ENVIRONMENTAL REPORT

02 01 03 Contents OF “SURGUTNEFTEGAS” PJSC DIRECTORFIRST DEPUTY GENERAL MESSAGE FROM ANATOLY S. ACTIVITY ENVIRONMENTAL OF THE COMPANY'S KEY AREAS ACTIVITY ENVIRONMENTAL SAFETY ENVIRONMENTAL Key areas environmental activity and key areas ofthe Company's The Ecology national project Air protection Dehydration ofoil with an internal coating Use ofpipeproducts Pipeline inhibitor protection and diagnostics Field pipelinecorrosion monitoring ofpipe products Receipt inspection Accident riskmitigation measures the best available technologies The Company's readiness to adopt of the Ecology program

NURYAEV,

20 17 16 15 14 13 12 9 7 6 04 MANAGEMENT OF ENVIRONMENTAL IN THE FIELD DOCUMENTS BASIC STRATEGIC of management and otherterritories withspecialmode natural reservations ofspeciallyprotected and support Biodiversity conservation environmental monitoring In-house of an environmental impact Indicators Forest protection and rational useofland Protection Waste management of water resources Protection andrational use peoples ofthe North with the small-numbered indigenous Policy oninteraction The Company's responsibilities Environmental policy and media Cooperation withpublicorganizations of employees and professional training Environmental education The “green office” principles environmental control Industrial of environmental protection inthe field R&D activities indigenous peoplesofthe North withthe small-numberedInteraction

40 38 35 34 30 26 24 56 55 54 50 48 47 46 45 44

“Surgutneftegas” PJSC 2 Environmental report 2018 “Surgutneftegas” First DirectorGeneral Deputy ANATOLYS. NURYAEV PJSC For the period from 2018 to 2024, at resource saving and energy efficiency. the Ecology national project has become For the last five years, “Surgutneftegas” PJSC one of the priority development vectors for investments in environmental activity the Russian Federation. Its objectives and aims exceeded RUB 92 billion. align with the regulations of the Environmental The Company understands policy of “Surgutneftegas” PJSC. For almost the importance of maintaining balance, 30 years, the Company has successfully been providing not only an economic performance implementing the comprehensive measures of “Surgutneftegas” PJSC operations, but also

of the Ecology corporate program, closely the reliability and environmental friendliness PJSC “Surgutneftegas” following the requirements of environmental of all production processes as well as legislation. the social responsibility of the business. “Surgutneftegas” PJSC is the all-time The Company develops an effective leader of Russian fuel and energy complex collaboration with various public institutions. in terms of utilization of associated petroleum Thanks to our combined efforts a solid gas. As far back as ten years ago, the Company foundation is laid for the further sustainable reached the level of 95% in terms of efficient development of Surgutneftegas and utilization of associated petroleum gas. territories of the Company’s operations. Since 2012 to the present day, Surgutneftegas The Company is engaged in has been holding the record in the sector – a constructive dialog with the indigenous more than 99%. people representing the small-numbered The Company ensures environmental peoples of the North, who revere customs safety of field pipelines: for the fifth year, it has and the way of life of their ancestors, been operating its own in-house specialized engaging in deer herding and other enterprise for application of an internal traditional industries. Surgutneftegas cares polymer coating on pipes and pipeline about biodiversity conservation, performs fittings. At the end of 2024, the Company an extensive work to artificially restore will use only pipelines with an internal anti- aquatic biological resources and forests. corrosion coating. The Company shows a high level The Company continues to develop and of information transparency in the issues move forward: it tests and implements the best of environmental responsibility. available technologies, new machinery, “Surgutneftegas” PJSC uses resources equipment, improves the competences in the most efficient way, minimizes its of its personnel. In all areas of its operations environmental impact in order to preserve the Company steadily mitigates a negative the unique natural heritage of Russia for environmental impact of production aiming future generations.

3 01 Key areas of the Company's environmental activity

6 Environmental report 2018 “Integrated system for municipalwaste air”,water”, “Clean preservation”, “Forests 11 areas, including “Clean country”, “Fresh for upto the period 2024”. The covers project the development ofthe RussianFederation “On thenational goalsandstrategic tasksof Vladimir Putin, dated 7May 2018 the President ofthe RussianFederation, implemented pursuant to Decree of environmental activity and key areas ofthe Company’s The Ecology national project The Ecology national is project standards ofecological well-being. ofRussia we must territory ensure the highest Throughout the entire Vladimir V.Vladimir Putin, President ofthe Russian Federation resource saving anda consistent of reduction the Ecology corporate program provides protection. The implementation of attention to the issuesofenvironmental ecological tourism development”, etc. classes I-II)”, and“Biodiversity conservation hazardous waste management (hazard management”, for“Infrastructure especially the environmental ofproduction. impact “Surgutneftegas”

PJSC pays close Key areas of the Ecology program:

construction of environmental facilities, 6 centers for oily soil decontamination; including air protection facilities, waste decontamination and utilization facilities; 3 centers for sludge decontamination with sludge storage ponds, units for oily air protection; fluid recovery and Heater-Treater three- phase separators; protection and rational use of water resources; 5 mobile units for tank cleaning and initial oil sludge treatment, including three- industrial waste decontamination and phase centrifuges; utilization; 33 single- and multiple- cell sludge PJSC “Surgutneftegas” protection and rational use of land; storage ponds with a total capacity of 81 thousand cubic meters; monitoring of environmental components and control of production 10 units for thermal oil sludge facilities operation; decontamination with a total capacity of 70 thousand cubic meters per year; ensuring environmental safety of oil production facilities, including 5 landfills for disposal of solid household pipelines; and industrial wastes designed to dispose of production and consumption environmental training and education of waste with a total capacity of the personnel; 1,671 thousand cubic meters;

implementation of the “green office” 21 Forsazh mobile units for thermal principles in each administrative building decontamination of solid oily waste with of “Surgutneftegas” PJSC; a total capacity of 15.75 thousand tonnes per year; biodiversity conservation in the areas of the Company’s operations; units for shredding waste paper and non-returnable plastic containers with R&D activities in the field of a capacity of 1,150 kilograms per hour environmental protection. and 50 kilograms per hour respectively;

The Company annually increases a tire recycling plant for recycling worn- its production resource saving capacity, out tires and inner tubes with a capacity and owns a vast fleet of machinery and of 5 thousand tonnes per year; equipment, including: a workshop for application of an anti- gas processing plant; corrosion coating on pipes and pipeline fittings with a capacity of 720 kilometers 23 gas turbine power plants and 7 gas of pipes and 15 thousand fittings per year. reciprocating engine power plants (GTPP, GREPP); A high level of environmental safety of “Surgutneftegas” PJSC production across 31 compressor stations; the whole territory of the Company’s operations, including new regions of operations is ensured 2 gas processing units for utilization of by a sustainable financing of environmental associated petroleum gas (APG); protection measures. The annual costs of the Company for 112 initial water separation units (IWSUs); environmental protection are made up of 7 8 Environmental report 2018 in 2018 Investments inenvironmental protection measures their consequences, airprotection, industrial and oilcontamination, andelimination of from corrosion, preventing equipment failures protecting oilfieldequipment andfacilities those ofrepairing andreplacing pipelines, a number ofdifferent expenses, including BY INVESTMENTS IN ENVIRONMENTAL PROTECTION MEASURES Total costs ofmeasures and certification training, specialisttraining environmentaland services, R&D andotheractivities Air protection Monitoring Sludge pitsreclamation facilities of production consequences, reconstruction of oilcontamination Prevention andelimination decontamination wastewater utilization and wastes and Industrial Pipeline accident prevention environmental facilities of Construction

“SURGUTNEFTEGAS” Measures 48.8% 4.3% 13.7% PJSC FOR 2014-2019, RUB MN 18,578.50 27.7% 1,487.13 7,333.30 4,981.09 4,100.43 131.64 360.15 93.78 90.98 2014 17,892.77 1,293.76 6,457.79 4,306.14 5,078.51 110.11 104.37 143.19 398.90 2015 RUB 0.5billion. the costs are plannedto beincreased by the costs reached2019, RUB17.4billion.In year, the reporting In and R&Dactivities. land reclamation, environmental monitoring wastewater utilization, waste management, 17,733.77 1,183.44 6,370.34 5,193.77 4,010.00 200.91 189.03 487.86 98.42 2016 1.1% 0.6% 1.5% 2.3% 4.3% 48.8% 27.7% 13.7%

21,106.10 1,083.96 9,330.36 5,078.22 4,566.71 263.02 249.93 441.17 92.73 2017 training andcertification environmental training, specialist andservices, R&D andotheractivities Air protection Monitoring Sludge pitsreclamation reconstruction facilities ofproduction contamination consequences, Prevention andelimination ofoil utilization anddecontamination wastes andwastewaterIndustrial Pipeline accident prevention facilities ofenvironmentalConstruction 17,402.58 8,493.88 4,814.70 2,382.55 750.93 189.75 105.99 268.64 396.14 2018 17,890.23 8,007.65 4,925.87 2,536.36 (as planned) 898.54 346.07 287.46 792.97 95.31 2019 The Company’s readiness to adopt the best available technologies

Since 2018, there has been an environmental reform in Russia. Adoption of the best available technologies (BAT) is a strategic task, determined by the Government of the Russian Federation in the field of environmental protection. “Surgutneftegas” PJSC in a timely manner started to solve

vital environmental protection problems in accordance with PJSC “Surgutneftegas” the new normative acts and the new requirements, which depend on the volume of a negative impact.

At the end of 2017, all facilities, The requirements on new comprehensive technologies and equipment of the Company and declared approval environmental were evaluated for their compliance with protection documents on companies’ the principles of BAT. Registration of facilities, business activities became effective in that have a negative environmental impact, the Russian Federation on 1 January 2019. was performed according to an integrated Due to the preventive measures taken in 2018, data, which is a key aspect of adopting the Company has all the required documents. the principles of BAT by enterprises and can In the reporting year, “Surgutneftegas” PJSC be found in BAT information and technical won the XIV ­All-Russia contest “Leader reference books. of environmental protection in Russia” “Surgutneftegas” PJSC being among in the category “Best environmentally the eight domestic vertically integrated oil responsible company in oil and gas and gas companies, which provide about production industry”. The Company’s 90% of all oil production in Russia, operates environmental management is recognized 30 oil production facilities and 11 waste by the first prize diploma in the rating of management facilities. These facilities transparency of oil and gas companies are classified as I category facilities, that in Russia in the sphere of environmental have a negative environmental impact. responsibility. The results of the rating are Technologies and equipment used at these provided by the World Wildlife Fund (WWF) Company’s facilities comply with BAT. and “CREON” group.

9 02 Environmental safety

12 Environmental report 2018 which includesthe following activities: the operational reliability ofthe fieldpipelines, comprehensive program onincreasing safe maintenance offieldpipelines. solutions for optimizedcontrol quality and ofconstruction mitigate the accident risks, the Company appliesefficient on the operational reliability offieldpipelines.In order to “Surgutneftegas” Accident riskmitigation measures

dehydration of well fluid; production use ofpipeswithan anti-corrosion controlquality offieldpipelines receipt ofpipesandfittings; inspection design, usingthe bestavailable coating; construction; technologies; The Company implements a long-term PJSC environmental safety islargely based

computer modelingandoptimization of control over pressure andvolume balance field pipeline corrosion monitoring and inhibitor protection; timely repair andreplacement of monitoring ofmainpipelinescondition, operation modes; of pumpedfluids; diagnostics; accident-prone pipeline sections. with videomonitoring; including the useofaircrafts equipped Receipt inspection of pipe products

“Surgutneftegas” PJSC ensures the environmental safety of pipelines starting from the receipt of pipes. In order to confirm its high quality a receipt inspection of pipes is performed using both destructive and non-destructive methods.

All pipes that come to “Surgutneftegas” PJSC Receipt inspection of oil and gas pipes for construction of oil pipelines and oil and using destructive methods, gas pipelines undergo a receipt inspection for km PJSC “Surgutneftegas” compliance with the technical requirements using non-destructive methods. In the reporting year, the receipt 2,618 inspection using destructive methods amounted to 467.2 kilometers (26.6%) with 2 kilometers of rejected pipes being replaced 1,755 1,594 1,644 by the supplier with high quality products. 1,449 32% 30%

22% 18% 26.6%

2014 2015 2016 2017 2018

Pipes received Receipt inspection of pipes

100% OF PIPES UNDERGO A RECEIPT INSPECTION USING NON-DESTRUCTIVE METHODS

13 14 Environmental report 2018 corrosion protection. control andthe process of the efficiency control. This method isan effective tool to at 686points of in pipelinesisperformed Corrosion monitoring ofpumpedfluids (82%)ofitsfieldpipelines.of 2,516kilometers the Company diagnostics performed pipelines in “Surgutneftegas” The mostaccurate offield ofinspection diagnostic type and diagnostics Field pipelinecorrosion monitoring For from the period 2012to 2018, ANNUALLY, 500-700 KILOMETERS UNDERGO PIPE PIGGING PJSC ispipepigging. reporting year.the reporting to of pipelinesin repair 616kilometers of fieldpipelines, whichallowed the Company measures to increase the operational reliability overhaul program isplannedaswell asother Based onthe received data, an annual OF FIELD PIPELINES

Pipeline inhibitor protection

In order to control the corrosion inhibitors quality, the Company created the system for the admission of chemical products for use.

In 2018, the inhibitor protection was equipped with devices for automatic control performed on 2,268 kilometers of field of operating parameters with technological pipelines, the inhibitor injection was processes online data transfer to performed by 292 chemical injection units, ASU TP “­OKO-TsITS OGPD”. “Surgutneftegas” PJSC “Surgutneftegas”

THE EFFECTIVENESS OF INHIBITOR FIELD PIPELINE PROTECTION OF “SURGUTNEFTEGAS” PJSC IS 90-95%

15 16 Environmental report 2018 Effectiveness ofpipelineswithan internalcoating ofintroduction year, the reporting of itsown In production. coating, the Company usesprotective sleeves pipe joints having an internal anti-corrosion 78,000 pipelinefittings. To protect welded produced over ofpipesand 2,200kilometers for 4years. thisperiod, During the Company The plant hasbeensuccessfully operating polymer coating onpipesandfittings. for application ofan internal anti-corrosion “Surgutneftegas” experience,the world cutting-edge an internal coating. Taking into consideration oil andgaspipelinesusingonlypipeswith reconstruction andrepairconstruction, of been operating the program oncapital environmental risks. improved corrosion resistance inminimizing is the priority gas pipelineswithan internal coating. The useofpipeswith sevenIn years, “Surgutneftegas” with an internal coating Use ofpipeproducts

1,420 2014 Introduction ofpipelines withan internal coating,Introduction km Since 2013,the Company has BY 2025, THE 2,054 2015 PJSC a plant constructed SHARE OF THE 2,707 2016 3,545 2017 COMPANY’S OIL AND GAS PIPELINES WITH AN COATINGBE WILL +35% 4,424 2018 PJSC willuseonlyoiland of suchfieldpipelines(54%from the Company operates about4,400 kilometers ofthe overhaul program.as apart total, In – plan,and378.8kilometers construction –according500.6 kilometers to the capital with an internal protective coating, including ofpipelines 879.4kilometers constructed of those. the Company produced more than 66,000 of 2019willexceed 5,300kilometers. increased more andat end the than three-fold pipelines withan internal coating has “Surgutneftegas” the total length ofoilandgaspipelines

100% 2014 Area ofoilcontaminated lands, ha In 2018, In “Surgutneftegas” Since 2014, the lengthofoilandgas 189 2015 144 PJSC). 2016 134 INTERNAL PJSC 2017 126 –63% 2018 69.5 Dehydration of oil

Intra-field dehydration of well production fluid ensures mitigation of accident risks, reduction of pipelines length and power consumption during oil pumping and allows the Company to rationally use the water resources.

Transportation of dehydrated oil is one of in close proximity to the production sites the efficient methods of corrosion protection. allow the Company to decrease the diameter Dehydration of oil by “Surgutneftegas” PJSC and length of pipelines, eliminate is done at 112 booster pump stations with the corrosion-prone operation mode of PJSC “Surgutneftegas” initial water separation units, 106 of which pipelines, mitigates accident spill risks and are equipped with Heater-Treater three-phase the possibility of environmental pollution. separators. Due to preventive measures, the Company Separation and reuse of formation water managed to perform accident-free operation of in the reservoir pressure maintenance system its field pipelines in 2018.

17 03 Environmental activity

20 Environmental report 2018 compressor stations, whichcanfullyextract upgrading of22 low pressure separation generation facilities, was introduction and in additionto using30 small-scalepower contributed to ofgasflaring, the reduction environmental initiatives ofthe Company that legalrequirements.of obligatory Oneof changes longbefore the introduction innovative inthe sphere projects ofclimate upgrading offacilities. level ofinvestments and inconstruction approach to airprotection measures, a high solid results thanksto a comprehensive into the atmosphere were prevented. than 30million tonnes ofgreenhouse gas(inCO flaring decreased by 94%against2004andemissionsofmore over 99%. Thus, the amount ofemissionspollutants from (APG) amongRussian fuelandenergy complex companies – the record level ofutilization ofassociated petroleum gas For seven years, “Surgutneftegas” Air protection EFFICIENT APG UTILIZATION IS The Company to implement started The Company was ableto achieve these AT THE END OF 2018, THE

LEVEL OF 99.56% processing plant, compressor station for gas infrastructure, whichemploys a gas and well-developed production cubic meters annually). from the oilemulsion(more than1.5 billion the gas saturated hydrocarbons withheavy was 99%andhigher. APG utilization at 58 fieldsoftheCompany year, thereporting In the level ofefficient furnaces, initialwater separation units, etc. the Company’s operations asfuelinboilers, Besides, APGisutilized across the areas of stations.gas pipelinesanddistribution compressor stations, transport injection, PJSC hasbeenholding 0% “Surgutneftegas” OF APG FLARING) IS REACHED AT – THE 14 FIELDS OF THE BEST INDICATOR (ZERO PJSC hasa powerful 2 -equivalent) -equivalent) COMPANY LEVEL APG utilization level and emissions of pollutants from flaring, %

99.17 99.38 99.32 99.32 96.89 97.81 94.26 93.13 99.20 99.14 99.34 99.56 95.90 93.70 93.53 95.37 “Surgutneftegas” PJSC “Surgutneftegas”

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (as planned)

Emissions of pollutants from flaring APG utilization level

AIR PROTECTION MEASURES decrease emissions during the periods of adverse meteorological conditions; For the purpose of APG utilization and reduction of the negative impact on ambient using environmentally friendly fuel; air, “Surgutneftegas” PJSC implements the following measures: renewal of motor vehicle fleet, an increase of fuel efficiency of motor vehicles; construction of facilities for APG utilization, their technical reequipment, transition of the equipment to coolants, reconstruction and upgrading; which are safe for the ozone layer;

improvement of energy efficiency of performing regular checks of transport production and reduction of hydrocarbon and other vehicles for compliance with losses, including due to prevention of technical standards for emissions; accident emissions of pollutants into ambient air. industrial environmental control;

performing regular operating setup of recording of emissions of pollutants, fuel-fired equipment; including greenhouse gases and chemicals that destroy the ozone layer; using gas treatment units, controlling their efficiency, performing routine improvement of arrangement and quality repairs and overhaul; of air protection in the Company.

21 22 Environmental report 2018 costs ofairprotection measures specificemissionsofpollutants,Hydrocarbon production, decreased more against2004 thantwo-fold high level ofhydrocarbon is production specific emissions ofpollutants withthe stable APG utilization innewoilfields. The rate of investments are madefor efficient ensuring for APGutilization inthe existingfieldsand has a complete infrastructure production thatdetermined the Company by the fact utilization ofassociated petroleum gasis and reconstruction offacilitiesfor A decrease ofinvestments inconstruction to RUB 58billionfor the last15years. Investments infixed assetsamounted “Surgutneftegas” by protection facilitiesare performed 2004

Costs ofairprotection measures, RUBmn Specific emissionsofpollutants, % Hydrocarbon % production, Designing and construction ofair Designing andconstruction 2005 2006 PJSC at itsown expense. 4,473.33 2007 2008 2009 7,078.55 2010 2011 2012 Nyurymskoye field is expected in2019. fieldisexpected Nyurymskoye separation compressor station at the constructed. ofa low Construction pressure station at the field andlow pressure separation compressor separation at the Rogozhnikovskoye facility measures. ofgaspipelines, A network gas spent over RUB 2billiononairprotection of environmental facilities. The Company volume ofcapitalinvestments inconstruction utilization amounted to 81.5%ofthe total technical reequipment offacilitiesfor APG “Surgutneftegas” per tonne of produced hydrocarbons). (from to 4.09kilograms 1.98 5,310.10 2013 reporting year, the reporting In the investments of 2014 Yuzhno-Vatlorskoye field were

2015 PJSC and inconstruction 2016 2,536.03 2017 2018 Yuzhno- (as planned) 2019 ENVIRONMENTAL EFFECT FROM withdraw substances which destroy AIR PROTECTION MEASURES the ozone layer (more than 38% of the total coolant consumption) from Implementation of air protection the use; measures in 2018 compared to 2017 let the Company to: reduce emissions of pollutants from motor vehicles by 10% by increasing their ensure high rates of APG utilization – fuel efficiency and using environmentally 99.56%; friendly fuel (more than 94% of the total consumption); decrease the volume of associated petroleum gas flaring two-fold; decrease the rate of specific emissions from 2.51 kilograms to 1.98 kilograms decrease the volume of emissions of per tonne of produced hydrocarbons;

pollutants from stationary sources PJSC “Surgutneftegas” by 21%; ensure the existence and compliance with emissions standards at each source prevent emissions of pollutants due to and prevent above-limit emissions into rational use of associated petroleum gas ambient air. by more than 3 million tonnes per year (including by 340 thousand tonnes of A systematic approach to reduce methane greenhouse gas, which is about a man-made impact on ambient air,

9 million tonnes in CO2-equivalent); preservation of ecosystems and rational use of natural resources allow the Company reach a high level of air pollutants caught to significantly minimize the negative impact by gas treatment units (more than on the atmosphere as a result of production 22 thousand tonnes); operations of “Surgutneftegas” PJSC.

23 24 Environmental report 2018 of water pertonne ofhydrocarbons produced. a minimum level oflessthan1.5 cubicmeters water consumption hasbeenkeptat resources. recent In years, the total specific emphasis onthe rational useofwater approval. andepidemiologicalobtained a sanitary water intake points, have theirprojects developed for householdanddrinking 100 cubicmeters per day. water intake points rate withproduction over fresh groundwater were reserves evaluated at year, documents.regulatory thereporting In compliance and withthe project in strict andground water surface abstraction performs asacceptable. isdescribed impact The Company the Company’s license blocks, the environmental of the environmental components at protection ofwater bodiesfrom pollution. aimed at saving, rational useofwater resources and onwateractivities bodiesby implementing a setofmeasures “Surgutneftegas” of water resources Protection andrational use INFORMATION ON WATER CONSUMPTION Specific water consumption water abstraction Surface Water production incl. fresh subsoil “Surgutneftegas” There protection zones are sanitary According to the monitoring results 100% ARE EQUIPPED WITH WATERARE METERING INSTRUMENTSMETERING “SURGUTNEFTEGAS” OF WATER INTAKE POINTS OF Indicator PJSC putsspecial PJSC ofbusiness minimizes the impact PJSC

’000 cubm ’000 cubm ’000 cubm cub m/t Unit 1.8 million cubicmeters. was saved; the planfor 2019isto makeit than 1.5 millioncubicmeters offresh water supply. year alone, thereporting more In waterbe usedfor householdanddrinking waterone (frombodies)whichcan surface of underground salinewater instead offresh the Company isgradually switching to the use Romanovsky Klyuch brook Klyuch onlyafter the Romanovsky the (Yakutia). ofSakha in the Republic cubic meters, including2.8 millioncubicmeters pressure year was inthe reporting 4.4million wastewater to maintain injected reservoir injected. Total volume oftreated household of wastewater andproduced water was 2018, about429.8millioncubicmeters In pressurethe reservoir maintenance system. wastewaterindustrial in asinjectant 17,847.02 83,258.53 Yakut villageof Vitim are streamed to 4,426.35 To pressure, maintain reservoir Effluents from the facilitieslocated in “Surgutneftegas” 1.418 2017 THE OF COMPANY ABSTRACTS THE OF

ALLOWABLEVOLUME

FRESH 16,313.06 83,652.57 4,187.42 1.408 PJSC recycles treated 2018 WATER 14,500.96 82,816.04 (as planned) 4,145.55 47% 1.424 2019

Hydrocarbon production, specific water consumption, costs of capital construction of water protecting facilities

1,254.71

846.23 812.66 624.03

507.89 PJSC “Surgutneftegas”

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (as planned) Hydrocarbon production, % Specific water consumption, % Costs of capital construction, RUB mn being cleaned to the required standard at thereby reducing the corrosion of pipelines, biological treatment facilities. which significantly cuts down the likelihood “Surgutneftegas” PJSC implements of failures at the Company’s field pipelines a comprehensive program on increasing and, as a result, the possibility of pollution the operational reliability of the oil production of water bodies. facilities involving the construction of initial Reconstruction of oilfield infrastructure water separation units based on three-phase is performed in accordance with separators. These units are usually mounted the requirements of environmental on booster pump stations and are designed legislation: in the reporting year, drain tanks to separate the water-oil emulsion and bring were installed at 18 well pads, ramps were the water to the requirements of the relevant reconstructed at 81 sites. In 2018, the capital standards. IWSU enables to efficiently separate investments of “Surgutneftegas” PJSC in produced formation water for its further use construction of all water protecting facilities in the reservoir pressure maintenance system, exceeded RUB 269 million.

OVER RUB 812 MILLION – IN 2019, THE COMPANY WILL TRIPLE FINANCING OF WATER PROTECTING FACILITIES CONSTRUCTION

INFORMATION ON WATER DISCHARGE

2019 Indicator Unit 2017 2018 (as planned) Wastewater injection ’000 cub m 446,545.1 429,783.62 425,506.11 incl. household wastewater ’000 cub m 4,240.5 4,441.08 4,396.67 Treated wastewater discharge ’000 cub m 21.7 19.83 22.5 into water bodies 25 26 Environmental report 2018 and burial. to decontaminate disposal itfor further waste to utilization sites andnecessity ofavoiding ofthistype transportation areas witha specialmodeofmanagement, “Surgutneftegas” onwellconstruction pads. fill cuttings are utilized earth assoilduring fluid are employed.Decontaminated drill cleaning andcirculation systems for drilling biodegradable polymersare used, four-stage clay fluidswiththe additionof baseddrilling the processprotection. In ofdrilling, only intermsglobal practices ofenvironmental Western isoneofthe mostpromising Siberia, successfully employed by the Company in saving technology ofpitlessdrilling, 800 thousandtonnes. generated eachyear inthe amount ofabout wastesand production ofthe Company, the greater (over 70%)ofallconsumption part fluids.of drilling cuttings Drill constitute toxic chemicalsandoilfor the preparation waste generation, gradually refusing to use reducingproduction, the amount ofdrilling a negative environmental of impact be usedby the Company withoutrestrictions. technical reference book(“Oil production” andcan industry) pitless drillingisincludedinthe RussianBAT information and to the bestavailable technologies. Thus, the technology of “Surgutneftegas” The advanced innovative technologies that Waste management OVER Application ofthisBAT allows Environmentally andresource friendly “Surgutneftegas” DRILL CUTTINGS UTILIZATIONDRILL CUTTINGS LEVEL 75% – “SURGUTNEFTEGAS” PJSC to wells drill in PJSC seeksto minimize PJSC usesinwaste management correspond PJSC ‘000 tonnes sites, drilling exploratory ondevelopmentfill and construction earth cuttings utilizationassoilduring “Surgutneftegas” Utilization Disposal, decontamination 2017 147 445 PJSC dataondrill 2018 442 102 (as planned) 2019 164 436 WASTE MANAGEMENT IN “SURGUTNEFTEGAS” PJSC

2019 Indicator 2017 2018 (as planned) Waste generated, ’000 tonnes 837.66 824.49 797.70 incl. drilling waste 591.94 584.61 559.10 Waste utilized, ’000 tonnes 527.11 535.10 523.10 incl. drilling waste 444.54 455.16 442.61 Waste utilization level, % 62.93 64.90 65.58 incl. drilling waste, % 75.10 77.92 79.16

Waste decontaminated, ’000 tonnes 50.54 45.73 47.40 PJSC “Surgutneftegas” incl. drilling waste 27.75 28.14 27.60 Waste disposal and burial, ’000 tonnes 235.52 225.37 236.30

incl. drilling waste 100.90 92.65 98.00

“Surgutneftegas” PJSC uses single and Waste management multiple cell sludge storage ponds that in “Surgutneftegas” PJSC, collect oil sludge and drill cuttings, oil ‘000 tonnes containing fluids and contaminated soil all year round. As many as 6 centers for oily soil 837.7 824.5 797.7 decontamination that include 4 upgraded lines for fluid phase recycling, equipped with tricanter centrifuges, are used for maximum recovery of oil that returns to the technological process. The remaining solid phase of oil sludge is decontaminated by a thermal method using 10 Szhigatel incineration units. 577.7 580.8 570.5 Due to such a high level of equipment availability, the annual burial of over 60 thousand cubic meters of oil sludge and oily soils is prevented as the Company fully decontaminates this waste. 235.5 225.4 236.3

2017 2018 2019 100% – OIL SLUDGE (as planned) DECONTAMINATION LEVEL Waste generated Waste utilized and decontaminated Waste disposed

27 28 Environmental report 2018 by third-party consumers.by third-party andwidelydemanded areproducts certified concrete plants ofthe Company. The resulting are usedto modifybitumenat asphalt- produces pelletsfrom rubbercartires, which the Company. The complex ofequipment and metalcords are alsofullyrecycled by up (settling). Worn-out cartires withfabric fully utilized into commercial clean- oilafter oils generated in “Surgutneftegas” and tires employing itsown equipment. Used decontamination.companies for further transferred underthe contracts to specialized class I(in2018–31.04tonnes) hasbeen waste (0.392thousandtonnes intotal). of oilywaste cloth,filters andothersolidoily unitsfor decontaminationdestruction thermal WASTE UTILIZATION AND RECYCLING DECONTAMINATION OF OIL SLUDGE AND OILY SOILS Paper, plasticrecycling, ’000tonnes Used tires recycling, ’000tonnes Used oilsutilization, ’000tonnes Decontamination level, % Decontamination, ’000cubm,incl.: Generation, ’000cubm at panningcenters using Szhigatel incinerators The Company utilizes 100%ofusedoils containing wasteAll mercury ofhazard The Company uses21Forsazh thermal Indicator Indicator PJSC are production andconsumptionproduction waste at accumulation anddecontamination of ofa site forthe construction disposal, as well asby pressing cardboard. wasteand polymer-containing products, material obtainedby grinding paper Yuzhno-Nyurymskoye field. the Yuzhno-Nyurymskoye In 2018, In “Surgutneftegas” The Company alsosellsrecyclable 100% 46.29 55.56 55.56 0.472 2.305 2.559 2017 2017 9.27 100 AND DECONTAMINATED DUE TO AND FABRIC CORDS IS UTILIZED THE USED OILS, TIRES WITH METAL COMPANY’S PRODUCTION OF GENERATED OIL SLUDGE, PROCESS 50.54 60.33 60.33 0.403 2.673 2.285 2018 2018 9.79 100 PJSC completed (as planned) (as planned) 52.90 65.05 65.05 0.361 2.302 3.379 12.15 2019 2019 100

Hydrocarbon production, waste utilization, treatment and decontamination, costs of construction and purchase of environmental facilities for safe waste management “Surgutneftegas” PJSC “Surgutneftegas”

49 49 47 48 48

38

3,098.5 26 27 24 24 22 17 15 1,539.8 10 8 8 483.2

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (as planned) Waste utilization, treatment, decontamination, ‘000 tonnes Hydrocarbon production, ‘000 tonnes Costs of environmental facility construction for safe waste management, incl. equipment purchase, RUB mn Number of facilities for safe waste management, units

FOR YEARS, BY DIRECTING SIGNIFICANT INVESTMENTS IN THE CONSTRUCTION OF FACILITIES AND PURCHASE OF EQUIPMENT FOR SAFE WASTE MANAGEMENT, THE COMPANY HAS PROVIDED: – LOW SPECIFIC INDICATOR OF WASTE GENERATION AND BURIAL (0.012 TONNES AND 0.003 TONNES PER 1 TONNE OF PRODUCED HYDROCARBONS RESPECTIVELY); – HIGH LEVEL OF WASTE UTILIZATION, TREATMENT AND DECONTAMINATION (OVER 70%)

29 30 Environmental report 2018 reclamation andreturn. in goodstandingfor ofland the purposes operations related to the landuse. kindsof ofall efficiency “Surgutneftegas” reclamation phases, whichensures high fielddevelopmentconstruction, andland is constantly exercised infrastructure during environmental Industrial the project. control the completion ofthe works provided for by of the plants condition continues even after damage andthe loadonsoil. Monitoring equipment andmaterials are usedto minimize environmental conditions, the necessary oflandscape,on the type climatic and ofeachlandplot:depending characteristics intoreclamation account taking the individual it is142,659 ha. the lands to the Russian Forest Fund andnow year dueto the reclamation andreturn of Oblast in2017,decreased inthe reporting the new oilandgascluster in Tyumenskaya the commissioning facilitiesof ofproduction the Company increasing after following documents.project in accordance withcorporate programs and they are returned to the State Forest Fund lands isconsistently which out,after carried Subsequently, reclamation ofdisturbed the minimum possiblelandallocation. across the areas ofitsoperations with the State Forest Fund ofthe Russian Federation. andtimelyreturn to restore theirfertility reclamation landsinorder ofdisturbed to measures forthe technical andbiological resources, annually comprehensive taking Protection andrational useofland LAND RECLAMATION “Surgutneftegas” The area oflandsthat are usedby The Company places itsfacilitiesclosely “Surgutneftegas” PJSC rationally usesland For many years, the Company has been RETURNED RETURNED TO THE THE 5,205 HECTARES RUSSIAN FEDERATION IN 2018 PJSC conducts FOREST FUND OF OF LANDS PJSC

more than 20 years; thistime, during the sites used by the Company in Western for Siberia pit overgrowing. This technology hasbeen willow grow stimulating the process ofsludge forming material, planted reed mace and take place: oilsludgetransforms into soil of sludgepits, dueto this, natural processes of forest rehabilitation excludes backfilling adopted in “Surgutneftegas” ofthe Ecology corporateis a part program wastethe negative ofdrilling –this impact lands, ofdisturbed of reduction functions Commission. Environmental Expert of Forest by the State iscertified SBRAS cooperation withV. plots. The uniquetechnology developed in land of ecosystems ononce-disturbed of natural mechanismsforthe restoration forest rehabilitation, whichmaximizes the use ofsludgepitreclamationthe method by ha by “Surgutneftegas” Land area in use OF SLUDGE PITS CONSTRUCTION AND OPERATION DISTURBED DURING RECLAMATION OF LANDS

Return oflandsto the ForestReturn Fund of the RussianFederation Effective restoration ofecological The Company employs actively 140,080 5,765 2016 N. 144,437

6,833 Sukachev Institute 2017

PJSC, PJSC. The method 142,659 5,205 2018 once occupied by sludge pits have turned has been preserved from destruction into forest communities characterized by under piles of sand over an area of about biological diversity and high productivity. 55.46 hectares, it was possible to avoid In the reporting year, “Surgutneftegas” PJSC the construction of water-flooded pits over reclaimed 29 sludge pits using this the area of about 164 hectares. Besides, technology. The Company’s demand for soil about 36.3 thousand tonnes of motor vehicle was reduced, and as a result, the ecosystem emissions have been prevented.

1,873 SLUDGE PITS RECLAIMED THROUGH FOREST REHABILITATION BY SURGUTNEFTEGAS SINCE 1997 “Surgutneftegas” PJSC “Surgutneftegas” THE MAIN COMPONENTS OF SLUDGE PITS RECLAMATION METHOD

Construction phase Operation phase Reclamation phase

Reinforced sludge pit Drilling waste disposal for Refusal to backfill drilling construction maximum hazard class IV waste surface

• recovery of cofferdams • double diking • use of low hazard chemicals and filling of a “ledge” in a sludge pit

• use of a four-stage drilling • application of a peat • making a hydraulic lock fluid cleaning system sand mix

• waterproofing with a clay • planting reed mace and drilling mud willow sprigs

SLUDGE PIT BEFORE COMMENCEMENT RECLAIMED OF DRILLING SLUDGE PIT A sludge pit on a well pad is designed for drilling Following reclamation work, phytocenoses waste disposal and collecting drilling wastewater appear in place of sludge pits, and they surpass generated during the construction of wells. the permanent plant community in terms of After drilling operations are completed, the sludge productivity and biological diversity. pit requires reclamation.

31 32 Environmental report 2018 materials: includes the following equipment and reclamation ofpolluted lands. including birds, andto ensure high-quality conditions, to prevent the death ofanimals, ofterrain and under anyon varioustypes spills ofany level (from localto federal) to eliminate the effectsofoilandproduct equipment, isready to immediately begin adopted inthe oilindustry. international standards environmental safety prevention andresponsesystem thatmeets “Surgutneftegas” PJSC hasa uniqueoilspill measures oflandresources. forthe protection area of isthe mostimportant oil products AND ELIMINATION POLLUTION PREVENTION

mobile tanks for temporary storage42 mobile tanksfor of temporary ofabsorbent booms; 23.43 kilometers ofrapid deployment20.68 kilometers ofeasy-to-assemble 12.78 kilometers pumps; 91 self-contained boatsofoilon for4 skimmer skimming designed to operate128 oil skimmers in skimmed oil; skimmed for onshore protection; made offrost-proof materials, including booms bothlightweight andreinforced aluminum pipes; 6 shallow water trimarans; ofrivers andlakes, including the surface weather andclimatic conditions; various oilviscosities andunderdiverse The Company’s oilspillresponse fleet The Company, withitsown necessary Prevention by oflandpollution oiland

for the prevention andelimination ofoiland provided actions for inthe plan the necessary accident rescue outall unitthat carried a high level oftraining for the out-of-staff responseemergency exercise showed were used. The joint integrated man-caused equipment and 258 unitsofpurpose-built the RussianFederation, 60unitsofvehicles ofEnergy of a commission ofthe Ministry including professional by rescuers certified took part. The exercise involved 187 workers, of-staff accident rescue unitofthe Company the eight accident rescue squadsofthe out- the Lyantorskoye field, inwhichsixof exercise was heldonthe Pim Riverat of readiness. of personnelandmaintaining a highlevel by oilspills, for the effective interaction situations caused elimination ofemergency for the prevention skills practical and comprehensive exercises in order to develop

85 vacuum dumptrucksandtank 23 all-terrain vehicles withexcavators and 146 dumptrucksfor soiltransportation; floating platforms30 multifunctional 9 unitsfor producing exfoliated thermally for biological agents22 sprinklers and The Company regular conducts other equipment. oil spills; from the areasand transportation of trucks for pumpdown oilproducts treatment; water bodiesandinshore zone integrated equipped withan attached system for perhour; of30kilograms the capacity graphite absorbent(U-SRTG) with treatment;bacteria Thus, inMay 2018,a comprehensive oil products spills at production facilities, Reclamation of oil contaminated lands including situations when spills enter rivers. “Surgutneftegas” PJSC, For more than five years, ha “Surgutneftegas” PJSC has been performing reclamation work only at recently emerged areas, the so-called “old” oil contaminations 2.52 2.52 are absent. In 2018, there were two oil spill incidents at the Company’s fields (one due to a criminal tie-in, the second due to internal corrosion of the pipeline), and a total land area of 1.21 hectares was reclaimed. Additionally, 1.26 1.26 1.21 1.21 in 2018, previously reclaimed lands with the area of 1.26 hectares were excluded from the register of territories and water bodies of Khanty-Mansiysky Autonomous Okrug – PJSC “Surgutneftegas” Yugra contaminated by oil, oil products and produced water. 2016 2017 2018

Area of oil contaminated lands

Area reclaimed

33 34 Environmental report 2018 and fishermen. including poachersfrom amonghunters into the forestedthe entry areas ofallcomers, has introduced an access moderestricting by the forestleft visitors. The Company andtakeoutthe garbage clear the territory volunteer clean-upsonaregular basisto “Surgutneftegas” wastes, andeliminate unauthorized landfills. management andconsumption ofproduction areas, to prevent whichserves violations in taken to prevent littering ofadjacent forest inatimelymanner,performed measures are avoid additionalloadandsoil disturbance. wheels andtracks are used, whichhelpsto cover. vehicles Specialty withwidepneumatic ofself-rehabilitationthe ability ofthe soil there isenoughsnow, inorder to preserve work inthe forests inwinter time, provided permits (titledocuments). and the development ofmineral resources withoutissued outthe geological studyofthe subsoil and landsfor carrying Federation. The Company doesnotallow use offorests the are located ofthe Forest inthe territory Fund of the Russian As muchas99%ofthe landplotsusedby “Surgutneftegas” Forest protection Every yearEvery efficient land reclamation is The Company strives to accomplish most PJSC employees undertake fitted arresters. with spark for the equipmentobligatory inuseto be equipment; itis equipped withfire-fighting and mobilepoints sites ofproduction are along the borders ofthe forest, allstationary fires.Mineralized fire strips are barrier created ready to respond promptly incaseofpossible prevention measures, trained personnelare from fire, the Company annuallytakesfire adjacent territoriesandforest resources CLEAN-UPS IN 2018, SURGUTNEFTEGAS MORE THAN In orderIn to protectfacilities, production OF FOLLOWING THE AND GARBAGE IN FORESTED AREAS WAS EMPLOYEES COLLECTED INSHORE ZONES WHICH TAKEN TO 3 THOUSAND TONNES

LANDFILLS

VOLUNTEER

PJSC

Indicators of an environmental impact

For five years, “Surgutneftegas” PJSC – applying a comprehensive approach to solving environmental protection problems – has maintained the position of the industry leader among enterprises with a minimum negative environmental impact.

No. Name of specific indicator Unit 2015 2016 2017 2018 PJSC “Surgutneftegas”

1 Oil production ’000 tonnes 61,621.5 61,848.7 60,544.9 60,886.2 2 Hydrocarbon production ’000 tonnes 71,167.73 71,575.72 70,472.46 70,490.52 3 Gross pollutant emissions ’000 tonnes 132.2 185.1 176.7 139.5 into the atmosphere 4 Specific pollutant emissions into the atmosphere kt/t 1.86 2.59 2.51 1.98 per unit of produced hydrocarbons 5 APG utilization level % 99.38 99.34 99.32 99.56 6 Waste generated ’000 tonnes 725.8 714.0 797.3 798.6 7 In-house utilized waste ’000 tonnes 452.6 417.1 462.3 480.5 8 Waste treated in in-house ’000 tonnes 43.0 43.9 50.5 45.7 production 9 Transferred to external ’000 tonnes 183.3 181.7 176.7 164.1 companies 10 Specific indicator of waste disposal per unit of t/t 0.002 0.003 0.003 0.003 produced hydrocarbons 11 Water consumption ’000 cub m 100,509.8 101,551.04 101,105.56 99,965.63 12 Specific water consumption per unit of produced cub m/t 1.411 1.426 1.418 1.408 hydrocarbons 13 Discharge of wastewater cub m 0 0 0 0 into surface water bodies 14 Total land area at ha 131,681 133,798 140,080 144,437 the beginning of the year 15 Total land area at the end of ha 133,798 140,080 144,437 142,659 the year 16 Disturbed land area at ha 14,251 13,742 10,700 10,373 the beginning of the year 17 Disturbed land area at ha 3,060 7,911 3,866 5,168 the end of the year 18 Polluted land area at the beginning of the year ha 0 0 0 0

35 36 Environmental report 2018 No. 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 35 Supply of thermal energySupply of thermal to generated (Eastern Siberia) including in-house consumersto external energy Supply ofelectrical Thermal energy saving sources for in-houseneeds energy from external Consumption ofthermal energy saving Electrical sources for in-houseneeds energy from external Consumption ofelectrical and energy consumption Volume offuel ofreduction Vehicles total mileage Kerosene Diesel fuel Gasoline Gas Oil Diesel fuel Fuel oil used in the total amount offuel Euro 3-4-5,gasmotor fuel) gasoline Euro 4-5,diesel fuel(high-octane friendly Share ofenvironmentally payments environmental impact amount ofthe negative payments inthe total Share ofabove-limit and produced water spills Number ofoil, oilproducts and accidents a result ofpipelineruptures spilled (remained) as Amount ofoil(oilproducts) the end ofyear Polluted land area at generated including in-house consumers external MOTOR FUEL CONSUMPTION: BOILER AND FURNACE FUEL CONSUMPTION: Name ofspecificindicator ’000 cubm equivalent tonnes of ’000 kWh ’000 kWh RUB/RUB mn kWh mn kWh tonnes tonnes tonnes units liters liters liters Unit Gcal Gcal Gcal Gcal fuel km ha kg % 485,542,315 300,927,112 20,283,604 3,023,042 152,620 620,428 145,092 168,358 31,415 31,887 15,055 64,333 34,194 16,702 94.78 0.001 1,369 6,290 2015 572 9 0 0 477,344,756 293,654,921 18,771,097 3,078,228 181,476 565,565 150,871 183,608 29,541 29,877 14,045 71,756 32,329 17,916 94.24 0.000 1,493 5,767 2016 607 9 0 0 483,638,262 311,979,886 19,054,054 3,135,174 172,862 552,531 147,987 184,161 23,366 23,615 14,240 58,305 40,056 16,476 93.99 0.001 1,497 6,061 2017 644 5 0 0 486,420,935 292,596,142 19,513,750 3,413,229 167,840 552,322 154,009 102,376 27,550 27,782 17,399 49,622 45,049 18,377 94.09 0.002 5,852 2018 568 812 2 0 0 In 2018, “Surgutneftegas” PJSC payments Payments for the negative for the negative environmental impact environmental impact, amounted to RUB 75.4 million, including RUB thous. above-limit payments – RUB 173 thousand (0.2%). Above-limit payments for excess air 173 pollutant emissions were caused, among other things, by the use of backup power plants in order to maintain operation of health resorts of the health trust “Surgut” during 57 unplanned power outages in Krasnodarsky 2 Krai. Above-limit payments for disposal of consumption waste generated by Yakutsk Representative Office of the Company are due to lack of landfills included into state register 41,406 51,253 75,200 of waste disposal facilities. PJSC “Surgutneftegas”

2016 2017 2018

Above-limit payments for excess emissions of pollutants (discharge) (above-limit production and consumption waste disposal) Payments for allowable emissions of pollutants (discharge) (production and consumption waste disposal)

37 38 Environmental report 2018 components was controlled at 126 license local environmental monitoring. issupplementedproduction annuallyduring contamination) the fieldsare andafter putin commercial development (initial(background) toblocks prior the commencement oftheir the environmental components oflicense database that covers contamination of 150 thousandsquare kilometers.An extensive The area that hasbeenmonitored isabout the Company’s license blocksfor many years. hasbeenoperating network at observational programs ofenvironmental monitoring. The operations inaccordance withthe developed across the areas of “Surgutneftegas” for itsmitigation orelimination. made facilitiesanddevelopment ofmeasures ofman- identification ofa specificimpact the environmental condition for timely the watercourses isto regularly monitor ponds, flares, pipeline crossings over waste disposallandfills, sludgestorage of man-madefacilitiesincludingwell sites, management. provision ofrational natural resources with environmental standards quality and compliance ofbusinessactivities, impact facilities,production preventing a negative environmental components of inthe vicinity information onthe condition of for ofgetting the purpose is performed “Surgutneftegas” the environmental by condition. Monitoring isperformed long-term observations, assessment andforecast of condition andpollutionlevel monitoring whichincludes Production environmental monitoring (PEM)isenvironmental environmental monitoring In-house In 2018, the condition ofenvironmentalIn The environmental condition iscontrolled The ofPEMinthe vicinity mainobjective Production environmental monitoring

PJSC withinindustrialenvironmental control. PJSC including: blocks ofthe Company at 3,839 control points, independent third-party organizations whose independent third-party “Surgutneftegas” laboratories, for environmental monitoring, 20 and more from techniques. in-house Apart divisions –forof sixoilandgasproduction testing laboratories ofR&DandDesign Center for 102 techniques; physical andchemical workproduction site inOGPD “Talakanneft” and research ofthe R&Dand laboratory 153 measurement techniques; the production CenterImplementation isaccredited for Studies ofthe Engineering andEconomic for Ecoanalytical and Technological equipment. The Central BaseLaboratory 11 accredited laboratories fitted withthe best monitoring. Testing outin iscarried capabilities ofsuccessful environmental

during environmentalduring monitoring of assessmentduring ofthe initial during monitoring ofconditionduring and blocks at 1,342 control points; environmental monitoring oflicense contamination local andconducting “Surgutneftegas” images at 271 facilities. interpretation ofsatellite andaerial around sludgepitsusingexpert contamination ofvegetation cover man-made facilitiesat 2,497 points; PJSC engageslaboratories of PJSC hasvast

– reports are accepted by the regulatory bodies and projects on reclamation, the Company when exercising regulation and supervisory practices remote monitoring by air patrolling, functions. including the use of unmanned drones, The Company has the license to operate large-scale aerial photography and ultra- in the sphere of hydrometeorology and related high resolution space imagery. Geobotanical areas, including determination of the pollution monitoring in the area of sludge pits is level of ambient air, water and soil. performed based on expert interpretation of To solve environmental problems such remote sensing data. as assessment of the current environmental The results of environmental monitoring situation within license blocks, making have confirmed that the Company operates inventories of disturbed lands, performance with a minimum environmental impact; of landscape monitoring, development environmental conditions at license blocks of of projects on environmental monitoring “Surgutneftegas” PJSC are favorable. “Surgutneftegas” PJSC “Surgutneftegas”

39 40 Environmental report 2018 recognized the Company for itsactivities Head ofthe Federal for Agency Fisheries Agriculture ofthe RussianFederation and RUB 65.5million for of Minister this. Deputy “Surgutneftegas” biological resources andmaintain biodiversity, year inorderthe reporting to restore aquatic peled were released into water bodiesin ofhydrocarbons.and production mostofitsprospecting, explorationperforms (Yakutia)of Sakha where the Company Yugra, Tyumenskaya Oblastandthe Republic Autonomous – Okrug Khanty-Mansiysky plants, mosses, lichens, birds, mammals)for key biogeocenoses indicator species(vascular BranchhaveSiberian ofRAS developed listsof for Biological Problems of andCryolithozone Branchandthe Institute of Siberian ofRAS State University, the the Company isperformed. facilitiesof ofproduction species inthe vicinity vegetation. ofbiodiversity indicator Monitoring monitoring ofbioresources andmonitoring of the environmental components, including of biological resources, monitoring of protection oflands, water bodies, reproduction programconservation whichisaimedat program implements the biodiversity ofwhichisbiodiversity conservation. aspects an ecosystem approach, oneofthe key operations,production the Company utilizes of an environmental ofproduction. impact the Company’s operations andminimization the originalstate ofthe areas of at preserving the Ecology complex program, whichisaimed “Surgutneftegas” PJSC of andan integral part the key areas of ofthe environmental policy with special modeofmanagement andother territoriesreservations ofspeciallyprotected natural support Biodiversity and conservation BIODIVERSITY CONSERVATIONBIODIVERSITY million young and larval More than45 millionyoung andlarval ofLomonosovLeading Moscow experts “Surgutneftegas” outits When planningandcarrying conservationBiodiversity isoneof PJSC allocated about Tyumen Scientific Center PJSC withinthe Ecology experience inthe region from Lomonosov 7 years already by scientists withthe richest Researches have beendonecontinuously for Autonomous – Okrug Khanty-Mansiysky Yugra. programthe biodiversity conservation in monitoring inNumto nature within park accounted for RUB23 million. programof the biodiversity conservation planted in2018.Expenditures onthispart more than880,000 pinesaplingswere maintain biodiversity by a letter ofthanks. to restore aquatic biological resources and the Company implements measures to that suchresearches. conducted (Yakutia) ofSakha subsoil userinthe Republic period. “Surgutneftegas” increase inthe elkpopulation for the 20-year it was found that there hasbeena six-fold According to the results ofthe observations, which create the basisofgameanimals. “Surgutneftegas” operations ofproduction of of impact was doneinorder toin 2018.It assessthe level (Yakutia) of Sakha the Republic was organized in the areas ofthe Company’s operations in Talakansky license block. ofthe inthe territory performed year, thereporting In were activities of bioresources andcryolithozone. withinmonitoring the field observations Branchcontinuedof Siberian ofRAS Biological Problems andCryolithozone scientists from for the Institute was identified in 2018. ofNumto nature asa whole the territory park plant andanimalspeciesbiodiversity in monitoring, nothreat to habitareas ofrare As atReserve. the previous stagesofbiological ScienceInstitute,Soil Yugansky State Nature Moscow State University, V. The Company biological performs the course ofreclamationIn activities, territory ofNumto nature the territory park In ofungulates survey addition, the aerial In (Yakutia), ofSakha the Republic In PJSC onlarge wildlife resources PJSC isthe firstandonly V. Dokuchaev Dokuchaev Yuzhno- minimize environmental risks when placing The received materials and production facilities in the wetland ecosystems, recommendations were used during to mitigate a negative impact of business development of mitigating and activities on the hydrology of wetlands and compensatory environmental protection implements preventive measures to avoid measures in project documentation. Thus, death of birds at electric power supply network scientists discovered Dryopteris filix-mas – facilities. It is done within agreements on a specimen of fern added to the Red Book. cooperation with the Institute of Forest Science It was discovered during an inspection of RAS, the State Hydrological Institute and of fields of common mineral resources in the All-Russia public organization “Russian bird Uvatsky District in 2018. In order to save conservation union”. the rare plant, the Company took a decision In order to carry out complete to change the location of a borrow pit environmental impact assessment (EIA) of under design. the planned activities, the Company pays During the whole period of construction particular attention to issues of biodiversity and operation of waste disposal facilities PJSC “Surgutneftegas” conservation and ecosystem services. In this “Surgutneftegas” PJSC remotely monitors connection, environmental and biological vegetation condition around cluster well assessment of priority development territory pads and waste landfills by large-scale aerial and a spatial analysis of environmental risks photography and ultra-high resolution are carried out when planning activities in space imagery. especially valuable and sensitive areas, for The geoinformation system of example, in Numto nature park or in the flood the Company has a database which contains plain of the Irtysh River. In 2018, Surgut State information on discovered habitat of rare University and the Tyumen Scientific Center and endangered biota representatives. of Siberian Branch of RAS were engaged to The database is always updated as far as new perform these R&D activities. research results appear.

RUB 6.4 BILLION – IS THE AMOUNT OF INVESTMENTS IN THE BIODIVERSITY CONSERVATION PROGRAM IN 2018

SUPPORT OF SPECIALLY PROTECTED preserving the ethnos, the Company ensures NATURAL RESERVATIONS AND the achievement of the following goals and OTHER TERRITORIES WITH SPECIAL the solution of the following tasks: MODE OF MANAGEMENT minimize the number and area of The Company carries out its production industrial sites and linear facilities through operations within specially protected natural implementation of the best available reservations using a special procedure. They technologies for exploration, production are performed because they are subject to and transportation of oil and gas; fulfillment of license agreements for subsoil use. minimize a negative environmental Adhering to the Environmental policy impact, reducing emissions, effluents which provides for compliance with the rules and waste, eliminating any man-made and customs adopted in the places of residence impact outside the areas designated for of the small-numbered indigenous peoples production facilities; of the North, “Surgutneftegas” PJSC ensures maximum conservation of indigenous eliminate the vehicles and personnel environment, housekeeping activities and presence and movement outside industries of the indigenous population the boundaries of industrial sites and in traditional nature management areas. facilities designated for this purpose To implement the basic principles of without proper authorization; 41 42 Environmental report 2018 monitoring inthe nature andpurchasing park for the arrangement ecological ofan trail, nature inKhMAO-Yugra park transferred funds Numto Institution agreement withBudgetary

supervise observance ofthe code of observance supervise limit unauthorized access to traditional ensure subsequent restoration of arrange fieldoperationsareas to survey In 2018, In “Surgutneftegas” ofSPNR. boundaries byconduct employees within working nature management areas andSPNR; the design stage; consideration ofecosystem at functions proposed locationsites ofindustrial and ofthe areasthrough of detailedsurvey indigenous peoplesofthe North, ofthe small-numberedand industries the traditionalpreserve way oflife including resource capacitiesthat ofthe territory,original natural functions to technologicalsubject capabilities; facilitiesoutsidethe area,production ethnographic andifany, objects, transfer the presence ofethno-archeological and of proposed locationsites ofindustrial for PJSC in of the environmental components within continued monitoring andregular survey in tookbodies andlocalauthorities part organizations, andsupervisory regulatory license block. ofKhMAO-YugraDistrict withinthe Company’s unique natural site islocated inSurgutsky bor. kedrovy significance The Tundrinsky maintain the natural ofregional landmark an initiative ofthe reservations, the Company supported development ofspeciallyprotected natural resources andlandscapesinNumto nature park. assessment ofbiodiversity, vegetation cover Universities inorganization ofthe research on BranchSiberian ofRAS, Yugra andSurgut State scientists from the exceeded RUB 26million. Grand total offinancingunderthe agreement andequipment. of monitoring machinery the operation ofthe Company. andthere were the territory nocomments on assessment ofthe environmental condition of “Surgutneftegas” According to the results ofthe inspection, the sightseeing Sacred attraction LakeImlor. the cultural site heritage oflocalsignificance, In 2018,representativesIn ofpublic of Understanding the importance the year,During the Company assisted PJSC received a high Tyumen Scientific Center of Yugra to authorities The high results have been achieved forming a major part of the culture of by the Company through implementation the indigenous people; of a number of actions with a view to ensure water and air resources protection and taking into account the partnership prevent the territory from becoming polluted experience and continuous improvement with production and consumption wastes of the system of relations with the small- as well as oil spills. Environmental monitoring numbered indigenous peoples of the North; of the territory is conducted; 100% of field pipelines within Lake Imlor were replaced immediate reporting to the Indigenous with pipelines with an internal anti-corrosion Peoples Affairs Department of coating. Land Use Division, Environmental The measures taken allow Safety and Management Division of “Surgutneftegas” PJSC to ensure trouble-free “Surgutneftegas” PJSC in the event of operation, lower the risk of accidents and misunderstanding, threat of conflict or incidents and, as a result, preserve game violation of the established requirements; PJSC “Surgutneftegas” animals and wild-growing herbs which are the basis of the traditional way of life of conflict resolution and misunderstanding the indigenous population. clearing up through discussion and There are checkpoints along the Company negotiation; field roads in order to protect the facilities of the fuel and energy complex and to limit impermissibility of conflicts between unauthorized access to places of traditional the employees of the Company and residence of the indigenous people. the indigenous people; The personnel of “Surgutneftegas” PJSC working in places of residence of the small- ensuring privacy of the small-numbered numbered indigenous peoples of the North indigenous peoples of the North; adheres to the following principles: adherence to environmental standards understanding and respect for and requirements. the traditions, customs and rituals

43 44 Environmental report 2018 road traffic routes withdeer paths and roads to ensure safe traffic of atthe intersection isprovided.and shrines Measures are taken aswell asplaces ofthe worshipof the North of the small-numbered indigenous peoples management rights. with the holdersoftraditional nature problems ofthe localpopulation are concluded management areas, aimedat solvingsocial of traditionalwithin the boundaries nature living standards ofthe indigenouspopulation. improvementeducation andculture support, of territories, infrastructure development, onsustainabledevelopmentprojects of municipalities, invests insocialand economic agreements withthe regional and authorities protected natural reservations. offieldfacilities, construction located onspecially requirements exploration, to conducting people. The Company meetsthe moststringent withthe indigenous peoples ofthe North and habitats ofthe small-numbered indigenous facilities intraditional nature management areas manner coordinates the placement ofproduction peoples ofthe North. area oflivingthe small-numbered indigenous ofthe historically developed at preservation responsibility ofthe Company whichisaimed notonlyofsocialbutenvironmental the territory dressing is herbs, andothers. animalskin It fishing, hunting, gatheringofwild-growing national whichincludedeerherding, industries ancestors aswell and aseconomic activities generations the way inherit oflife oftheir Nenetsandotherpeoplesthat for Mansi, territories historically inhabited by the Khanty, relations basedontrust,andmutualunderstanding. respect the indigenous population have builtlong-term partnership authentic culture andtraditional way oflife. The Company and that preserve numbered indigenouspeoplesofthe North the small- position ofthe Company supports whichparticularly responsibility of Social “Surgutneftegas” indigenous peoplesofthe North withthe small-numberedInteraction Contracts on subsoil use of land plots Contracts onsubsoiluseoflandplots “Surgutneftegas” “Surgutneftegas” The Company’s license blocksoverlap property offamilies ofthe property Inviolability PJSC ina mandatory PJSC concludes indigenous peoplesofthe North. representatives ofthe small-numbered and driveways from fallentrees usedby roads dirt clearing their timelyclearing; building safe crossings anddriveways and of the indigenouspopulation by sign posting, Forum Issues. onIndigenous of the session United Nations Permanent represented assuccessful at practices meetings significant of the Company projects are promising Most andsocially of the North. of the small-numbered indigenous peoples which regulates relations withrepresentatives Autonomous – Okrug Khanty-Mansiysky Yugra was usedasa basisforcrafts legalframework of national culture, traditional and industries of their preservation peoples ofthe North, of rightsthe small-numbered indigenous “Surgutneftegas” wood are suppliedto Numto village. boat engines, etc.). materials Construction and plants, chainsaws, snowmobiles, motorboats, traditional festivals andwithsupplies(power aswell aswithprize fundtoservices celebrate helicopter communication, transportation, the indigenous population withhealth,dental, headquarters. The Company provides “Surgutneftegas” successfully operate inthe businessunitsof numbered indigenouspeoplesofthe North prohibited.strictly of wild-growing insuchterritoriesare herbs prohibited. Hunting, fishingandgathering animals as well as alcohol beverages is and hazardous chemicals, dogsandother of firearms, fishingequipment, explosives management areas andSPNR.Conveyance unauthorized personsto traditional nature Special access modelimitsaccess of Organization ofsystem work of dedicated to work withthe small- Services PJSC isthe principled PJSC interms ofprotection PJSC andthe Company’s R&D activities in the field of environmental protection

“Surgutneftegas” PJSC cooperates with a wide range of scientific organizations which research the field of environmental safety, environmental monitoring as well as environmental and biological assessment of the area of operations.

To receive an independent professional In order to prevent an impact assessment of the environmental condition and changes which can happen with PJSC “Surgutneftegas” in the area of production operations, the environment, scientists from the Institute development of the new and the most for Biological Problems and Cryolithozone of effective technologies which facilitate Siberian Branch of RAS continued monitoring minimization of an environmental impact, of bioresources in the areas of the Company’s “Surgutneftegas” PJSC throughout operations in the Republic of Sakha (Yakutia). many years cooperates with different Scientists from the Tyumen Scientific Center scientific organizations many of which are of Siberian Branch of RAS and Surgut State incorporated into the Russian Academy University made environmental and biological of Sciences. assessment in the vicinity of facilities under In 2018, the Company continued to design at the Company’s license blocks. cooperate with the St. Petersburg Scientific Since 2012, the Company annually has Research Center for Ecological Safety of been inviting employees from Lomonosov RAS (SRCES RAS) which has a profound Moscow State University, V. V. Dokuchaev experience in the unique complex Soil Science Institute, Surgut State University environmental and toxicological research and Yugansky Nature Reserve for biological of drill cuttings. In the reporting year, at monitoring at the Company’s license blocks the Company’s request, SRCES RAS also in Numto nature park. researched disturbed lands and developed The results of the research are applied recommendations for efficient reclamation to make management decisions aimed at of disturbed lands and reinforcement of side minimizing a negative environmental impact slopes of fill-up soils. of oil production facilities.

45 46 Environmental report 2018 the monthly council ofthe businessunits of the comments analysis are announced at effective decisions. managerial The results used to adoptsummarized to befurther are at the summing-upmeetings. reported month. every instructions The results obtained monitors fulfillment ofthe proposals and of the personsto beinspected. The Company controlled notification withoutpreliminary control results reports. Their fulfillment is andecoanalytical and issuessamplecollection required andworks andtheirdeadlines actions standards andrequirements. environmental, andepidemiological sanitary legislation, approval documents, as well asadherence to environmental safety standards andin-housestandards environmental legislation, environmental facilitieswiththe naturalof the inspected Ecological Council. “Surgutneftegas” system that isledby First DirectorGeneral of Deputy ofthe Company’s isa part (IEC) environmental management Two-level integrated vertically industrialenvironmental control environmentalIndustrial control ENVIRONMENTAL CONTROL THE RESULTS OF INDUSTRIAL Level IIcontrol Level Icontrol IEC results are accounted, analyzed and The Company makesoutproposals on The Company oversees compliance Level ofcontrol PJSC, the ChairpersonofCompany’s 371 42 Number of inspections 1,339 2016

575 Number of inspected facilities 1,611 624 Number of comments from the publicandorganizations resources. andproviderisks rational useofnatural technological processes, the environmental to mitigate the environmental of impact the Ecological Council, whichisstriving legislation andalsoat the meetingof compliance withthe natural environmental General, at the meetingsonissuesof ofDirectorheads underthe chairmanship of Surgutneftegas. information boards are field placed at every atdirectly the oilfields:numerous canbefoundthe responsible departments were received in2018. the Company’s businessunitsandemployees andfailingsof violations, underperformance No complaints concerning environmental “Ecology”,section information”).ru, “Public via itsofficial(www.surgutneftegas. website 276 44 Number “Surgutneftegas” of inspections The information contact of 1,768 2017 590 Number of inspected facilities 2,023 512 Number of comments PJSC feedbacks collects

197 380 Number of inspections 2,197 2018 928 Number of inspected facilities 1,461 2,435 Number of comments The “green office” principles

“Surgutneftegas” PJSC widely supports the “green office” principles in each administrative building of the Company in its attempt to mitigate the negative environmental impact, ensure the maximum conservation of natural resources and reduce wastes.

Due to the electronic document flow usage of electronic ballasts in fluorescent system (Directum), the Company managed spotlights; PJSC “Surgutneftegas” to significantly eliminate the number of the documents printed black-and-white usage of programming units and motion and color. By setting printers to automatic sensors in indoor lighting systems and double-sided printing, the Company is able daylight sensors and automatic switches to reduce the amount of the consumed in the outdoor lighting; stationary paper. Waste paper, packing board and other optimization of operating mode wastes related to the stationery are collected of electrical equipment and heat by the Company’s office employees to be consumption of buildings; further processed by the in-house unit. Shredded and compressed paper wastes replacement of air conditioners with become valuable recyclable material which multi systems; is transferred to specialized enterprises under the contracts for its further use. The paper implementation of energy efficient wastes are not buried. pumping modules and ventilators; The Company adheres to the following “green office” principles: usage of power filters at workplaces to switch off simultaneously several units of usage of modern energy-saving equipment after completing work; (LED, electrodeless, fluorescent) lamps and spotlights in indoor and outdoor implementation of metering devices, water lighting systems; flow and heat consumption regulators.

47 48 Environmental report 2018 implementation ofthe Environmental and environmental safety aimedat in the fieldofenvironmental protection work toofpersonnel upgrade the skills workover crews. shops aswell asbetween well overhaul and crews, teams ofoilandgasproduction economic competitions heldamongdrilling forwinnersof on the listofcriteria selecting of the Company’s facilitiesare production indicators inthe fieldofenvironmental safety excellent work, performance high-quality regulations at sites. production with allenvironmental requirements and tasked withoverseeing the compliance there are alsothe environmental specialists ofsuchcorporate projects the participants professionals of “Surgutneftegas” technical conference for young scientists and their solutionsat the annualscientific and The Company’s young peopledemonstrate competitions “Best-in-Profession”. skills competences inprofessional by participating are to develop offered their opportunity the Russian Federation. with the requirements ofthe environmental legislation of treatment ofnatural resources, compliance andensure strict accept the principlesofenvironmental friendlinessandcareful “Surgutneftegas” which increase the awareness employee andmake every of the high level ofenvironmental safety ofproduction, of Environmental education andprofessional training professional training ofemployees Environmental education and The Company continues systematic Avoidance ofaccidents anddefects, yearEvery the Company’s employees most important aspects toemployees maintain aspects are the mostimportant PJSC anditscontractors unconditionally PJSC. Among The training ofspecialistsinambient air of policy “Surgutneftegas” films containing up-to-date basic principles basicprinciples films containing up-to-date obliged to studyspecialmemosandanimated Numto the employees nature are park, including a special modeofbusinessactivities, the territorieswith In toprior eachshift. meetingwiththe personnel the induction contractors inallplaces andholds awareness among itsemployees and the abovementioned area. of the Company improved in their skills manage wastes. 2018, 568employees In other issuesaswell asworkers admitted to for and decisionsonbusinessactivities for itsmanagersandspecialistsresponsible courses developed by “Surgutneftegas” classes I-IV, there are professional training its employees inwaste management ofhazard environmental control systems. the environmental and departments safety by managersandspecialists of the course of Provision ofenvironmental 180 employees hadtraining under protection was continued. As muchas The Company raises environmental To ensure regular professional training of PJSC. PJSC of the Company’s Environmental policy, code representatives of the Directorate of Numto of conduct in specially protected natural nature park (the city of Beloyarsky) attended reservations and interaction with the small- workshop Specific features of the GIS-based numbered indigenous peoples of the North. spatial system of decision-making when In the reporting year, 35 employees planning environmental management in of “Surgutneftegas” PJSC as well as Numto nature park and promising forms of the indigenous people of Numto management of specially protected natural national village (Beloyarsky District) and reservations. “Surgutneftegas” PJSC “Surgutneftegas”

49 50 Environmental report 2018 support to the firstinnovativesupport project technologies usedby the Company. and were ableto assessthe bestavailable attended andcluster rig well a drilling pads environmental specialists, for the firsttime, sites of “Surgutneftegas” which includedvisitsto the production State University were offered training practical environmental training, the students ofSurgut totally safe for the birds. wires,of the insulated electric whichwillbe falcons. The Company plansto expanditsuse devices at the nestsites peregrine ofthe field withabout500specialbird protection facilitiesofthe supply network union”, the Company equippedthe power organization “Russian bird conservation the recommendations ofthe All-Russiapublic and localpublicorganizations. Thus, upon regularly interacts withnational, regional operations,production the Company evaluation ofenvironmental of aspects inthe publicdiscussions. participate to indigenous peoplesofthe North, communities –the small-numbered of the publicorganizations andlocal stakeholders, includingthe representatives the letter ofthe law, the Company invites all following Strictly business activities. the environmental ofthe expected impact documentationproject on assessment of Company initiates publicdiscussionsof are interested information. inobtainingthe objective the public organizations andeditorial staffofthe media,which “Surgutneftegas” environmental events are the distinguishingfeature of readiness to discloseinformation onthe Company’s significant Promotion ofthe environmental and protectionprojects and media Cooperation withpublicorganizations In 2018, during the academicand 2018, during In orderIn to obtainan independent “Surgutneftegas” Public Joint Stock Surgutneftegas provided transport PJSC. Future PJSC. The Company cooperates actively with Vatlorskoye Ural Federal District and expert of RAIPON of Ural ofRAIPON Federal andexpert District and the Far Eastofthe RussianFederation in Siberia indigenous peoplesofthe North, of the Association ofthe small-numbered Autonomous – Okrug Yugra, vice-president a member oftheDumaKhanty-Mansiysky was initiated by AlexanderNovyukhov, in Yugra – “IT nomandcamp”, which took part inthe press tour organizedtook part conference.and practical preparation andorganization ofthe scientific highlighted the Company’s contribution to Autonomous – Khanty-Mansiysk Okrug Yugra of SubsoilUse andNatural Resources of Numto national village. The Department remote, hard-to-reach nomadcampsand MI-8 helicopter ofBeloyarsky, to the city arranged an additionalround flight trip of inthe conference,participated the Company the North. To the indigenouspeople transport the small-numbered indigenouspeoplesof (Yakutia), subsoilusing companies and of Yugra, Yamal ofSakha andthe Republic the public organizations, publicauthorities Oil. Law”, whichhosted representatives of conference peoples.“Indigenous Environment. a positive exampleat scientific andpractical in Numto nature were park presented as implemented by “Surgutneftegas” environmental protection programs territories of Yugra andinformation on to develop the remote District of Beloyarsky between the Company andthe administration the United Nations GeneralAssembly. reporting year, the reporting In journalists The experience ofbuildingpartnership PJSC in Surgutsky and Beloyarsky Districts the oil sector is also provided by Arctic of Khanty-Mansiysky Autonomous Consult, a company delivering consulting Okrug – Yugra. The Company prepared services for the small-numbered indigenous information material on the expedition peoples of the North. results obtained by the scientists in Numto In 2018, special correspondents of nature park, where the Company had magazine “Tourism and Leisure in Russia” been monitoring the territories of oil fields (Moscow) had an expedition to Numto under construction for the seventh year nature park. Alexander Tukmakov and running. Members of the media witnessed Andrey Nurutdinov visited Numto village comprehensive emergency training exercises and a nomand camp of Vasiliy Pyak, of the out-of-staff accident rescue units of the vice-president of the Union of Reindeer “Surgutneftegas” PJSC on response to man- Herders, and rafted over 200 km down caused emergencies, attended a three-day the taiga river Kazym to Yuilsk village. workshop with participation of Tatiana The journalists passed this touristic trail

Minaeva, an international expert and project 36 years ago when they were working for PJSC “Surgutneftegas” coordinator of the Wetlands International the Beloyarsky District newspaper and now organization dedicated to the conservation they got the opportunity to personally and restoration of wetlands. assess how much “Surgutneftegas” PJSC Information on the latest had changed life of the Kazym Khanty and geoinformation technologies applied in forest Nenets.

51 04 Basic strategic documents in the field of environmental management

54 Environmental report 2018 priorities andoperationalpriorities conditions. case the Company changesitsdevelopment to revision, adjustment andimprovement in operations. The Environmental issubject policy environmental protection inthe areas ofits suppliers ofthe Company inthe fieldof of the contractors, subcontractors and the recognition ofthe contractual obligation the Company andisimplemented throughout to the attention ofeachemployee of documents inthe fieldofenvironmental management. are the basicstrategicindigenous peoplesofthe North as well asPolicy oninteraction withthe small-numbered the concept ofsustainabledevelopment inmodernconditions andadherencein the course ofitsbusinessactivities to principles whichare bindingfor “Surgutneftegas” The Environmental represented policy by the environmental Environmental policy OF OF BASIC PRINCIPLES

“SURGUTNEFTEGAS” THE Maintaining industrial andenvironmental industrial Maintaining to preventionGiving priority of Systematic minimization of international standards andrequirements. safety inlinewithup-to-date of suchan impact. compared to mitigation ofconsequences the negative environmental as impact technical achievements. technologies aswell asscientific and implementation ofthe bestavailable of the environmental through risks technological processes andmitigation the negative environmental of impact The Environmental isbrought policy ENVIRONMENTAL POLICY

PJSC

Systematic control over compliance useofnaturalRational resources based Transparency ofthe Company’s socially concerned,Cooperation withparties Improvement ofthe personnel’s Improvement ofenvironmental activity Environmental monitoring inthe areas of Preservation ofthe primordial with industrial andenvironmentalwith industrial safety saving technologies. environmentally andresource friendly on implementation ofinnovative significant environmental efforts. public organizations andthe media. environmental skills. in the Company’s subdivisions. and environmental management system the Company’s operations. the indigenous peopleofNorth. of andindustries business activities environment, traditional way of life, requirements. PJSC The Company's responsibilities

To adhere to the basic principles of Implement all possible measures on the Environmental policy, the Company biodiversity conservation, preservation undertakes the following responsibilities: of animal migration paths in the areas of operations, timely reclamation of Comply with the legislation of disturbed lands as well as reduction of the Russian Federation in the fields natural landscapes fragmentation by of environmental protection and laying linear facilities in the existing utility sanitary and epidemiological welfare of line areas and placing site facilities on the population. previously disturbed lands within existing industrial sites.

Conduct a strategic environmental PJSC “Surgutneftegas” assessment while implementing Avoid carrying out works in the territory large-scale infrastructure projects of of World Natural Heritage sites and the Company. wetlands having special significance and in specially protected natural reservations Conduct a comprehensive environmental when designing site structures and oilfield impact assessment (EIA) of projects from infrastructure facilities. In the absence of construction to decommissioning of such possibility – observe a special mode facilities. of business activities.

Additionally assess environmental Take account of interests and rights of risks while developing project the small-numbered indigenous peoples documentation for the construction of to lead the traditional way of life and facilities in environmentally sensitive preserve their traditional settlement and valuable areas. territories historically inhabited by their ancestors. Ensure efficient environmental activity and improve its control system. Observe current rules and standards of the Company’s employees’ conduct when Improve industrial and environmental implementing the Company’s projects, safety at the Company’s facilities, assume including waste management standards required measures to mitigate accident and prohibition of hunting, fishing and risk of oilfield equipment, including gathering wild-growing herbs, to require pipelines. the contractors to comply with these rules and standards. Enhance energy efficiency of production processes at all production stages. Organize regular professional training and environmental education of Reduce motor fuel consumption and the Company’s employees. improve the environmental performance of the Company’s vehicles. Ensure wide accessibility of environmental information on Ensure rational environmental the Company’s business activities, management, mitigation of a negative transparency of environmental impact on the environmental management and decisions made components and compensation of in this area. possible damage to the environment. Apply environmental standards of Adhere to the “green office” principles. the Company to the activity of contractors.

55 56 Environmental report 2018 that relate of to sector the oilandgasproduction “Surgutneftegas” “Surgutneftegas” indigenous peoplesofthe North interaction withthe small-numbered on Basic principlesofthe policy

ethnic Obligation to the ethnic respect useoflandand naturalRational resources ofland, Recognition ofthe importance Preservation ofthe primordial Compliance withfederal andregional the indigenous people. identity, culture andlocalcustoms of of the North. the small-numbered indigenouspeoples of traditional housekeepingactivities in the places of traditional residence and peoples. management ofthe small-numbered as the basisfor the traditional nature resource potential ofthe ecosystems game animals, maintaining environmental water bodies, wild-growing and herbs of theindigenous population. andindustries housekeeping activities environment, traditional way oflife, numbered indigenouspeoples. and legitimate interests ofthe small- legislation aimedat protecting the rights PJSC, “Company”, “Surgutneftegas”, “joint stock company” and “we” are ofthe Environmental usedinthe text interchangeable Report terms PJSC.

Conclusion ofeconomic agreements and ofrepresentatives participation Ensuring a balanceMaintaining between Transparency ofthe Company’s socially most important tools of toolstreaties of asthe mostimportant housekeeping activities. oftheirlivingandtraditional the territory on placement ofbusinessassetsin indecision-making peoples ofthe North of the small-numbered indigenous andobligations.restrictions by imposingmutualself- of the North the small-numbered indigenouspeoples the interests ofthe Company and indigenous peoplesofthe North. the relations withthe small-numbered the state ofthe natural environment and significant environmental efforts, use ofnatural resources. the limitation imposedonthe traditional people inorder to compensate for withthe indigenous equal partnership