016 2017 2018 2019 tary hydrotreating catalysts for diesel The material is designed to improve fuels, hydrogenation of vacuum gas- well productivity when using hydrau- oil, hydrocracking, and guard catalysts lic fracturing and enhance oil recovery will be manufactured by RN-Kat, a sub- by producing oil in previously undevel- sidiary of Bashneft. oped field areas.

134 2019 / Sustainability Report of Rosneft 135 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Below are the projects completed The results of the modelling predic- Iceberg Safety Exploration of the Arctic Shelf and Operational by Rosneft as part of its Arctic shelf tions are used to define theoretical Safety on Shelves of Freezing Seas research programme in the reporting metocean values. Moreover, presented Since 2016, the Company and the Arctic year: in a reanalysis, these data may benefit Scientific Centre have been testing ice- ▪ Kara Summer 2019 research expedi- a number of projects relating to model- berg towing in the Barents and Kara tion to the Kara, Pechora and Laptev ling various processes such as: seas to assess the possible changes seas; ▪ the spread of accidental spills in iceberg drift trajectory and prevent Scientific Research in the Arctic ▪ biological agent to clean the coast- of hydrocarbons and pollutants, the collision with offshore oil and gas line and waters of northern seas development of an accidental oil spill facilities. from oil and petroleum product prevention and response plan; Rosneft places a particular emphasis on environmental research spills; – determining the loads on vessels These activities have resulted in a holis- and biodiversity conservation in the Arctic region. ▪ digital archive of metocean and ice and offshore facilities in various tic approach to ensuring iceberg conditions based on a mathemati- metocean scenarios; safety. The Company also conducted cal model; – sediment transportation; a research to examine the morphol- ▪ study of predictability – drifting of ice and various ice ogy and formation of outlet glaciers The Arctic Scientific Centre (part of sea ice extent parameters during formations. in the Russian Arctic and study met- of Rosneft's research and design clus- Kara Summer 2019 research expedition the open-water period in Russian ocean and ice conditions in Russia’s ter) conducts comprehensive environ- Arctic seas; Arctic seas. mental studies, including biological, November 2019 saw the end and Laptev seas (sea level fluctua- ▪ jointly with the Far Eastern Federal of the Kara Summer 2019 research tions, sea state, direction and speed For details on the preservation of the biodiversity hydrological, hydrochemical examina- University examining the structural of marine ecosystems in Rosneft’s licence areas In 2019, employees of the Company expedition organised by the Arctic of currents, sea ice draft and drift tions as well as modelling and monitor- properties of deformed ice; in Russia’s Arctic region, see the Biodiversity and the Arctic Scientific Centre received Scientific Centre with the assistance velocity) over a one to two year Conservation section of this Report. ing of Arctic ecosystems. of the Arctic and Antarctic Research period. This information is needed ▪ ice management system. a government award in science Institute of the Russian Federal to develop an offshore exploration and technology. GRI 103–3 To monitor the Arctic shelf envi- Service for Hydrometeorology drilling strategy and ensure safety On top of that, the intellectual efforts ronment, the centre leverages and Environmental Monitoring. and effectiveness of marine opera- of the Arctic Scientific Centre yielded 20 a year-round observation network tions, design drilling rigs and hydro- patents of the Russian Federation The expedition collected hydro- technical facilities. of automatic weather and seismic sta- logical data for the Kara, Pechora for inventions in biotechnology, micro- tions and autonomous buoy stations biology, ecology, and environment Atlas “Russian Arctic. Space, Time, Resources” protection. In 2019, Rosneft together with Innopraktika, a non-govern- Digital Archive mental development institute, of the Arctic Ocean Data published atlas titled Russian Arctic. Space, Time, Resources. The Arctic Scientific Centre created The atlas is organised into 15 top- THE COMPANY SUPPORTS CLIMATE RESEARCH a digital archive of metocean and ice ical sections and constitutes AND HAS ORGANISED MORE THAN 20 LARGE-SCALE ARCTIC data based on mathematical modelling a collection of valuable scientific EXPEDITIONS SINCE 2012. (reanalysis) that contains key meteoro- data on the physical geography, logical, oceanographic and ice infor- environment, history of exploration, and economic potential mation from 1966 through to 2017. of Russia's Arctic Zone. The data resolution is 15x15 km for the Arctic Ocean and 5x5 km for The edition contains unique pic- Russia's Arctic seas. tures of majestic ice landscapes and spectacular fauna that were shown in the Magnetic Arctic exhi- The models were set bition held in Tsvetnoy Boulevard, up and verified using Moscow. the Company’s historical data and observations of 2012–2017.

136 2019 / Sustainability Report of Rosneft 137 “Rosneft’s main asset is its highly skilled employees driving the Company’s development. We have always been committed to social responsibility and protection of human rights. In 2019, Rosneft was recognised as the best performing Russian company in the CHRB (Corporate Human Rights Benchmark) international human rights index, which is in line with the Company’s priorities in achieving the UN goals. We will continue this work going forward.”

Alexey Artemyev Vice President for HR and Social Policy of Rosneft

142 Management Framework and Personnel Profile 146 Personnel Training and Development 156 Social Policy For details on approaches to promoting human rights, PERSONNEL see p. 35 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Personnel Structure Average headcount in 2019 (as per Headcount Management Framework and Personnel Profile the business plan), % GRI 102–7 as at 31 December 2019 (as per Rosneft is one of Russia’s largest GRI 102–8 the Business Plan), % employers. In 2019, its average headcount stood at 315.4 thousand peo- Management Framework ple, up 2.4% year-on-year. The increase was driven by production development, 2 2 acquisition of new assets or their inclu- 2 2 Highly skilled and motivated employees are the Company’s core asset. Rosneft sion in the business plan2. Most is focused on effective personnel management, offering professional and personal of the workforce is located in Russia (98.8 %), Ukraine (0.5 %) and Belarus growth opportunities, as well as social support for its employees. GRI 103-1 (0.2 %), with 0.5% of the employees 3154 3346 working in other countries3. thousand thousand employees employees The average employee age remained In its employment practices, Rosneft In December 2019, the Company mostly unchanged at 40.3 years. complies with applicable Russian approved its Personal Data Processing Managerial positions were held and international laws and never uses Policy aimed at protecting human by 40.8 thousand employees. forced, compulsory or child labour. and civil rights and freedoms Employees categorised as managers The Company’s Policy on Personal Data Processing ploration an roution ploration an roution The Company takes a zero tolerance in this area. GRI 103-2 made up 12.2 % of the total average is available on the webstie. inluin as inluin as approach to discrimination on the basis headcount in 2019. In-House Services (Oilfield In-House Services (Oilfield of gender, age, ethnic origin, religion, Series Series race, or any other grounds. Rosneft oere an oistis oere an oistis and Group Subsidiaries never use THE COMPANY’S PERSONNEL MANAGEMENT PRIORITIES For more details on the Company’s personnel Oil Refining, Gas Processing and Oil Refining, Gas Processing and child labour in whatever circum- structure, see Appendix 1 to this Report. etroeials etroeials stances1. Foreign assets operate INCLUDE: in line with the corporate procedures orporate Series orporate Series and local legislation. GRI 102-15 Resear Resear The share of female employees Head Office (Rosneft) Head Office (Rosneft) The Company recognises remained virtually flat at 32.7 %. ter ter the importance and value Enhancing labour productivity Continuous self-improvement As at the end of 2019, women and organisational and high efficiency of fundamental human rights effectiveness of the HR service accounted for 23.9 % of all managers and freedoms at workplace: and 14.9 % of top and senior managers the freedom of association, of the Group Subsidiaries. the right to collective Employee turnover,% GRI 401–1 Personnel by country (average bargaining, labour rights headcount) in 2019, % GRI 405-1 and the right to health. Cooperation with executive 10.8 Developing effective incentives, 10.3 10.2 Rosneft abides by authorities' directives benefits and compensations authorities and vocational and actively supports the government's institutions to support social policy. the government's personnel training policy The Company’s main publicly availa- 2019 ble regulations related to personnel Talent management, management: development of staff through ▪ Code of Business and Corporate the continuous corporate Ethics of Rosneft; education and training 2017 2018 2019 ▪ Company Policy on Sustainable Development. HR records management in strict compliance with labour Russia laws and other regulations applicable to labour relations 0 raine Providing personnel 02 elarus with required skills and expertise for the Company’s 0 Оther countries3 projects

2 NizhnevartovskNIPIneft, Bashgiproneftekhim, Petersburg Fuel Company, PTK-Terminal, Trans- Time, Samaraneftegeofizika, Alaniyanefteprodukt. 3 Abkhazia, Armenia, Brazil, UK, Venezuela, Vietnam, Germany, Egypt, Iraq/Kurdistan, Kazakhstan, 1 An employment agreement with a minor may only be made in strict compliance with applicable laws of the country where Rosneft or its respective Canada, Qatar, Cyprus, Kyrgyzstan, Cuba, Mongolia, Myanmar, Norway, Poland, USA, Switzerland. Group Subsidiary operates.

140 2019 / Sustainability Report of Rosneft 141 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Improving HR Processes for Better Protection of Labour Rights Key Performance Environmental indicators include related to their function, which cascade Indicators reduction of emissions and dis- down to their subordinates, as well charges, as well as waste and the area as a number of general corporate It is important to improve HR processes by 129 Group Subsidiaries with more mine surveying and land use (for Rosneft has a system of key perfor- of contaminated lands. The injury rate indicators. for minimising the risks of labour rights than 197 thousand employees. Exploration and Production and Gas mance indicators (KPIs), which forms includes such generally accepted inter- violations. Rosneft is making consist- businesses); and work with internal reg- an integral part of the management national indicators as LTIF1 and FAR 2. ent efforts to unify and automate its ulations. Their phased implementation incentives and remuneration. The Company's top managers are per- processes as well as unify the organisa- Unification is planned until the end of 2022. sonally responsible for injuries of any For details on sustainable development KPIs, tional structures of Group Subsidiaries’ of the Organisational The KPI system includes a number employees of Rosneft, its contractors see the Sustainability Management section functions. Structures of the Group Rosneft also unified the structure of sustainable development indicators, and subcontractors. of this Report. Subsidiaries' Functions and functions of Chief Engineer including the saving of fuel and energy and Prospective Development produc- resources, injury rate, environmental The management bonuses depend Unification The Company seeks to optimise its tion units of the Company's upstream indicators, and the efficiency of pro- on KPIs. KPIs of each top manager and Automation processes and reduce labour costs. businesses. GRI 103-3 curement from SMEs. include both specific indicators directly Key HR business processes are per- In 2014, we began to unify the functions formed in line with the uniform cor- and organisational structures of Group porate HR, compensation and social Subsidiaries. Over five years, 30 cor- Breakdown of social payments, development standards. The standards porate-wide functions (80 %) were benefits and one-off bonuses apply to personnel accounting, record- standardised. included in the payroll in 2019, ing of working hours, organisational RUB mln GRI 201-3 management, remuneration system, In 2019, five typical organisational and payments to the staff and third structures were developed and circu- parties. lated among the Group Subsidiaries. THE COMPANY HAS They covered industrial safety; health, , A TRANSPARENT APPROACH , In 2019, we continued to roll out safety and environmental protection TO REMUNERATION, the methodology based on two corpo- (for Commerce and Logistics busi- EVALUATION, MOTIVATION rate IT platforms, which, as at the end nesses); HR and social programmes; AND PROMOTION of the reporting period, were used energy supply (for Gas businesses); RUB mln

HR Management Performance ,0 ,

Remuneration The Company adheres to the principles For comparison of average monthly ellness of eployees an teir of high social responsibility in terms salary in the Group Subsidiaries ilren Rosneft provides comfortable work of remuneration and ensuring a decent with the average salary by the region, Beneﬁts and one-off bonuses environment and development standard of living for its employees see Appendix 1 to this Report. inlue in te payroll opportunities for every employee. and seeks to maintain wages above oluntary ealt insurane The Company has transparent the regional average and perform In 2019, social payments, regular ben- ontributions approach to remuneration, evaluation, annual indexation. efits, and one-off bonuses included Retireent motivation and promotion, and fol- in the payroll amounted to an average lows the principle of equal pay for work The average monthly salary for all of RUB 59.2 thousand per employee. Seerane of equal value. Employees in the same Group Subsidiaries in 2019 reached ter soial payents positions and professions are paid RUB 88,609 which, for most To ensure increase in real wages equally, and there is no pay gap of the Group Subsidiaries, is tradi- and offset the inflation, Rosneft between men and women performing tionally above not only legal min- adjusted the salaries in Group identical functions. imum wage but also the actual Subsidiaries located in Russia by 4 % average salary in the respective regions. in 2019.

1 Lost Time Injury Frequency is the ratio of the number of lost-time work-related injuries (including fatalities) of the Company's employees to one (1) mln man-hours worked. 2 FatalityRate (FAR), the ratio of the total number of the Company’s work-related fatalities to one hundred (100) mln man-hours worked.

142 2019 / Sustainability Report of Rosneft 143 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

In 2019, we significantly expanded Personnel Training and Development TRAINING AND DEVELOPMENT PROGRAMMES GRI 404–2 the range of management courses to include: ▪ MBA programmes for managers, talent pool and high-potential Personnel Training System Compulsory training Professional development employees; to ensure workplace safety (training, retraining, ▪ series of Director Club workshops; and good performance advanced training) ▪ Leader of the Future programme; Training and development The corporate training and develop- Results in Personnel ▪ The University of CEO of our personnel are strategic priori- ment system aims to: Training and the School of Management ties at Rosneft. We make every effort ▪ develop professional skills for CEOs of the Group Subsidiaries to offer our employees opportunities of the employees; and their deputies. for continuous professional and per- ▪ improve managerial skills and create In 2019, we continued working Targeted enhancing Management training of professional skills for current managers sonal growth and development. GRI 103-1 an internal talent pool; consistently on enhancing We provide the following professional and talent pool ▪ provide qualified personnel the professional skills education opportunities: The corporate training system covers for the Company’s strategic projects; of the Company’s ▪ training for young engineers all business areas and staff categories. ▪ ensure that all employees are com- employees. Rosneft delivered from exploration and production We engage experts from educational petent in HSE matters; 635.9 thousand man-courses facilities; and consulting companies to train ▪ guarantee compliance with manda- in mandatory vocational ▪ training of shop managers our people in line with our current tory state requirements for person- and management training, which from the exploration and produc- and strategic needs. GRI 103-2 nel training in the fuel production is 33% more than the 2019 target. tion facilities under a professional industries. retraining programme designed to improve performance and production methods; ▪ professional retraining in oil refining Personnel training and development, thousand man-coursesGRI 404–1 and petrochemicals; ▪ training of specialists involved Indicator 2017 2018 2019 in coaching line personnel at oil Total for year, including by category: 533 535 636 depots and filling stations of oil distribution facilities. managers 100 106 119 talent pool 3 2 2 In HSE, we implemented the follow- white-collar workers 121,198 125 146 ing programmes: training in corporate young professionals 4 3 4 approaches to carbon management blue-collar workers 306 299 365 for top managers and heads of departments in the Company's Head Office, and courses in leadership, internal incident investigation, risk assessment and management for heads Personnel training and development in 2019 GRI 404–1 of the Group Subsidiaries.

Indicator In 2019, Rosneft launched a profes- Average duration of training per employee per year, man-hours 60 sional retraining programme for HR Total duration of training, thousand man-hours 18,979 managers and employees of the Group Subsidiaries. It builds on the innovative By category: Leaders of Russia Nationwide Competition master's programme in organisational managers 3,439 development and personnel manage- white-collar workers 4,232 In 2019, some Six Rosneft employees qualified ment in the oil and gas industry that of the Company's employees to the finals and three of them opened in 2018 through joint efforts blue-collar workers 11,308 took part in the Leaders of Russia became winners of the com- of Rosneft and Ufa State Petroleum By gender1: competition for a new generation petition. All finalists received of leaders. The competition seeks educational grants from the organ- Technological University. men 15,767 to identify people with a strong isers, while the winners were women 3,213 managerial potential and contribute included in Russia’s leadership to the development of their skills. talent pool programme. They will be able to spend a year working under the supervision of a mentor from among Russia’s best corporate and public sector executives.

1 The different number of training hours for men and women is due to the large amount of mandatory training for hazardous jobs that are mostly done by men.

144 2019 / Sustainability Report of Rosneft 145 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Internal Training System All in all, there are 63 training cen- Corporate Mentoring Professional Standards Rosneft representatives take part tres operating as part of the Group Programme IN 2019, THE BEST MENTOR in the National Council for Professional At Rosneft, we have built an internal Subsidiaries or local educational institu- CONTEST WAS HELD As part of efforts to support the gov- Qualifications in the Oil and Gas training system to preserve and trans- tions across our footprint. The Company has been implement- FOR THE FOLLOWING ernment policy to improve labour Industry1 . In 2019, as part of its involve- fer knowledge within the Company. We ing a corporate mentoring and devel- BUSINESSES legislation, Rosneft is working consist- ment in the Council, Rosneft drafted leverage our in-house training cen- In 2019, we set up corporate train- opment programme for workers AND FUNCTIONS: ently to implement professional stand- four industry standards and submit- tres, coaches, experts and workplace ing centres in the following Group and young professionals It aims to facil- ards in the Group and its Subsidiaries. ted them for approval to the Ministry mentors to provide 62 % of training Subsidiaries: RN-Tuapse Refinery itate employee onboarding and build Of the nearly 1.3 thousand professional of Labour and Social Protection. (395.8 thousand man-courses). (Tuapse), RN-Uchet (Samara), up their skills to professional stand- standards currently approved in Russia, In the reporting period, the Ministry and Rosneft-Termneft (Krasnodar). ards. The programme is offered more than one fourth of them can also approved three industry standards In 2019, internal coaches conducted In the reporting period, we worked to the newly hired blue-collar workers be implemented in Rosneft, including that had been developed by Rosneft. 688 training sessions and 15,570 man- to create the following facilities: and young professionals with higher the 54 that are classified as mandatory courses. On top of that, over 71 thou- ▪ an electrical engineering and testing education in a relevant field. The dura- Exploration and Production qualification requirements. The qual- In 2019, 755 employees sand man-courses were available site at the Samaraneftegaz training tion of the programme is three to nine ification standards apply to more received additional in the distance learning format. centre; months for blue-collar workers, than 13 % of employees (44.6 thou- professional education ▪ a corporate training centre depending on the occupation, and 12 sand people), of whom over 95 % have and vocational training In the reporting period, we launched at Bashneft-PROFI; to 36 months for young professionals, an educational background meeting thanks to the implementation a targeted training programme ▪ a training centre at Zvezda depending on individual competence the requirements. of professional standards. for in-house coaches made up Shipbuilding Complex. level. Oil Refining, Gas Processing of 15 modules, with 163 groups trained and Petrochemicals (2,126 man-courses). Rosneft has over 15 thousand mentors. In 2019, they helped train 4,876 new WorldSkills Championship of Vocational Skills workers and 3,994 young professionals. In 2019, Rosneft held the fourth Subsidiaries. Winners of the cor- First Geo-Steering Championship The Company holds an annual Best Worldskills corporate championship porate championship represented to promote blue-collar occupations Rosneft at the 6th WorldSkills Mentor contest, which has become In-House Services (Oilfield and improve vocational training Competition of High-Tech Cross- Over the past decade, Rosneft has All actions by the contesters were Services) an important element of its corporate based on international require- Industry Blue-Collar Professionals been steadily increasing the volume analysed to focus on the best culture, serving to promote the pro- ments. Contestants competed in Yekaterinburg. Composed of horizontal drilling. However, solutions and provide guidance gramme among employees and help- in the Laboratory Chemical Analysis of 21 contestants and 17 experts as projects become exceedingly to employees on specific steps category and the new Occupational from 16 Group Subsidiaries complex both geologically to be taken in a given situation. ing to identify the best mentoring Safety category. and the Head Office, the Rosneft and technologically, the Company and experience sharing practices. According to the event team competed in eight cat- needs to continuously focus The tournament was held organisers, the championship Marketing and distribution egories and won prizes in six on maintaining and developing The contest is held in stages, at the Novokuibyshevsk produc- will help broaden the employees’ of them. Rosneft championship professional expertise in planning tion site. Participants included professional horizons and develop with winners selected in two categories: in geo-steering. and drilling. In 2019, Rosneft held 40 technicians and 44 experts relevant skills and expertise. The Best Worker’s Mentor and The Best its first corporate championship in chemical analysis from 44 Group A representative of the Institute Mentor of Young Professionals. in geo-steering to help improve Subsidiaries, along with 11 spe- of Geology and Development In 2019, the first round welcomed employee professional skills cialists and 11 experts in occu- of Fossil Fuels came out on top. All 5,226 mentors of blue-collar employees and facilitate their involvement Corporate Services (R&D pational safety from 11 Group in geological support for drilling medallists will compete for Rosneft and 649 mentors of young profession- at the 2020 national geo-steering and design institutes) high-tech horizontal wells. als from 74 Group Subsidiaries. championship. Over 40 people representing 20 Group Subsidiaries The second round was conducted and the Company’s Head Office for the first time in the reporting period, competed in the tournament. Using with contestants including 53 worker a virtual simulator they had to drill mentors and 47 young talent mentors, three horizontal wells of various as well as 40 HR managers in charge degrees of complexity to penetrate of mentoring. an oil reservoir as far as possible. Many of the participants, including those who work in well planning, gained unique experience in horizontal drilling support in real geological environments across the Company’s footprint.

1 Created by the resolution of the Presidential National Council for Professional Qualifications dated 27 March 2015.

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Skills assessment Talent pool An external young talent pool includes As part of an educational and train- Best in Profession Corporate Festival and Competition framework school and university students attending cooperation agreement between Rosneft’s talent pool programme ing Rosneft’s training programmes Rosneft and CNPC, 20 CNPC employees At the core of Rosneft’s corporate occupations (geologists and tech- Rosneft has a unified skills assessment focuses on the identification of prom- and is designed to help the Company did internship at Group Subsidiaries culture and its further develop- nologists) of oil and gas companies. framework covering all personnel cate- ising employees, their special-purpose achieve its objectives in the long run. in Samara and 20 employees of Rosneft ment and enhancement lies sharing Annually, over 20 thousand employ- gories (managers, white- and blue-col- training and promotion to the key man- were dispatched to China as interns of best practices and work culture, ees take part in various stages lar employees) and focusing on three agement positions. For the Company, in 2019. raising the prestige of blue-col- of the competition. International projects lar occupations, and identifying key areas: the talent pool programme serves and incentivising pro-active and tal- In 2019, the event’s finals were ▪ creating a talent pool and expert as a guarantee of business efficiency, Under an agreement signed between held at Bashneft’s sites in Ufa, ented employees. To further pro- communities; while the staff view it as an opportunity As part of comprehensive staff train- Rosneft and the Qatar Foundation, mote these goals, the Company with over 1.1 thousand employees from 100 Group Subsidiaries taking ▪ planning competency training; for development and career growth. ing, Rosneft sets up partnerships 49 employees of the Company took holds an annual Best in Profession ▪ recruiting or changing job with global oil and gas companies training offered in 2019 by an expert festival and competition. part and 28 categories contested. Apart from the winners in each cat- descriptions. The programme helps create the talent and educational institutions to promote from the Qatar National Research The event covers blue-collar occu- egory, a winner was also named pool for the first-, second- and third- joint internships, conferences and train- Fund (part of the Qatar Foundation) pations in oil and gas production, in the Safe Work area – a contestant The assessment of professional skills level management positions, with first- ing programmes. at the Gubkin Russian State University oil refining and gas process- with the best result in HSE and fire uses materials drafted in the course level successor candidates eligible of Oil and Gas. ing, and oil marketing and dis- safety. of the target innovative project for target positions in several Group In 2019, the Company continued deliv- tribution, as well as engineering to introduce a skills-based approach Subsidiaries. The Company paves ering on its arrangements with inter- In the reporting year, Rosneft to personnel development across all the way for professional development national partners focusing on projects and BP Plc took the following steps business segments. In 2019, more than of its talent pool members by offering offering foreign students an oppor- to strengthen their long-standing 20.83 thousand people were assessed them job rotations, making them first- tunity to pursue higher education partnership: for compliance with the professional choice candidates for promotion to target at Russian universities with financial ▪ Rosneft and BP signed an agree- and technical skill requirements. positions and enabling them to partici- and organisational support provided ment on cooperation in the field pate in the Company’s key projects. by Rosneft. of HR management and social The corporate and management responsibility; skills model is a local regulation used The Company has a multi-tier inde- Under an educational cooperation ▪ created a joint working group as a basis for personnel assessment. pendent assessment framework to eval- agreement between Rosneft and ONGC in this area; uate management skills of employees Videsh Ltd. (India), 41 employ- ▪ developed a partnership road map included in the talent pool. In 2019, ees of the Company’s Head Office for 2019–2020; In 2019, the Company applied the selection process included assess- and Group Subsidiaries received train- ▪ staged events to exchange expe- the model to evaluate ment of 5,295 employees to deter- ing in India in the reporting year. rience in personnel assessment mine growth priorities for them, and HR e-workflow management. with 1,224 participants ending up thousand23.65 people with individual development plans.

Comprehensive personnel assessment framework, thousand people GRI 404-3

Skills assessed 2017 2018 2019 Professional and technical Over 13 Over 14 Over 20 Corporate and management Over 15 Over 17 Over 23

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Youth Policy HR Conference YOUTH POLICY HIGHLIGHTS IN 2019 Attended Rosneft’s youth policy aims to ensure by International a steady influx of young profession- Partners als. To that end, the Company is building an external talent pool comprised 2019 was the first year when of students from Rosneft’s regions the annual Conference of operation. The youth policy largely of Heads of Rosneft’s Social relies on a school-to-workplace and HR Functions was attended approach, benefiting from the advan- by the Company’s international partners. tages of continuous corporate training. The Conference brought >80 122 together more than 290 employ- thousand class programmes Youth Policy Funding in 2019, ees of Rosneft’s Head Office school and university students supported by Rosneft Group and Group Subsidiaries, RUB mln covered by youth policy projects Subsidiaries across the Company’s with speakers including repre- footprint sentatives of the world’s leading oil and gas corporations. 200 The participants shared experi- 2 ence in personnel management and corporate culture, discussed avenues for further cooperation and established working contacts between the HR functions. The Conference also shone RUB mln the light on best global prac- specialised25 thousand~4 tices in personnel management. university departments young professionals opened by Rosneft ,2

rootion of preuniersity trainin ooperation it uniersities euipent upraes internsip Master's Programme opportunities solarsips for in Oil Engineering stuents an rants for profes sors In 2019, Rosneft partnered or it youn talent 163 61 with BP Russia to create a dedi- partnerships set up partnerships cated Master's programme in Oil with educational institutions set up with universities Engineering at Kazan (Volga) Federal University. The programme allows enrollees to gain advanced knowledge of oil production, development system streamlining, and well and oilfield management. In October 2019, 10 students enrolled on this Master’s programme, having passed a complex selection procedure. Upon the programme’s com- 38 1.7 pletion in 2021, the graduates partnerships RUB bln will be hired by eight Group set up with colleges invested by the Company in youth Subsidiaries. policy projects

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Development of Young Talents Cooperation ▪ a new specialised university with more than 20 thousand stu- with Universities department was established dents attending; and 24 existing departments con- ▪ more than 7 thousand students WORK WITH YOUNG TALENTS HAS A NUMBER OF FOCUS AREAS. The Company actively leverages coop- tinued to operate, with 74 employ- and 47 university academics com- eration agreements to promote ees of the Company involved pleted internships in the Company; partnerships with 61 Russian and for- in their activities; ▪ the Head Office arranged a long- eign universities from the regions ▪ work continued on projects aimed term internship for 179 Master's where it operates. In the reporting at enhancing curriculum via more students of Rosneft's partner year, the following steps were taken sophisticated university infra- universities. in this direction: structure; Rosneft Days were held Onboarding Training and Development Financial and social support University Cooperation Highlights

Indicator 2017 2018 2019 Number of partner universities 58 60 61 To fast-track the onboarding of young professionals, we have set up Number of students doing internship 6,661 7,014 7,088 71 young specialist councils and introduced mentorship programmes Identifying and development across the Group Subsidiaries. In 2019, 105 Group Subsidiaries Financing of university cooperation initiatives, RUB mln 1,049.8 1,147.7 1,345.2 of potential leaders employed 4 thousand young professionals.

As part of an effort to develop the professional, technical, corporate and managerial competencies of young specialists, we put in place training programmes (approximately four thousand man-courses organised) and arranged for 2.6 thousand Pre-University Training are available at educational institutions studies at universities. Upon gradua- young professionals to participate in regional and cluster R&D conferences. across the Company’s regions of oper- tion, the best students are employed Rosneft classes are a part of pre-uni- ation and offer school students sec- by the Group Subsidiaries. versity training programmes designed ondary education with a strong focus Progress assessment to help the Company create an exter- on technology and natural sciences nal young talent pool. Rosneft classes to enable them to continue engineering

Rosneft Classes Highlights

Young Professionals at Rosneft, people Indicator 2017 2018 2019 Number of Rosneft classes 111 117 122 Indicator 2017 2018 2019 Number of students trained 2,615 2,762 2,839 Number of young professionals hired upon graduation 1,437 1,459 1,360 Number of regions 25 26 27

Number of young professionals in the Company, people 4,161 3,994 4,001 Investments in Rosneft classes, RUB mln 191.1 224.4 258.8 Number of young professionals participating in R&D conferences 2,072 2,391 2,607

Financing of the young talent programme, RUB mln 102.7 116.1 120.0 In 2019, the Company sponsored 2019 saw the creation of a new dedi- Charitable Support 122 Rosneft classes in partnership cated Rosneft class designed to supply for Educational with 64 secondary schools from across talent for the Company’s operations Institutions 27 Russian regions. The classes had focusing on Arctic and offshore oil Strategic young with 189 employees from 58 Group Furthermore, in 2019 we held a total attendance of 2,839 students. and gas exploration and develop- Rosneft and the Group Subsidiaries talent pool Subsidiaries selected to be consid- an annual conference for chairs ment, including environmental sup- provide charitable assistance to edu- ered for inclusion in the strategic of young professionals’ councils to help With a lot of Rosneft classes grad- port and protection and biodiversity cational institutions taking part in pro- The Company pays special attention pipeline of young talent and offered boost the efficiency of their work. uates employed by the Company, preservation. The class is hosted jects and programmes of the corporate to the development of a strategic young further training under the Three Steps The event saw 58 participants. the project has proved its efficiency. by AESC MSU – Kolmogorov’s boarding School–University–Company framework talent pool, staging regular assessment programme. In the reporting year, In 2019, 32 Group Subsidiaries hired school, a department of Moscow State for continuing education. In the report- business games for young professionals we trained a total of 114 young pro- 107 Rosneft classes graduates. University. ing year, total charitable aid allocations in their third year of employment. fessionals who had topped in the 2018 amounted to RUB 1,126.8 mln for voca- assessment games. tional and higher education institutions In 2019, 374 young specialists and RUB 237.9 mln for partner schools. from 74 Group Subsidiaries participated in the assessment games,

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In 2019, for the third year in a row, Rosneft was rated the Most Socially Social Policy Responsible Oil and Gas Company of the Year in a contest organised by the Russian Ministry of Energy.

Rosneft’s management has always been committed to maintaining high social The panel of judges gave high praise to the Company's achievements security standards for our employees. For many years, the Company has been in fostering the corporate culture and developing professional and personal one of the most socially responsible employers in Russia. skills of its employees. The judges also noted considerable work done by the Company to promote the principles and develop new formats of social partnership, as well as to propagate healthy lifestyles and ensure In 2019, the Company continued to implement the Rosneft–2022 Strategy occupational safety. to ensure better motivation and social security for its employees and retirees. Furthermore, Rosneft was awarded for the best public non-financial report among oil and gas companies.

Key social policy costs in 2019, % ROSNEFT–2022 STRATEGY INCLUDES SOCIAL INITIATIVES Employee Satisfaction Survey

Rosneft conducts a biennial socio- and access to information, and vast 2 0 logical survey of employee satisfac- opportunities for growth thanks tion with HR and social programmes to corporate training programmes. that covers the Group’s Subsidiaries and the Company’s Head Office. The survey also identified several At the end of 2018, the survey areas for improvement. Based RUB bln encompassed some 70 Group on the results, a discussion Subsidiaries and included session was held in 2019 that was attended by representatives MODERN MEDICINE ACTIVE LONGEVITY AFFORDABLE HOUSING 2 over 16,000 respondents, around 300 focus groups, and more than of the Company’s HR and social 170 in-depth interviews with com- function, as well as deputy HR Expansion of industrial healthcare Regular indexation of corporate Enabling employees to improve and social programme directors pany managers. facilities network, promotion pensions from the investment income their living conditions by using of the Group Subsidiaries. Following of telemedicine technologies, of the Company’s pension fund concessional special-purpose non- The survey showed that the meeting, each Company implementation of a brand new interest-bearing loans granted ptial orplae onitions the employees were content compiled its own action plan programme for preventive medical by the Company and lower mortgage an soial infrastruture ainte with the Company’s social policy to improve employee satisfaction. examination rates offered by partner banks nane and the quality of corporate A survey that is scheduled for 2020 ealtare ealty lifestyle initiatives. Among the things will assess the progress under these In 2019, the Company allocated RUB 35.4 bln for creating optimal social and working conditions, promoting prootion an oter soial mentioned by the respondents initiatives. GRI 103-3 healthy lifestyles, and providing healthcare and social guarantees for its employees. ontributions were Rosneft’s prestigious ousin brand as an employer, better internal communications riate pension plans

SOCIAL POLICY COMPONENTS GRI 401-2 Social and Working Conditions at Production Sites

Creating optimal social Providing emergency Comprehensive housing Over the reporting year, Rosneft accommodated close to 52 thou- and working conditions medical aid programme on the Company’s sites on the Company's sites continued to implement its com- sand employees of the Company and its prehensive programme to ensure contractors. 8.7 favourable social and working con- RUB bln ditions for the Company employ- In 2019, RUB 8.7 bln was spent on pro- was spent by the Company ees stationed in remote regions viding favourable social and work- on ensuring good social and adverse climatic conditions. ing conditions. Capital investment and working conditions in 2019 Development of the health Corporate pension Supporting employee The programme’s key focus is the devel- in the construction, reconstruction, protection system, supporting programme and veteran insurance programmes opment and fit-up of 349 shift camps development and fit-up of shift camps, and promoting healthy support project lifestyles (including 119 shift and trailer camps, field support bases, sites and work- and 230 trailer camps for the drilling shops amounted to RUB 8.1 bln. crews of RN-Bureniye), which in 2019

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Quality Living Conditions Employee Health Management

One of the core areas of the Company’s an interest-free 20-year loan to cover The Company views keeping employees Emergency Medical Aid Implementation Social Policy is its comprehensive hous- 25–35 % of the flat’s cost. The employee in good health as one of the strategic at Production Facilities of a Brand New ing programme that facilitates long- then enters into a mortgage agreement 1,112 priorities of its Social Policy that serves Programme for Preventive term cooperation with highly-qualified for the remaining amount with partner families to shape conditions for better labour All occupational medical stations Medical Examination and valuable employees. banks at a below-market interest rate. of Rosneft employees saw productivity. of the Company are equipped their living conditions improve with state-of-the-art medical equip- Ensuring good health of its employees The cornerstone of the programme In addition, relocated professionals in 2019 To improve the quality of medical ser- ment for emergency care and pro- and maintaining their long-term pro- is corporate mortgage, which consists are provided with corporate housing vices at remote worksites, provide fessional-grade training equipment fessional engagement are the priori- in the Company’s giving an employee for a period of up to five years. healthcare for its employees, and carry for the development of emergency ties of the Company's new programme out the Modern Medicine strategic ini- medical care skills. for preventive medical examina- tiative, Rosneft is implementing a num- tion aimed at early-stage diagno- ber of measures along the following The Group has established regular sis and treatment of life-threatening lines: training sessions on prehospital emer- conditions. Education Support for Employees and Members ▪ development and improvement gency care in accordance with modern of an emergency aid and evacuation international standards (both in-person As part of the programme, employees of Their Families system at the production facilities and using telemedicine). get access to additional medical ser- of the Group Subsidiaries; creation vices intended to effectively diagnose Rosneft continues to invest in train- and development of a corporate To assess the readiness of the emer- cardiovascular diseases and cancer. ing of the Company's employees telemedicine network; gency medical response, the Group and their children who attend universi- ▪ introduction of a brand new pro- holds regular medical drills at various In 2019, the programme saw ties on a full-time basis by issuing stu- gramme for preventive medical levels. In 2019, large-scale drills were over 30 thousand employees dent loans. examination of employees aimed hosted by 50 Group Subsidiaries. from 11 Group Subsidiaries (pilot pro- at early detection of life-threatening ject) and Head Office of the Company. conditions; ▪ disease prevention and promotion Creation All employees who went through In the reporting period, these of healthy lifestyles. and Development the prevention programme received loans were taken out by of a Corporate health passports containing the results Telemedicine Network of the check-ups and detailed individual Occupational Medicine recommendations on further monitor- 307 Advisory Board As part of a strategic initiative, a pro- ing and treatment. As part of the exist- employees In order to boost the efficiency ject is being implemented to estab- ing voluntary medical insurance ("VMI") of the healthcare system and effec- lish a corporate telemedicine network programme, employees received fol- tively provide emergency medical that will bring together 90 healthcare low-up examinations and all types aid, the remote production facilities facilities from remote production sites of treatment, including high-tech ones. of the Group Subsidiaries have an occu- of 18 Group Subsidiaries and large pational medicine advisory board federal and regional medical cen- The results confirmed the new format in place that consists of highly expe- tres from across eight Russian regions of the prevention programme to be rienced occupational medicine spe- to improve the availability and qual- highly effective, especially when it came Rosneft Vector – Camp for Employees’ Children cialists from the Group Subsidiaries ity of medical care in the hard-to-reach to early diagnosis of life-threatening and the Company’s Head Office. regions of the Company’s operation. diseases at pre-clinical stages. The pro- In August 2019, corporate children’s associations, supported cultural and Khakassia Nature Reserve. gramme has been extended into 2020. camp Rosneft Vector opened its and volunteer activities, and won The camp also welcomed renowned In 2019, the board’s experts conducted doors for the first time to children awards at municipal, regional, fed- guests who came to speak comprehensive audits of the health- Additionally, there are various initiatives from all over Russia whose parents eral and international levels in sports, to the children – Guinness World are employed by the Company. culture and education. Record holder Sergey Burlakov care and emergency aid system under the healthy lifestyle propaga- and legendary CSKA ice hockey at six Group Subsidiaries and also tion programme that include promo- This pilot project brought together The girls and boys enjoyed colourful player and Olympic champion Yury assessed the organisation and qual- tion of examinations for early diagnosis 135 kids from 59 Group Subsidiaries and exciting pastimes such as Future Blinov. The shift ended with an award ity of pre-shift medical check-ups of cancer. On the World Cancer Day in the picturesque Republic Oil Worker and Spitting Image ceremony that celebrated the best of Khakassia, at the Lake Shira chil- talk shows, Rosneft Lights Up at ten of the Group's Exploration (4 February), Rosneft prepared a spe- group and sports team, as well and Production Subsidiaries. cial newsletter on cancer risk fac- dren’s health resort that is super- the Nights tryouts and gala con- as a music concert and fireworks. vised by the Achinsk Refinery. cert, a Spartakiad, the Live Longer tors and life-saving benefits of early quiz, Rosneft Plants multiple-stage diagnosis. The first shift was comprised of chil- quiz, business and takeover days dren who had actively participated and much more. The kids also in competitions and Olympiads went on excursions to the Shirinsky organised by Rosneft and regional Museum of Local History

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Disease Prevention of the Company’s operation courtesy ▪ VHI, where more high-tech Promotion of a healthy lifestyle, sports, and culture and Promotion of Healthy of leading Russian experts from the rel- and multidisciplinary clinics Lifestyles evant fields. with state-of-the-art equipment were included into the coverage to pro- Rosneft has a long history of promoting a healthy lifestyle and extensively The Company continues running its Measures for preventing non-infec- vide services in excess of those supporting sports. Rosneft corporate events facilitate sports activities and give 2018–2022 Live Longer! programme tious diseases include a special focus guaranteed by the government; employees an opportunity to demonstrate their athletic achievements. that promotes healthy living in order on mental health issues. ▪ voluntary accident insurance, which to prevent diseases and keep its ensures round-the-clock cover- employees in good health. On the World AIDS Day (1 December), age for employees in case of death the Company holds an information and total or partial disability With more and more employ- campaign on the disease. One of its as a result of an accident. The Group The “LIVE LONGER!” ▪ Rosneft was represented Our triathlon team consists of more ees of the Company’s Head Office goals is to reiterate the guidelines Subsidiaries are moving towards Programme to Promote by its athletes on the half ironman than 250 employees representing and the Group Subsidiaries participat- on how to act in connection with these increasing individual insurance cov- a Healthy Lifestyle and sprint distances at IRONSTAR, over 20 Group Subsidiaries. ing, they not only take more interest issues and to protect those living erage amounts that determine maxi- an international triathlon race held in monitoring their physical condi- with HIV against discrimination. mum payouts to employees; The project is set to promote a healthy in Kaliningrad; In the Sport and Russia national award, tion, but also take active steps to find ▪ personal insurance programmes lifestyle, disease prevention, and involv- ▪ a large-scale running event Run Rosneft's “Live Longer!” programme was out more about ways to maintain covering more than 330 thousand ing employees of various ages and fit- 10 km to Celebrate the Oil Worker awarded a diploma and a cup in the nom- their health, live a more active life, Personal Insurance employees of Rosneft and Group ness levels in athletic events. Day was held; ination The Best Project in Corporate and thus make it more fulfilling. Programmes Subsidiaries. ▪ family sports events were arranged, Mass Sports and Promotion of Healthy One of the Company’s key measures As part of the programme: including Spring Athletics Festival Lifestyle among Employees. The programme includes online aimed at fostering a favourable social ▪ the Company's staff competed at CSKA and Summer Running lectures and training sessions environment is the implementation in a number of major Russian ath- Festival in Moscow. In 2019, Rosneft won a contest held on healthy behaviours, which bring of employee personal insurance pro- letic events, including a series by the Russian Ministry of Energy the latest and greatest in healthy living grammes, which include: of races of the Moscow Marathon, For the second year in a row, Rosneft's among oil and gas companies and disease prevention to the regions Pioner Cup biathlon race, All-Russian triathlon team became the corporate in the nomination titled Promoting Ready for Labour and Defence team of the year and won a commem- Healthy Lifestyle Culture and Standards Festival for employees; orative award – a symbolic crystal. among Employees.

OUR TRIATHLON TEAM CONSISTS OF MORE THAN 250 EMPLOYEES REPRESENTING OVER 20 GROUP SUBSIDIARIES.

EMPLOYEE ENGAGEMENT IN THE LIVE LONGER! PROGRAMME TO PROMOTE A HEALTHY LIFESTYLE CONSISTENTLY GROWS.

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In addition, the Company arranges internal events to promote corporate culture and support creativity among its employees. Rosneft Lights Up the Nights

In 2019, Rosneft held its 9th annual The concert programme featured This traditional festival reveals new corporate festival Rosneft Lights Up the best performances of the festi- talents and every year confirms its the Nights, which brought together val's final phase and those put up status as a notable cultural event more than 6.5 thousand employees by participants together with profes- attracting performers from the Group 9th Winter Spartakiad and 15th Summer Spartakiad of Rosneft from 125 Group Subsidiaries. sional artists and Russian pop stars – Subsidiaries across Russia. Dmitry Malikov, Natalia Podolskaya, The Company places great impor- an overall winner, Angara were run- athletics, billiards, and bowling. Individual performers and groups Mitya Fomin, Levon Oganezov, Pizza, tance on its winter and summer ners-up, while Samaraneftegaz took 800 athletes and 20 teams took part which qualified after regional contest and JukeboxTrio. Rosneft Lights Up Spartakiads. the bronze. in the event with Angara celebrating stages got a chance to win in one the Nights is famous for its rousing the victory, Samaraneftegaz winning of the following nominations: cho- dances, sophisticated instrumental The 9th Winter Spartakiad was In autumn 2019, silver, and Novokuibyshevsk Refinery reography, vocal, instrumental, cir- hosted by Ufa and featured com- the Company awarded prize-win- compositions, and the unique nature coming third. cus, and performance arts, artwork of each performance. petitions in four sports – ice ners of the 15th Summer Spartakiad (painting and photography) in three hockey, skating, cross-country ski- in Sochi with competitions held age groups – 7 to 12, 13 to 17, and 18 ing, and luge relay. 560 athletes in twelve disciplines, including and older. and 32 corporate teams partici- futsal, volleyball, basketball, kettle- pated in the event. Bashneft became bell lifting, tug of war, table tennis,

IN 2019, ROSNEFT LIGHTS UP THE NIGHTS BROUGHT TOGETHER MORE THAN 6.5 THOUSAND EMPLOYEES FROM 125 GROUP SUBSIDIARIES AND THEIR CHILDREN

ALL STAGES OF THE SUMMER AND WINTER SPARTAKIADS INVOLVED SOME 25 THOUSAND EMPLOYEES REPRESENTING 100 GROUP SUBSIDIARIES

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Corporate Pensions and Support Collective Bargaining Agreement and Labour Rights for Veterans Rosneft respects employees’ right Liaising with the Russian Industry Agreement Since 2000, the Company cooperates The Active Longevity to freedom of association and collective Association of Oil between Oil and Gas with Non-State Pension Fund Evolution1 Programme is implemented 80 bargaining. The Company never pre- and Gas Employers. Companies to implement a pension programme set as part of the Rosneft–2022 Strategy thousand former vents its employees from joining associ- to improve the social security of retired and designed to improve the social employees ations and trade unions. The last year saw a closer partner- In 2019, Rosneft actively contrib- employees of Rosneft and Group security of retirees. In 2019, RUB 2.5 bln received corporate pensions ship with the Russian Association of Oil uted to drafting of and entering into Subsidiaries. As at the end of 2019, was invested in the programme. This in 2019 The Rosneft Interregional Trade Union and gas Employers (the Association). a new Industry Agreement between the programme covered 280 thousand helped to: Organisation (Rosneft ITUO) is a partner There are more than 200 cooperation oil and gas and construction com- employees, and some 80 thousand ▪ apply one-time indexation that plays a key role in the Company’s agreements between the Association panies (the Industry Agreement). former employees received corporate to ca. 18 thousand pensions HR and social policies. GRI 103-2 and Group Subsidiaries. For the first time since 1992, pensions. RUB 3.3 bln was paid in pen- awarded in or before 2010, the Industry Agreement promotes sions during the year. with the average pension amount the interests of the oil and gas sector. increasing by 17.5 %; The long-lasting negotiations resulted In 2019, private pension schemes cost ▪ top up personal pension accounts in amending 56 clauses of the Industry the Company RUB 8.9 bln, including of ca. 41 thousand retirees Agreement with 24 new clauses added. RUB 461.6 mln spent on the social sup- to ensure a 6.18 % indexation port of veterans. of corporate pensions financed Employees of the Group Subsidiaries from the investment income will enjoy the industry standard that For details on Rosneft ITUO For details on the Association Under the collective bargaining agree- of NPF Evolution. guarantees minimal social benefits ment, retirees receive extra one-off and compensations. The new Industry financial aid or enjoy health resort The Active Longevity Programme to be As at the end of 2019, there were more The Association consistently liaises Agreement will enhance social secu- treatment free of charge. These completed in 2021 is aimed to ensure than 200 trade unions in Rosneft ITUO with the Russian Federal Service rity for employees, support sustain- expenditures came to RUB 522 thou- the annual indexation of all corporate representing the Group Subsidiaries, for Labour and Employment able development of the Company, sand in the reporting year. Rosneft also pensions from the investment income with more than 160 thousand mem- for the unambiguous interpretation and mitigate the risks of social strain held holiday celebrations for veterans of NPF Evolution, thus maintaining bers (ca. 50 % of the total headcount of labour laws. and conflicts among employees. on the occasion of Victory over Nazism their purchasing power over the whole as at the year-end). Another benefit of joining the Industry in WWII, Oil and Gas Workers’ Day payment period. GRI 201-3 In 2019, in addition to entering into Agreement is the capability to apply and New Year’s Day. Collective bargaining cooperation agreements, another specific provisions of the Russian agreements cover more than 16 Group Subsidiaries became full- Labour Code conditioned upon 74 % of the headcount. GRI 102–41 fledged members of the Association. the presence of relevant provisions in the Industry Agreement. To facilitate the social partnership pro- Private pension schemes gramme, we continued the tradition of annual meetings of Rosneft’s HR Period 2017 2018 2019 and social segment and other func- The Company’s contributions to NPF Evolution under the pension scheme, 6,843 11,577 11,402 tions with leaders of Rosneft ITUO RUB mln trade unions in 2019. In November Number of people receiving corporate pensions 72,841 76,892 79,836 2019, they met in Moscow to discuss a number of burning issues for employ- Pension payments, RUB mln 2,196 2,786 3,287 ees – wages, their indexation, pen- Total value of personal pension plans with NPF Evolution, RUB mln 6,868 8,833 10,806 sion schemes, subsidised vouchers, and local topics that needed to be Number of people with personal pension plans (cumulative total) 76,460 91,124 96,358 taken care of by the Company. GRI 103-3 Employees contributing to the fund, thousand people Over 233 Over 266 Over 280 Traditionally, Rosneft ITUO places a special focus on industrial safety. In particular, a meeting of the Health, Safety, and Environment Committee held in 2019 highly appreciated the performance of the Orenburgneft trade union’s labour safety officer and recommended to expand the practice of setting up the position of such Rosneft ITUO officers in other Group Subsidiaries. GRI 403–4

1 Formerly known as NPF NEFTEGARANT.

162 2019 / Sustainability Report of Rosneft 163 As a socially responsible business, Rosneft consistently implements a policy to facilitate comprehensive social and economic development across its regions of operation. We build long-term partnerships with local communities, take steps to protect social and cultural heritage and support key infrastructure projects aimed at advancing healthcare, education, culture, mass and youth sports. The Company respects the traditions of indigenous minorities and local ethnic diversity. We have gained a unique experience in addressing challenges related to preserving the identity, lifestyle and households of indigenous people, while also helping provide quality education and healthcare.”

SUPPORTING

Elena Zavaleeva SOCIAL State Secretary – Vice President of Rosneft AND ECONOMIC 168 Supporting Social and Economic Development 181 Support for Indigenous Minorities of the North For details on Vostsibneftegaz’s grant programme to preserve the Evenki DEVELOPMENT language, see p. 181 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Equipment Localisation Advancing Prospecting, Supporting Social and Economic Development Exploration and Development In 2015, Rosneft launched an Import Substitution Technologies Rosneft is committed to promoting sustainable development of local communities and Equipment Localisation Programme designed to help by bolstering related industries and creating added value and new jobs across the entire the Company achieve its goals in line with its strategic In partnership with Rosatom, Rosneft production and sales chain. We implement socially significant infrastructural projects that priorities. creates instruments for measuring mineral composition of formations and log- serve to improve the quality of life for local communities. GRI 102-15 ging1 while drilling horizontal wells. This will help provide for high-quality insights into complex reservoirs2 OBJECTIVES UNDER THE IMPORT SUBSTITUTION and ensure independence from expen- AND EQUIPMENT LOCALISATION PROGRAMME sive foreign services.

Economic Development Rosneft and its another partner Rostec are working on a project to produce As a major Russian taxpayer, Rosneft Most of Rosneft's investment pro- synthetic proppants using a jointly helps ensure budget stability and con- jects are based in Russia that INVESTMENT Rosneft development as a high-tech oil and gas developed technology. tributes to the nation's social and eco- accounts for 92% of the Company's PROCESS: PRINCIPLES company nomic development. total investments in 2019, of which AND OBJECTIVES about 20% are projects in Eastern Technological leadership in the core competencies: oil and gas Promoting Russian-Made production, oil refining and gas processing In 2019, the Company paid RUB 3.6 trln Siberia and the Far East. We invest Catalysts in taxes, duties and insurance con- in projects that bring about social In 2019, Rosneft's subsidiary RN-Kat tributions to the budgets of all levels and economic improvements and boost specialising in catalyst produc- and non-budgetary funds, which makes the quality of life in Russian regions. tion and the Ufa Refinery conducted up 18 % of federal budget revenues. industrial tests on the first batch Rosneft's investment management pro- Focus on UN Sustainable Technologically sustainable position of the hydrotreating catalyst suita- cess is designed in line with interna- Development Goals in the hydrocarbons market ble for Euro5 compliant diesel fuel. tional best standards and practices, This is a unique hydrotreating agent including initiation, pre-study, approval, Increasing the share of Russian-made products and implementing capable of fully replacing its foreign 3.6 projects to localise the manufacturing of foreign oil and gas trillion roubles monitoring of investment projects, equipment in Russia in cooperation with leading global producers peers for the Russian refining industry. and management of the Company's The tests proved that Rosneft’s propri- in taxes, duties and insurance investment portfolio. The investment etary catalyst was fit for the production contributions paid by Rosneft process is integrated with all related Honouring the Company’s strong of diesel fuel compliant with all the lat- in 2019 social responsibility commitments, processes, including strategic and busi- including its contribution est technical requirements. ness planning, budgeting, reporting to the social and economic and financial control, project man- development of local communities In 2019, the Novokuibyshevsk Investment Programme agement and corporate governance. Sustainable infrastructure development Catalysers Plant launched Russia’s GRI 103-2 GRI 103-3 first-ever advanced pilot testing facil- Rosneft’s investment programme com- Running upstream and downstream projects ity for hydrotreating catalysts. The new prises high-quality projects across all facility is designed to test technolo- business segments and seeks to help gies for manufacturing new oil refining the Company deliver on its strategic Increasing efficiency across all and petrochemical catalysts with a view goals, including an increase in profita- operating segments to ramping up large-scale production. bility, enhancing operational and invest- Until now, Russia has been lacking ment efficiency, and minimising As part of the programme, Rosneft technological capabilities of this kind. For details on the proprietary research-intensive the environmental footprint. keeps investing in proprietary solutions specialist software, see the Development of R&D The cutting-edge platform will fast-track and products with a view to sustaining Capabilities section of this Report. the implementation and commercialisa- For details on the investment programme, see the The existing investment portfolio man- 2019 Annual Report. its technological self-sufficiency. tion of Rosneft’s R&D initiatives focusing agement and project ranking pro- Robust business growth on catalysis and catalysts for the said cess make the investment programme processes. flexible enough to respond quickly to changes in the macroeconomic environment and business, as it boasts high resistance to adverse external factors. Improvement of the investment discipline

1 A type of borehole measurement. 2 Rock formation with voids (pores, vugs, cracks or fractures) that can host and filter fluids (oil, gas and water).

166 2019 / Sustainability Report of Rosneft 167 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Zvezda Shipbuilding Following the commissioning of its Government Relations Complex second phase, Zvezda will be able in Import Substitution Social and Economic Development of the Russian Far East to build all types of vessels and marine and Localisation Upon instruction from the Russian equipment. Work is currently under- Building a cutting-edge industrial Large-scale work is in progress A special focus in placed on improv- President, Rosneft is running a pro- way to build a dry dock and additional In 2019, we continued to develop cluster requires a lot of investments to train and attract qualified ing social infrastructure in Bolshoy in manufacturing, as well as in talent workforce. Kamen. To create a comfortable gramme to ramp up a shipbuilding clus- full-cycle workshops for large capac- import substitution in cooperation pool and social infrastructure. Thanks living and working environment, ter in the Far East. Zvezda Shipbuilding ity vessels and marine equipment. with the following federal executive to the Zvezda Shipyard, the Primorye The Company runs a local school- Zvezda helps build housing for its Complex (Zvezda Shipyard) in Bolshoy The shipyard will be fully operational bodies: town of Bolshoy Kamen received to-workplace framework for contin- staff. November 2019 saw the com- Kamen, Primorye Territory, is the core in 2024. ▪ Russian Government; a powerful impetus for growth. uing education, with three Rosneft missioning of four new residen- classes opened to provide future shipyard in the cluster and Russia’s ▪ Ministry of Industry and Trade; tial buildings intended for Zvezda The shipyard talent with a deep insight into core first-ever facility for the construction ▪ Ministry of Energy; employees. At the official ceremony, will be built by a Rosneft-led consor- subjects. Zvezda maintains close they received keys from 144 apart- of large-capacity vessels. ▪ Ministry of Economic Development. tium in furtherance of instructions cooperation with local educa- ments fully ready for a comforta- from the Russian President Vadimir tion institutions, providing training WORKS COMPLETED ble living. By the end of the year, In 2019, the shipyard has 42 vessels Rosneft is represented in various inter- Putin. Today, the shipyard has 39 ves- and jobs to their graduates. It also another 12 residential buildings in pipeline, with orders for 28 ves- AS PART governmental task forces and research sels (59 including options) in its organises job fairs and open days with 528 apartments were com- pipeline, with orders for 28 vessels for students. In 2019, we helped sels placed by Rosneft to secure pilot THE FIRST AND SECOND groups established by federal execu- missioned, with two other build- placed by Rosneft to secure pilot launch new specialisations in the Far workload. tive bodies to look into ways to reduce ings of 68 apartments each made CONSTRUCTION PHASES workload. Zvezda product range will Eastern Shipbuilding College, such IN 2019: the domestic fuel and energy sec- available for living earlier as part feature vessels with an up to 350 kt as hull steel work assembly and elec- of the project. By 2023, the Zvezda Zvezda Shipyard produces vessels tor’s dependence on imported equip- displacement, components of marine trogas welding. Shipyard contractors and Primorye of various class and purpose, includ- ment, components, spare parts, as well platforms, ice-class vessels, commer- Zvezda experts made a presenta- Territory Administration will build ing large-capacity Aframax tank- as on foreign services and software. cial vessels for cargo transportation, tion at the Ufa State Petroleum a total of 788 apartments in seven ers, MR product tankers powered Soil dumped specialty vessels, and other types Bolshoy Kamen microdistrics. of marine equipment of any com- Technological University and Bashkir by gas motor fuel, shuttle oil tankers Rosneft is also involved in public dis- >700 plexity, characteristics and purposes, College of Welding, Assembly and Arc7 ice-class gas carriers, nuclear cussions of draft laws and regulations including those not previously man- and Industrial Production. Following and diesel-electric icebreakers, mul- thousand cub m aimed at facilitating import substitution. ufactured in Russia due to the lack the assessment of candidates, ti-purpose supply vessels, and also of required launching and hydraulic the shipyard made job offers to 21 welders. the world’s most powerful nuclear As at the end of 2019, the Company structures. The new industrial clus- Project 10510 “Leader” ice-breakers. signed cooperation agreements ter emerging in the Russian Far East Zvezda is also strengthening dia- Construction sites with 48 Russian regions, which among has created thousands of jobs, con- logue with employment cen- tributing to the region's economic Zvezda is set to become a strong developed other things set stage for localis- tres countrywide. The company and social development. The ship- and the Agency for Human Capital competitor to foreign shipyards, pro- >16.5 ing equipment manufacturing across yard currently employs as many Development in the Russian Far East viding Russia with a maritime fleet Russia. thousand cub m as 3 thousand people, with its head- are implementing a jointly developed to develop offshore oil and gas reserves count expected to exceed 7.5 thou- roadmap. and ensure seamless operation sand by 2024. of the Northeast Passage – the short- Sheet piles installed est shipping route between Europe 3.2 and Asia. kt

Zvezda Shipbuilding Complex is being built in two phases. Already commis- Concrete poured sioned are the facilities of the extended >136 first phase, including a hull production thousand cub m block, painting workshops, an open heavy slipway equipped with unique cranes, an advanced ship moving sys- Steelworks assembled tem, and a transport-transfer dock. ~12 kt With these facilities on stream, the shipyard was able to start building vessels, including the most sophisticated Piles installed Aframax tankers, without waiting 7 thousand for the completion of the second-phase facilities.

168 2019 / Sustainability Report of Rosneft 169 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Supporting Social Development of Regions and Charity Charity funding, RUB mln Support for Local Water supported a project to provide GRI 203-1 Supply Initiatives clean drinking water to settlements located in the Bolsheuluisk District Rosneft sponsored a large-scale of the Krasnoyarsk Territory. The pro- 1 Rosneft makes a significant contribution Allocation of Funds in 2019 , % GRI 203–1 project to improve water supply gramme is being implemented jointly to the development of local healthcare, in the Republic of Ingushetia. In 2019, with the district administration. GRI 413-1 education, culture and infrastruc- water supply facilities were put into 9,543 ture while also promoting mass sports operation in Nazran and six rural set- in the regions of operation. In its chari- ealtare tlements outside the town. Over 40 km Charity 6,668 7,138 table activities, the Company prioritises ysial euation an sports of water pipeline, three water tanks social investments in the regions as per inluin ilrens prootion and eight artesian wells were built Rosneft provides charitable support of ealty lifestyles social and economic cooperation agree- 3,186 to provide clean drinking water to local to the regions across its footprint. 2,671 2,418 ments with regional authorities. nfrastruture eelopent in communities. The Company’s charitable activi- reions istrits an uniipali ties are carried out in accordance RUB mln ties In 2019, we continued to honour The Company also supports projects with the Federal Law On Charitable uation an siene 2017 2018 2019 our commitments under the relevant to secure water supply in the Tarqazy Activity and the Regulations agreements with 48 Russian regions. ulture an reial of ultural Social ﬁnancing under signed settlement and to repair water sup- on the Procedure for Charitable eritae areeents GRI 103-2 ply networks in 11 settlements Activities in Rosneft and Group Support for eterans te niiual aritable proets of Yermekeyevsky, Ishimbaysky, Subsidiaries. GRI 103-2 isable an people in nee total and Chekmagushevsky districts resool institutions an of the Republic of Bashkortostan. orpanaes arities s uanitarian ai In the Khanty-Mansi Autonomous Support for inienous peoples Area – Yugra, discussions are underway of te ort 9,556 to construct a modular water treatment ter epenses million roubles plant in the settlement of Karkateyevy. spent on sponsorship activities It is also planned to erect engineer- in 2019 ing facilities for water supply networks in the district's urban and rural settlements.As part of the Clean Water federal project, the Achinsk Refinery

KEY AREAS OF ROSNEFT’S CHARITY

Development Support for health Support for education, Support for veterans of social infrastructure care and disease science, culture, and the disabled, in the Company’s prevention, promotion the fine arts, including retirees, regions of operation of a healthy lifestyle patriotic upbringing as well as employees and improvement and personal and members of the psychological development of their families climate

Support for educational Support for Indigenous Support for physical Environmental institutions and corporate Minorities of the North education and amateur protection and wildlife training centres (School– sports preservation University–Company)

1 For charity expenses related to the support of education institutions and Veterans Council, see the Personnel and Social Programme section of our annual reports for 2017, 2018 and 2019.

170 2019 / Sustainability Report of Rosneft 171 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

SUPPORT AS PART OF COOPERATION AGREEMENTS Yamal-Nenets Autonomous Khanty-Mansi Autonomous Area – Yugra WITH REGIONAL AUTHORITIES Area • Design works and improvement of the sports centre in Mezhdurechensky, purchase • Providing for diagnostics, med- and installation of street lighting systems in Kondinsky District localities, setting up ical treatment and rehabilita- a walking route in Mezhdurechensky; In 2019, Rosneft and the Group Subsidiaries provided tion of critically ill and disabled • staging municipal events, including greetings for socially disadvantaged groups children; and indigenous northern minorities as part of milestone celebrations and festive funding under cooperation agreements with the following • implementing social programmes occasions (Victory Day, Town Day, or Day of the Oil and Gas Industry Worker); regions (including as part of certain projects) GRI 203-1 and initiatives to develop Novy • purchase of sports facilities for Mezhdurechensky; Urengoy, Purovsky and Tazovsky • completion of a 25-bed district hospital and a clinic for 85 patient visits per shift districts; in Talinka; • reconstruction, repairs and beau- • design and construction of the Quantorium youth centre in Quarter No. 21 tification of urban recreational of the Vostochny Planning District, Nizhnevartovsk; and sporting areas, facilities • improvement of the waterfront esplanade crossing Chapaeva and Khanti- improvement for the Zenit sports Mansiyskaya Streets; Republic of Bashkortostan Kostroma Region and health centre; • construction of a modular water treatment plant in Karkateyevy, Nefteyugansky • design, construction and repairs District; • Purchase of municipal service • Gasification of Kostroma Region of housing and social infrastruc- • reconstruction and repairs of the Sibiryak sports centre; vehicles; localities ture, purchase of portable hous- • upgrade of local treatment facilities in Gornopravdinsk. • major overhaul of the community ing, social infrastructure facilities centre in Dyurtyuli; and specialised equipment • major overhaul of the administra- for tribal communities of indige- tive premises in the Yanaul youth nous northern minorities; recreation centre; • repair of the teaching block and the gym of the Ufa Forestry Technical College; • major overhaul and equipment purchase for the Spartak stadium in Tuymazy; • repair of the water supply system in Chekmagush; • design works for the major overhaul and construction of the republican rehabilitation and education centre for children and teenagers with special needs in Ufa's Kirovsky District; • construction of a footbridge across the Druzhby Narodov Avenue in the vicinity of the Kamyshlinskaya specially protected area (Leninsky District, Ufa); • construction of a kindergarten for 220 kids in the Andreevsky Microdistrict, Kushnarenkovo; • major overhaul of the Urazaevo pump station and the Sabanchi– Redkino (Krasnokamsky District) water supply main to provide water to residential areas; • construction of a clinic for 320 patient visits per shift in Nagaevo;

Tyumen Region

• design, reconstruction, repair and improvement of roads, streets and public spaces, including the Oil Industry Worker Square in Uvat (Uvat Municipal District, Tyumen Region); Irkutsk Region Republic of Sakha (Yakutia) • support of indigenous peoples of the North, preservation and promotion of their traditions; • Design and construction • Construction of a teaching block • staging parachuting competitions of various levels; of bridges in Uygat village for 150 students and a boarding • staging the Miracle Men park sculpture festival; Orenburg Region and Chernyaev Lug gardeners' school for 100 kids for the Sakha • setting up a community music studio for kids and the youth in the Uvatsky non-commercial partnership; (Yakutia) Junior Science Academy Municipal District; • purchase of two ferryboats in Chapaevo (Khangalassky • renovation and equipment pur- • staging various boxing competitions; and hovercraft for Oktyabrsky-2 District) chases for the regional clinical • support for childhood disease prevention, treatment and rehabilitation of children and Uygat hospital in Orenburg with serious illnesses;

172 2019 / Sustainability Report of Rosneft 173 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Rosneft supported certain charity 2019 saw Rosneft allocate ▪ performing design works and con- ▪ upgrading social facilities in Achinsk; projects by allocating RUB 418 mln to support certain char- structing bridges in the Uygat vil- ▪ purchasing equipment for children’s Round Table of the Group Subsidiaries in the Republic ity projects in addition to investments lage of the Tulunsky District playgrounds and sports grounds of Bashkortostan in the regions as per the agreements and in the Chernyaev Lug garden- in Strezhevoy; on social and economic cooperation. ers' non-commercial partnership ▪ sponsoring holiday and after- Rosneft organises round of the Company and the Ministry 2,418 In the reporting period, Rosneft gave of the Nizhneudinsky District (Irkutsk school activities of orphans, children tables with its stakeholders of Industry and Innovation Policy million roubles on a regular basis. April 2019 of the Republic of Bashkortostan; charitable support to the following Region); from disadvantaged and low-in- saw one of the events held • fostering the creation activities and projects: ▪ providing financial support to over- come families, organising New Year in Ufa and attended by represent- of the Rosneft – Ufa State Oil ▪ improving social infrastructure haul a children’s tuberculosis sana- plays for disabled children and chil- atives of the Group Subsidiaries Technical University research of the Evenkiysky District (purchase torium in Saratov; dren from low-income families living and the republic’s government, and education centre; of equipment for municipal needs, ▪ purchasing medical equipment in the areas of the Company’s opera- contractors, and educational insti- • creating a mechanism for the out- improvement of the rural settle- for the Novokuibyshevsk Central City tions in the Tomsk Region; tutions. The agenda included of-court settlement of disputes ments’ living environment, overhaul Hospital and the Ryazan Regional ▪ upgrading social facilities located the most pressing issues on sustain- arising during the Company’s able development, regional impact procurement activities; of socially important facilities, includ- Clinical Perinatal Centre, improv- in the Mirninsky and Lensky districts of the Company and the Group • familiarising members ing repairs of housing) and sup- ing the technical infrastructure of the Republic of Sakha (Yakutia); Subsidiaries, as well as suggestions of the Chamber of Commerce porting the Surindinsky reindeer of the Angarsk Perinatal Centre; ▪ reconstructing the stadium put forward during the previous and Industry with Bashneft's pro- husbandry enterprise. ▪ repairing the roof of Secondary of the Children and Youth Sports event. curement procedures through ▪ purchasing diesel generators School No. 7 named after School situated in the Parabelsky training seminars. At the round table meeting, stake- for the villages of Yerbogachen Alexander Pushkin with advanced District (the Tomsk Region); holders presented their propos- As the event came and Nepa (Irkutsk Region) and imple- study of English, repairing heating, ▪ providing financial support to veterans als and provided their assessment to a close, the stakeholders thanked menting a project to promote water supply and sewage facilities and disabled servicemen of the Great of cooperation on sustainable the Company and other partic- school forestry units in the villages of Secondary School No. 48 located Patriotic War, home front work- development. The participants’ ipants for organising a platform of Yerbogachen, Preobrazhenka, in Vladikavkaz (Republic of North ers, as well as persons of equiva- requests included the following: for a constructive dialogue. GRI 413-1 Podvoloshino; Ossetia – Alania); lent categories in the regions across • resuming joint scientific and technical councils the Company’s footprint.

174 2019 / Sustainability Report of Rosneft 175 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Sponsorship Volunteering Activities

Rosneft pays special attention to spon- ▪ exhibition of the British art- ▪ Eifman Ballet performed Anna The Group Subsidiaries sorship activities in the regions where ist Thomas Gainsborough held Karenina in Doha at the prem- promote volunteering Bashneft’s Kind Hearts it operates. The Company provides at the Pushkin State Museum, a per- ises of the Qatar Foundation among its staff. ample support to projects aimed manent historical display Ancient for Education, Science It has become a New Year’s Eve tra- from 25 sponsored institutions. at reviving spiritual and national values, Colonisation of the Northern Black and Community Development; dition for employees of Bashneft They also donated thousands to stage festive events for chil- of children’s gifts, as well as fitness developing culture, science, education, Sea Region staged by the State ▪ comprehensive programme to pro- Rosneft’s employees take part in a variety dren (A Gift From Father Frost) and rehabilitation equipment, office industry, and sports. Hermitage Museum; tect polar bears living in Russian of volunteering initiatives such as sup- and for the Company’s veterans and household appliances, carpets ▪ BraVo International Music zoos, which has been running porting vulnerable population groups (The Warmth of Our Hearts). The Kind and furniture. In 2019, Rosneft spent RUB 1,842 mln Award, White Nights Festival, since 2013: under the programme, (veterans, disabled people, orphans, Hearts volunteer programme began Volunteers visited veterans’ homes on sponsorship activities, including as well as events organ- Rosneft provides sustenance and older people who live alone), organ- over eight years ago, adding in size and scale every year. to give presents to the those the following events: ised by the D. D. Shostakovich for 36 polar bears in 16 zoos across ising and holding sports, educational, affected by the Great Patriotic ▪ seven business forums and confer- St Petersburg Academic the country; social, and cultural events, implement- In 2019, volunteers held New Year War and former employees ences held in Russia and abroad, Philharmonia; ▪ financing of the CSKA Moscow ing projects to protect the environment plays for more than 1,000 children of the Company. such as the St Petersburg ▪ performances of the St Petersburg Hockey Club and the Arsenal Tula and address green issues. International Economic Forum, Eifman Ballet, Chamber Choir Football Club; the Eastern Economic Forum, of the Moscow Conservatory, ▪ funding of the LADA Sport ROSNEFT the Russian Energy Week Mariinsky Orchestra conducted racing team; International Forum, the Arctic: by Valery Gergiev, and other events ▪ acting as a general spon- Territory of Dialogue International as part of the Russian Culture sor of the International SAMBO Arctic Forum; Festival celebrated in Japan; Federation.

176 2019 / Sustainability Report of Rosneft 177 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Donor Day Support for Indigenous Minorities of the North

Every year, Rosneft’s employees A corporate Donor Day has participate in Donor Day events now become a good tradition Respect for the cultural heritage, traditions and rights is a guiding principle and actively donate blood on an indi- for Bashneft’s employees. The event vidual basis. Several dozens of them is held right after the Oil and Gas of Rosneft’s operations in the regions of indigenous minorities. GRI 103-1 were recognised as Honorary Donors Industry Workers Day. In 2019, of Russia, which means they have it brought together over 60 employ- made over 40 blood donations. ees of Bashneft and its subsidiar- In 2019, some 1.5 thousand employ- ies. Those interested also applied Support for the Indigenous ees of the Company took part for becoming bone marrow donors. When engaging with indigenous peo- Rosneft and the Group Subsidiaries in Donor Days and donated more Our employees are proactive people Minorities of the North, ples, the Company is guided by the fol- support indigenous minorities RUB mln than 650 litres of blood. always ready to help those in need. lowing international documents: in addressing social issues, running ▪ United Nations Declaration initiatives to improve the legal liter- on the Rights of Indigenous Peoples acy of community leaders, purchasing 107.80 (UNDRIP); equipment and materials for tradi- ▪ Indigenous and Tribal tional economic activities and crafts. Peoples Convention (No. 169) The Company promotes access of the International Labour to healthcare services in the remote 43.50 36.32 Organisation. GRI 103-2 areas of the North, purchases necessary equipment and supplies, and sup- Rosneft strictly complies ports the activities of institutions that with the Russian laws care for the health of indigenous 2017 2018 2019 on indigenous minorities children. of the North, ensuring they can exercise their rights to protect In 2019, the Company cooperated Breakdown of expenditures their natural environment, with indigenous peoples in a number to support the indigenous traditional way of life, economic of areas, including: peoples of the North, % activities, and crafts. ▪ developing social infrastructure in the Turukhansky and Taymyrsky Representatives of indigenous peo- Dolgano-Nenetsky districts, including ples are involved in decisions that support for indigenous minorities; may affect their interests. In particu- ▪ supporting the Association lar, they have the right to participate of Indigenous Peoples of the North in the decision-making process dur- of the Yamal-Nenets Autonomous ing the assessment of environmen- Area “Yamal for Descendants” RUB mln tal impact and public environmental ▪ sponsoring and hosting the Rossypi reviews. GRI 103-3 Yugri regional festival of Northern peoples culture in the Khanty-Mansi Autonomous Area – Yugra; ▪ staging events aimed at preserving ethnic identity, culture roision of aterials an and lifestyle of indigenous minorities euipent of the Khanty-Mansi Autonomous reseration of te loal ulture Area – Yugra. ealt iproeent proraes

178 2019 / Sustainability Report of Rosneft 179 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

ECOARCTIC Forum

March 2019 saw the ECOARCTIC environmental forum staged as part of cooperation between the administration of the Nenets Autonomous Area and RN-Shelf Arktika, a subsidiary of Rosneft. Attended by over 2.5 thousand people, the event sought to establish an open and fruitful dialogue between scientists, government officials, major subsoil users, and local residents on matters relating to environmental protection and preservation of indigenous peoples’ identity. In 2019, the forum’s key event was a round table on safe development of the Arctic and reduction of environmental impact. The dialogue also centred around the grant programme to study the Evenki reindeer. As part of the programme, scientists of the Siberian Federal University are studying reindeer migration routes. The scientists also presented the results of projects to study the polar bear and the Laptev Sea sub- species of the Atlantic wal- ROSNEFT SUPPORTS STAGING EVENTS AIMED AT PRESERVING rus inhabiting the Russian part ETHNIC IDENTITY, CULTURE AND LIFESTYLE OF INDIGENOUS of the Arctic Ocean. MINORITIES During the event, six career guidance lectures on ecology and geology were held for schoolchildren of grades 8 to 11 from three residential areas. The forum was concluded by the Syamyankhat Mereta national holiday featuring rein- Support for Indigenous People by Vostsibneftegaz deer races, national games, a national costume contest, In 2019, Vostsibneftegaz, a subsidiary environment, making sure reindeer research of considerable significance and musical performances. More of Rosneft, took further steps herders can coordinate the herd- for the residents of the Evenkiysky than 70 reindeer herders took to maintain traditions and preserve ing process and protect reindeers District, scientists of the Siberian part in Syamyankhat Mereta the culture of indigenous from wolves. Federal University continued to take competitions. minorities of the Evenkiysky steps to preserve the Evenki lan- A new three-apartment house was FOR DETAILS District (Krasnoyarsk Territory). guage. For this purpose, the first Supporting domestic reindeer built in the national village of Poligus. audio library of Evenki speech ON THE GRANT herding and craftsmanship is among In the Ekonda village, municipal and folklore was created and used PROGRAMME OF EAST the company’s priorities. housing stock was renovated, while as a basis for the only website in the Mutorai village, school and kin- in Evenki. SIBERIAN OIL AND GAS Vostsibneftegaz is a traditional part- dergarten buildings were over- COMPANY ner in celebrating the Reindeer hauled. The Union of Indigenous In 2019, the Kuyumbinskoe Hunters Herder’s Day. In addition to prizes Communities of the North received Society was awarded its first for the winners, Surindinsky, support for traditional economic grant for the project to preserve the only reindeer husbandry enter- and cultural activities, training and reproduce the purebred Evenki prise in Evenkia, received 15 radio of students and healthcare services Laika. When revived, the dogs For details on public discussion of environmental stations and a car on the basis for the indigenous population. of this genotype will help support impact assessment with regard to planned of GAZ-73 with radio communica- traditional folk crafts as a key activity operations, see the Environmental Protection Under the Vostsibneftegaz grant section of this Report. tion equipment suitable for the taiga of the Evenks. programme to support scientific

180 2019 / Sustainability Report of Rosneft 181 "As an operator of the largest retail network of filling stations and oil depots in Russia, Rosneft has been putting significant effort into developing the marketing and distribution infrastructure. The Company is committed to responsible business practices when engaging with a wide range of contractors and builds relationships based on mutual interest, transparency, competitiveness and effectiveness. Stable supplies of environmentally- friendly and high-quality products and complementary goods coupled with high service standards make the Company a leader in the Russian retail market. On top of that, Rosneft contributes to the social and economic development across its footprint by contracting local SMEs."

Avril Conroy RESPONSIBLE Vice President for Retail Business and Domestic Market BUSINESS Development 186 Customer Engagement For details on fuels with improved 193 Supplier and Contractor Relationships PRACTICE environmental properties, see p. 187 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

New Digital Services The Company is moving with the times, Customer Engagement ADVANTAGES for Customers introducing advanced digital solutions OF THE COMPANY'S to make the customers’ business pro- Rosneft makes it a priority to build trust-based partner DIGITAL SOLUTIONS: Rosneft seeks to improve cesses easier. Today, to gain access relationships with all its consumers, embrace a customer- the effectiveness of its retail business. to virtual card payment and electronic driven approach and supply environmentally-friendly In line with the Rosneft–2022 Strategy, accounting documents, a potential the Company is introducing digital tech- customer can download a mobile app and high-quality solutions. Its products are sold in domestic For details on the Company’s domestic and export sales, see the Commerce and Logistics section nologies to develop digital marketing from the website at www.rn-card.ru and international markets. GRI 103-1 of this Report. channels, including new mobile apps, and sign a contract within just five Guaranteed high quality of fuel brand promotion in social networks, minutes. from a reliable supplier development of new distance learning courses for employees, automa- More Eco-Friendly Retail Sales tion of material flow measurements and a monitoring system keeping track Products of petroleum product inventories. In 2019, Rosneft continued imple- As at the year-end, Rosneft’s retail sales gasoline tanker trucks CUSTOMERS menting projects to bring fuels covered 66 Russian regions. We oper- in operation. OF THE COMPANY’S RETAIL Extensive chain of filling stations, Rosneft is working on new solutions with improved environmental effi- ate the largest and most geograph- NETWORK, INCLUDING including the partner ones to offer online fuel payment ser- ciency and performance to the Russian ically diverse retail chain in Russia, The Company continues to expand FILLING STATIONS vices for individuals. The Company market. holding a leading position in most sales of complementary goods in con- UNDER THE ROSNEFT, and its partners have launched a fuel regions. The Company also has retail venience stores and cafés at its filling BASHNEFT, BP AND PTK payment service via a mobile app, In 2019, Tulanefteprodukt, chains in Abkhazia, Belarus, Kyrgyzstan, stations. As at the year-end, filling sta- BRANDS, CAN BE GROUPED allowing customers to pay for fuel Ryazannefteprodukt, Georgia and India. Rosneft is a leading tions had 2,079 convenience stores, INTO TWO SEGMENTS: without leaving their car. In 2019, Kaluganefteprodukt and RN-Moscow Russian fuel brand in terms of recogni- with 2,530 filling stations offering Attractive flexible pricing the loyalty programme was updated, (Rosneft’s subsidiaries) switched tion and quality perception. coffee service. In 2019, over 45 mln with a new Virtual Card service availa- to improved Euro‑6 gasoline (AI-95-K5). cups of hot drinks were sold ble in-app to phase out plastic cards. Euro‑6 gasoline is currently sold As at 31 December 2019, at the Company’s filling stations. In the reporting year, the number at 727 filling stations of the Company the Company’s retail chain com- В2С of Family Team, BP Club and Bashneft in the Republic of Bashkortostan prised over 3 thousand filling stations Rosneft aims to further develop loyalty programme members (112 filling stations), Krasnodar in 66 Russian regions and over 5 thou- the infrastructure at its filling stations reached 13.6 mln people. Territory (205 filling stations), Republic sand filling stations abroad. In 2019, to meet the market needs. To this end, Mobile app with a virtual fuel of Adygeya (5 filling stations), Tula card the Company completed the acquisition it is implementing a programme (40 filling stations), Kaluga (27 filling of Petersburg Fuel Company to become to expand its sales of compressed natu- stations), Ryazan (42 filling stations) Individuals Family Team and BP Club websites have been a leader in the strategic market ral gas (CNG). In 2019, its monthly CNG updated. and Vladimir (3 filling stations) regions, of St Petersburg and the Leningrad sales totalled 1.7–2 mmcm, with up in Moscow and the Moscow Region Region. to 2.5 thousand vehicles serviced (293 filling stations), as well as in whole-

daily at the Company’s filling stations. Quick contract execution sale quantities from oil depots. GRI 103-2 As at 31 December 2019, Rosneft has 12 CNG modules at its В2В The Company is also developing В2В the Company had 132 oil depots filling stations and plans to expand services. Rosneft – Fuel Cards provides (including two filling stations) further. a comprehensive and practical solu- and approximately a thousand tion for businesses. The product offers cashless payments for legal entities using virtual and plastic fuel cards. Legal entities and individual Electronic workflow entrepreneurs In 2019, Rosneft was the first in Russia >3 to launch a В2В fuel payment service thousand via its RN-Card mobile app. filling stations Financial instruments and additional services Government and municipal in 66 organisations Russian regions

Round-the-clock hotline

184 2019 / Sustainability Report of Rosneft 185 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Eco-Friendly Marine Fuel Fuels with Improved Environmental Properties Euro‑6 gasoline Pulsar 100 In 2019, RN-Bunker (Rosneft’s special- gasoline ised subsidiary) started bunkering ves- Rosneft Deutschland GmbH • an initiative to produce sels in the Far East with RMLS40, fuel (Rosneft’s subsidiary) produces regenerative fuels at MiRO greener transportation fuels using Refinery. As part of the reFu- with improved environmental perfor- both traditional components els – Rethinking Fuels (regen- mance. It is characterised by a low sul- 1 The new fuel contains less sulphur, benzene and aro- The gasoline is high-octane fuel with decreased and HVO additive made from veg- erative fuels) project, MiRO phur content that does not exceed matic hydrocarbons, resulting in lower corrosive- deposit formation. Compared to AI-95-K5, Pulsar 100 etables, as required by German Refinery together with Karlsruhe ness and toxicity of exhaust gases. The gasoline has a different composition with a decreased content 0.5 % and fully meets the require- and European legislation. Its refin- Institute of Technology (KIT), helps decrease deposits by 12.5 % on intake valves of aromatic hydrocarbons and an increased content ments of the International Convention eries and numerous terminals the Baden-Württemberg Ministry and by 12.7 % in combustion chambers. In 2019, pro- of high-quality components ensuring low deposit for- for the Prevention of Pollution across Germany deliver over 500 of Transport, other govern- duction of Euro‑6 gasoline was launched at Ryazan mation. The fuel contains active cleaning additives from Ships (MARPOL). kt of biofuels per annum. Rosneft ment authorities and partners Refinery. In November 2019, Euro-6 fuel received for stable and reliable operation of the car fuel sys- Deutschland sells its bio-based fuel from the automotive industry awards from the nationwide Top 100 Best Russian tem. Pulsar 100 gasoline is sold at the Company’s fill- to customers in Germany, Poland have been looking into efficient Goods programme. ing stations in the Moscow Region. The first 200 tonnes of marine fuel were and Austria. production and use of regenera- supplied to a bulk carrier in Nakhodka. tive fuels, the so-called reFuels. The low-sulphur fuel is also used As an equity holder in three German The project focuses on the pro- refineries, Rosneft promotes a vari- for vessels operating in the waters cesses designed to significantly ety of greener production initia- expand the production of gas- of Bolshoy Kamen as part of the Zvezda tives, including: Shipbuilding Complex project. oline and diesel fuels based • a feasibility study for the IH²® on renewables and available technology (Shell technology raw materials. It also explores BP Fuels with ACTIVE Compressed natural used by another shareholder technology gas The environmentally friendly marine the impact of regenerative fuels fuel for the Far East is produced in the PCK Refinery in Schwedt). on the level of pollution emissions at Rosneft’s Komsomolsk Refinery The IH²® technology is a catalytic and vehicle operation. The pro- thermochemical process to con- in the Khabarovsk Territory. duction of synthetic fuels using vert biomass directly to high-pu- The ability to produce this type the existing refinery infrastructure BP fuels with ACTIVE technology are specially Gas motor fuel is more environmentally friendly rity hydrocarbon hydrocarbon will enable a phased transition of fuel testifies to the high techno- designed to provide a high level of engine protec- and efficient type of fuel that allows car owners fuel components. It helps achieve to carbon-neutral fuels. tion against deposits formation and remove existing not only to considerably cut costs, but also ben- logical level of the Company’s refin- cost savings in turning forestry, deposits. ACTIVE fuel is a unique set of compo- efit from a more efficient car while also reducing eries, while the use of this fuel agricultural and municipal waste nents developed specifically for the new BP fuel line their environmental impact. In 2019, 12 filling stations helps reduce the transport's impact into transportation fuels, reduces to effectively prevent deposit formation on the main in Russian regions served daily up to 2.5 thousand on the environment. the hydrocarbon fuel consump- parts of the engine and contribute to greater fuel cars with this fuel. tion, and provides up to 72 % economy and restoration of the engine capacity. bio-energy recovery from organic In 2019, RN-Bunker started fuelling ves- wastes and up to a 92 % reduc- sels with eco-friendly LMF type A fuel tion in greenhouse gas (GHG) (low-viscosity marine fuel) produced emissions; at Novokuibyshevsk Refinery. The sulphur content in the fuel is below 0.1 %.

Electric Car Charging Stations

In 2019, to expand service offering at filling stations, Rosneft continued developing its electric car charging infrastructure. As part of these efforts, 50 kW fast charging columns were installed in the Moscow Region and the Primorye Territory, making it possible to charge a car in less than one hour.

1 Hydrotreated Vegetable Oil.

186 2019 / Sustainability Report of Rosneft 187 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Quality Management System

As a leader in the motor fuel market, the Company pays special attention to the compliance of its products with all applicable standards and customer expectations. The Rosneft trademark is one of the most Контроль Control during shipment Control during recognisable for petroleum products across the regions where готового продукта from the refinery the acceptance at the oil the Company operates and is associated with quality fuel on sale at filling при паспортизации на НПЗ depot stations. GRI 103-2

THE CONTROL PROCEDURES ARE IN PLACE FOR EACH OF THE SEVEN STAGES OF PRODUCTION, TRANSPORTATION, STORAGE AND SALES. Product Quality Control Rosneft's products are also subject Cooperation to quality verification by the Federal with Rosstandart We have built a system to manage Agency for Technical Regulation on Fuel Quality Control during storage fuel quality at all stages of produc- and Metrology (Rosstandart). In 2019, at oil depots tion, transportation and sales. The sys- the watchdog conducted 32 scheduled The reporting year saw Rosstandart's tem seeks to ensure consistently high and ad-hoc checks at the Company's Interdepartmental Working Group fuel characteristics all the way through marketing and distribution subsidiar- on Countering the Illegal Turnover from refinery to car tank.GRI 103-3 ies and analysed fuel samples from four of Petroleum Products take the follow- oil depots and 74 filling stations across ing steps in cooperation with Rosneft: Motor gasoline and diesel fuel sold Russia. The checks confirmed the top ▪ develop and approve a risk-ori- domestically meet the K5 class require- quality of our motor fuel. GRI 416–2 ented quality preservation system ments outlined in Technical Regulations for petroleum products; of the Customs Union CU TR 013/2011. In 2019, the testing conducted by NGOs ▪ run a pilot project in St Petersburg Control during sales Control during tank truck Control of loaded tank at filling stations in the Kurgan Region to create a national traceability from fuel dispensers unloading at the filling truck movements Fuel parameters are verified using (Ural Federal District) validated the high solution to prevent fuel surrogates at the filling station station cutting-edge equipment at stationary quality of our products. from entering the market. site labs and oil depot labs and specified in the quality certificate available Fuel sold in Abkhazia, Belarus at Rosneft filling stations. and Kyrgyzstan complies with the Technical Regulations Customer Focus The final link in this chain is 15 mobile of the Customs Union and undergoes labs equipped with high-tech analys- quality checks at independent labs. ers to perform tests at filling stations. Improving Customer In 2019, the Company kept running its Loyalty programme hotlines: Mobile labs control fuel quality, among Experience Mystery Shopper programme to assess other things by measuring and bench- the service quality at filling stations, Family Team: marking its impact on consumer health High quality service is the key driver with a score for the year2 standing +7 800 775 7588 and safety against the standards set of our retail business. Our custom- at 91.13 % (excellent level). out in the Technical Regulations (sul- er-centric culture hinges on profes- for the Far East: phur content, benzene in gasoline, die- sional staff at oil depots and filling The Company has set up 24/7 hot- +7 800 555 3723 sel flash point, etc.). Each lab checks stations, an effective training system, lines for loyalty programme partici- over 700 filling stations annually. and customer satisfaction monitoring. pants. The reporting year saw 783,522 BP CLUB: and 103,189 queries under the Family +7 800 234 7550 In 2019, the Company held training Team and BP Club programmes, sessions for filling station managers respectively. The average speed and administrative staff in effective of answer on the line does not exceed management, customer-centric behav- 30 seconds, and the average talk time iour and constructive customer rela- is 2–3 minutes. GRI 103-3 GRI 416-2 tions, with a total of 414 employees from nine marketing and distribution facilities having been trained.

1 Data for October–November 2019.

188 2019 / Sustainability Report of Rosneft 189 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Pricing Policy Launch of Filling Stations in Remote Regions Supplier and Contractor Relationship Rosneft pursues a balanced pricing pol- Management icy and takes steps to stabilise the fuel Rosneft runs low-cost projects By expanding its retail network, market. Our retail prices are on par to open fuel outlets in remote areas Rosneft contributes to the regional with low traffic volumes and rela- development and meets local with the competition, and we take tively weak demand for gasoline. demand for affordable quality fuel. action to prevent a sharp rise in prices Strengthening Partnerships at our filling stations. By doing so, The reporting year saw we smooth out necessitated price hikes the Company launch Filling Station No. 51 in Lesosibirsk and prevent repercussions from high as part of the Krasnoyarsk Territory Rosneft if one of the biggest consumers of goods, works and services in all volatility on the exchange market, thus Governor's initiative to increase of its geographies. The Company's model of partnership with suppliers helping consumers get fair prices. the number of filling stations along and contractors meets high international standards on procurement local highways. organisation and efficiency.GRI 103–1 Fuel Availability in Remote Regions

We operate one of the largest and most extensive retail networks spreading THE COMPANY’S Corporate Internet from Russia's western PRINCIPLES IN SELECTING RUB trln2.6 Shop CONTRACTORS3 borders to the Kamchatka spent by Rosneft and the Group To enhance the transparency Territory. Our network brings Subsidiaries on procuring goods, Rosneft petroleum products and efficiency of minor pro- works and services in 2019 1 to 66 regions, including remote curement , TEK-Torg’s electronic trading platform launched and poorly accessible areas. a Corporate Internet Shop. The Company is advancing partnerships with its suppliers and contractors As a result, the Company man- Irkutsknefteprodukt's Ust-Kut oil depot aged to attract new coun- Openness by signing long-term agreements that is a key element in the petroleum terparties (mostly small facilitate stable development of the oil product shipment by river and medium-sized enterprises and gas industry, the machine building under the Northern Supply Haul (SMEs)). More than 14 thou- industry and the maintenance services sand suppliers are registered programme. The depot supplies Rosneft market, while also helping create jobs in the Corporate Internet Shop, products to the Republic of Sakha in all industries and drive innovation. including over 10 thousand (Yakutia) and the north of the Irkutsk Reasonableness In 2019, long-term contracts accounted SMEs. In 2019, the Company ini- Region. tiated more than 29 thousand for over 70 % of the Company’s produc- procurement procedures. RN-Vostoknefteprodukt uses its tion programme. tanker fleet to transport motor fuels to the Magadan Region, Kamchatka Territory and Sakhalin. To ensure procurement transparency, In 2019, TEK-Torg was named Competitiveness increased competition and equal access the third best electronic for market participants, the Company trading platform in Russia manages and conducts its procurement in terms of corporate customer Fuel Supply to Socially procedures electronically via TEK-Torg’s satisfaction with the quality 2 Significant Consumers electronic trading platform. of services . GRI 103-3

The Company's subsidiaries ensure Effectiveness In 2019, the Company and the Group uninterrupted sales of motor fuel, Subsidiaries initiated more than both wholesale from oil depots 102 thousand procurement procedures and retail via a network of filling sta- with a total initial (maximum) value tions. They also take part in public of over RUB 2.1 trln. tenders organised in line with federal laws. Rosneft is the sole motor Non-discrimination fuel supplier for the majority of large government-owned companies, such as agricultural producers. GRI 203-2 1 Minor purchases are those worth below RUB 500,000. 2 Analytical materials “Electronic Trading Platforms in Russia. Active Development”, RAEX-Analytics, February 2020, Moscow. 3 These principles are set forth in Federal Law No. 223-FZ on Procurement of Goods, Works and Services by Certain Types of Legal Entities dated 18 July 2011 and laid down in the Regulations on Procurement of Goods, Works and Services binding on both the Company and the Group Subsidiaries.

190 2019 / Sustainability Report of Rosneft 191 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

The Company is consistently work- End-to-End System for Controlling Compliance ing towards implementing the category management in procurement, In order to pick reliable suppliers and contractors, the Company and Group with 18 category/procurement strate- Subsidiaries always employ a single end-to-end system for controlling gies developed and approved in 20191. compliance with corporate requirements. It consists of several elements.

Category management makes it possible to move from single to consolidated purchases that are based on the specific characteristics of a given product category, standardise technical Before signing an agreement To establish long-standing relationships requirements, and use the advantages with the Company, candidates go with suppliers, the Company’s internal of the market environment and domes- through a test of their compliance regulations provide for long-term (up tic demand forecasting, as well with the minimum established require- to 18 months) accreditation as establish and prioritise management Reliability testing ments as regards the legal status, (accreditation) approaches for categories of goods, financial stability, reliability, and busi- works and services. ness reputation, which constitutes part of the measures to combat fraud Category strategies are geared towards and involvement in corruption activities. boosting procurement efficiency via the implementation of an optimal approach to purchasing materials and supplies, works, and services within Suppliers and contractors go through on the TEK-Torg electronic platform. given categories and the standardisa- a test of compliance with special For the purposes of long-term qualification of the main parameters of procure- requirements confirming their abil- tion (for 18 months), standard criteria ment procedures along with reducing ity to supply high-quality products for centralised procurement of materi- the time spent on preparation to carry Qualification of a certain kind (goods, works, ser- als, supplies and equipment have been by product them out. GRI 103-2 vices) in a timely manner, including developed and approved requirements on specialised experience, resources, permits, as well Category strategy as other requirements that are publicly is a local regulation determining available on the Company’s website the Company's unified approaches to managing a specific category of goods, works and services Technical audits examine suppli- are publicly available on the Company’s and setting out targets ers’ production and technical activi- website and on the TEK-Torg elec- and objectives for the category ties, technical capabilities, capacities, tronic platform so that potential sup- and the most efficient assess their ability to produce and suppliers and contractors could view them procurement approaches. Technical audits ply the necessary amounts of prod- in advance. A total of 473 technical ucts in accordance with the Company’s audits were completed in 2019. technical requirements. The decision to hold this audit may be made as part of a procurement process or based Shared Service Centre on the Company’s pre-approved sched- ule. All of the above requirements The Company is setting up a Shared Service Centre with a view to centralising and pipelining routine procure- The Company has developed in terms of deadlines and qual- ment operations and category management functions. In 2019, and applies uniform require- ity of delivery. Technical inspections regional inventory management ments to inspection con- include control and assessment and quality control functions trol of production and shipment of whether technological pro- were transferred to the Shared Inspection control of materials and supplies on the processes of manufacture and shipment Service Centre. duction sites of manufacturers/sup- and the materials and supplies meet pliers in order to evaluate their ability the requirements under the agree- to follow through with their obligations ments with the Company

1 The business plan for 2020 provides for 48 % of its needs to be covered by existing strategies.

192 2019 / Sustainability Report of Rosneft 193 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

Responsible Relationships with Suppliers and Contractors Contractor Compliance Automation In 2019, the total value with Human Rights of Procurement Processes of contracts made between Rosneft Protection Requirements and SMEs amounted to RUB 16.3 bln, One of Rosneft’s strategic priorities with RUB 4.1 bln worth of contracts In 2019, the Company approved is procurement process automation. awarded as a result of direct pro- Contractor Compliance To test contractors for compliance a roadmap on implementing The Company is implementing the fol- curement from SMEs. To foster fur- CHECKING with the Company’s with health and safety requirements, approaches to promoting human lowing automation projects: ther development in this area, Rosneft OF PROCUREMENT/ Requirements the collective bodies responsible rights across the supply chain. ▪ developing the information resource and SME Corporation signed a coopera- QUALIFICATION SUBJECTS on Health, Safety for procurement decisions, include HSE The roadmap provides for the devel- “SAP SRM 2-based automated tion agreement that in 2019 saw: FOR COMPLIANCE and Environment (HSE) function representatives. opment of a Declaration on Respecting system for supplier relationship ▪ 18 seminars held for contracted WITH THE COMPANY’S HSE Human Rights to be used when inter- management”; SMEs in Russia’s regions; REQUIREMENTS CAN BE The Company strictly adheres acting with suppliers and contrac- ▪ vertically integrated procurement ▪ work on developing and improv- DONE IN TWO STAGES. to health and safety require- Rosneft treats its employees tors, with phased awareness raising solution; robotisation of accounting Russia’s regulatory framework ments. As part of the implementa- and the employees and educational round table discus- ing and inventory management in this field. tion of the comprehensive approach of the contractors that sions planned. processes. to uphold HSE requirements work at its facilities and in connection with the Company’s the same, applying universal STAGE I Regulations on Procedure HSE requirements to everybody. Support (MANDATORY) for Interaction with Contractors of SMEs in the Regions For more information on the Company’s approaches >122 on Occupational and Fire Safety, Health to human rights protection, see the respective of Operation RUB bln and Environment Issues that came into All standard agreements on construc- section of the Sustainable Development chapter of this Report. of contracts signed by Rosneft DESK AUDIT effect in 2019 and introduced new HSE tion, installation and oil production To facilitate competition and develop- and Group Subsidiaries with SMEs qualification criteria, standard crite- works include provisions on the need ment of SMEs, Rosneft seeks to part- in 2019 GRI 204-1 • Review of documents/information ria for HSE qualification by product, to follow the Company’s HSE rules. ner with small and medium-sized submitted by the procurement/ work, and service have been developed. For oil production (drilling in particular), businesses as part of its procurement qualification subject as part of their application to confirm The following requirements to contrac- the agreement contains additional pro- Digital Transformation activities. compliance with the HSE tors and suppliers are included in provisions on drilling waste management of Procurement qualification requirements curement procedures: by contractors based on the applicable The Company holds round-table dis- ▪ a health and safety management environmental and other laws. The Company is establishing cussions with suppliers and contrac- system in place; a distribution centre for per- tors on individual procurement items sonal protective equipment ▪ well-educated personnel with duly and provides information on: STAGE II on the premises of the regional certified knowledge on health procurement operator ▪ procedure and rules of engagement (OPTIONAL) and occupational, fire, and electri- in procurement with the Company; For more information on contractor compliance RN-Snabzhenie-Samara. Key pro- cal safety; with the HSE requirements, see the Health and Life ject goals: ▪ minimum requirement to all pro- ▪ existence of the relevant services/ Safety chapter of this Report. • Create advanced and hi-tech curement participants; FIELD AUDIT divisions; warehousing facilities using ▪ benefits afforded to SMEs as part ▪ provision of personal protective automated and robotised sys- of procurement. tems of processing and stor- • Technical audit to verify equipment to contracted personnel; the documents/information ing supplies; ▪ compliance with laws in terms submitted by the procurement/ • Transform key processes qualification subject as part of mandatory pre-employment of supplying personal protec- of their application to confirm and regular medical check-ups tive equipment to the Group compliance with the HSE for the employees of the supplier/ Subsidiaries: requirements qualification requirements planning, supply logistics >76% contractor; of potential suppliers accredited management (trials of new ▪ availability of job-specific guidelines, with Rosneft are represented logistic models of deliv- briefing programmes; by SMEs ery), inventory and quality ▪ pre- and post-trip medical check-ups management. for contracted drivers. In 2019, pre-project study was completed and funds for the project were allocated. Commissioning is scheduled for 2023.

194 2019 / Sustainability Report of Rosneft 195 198 Independent Assurance Report on Rosneft’s 2019 Sustainability Report 200 Appendix 1. Key Sustainability Indicators 206 Appendix 2. Report’s Compliance with International Standards 225 Appendix 3. Stakeholder engagement in 2019: round table meetings in the Company’s regions of operation 229 Appendix 4. Abbreviations APPENDICES 230 Contact Details SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

age Ernst & Young LLC ООО «Эрнст энд Янг» Sadovnicheskaya Nab., 77, bld. 1 Россия, 115035, Москва Moscow, 115035, Russia Садовническая наб., 77, стр. 1 Tel: +7 (495) 705 9700 Тел.: +7 (495) 705 9700 +7 (495) 755 9700 +7 (495) 755 9700 Fax: +7 (495) 755 9701 Факс: +7 (495) 755 9701 www.ey.com/ru ОКПО: 59002827

Translation of the original Russian version Translation of the original Russian version Independent Assurance Report on the Our responsibility Sustainability Report 2019 ► enchmarking of the Report against sustainability re- Our evidence gathering procedures are more limited than Our responsibility is to independently express conclusions ports of selected international and Russian peers of for a reasonable assurance engagement, and therefore that: To the Board of Directors and Stakeholders of Ros- the Company and lists of sector-specific sustainability less assurance is obtained than in a reasonable assurance neft Oil Company issues raised by stakeholders engagement. ► The information in the Report is, in all material re- Subject matter spects, a fair representation of sustainability policies, ► Analysis of material sustainability issues identified by Conclusion activities, events and performance of the Company for the Company the year ended ecember At the request of Rosneft Oil Company (the “Company”) we ased on the procedures performed and evidence ob- have completed an engagement to obtain a limited level of ► Identification of sustainability issues material to the tained, nothing has come to our attention that causes us to assurance on the qualitative and quantitative information ► The Report is prepared ‘in accordance’ with the GRI Company based on the procedures described above believe that the information in the Report does not repre- disclosed in the Sustainability Report of Rosneft Oil Standards using the Core option. and analying how they are reflected in the Report sent fairly, in all material respects, the sustainability poli- Company (the “Report”), except for the following aspects: cies, activities, events and performance of the Company e apply International Standard on uality Control and for the year ended ecember in accordance with ► Review of data samples on key performance indicators ► orward-looking statements on performance, events accordingly maintain a comprehensive system of quality relating to human resources, energy use, environmen- the GRI Standards and the Company’s sustainability report- or planned activities and control, including documented policies and procedures re- tal protection, industrial and occupational health and ing principles and approaches to defining certain sustaina- garding compliance with ethical requirements, professional safety for the year ended ecember to assess bility as set out in the Report. standards and applicable legal and regulatory require- ► Correspondence between the Report and the Oil and whether this data has been collected, prepared, col- ments. Gas Industry Guidance on oluntary Sustainability Re- lated and reported appropriately at the headquarters othing has come to our attention that causes us to believe porting developed by the International etroleum In- level that the Report is not prepared ‘in accordance’ with the GRI dustry nvironmental Conservation Association and e have complied with the independence and other ethical Standards using the Core option. American etroleum Institute, Task orce on Climate- requirements of the Code of thics for rofessional Ac- ► isits to selected subsidiaries in order to (i) interview related inancial isclosures, and Global Compact countants issued by the International thics Standards those responsible for human resources management, principles. oard for Accountants, which is founded on fundamental environmental protection, industrial and occupational principles of integrity, obectivity, professional compe- health and safety, (ii) gather evidence supporting the tence and due care, confidentiality and professional behav- D.E. Lobachev Applicable criteria assertions made by the Company on its sustainability ior. Partner policies, activities, events and performance, and (iii) The criteria for our engagement were the Global Reporting Ernst & Young LLC observe the aspects of operations relating to industrial Initiative’s Sustainability Reporting Standards (the “GRI Summary of work performed and occupational health and safety and environmental Standards”), the Company’s sustainability reporting princi- 17 June 2020 Our engagement was conducted in accordance with Inter- protection ples and approaches to defining certain sustainability performance indicators as set out in section “About the Re- national Standard on Assurance ngagements (ISA) ► Collection on a sample basis of evidence substantiat- port” and the corresponding notes in the text of the Report. (Revised), Assurance ngagements Other than Audits or ing the qualitative and quantitative information in- e believe that these criteria correspond to the obectives Reviews of istorical inancial Information, issued by IAC, cluded in the Report at the headquarters level of our engagement. and accordingly included the following procedures:

► Assessment of compliance of the Report and its prep- Management's responsibilities ► Interviews with representatives of the Company’s management and specialists responsible for sustaina- aration process with the Company’s sustainability re- The management of the Company is responsible for the bility policies, activities, performance and relevant reporting principles and preparation of the Report and for ensuring that the infor- porting mation contained therein represents fairly, in all material ► Assessment of compliance of information and data dis- respects, the Company’s sustainability policies, activities, ► Analysis of key documents related to the Company’s closures in the Report with the requirements of the events and performance for the year ended ecember sustainability policies, activities, performance and rel- Core option of reporting ‘in accordance’ with the GRI in compliance with the GRI Standards and the Com- evant reporting Standards. pany’s sustainability reporting principles and approaches to defining certain sustainability performance indicators as ► Obtaining an understanding of the process used to pre- set out in section “About the Report” and the correspond- pare the information on sustainability performance in- ing notes in the text of the Report. This responsibility in- Details of the subject of the independent assurance dicators of the Company and other engagement cir- cludes designing, implementing and maintaining internal cumstances by reviewing the reporting process used ame: Rosneft Oil Company controls relevant to the preparation of a sustainability re- ntered in the nified State Register of egal ntities on August and assigned state registration number . Registered address and location: Russia, for the preparation of sustainability reports oscow, Sofiyskaya emb., . port that is free of material misstatements, selecting and applying appropriate reporting principles and using meas- Details of the assurance provider ► Analysis of stakeholder engagement activities via re- urement methods and estimates that are reasonable in the viewing minutes of stakeholder meetings conducted ame: rnst oung C circumstances. ntered in the nified State Register of egal ntities on ecember and assigned state registration number З. by the Company Registered address and location: Russia, oscow, Sadovnicheskaya emb., , bld. . rnst oung C is a member of self-regulated organization of auditors Association «Sodruzhestvo» (“SRO AAS”). rnst oung C is included in the control copy of the register of auditors and audit organiations, main registration number .

A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited

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Appendix 1. Key Sustainability Indicators Period 2017 2018 2019 Air pollutant emissions Gross air pollutant emissions, including: 1,846 1,835 1,773 oil and gas production 1,530 1,524 1,465 oil refining, gas processing and petrochemicals 254 250 248 Period 2017 2018 2019 gas business 31 30 28 Operating and economic indicators marketing and distribution 20 22 23 Proved SEC reserves of oil, gas condensate and hydrocarbon liquids, mmt 3,792 3,899 3,935 service Group Subsidiaries 11 9 9 Proved SEC reserves of marketable gas, bcm 1,949 2,065 2,119 Air pollutant emissions from extraction activities, t/ktce 4.05 3.96 3.83 Production of hydrocarbon liquids, mmt 225.5 230.2 230.2 Air pollutant emissions from refining and petrochemical activities, t/ktce 1.90 1.77 1.83 Natural gas production, bcm 68.4 67.3 67.0 GHG emissions Hydrocarbon production, mmboe 2,087 2,115 2,114 Total emissions (Scope 1+2), mmt CO eq. 75.2 76.9 81.2 Refining, mmt 112.8 115.0 110.2 2 Direct emissions (Scope 1), mmt CO eq. 53.9 54.7 59.4 Petroleum product and petrochemicals output, mmt 109.1 111.7 107.5 2 Indirect emissions (Scope 2), mmt CO eq. 21.3 22.2 21.8 Assets as at year-end, RUB bln 12,228 13,163 12,950 2

1 Indirect emissions (Scope 3) from the use of the Company's products, mmt CO2 207.2 244.3 243.0 Revenues and equity share in profits of associates and joint ventures , RUB bln 6,011 8,238 8,676 eq. Equity, RUB bln 4,183 4,677 5,152 Direct GHG emissions, kt 1 Dividends , RUB bln 104 225 283 4 Carbon dioxide (СО2) 46,364 50,629 56,035 Direct economic value generated and distributed2, RUB bln Methane (CH4) 303 164 134 Direct economic value generated GHG emissions, t CO2 eq. / ktce Income 5,951 7,968 8,670 Oil and gas production (including oilfield services) 0.123 0.129 0.140 Direct economic value distributed Oil refining, gas processing and petrochemicals 0.131 0.119* 0.120 Opex 1,967 2,270 2,917 GHG emissions, t CO2 eq. / kboe Payments to providers of funds 346 521 585 Oil and gas production (including oilfield services) 24.0 25.1 27.3 Personnel expenses, excluding compulsory insurance premiums 269 296 327 Oil refining, gas processing and petrochemicals 25.5 23.2* 23.4 Insurance premiums 61 67 75 GHG emissions, t CO2 eq. / kboe Accrued taxes and duties 2,614 3,879 3,576 Company-wide 24.5 24.4* 26.1 Community investments 22 26 22 APG utilisation rate5, % 89.2 84.4 6 77.8 7 Economic value retained 672 909 1,168 Water consumption and water discharge Health, safety and environment performance indicators Water consumption (water intake from surface and underground sources) 0.43 0.46 0.49 Number of lost-time work-related injuries (including fatalities) of the Company's – 0.343 0.36 3 for extraction activities, cub m / tce employees to 1 mln man-hours (LTIF) Water consumption (water intake from surface and underground sources) 1.47 1.43 1.50 The ratio of the total number of the Company’s work-related fatalities to one 1.87 2.473 1.043 for refining and petrochemical activities, cub m / tce hundred (100) mln man-hours worked (FAR) HSE training, thousand man-courses 413.0 414.3 477.3

Expenditure on health and safety, including fire safety and blowout prevention, 56 56 55 3 The figures for 2018–2019 are presented in accordance with the IFRS accounts and the new calculation methodology, which does not include RUB bln injuries as a result of participation in sports events, unlawful activities of third parties and road accidents caused by third parties in the total injury rate. Rate of pipeline failures (unit/kilometre per year) 0.101 0.095 0.101 The indicators for 2017 cover a wider range of subsidiaries. The injury rate includes injuries as a result of participation in sports events, unlawful activities of third parties and road accidents caused by third parties. Total volume of spilled oil and oil products across the Company, t 730 663 652 LTIF for 2018 and 2019 calculated in accordance with the methodology used by the Company until 2018 would be 0.41 and 0.38, respectively, Spilled oil and gas condensate volume as a result of pipeline failures, tonnes 684.3 647.2 642.9 with a FAR of 3.00 and 1.04 respectivley. 4 The 2018 metric was adjusted following the update on fuel consumption by certain Group Subsidiaries. 5 The information and plans on APG utilisation relate to the Company’s Russian assets. 6 The changes in the APG utilisation rate are driven by higher oil and APG production at greenfields and production cuts at brownfields as part of the Company's commitment under the OPEC+ agreement. 7 Including fields under development and greenfield projects at early stages of development.

1 Dividends paid to Rosneft's shareholders in the calendar year. 2 Data for 2017–2019 reflects more accurate calculation of payments to providers of funds, personnel expenses, and community investments under GRI 201-1.

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Period 2017 2018 2019 Period 2017 2018 2019 Polluted water intake for treatment and use/discharge, mcm Social performance indicators Wastewater 132.9 170.4 117.0 Tax payments and customs duties2, RUB bln, including: 2,575 3,971 3,528 Produced water 1,587.8 1,588.1 1,658.2 federal tax payments and customs duties 2,180 3,503 3,042 Bottom water 1.0 0.5 2.9 regional tax payments 325 393 404 Gross industrial wastewater discharges to surface waters, mcm 133.2 127.9 122.7 payments to non-budgetary funds 70 76 82 Wastewater discharges into third-party networks for reuse, thousand cub m 290.39 8,938.86 10,380.24 Expenditures on social programmes, social investments in the regions and char- 37 46 45 ity, RUB bln, including: Wastewater discharges from extraction activities, cub m / tce 0.0006 0.0005 0.0003 optimisation of working conditions, RUB bln 8.5 8.2 9.4 Wastewater discharges from refining and petrochemical activities, cub m / tce 0.99 0.90 0.90 social investments under cooperation agreements with regional authorities, 6.7 9.5 7.1 Polluted wastewater discharges from extraction activities, cub m / tce 0.000400 0.000100 0.000004 RUB bln Polluted wastewater discharges from refining and petrochemical activities, 0.62 0.55 0.55 charity, including charitable aid to educational institutions in furtherance 2.7 3.2 2.4 cub m / tce of the government’s education and science policy3 Environmental protection expenditures other social investments 20 25 26 Environmental protection investments, including as part of production pro- 67 46 35 Anti-corruption performance indicators grammes with an environmental impact, RUB bln Calls received by the Security Hotline 20,486 27,081 35,106 Current environmental protection opex1, RUB bln 29 32 29 Damage identified/prevented following the review of Security Hotline calls, 103.7 34.5 40.5 Environmental fines payable, RUB bln 0.26 0.29 0.20 RUB mln Payments to budgets of all levels related to environmental protection and sus- 4.2 4.7 4.3 Criminal cases opened, including following Security Hotline calls 735 751 739 tainable use of natural resources, RUB bln Emergency prevention and response performance indicators Financial and non-financial reserves for emergency prevention and response, 1.9 2.0 2.0 RUB bln Innovation performance indicators R&D expenses, RUB bln 29.90 32.10 30.05 HR indicators Headcount at year-end, thousand employees 318.0 325.6 334.6 Average headcount, thousand employees 302.1 308.0 315.4 Workforce by category at year-end, % Blue-collar workers 57.8 56.2 54.7 White-collar workers 30.0 31.5 33.1 Managers 12.2 12.2 12.2 Workforce by gender at year-end, % Women 33.5 32.2 32.7 Men 66.5 67.8 67.3 Employee turnover, % 10.3 10.8 10.2 Company average monthly salary per person, RUB 79,221 84,030 88,609 Payroll, including benefits and one-off bonuses as part of the payroll and annual 287 311 335 remuneration, RUB bln Social payments fund, RUB bln 7.7 8.6 9.3

2 Taxes, customs duties and insurance contributions transferred to the budget of the Russian Federation. 3 1 Data for 2017 were adjusted following updated information, including that on Novokuibyshevsk Petrochemical Company. For charity expenses related to the support of education institutions and Veterans Council, see the Personnel and Social Programme section of our annual reports for 2017, 2018 and 2019.

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Salary ratios for certain Group Subsidiaries across Rosneft’s footprint in 2019, RUB per month

Region Group Subsidiary Average salary Average salary Average salary Region Group Subsidiary Average salary Average salary Average salary at the Group in the region, at the Group at the Group in the region, at the Group Subsidiary, RUB RUB (as per Subsidiary to average Subsidiary, RUB RUB (as per Subsidiary to average Rosstat’s data salary in the region, Rosstat’s data salary in the region, for November 2019) % for November 2019) % Primorye JSC Eastern Petrochemical Company 131,931.07 45,372.20 291% Chechen OJSC Grozneftegaz 35,458.51 29,297.30 121% Territory Republic LLC RN-Morskoi Terminal Nakhodka 64,380.64 45,372.20 142% LLC RN-Chechennefteprodukt 21,409.02 29,297.30 73% Khabarovsk LLC RN-Komsomolsk Refinery 82,979.24 48,887.00 170% Republic JSC Khakasnefteprodukt VNK 34,372.92 40,073.70 86% Territory of Khakassia Sakhalin Region RN-Sakhalinmorneftegaz LLC 106,669.98 84,665.60 126% Krasnoyarsk LLC RN-Vankor 141,542.90 48,445.20 292% Territory Republic LLC Taas-Yuryakh Neftegazodobycha 139,745.98 71,668.00 195% JSC Vostsibneftegaz 138,399.20 48,445.20 286% of Sakha (Yakutia) JSC Achinsk Refinery VNK 81,775.25 48,445.20 169% Republic LLC Bashneft-Dobycha 70,762.34 36,266.70 195% LLC RN-Krasnoyarsknefteprodukt 68,340.56 48,445.20 141% of Bashkortostan PJSC Ufaorgsintez 81,158.41 36,266.70 224% Irkutsk Region JSC Angarsk Petrochemical 72,720.87 45,891.60 158% Company Ufa Refinery (branches 79,618.83 36,266.70 220% of PJSC Bashneft) JSC Angarsk Polymer Plant 70,355.61 45,891.60 153% LLC Bashneft-Roznitsa 41,093.68 36,266.70 113% JSC Irkutsknefteprodukt 45,690.79 45,891.60 100% Udmurt JSC Udmurtneft 69,078.15 34,140.80 202% JSC Verkhnechonskneftegaz 121,786.89 45,891.60 265% Republic Tomsk Region JSC Tomskneft VNK 99,212.12 42,353.90 234% Orenburg JSC Orenburgneft 66,427.72 32,068.60 207% JSC Tomsknefteprodukt VNK 50,681.73 42,353.90 120% Region Tyumen Region JSC Tyumenneftegaz 134,483.25 44,906.00 299% Samara Region JSC Samaraneftegaz 62,669.38 35,895.80 175% LLC RN-Uvatneftegaz 139,256.21 44,906.00 310% JSC Kuibyshev Refinery 66,521.01 35,895.80 185% Khanty-Mansi LLC RN-Yuganskneftegaz 110,662.02 65,039.60 170% Novokuibyshevsk Refinery 65,671.21 35,895.80 183% Autonomous PJSC Varyeganneftegaz 113,962.48 65,039.60 175% Syzran Refinery 67,724.75 35,895.80 189% Area – Yugra JSC RN-Nyaganneftegaz 181,701.65 65,039.60 183% JSC Novokuibyshevsk Petrochemical 49,500.85 35,895.80 138% Company JSC Samotlorneftegaz 110,360.15 65,039.60 170% LLC Novokuibyshevsk Oils 58,482.54 35,895.80 163% LLC Krasnoleninsky Refinery 97,617.79 65,039.60 150% and Additives Plant LLC Nizhnevartovsk Oil Refining 105,605.39 65,039.60 162% JSC Samaranefteprodukt 33,634,74 35,895.80 94% Association Saratov Region PJSC Saratov Refinery 72,175.04 30,212.90 239% Yamal-Nenets LLC RN-Purneftegaz 118,411.20 89,778.20 132% Autonomous PJSC Saratovnefteprodukt 30,617.16 30,212.90 101% Area JSC Rospan International 202,648.00 89,778.20 226% Arkhangelsk LLC RN-Arkhangelsknefteprodukt 47,217.64 48,100.60 98% JSC Sibneftegaz 202,305.58 89,778.20 226% Region Yaroslavl Region JSC RN-Yaroslavl 33,730.25 34,933.80 97% Republic LLC RN-Severnaya Neft 120,238.24 50,416.80 238% of Komi Ryazan Region JSC Ryazan Oil Refining Company 73,639.47 33,192.20 222% Nenets LLC Bashneft-Polyus 150,618.00 80,562.30 187% JSC Ryazannefteprodukt 37,136.71 33,192.20 112% Autonomous Moscow Region CJSC TZK Sheremetyevo 97,808.09 54,006.20 181% Area Rostov Region JSC RN-Rostovnefteprodukt 32,169.12 33,716.00 95% Republic JSC Karelianefteprodukt 37,581.70 42,187.50 89% of Karelia Krasnodar LLC RN-Krasnodarneftegaz 54,809.49 35,334.40 155% Territory Murmansk PJSC Rosneft-Murmansknefteprodukt 44,821.29 62,516.60 72% LLC RN-Tuapse Refinery 70,209.49 35,334.40 199% Region LLC RN-Morskoi Terminal Tuapse 50,433.34 35,334.40 143% St Petersburg LLC RN-Severo-Zapad 54,232.28 61,141.20 89% PJSC Rosneft-Kubannefteprodukt 35,683.10 35,334.40 101% Republic OJSC RN-Ingushneft 30,318.07 27,213.60 111% of Ingushetia LLC RN-Ingushnefteprodukt 28,970.11 27,213.60 106%

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No. Name Report section / references Omission Page External Appendix 2. Report’s Compliance to other public documents in the Report assurance with International Standards GRI 102-12 Externally developed economic, environmental and social charters, principles, or other initiatives No. Name Report section / references Omission Page External to which the organisation subscribes or which to other public documents in the Report assurance it endorses General disclosures In 2009, the Company joined the UN Global Compact and the Social Charter of the Russian Business. Since General 2013, the Company has been supporting the Anti-Corruption Charter of the Russian Business. In 2018, Rosneft’s Board of Directors approved the Company’s strategic principles and public statement “Rosneft: GRI 102-1 Name of the organisation Contact Details p. 238 contributing to implementation of the UN Sustainable Development Goals”. The Company also shares and endorses the principles of the Universal Declaration of Human Rights, Declaration on Fundamental GRI 102-2 Activities, brands, prod- 2019 Annual Report, Operating Principles and Rights at Work of the International Labour Organisation, and The Rio Declaration ucts, and services Results section, p. 36–113 on Environment and Development. In 2019, Rosneft joined an international industry initiative by signing Key products: oil, gas, and refining products Guiding Principles on Reducing Methane Emissions across the Natural Gas Value Chain, confirming its commitment to partnerships in carbon management GRI 102-3 Location of headquarters The Company’s Head Office is located in Moscow GRI 102-13 Membership of associ- Stakeholder Engagement p. 32–35 ations and/or national GRI 102-4 Location of operations 2019 Annual Report, Assets or international advocacy and Regions of Operation sec- organisations tion, p. 8–9; Company Structure section, p. 14–15 The Company is a member of the Russian–German Foreign Trade Chamber, Chamber of Commerce and Industry of the Russian Federation, Russian National Committee for Pacific Economic Cooperation, GRI 102-5 Ownership and legal form 2019 Annual Report, Share Petrochemical and Refiners Association, Russian Gas Society – association of oil and gas businesses, National Capital section, p. 248 Association for Subsoil Examination, Non-Profit Russian Corporate Counsel Association, and National Association of Technology Transfer (NATT) GRI 102-6 Markets served 2019 Annual Report, Assets and Regions of Operation GRI 102-14 Statement from senior Message from the Chairman p. 4–5, section, p. 8–9; Company decision-maker of Rosneft’s Board of Directors p. 6–7 Structure section, p. 14–15; Message from Rosneft’s Chief Appendix 6: Financial Statements Executive Officer and Auditor’s Report, note 26 Segment Information, p. 366 GRI 102-15 Key impacts, risks, Message from the Chairman p. 4–5 IPIECA-HS4 and opportunities of Rosneft’s Board of Directors GRI 102-7 Scale of the organisation Management Framework p. 142–145 Message from Rosneft’s Chief p. 6–7 and Personnel Profile Executive Officer Key Sustainability Indicators; p. 204–209 Sustainability Management p. 25–31 Stakeholder Engagement GRI 102–8 Information on employees Management Framework p. 142–145 Approaches to Promoting p. 32–35 and other workers and Personnel Profile Human Rights Key Sustainability Indicators; p. 204–209 Compliance Framework p. 37–39 Headcount as at the end of 2019, including: Development Permanent employment contract: women – 104,252, men – 206,281 Climate-related Risks p. 40–47 Temporary employment contract: women – 15,310, men – 8,741 and Opportunities p. 55 Full-time employment: women – 112,299, men – 221,125 Health and Safety Management p. 90–93 Part-time employment: women – 466, men – 694 Emergency Prevention and Response p. 110 GRI 102–9 Supply chain 2019 Annual Report, Business Management Framework Model section, p. 12–13 and Personnel Profile p. 142–145 Supporting Social and Economic GRI 102-10 Significant changes 2019 Annual Report, Company Development p. 168–180 to the organisation and its Structure section, p. 14–15 supply chain GRI 102-16 Values, principles, Strategic Vision of Sustainable p. 20–24 UNGC standards, and norms Development p. 40–47 GRI 102-11 Precautionary Principle Principle 10 of behaviour Compliance Framework UNGC or approach Development Principle 7 IPIECA-EN5, The Company believes it important to carry out environmental impact assessments (EIAs) to use the out- Additional information is available on the Company’s website at https://www.rosneft.com/Investors/ HS4 comes as a basis to develop activities aimed at minimising the Company’s environmental footprint. Documents/ In conducting EIAs, the Company follows the precautionary approach laid out in The Rio Declaration The Company's Policy on Sustainable Development: https://www.rosneft.com/upload/site2/document_file/ on Environment and Development (Principle 15. The Rio Declaration on Environment and Development, UN, development_policy_eng.pdf 1992) Code of Business and Corporate Ethics: https://www.rosneft.com/upload/site2/document_file/P3-0106_P- 01eng.pdf GRI 102-17 Mechanisms for advice Compliance Framework p. 40–47 UNGC and concerns about ethics Development Principle 10

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No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance GRI 102-18 Governance structure Sustainability Management p. 25–31 GRI 102-52 Reporting cycle About the Report p. 12–15 IPIECA-HS4 2019 Annual Report, Corporate Governance section, p. 196–247 GRI 102-53 Contact point for ques- Contact Details p. 238 tions regarding the report GRI 102-20 Executive-level responsi- Sustainability Management p. 25–31 bility for economic, envi- GRI 102-54 Claims of report- About the Report p. 12–15 ronmental, and social ing in accordance topics with the GRI Standards GRI 102-22 Composition of the high- Sustainability Management p. 25–31 GRI 102-55 GRI content index This appendix est governance body 2019 Annual Report, Corporate GRI 102-56 External assurance About the Report p. 12–15 and its committees Governance section, p. 196–247 Independent Assurance Report p. 200–203 GRI 102-29 Identifying and managing Sustainability Management p. 25–31 on Rosneft’s 2019 Sustainability economic, environmental, Report and social impacts This appendix GRI 102-40 List of stakeholder groups About the Report p. 12–15 Stakeholder Engagement p. 32–35 Material topics GRI 102-41 Percentage of total Social Policy p. 156–165 1. Economic performance UNGC employees covered Principle 3 by collective bargaining GRI 201 Economic Performance 2016 IPIECA-SE15 agreements GRI 103 Management approach 2016 74 % of the headcount are covered by collective bargaining agreements GRI 103-1 Explanation of the mate- 2019 Annual Report, Strategy GRI 102-42 Identifying and selecting rial topic and its Boundary section, p. 18–29 stakeholders GRI 103-2 The management 2019 Annual Report, Mission Rosneft interacts with all stakeholder groups that have an impact on, and are impacted by, the Company’s approach and its and Values section, p. 10–11; operations components Strategy section, p. 18–29 GRI 102-43 Approach to stakeholder Stakeholder Engagement p. 32–35 GRI 103-3 Evaluation of the manage- 2019 Annual Report, Strategy engagement ment approach section, p. 24–26 GRI 102-44 Key topics and con- About the Report p. 12–15 GRI 201-1 Direct economic value Key Sustainability Indicators p. 16–17 cerns raised, and how Stakeholder Engagement p. 32–35 IPIECA-SE4, generated and distributed the organisation has SE13 responded to those key GRI 201-3 Defined retirement plans Management Framework p. 142–145 topics and concerns, and other benefit plans and Personnel Profile including through its Social Policy p. 156–165 reporting GRI 201-4 Financial assistance GRI 102-45 Entities included About the Report p. 12–15 received from government in the consolidated finan- 2019 Annual Report, Company cial statements Structure section, p. 14–15 The Company and Group Subsidiaries make use of tax benefits provided for by federal tax laws. In a number of regions of operation, the Company and Group Subsidiaries use income tax benefits and corporate prop- GRI 102-46 Defining report content About the Report p. 12–15 erty tax benefits under regional laws and topic Boundaries 2. Indirect economic impact GRI 102-47 List of material topics About the Report p. 12–15 GRI 203 Indirect Economic Impacts 2016 GRI 102-48 Any restatements of infor- About the Report p. 12–15 mation given in previous Key Sustainability Indicators p. 204–209 GRI 103 Management approach 2016 reports, and the reasons for such restatements GRI 103-1 Explanation of the mate- Supporting Social and Economic p. 168–180 rial topic and its Boundary Development The key reasons for restatements of information in the Report are the development and improvement of the corporate reporting framework, fine-turning of the indicators’ boundaries and retrospective GRI 103-2 The management Supporting Social and Economic p. 168–180 information approach and its Development components GRI 102-49 Significant changes About the Report p. 12–15 from previous reporting GRI 103-3 Evaluation of the manage- Supporting Social and Economic p. 168–180 periods in the list of mate- ment approach Development rial topics and topic GRI 203-1 Infrastructure investments Supporting Social and Economic p. 168–180 Boundaries IPIECA-SE7 and services supported Development GRI 102-50 Reporting period About the Report p. 12–15 GRI 203-2 Significant indirect eco- Message from the Chairman p. 4–5 GRI 102-51 Date of the most recent IPIECA-SE6 nomic impacts, including of Rosneft’s Board of Directors report scope of impact Message from Rosneft’s Chief p. 6–7 Executive Officer Rosneft’s 2018 Sustainability Report was published in June 2019 Customer Engagement p. 186–192

208 2019 / Sustainability Report of Rosneft 209 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance GRI 415 Public Policy 2016 GRI 205-2 Communication and train- Compliance Framework p. 40–47 UNGC ing about anti-corruption Development GRI 103 Management approach 2016 Principle 10 policies and procedures GRI 415-1 Total monetary value IPIECA-SE11 UNGC of political contributions GRI 205-3 Confirmed incidents Principle 10 by country and recipient/ UNGC of corruption and actions IPIECA-SE11, beneficiary Principle 10 taken SE14 The Company does not provide financing for any political causes IPIECA-SE11, SE14 No confirmed cases of corruption were identified in 2019. Corruption prevention is the responsibility 3. Procurement practices (including local suppliers) of the Company's Security Service and Internal Audit Service GRI 204 Procurement Practices 2016 GRI 206 Anti-competitive Behaviour 2016 GRI 103 Management approach 2016 GRI 206-1 Number of legal actions against the Company GRI 103-1 Explanation of the mate- Supplier and Contractor p. 193–197 regarding anti-com- rial topic and its Boundary Relationship Management petitive behaviour and violations of anti-trust GRI 103-2 The management Supplier and Contractor p. 193–197 and monopoly legisla- approach and its Relationship Management tion during the reporting components period GRI 103-3 Evaluation of the manage- Supplier and Contractor p. 193–197 2019 saw no court disputes related to the Company’s alleged violations on monopoly laws that would result ment approach Relationship Management in court orders taking effect GRI 204-1 Proportion of spend- Supplier and Contractor p. 193–197 5. Energy IPIECA-SE5 ing on local suppliers Relationship Management in significant locations GRI 302 Energy 2016 of operation GRI 103 Management approach 2016 With Russia as the key region of operation, Rosneft places special emphasis on supporting local suppliers. In its procurement activities, the Company prioritises goods, works and services made, provided and ren- GRI 103-1 Explanation of the mate- Energy Saving and Energy p. 123–124 dered by Russian entities, including by way of direct procurement from SMEs in line with applicable laws. rial topic and its Boundary Efficiency The Company’s procurement is based on principles of information openness, no unwarranted restric- GRI 103-2 The management Energy Saving and Energy p. 123–124 tions on bidders, and targeted and cost-efficient expenditures as set forth by Federal Law No. 223-FZ approach and its Efficiency on Procurement of Goods, Works and Services by Certain Types of Legal Entities dated 18 July 2011. Suppliers components (contractors) are selected as part of procurement (including bidding) procedures provided for by the above law, in order to meet the Company’s demand for products, works and services GRI 103-3 Evaluation of the manage- Energy Saving and Energy p. 123–124 ment approach Efficiency 4. Combating corruption and non-competitive practices GRI 302–1 Energy consumption Energy Saving and Energy p. 123–124 GRI 205 Anti-corruption 2016 UNGC within the organisation Efficiency GRI 103 Management approach 2016 Principles 7, 8 The Group Subsidiaries use various types of fuel, above all natural and associated petroleum gas, as well GRI 103-1 Explanation of the mate- Compliance Framework p. 40–47 IPIECA-E2 as fuel oil, diesel fuel, and oil rial topic and its Boundary Development GRI 302-4 Reduction of energy Energy Saving and Energy p. 123–124 GRI 103-2 The management Compliance Framework p. 40–47 UNGC consumption Efficiency approach and its Development Principles components 8, 9 As a result of activities implemented under the Energy Saving Programme, the Company saved a total IPIECA-E2 of 25.7 mln GJ of fuel and energy resources (heat, electricity, and fuel) in 2019 GRI 103-3 Evaluation of the manage- Compliance Framework p. 40–47 ment approach Development GRI OG3 Total amount of renew- Partially dis- IPIECA-E3 able energy generated closed. GRI 205-1 Total number and per- by source Information UNGC centage of operations is unavailable Principle 10 assessed for risks related due to insignif- IPIECA-SE11, to corruption, and signifi- icant volumes SE12 cant risks identified of renewable In 2019, risks related to corruption were assessed on a quarterly basis at the level of the Company, busi- energy gener- nesses, and business functions (covering 100 % of all units). This risk is cross-functional and affects all business ation. Rosneft processes, requiring business process owners to develop control procedures aimed at preventing it. plans to start Ant-corruption is one of the components of the Code of Business and Corporate Ethics in place at Rosneft. accounting The Company also has the Policy on Combating Corporate Fraud and Involvement in Corruption Activities for this type approved by resolution of Rosneft's Board of Directors dated 21 May 2015, Minutes No. 19 dated 21 May 2015, of energy after and the Regulations on Coordinating Anti-Fraud and Anti-Corruption Processes providing for the algorithm the Company's and methodology to assess the risk. reliance To implement the above documents, the Company ran programmes in 2019 as part of the Comprehensive on it grows Anti-Fraud and Anti-Corruption Programme Currently, the volume of generated renewable energy accounts for an insignificant part of total energy volume

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No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance 6. Water GRI 304-2 Nature of significant Partially dis- UNGC impacts of operations, closed. The scale GRI 303 Water 2016 Principle 8 products, and services of the Company’s GRI 103 Management approach 2016 IPIECA-E5, on biodiversity in formally operations HS4 protected areas and for- makes it impos- GRI 103-1 Explanation of the mate- Conserving Water Resources p. 71–75 mally designated areas sible to identify rial topic and its Boundary of special importance all of the spe- or sensitivity cies affected GRI 103-2 The management Conserving Water Resources p. 71–75 and extent approach and its of areas impacted. components Rosneft’s key impacts on biodiversity are related to exploration, production, treatment, transportation GRI 103-3 Evaluation of the manage- Conserving Water Resources p. 71–75 and retail sales of petroleum products and in most cases have a duration of the term of lease or operation ment approach of respective production facilities. The Company has no irreversible impact on biodiversity. The most com- GRI 303-1 Total volume of water Conserving Water Resources p. 71–75 mon impacts are area pollution and construction and use of production capacities UNGC withdrawal by source Key Sustainability Indicators; p. 204–209 GRI 304-3 Habitats protected Land Remediation and Waste Partially dis- p. 77–80 Principles UNGC or restored Management closed. The scale 7, 8 According to the data collection methodology, the Company discloses data on total volume of water withdrawn, including rainwater, waste water, and recycled water Principle 8 of the Company’s IPIECA-E6 IPIECA-E5 operations GRI 303-3 Percentage and total vol- Key Sustainability Indicators p. 16–17 makes it impos- UNGC ume of water recycled Conserving Water Resources sible to identify Principle 8 and reused p. 71–75 all of the spe- IPIECA-E6 cies affected In 2019, the percentage of water recycled and reused stood at around 94 % (2,496 mmcm) and extent of areas impacted. 7. Biodiversity The final phase of land remediation is an assessment of work done by an independent contractor. GRI 304 Biodiversity 2016 Remediation is confirmed by acceptance certificates handed over to local authorities GRI 103 Management approach 2016 GRI 304-4 Total number of IUCN Red GRI 103-1 Explanation of the mate- Biodiversity Conservation p. 71–75 UNGC List species and national rial topic and its Boundary Principle 8 conservation list spe- IPIECA-E5 cies with habitats in areas GRI 103-2 The management Biodiversity Conservation p. 80–84 affected by the opera- approach and its tions of the organisation, components by level of extinction risk GRI 103-3 Evaluation of the manage- Biodiversity Conservation p. 80–84 ment approach GRI 304-1 Operational sites owned, UNGC leased, managed Principle 8 in, or adjacent to, pro- IPIECA-E5 tected areas and areas of high biodiversity value Species with habitats in areas affected by the Company’s operations include grey whale, sperm whale, rein- outside protected areas deer, grey heron, golden eagle, Eurasian otter, European pond turtle, sturgeon, etc. The Company analyses its impact on the above species and aims to minimise it The Company engages in exploration in environmentally vulnerable and protected areas, including those in the Yamal-Nenets Autonomous Area, Krasnoyarsk Territory, Arkhangelsk Region, and Republic of Sakha, GRI OG4 Number and percentage on the shelf of the Sea of Okhotsk, Barents, Pechora, and Kara seas, and produces, treats and transports oil UNGC of significant operating near the Verkhnee Dvuobye wetlands, Yugansky Nature Reserve in the Khanty-Mansi Autonomous Area – Principle 8 sites in which biodiversity Yugra, various protected areas in the Samara Region, including I.I. Sprygin Zhiguli State Nature Biosphere IPIECA-E5, risk has been assessed Reserve, More-Yu wildlife sanctuary, and Pym-Va-Shor nature monument in the Nenets Autonomous Area. HS4 and monitored The Company also operates in nature reserves and wetlands of the Krasnoyarsk Territory. In addition, the Company engages in activities related to oil and gas production, treatment and transportation in areas The percentage of existing significant facilities for which biodiversity risk was assessed totalled 8 % in 2019 traditionally used by indigenous peoples of the North, and carries out retail sales of petroleum products (18 facilities) near protected areas, including the Utrish State Nature Reserve, Losiny Ostrov National Park, Samarskaya Luka National Park, Tunkinsky and Pribaikalsky national parks, Baikal Nature Reserve, Teberda Nature Reserve, Kumysnaya Polyana park, and Vysokovsky Bor nature monument. The Company also operates in or near environmentally vulnerable and protected areas in strict compliance with applicable laws on environment protection. In 2019, the Company had 214 facilities that involved a significant impact on biodiversity. The percentage of existing significant facilities for which biodiversity risk was assessed totalled 8.4 % in 2019 (18 facilities)

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No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance 8. GHG emissions GRI 306-1 Total water discharge Conserving water resources Partially dis- p. 71–75 UNGC by quality and destination closed. 9. NO , SO , and other air emissions X X Principle 8 The scope GRI 305 Emissions 2016 IPIECA-E7, of the Company’s E9 operations GRI 103 Management approach 2016 makes it impos- sible to provide GRI 103-1 Explanation of the mate- Carbon Management Goals p. 50–51 the breakdown rial topic and its Boundary and Approaches of target water Reducing Air Emissions p. 69–70 bodies. GRI 103-2 The management Achievement of Climate Goals p. 56–58 According to the data collection methodology, the Company discloses the total volume of waste water (both approach and its in 2019 own and received from third parties) discharged into the environment through its own and third party cen- components Reducing Air Emissions p. 69–70 tralised waste water systems. The Company also discloses data on domestic water discharges GRI 103-3 Evaluation of the manage- Managing Our Environmental p. 64–68 GRI 306-2 Total weight of waste Land remediation and waste p. 77–80 ment approach Impacts UNGC by type and disposal management GRI 305-1 Direct (Scope 1) GHG Achievement of Climate Goals p. 56–58 Principle 8 method UNGC emissions in 2019 IPIECA-E9, E10 The main type of waste generated by the Company is oil sludge and drill cuttings. Rosneft does not trans- Principles port, import, export, or process waste deemed hazardous under the terms of Annexes I, II, III, and VIII 7, 8 to the Basel Convention. IPIECA-E1 The Company does not consolidate information on waste by hazard class, each Group Subsidiary accounts GRI 305-2 Indirect and energy Achievement of Climate Goals p. 56–58 for its own waste UNGC (Scope 2) GHG emissions in 2019 GRI 306-3 Total number and volume Prevention of and response p. 76 Principles UNGC of significant spills to oil spills 7, 8 Principle 8 IPIECA-E1 IPIECA-E9 GRI 305-3 Other significant GHG Achievement of Climate Goals p. 56–58 GRI 306-4 Weight of transported, UNGC emissions stating volume in 2019 UNGC imported, exported, Principles Principle 8 or treated waste 7, 8 IPIECA-E10 deemed hazard- IPIECA-E1 ous under the terms GRI 305-4 Reduction of GHG Achievement of Climate Goals p. 56–58 of Annexes I, II, III, and VIII UNGC emissions in 2019 to the Basel Convention, Principle 8 and the share of waste IPIECA-E1 transported internationally GRI 305-5 Reduction of GHG Achievement of Climate Goals p. 56–58 The main type of waste generated by the Company is oil sludge and drill cuttings. Rosneft does not trans- emissions in 2019 port, import, export, or process waste deemed hazardous under the terms of Annexes I, II, III, and VIII to the Basel Convention. GRI 305-6 Emissions of ozone-de- The Company does not consolidate information on waste by hazard class, each Group Subsidiary accounts UNGC pleting substances for its own waste Principles 7, 8 The Company does not use ozone-depleting substances on an industrial scale GRI 306-5 Information on water bod- IPIECA-E8 UNGC ies significantly affected Principles by the Company's dis-

GRI 305-7 NOX, SOX, and other air Reducing Air Emissions p. 69–70 8, 9 charges of water and/or UNGC emissions IPIECA-E7, runoff Principles E9 7, 8 In 2019, no significant impacts of the Company’s discharges on water bodies was registered IPIECA-E8 GRI OG5 Oilfield water generated Conserving water resources p. 71–75 10. Water discharge and waste management (including spills) UNGC and injected Principles GRI 306 Effluents and waste 2016 8, 9 IPIECA-E10 GRI 103 Management approach 2016 GRI OG6 APG utilisation Achievement of Climate Goals p. 56–58 GRI 103-1 Explanation of the mate- Land Remediation and Waste p. 77–80 UNGC in 2019 rial topic and its boundary Management Principles GRI 103-2 The management Prevention of and response p. 76 8, 9 approach and its to oil spills IPIECA-E4 components Land remediation and waste GRI OG7 Total drilling waste (drill- management p. 77–80 UNGC ing mud and cuttings) GRI 103-3 Evaluation of the manage- Environmental impact p. 64–68 Principles and approach to its ment approach management 8, 9 disposal IPIECA-E10 In 2019, total drilling cuttings generated when using aqueous and non-aqueous drilling fluids amounted to 4,351.1 kt and 32.5 kt, respectively.

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No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance 11. Environmental compliance (regulatory aspects) GRI 401-1 New employee hires Management framework Partially dis- p. 142–145 UNGC and employee turnover and personnel profile closed. No infor- p. 204–209 GRI 307 Environmental compliance 2016 Principle 6 Key sustainability indicators mation on new GRI 103 Management approach 2016 hires or turnover by gen- GRI 103-1 Explanation of the mate- Environmental impact p. 64–68 der and age rial topic and its boundary management is collected. The Company GRI 103-2 Management approach Environmental impact p. 64–68 intends to collect and its components management such information GRI 103-3 Evaluation of the manage- Environmental impact p. 64–68 once the uni- ment approach management fied automated HR records man- GRI OG8 Fuels with benzene, lead agement system and sulphur content sig- is implemented nificantly exceeding in all Group the national standards Subsidiaries as part of cen- The Company does not produce fuels with benzene, lead and sulphur content significantly exceeding tralised business the national standards (technical regulations) planning, which GRI 307–1 Monetary value of sig- Environmental impact p. 64–68 will be in place UNGC nificant fines and total management no sooner than Principle 8 number of non-monetary 2020 sanctions for non-com- GRI 401-2 Benefits provided Social policy p. 156–165 pliance with laws to full-time employees and regulations that are not provided A number of Group Subsidiaries were fined for environmental non-compliance. Total fines in 2019 amounted to temporary or part-time to RUB 200 mln. Individual fines were insignificant employees 12. Employment and labour/management relations GRI 402 Labour/management relations 2016 GRI 401 Employment 2016 GRI 103 Management approach 2016 GRI 103 Management approach 2016 GRI 103-1 Explanation of the mate- Management framework p. 142–145 rial topic and its boundary and personnel profile GRI 103-1 Explanation of the mate- Management framework p. 142–145 rial topic and its boundary and personnel profile GRI 103-2 Management approach Management framework p. 142–145 and its components and personnel profile GRI 103-2 Management approach Management framework p. 142–145 and its components and personnel profile GRI 103-3 Evaluation of the manage- Management framework p. 142–145 ment approach and personnel profile GRI 103-3 Evaluation of the manage- Management framework p. 142–145 ment approach and personnel profile GRI 402-1 Minimum notice periods regarding changes in operations, including whether these are specified in collective agreements The Company fully complies with the laws on notifying the employees of significant changes 13. Occupational health and safety

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No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance GRI 403 Occupational health and safety 2016 GRI 407 Freedom of Association and Collective Bargaining 2016 GRI 103 Management approach 2016 GRI 103 Management approach 2016 GRI 103-1 Explanation of the mate- Health and safety management p. 90–92 GRI 103-1 Explanation of the mate- Management framework p. 142–145 rial topic and its boundary rial topic and its boundary and personnel profile GRI 103-2 Management approach Health and safety management p. 90–92 GRI 103-2 Management approach Management framework p. 142–145 and its components and its components and personnel profile Social policy p. 156–165 GRI 103-3 Evaluation of the manage- Health and safety management p. 90–92 ment approach GRI 103-3 Evaluation of the manage- Social policy p. 156–165 ment approach GRI 403-2 Type of injury and rates Human safety Partially dis- p. 93–99 IPIECA-HS3 of injury, occupational closed. The infor- GRI 407-1 Identified units and sup- diseases, lost days, mation necessary UNGC pliers that could be violat- and absenteeism, to calculate Principle 3 ing freedom of association and total number the absentee and rights to collec- of work-related fatalities rate is currently tive bargaining or that not available, have a significant risk as the Company of such violations, as well does not collect as measures taken to pro- such information tect these rights in a consolidated manner The Company operates in compliance with the laws ensuring freedom of association and rights to collective bargaining. Rosneft has no information about units or suppliers that could be violating these rights GRI 403-3 Workers with high injury rate or high risk IPIECA-SE18 Employment disputes of diseases related The Company operates in compliance with labour laws. Rosneft is committed to resolving all employment to their occupation disputes through negotiations When analysing injuries and cases of occupational diseases, the Company identified a number of professions GRI 410 Security practices 2016 that are most vulnerable to injuries (drillers, operators of process units / filling stations / oil and gas production facilities) and occupational diseases (drivers, bulldozer operators and special machinery drivers). Rosneft GRI 410-1 Percentage of secu- is committed to minimising the negative impact on such employees rity personnel trained in the human rights poli- GRI 403-4 Health and safety topics Health and safety management p. 90–92 cies or procedures IPIECA-HS1, covered in formal agree- Social policy HS2, HS3, ments with trade unions p. 156–165 In 2019, the percentage of security personnel trained in the human rights policies or procedures stood SE16 at 73 % IPIECA-HS2, Programmes and pro- Social policy p. 156–165 GRI 412 Human rights assessment 2016 HS3 cedures used to identify and solve significant GRI 103 Management approach 2016 employee safety issues GRI 103-1 Explanation of the mate- Approaches to promoting p. 37–39 GRI OG13 Safety of production Safety of production facilities Partially dis- p. 100–104 rial topic and its boundary human rights IPIECA-HS1, processes and processes closed. GRI 103-2 Management approach Approaches to promoting p. 37–39 HS5 and its components human rights The Company has a PSE‑1 and PSE‑2 procedure for record- GRI 103-3 Evaluation of the manage- Approaches to promoting p. 37–39 ing and analysing ment approach human rights operational incidents in accordance GRI 412-2 Total hours of employee Approaches to promoting с. 37-39 with ANSI/API RP 754 training in human rights human rights recommendations and IOGP Report 456, policies and procedures but the data are not consolidated in line with IFRS. Therefore, the calculation of per unit PSER does not fully comply with the ANSI/ API RP 754 recommendations and IOGP Report 456 The Company is committed to safety. To prevent incidents, Rosneft conducts regular health and safety inspections, has a system of health and safety training in place, and includes response measures into drills and on-site training sessions

218 2019 / Sustainability Report of Rosneft 219 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK R&D AND DIGITAL SUPPORTING SOCIAL RESPONSIBLE DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT TRANSFORMATION PERSONNEL AND ECONOMIC DEVELOPMENT BUSINESS PRACTICE APPENDICES

No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance 14. Training and Education GRI 406 Non-Discrimination 2016 GRI 404 Training and Education 2016 GRI 103 Management approach 2016 GRI 103 Management approach 2016 GRI 103-1 Explanation of the mate- Management framework and per- p. 142–145 rial topic and its boundary sonnel profile GRI 103-1 Explanation of the mate- Personnel training p. 146–155 rial topic and its boundary and development GRI 103-2 Management approach Management framework and per- p. 142–145 and its components sonnel profile GRI 103-2 Management approach Personnel training p. 146–155 and its components and development GRI 103-3 Evaluation of the manage- Approaches to promoting human p. 37–39 ment approach rights GRI 103-3 Evaluation of the manage- Social policy p. 156–165 ment approach GRI 406-1 Total incidents of discrim- UNGC ination and corrective GRI 404-1 Average hours of training Personnel training p. 146–155 Principle 6 actions taken UNGC per year per employee and development Principle 6 by gender and category The Company identified no incidents of discrimination in the reporting period. IPIECA-SE16 16. Rights of indigenous people and minorities GRI 404-2 Programmes for upgrad- Personnel training p. 146–155 Principle 6 ing employee skills and development GRI 411 Rights of Indigenous Peoples 2016 IPIECA-SE16 and lifelong learning GRI 103 Management approach 2016 GRI 404-3 Percentage of employees Personnel training Partially dis- p. 146–155 GRI 103-1 Explanation of the mate- Support for indigenous minorities p. 181–183 UNGC receiving regular perfor- and development closed. rial topic and its boundary of the North Principle 6 mance and career devel- The Report IPIECA-SE16 opment reviews presents data GRI 103-2 Management approach Support for indigenous minorities p. 181–183 on the total num- and its components of the North ber of employees subject GRI 103-3 Evaluation of the manage- Support for indigenous minorities p. 181–183 to reviews. ment approach of the North The Company GRI 411-1 Total number of identi- currently does UNGC fied incidents of viola- not collect any Principles tions involving the rights evaluation data 1, 2 of indigenous minitorities by category and actions taken or gender The Company operates in compliance with the laws prohibiting any forms of human rights violation. In 2019, no incidents of violations of indigenous minorities’ rights were identified in the Company GRI OG9 Operations which affect interests of indigenous minorities and involve In 2019, Company-wide reviews of corporate and managerial competencies covered more than 23 thousand special actions to liaise employees. with them. 15. Diversity and equal opportunity, non-discrimination The Company operates in some oil and gas producing regions where indigenous communities are present. In all these regions, the Company runs programmes to engage with, and provide support to, such GRI 405 Diversity and Equal Opportunity 2016 communities. GRI 103 Management approach 2016 GRI 413 Local Communities 2016 GRI 103-1 Explanation of the mate- Management framework and per- p. 142–145 GRI 103 Management approach 2016 rial topic and its boundary sonnel profile GRI 103-1 Explanation of the mate- Supporting social and economic p. 168–180 GRI 103-2 Management approach Management framework and per- p. 142–145 rial topic and its boundary development and its components sonnel profile GRI 103-2 Management approach Supporting social and economic p. 168–180 GRI 103-3 Evaluation of the manage- Approaches to promoting human p. 37–39 and its components development ment approach rights GRI 103-3 Evaluation of the manage- Supporting social and economic p. 168–180 GRI 405-1 Diversity of governance Sustainability management p. 25–31 ment approach development bodies and key categories Management framework and per- of employees sonnel profile p. 142–145 GRI 413-1 Operations with local Public relations p. 85–87 UNGC community engage- Supporting social and economic p. 168–180 The Company complies with Russian laws on the protection of the disabled when it comes to meet- Principle 1 ment, impact assess- development ing the established disabled quotas. We employ nearly 2 thousand disabled who enjoy equal access IPIECA-SE1, ments, and development to education. SE2, SE3, programmes At the same time, taking into account the nature of its operations and a high share of hazardous or danger- SE4, SE5 ous jobs according to the special assessment of working conditions, the Company pays compensations The Company implements procedures for stakeholder engagement and community impact assessment to the disabled employment promotion fund as provided for by regional laws. In 2019, relevant Company- and management in the key regions of operation, including when developing new projects. Such approaches wide expenses totalled RUB 152 mln. affect the absolute majority of the Company’s operations.

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No. Name Report section / references Omission Page External No. Name Report section / references Omission Page External to other public documents in the Report assurance to other public documents in the Report assurance GRI 413-2 Operations with signifi- GRI 103-2 Management approach Health and Safety Management p. 90–92 UNGC cant actual and potential and its components Safety of Production Facilities Principle 1 negative impacts on local and Processes p. 100–104 communities GRI 103-3 Evaluation of the manage- Health and Safety Management p. 90–92 The Company takes action to prevent adverse impacts of employee relocation on local communities. We also ment approach Safety of Production Facilities p. 100–104 implement measures to mitigate our environmental footprint and enhance safety. and Processes GRI OG10 Number and descrip- 21. Strategic targets of sustainable development tion of material conflicts with local communities GRI 103 Management approach 2016 and indigenous peoples GRI 103-1 Explanation of the mate- Strategic Vision of Sustainable p. 20–24 In 2019, there was no materials conflicts with local communities or indigenous peoples rial topic and its Boundary Development 17. Compliance with social and economic requirements GRI 103-2 Management approach Sustainability Management p. 25–31 and its components GRI 419 Socioeconomic Compliance – 2016 GRI 103-3 Evaluation of the manage- Strategic Vision of Sustainable p. 20–24 GRI 103 Management approach 2016 ment approach Development GRI 103-1 Explanation of the mate- Compliance framework p. 40–47 22. Alternative fuels and innovations rial topic and its boundary development GRI 103 Management approach 2016 GRI 103-2 Management approach Compliance framework p. 40–47 and its components development GRI 103-1 Explanation of the mate- Innovation Management p. 118–119 rial topic and its Boundary Digital Transformation p. 125–128 GRI 103-3 Evaluation of the manage- Compliance framework p. 40–47 Customer Engagement p. 186–192 ment approach development GRI 419-1 Significant fines and total GRI 103-2 Management approach Innovation Management p. 118–119 number of non-monetary and its components Digital Transformation p. 125–128 sanctions for non-com- Customer Engagement p. 186–192 pliance with laws and/or regulations in the social and economic area GRI 103-3 Evaluation of the manage- Development of R&D Capabilities p. 129–137 ment approach Customer Engagement p. 186–192 In 2019, there were no significant fines for non-compliance with laws and/or regulations in the social and economic area confirmed by court rulings 23. Amount and type of estimated proved reserves and production GRI 103 Management approach 2016 18. Risks and opportunities related to climate change (physical aspects) GRI 103-1 Explanation of the mate- 2019 Annual Report, Rosneft’s GRI 103 Management approach 2016 rial topic and its Boundary Exploration and Reserve Replacement section, p. 38–43 GRI 103-1 Explanation of the mate- Climate-related risks p. 55 rial topic and its boundary and opportunities GRI 103-2 Management approach 2019 Annual Report, Rosneft’s and its components Exploration and Reserve GRI 103-2 Management approach Climate-related risks p. 55 Replacement section, p. 38–43 and its components and opportunities GRI 103-3 Evaluation of the manage- 2019 Annual Report, Rosneft’s GRI 103-3 Evaluation of the manage- Climate-related risks p. 55 ment approach Exploration and Reserve ment approach and opportunities p. 59–60 Replacement section, p. 38–43 Climate cooperation GRI OG1 Proved reserves Key Sustainability Indicators p. 204–209 19. Emergency preparedness and response and production GRI 103 Management approach 2016 24. Consumer health and safety GRI 103-1 Explanation of the mate- Emergency prevention p. 108 GRI 416 Consumer health and safety 2016 rial topic and its boundary and response GRI 103 Management approach 2016 GRI 103-2 Management approach Emergency risk management p. 111 and its components GRI 103-1 Explanation of the mate- Customer Engagement p. 186–192 rial topic and its Boundary GRI 103-3 Evaluation of the manage- Employee training in emergency p. 115 GRI 103-2 Management approach Customer Engagement p. 186–192 ment approach response and its components 20. Asset integrity, process safety (safety procedures and number of accidents) GRI 103-3 Evaluation of the manage- Customer Engagement p. 186–192 ment approach GRI 103 Management approach 2016 GRI 416-2 Cases of product Customer Engagement p. 186–192 GRI 103-1 Explanation of the mate- Safety of Production Facilities p. 100–104 and service non-com- rial topic and its Boundary and Processes pliance with regulatory requirements

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No. Name Report section / references to other Omission Page public documents in the Report Appendix 3. Stakeholder engagement in 2019: 25. Climate-Related Financial Disclosures (TCFD) round table meetings in the Company’s regions Governance a) The Board of Director’s Sustainability Management p. 25–31 of operation position on climate-related risks and opportunities b) Management’ role Carbon Management Goals p. 50–51 in assessing and manag- and Approaches ing climate-related risks Since 2007, Rosneft has been annu- is represented by the heads ▪ status of stakeholder suggestions and opportunities ally holding meetings with stakehold- of the Group Subsidiaries operat- made at previous round tables; ers in its key regions of operation. ing in the region. The round table ▪ exchange of views with stakeholders. Strategy a) Short, medium and long Climate-related Risks and Opportunities p. 55 term climate-related risks The events are held in the round table agenda traditionally includes discussion and opportunities identified format and attended by partner and cli- of the following items: In total, 16 round table were held by the Company ent representatives, NGOs, educational ▪ Group Subsidiary activities in 2019 across the Company’s footprint. b) The impact of climate-re- Sustainability Management p. 25–31 institutions, the media, as well as super- and contribution to the development lated risks and opportunities visory bodies, government agencies, of a respective region in the report- on the Company’s busi- and municipal authorities. The Company ing year; ness, strategy and financial planning c) Strategy resilience Development of Global Energy Markets p. 52–54 with regard to climate sce- 1. Round table “Sustainable Development of Rosneft Group Subsidiaries and the Republic of Bashkortostan in 2018”, Ufa, narios, including the below Republic of Bashkortostan 2 °C scenario. Participants: representatives of Bashneft, Rosneft, the government of the Republic of Bashkortostan, contractors Risk a) Processes to identify Climate-related Risks and Opportunities p. 55 and the media. management and assess climate-related risks Discussions of current issues, including: resuming joint scientific and technical councils of the Company and the Ministry of Industry and Innovation Policy b) The Company’s processes Sustainability Management p. 25–31 of the Republic of Bashkortostan; to manage climate-related Emergency Prevention fostering the creation of the Rosneft – Ufa State Oil Technical University research and education centre; risks p. 112–113 creating a mechanism for the out-of-court settlement of disputes arising during the Company’s procurement activities; familiarising members of the Russian Chamber of Commerce and Industry with Bashneft's procurement procedures through c) Integration of processes Carbon Management Goals p. 50–51 training seminars. to identify, assess, and man- and Approaches age climate-related risks into a unified Company risk man- 2. Round table “Sustainable Development of Vostsibneftegaz and the region where it operates in 2018”, the village agement process of Baykit, Evenkiysky District, Krasnoyarsk Territory Targets a) Targets used Biodiversity Conservation p. 80–84 Participants: representatives of Vostsibneftegaz, Slavneft-Krasnoyarskneftegaz, the Evenkiysky District Administration, vil- and indicators by the Company to assess lage councils, educational institutions, the public and the media. associated risks and opportunities in accordance Discussions of current issues, including: with the risk management • creation of a salt therapy room for children in the village of Baykit as part of the Company's charity program; strategy and process • support for an additional police position in the Evenkiysky District; • sending the Company's vacancies to the Baykit Employment Centre to facilitate local employment. b) Scope 1, Scope 2 Strategically Important UN Sustainable p. 8–9 and Scope 3 greenhouse gas Development Goals emissions and associated Carbon Management Goals p. 50–51 3. Round table “Sustainable Development of Rosneft Group Subsidiary in the regions where it operates in 2018”, Igarka, risks and Approaches Turukhansky District, Krasnoyarsk Territory Achievement of Climate Goals in 2019 p. 56–58 Participants: the management of RN-Vankor, administration heads of the Turukhansky District and city of Igarka, representa- c) Targets used Achievement of Climate Goals in 2019 p. 56–58 tives of legislative bodies, educational, health, culture, and religious institutions, NGOs and contractors. by the Company to man- Managing Our Environmental Impacts Discussions of current issues, including: age climate-related risks p. 64–68 • increasing the the Company’s contribution to the project to create an ethnic theme park in the village of Sovetskaya and opportunities Rechka; and their consequences • RN-Vankor’s offer to join the programme to compensate travel costs financed by the municipal budget; • partnering with educational institutions to facilitate employment of graduates whose tuition was paid from the government budget; • streamlining food delivery to Igarka through opening a grocery store by a Company contractor.

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Participants: representatives of RN-Purneftegaz, the government and municipalities of the Yamalo-Nenets Autonomous Area, 4. Round table “Sustainable Development of Udmurtneft and the Udmurt Republic in 2018”, Izhevsk, Udmurt Republic indigenous peoples of the North and trade unions. Participants: representatives of Udmurtneft, executive bodies of the Udmurt Republic, local governments, educational Discussions of current issues, including: and social institutions, and the media. • financial support of the 75th WWII Victory anniversary celebrations and participation in campaigns to search for the arte- facts, relics and burials of war in the Yamalo-Nenets Autonomous Area; Discussions of current issues, including: • use of CCTV cameras on towers at remote fields; • Udmurtneft’s contribution to national environmental projects; • invitation for the Company to become part of the collective bodies of the Muravlenkovsky Multidisciplinary College • setting up a Rosneft Class in one of the villages in the Votkinsk District; branch management. • Udmurtneft’s contribution to upgrading the water supply system in the Karakulinsky District by financing the drafting of project documents to include the district in the federal Clean Water programme; • joint effort by Udmurtneft and the Republic’s authorities to repair the Malye Kalmashi-Vyatskoye road. 10. Round table “Sustainable Development of Rosneft Group Subsidiaries in the Ryazan Region in 2018”, Ryazan Participants: representatives of Ryazan Refinery, Ryazannefteprodukt, the government of the Ryazan Region, Ryazan 5. Round table “Sustainable Development of Rosneft Group Subsidiaries and the Irkutsk Region in 2018”, Irkutsk Regional Duma, Ryazan administration, educational institutions and supervisory bodies. Participants: representatives of Verkhnechonskneftegaz, Angarsk Petrochemical Company, Angarsk Polymer Plant, Discussions of current issues, including: Irkutsknefteprodukt, heads of regional administrations and city districts, regional authorities, dedicated supervisory agen- • brokering approvals between the Environmental Management Ministry of the Ryazan Region and Ryazan Refinery cies, EMERCOM, industrial and commercial companies, scientific, higher and vocational educational institutions, charitable in respect of the possibility and terms of using the Refinery’s ecology lab; NGOs, the Ethnocultural Centre and the media. • interaction with Ryazan Refinery on the matters of materials and equipment supply, adjustments to training programmes, and recruitment of the Kasimov Oil and Gas College graduates; Discussions of current issues, including: • equipment upgrades for related subjects at sponsored schools (Rosneft Classes), help with organisation and implemen- • arranging doctor visits to the Katangsky District; tation of school students’ individual projects; • construction and financing of an Ethnocultural Centre for the indigenous peoples of the North in Irkutsk; • Rosneft’s participation in establishing the Digital Education Centre. • public-private partnership programme to recycle municipal solid waste; • allocating funds to purchase seedlings for a park in Angarsk; • supporting the project to build a fitness centre in the Katangsky District. 11. Round table “Sustainable Development of Rosneft Group Subsidiaries and the Samara Region in 2018”, Samara Participants: representatives of Samaraneftegaz, SamaraNIPIneft, Kuibyshev Refinery, Syzran Refinery, Novokuibyshevsk 6. Round table “Sustainable Development of Rosneft Group Subsidiaries and the Khabarovsk Territory in 2018”, Petrochemical Company, Samaranefteprodukt, Samara Region government agencies, municipalities, business community, Komsomolsk-on-Amur, Khabarovsk Territory trade unions and educational institutions. Discussions of current issues, including: Participants: representatives of RN-Komsomolsk Refinery, the government of the Khabarovsk Territory, the administration • active participation of Rosneft Subsidiaries in the EcoLeader regional competition; of Komsomolsk-on-Amur, sports and cultural NGOs, the regional veterans organisation, children's rehabilitation centre, edu- • participation of Rosneft Subsidiaries in the implementation of national projects (Clean Volga programme); cational institutions, medical organisations, and the media. • changes in wages at the Samara Region's Rosneft Subsidiaries; Discussions of current issues, including: • Rosneft Subsidiaries’ participation in trade unions’ cross-industry events; • supporting instructors at Komsomolsk-on-Amur State University; • proposals on increasing the number of Rosneft Classes; • continued partnership to develop the city and regional infrastructure, including building a sidewalk from the Learning • supplementing the agreement between Rosneft and the Samara Region with a project to reconstruct the school Centre to the Komsomolsk Refinery as part of the project to repair pavement on Leningradskaya Street in 2021; in an urban district where the bulk of the population are employees of Syzran Refinery. • treating with anti-icing chemicals of pedestrian crossing at the Learning Centre in the autumn-winter season, cleaning the sidewalk along from the Learning Centre to the Komsomolsk Refinery. 12. Round table “Sustainable Development of Rosneft Group Subsidiaries and the Saratov Region in 2018”, Saratov

7. Round table “Sustainable Development of Rosneft Group Subsidiaries in the Krasnodar Territory in 2018”, Krasnodar Participants: representatives of Saratov Refinery, Saratovnefteprodukt, the government of the Saratov Region, regulatory bodies, municipalities, educational and healthcare institutions. Participants: representatives of Rosneft Group Subsidiaries, the government of the Krasnodar Territory, EMERCOM, Discussions of current issues, including: and administrative bodies of Krasnodar’s municipalities. • cooperation with the Rodnye Reki (Homeland Rivers) foundation on the Patriotism. Environment. Leadership project; Discussions of current issues, including: • employee and community safety; • improvement of inside premises across the retail network of filling stations; • help in implementing the HR standard for industrial economic growth of the Saratov Region’s Ministry of Employment, • interaction with local EMERCOM bodies in municipalities, consulting and awareness-raising work; Labour and Migration; • joint work on prevention initiatives to create precautions against theft of Subsidiaries’ production equipment. • sharing of the Group Subsidiaries’ experience in teaching safe work practices for their roll-out at other companies in the region. 8. Round table “Sustainable Development of Orenburgneft as a Rosneft Subsidiary and the Orenburg Region in 2018”, Orenburg 13. Round table “Sustainable Development of Rosneft-Stavropolye and RN-Stavropolneftegaz in the region where they operate in 2018”, Stavropol Participants: representatives of Orenburgneft, Orenburg Region authorities, supervisory bodies, Orenburg Region Union of Industrialists and Entrepreneurs, regional clinical hospital, municipal authorities, service providers and trade unions. Participants: representatives of Rosneft-Stavropolye, RN-Stavropolneftegaz, Stavropol Territory authorities, educational Discussions of current issues, including: and science institutions, business community and municipalities. • working meetings with the heads of municipalities on the salaries of the contractor and sub-contractor employees; Discussions of current issues, including: • participation in the regional APG utilisation programme and establishment of a coordination board featuring experts • improvement of service quality at the filling stations of Rosneft-Stavropolye; from the scientific community; • informing the region’s administration about capital investments and the planned investment projects; • arranging for the joint control of biological land restoration by Orenburgneft and the Krasnogvardeysky District • implementation of a railroad project to connect Budyonnovsk and Kochubey khutor; Administration; • contributions to boosting employment in select districts; • raising awareness of the local authorities about the Orenburgneft activities. • maintaining social support measures at the level of 2014–2015; • participation in new social projects of the Levokumsky Municipal District. 9. Round table “Sustainable Development of RN-Purneftegaz in the Yamalo-Nenets Autonomous Area in 2019”, Gubkinsky, Yamalo-Nenets Autonomous Area

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14. Round table “Sustainable Development of RN-Severnaya Neft and the region where it operates in 2018”, Usinsk, Komi Appendix 4. Abbreviations Republic Participants: representatives of RN-Severnaya Neft, Usinsk Urban District administration, educational institutions, war, labour and military veterans council, healthcare institutions and mass media. Discussions of current issues, including: • financial support of Usinsk; Rostechnadzor Federal Environmental, Industrial • employment at RN-Severnaya Neft for the indigenous and local population; and Nuclear Supervision Service • lectures for students of the Usinsk branch of Ukhta State Technical University; of Russia • training and competitions for the rescue unit of RN-Severnaya Neft hosted at Usinsk Polytechnic College. VHI Voluntary health insurance PPE Personal protective equipment 15. Round table “Sustainable Development of Rosneft Group Subsidiaries and the Khanty-Mansi Autonomous Area – Yugra in 2018”, Khanty-Mansiysk

Participants: representatives of RN-Yuganskneftegaz, Samotlorneftegaz, Varyeganneftegaz, RN-Nyaganneftegaz, regional

authorities, Duma of the Khanty-Mansi Autonomous Area – Yugra, regulatory bodies, business community, educational institutions, head offices of cities and districts, and mass media. Discussions of current issues, including: CNG Compressed natural gas • appointment of personnel by Rosneft Subsidiaries for interaction with the Yugra Development Foundation on the matters of localising suppliers’ production operations in the Khanty-Mansi Autonomous Area – Yugra; KPI Key performance indicators API American Petroleum Institute • full inventory of disturbed land by RN-Yuganskneftegaz jointly with the supervisory and regulatory service;

• additional focus on cardiovascular diseases in the process of recruitment and otherwise; FAR Fatal Accident Rate, the ratio • launch of Rosneft Classes in the Oktyabrsky District; ILO International Labour Organisation of the total number of the Company’s • arrangement of joint efforts with Rosneft Subsidiaries on retraining and professional development of employees work-related fatalities to 100 mln with higher education; ITUO Interregional Trade Union man-hours worked. • participation of RN-Yuganskneftegaz in the construction of a park in the town of Pyt-Yakh. Organisation IPIECA International Petroleum Industry SME Small and medium-sized enterprises Environmental Conservation Association 16. Round table “Sustainable Development of Rosneft Group Subsidiaries and the region where they operate in 2018”, IFRS International Financial Reporting Yuzhno-Sakhalinsk Standards ISO International Organisation for Standardisation Participants: representatives of RN-Sakhalinmorneftegaz, RN-Shelf Arktika, RN-Vostoknefteprodukt, RN-SakhalinNIPImorneft, EMERCOM Ministry of the Russian Federation Sakhalin Region executive bodies, non-profit environmental organisations and veteran organisations, educational and sci- for Civil Defence, Emergencies LTIF Lost Time Injury Frequency, ence institutions, clergy and culture establishments. and Elimination of Consequences number of lost-time work-re- Discussions of current issues, including: of Natural Disasters lated injuries (including fatali- • RN-SakhalinNIPImorneft's proposal to engage the public in the matters of design, development and operation ties) of the Company's employees R&D Research and development of the Vostochno-Pribrezhny and Deryuginsky licence areas; to 1 mln man-hours worked • conclusion of a cooperation agreement between the Civic Chamber of the Sakhalin Region and Group Subsidiaries SEC U.S. Securities and Exchange in the region; Commission • career guidance activities at all Sakhalin schools; • proposal for cooperation in establishing an animal rehabilitation centre; NPF Neftegarant Non-State Pension Fund Neftegarant • development of programmes to support traditional use of natural resources and economic activities. UN United Nations

OHS Occupational health and safety HSE Health, safety and environment APG Associated petroleum gas RAS Russian Academy of Sciences RSPP Russian Union of Industrialists and Entrepreneurs.

Rosprirodnadzor Federal Service for Supervision of Natural Resources

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Units of Measurement FOR NOTES

mln million bln billion trln trillion th. thousand t tonne tce tonne of coal equivalent toe tonne of oil equivalent kg kilogramme km kilometre sq m square metre cub m cubic metre ha hectare RUB rouble

CO2-equivalent, CO2-eq. Total emissions from various greenhouse gases and from an organisation as a whole on the basis of their global warming potential

Contact Details

Rosneft Oil Company, Public Joint-Stock Feedback: Company Feel free to address any queries in relation to the Company’s Sustainability Address: Report to the Social Development 26/1 Sofiyskaya Embankment, Moscow, and Corporate Culture Department. 117997, Russian Federation Email: [email protected]; Phone: [email protected] +7 499 517 7333

Email: [email protected]

Corporate website: Russian: www.rosneft.ru English: www.rosneft. com

230 SUSTAINABLE CLIMATE ENVIRONMENTAL OCCUPATIONAL EMERGENCY RISK DEVELOPMENT ACTION CONSERVATION HEALTH AND SAFETY MANAGEMENT

FOR NOTES