Sustainability Report 2014
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TABLE OF CONTENTS Message from the President and the Chairman Environmental Safety . 58 of the Management Board . 4 Development of the Environmental Management System . 58 Key Sustainability Performance Indicators . 6 Company’s Environmental Performance in 2014 . 66 About this Report . 11 Energy Consumption and Energy Efficiency . 76 Reporting Principles . 13 Personnel . 78 Reporting Boundaries . 13 Development of the HR Management System . 78 Company Performance . 14 Company’s HR Management Performance in 2014 . 80 The Company in 2014: General Information . 16 Society . 100 Rosneft 2030 Development Strategy . 18 Development of the Social Impact Management System . 100 Development of International Projects in Promising Company’s Social Performance in 2014 . 101 Oil and Gas Regions . 20 Independent Assurance Report Expansion of International Cooperation on the Sustainability Report 2014 . 110 for Offshore Projects Development . 21 Annex 1 Operating on the Russian Shelf . 21 Achievement of the Objectives for 2014 Set Import Substitution and Localization . 27 in the Sustainability Report 2013; Corporate Governance System . 28 Goals and Objectives for2015–2018 . 112 Shareholder Relations . 30 Achievement of the Objectives for 2014 Set in the Sustainability Report 2013 . 112 Investor Relations . 32 Goals and Objectives for 2015–2018 . 115 Sustainability Management . 33 Annex 2 Sustainability Policy . 33 Environmental Performance Targets through 2018 Development of the Compliance System . 34 and Results of 2014 . 117 Risk Management and Internal Control . 36 Company’s Targets in the Area of Land Protection and Remediation as well as Waste Treatment . 117 Risk Management . 36 Air Emissions Targets . 117 Internal Control . 39 Water Management Targets . 118 Stakeholder Engagement . 40 Annex 3 Public Hearings on the Results of the Environmental Key Sustainability Performance Indicators Impact Assessment of Planned Activities . 40 for Acquired Assets . 119 Roundtable meetings in the Key Regions of Operation . 41 Acquired assets of Weatherford Group in Russia Innovation Development . 44 and Orenburg Drilling Company LLC . 119 Cooperation with Leading Universities Acquired assets of Itera Group . 119 and International Cooperation . 46 Annex 4 Improvement of Sectoral Innovation Correspondence between this Report and GRI Management Standards . 47 Sustainability Reporting Guidelines . 120 Process Streamlining and Improvement . 47 Annex 5 Occupational Health and Safety . 48 List of Abbreviations . 140 Development of the Occupational Health and Safety Management System . 48 Company’s Occupational Health and Safety Performance in 2014 . 51 Rosneft Sustainability Report 2014 3 MESSAGE FROM THE PRESIDENT AND THE CHAIRMAN OF THE MANAGEMENT BOARD Despite the volatile macroeconomic and Rosneft aims to become the global tech- regard to environmental safety amongst socio-political climate, Rosneft recorded nology leader in the energy industry and the world’s leading oil and gas players high operational and financial perfor- is consistently implementing its innova- by 2030 . Rosneft works to reduce its mance results in 2014 . Today, Rosneft tive development program, including the negative environmental impacts through can rightly be called a global energy introduction of new technologies and the implementation of a number of corpo- player, with a balanced project portfolio upgrading of existing production pro- rate targeted programs . As a result of the and a clear vision for the Company’s cesses . Total funding for this innovation Investment Gas Program in 2014, associ- development . program was over RUB 170 bn in 2014; this ated gas utilization rate increased by 11 included RUB 33 .2 bn for research and percentage points, reaching 80 .8%1; Offshore projects, the development development, up 43% versus 2013 . this allowed for significantly reducing of the domestic market, particularly in pollutant and greenhouse gas emissions . Eastern Siberia and in the Far East, and Considering human life and health being exports diversification with focus on the the first priority, Rosneft recognizes its A high world-class level of corporate rapidly developing markets of the Asia- responsibility to ensure incident-free governance, information transparency Pacific Region, as well as enhancing the operations, safe working conditions and compliance with regulations and Company’s own resources to improve for company staff and contractors, and standards that are in line with state, business performance and reduce de- avoidance of harm to people’s health market and public requirements, remain pendence on contracting parties abroad, in those regions where the company a key priority for the Company . In 2014, including those in the oilfield services in- operates . In 2014, over 41 thousand Rosneftwas awarded a high rating in dustry, remain key priorities for Rosneft . occupational health and safety checks the corporate reporting transparency The discovery of the new Victory oil and were carried out in Rosneft subsidiary rankings for the largest international gas field on the Kara Sea shelf resulting companies; funding for the company’s companies, conducted by Transparency from drilling at the northernmost Arctic health and safety initiatives increased by International for the largest publicly trad- well Universitetskaya-1 was a significant 33% from 2013 . ed companies . Rosneft is committed to achievement for the company . internationally recognized principles and One of the Company’s strategic goals sustainability priorities, including those is to become a recognized leader with stipulated in the UN Global Compact . Message from the President 4 and the Chairman of the Management Board CONSIDERING HUMAN LIFE AND HEALTH BEING THE FIRST PRIORITY, ROSNEFT RECOGNIZES ITS RESPONSIBILITY TO ENSURE INCIDENT-FREE OPERATIONS, SAFE WORKING CONDITIONS FOR COmpANY STAFF AND CONTRACTORS, AND AVOIDANCE OF HARM TO PEOPLE’S HEALTH IN THOSE REGIONS WHERE THE COmpANY OPERATES. ONE OF THE COmpANY’S STRATEGIC GOALS IS TO BECOME A RECOGNIZED LEADER WITH REGARD TO ENVIRONMENTAL SAFETY AMONGST THE WORLD’S LEADING OIL AND GAS PLAYERS BY 2030. FROM YEAR TO YEAR, ROSNEFT the Russian Federation . The 2014 tax pay- Yours sincerely, MAINTAINS ITS POSITION AS ments totaled RUB 3 1. tn, 213 bn of which Igor Sechin ONE OF THE LARGEST EmpLOY- was transferred into regional budgets . President and the Chairman ERS IN RUSSIA. of the Management Board, Rosneft 2030 strategy aims to ensure Rosneft By the end of 2014, the number of Ros- that the Company achieves a leading po- neft employees reached 243 thousand2 . sition in such business areas as offshore The average monthly salary across the projects, the production of unconven- company increased by 8% to RUB 65 tional types of hydrocarbons and the thousand in 2014; being traditionally monetization of oil and gas on the global higher than the average salary in most of market . I am confident that Rosneft the regions where our subsidiaries oper- responsible approach to sustainability ate . Rosneft is aware of its responsibili- should enable the Company to reach its ties as one of the leading companies in goals and objectives . Russian economy and continues to work on vital social projects and initiatives in those regions where the Company oper- ates . This type of work efforts contributes both to creating favorable economic, legal and organizational conditions for Rosneft business and to the integrated development of the constituent entities of the Russian Federation regions Total. expenditure on social partnership ac- tivities, including regional social invest- 1 Hereinafter data and plans on associated petroleum gas recovery and use relate to Russian assets of the ments and charity, reached RUB 29 .8 bn Company . in 2014 . Rosneft is the largest taxpayer in 2 Hereinafter personnel data are listed according to the Company’s centralized business planning boundaries in 2014, unless otherwise stated . By 2014 year end, total workforce including Tomskneft VNK OJSC reached 247 (+4) thousand persons . The headcount for subsidiaries consolidated in accordance with IFRS by 2014 year-end was 248 .9 thousand . Rosneft Sustainability Report 2014 5 KEY SUSTAINABILITY PERFORMANCE INDICATORS OPERATING AND ECONOMIC PERFORMANCE INDICATORS3, 4 Indicator 20125 2013 2014 SEC proven oil, gas condensate, and liquid hydrocarbon reserves, mmt 1,999 3,398 3,432 SEC proven gas reserves6, bscm 753 1,329 1,414 Oil and gas condensate production, mmt 122 .0 189 .27 204 .9 Gas production, bscm 16 .4 38 .28 56 .7 Hydrocarbon production, mboe 989 1,622 1,864 Oil processing, mmt 61 .6 90 1. 99 .8 Output of petroleum products and petrochemicals, mmt 59 .6 87 1. 97 1. Assets at the year-end, RUB bn 3,971 7,531 8,736 Total revenues and equity share in profits of joint ventures and associates, RUB bn 3,089 4,694 5,503 Total equity, RUB bn 2,322 3,169 2,881 Current and non-current liabilities, RUB bn 1,649 4,362 5,855 Dividends declared (including minority shareholders), RUB bn 719 85 136 GENERATED AND DISTRIBUTED DIRECT ECONOMIC VALUE, RUB BN10 Indicator 2012 2013 2014 Generated direct economic value Revenues 3,102 4,736 6,023 Distributed economic value Operating costs 923 1,197 1,390 Employee wages and benefits 94 178 221 Payments to providers of capital 86 57 192 Payments to governments 1,625 2,45711 2,968 Community investments 7 .6 7 .6 8 .0 Retained economic value 366 84012 1,244 3 According to IFRS, unless stated otherwise . 4 Data for 2013 on assets at the year-end, total equity, as well