1 Gazprom Neft PJSC Financial and Operating Results in 12M and Q4

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Financial and Operating Results in 12M and Q4 2020 18 February 2021

Anna Sidorkina, Head of Investor Relations Good afternoon, ladies and gentlemen. We are pleased to welcome you to our quarterly conference call devoted to the business results of Gazprom Neft in 2020. Allow me to present the participants of today's call. Alexey Yankevich, Management Board member and CFO, will be commenting on our financial statements. Igor Shkirov, Head of Planning, Efficiency and Data Management for Upstream, will talk about work in the Upstream Division. Then Alexey Urusov, Head of Economics and Corporate Planning for Downstream, will tell you what has been happening in Logistics, Refining and Marketing. We will be joined by Sergey Vakulenko, Head of the Strategy and Innovation Department, and colleagues from other relevant departments for the Q&A session. Before beginning the presentation, I should remind you that that all comments on the presentation and all statements that are made during the conference call may and will contain forward-looking statements regarding the financial situation and results of the business of Gazprom Neft. All statements, except for statements about past facts, are or may be regarded as forward-looking statements. Forward-looking statements are statements of future expectations based on the current situation and the assumptions of management and may involve known and unknown risks and uncertainties that could cause actual results, indicators and events to differ materially from those contained or implied in today's conference call. Thank you very much. Alexey Yankevich will be the first speaker. Alexey Yankevich, Member of the Management Board and CFO Good afternoon, ladies and gentlemen. Undeniably, 2020 was a very unusual and difficult year. As a responsible company that shares the values of ESG, we would like to start with a summary of the measures we took to combat the spread of the COVID-19 pandemic. We believe that we rose to the challenge of the pandemic and were largely successful in compensating the negative effects that may have arisen from it. Firstly, we succeeded in protecting our employees and contractors and in preventing flare-ups of the disease and production shutdowns. We organized mass testing (more than a million tests) for this purpose, we set up buffer terminals, regulated access to shifts and carried out other actions. We have now progressed to the next stage, that of vaccination. We are working towards collective immunity and we expect the company to gradually return to business as usual. Secondly, we have been helping in regions where we have presence, and helping medical personnel and volunteers. Active assistance was provided on behalf of the company, and personally by employees and managers. Personal contributions were collected in order to help medical personnel and hospitals at the peak of the epidemic, so we have been doing what we could in the fight against coronavirus. Gazprom Neft really has put strong emphasis on ESG, and this is evident in other matters as well as our efforts to fight the coronavirus infection. We have been paying a lot of attention to issues of ecology and the climate agenda. These aspects are under the special control of our CEO, and we are seeing first results of the intensive work that we have carried out in this direction. In 2020, we joined the UN Global Compact and we also made significant improvements to the quality of our ESG reporting and disclosure. As a result, we obtained a high rating (level B) from of the large and reputable CDP (Carbon Disclosure Project), which rates companies based on their work in the sphere of ecology and climate. Let's move on now to quantitative results. We have set ourselves a goal of zero harm to our employees, partners, the environment and property in the course of our industrial work. This is an ambitious goal and tough to meet. We came through 2020 with 1

zero deaths ,which certainly is not something to be specially proud of, but, nevertheless, given the huge scale of our business, the fact that we have not had any fatalities is a very good indicator. As for financial indicators, comparisons with 2019 are hard to make. It is fair to say that, for the whole of the oil industry, there is a division between how things were before and how they were after. All the same, we think that we showed decent results. Adjusted EBITDA was RUB 485 billion. Net profit was 118 billion rubles, and it is important that our company compared well with its peers in the Russian and global industry by the speed with which we went back into positive territory from the second quarter, then obtaining net profit and increasing it consecutively from the second to the fourth quarters. So the third quarter was better than the second, and the fourth was better than the third. Full-year net profit of Gazprom Neft was RUB 118 billion. These results meant that we were able to declare and pay interim dividends. We said that we would not give up interim dividends, even in the midst of the crisis. We announced and paid dividends of 5 rubles per share for nine months of 2020 – not a very large amount, but a decent sum based on the share price and in comparison with interim dividends of competitors. Some of our competitors did not pay interim dividends at all. But we did, and our performance relative to other companies is attractive. As to operating indicators, our hydrocarbon production remained practically at the level of 2019, mainly due to the growth in gas production. Production of liquid hydrocarbons decreased because were working under the OPEC restrictions. Refining volumes were determined by the economy and by market conditions: we refined just as much oil as the economy permitted us to do while staying in positive territory, and just as much as the market could take at that time. Thank you, I will hand over to Igor Shkirov. Igor Shkirov, Head of the Planning, Efficiency and Data Management Department, Upstream Good afternoon. Looking at quarterly results for oil production in 2020, you can see that the third quarter was the toughest, because it was when the main restrictions were in force. From August, OPEC moved to the second stage of its deal, relaxing the restrictions by about 2 million barrels per day, which, naturally, was reflected in growth of our production in the fourth quarter, both at subsidiaries and in joint operations and joint ventures. This factor, coupled with high production in the first quarter and growth of gas production, meant that we were able to maintain total hydrocarbon production at the level of 2019. The increase in the share of gas in total production was made possible by commissioning of a compressor station at the Urmano-Archinskoye field at the end of 2019, and also by steps to increase productivity of our gas infrastructure port and higher production levels at Arcticgas. As regards the structure of production by assets, output at new fields (the Otdalennaya group of fields, Zima, Novy Port, oil rims) increased by 15%, which partially made up for declining production at mature assets. Unit operating costs in the Russian Federation were down by 5% y-o-y. The decline at mature assets was due to large-scale optimization measures and shutdown of wells with high water cut. Increase of production reduced unit costs at new fields. The slight increase of ruble operating costs at foreign assets is explained by weakening of the ruble in a context of natural decline in production. Let me say more about new projects. We substantially increased recoverable reserves at the Zima project in 2020. We drilled 70 wells and increased annual hydrocarbon production to 1.2 million tonnes of oil equivalent. We are also working hard to build infrastructure facilities, drilling work is continuing in order to further increase production and, of course, we are focusing on efficiency improvements. For example, cumulative production from wells increased by 15% over the past year and investments per ton of produced hydrocarbons are falling. Drilling is going ahead at the Otdalennaya group of fields. Production growth there in 2020 was 34% and prospecting wells that have been drilled as part of the project are also showing good production rates, which offers a good basis for further development at Otdalennaya. In the oil rim project, we started production at the Chayandinskoye field and there were substantial production increases at the Pestsovoye, Yen-Yakhinskoye and Zapadno-Tarkosalinskoye fields thanks to launch of mobile oil treatment units. Hydrocarbon production in 2020 was in excess of 1.6 million tonnes of oil equivalent.

We have a systematic approach to partnerships and diversification of our portfolio. One good example of this is a joint exploration venture that we set up with Shell in 2020 on the Gydan Peninsula. We are using the same strategy of seeking and establishing partnerships for the large-scale Tazovsky project, which will have a production peak of up to 8 million tons of oil equivalent in 2024 following the start of commercial operation in 2021. The field should produce 3.3 million tons of oil equivalent in 2021. Thank you. Alexey Urusov will be the next speaker. Alexey Urusov, Head of the Economics and Corporate Planning Directorate Good afternoon, colleagues. I will give you an overview of our work in the Downstream Division during 2020. Refining netback increased slightly in the fourth quarter, but record-low crack spreads mean that refining netback has remained below netback for oil exports. We also need to notice atypical reduction of the spread between Brent and Urals which went so far as to make Urals more expensive than Brent. That also affected results for oil refining. Our refining efficiency depends on the domestic premium market and secure channels for sale of petroleum products. Refining volumes in 2020 were down by 2.6% due to reduced demand for fuel during the pandemic, although refining volumes at the Pancevo Refinery grew year-on-year due to repair work in 2019. There was a major increase of refining depth and light product yield in 2020 thanks modernization of our refineries and work to improve efficiency and end-product margins. Successful completion of refurbishment work on refining units, carried out in 2019, also has an impact on refining performance. The Company increased its market share in almost all premium market segments during 2020. Slight decline of market share in the jet fuel segment was due to optimization of the product sales structure. Gazprom Neft reallocated jet fuel supplies from small-scale wholesale to large-scale wholesale in response to aggressive pricing policy by competitors in Moscow region, and this was achieved without reducing margin. Significant events during the fourth quarter in the jet fuel segment included the launch of into-wing refuelling of aircraft operating regular flights at Baikal international airport in the city of Ulan-Ude. In bunkering business, MARPOL rules on environment-friendly marine fuels came into force in 2020. A hybrid marine fuel with low sulfur content, developed by our Company, is now our main environment-friendly product in the segment and it has already enabled us to take 22% of the low-sulfur fuel market in Russia. Gazpromneft-Lubricants won another victory in competition to supply first-fill lubricants, becoming supplier to the conveyor belt of HYUNDAI, the largest manufacturer of foreign cars in Russia. In the bitumen segment, Gazprom Neft was the leading Russian producer of premium bitumen with supply volume above one million tons. In the motor fuel segment, we are continuing to introduce digital and energy-efficient technologies at Company filling stations. We told you before about commissioning of a solar-powered power plant, the AZS.GO online application for payment for fuel at filling stations and other developments. The Company has also launched a project for self-service checkouts at filling stations, enabling customers to pay for food and drink and related products independently. By the end of 2020 all of the Company's filling stations in ownership had been equipped with self-service fuelling, which reduces operating costs and downtime at filling stations, increasing effective working time. Gazprom Neft is the strong leader in Russia by average daily sales per filling station, with a figure of 17 tons per day. Russia’s first LNG bunkering vessel was launched in December 2020 for refuelling of cargo and passenger ships with liquefied natural gas using ship-to-ship technology. The new vessel will join the Gazprom Neft fleet in the second half of 2021 and will provide transportation and bunkering of low-tonnage LNG fuel in ports in the Gulf of Finland and the Baltic Sea (St. Petersburg, Ust-Luga and Primorsk). The new vessel incorporates the latest shipbuilding technologies, and technologies for the storage and transportation of liquefied gas. Its equipment meets the requirements of the International MARPOL Convention and is certified to the ECO-S environmental standard. The vessel is designed with zero-discharge principles in mind, and its power plant uses gas and LNG as fuel. The Deep Refining Complex was launched at the Pancevo Refinery in November 2020 representing an investment of 300 million euros. The new complex can increase annual production of gasoline by 2%, of Euro- 3

5 diesel fuel by 38% and of liquefied petroleum gas by 7%. After launch of the Complex, the Pancevo Refinery will halt production of fuel oil and reduce its environmental impact. Commissioning of the new facility will also enable Pancevo to start producing petroleum coke, which is in strong demand from the metallurgy and construction industries and for which Serbia was previously reliant on imports. Petroleum coke output from the Pancevo Refinery will fully meet the needs of the Serbian market and leave a surplus for export to other countries in the Balkan region. Further, the Company's technology center has designed and patented a technology for the construction of asphalt-concrete roads using local materials. Pilot tests in Khanty-Mansi and Yamalo-Nenets Districts have proved applicability of the technology for the construction of high-quality roads at oil and gas fields, with reduction of construction costs. The possibility of using drill cuttings as a building material is also being studied. This will reduce costs of disposing of cuttings. This is a versatile technology that could be profitably applied beyond oil and gas fields, in other spheres of industrial civil engineering.

Alexey Yankevich, Member of the Management Board and CFO Ladies and gentlemen, allow me to continue what I had to say about our financial performance in 2020. As regards net profit and EBITDA, I would say once again that we are pleased with the way net profit has developed. The company has been showing a net profit since the second quarter, and our net profit in the fourth quarter was close to the pre-crisis level if we recalculate for the year (because the fourth quarter is traditionally a bit worse than the average for the second and third quarters due to seasonality). As for dynamics compared to last year, let's take a look at factor analysis. The main impact on adjusted EBITDA year-on-year was from prices, which accounted for 295 billion rubles. Also, our production capacity and EBITDA dynamics were affected by OPEC restrictions. We have started to accrue tax on additional income for Novy Port, which was expected. We tried to compensate impact from the negative environment to the greatest possible extent and the increase of operating profit by 45 billion rubles was due to the company's response to the crisis, cost optimization, and optimal management of well stock in the context of OPEC restrictions. All of these factors together meant that we increased operating profit by 45 billion rubles in comparable terms,. Regarding quarterly operating profit trends, the fourth quarter is traditionally worse than the third due to seasonality. We saw a rebound and good profitability in the refining segment in the third quarter. Refining margin declined in the fourth quarter, reflecting the growth in oil prices. A number of one-off factors were also at play, notably repairs, which also influenced the quarterly trend. But the fourth quarter turned out better than the previous quarter overall. Turning now to investments, we set ourselves the task of optimizing capital investments to the greatest possible extent in order to reduce impact on cash flows. We significantly optimized investments in our older assets and in downstream. But we tried to maintain all of the projects that remain profitable for us even when prices are lower. We tested all our projects at prices lower than those we have today (USD 40-45 per barrel). We tried to keep projects that were sustainable, because they offer added value and the opportunity for cash flow growth in the future, and closure of these projects would have negative impact on Company value. So we tried to implement a balanced approach. It is important that our base plan was for creation of a joint venture for Meretoyakha. We were not intending to finance this project ourselves. But, as you know, the scheduled closing of the deal coincided with the middle of the crisis, so the partnership was postponed. We have now resumed work to find a partner. Constructive, intensive negotiations are underway and we believe that we will find a partner and move on to our target scheme for implementing this project. Without the self-financing effect, the reduction in capital investments will be about 11%. We also had a net effect from purchase and sale of assets. Sale of assets exceeded purchases and gave us an additional 14 billion rubles, so net investments in the year were 400 billion rubles. We were targeting a figure of 370-380 billion rubles, but you should understand that that was in the summer and autumn, before we saw that the market situation was improving and that it would be better not to postpone profitable projects in order not to lose value. There were intensive discussions regarding a number of projects. For example, the project for production of base oils in second and third groups looked questionable, but we felt that the situation

was improving and that we could afford to finance a project that created additional value, so we let the project go forward. All this work taken together gave us positive free and net cash flow and we are feeling very confident as regards financial stability. We have relatively low net debt/EBITDA and our current liquidity is high. So we think that we have achieved a good balance between maintaining financial stability through the crisis and continuing to implement those projects that are beneficial for us and create added value, even in the context of fairly conservative price forecasts and of OPEC restrictions. We also feel comfortable as regards the debt repayment profile, because the share of short-term debt is small. We are trying to increase the average debt maturity, we have reduced the interest rate, and average cost of debt is 5.13%, which is a good figure. Our financial stability has been confirmed by rating agencies, which have kept our ratings at investment level with stable outlook. Finally a few words about an important corporate event – the approval of a new dividend policy. We were often asked – are you going to update your dividend policy and officially fix the payout ratio at 50%? We said then that this is not something that we absolutely must do, because we always keep our promises even without having them set down in a document. But the fact that we have now set this down in a document confirms once again our commitment to increasing profitability for investors. It confirms that this matters to us, and we wanted to do all we can to reaffirm to investors that we are maintaining our dividend obligations and the benchmarks that we have talked about are mandatory. We have established a payout ratio of 50% of adjusted IFRS net income and are continuing our practice of paying interim dividends. Thank you all for listening. We are ready to answer your questions.

Question 1

Alexander Burgansky, Renaissance Capital Hello. Thank you very much for the presentation. I have three questions. First question: could you please state what the adjusted net income for 2020 will be for calculating dividends? Second question: could you please tell us your plans for production and capital expenditures in 2021? Third question: given the increased tax burden on Gazprom Neft in 2021, how committed are you to positive free cash flow in 2021? Is that a goal for you this year, or can you afford to dip into negative territory in order to carry out your investment program? Thank you.

Alexey Yankevich, Member of the Management Board and CFO

Good evening, Alexander, and thanks for your questions. The first question was how net income will be calculated for purposes of 2020 dividends. Firstly, we certainly will not adjust net profit into negative territory. Most probably, there will be a repeat of the adjustments we made for nine-month dividends (excluding one-off impairments), which were typical for the whole industry. But the decision has not yet been made and it will depend on how we see the market. We want to be competitive and better than our competitors. The net profit figure is only the starting point, the final decision has yet to be made. I can say for sure that adjusted net profit will be no less than what you see in the financial statements. Most likely, it will be more, at least for the items that we have adjusted for the nine-month results. We have often used a target percentage to set dividend payments from net profit, but this year all companies will make some adjustments, because the fluctuations were very substantial. The next question was about production and capital investment trends. The answer is simple: we expect capital expenditures to be around the level of 2020. The investment program is reviewed every quarter, so it will be close to the 2020 level, plus or minus. As for production, we have some opportunities for increasing production, but everything will depend on the quota and what the restrictions will be. We hope that market recovery will bring additional quotas and additional opportunities. But we are ready for any scenario, we have flexibility, so everything will depend on what OPEC does. The third question was about free cash flow. Of course, positive free cash flow is the goal we aim for. But we do not mean to achieve this goal at any cost. There is some room for compromise between good, 5

profitable projects and free cash flow, because we can see that our financial stability permits it. And debt/EBITDA is at a comfortable level. Overall, though, positive free cash flow is our goal.

Question 2

Ronald Smith, BCS

If I understood correctly, Gazprom Neft has recently transferred many fields to the tax-on-additional- income regime. Could you elaborate a little more on your overall taxation strategy, taking into account the changes that happened last autumn. To what extent are the tax regime and changes to the tax regime important for your plans to develop Achimov deposits?

Alexey Yankevich, Member of the Management Board and CFO Thank you very much for your questions. As regards the overall strategy for tax on additional income, we have always said that tax on additional income is a good and promising system. It works well for all fields, except those where the gas ratio is too high. The possibility of quitting tax on additional income when the gas- oil ratio grew was built into the system when it was introduced and this defines our strategy – to switch to tax on additional income wherever we have the possibility of doing so. At present mature fields (more than 20 areas) are being transferred to tax on additional income, with the exception of Muravlenkovskoye, where the gas-oil ratio is high. The Messoyakha field group (Vostochno-Messoyakhskoye field), where the export duty exemption has been cancelled, has also been transferred to tax on additional income. Of course, it is important for us to obtain tax advantages for Achimov deposits, because they are the reserves of the future and we understand that Achimov are not the cheapest reserves to develop. So here everything will depend on how the market develops, what the OPEC restrictions will be and what our opportunities will be in the future. Therefore I would say that, yes, the tax regime is important, but it is not the most important thing. Time is an important factor here because, although Achimov is a strategic project for us, there is much uncertainty and major technological challenges, so we are moving forward with care. We believe that development of Achimov formations will be successful for us and we are doing what we can to ensure that they will, but there are several other new projects where the guarantees are better.

Question 3

Evgenia Dyshlyuk, Gazprombank Good afternoon, colleagues. I would like to clarify what the size of capital investments in refining will be, because some reduction was expected there. My second question is more extensive, It is about the upstream business. If the OPEC+ restrictions are relaxed in the future, what priority projects in upstream will ensure growth of Gazprom Neft production over the next two to three years, ranked in order of priority? Are there any investment projects in the Arctic in the longer term? Rosneft is planning to create a large cluster there. Thank you.

Alexey Yankevich, Member of the Management Board and CFO Thank you very much for your questions, Evgenia. As regards capital investments, we had planned some reduction in 2021, but taking into account the fact that we postponed some projects due to capex optimization in 2020, we now expect the level to be about the same. There is a lot of work going on this year to complete modernization of the Omsk Refinery. The modernization there is on a much larger scale than the facilities that we built at the Moscow Refinery, because it involves more units. The Omsk Refinery will have changed significantly by next year. Its performance will improve radically and will be as good as a high-quality European refinery in terms of product complexity – by 2022 it will be complete, up to date and close to the best industry standards. This defines the capital expenditure trend. There will be some downward adjustment of the investment program after we complete the Omsk Refinery.

Igor Shkirov, Head of the Planning, Efficiency and Data Management Department, Upstream

In a lot of ways, the projects that we view as promising and that will give us production growth have been listed in today's presentation. We see much potential for the Zima project. We have good results from exploration work at the Otdalennaya group of fields. And the Tazov field and oil rims are also important: they have major growth potential this year, so they are also a point of growth for us.

Alexey Yankevich, Member of the Management Board and CFO We do not have a grand plan for new Arctic projects. We have quite a good gas monetization and gas utilization project at the Novoportovskoye field, which should be launched in late 2021-early 2022. Once the infrastructure for gas monetization has been installed there, opportunities will immediately be created for development of satellite fields in the vicinity. Development of other fields is hampered at present by the large gas factor and lack of ways of utilizing and monetizing gas. Regarding the distant future and prospects, our Yenisei project for development of the Leskinsky area, can also be called an Arctic project to some extent. It is a promising exploration project with major geological uncertainties. Shell came into the project with us – we have set up a joint venture together to develop the site. We hope that work by the joint venture will lead to a discovery. These are our plans for the Arctic that we can tell you about. Achimov deposits are also in that region and they are a strategic project for the future.

Question 4

Anna Kotelnikova, Sberbank CIB Good evening. Thank you very much for your presentation. I have two clarifying questions. You talked before about the Zima project, but could you also tell us when you expect full launch of the project? What will production levels be at launch and at the plateau? When do you expect completion of construction and launch of the gas pipeline in Yamal, at the Novoportovskoye field? Thank you.

Igor Shkirov, Head of the Planning, Efficiency and Data Management Department, Upstream We expect the gas pipeline to be launched at the Novy Port field in late 2021 - early 2022. We see great opportunities for the Zima project. Geological exploration is now underway. We expect production growth at least up to 2023, but we will not reach a shelf in excess of 5 million tons before 2023 inclusive.

Question 5

Alexander Burgansky, Renaissance Capital I have a follow-up question about one of your previous answers. You said that almost 20 licensed areas have been converted to tax on additional income. Could you give us the approximate total volume of oil production covered by these licenses? Thank you.

Alexey Yankevich, Member of the Management Board and CFO There are a lot of areas, I cannot give the figure straight away, but it is a considerable amount. We will send it to you separately.

Anna Sidorkina, Head of Investor Relations A big thank you to everyone who has taken part in our conference call – thanks for listening and contributing. If you have any further questions, we will be happy to answer them. Have a nice evening!