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JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
ENERGY FOR LIFE ENERGY FOR PEOPLE
JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Presented below is Sustainable Development Report of JSC Gazprom Neft for 2009. Since the year 2007, the Company has been annually summing up the results of this activity, informing the stakeholders of its priorities and achievements. This fourth release of the Report describes the Company’s efforts in achieving the sustainable development goals set in the corporate strategy.
In this Report, such terms as JSC Gazprom Neft, Gazprom Neft, the Company, and the Group in various versions mean JSC Gazprom Neft and its affiliates and subsidiaries. The Report describes the financial standing and performance based on the consolidated data of JSC Gazprom Neft. The data describing the activities in the social sphere and labor relations, and environmental protection results, cover JSC Gazprom Neft and its affiliates and subsidiaries in Russia and the CIS, if not otherwise specified in the text. 2 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Contents
5 1. Letter from the Chairman 71 8. Safe development: industrial of the Management Board and environmental safety, occupational health 7 2. Gazprom Neft in 2009 72 Strategy and management 8 About the Company 73 Occupational health and safety 12 Key Achievements of 2009 76 Industrial safety 77 Reduction of adverse environmental 15 3. Implementation of the sustainable impacts and efficient use of resources development strategy: consistency and efficiency 84 9. Appendix 1. selected terms and abbreviations 23 4. Sustainable development management 24 Integration of the sustainable 86 10. Contacts and feedback development principle into the Company’s practice 25 Corporate Governance and Operations Management 26 Implementation of the systemic approach to management 26 Interaction with Stakeholders 27 Corporate Communications 31 Sustainability Reporting
33 5. Resources for the future: economic development 34 Strategy Implementation: Growth and Efficiency 42 vECTOR of Innovative Development
47 6. Human resources development and social programs 48 Strategy and management 50 Personnel characteristics 51 Personnel recruitment and training 52 Motivation and wages 54 Cooperation with trade unions 54 Social programs
59 7. Contribution to regional development 60 Strategy and management 60 Regional cooperation and social investments 69 Charitiy
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JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Dear colleagues,
In the year 2009, Gazprom Neft confirmed its reputation of a stable and efficient company once again. In a difficult financial and economic environment, the Company increased its oil production and refining outputs, and extended its assets in and outside Russia. Along with this, we strive to ensure the optimal balance of the economic, environmental, and social components of the Company’s activity, to generate an environment friendly for business and for development of our employees’ innovative potential, thus providing a stockpile for stable growth in the future.
The sustainable development strategy is an integral part of the Company’s long-term strategy. Creating a firm basis for large-scale growth, for establishment of Gazprom Neft as a world class company, we consistently set and achieve targets both of financial and technological nature and those aimed at increasing the social capital and natural resources conservation. These targets are closely interrelated, for successful modernization is impossible without proper care of the Company’s human resources, and you cannot successfully compete on the world market today without improving your environmental safety.
In 2009, our sustainable development activity was aimed at improving the quality and efficiency of the key social and environmental programs. Under the challenging economic conditions, we have learned to manage these programs better, to focus our resources on strategic sectors, and to set our priorities with regard to material issues of the day. Improvement of corporate governance, development and implementation of policies and standards relying on the best international and Russian practice in industrial safety, occupational health and environmental protection, as well as in human resources development and community investments – have raised this work to a higher level, enabling us to retain and develop programs important for our employees and social partners.
Among the priorities of the year for the Company were improvement of the employee motivation and professional development system, social support to employees, involvement in the social and economic development of the regions where Gazprom Neft operates, and implementation of large-scale programs aimed at higher industrial and environmental safety. The innovative technological, social, and environmental initiatives of Gazprom Neft presented in this Report have become a material input to implementation of the Company’s long-term development strategy. Many of these initiatives have also won public recognition, receiving awards and prizes of governmental agencies and of public and professional organizations.
In these efforts, Gazprom Neft actively cooperates with a broad range of stakeholders: the Government, shareholders, employees, users, and suppliers, as well as with local communities in the regions where the Company operates. We strive to build this interaction upon a basis of mutual trust and responsibility. The Company emphasizes the transparency of its activity. In 2009, the information disclosure quality of Gazprom Neft was recognized both in and outside Russia. The annual report of the Company was named the best in the non-financial sector by the results of the 11th annual competition of annual reports of the Expert RA rating agency. Gazprom Neft was also ranked first among global oil and gas industry companies for best financial disclosure procedures by the IR Global Rankings.
The Company’s sustainability reports supplement its financial reporting, reflecting the balance of the financial, industrial, social, and environmental components of the Company’s activity. Oriented at the best international and Russian practice, Gazprom Neft has started implementation of the internationally recognized sustainability reporting guidelines. The dynamic growth of the Company, as well as the developments concerning its structure and business processes, requires careful adaptation of our sustainability reporting to the new conditions. We consider the 2009 Sustainable development report as a step in this direction.
Presenting you this Report, I hope for constructive and concerned discussion of both our today’s performance and problems that have yet to be solved. I would also like to express my gratitude to all employees of the Company who took part in the preparation of this Report.
Alexander Dyukov,
Chairman of the Management Board, Gazprom Neft
5 ENERGY FOR LIFE ENERGY FOR PEOPLE 2 GAZPROM NEFT IN 2009 GAZPROM NEFT IN 2009 Energy for life 2 ENERGY FOR PEOPLE GAZPROM NEFT IN 2009
About the Company
Gazprom Neft, a subsidiary of JSC Gazprom, The Company’s core lines of business Company’s is one of Russia’s largest and fastest-growing AAOil and natural gas prospecting, Business oil and gas companies. Gazprom Neft is development, production, and sales Russia’s fifth company by oil production AAOil refining and marketing of Geography level, and third, by the oil refining output. petroleum products The Company’s proved hydrocarbon The Company carries out its activities reserves by the SPE (PRMS) classification in Russia’s largest oil- and gas-bearing exceed 1 billion TOE, which positions the Strategy regions such as Khanty-Mansiysk Company among the twenty world’s largest Autonomous District, Yamalo-Nenets oil companies. The Company employs over The strategy of JSC Gazprom Neft Autonomous District, Tomsk, Omsk and 50 thousand people. is oriented to increase the scale and Tyumen Regions. expand the geography of the business, and to maintain and improve its The Company’s major oil refining efficiency. The goal of the Company’s facilities are located in Moscow, the long-term Development Strategy until Omsk and Yaroslavl Regions. The 2020 is to establish Gazprom Neft as Gazprom Neft’ distribution network a global company of Russian origin operates countrywide. efficiently competing on the worldwide oil and petroleum products markets. Gazprom Neft is strengthening its positions on international markets. The Company operates in Kazakhstan, Kyrgyzstan, Tajikistan, and the Republic of Belarus. The Gazprom Neft assets outside Russia include companies in Serbia and Italy. The Company Strategic goals implements projects in the Middle East, of JSC Gazprom Neft Africa, and Latin America. until 2020
Growth of proved oil reserves: Up to 2,200 million tons Key Financial and Operational Results in 2009* Growth of oil production: Proceeds, US$ millions 24 166 Up to 90–100 million TOE a year EBITDA, US$ millions 5 977 Oil and gas production, millions of barrels, oil equivalent Growth of oil refining (including the interest in subsidiaries assessed by the share 369,8 output: Up to 70-80 million interest method) tons a year Refining, millions of tons (by corporate refineries, and subsidiary refineries included 33,4 Growth of sales of high added by the share interest method) value oil products: Up to 40
million tons a year * For more details of the financial and industrial results of the Company’s activity, see «JSC Gazprom Neft Annual Report for 2009»
8 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
COMPANY’S STRUCTURE
Gazprom NEFT
Production Oil Service and Exploration MARKETING
OJSC Gazprom Neft-Noyabrskneftegas Gazprom Neft-Nefteservice LLC OJSC Gazprom Neft-Omsk Gazprom Neft-Khantos LLC OJSC Gazprom Neft NNGF CJSC Gazprom Neft-Kuzbass Gazprom Neft-Vostok LLC Kapitalny Remont Skvazhin – Service LLC OJSC Gazprom Neft-Altai Archinskoye LLC Spetstransservice LLC Gazprom Neft-Tsentr LLC OJSC Meretoyakhaneftegaz Noyabrskneftegazsvyaz LLC CJSC Munai-Myrza Sibneft-Yugra LLC Noyabrskteploneft LLC Gazprom Neft Marine Bunker LLC Severnaya Taiga – Neftegaz LLC RMZ Gazprom Neft – Omsk Refinery LLC Gazprom Neft Asia LLC Zapolyarneft LLC Noyabrskneftespetsstroy LLC OJSC Gazprom Neft-Tyumen Gazprom Neft-Yamal LLC Noyabrskenergoneft LLC Gazprom Neft-Chelyabinsk LLC Gazprom Neft-Angara LLC NoyabrskEPUService LLC Gazprom Neft-Krasnoyarsk LLC Gazprom Neft-Sakhalin LLC Service Drilling Company LLC OJSC Gazprom Neft-Ural Neftekhimremont LLC CJSC Gazprom Neft-Aero Refining OOO YamalServiceTsentr (LLC) CJSC Gazprom Neft-Aero OJSC Gazprom Neft-Omsk Refinery Muravlenkovskaya Transportnaya CJSC Gazprom Neft-Severo-Zapad Gazprom Neft-Lubricants LLC Kompaniya LLC Gazprom Neft-Kaluga LLC Gazprom Neft Lubricants Italia S.p.A. Noyabrskneftegazproekt LLC OJSC Sibneft-Yaroslavnefteproduct OJSC Moscow Refinery Yamalenergoremont LLC OJSC Gazprom Neft-Novosibirsk Noyabrskneftegazavtomatika LLC CJSC Gazprom Neft-Noyabrsk Crude Exports Avtomatika Service LLC Gazprom Neft-Aero Murmansk LLC Gazprom Neft Trading Gmbh Servisnaya Transportnaya Kompaniya LLC Gazprom Neft-Tajikistan LLC Joint Ventures: Noyabrskaya Tsentralnaya Trubnaya Gazprom Neft-Kazakhstan LLP Slavneft Baza LLC Alliance Oil Asia LLC Tomskneft Gazprom Neft-Shipping LLC Multibusiness Companies: Other Operations Gazprom Neft-Resurs LLC «Naftna Industrija Srbije» (NIS) Sibir Energy Plc. Gazprom Neftfinance LLC Gazprom Neft-Nizhniy Novgorod LLC Gazprom Neftenergo LLC Gazprom Neft-Belnefteprodukt LLC Gazprom Neft – ZS LLC CJSC Gazprom Neft-Mobilnaya Karta Gazprom Neft – NTTS LLC OJSC Gazprom Neft-Yaroslavl Gazprom Neft – Invest LLC Gazprom Neft Business Service LLC CJSC Social and Business Center Okhta Complex Galernaya 5 LLC
9 GAZPROM NEFT IN 2009 Energy for life ENERGY FOR PEOPLE
Regions of Operations of JSC Gazprom Neft
1 Pskov Region 47 Republic of Sakha 2 Smolensk Region (Yakutia) 3 Bryansk Region 48 Amur Region 4 Kursk Region 49 Jewish Autonomous 5 Oryol Region Region 6 Belgorod Region 50 Primorsky Krai 7 Kaluga Region 51 Khabarovsk Krai 8 Rostov Region 52 Sakhalin Region 9 Krasnodar Krai 53 Kaliningrad Region 10 Stavropol Krai 11 Tver Region 54 Belarus 24 12 Moscow and 55 Kazakhstan 53 Moscow Region 56 Kyrgyzstan 23 13 Novgorod Region 57 Tadzhikistan 14 Leningrad Region 15 Yaroslavl Region GAZPROM neft 1 14 16 Vladimir Region marine bunker 13 17 Ivanovo Region 54 27 Belarus 25 18 Nizhny Novgorod St.Petersburg 11 22 Region Murmansk Region 2 19 Republic of Moscow 15 Mordovia Yaroslavl Region 3 7 12 28 20 Tambov Region Krasnodar Krai 21 21 Kostroma Region Far East 5 17 22 Vologda Region 4 16 23 Republic of Karelia gazprom neft 18 24 Murmansk Region 6 aero 35 47 25 Archangelsk Region Belarus 20 19 26 Republic of St.Petersburg Tatarstan 34 Murmansk Region 26 29 27 Nenets Autonomous Moscow Okrug 43 Tomsk Region 8 30 28 Komi Republic Novosibirsk Region 9 29 Perm Region Krasnoyarsk Krai 30 Sverdlovsk Region Bryansk Region 31 Chalyabinsk Region Kemerovo Region 10 33 32 Kurgan Region 31 32 33 Tyumen Region 37 34 Khanty-Mansi 36 Autonomous Okrug 35 Yamalo-Nenets 52 Autonomous Okrug 38 51 36 Omsk Region 44 48 37 Tomsk Region 38 Novosibirsk Region 55 41 39 Altai Krai 45 40 Altai Republic 39 42 49 41 Kemerovo Region 46 42 Republic of Khakassia 50 43 Krasnoyarsk Krai 40 44 Irkutsk Region 56 45 Republic of Buryatia 46 Chita Region
57
10 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
24
53 23
1 14 13 54 27 25 11 2 22
15 3 7 12 28 21 5 17 4 16
6 18 47 20 19 35
34 26 29 43 8 30 9
10 33 31 32 37 36 52 38 44 48 51
55 41 45 39 42 46 49
50 40
56
57
11 GAZPROM NEFT IN 2009 Energy for life ENERGY FOR PEOPLE
2009 Highlights
AA Retained leading positions in the Russian oil industry in terms of cost efficiency. AA The results of the Company’s operations exceeded the 2008 results for all the business lines. AA The resource and production potential of oil production enhanced by consolidating the controlling interest in Sibir Energy. AA A new business line generated, i.e. gas production. It is intended to start gas supplies from the Company’s fields to the unified gas supply system in the fourth quarter of 2010. AA Geography of oil production expanded outside Russia due to new projects in the Middle East, Africa, and Latin America, and integration of the Serbian NIS. AA A lubrication oil factory in Italy purchased. The production of the first product under the brand of Gazprom Neft in Europe, Gazpromneft Super Oil ESX 10W-40 semi-synthetic motor oil, has started. AA The Company’s oil refineries updating program launched. AA Completion of the first stage of the filling stations rebranding campaign that covered 387 filling stations of the Company. AA A spatial visualization center opened at the Research and Technology Center of Gazprom Neft, using advanced technologies in geological and hydrodynamic modeling. In 2009, hydrodynamic modeling was applied to 60% of the Company’s oil fields. AA Implementation of an Integrated Risk Management System at the level of production units and subsidiaries and affiliates. AA New version of the Corporate Code of Ethics of Gazprom Neft developed. AA The 2008 annual report of JSC Gazprom Neft recognized as the best in the non-financial sector by the results of the 11th annual competition of annual reports of the Expert RA rating agency. AA Gazprom Neft ranked first among global companies in Oil and Gas industry for «Best Financial Disclosure Procedures» by IR Global Rankings, and joined the Top Five European companies in terms of financial disclosure. AA Wage cost growth: 13.5%. AA 244 billion rubles transferred to the State as taxes and customs duties . AA General Agreements for cooperation signed with Yamalo-Nenets Autonomous District, Khanty- Mansiysk Autonomous District, Omsk, Leningrad and Murmansk Regions, and 13 agreements for social and economic cooperation with municipal entities. Under these agreements, the Company invested about 850 million rubles in the regions’ social development programs in 2009. AA Under these agreements, the Company invested about 850 million rubles in the regions’ social development programs in 2009. AA Launch of large-scale projects for more efficient utilization of associated petroleum gas: first stage of the Yuzhno-Priobskaya gas turbine powerplant, and gas supplies from the Ety -Purovskoye field to SiburTyumenGaz via a new pipeline. AA Implementation of the land reclamation program in an area of 148 ha.
1 Less refunded export VAT.
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ENERGY FOR LIFE ENERGY FOR PEOPLE 3 IMPLEMENTATION OF THE SUSTAINABLE DEVELOPMENT STRATEGY IMPLEMENTATION OF THE SUSTAINABLE Energy for life 3 DEVELOPMENT STRATEGY ENERGY FOR PEOPLE IMPLEMENTATION OF THE SUSTAINABLE DEVELOPMENT STRATEGY: CONSISTENCY AND EFFICIENCY
The Company’s sustainable development strategy is integrated into the long-term corporate strategy aimed at establishing Gazprom Neft as a world leader in the industry. The targets of medium-term sustainable development activity are determined by the Company’s objectives for the period of 2008-2010 when a firm basis for future fundamental growth is to be created. The table below presents consistent efforts of Gazprom Neft to achieve its sustainable development goals set for this period.
Medium-term Implementation sustainable development targets (2008–2010) 2008 2009
Sustainable Development Management
Development The Project Management Policy, Strategic Planning The new version of the Corporate Code of Ethics of JSC and approval of Policy, Risk Management Policy, Document Gazprom Neft developed. key sustainable Management Policy, Information Safety Policy, development codes Information Technology Policy, Occupational Health, A set of corporate standards regulating activities in risk and policies, and Safety, and Environmental Protection Policy, and management, personnel management, occupational health their implementation Charity Policy were adopted. and safety, and environmental protection was adopted. They at all of the are being implemented across the Company’s facilities. Company’s facilities
Development of The Risk Management Policy was adopted. An The Integrated Risk Management System was implemented the Integrated Risk Integrated Risk Management System (IRMS) was in 24 subsidiaries and affiliates. Essential business risks are Management System developed. identified and assessed, and actions for their management are being developed and implemented.
Improvement of Active expansion of the Company and Generation of reporting describing the implementation of the quantitative implementation of restructuring programs required the key medium-term targets on the basis of a reporting sustainable a revision of the reporting perimeter. The pilot structure complying with international principles of development data project «Sustainable Development Activity Review» sustainability reporting, and a set of selected performance collection, analysis was implemented using a limited number of key indicators. Adaptation of the data collection and and monitoring performance indicators in this activity. consolidation system to the Company’s new structure with system regard to development of globally recognized sustainability reporting guidelines in the oil industry.
16 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Medium-term Implementation sustainable development targets (2008–2010) 2008 2009
Systemization Participation of the Company’s management and Creating of a structural unit in the Company responsible for of dialogue with specialists in business and research/practice investor relations. stakeholders conferences. Establishment of a Coordination Center for dealing with trade Regular meetings of management and employees unions and labor collectives of JSC Gazprom Neft. Research identifying the most material issues of Preparation and signing of a package of agreements for interaction of the Company and its employees. social/economic cooperation with regions. Development of media communication channels. Implementation of the public hearing practice. Launch of the Neftegazeta, a new corporate newspaper. Implementation of a systemic approach to internal communications development. Adoption of a long-term Adoption of an internal communications External Communication Policy. development strategy for up to 2015. Expansion of the package of corporate communications channels. Development of corporate media contents with regard to information requests of the audience and feedback mechanisms. Regular publication of interviews with the Company’s management.
Publishing of The «Sustainable Development Report of Gazprom A review of the Company’s sustainable development activity sustainable Neft for 2007» issued in 2008 was entered on for 2008-2009 published with regard to stakeholders’ development activity the National Register of Non-financial Corporate requests. reviews with regard Reports of the Russian Union of Industrialists and to stakeholders’ Entrepreneurs. Stakeholders’ comments on the The concept and content structure of the Gazprom Neft requests document were considered in the preparation of the Sustainable Development Report for 2009 developed Company’s Sustainable Development Review issued with regard to the Company’s expanded geography and in 2009. implementation of structural optimization projects.
Economic Development
Oil production The challenging economic situation dictated some Recovery of an oil and gas production growth. increase due to reduction in the investments in oil field development development of and optimization. Oil production was increased in Acquisition of new assets (consolidating the controlling discovered oil fields, such oil fields of the Company as Priobskoye and interest in Sibir Energy and integration of NIS, Serbia). higher oil recovery some fields in the Tomsk and Omsk Regions. This Active development of oil fields, finding additional reserves ratio in the fields enabled to compensate for adverse trends in oil for oil recovery in assets with dropping production, and under development, production to some extent. structural and organizational reforms of the producing and purchase of assets. new subsurface resources sites and new assets
Further integration Gazpromneft-Nefteservis, a united service operator, A quality management system in compliance with ISO 9000 and improvement of one of the largest in the Russian oil and gas sector, international standards implemented at all the Gazpromneft- competitiveness of was established. Nefteservis facilities. the oil service sector Well construction time reduced by 15%.
17 IMPLEMENTATION OF THE SUSTAINABLE Energy for life DEVELOPMENT STRATEGY ENERGY FOR PEOPLE
Medium-term Implementation sustainable development targets (2008–2010) 2008 2009
Expansion and The number of filling stations (own, leased and By the end of 2009, the Company’s network included 950 development of the franchised) increased from 782 in 2007 to 865 in filling/service stations. Company’s retail 2008. sector Implementation of uniform customer service standards. The program of the Company’s retail brand creation scheduled for 2009-2011. 387 filling stations were rebranded in 2009.
Progress of the Gazpromneft - Research and Development Center Gazpromneft NTC provides the full range of work for oil and Research and (Gazpromneft NTC) runs several programs covering gas exploration, development and production. Development the entire oil prospecting and production cycle. Center on the basis Development of a concept for intellectual activity and of the Company’s innovative development protection. Research & Analysis The Spatial Visualization Center opened in St. Petersburg. Department and implementation Jointly with personnel of the Information Technologies, of the respective Automation and Telecommunication Department, new investment program solutions tested for setting up Data Processing Centers and generation of a highly efficient IT infrastructure. Creation of the Exploration Block.
Higher oil Development of a quality improvement program for The proportion of high octane gasolines in the overall conversion rate, and the Gazpromneft-ONPZ fuels aimed at compliance gasoline output was 84%, i.e. 5% higher than in 2008. The switchover to new of their production with the requirements of the average conversion rate was 80% (3% growth), and at motor fuel quality Technical Regulation «Requirements for motor Gazpromneft-ONPZ, 86%. standards gasoline and aviation gasoline, diesel and marine fuel, reactive engine fuel, and residual oil». Updating of the hydro cleaning plants for diesel oils 24/6 and 24/9 completed at Gazpromneft-ONPZ, which will enable switching over to production of diesel oil to standards of Class 4 and Class 5. The construction of the Isomalk-2 isomerization unit was started, which will enable an increase of motor gasolines output, while bringing their quality up to compliance with the requirements of Class 4 and Class 5.
Personnel Development, and Social Support to Employees
Implementation of A Target Management System was implemented. The Company’s general personnel strategy was developed the key performance Involved in the program were 550 managers of and approved, determining the key priorities and indicators system; the Corporate Headquarters and subsidiaries and development pines of personnel management. building a system affiliates. Implementation of the grade system of qualification started: pilot projects. The Corporate Headquarters Implementation of the grade system in subsidiaries and levels (‘grades») grade system was implemented. affiliates: appraisal and assigning grades to top managers and the related in all subsidiaries and affiliates. The grade system was compensations and completely implemented in nine subsidiaries and affiliates. benefits scheme Development of the Company standards in personnel linked to it motivation and social support management. Implementation of the key performance indicators system.
Definition of common Implementation scheduled for 2009 Development of a uniform concept of social benefits in the approaches to the Gazprom Neft Group started, with regard to the market social package practice. content, and leveling of social support at Development of a uniform collective bargaining pattern. enterprises
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Medium-term Implementation sustainable development targets (2008–2010) 2008 2009
Generation of Implementation of elements of a common integrated An internal communications strategy was adopted and is a common corporate corporate culture started in the Company. being implemented. culture; higher personnel loyalty and Transmission of the Company’s business targets and The Company’s standards in personnel motivation and motivation values via the Target Management system. social security were developed, which formed a procedural and regulatory basis for a uniform wage and social benefits Corporate events held in all structural units. management system. A program of management and employees information about the career growth philosophy and opportunities in the Company is being implemented Higher transparency of the compensation philosophy. Corporate events.
Attracting graduates/ 378 graduates were recruited by subsidiaries and Development of cooperation with universities, strategic young professionals, affiliates. partners of the Company. broader cooperation with universities and Jointly with the G. V. Plekhanov Saint-Petersburg State vocational colleges Mining University in, academic competitions were arranged for school leavers in cities of the Company presence (Noyabrsk, Omsk) to select winners and accept them to the Institute. Field practice was arranged for students of partner universities at the enterprises. Gazpromneft-NTC came to agreement with I. M. Gubkin Russian State University of Oil and Gas about establishing a base subdepartment. 305 graduates became the Company’s employees.
Establishment Standardized processes developed in such areas 1290 persons were trained. 642 persons were trained in and development as «Planning and training of personnel reserve corporate managerial competencies development trainings, of corporate for target positions», «Young professionals which is five times more than in 2008. training centers; management», «Personnel training procedure.» enhancement Modular programs generated for development of the of programs of The Company’s executive reserve was built. managerial potential of Gazprom Neft employees and professional training managers of various levels. and organizational/ Development of a professional competencies system by managerial skills business function, including result assessment. development
Contribution to region development
Fulfillment of the Continued cooperation with priority regions of the Work on the Regional Policy Concept of JSC Gazprom Neft terms of existing Company’s operations. Retaining all the basic social started. cooperation programs in the difficult economic environment. agreements with Preparation of the standard «Procedure of preparation and the regions of signing of social and economic agreements.» (Adopted in operations and February 2010 and recommended for use in subsidiaries further development and affiliates.) of partnership Cooperation with all the priority regions of the Company’s presence and expansion of regional cooperation was continued; social/economic agreements with the Leningrad and Murmansk Regions were signed for the first time.
Optimization of Higher funding of social support programs for Approval of the «Charity Procedure» corporate standard. charity expenses orphanages, schools, boarding schools, and cultural with regard to institutions. Charity optimization: development of priority sectors of strategic programs charities. emphasized in the Development of approaches to improvement of Charity Policy charity programs efficiency.
19 IMPLEMENTATION OF THE SUSTAINABLE Energy for life DEVELOPMENT STRATEGY ENERGY FOR PEOPLE
Medium-term Implementation sustainable development targets (2008–2010) 2008 2009
Safe Development: Health, Safety, and Environment
Implementation of The JSC Gazprom Neft Health, Safety and Generation and implementation of a package of standards the Occupational Environment Policy approved. as a regulatory and procedural basis for implementation Health, Safety of the corporate Occupational Safety, Health, and and Environment A strategy for implementation of the integrated Environmental Protection Policy, and implementation of the Policy, and building the Integrated Health, Safety, Environment and Integrated Health, Safety, Environment and Civil Protection an integrated Civil Protection Management System developed Management System. management system to comply with the basic recommendations of the for its fulfillment International Association of Oil and Gas Producers Analysis of accident origins and dynamics. and requirements of the ISO 9000, 14001, OHSAS 18001 international standards. Over 700 managers and specialists of the Company attended environmental legislation training. The Azimuth information and management system was developed and implemented, enabling integration of all gained industrial safety data, automation and standardization of managerial reporting, orientation of accident investigation at identifying the key origins, and current situation analysis. Accident recording discipline, accident information transparency, and information exchange speed were improved.
Higher personnel Corporate guidelines on personnel Health, Safety, Establishment of the function of internal instructors: 122 competence in Environment and Civil Protection training were instructors trained, of which, 58 in safe driving and 64, in Health, Safety, developed and approved. Health, Safety, Environment and Civil Protection programs. Environment and Civil Protection Personnel training in application of the Company’s Internal instructors trained 14,050 employees of subsidiaries standards in the area of Health, Safety, Environment and affiliates, of which 7013 in protective driving и 7037 in and Civil Protection was started. corporate HSE programs. Health, Safety, Environment and Civil Protection 57 exercises conducted in order to ensure efficient response Department specialists, and instructors of specialist to emergency situations. companies trained about 1,000 persons in the most important production areas.
Up-to-date individual Switchover to new types of up-to-date individual Approval of the standard «Procedure of IPG issue to protective gear for protective gear (IPG) started. personnel». personnel Industrial testing of samples of overalls, protective footwear, and individual protective gear arranged and conducted. The catalog IPG authorized for purchase generated. New Specifications for working clothes developed and approved. Complete switchover to purchasing of IPG complying with the new Specification and the corporate style.
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Medium-term Implementation sustainable development targets (2008–2010) 2008 2009
Higher safety of A truck simulator was purchased for training and The corporate standard providing for automotive transport truck shipping certification of drivers under conditions maximum safety is being implemented. close to various emergency situations on the road. Drivers’ training arranged and completed; internal instructors prepared. Any road accidents are subjected to internal investigation; based on its results, information is exchanged between subsidiaries and affiliates.
Reduction of The accident information transparency rate Development of primary standards; collection and analysis personnel injuries increased by 40% compared to 2007, reaching of statistical data related to occupational injuries. and adverse the level of performance of the world’s leading oil environmental companies. Implementation of an internal investigation system enabling impacts identification of cause-effect relations and systemic origins of Faster injury reporting (information on 97% of accidents. accidents was received within 24 hours). Development and implementation of corrective action, Occupational health costs per Company worker resulting in a noticeable reduction in fatal cases. were increased nearly twofold (from 6,000 to 12,000 rubles.) Several actions were completed aimed at lower adverse environmental impacts. The most important of these was approval and implementation of the sludge pits and contaminated land remediation program. The process condensate treatment module was updated at the catalytic cracking plant in Gazpromneft-ONPZ; as a result, the industrial effluent quality was greatly improved.
Greenhouse gas Greenhouse gas inventory is a component of the Continuous atmospheric air status monitoring; development inventory Company’s atmospheric air protection program. of standards for maximum permissible pollutant emission rates. Actions to reduce the specific and absolute values of harmful emissions are being developed and implemented.
Higher level of A Medium-Term Investment Program for Associated The associated gas utilization rate increased from с 37.5% in associated gas Gas utilization and higher efficiency use (MTIP) for 2007 to 48.1% in 2009. utilization 2008-2010 was adopted. On the basis of MTIP, an updated Gas Program was prepared, where the key investment projects are construction of a gas collection system, power generation, organization of an associated gas metering system, and disposition of low-pressure gas. The pipeline from the Ety-Purovskoye oil field, and the first stage of the gas turbine powerplant in the Southern license part of Priobskoye oil field were built and started up. Designing of the Shinginskoye oil field gas line started. Design of the automatic associated gas metering system completed.
21 ENERGY FOR LIFE ENERGY FOR PEOPLE 4 SUSTAINABLE DEVELOPMENT MANAGEMENT SUSTAINABLE DEVELOPMENT Energy for life 4 MANAGEMENT ENERGY FOR PEOPLE SUSTAINABLE DEVELOPMENT MANAGEMENT
The difficult economic situation of the last Integration The sustainable development principle two years has shown too evidently the vital suggests that today’s prosperity should importance of the sustainable development of the sustainable not be achieved at the expense of principle, which is embodied in the well- development prosperity of generations to come, or considered financial and investment policy, undermine the long-term development and balance between the Company’s principle into the potential. This principle reflects the business performance and societal impacts. Company’s practice idea of corporate social responsibility The Company’s commitment to this principle as recognized by the international has helped to minimize the adverse effects The most important clusters of and Russian business community. of the unfavorable market conditions on its sustainable development goals It is set forth in documents of the UN development. meeting the Company’s long-term and influential business associations, strategy as well as the key areas of including those in the oil and gas Implementation of the sustainable interaction with stakeholders were sector, and in documents of the national development principle is ensured by the ОАОoutlined «ГАЗПРОМin 2007. НЕФТЬ» business community such as the «Social Company management system. В СИСТЕМЕ РОССИЙСКОГОCharter of Russian Business».
ЭКСПОРТА НЕФТИ, 2007 ГОД (%)
Au liers tho pp riti u es S G MANA EME 'S NT Y S N Y A S P T s E M Economic development C e M O l e i e y C of the Company n o l t
s p Contribution to regional
m
E development Personnel development
S and support a h s n a l ie r t d e Safe Development a i h c n in o o u v L e ld m s e m to rs o rs c Pu ons blic organizati and media
Basic sustainable15 Прочие development goals clusters and key areas of interaction with stakeholders (For details, see Sustainable Development Report of JSC Gazprom Neft for0 2007.) Операторы 2 Руснефть 0 Газпром 24 20 Роснефть 2 Башнефть 7 Газпром нефть 6 Газпром 17 Руснефть 15 Сургутнефтегаз 16 Лукоил JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
The translation of the notion «sustainable Corporate Audit Committee and the Personnel and development» into the language of Governance Compensations Committee. practical management suggests AAbalanced financial, industrial, social and Operations The executive bodies of JSC Gazprom and environmental components of the Management Neft responsible for implementation Company’s activity of the Company’s goals, strategy, AAsystemic approach to risk management, and policy, are Management Board with non-financial risks included in the The establishment of Gazprom Neft as (collegial executive body) and Chief corporate risk management system a leading global oil company suggests Executive Officer (sole executive AAconsidering interests of a broad range a high level of corporate governance. body), who is the Chairman of the of stakeholders, and development of The Company is consistently guided Management Board of the Company1. mechanisms enabling dialogue and by the international principles and constructive interaction with them in standards and the best world practice Gazprom Neft is striving for a high handling problems material for the in this area, ensuring the shareholders’ level of transparency of its activities. Company and society. rights, high quality of managerial The Company publishes its financial decisions and efficient business. The reporting to international standards, The medium-term sustainable Gazprom Neft management system management reporting, and sustainable development goals (2008–2010) are is built in compliance with applicable development reports. Information on linked to the benchmarks set for the Russian laws, the Charter and internal the corporate governance structure, respective phase of implementation of documents of the Company, and principles of formation of the the corporate Strategy of Development provisions of the Corporate Governance Company’s governing bodies, and until 2020. This phase results should Code recommended for use by the principles of compensation to members provide a platform for future large- Federal Commission for the Securities of the Board of Directors is disclosed scale growth of Gazprom Neft, and its Market. Gazprom Neft pays most in Annual Reports of JSC Gazprom establishment as a leading global oil serious attention to the improvement Neft presented to the Company’s company. Table 1 shows the stage- of the corporate governance shareholders and placed on the official by-stage advance of the Company in system, being aimed at the growth corporate website, opening access to sustainability area (see p. 16–21 of this of the Company’s equity value and this data for all stakeholders and the Report). improvement of its economic and social general public2. efficiency, and environmental safety. Gazprom Neft consistently works The Annual report of JSC Gazprom on implementation of the systemic The General Shareholders Meeting Neft for 2008 was highly appreciated approach to management of is the superior controlling body of the by experts, and won several prestigious sustainable development factors, and Company. In accordance with the awards at once. It was recognized as the to integrated non-financial reporting. Charter, the General Shareholders best in the non-financial sector by the Today, it can be said that sustainable Meeting elects the Board of Directors. results of the XI Annual Reports Contest development management in general The professional skills and experience organized by the Expert RA Rating is built into the system of corporate and of the Directors ensure efficient Agency, and won in the nomination strategic governance and operations operation of the Board. The Board of for «Best annual report of the North- management. Directors runs two committees, the Western Federal District» of the 12th
1 For more details of the corporate governance system of JSC Gazprom Neft, the structure of the Company’s governing bodies, and their activity in 2009, see the Annual Report of JSC Gazprom Neft for 2009. 2 http://ir.gazprom-neft.ru/corporate-governance/.
25 SUSTAINABLE DEVELOPMENT Energy for life MANAGEMENT ENERGY FOR PEOPLE
Annual Report Contest sponsored by Code of the Federal Financial Markets to get the necessary knowledge and the RTS Stock Exchange. By the results Service was reviewed by the Company’s practical skills of risk management in of that contest, it also became No. 3 Board of Directors and recommended a short time. A project of implementation in the nomination for «Best Information for the General Shareholders Meeting’s of a specialized IT system is being Disclosure in the Annual Report by approval. utilized to enable automation of the Companies with a Capitalization of over basic phases of the risk management 100 Billion Rubles». The Company believes in a systemic process, and to generate a uniform approach to generation of its strategic corporate risk database. The system will Gazprom Neft was ranked first among development concept. In 2009, the cover all the subsidiaries and affiliates global companies of Oil and Gas industry Board of Directors approved the comprised in the implementation for best financial disclosure procedures Exploration and Production Block perimeter, and the Corporate by IR Global Rankings. The Company Strategy of JSC Gazprom Neft until Headquarters. competed in four nominations of the 2020, Oil Refining Strategy of JSC rating, «Best Website for Investors», Gazprom Neft until 2020, and the Oil In 2009, the Company was undergoing «Online Annual Report», «Investors’ Product Distribution Strategy of JSC structural reforms aimed at higher Choice» and «Financial Disclosure». Gazprom Neft until 2020. The Board stability and efficiency of its business. Besides, Gazprom Neft entered the of Directors also reviewed, and later Affiliation of new assets and expansion European Top 5 in financial information approved the Strategy of JSC Gazprom of the business scale and geography disclosure. Neft until 2020. Gradual transition to an required new approaches to integrated system of long-term strategy management, i.e. higher responsibility The sustainable development matters development and defence of medium- of divisions for their results, higher are continuously in sight of the term business plans is underway. manageability by reducing the Company’s Board of Directors and management levels, elimination of Management Board, which generated Important corporate governance duplicated functions of the Corporate the strategy in this area and monitor initiatives of 2009 were the projects of Headquarters and subsidiaries and its implementation. Gazprom Neft building an efficient system of internal affiliates, and changeover to the has developed and applies corporate audit function development and process management philosophy. policies in industrial safety, personnel implementation of the integrated risk potential development, environmental management system. protection, and social/economic Interaction with cooperation with regions that are guided The Integrated Risk Management Stakeholders by international principles and best System (IRMS) was developed and practice1. These documents provide is being integrated by the Company. a common ideology and procedural The risk management policy and the The expansion of the Company, and basis for operation of the respective standard «Integrated Risk Management a breakthrough in its operation level functional units responsible for System» were approved, the IRMS require a new quality of stakeholder implementation of the general corporate procedural documents were developed, engagement. In 2009, Gazprom Neft strategy in their sector. and the Company’s risks identified. developed the stakeholder engagement A risk card was developed for each practice both on the basis of the risk, with actions for its management existing approaches that have shown Implementation identified. The Company’s Management their efficiency and by implementing of the systemic Board defined the IRMS implementation new engagement mechanisms. perimeter for 2009-2010. It comprises For instance, the Investor Relations approach to clusters and units of the Corporate Department established within the management Headquarters and 34 subsidiaries and Company’s structure provides for higher affiliates of the Company. In 2009, quality of interaction with the investor actions for IRMS implementation were community. In 2009, Gazprom Neft continued carried out at 20 subsidiaries and improving the Company management affiliates of Gazprom Neft. Gazprom Neft as one of the largest in order to ensure further improvement Russian oil companies sees its of its long-term competitiveness and The IRMS implementation provides duty in constructive interaction with operating efficiency, and to strengthen personnel training, joint identification, the government in the key areas its sustainability under changing analysis and evaluation of risks by of national social and economic market conditions, flexibly responding their potential damage and probability development and of the oil and gas to requests by business and social of occurrence, and development of sector development. The Company partners. actions for their management. An IRMS takes part in the implementation of information site is provided on the large-scale infrastructure projects. In A new version of Gazprom Neft Company’s internal web portal, which 2009, Gazprom Neft entered into an Corporate Code oriented at the includes a remote online training course. agreement with the Russian Federation approaches outlined in the Corporate This course will enable newcomers Ministry of Transport of the Russian Federation on cooperation in production 1 For more details see the respective sections of this Report. and application of new generation
26 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
road petroleum asphalts. Under this agreement, Gazprom Neft, on the basis of its oil refining assets is setting up full-scale production of new polymeric bituminous binders that will considerably increase the service life of roads, and provide tangible reduction in repair expenses.
The Company contributes to innovative development of the Russian oil sector. One of the new developments is the Iskender Program and Industrial Complex developed for Gazprom Neft by the specialists of Sarov’s Oil and Gas Scientific and Production Center. The system was highly appreciated by the President of the Russian Federation Dmitry Medvedev in course of a meeting of the Commission for the Russian Economic Modernization and Technological Development.
The Company’s specialists jointly with representatives of governmental agencies and of other largest Russian companies contribute to the activities of expert organizations1 developing approaches to problems related to sustainable development, such as resources conservation, generation of a civilized gas market, industry regulation issues, and other strategic In February 2010 the President of the Russian Federation Dmitry Medvedev visited matters. «Gazpromneft-ONPZ» during his official tour to the Siberian Federal District. In the course of the visit the Chairman of Management Board JCS Gazprom neft Cooperation with trade unions Alexander Djukov presented the strategy of Gazpromneft-ONPZ, one of the largest reached a new level. In 2009, by the Russian oil refining factories. initiative of trade union organizations of the subsidiaries and affiliates and the Company’s Management, Gazprom Neft is committed to the (www.prom-oil.ru) which presents a Coordination Council for dealing with philosophy of transparency and information on well-proven equipment trade unions and labor collectives of openness in its dealing with suppliers. manufacturers and suppliers, aftersale JSC Gazprom Neft was established. The Company uses an open bidding service contractors and publishes The Council coordinates, on the purchase system. All information on advertisements of purchases by oil and corporation level, interaction with trade tenders to be held and forthcoming gas companies. unions and employees’ representatives purchases is placed on the Company’s in matters of social partnership and official website (http://www.gazprom- social protection of employees. neft.ru/tender/), in printed media and Corporate on industrial websites. Any potential Communications The practice of cooperation with regions supplier registered on the Gazprom on the basis of Social and Economic Neft website will automatically receive Cooperation Agreements was online notifications on the forthcoming Corporate communications play developed. Such form of stakeholder tenders at its email address. Thus, an important role in the Company involvement in the discussion of the the system ensures equal access management system. This role Company’s projects as public hearings to product and service purchase becomes especially noticeable in also proved to be efficient. In 2009, information for market players. Besides, periods of dynamic changes. Timely hearing was held in relation to the Gazprom Neft is a sponsor of the information about the Company’s project of associated gas recovery at information web resource «Russian strategy, current activities and its the Ety-Purovskoye oil field. Oil and Gas Equipment and Services» approaches to handling problems that concern people, is necessary to create 1 National Association for Subsoil Auditing, Russian Gas Society, Association of Petroleum Processors and an environment of trust, constructive Petrochemists, Union of Oil Exporters of Russia (SONEK) etc. and efficient interaction vitally important
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JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
for innovative initiatives generation, AAapproach to environmental protection began to regularly publish interviews of higher efficiency of all business AAthe Company’ s input to the the Company top-managers addressing processes and loyalty of employees. development of regions and territories the on-going activities, business results Corporate communications provide AAcharity policy. and prospects of the Company and feedback mechanisms, supplementing its particular divisions. The corporate formal administrative channels and For continuous coverage of these media create a common information ensuring timely response to material topics, the Company uses a broad space of the Company. Irrespective challenges. range of communication channels. of the geography and occupation, be it work at a production facility or In 2009, the Company’s Management In 2009, Gazprom Neft carried out in the Corporate Headquarters, each Board approved the long-term the implementation of the internal employee can get actual information on External Communications Policy of communications strategy for a period till events related to the Company. JSC Gazprom Neft for 2010-2020, 2015 adopted in 2008. which is coordinated with the Gazprom The internal communications system Neft long-term development strategy The Company owns a package of includes also meetings of employees and provides guidelines for external corporate media comprising of printed and managers, corporate events, and communication and information periodicals and their web analogues, newcomers adaptation programs. activities of all structural units and the Sibirskaya Neft magazine and the Further development of the internal subsidiaries and affiliates. The main goal corporate Neftegazeta newspaper. communications system is designed of these activities is to ensure efficient The Company’s employees are very to increase the level of employees’ communication with stakeholders, instrumental in generation of their self-identification as members of the which would promote a high level of content; the editors make regular polls Gazprom Neft team, and to achieve confidence in the Company. and analyze numerous letters from a high degree of compliance of their readers and responses to particular motivation and behavior with the The communications policy suggests articles. Responding to wishes of their Company’s corporate culture, thus regular identification of information audiences, in 2009 the corporate media disposing them to efficiently and requests from stakeholders, development of the communication channels system including feedback Сorporate communication channels and direct dialog channels, reputation risk management mechanisms, and MEDIA CHANNELS appraisal of efficiency of external communications. THE COMPANY’S WEBSITE CORPORATE REPORTING In the development of the Policy, media CONFERENCES AND ROUND TABLES research and expert interviews were CONTESTS AND EXHIBITIONS carried out, which enabled identification CORPORATE EVENTS AND of the most important topics for PRESENTATIONS interaction with stakeholders. Among PUBLIC EVENTS these topics are: PARTICIPATION IN PUBLIC AND PARLIAMENT HEARINGS, JOINT PANELS...) AAinvolvement of the Company in BULLETINS, INFORMATION MATERIALS handling of national social and economic problems; interaction with DIRECT MAIL the Government BLOGS, FORUMS. AAthe Company’s development strategy and risk management AAcorporate governance practice AAefficient business under the world economic recession and dropping Development of internal communications: energy prices from tools to results AAtechnological advance of the Company; implementation of innovations AAproduct quality and customer Development of a set Active application of Fine tuning of the internal of channels of internal advanced communication communications system relations practice communications technologies for handling business AAthe Company’s retail policy problems; performance appraisal based on AAthe Company as an employer: criteria linked to business approaches to personnel motivation results and compensation, and career prospects
AApersonnel development and Development of the quality content of internal communications with regard to the occupational safety Company’s strategic priorities and stakeholders’ information requests.
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JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
creatively contribute to common success.
The creation and promotion of the corporate brand has become a major component of the Company’s communication activity. The integrated process of the new brand creation started in 2007. The main goal of the project was to provide a clear, consistent, and positive image of Gazprom Neft as an up-to-date, dynamically growing, and highly efficient company. The rebranding program covered the structural units of the Corporate Headquarters and subsidiaries and affiliates. By the end of 2008, the program was successfully completed.
In 2009, the «Gazpromneft» retail brand project was launched. Creating Sustainability is also based on this approach. It the new brand, the specialists of Reporting also includes a number of standard the Company intended to retain and indicators, laying a base for further enhance the powerful positive potential development of sustainability reporting of the Gazprom brand, associated This Sustainable Development Report in the Company. It should also be noted with a large scale, stability, and social of JSC Gazprom Neft continues the that the Company expansion and its responsibility. At the same time, the program of non-financial reporting in management structures and systems new retail brand was required to the Company which started in 2007. optimization have set new tasks in deliver the specific features, the unique The program suggests stage-by- data collection and consolidation. In «promise» of the «Gazpromneft» retail stage implementation of internationally this respect, the standard indicators brand to the customers. The impressive recognized sustainability reporting in this Report do not cover all of the visual solution of the brand makes it approaches and guidelines. It is also Company’s activity. Thus, the scope recognizable and enables to effectively informed by the corporate business of coverage does not include foreign convey the "promise" – reliability, strategy, and the management systems assets, and only partially covers the security, quality assurance, up-to- development. The first publication under activities of affiliated Russian assets. dateness, friendliness, and accessibility. this program titled «Social Horizons: Where necessary, the coverage area is A Review of Gazprom Neft Social expressly stipulated. Integration of these Considering the Company’s ambitious Programs», included a few selected data into general corporate sustainable plans to expand of the filling stations standard reporting components as development reports is a task to be network and the brand development, presented by GRI-G3 Sustainability solved in the next reporting cycles. it is extremely important to ensure Reporting Guidelines. The sustainable the brand’s integrity in all of its development report for 2007 became manifestations. For this purpose, the the first to disclose the full set of Corporate Communications Department standard indicators provided by the developed a Corporate Style Book GRI-G3. for the Gazprom neft filling stations network which serves as a manual for In the next phase, in 2008 and 2009, the personnel of the Company and the main focus of the Company its sales subsidiaries. The Corporate sustainability reporting was to Style Book systematically covers the select and present the performance components of visual identification indicators against a wider context of the new retail brand, with graphic including Company’s strategy and and text recommendations for their management approach. This approach application on various carriers. (See was implemented, to a significant more about this project in the chapter extent, in the interim Review of the «Resources for the Future: Economic Company’s sustainable development Development».) activities issued in 2009. This Report
31 ENERGY FOR LIFE ENERGY FOR PEOPLE 5 RESOURCES FOR THE FUTURE: ECONOMIC DEVELOPMENT RESOURCES FOR THE FUTURE: Energy for life 5 ECONOMIC DEVELOPMENT ENERGY FOR PEOPLE RESOURCES FOR THE FUTURE: ECONOMIC DEVELOPMENT
Successful economic activity is a firm basis Gazprom Neft wishes to become an leader positions in terms of efficiency for Gazprom Neft’s large-scale contribution international oil and gas company performances. The Company’s to the social and economic development owning a regionally diversified strategy is carried out stage by stage. of the country and regions where it portfolio of assets along the whole The objective for the period of 2008- operates. Gazprom Neft is a leading value chain. The Company’s strategy 2010 is to create the basis for future supplier of fuel resources and one of of development until 2020 suggests fundamental growth. The goals set in Russia’s largest employers and taxpayers. impressive business growth in all key this area for 2009 were successfully The Company invests in production sectors, expansion of the business achieved. modernization and development of its geography, and strengthening of the R&D base, and commissions innovative technological solutions important for the industry’s development. Besides, Gazprom Neft supports Russian manufacturers Key production indicators, 2009 2008 2007 in other sectors placing its orders with 2007–2009 Russian contractors. The Company is Proved oil reserves, mln bbl 6 924 6 303 6 709 striving to provide ever-improving product quality, attentively considering the users’ Proved gas reserves, bn ft3 3 231 3 033 1 232 expectations and needs. Hydrocarbon reserves, mln BOE 7 462 6 808 6 914
Oil and gas production with share in equity 367,8 360,9 331,7 investees, mln BOE
Oil production of consolidated subsidiaries 224,9 228,6 243,2 and affiliates, mln BOE
Company’s share in production by equity 124,3 114,2 77,3 investees, mln BOE
Total, oil production, mln BOE 349,2 342,8 320,5
Oil refining at own refineries in Russia, 21,5 17,2 15,5 mln t
Oil refining at own refineries abroad, mln t 2,2 – –
Oil refining at equity investees’ refineries, 7,9 9,5 9,2 mln t
Oil exports, international markets, mln t 15,6 16,3 15,1
Oil exports, CIS, mln t 3,3 3,3 2,5
Crude oil sales, domestic market, mln t 0,3 0,9 1,6
Petroleum product exports, international 13,2 10,9 11,4 markets, mln t
Petroleum product exports, CIS, mln t 2,3 1,9 1,9
Petroleum product sales, domestic 18,3 16,2 13,4 market, mln t
34 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Strategy already under development. The current JSC GAZPROM NEFT SHARE Implementation: estimate of the provision of Gazprom IN THE RF OIL PRODUCTION Neft production with hydrocarbon IN 2009, million tons Growth and Efficiency reserves of Category SPE is about 20 years. During the year 2009, Gazprom Neft, just as all oil companies, had to operate The overall oil and gas production 9,5 % under quite difficult economic conditions, (including the interest in equity i.e. low oil prices early in the year and investees) was 369.8 million BOE in SOURCE: COMPANY a dropping demand for oil products. 2009, or a 2.5% growth against 2008. DATA However, the Company proactively used It could be managed not only by active the opportunities that opened evolved development of oil fields and the during the year to achieve its strategic purchase of new assets, but also by goals, extending portfolio of assets in large-scale structural and organizational 494 MLN TONS production, refining, and sales – both reforms of Gazprom Neft producing in and outside Russia. Gazprom Neft assets. An important achievement of the managed not only to retain its economic year 2009 was that additional reserves stability, but also to strengthen its market of oil extraction could be found for positions, and lay a reliable foundation assets with dropping production. for sustainable development in the future. The crucial task of 2009 was In 2009, the Company continued to improve efficiency by optimizing restructuring of its key oil production business processes and assets, facility Gazpromneft-Noyabrskneftegaz. updating capacities, and cutting costs. It was the first serious step in building optimal operation schemes of the The Company’s 2009 The results of the Company’s operations Company’s producing enterprises. Investment Program (less in all business sectors exceeded the On a later date, it is planned to bring purchase of new assets) results of 2008. Gazprom Neft achieved all the Gazprom Neft subsidiaries the targets set for 2009 to implement and affiliates to scales comparable in amounted to US$ 2.6 billion, the Company’s long-term strategy in all production rates, personnel numbers, of which: of its key business sectors1. and management systems, which in turn will enable comparability of the results 2.0 billion: between different producing enterprises. Production Block Oil and gas exploration, Simultaneously, a focused management development expenses development, and production vertical will be built in each of the business clusters with strict authority and 0.3 billion: The growth of proved hydrocarbon responsibility interfaces along the whole reserves of Gazprom Neft in 2009, chain from the Corporate Headquarters Refining Block Category SPE, less new acquirements, to workshops. This effort must result in development expenses was 97 million tons OE. It was higher business efficiency with minimized supported both by prospecting on new losses and costs. 0.3 billion: sites and detailed appraisal of oil fields Other expenses
1 For more details of the Company’s economic results see The Annual Report of JSC Gazprom Neft for 2009. These results were also commented on in the Sibirskaya Neft corporate magazine (No. 3, 2010) and the corporate newspaper (Neftegazeta, 2010, No. 2)
35 RESOURCES FOR THE FUTURE: Energy for life ECONOMIC DEVELOPMENT ENERGY FOR PEOPLE
Gazprom Neft development prospects in and outside Russia: Business geography
1 Cuba 13 14
2 Venezuela
3 Germany 12 20 4 Tunisia 15 11 5 Libya 16 7 8 3 17 6 Egypt 9 10
7 Belarus
8 Bryansk Region 23
9 Ukraine 4 22 21 10 Volgograd region Assets in 2009 5 6 1 11 Kazan Project for 2010–2012 12 KhantyMansi Autonomous Fields 18 District 13 Novoportovskoye field 2
14 Messoyakhskoye field 19
15 Kuyumbinskoye field Jet fuel
16 Chita Bunkering 17 Vanino
18 Thailand Exploration and production 19 Equatorial Guinea
20 Vologda Region Oils and lubricants
21 Iran Petroleum Product Supply Enterprises 22 Iraq
23 Turkey Trading
36 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
13 14
12 20
15 11 16 7 8 3 17 9 10
23
4 22 21
5 6 1
18
2
19
37 RESOURCES FOR THE FUTURE: Energy for life ECONOMIC DEVELOPMENT ENERGY FOR PEOPLE
Oil field service JSC GAZPROM NEFT SHARE roads, providing serious savings on IN THE RF OIL REFINING IN 2009, repair works. Production of the high- In 2009, despite the recession in million tons quality material based on advanced the demand for oil and gas field technologies will promote development services, the targets in this sector were of road construction in Russia. In turn, achieved. governmental support to the Company’s 13,2 % initiatives will provide sustainable The competition on the Russian oil development of the Company’s asphalt field service market is high, and the SOURCE: business. COMPANY requirements for companies operating DATA in this segment become more stringent In 2009, the Company’s subsidiary with every year. In order to improve the Gazpromneft–Lubricants LLC set up production efficiency and to strengthen the manufacturing of over 37 new the market positions, a quality 236 MLN TONS products, mainly related to premium management system in compliance industrial products. The enterprise not with the ISO 9000 international only extends the range of its products, standards is being implemented but also continuously improves their at all the Gazpromneft-Nefteservis quality. The quality is proved in particular enterprises. By the end of 2009, eight by the official approval of the SibiMotor of the nine enterprises were certified consumer motor oils by the world’s for compliance with these standards, rate was 80% (growth of 3%), and leading automotive companies. For and in 2010, the program will be in Gazpromneft-ONPZ, the rate was instance, in 2009, SibiMotor oils were completed. 86.7%. The range of oils made by the approved and were recommended for Company was extended in 2009 more use by MAN, Daimler, and Volkswagen In 2009, Gazpromneft-Nefteservis had than in the whole preceding history of etc. several record-breaking results: its existence, with 90 new items on the AAFor the first time in the Company’s product line of oils. Based on the results of testing by the history, 1.1 million m of advance was R&D center of the KAMAZ factory, drilled. The impressive program of updating SibiMotor oils of the Diesel Premium, AA656 new operating wells were the main refining assets will rank the Diesel Avangard and Diesel Extra series commissioned in the 12 months of 2009, Company among the world’s leading were included in the recommendations which is 45 wells more than in 2008. refineries. Most of the investment for use in the new engines of KAMAZ This increase in the number of wells projects are intended to improve the trucks. commissioned became possible due to fuel quality to comply with the Class an extended production drilling program: 4 and Class 5 requirements of the In 2009, JSC Slavneft-Yaroslavnefte the advance reached 2,158,100 m, Technical Regulation «Requirements orgsintez (YaNOS) received the Quality which exceeds the 2008 level by to Automobile and Aviation Gasoline, Award of the Government of the 125,000 m, as the overall drilling rate and Diesel and Ship Fuel, Jet Engine Fuel Russian Federation in the category of average advance per drilling crew. and Furnace Boiler Oil»1. By making large industrial enterprises with over AAThe well construction time was reduced high-quality oil products complying with 1,000 employees. The award was given by 15%. today’s world standards, the Company for significant results in product and will enhance its competitiveness on both service quality and implementation domestic and international markets. of highly efficient quality management Oil Refining methods. Products by the Company’s enterprises In 2009, Gazprom Neft continued its find their application in dealing with Diplomas of the Contest «100 Best long-term strategy of output increase, social and economic challenges of Products of Russia 2009» in the quality improvement, and conversion a national level, such as building a high- nomination «Products for Industrial and rate of its oil refining. quality transport infrastructure. In 2009, Technical Purposes» were awarded to Gazprom Neft signed an agreement products of JSC Gazpromneft-ONPZ and The Company retained its position with the Ministry of Transport of the JSC Slavneft-YaNOS. In particular, the as one of the industry leaders in oil Russian Federation on cooperation diplomas were given to industrial carbon refining growth rate. The growth was in manufacturing and application raw material, transmission oil Super 17.6%. The oil product output was of new-generation petroleum road T-3», and all-season universal motor oil increased by 18%. This was due both asphalts. The use of this product Extra produced by Gazpromneft-ONPZ. to the purchase of new assets, the will greatly improve the quality and Another product of Gazpromneft-ONPZ, Serbian NIS and an interest in Sibir extend the service life of Russian non-ethylated gasoline Premium Euro- Energy, and to the increased process level of the refineries. The proportion of high-octane gasolines in the total 1 Technical Regulation «Requirements to Automobile and Aviation Gasoline, Diesel and Ship Fuel, Jet gasoline input was 84%, or 5% higher EngineFuel and Furnace Boiler Oil», approved by the Russian Federation Government Decree No.118, than in 2008. The average conversion 27 February 2008)
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RESOURCES FOR THE FUTURE: Energy for life ECONOMIC DEVELOPMENT ENERGY FOR PEOPLE
95, got the «Novelty of the Year» status. retail network efficiency. This program However, the new brand is not only The diploma-winning reactive engine fuel included development of a «Book a unique and recognizable visual image. TS-1 made by JSC Slavneft-YaNOS is of Rules» regulating the personnel’s It is also a new offer by the Company intended for subsonic aircraft. Its features work at all of the Company’s filling to its customers: high-quality product are high quality and good performances, stations, and personnel training. A team and services at the up-to-date level for it ensures no-failure operation of reactive of internal trainers was put in place, the mass customer at an affordable engines and flight safety and meets and all the personnel of the filling competitive price. The specific features today’s environmental requirements. stations network (8800 persons) were of each region are considered too. The trained to pre-developed standards. new «Gazpromneft» brand offers the In 2009 the Moscow Refinery received A system of service quality control and customer reliability, security, friendliness, three diplomas of the Russian compliance with the uniform standards up-to-dateness, and respect. Organization for Quality and three was introduced. In some regions, the certificates to verify the top quality control formats included inspection by The program of setting up a united level of such products as 92 RON and the «Mystery Shopper» method, where network under the new «Gazpromneft» 95 RON motor gasolines and diesel fuel specially trained people pretending brand includes not only a new corporate of grades С, Е, F, and EURO-3. The to be normal customers evaluated style of the existing filling stations, «Russian Quality» program was instituted the station employees’ performance. but also their reconstruction, and by the Russian Organization for Quality The results obtained, and subsequent construction of new stations. Retail (ROQ) established in February by the involvement of the station employees stations under the «Gazpromneft» initiative of the Gosstandart of Russia. in the skill upgrading program enabled brand will be standardized to a few ROQ cooperates with committees of a sizeable improvement of the efficiency formats depending on the station size. the Federation Council and the State and quality of personnel operation. Reconfiguration of the stations will Duma, and interacts with the European make them more convenient in terms Organization for Quality and American In 2009, implementation of the new of approach drives, maneuvering, and Society for Quality. retail brand «Gazpromneft» started. no queues. Where only practicable, 387 filling stations started operating a broad range of extra motor services under the new retail brand of the will be offered, such as replacement Sales Company. Appearance of a national of oil and lubricants, maintenance, tire brand of high recognizability and high fitting, technical fluid filling, car wash In 2009, Gazprom Neft strengthened degree of confidence in the product etc.; services from stores and cafes to its positions on the wholesale and retail quality on the market will promote automatic teller machines and Internet oil product markets. The petroleum achievement of the Company’s access will be available to drivers. The product sales on the domestic market strategic goal, i.e. becoming a leader fuel quality everywhere will be brought increased by 13% in 2009 compared to in oil product sales in Russia. The up to the high Gazprom Neft standards. 2008 to become 18.3 million tons. The project of a united filling stations Discount and bonus programs will be Company’s share of the gasoline market network under the «Gazpromneft» offered to drivers. reached 15% (growth by 1%), and on brand suggests updating of over the aviation fuel market, 23% (growth by 1,000 filling stations in Russia and CIS The rebranding program is still going 5%). The growth of petroleum product countries in 2009–2011. on, but its first results can already be sales via premium channels (small mentioned. For instance, the sales at the wholesale and retail) was 40%. The eight-meter white-and-blue filling stations of some of the enterprises «beacon» steles brightly illuminated at operating under the new brand grew by The recognized high quality of its night have already become a customary 15–20%. products enabled the Company to guide for drivers in different regions take a leading position on the Russian of the country, from Moscow and St. It is intended that one day the Company’s market in such strategic segments as Petersburg to Siberia and Yamalo-Nenets filling stations network will win the status ship bunkering and aircraft refueling Autonomous District. By the end of 2011, of a global international brand due to provided by Gazpromneft Marine the corporate symbols of the Company’s integration of the Company’s assets Bunker and Gazpromneft Aero sale retail network will decorate all the filling outside Russia. companies. stations of Gazprom Neft. To extend the customer base and to The Company’s retail network was In 2009, the first phase of rebranding improve the customer loyalty, projects expanded. 11 filling stations were built, the Company-owned retail stations addressed to corporate and individual 58 reconstructed, and 61 purchased was implemented. 387 stations were clients were launched: a cashless in 2009. By the end of 2009, the rendered in the new corporate style. settlement system for corporations and Company’s network included 950 retail Gazprom Neft gas filling stations keep «Coming Your Way», a loyalty bonus outlets. The purchase of Sibir Energy to Gazprom’s color style. These stations program for individual customers. and NIS added 612 more retail outlets can be distinguished by their original Using the experience of these projects, to this network. art design represented by a dynamic the Company intends to implement graphic pattern, rounded stele and a common annual program of actions Implementation of uniform customer frieze shapes reminding of the well- covering all actions for promotion of fuel service standards helped to improve the known Gazprom «lighter» silhouette. and related products.
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The exports of oil slightly dropped Priority sectors of innovative developments in 2009 compared to 2008 due to in the Company the recession in demand on the international market. Gazprom Neft Exploration Development of rational packages of geological and geophysical supplied 15.6 million tons of crude oil surveys, improvement of resource evaluation methods, lowering to the world market (16.3 in 2008.) The geological risks, and achieving more precise location of promising crude oil supplies to the CIS markets sites remained at the level of 2008. The oil product exports to former Soviet Union Oil production Oil production stimulation and reservoir recovery improvement countries increased by 21.1%, and to Oil refining Implementation of Russian innovative technologies for international markets, also by 21.1% isomerization of light gasoline fractions. Manufacturing of highly compared to 2008. efficient catalysts for catalytic cracking.
Vector Sales Implementation of information technologies in customer relations of Innovative management; development of marketing technologies. Development Gazpromneft NTC was established in approved by governmental agencies, The innovative development ability 2007 on the basis of the Company’s patented, and included in the industrial is becoming a key factor of strategic Research and Analysis Department. cycle of the Exploration and Production competitiveness in today’s world. Building within the Company a powerful Block. Currently, on the sited of the Gazprom Neft uses a systemic research and development center, Gazpromneft-Khantos enterprise, approach to enhancement of its concentrating highly skilled scientists the Company is developing a new innovative potential, investing in and technologists and oriented at approach using more advanced research and development, creating solving practical problems is an remote online systems of separate managerial, infrastructural, and important prerequisite of efficient monitoring of oil production and personnel prerequisites for efficient innovative development. The principal injection rates. This effort received the implementation of innovations in goal of NTC in the domain of science science and technology prize of JSC the principal sectors of its activity. and technology is accelerated adoption Gazprom for 2009. Implementation of new technologies of technical progress achievements, enables the Company to keep up to preparation for implementation of In 2009, a Spatial Visualization Center date, regularly reducing operating new equipment and processes was opened at the Gazprom Neft costs and improving its business necessary for dynamic development Research and Development Center in efficiency. of production. Gazpromneft NTC St. Petersburg. The scope of problems provides the full range of designing and that can be solved with the aid of the Another priority for all the lines of the analytical and operating support to oil Center is vast. As of today, two of them Company’s business in innovative and gas exploration and production, are most urgent: support of adoption of development area is providing solutions including surface facilities, and a broad design solutions for development and for higher industrial and environmental range of R&D related to oil and operation of the Company’s oil fields, safety. gas exploration, development, and and design and follow-up of horizontal production. The results of the efforts well drilling. The structure of innovative activity in these domains help to improve in Gazprom Neft comprises the efficiency of field development This facility outfitted with the use of the facilities specialized in research and enhancement of the Company’s latest information and communication and development, projects of reserve base, and to reduce the time technologies enables specialists of implementation of new technologies and money costs. different profiles to make optimal and support to personnel’s innovative decisions in a consolidated manner, initiatives that are embodied by For instance, Gazprom Neft specialists jointly working with 3D geological enterprises within the core business proposed and carried through to hydrodynamic models of oil fields in blocks, and joint projects with leading large-scale implementation several a common virtual space. Visualization research and technology centers of the theoretical, process, and engineering helps specialists of different profiles country and with foreign partners. efforts that helped to solve an urgent to jointly analyze a lot of factors, problem of separate continuous e.g. data of seismic survey and The principles of the corporate production monitoring faced in the geophysical survey of the wells, intellectual activity results management operation of multi-zone reservoirs. The interwell correlation, development policy are in particular described in the technologies enable the Company to data, and costs. The consolidated Concept of Protection of Intellectual save sizeable money on the reduction solution will be the least risky and the Activity and Innovative Development of operating wells and unit operating most profitable one. Results developed in 2009 by costs, while providing correct JSC Gazpromneft Research and separate metering of production from A second important aspect of the Development Center, a subsidiary of the each zone, as required by license Center is support to well drilling during Company. agreements. The technologies were the operation. Data are received at
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complying with the Class 4 and Class 5 requirements of the Technical Regulation.
At the Moscow Refinery, the basic design for isomerization plants was developed, and work was underway on the catalytic cracking gasoline hydro cleaning project and selection of a catalytic system for reconstruction of the diesel fuel hydro cleaning plant.
In 2009, the Gazpromneft-ONPZ- Yokogawa Engineering Center started its operation at Gazpromneft-ONPZ. Its purpose is to create an advanced production/process control system the Center in the real time mode. This The system, used together with the NTC on the basis of up-to-date information enables the fastest response to any engineers’ developments, calculates technologies. Yokogawa automatic change in the situation. Even a slight the optimal operating conditions of wells control systems have been used by correction in the course of horizontal and well equipment. This will materially Gazpromneft-ONPZ for several years. well drilling can yield an impressive reduce the premature equipment Recently, implementation of the CENTUM cost effect. Geologists, drillers, and failures by optimal selection of pump CS3000 control systems has been going designers using the services of the equipment for wells with difficult on especially fast; they are already used Spatial Visualization Center can find geological conditions and noticeably on the sulfur production, GFU-2, AVT-6, their solution as fast as possible, with cut the costs both by reducing the and FSB plants providing high reliability the error risk greatly reduced. number of repairs and by optimizing of oil refining processes. Yokogawa the pump operating conditions. The is the general supplier of control and In 2009, JSC Gazpromneft- use of Iskender will also help to solve measuring as well as computer-aided Noyabrskneftegazgeofizika, a subsidiary some applied problems, for instance manufacturing equipment for the L-24-9 of Gazpromneft-Nefteservis LLC, making feasibility studies and oil field diesel fuel hydro cleaning system, which received the prestigious industrial prize developing projects, analyzing field will make diesel fuel of European quality OFS-AWARDS-2009 in the nomination developing risks, and predicting the after its reconstruction. Such control «Strategy of the Year». The development production performances. The model is systems with emergency protection will strategy of Noyabrskneftegazgeofizika is adapted to the conditions of Gazprom be mounted on several other plants of based on implementation of innovative Neft oil fields, and applicable to the refinery. The engineering Center methods and technologies. For this horizontal wells. outfitted to state-of-the art models is purpose, an innovative design and becoming a base for quality testing of technological unit was established within The research and development in oil new equipment and personnel training GPN-NNGGF, with its activity focused on refining in 2009 were mostly intended in using it. Each training place has collection and generation of innovative to solve problems related to production everything for computer testing of any ideas, patenting, and development of updating and higher quality of motor sensors and detection of instrumentation design documentation. The number of fuels. Retrofitting projects were that needs replacement. Besides, at innovations created and patented per implemented at the Gazpromneft- such training places you can model thousand workers exceeds the average ONPZ and Moscow Refinery. Among a failure of equipment components Russian figures several times. Besides, these projects are an isomerization and find ways to solve the problem. the enterprise has its own facilities plant, a set of hydro cleaning plants The Center’s equipment is identical to for making pilot models of innovative for diesel fuels and catalytic cracking that used on the operating plants of the equipment for new and updatable gasolines, and reconstruction of L‑24‑9 refinery. This will help not only to instruct technologies and instruments. и L‑24‑6 hydro cleaning plants at the refinery’s employees, but also to Gazpromneft-ONPZ. quickly replace a failed component of In developing new technologies, the process control system in case of an Gazprom Neft cooperates with industrial In 2009, construction of Isomalk-2, urgent need. R&D centers. The Program and one of Russia’s largest isomerization Industrial Complex named Iskender plants, started at Gazpromneft-ONPZ. In its sales activity, Gazprom Neft pays may serve as an example of such The completion of the construction special attention to updating service cooperation. It is being developed is scheduled for July 2010. The new technologies. In 2009, the Company for the Company by the specialists plant will be able to process 800,000 introduced a new Petrol Plus Corporate of Sarov’s Oil and Gas Scientific and tons of crude per year and will help the Cashless Payment System based Production Center. Iskender is a tool for Company to reduce purchases of high- on microprocessor fuel cards. The hydrocarbon deposit surveying with the octane additives and greatly increase system enables corporate clients to aid of computer numerical calculations. the output of high-octane gasolines control spending of their money and oil
44 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
products, to set a daily or monthly limit Technologies, Automation, and Young Gazprom Neft professionals of filling up on fuel at filling stations per Telecommunications completed in 2009 arrive here with scientific papers vehicle, and to get detailed information the first phase of solution testing on the from St. Petersburg, Tomsk, Khanty- as to what amount, where and when basis of the «thin client» technology. Mansiysk, Muravlenko and other the automobile was filled up. By the These solutions are offered by НР, cities. In 2009, 75 young professionals end of each month, depending on a world leader in this segment, for attended the conference. The the quantity of oil products used, setting up Data Processing Centers proceeding was subdivided into four corporate customers of Gazprom Neft and building a highly efficient IT sections, «Geology and development retail stations are granted an individual infrastructure, and are implemented on of oil fields», «Oil and gas production discount. the latest software/hardware platform technology», «Oil and gas treatment that has no analogues yet in other and transportation», and «Support The new system is convenient, safe, oil companies operating in Russia. to business». The experts reviewing and efficient. It enables unification of the The «thin client» technology enables the papers were specialists from the customer service system, improvement centralized processing and storage of relevant departments of Gazprom Neft, of the service quality, and material user data, and offering users computing executive managers of territorial oil expansion of the Gazprom Neft fuel facilities and graphic resources in the production projects, and leading faculty card service geography all over Russia. terminal mode as necessary. It ensures professors and instructors of the Gubkin The system enabled integration of all cost cutting, flexibility, and mobile Russian State University of Oil and Gas, retail stations into one interregional corporate IT support. Tyumen State Oil and Gas University, processing center, which has greatly National Research Tomsk Polytechnic simplified the document flow within the A favorable social environment is University, and Ufa State Petroleum Company itself. as important for innovations as the Technological University. Such information technology environment. conferences help to identify promising A major factor of the Company’s Gazprom Neft is consistently shaping specialists oriented at research and innovative development is its advanced such an environment. Special attention industrial practice at the same time. information infrastructure. Gazprom is paid to young graduates who are About one quarter of proposals Neft pays most serious attention to given the opportunity of continuous presented at the conference later find renovation and improvement of the professional development and creative their application as inventions providing Company’s information technology self-fulfillment. Since 2007, interregional real saving for the business. potential. Specialists of Gazprom conferences of the Company’s young Neft NTC jointly with employees professionals have been held in of the Department of Information Noyabrsk.
45 ENERGY FOR LIFE ENERGY FOR PEOPLE 6 HUMAN RESOURCES DEVELOPMENT AND SOCIAL PROGRAMS HUMAN RESOURCES DEVELOPMENT Energy for life 6 AND SOCIAL PROGRAMS ENERGY FOR PEOPLE HUMAN RESOURCES DEVELOPMENT AND SOCIAL PROGRAMS
Creating a world-class team is a prerequisite Strategy and of improvement measures for HR for Gazprom Neft to become a global leader management management, recruitment, training, in the industry. The Company’s ambitious motivation, compensation, social strategy can only be implemented by a highly benefits, corporate culture. The motivated professional team sharing common The Company’s strategic HR Company is working to implement objectives. Gazprom Neft regards its staff development priorities are dictated uniform HR business processes and as strategic partners and sees investments by its long-term strategy providing management structures within its main in human resources as investments in its for a rapid growth of the Company, activity areas. future. The Company works consistently to proactive geographic expansion and hire the best professionals, form a personnel orientation to maintain leadership Within the framework of developing the reserve, develop the motivation system and in efficiency. These tasks require Company’s HR management system, improve skills. The employees are provided appropriate human resources, i.e. a sociological study «Work at Gazprom with competitive wages and social package. such people who are ready to ensure Neft» was carried out by BCG, an The Company encourages its employees’ operational efficiency, successful work international consulting company. initiatives and innovations, provides a wide with hard-to-develop hydrocarbon fields In total, about 2,900 employees and range of self-development and career and utilization of large projects. In the managers were surveyed. The study opportunities. end of 2008, Gazprom Neft’s Human enabled to assess the employees’ Resources Management Strategy till satisfaction and analyze a number of the Year 2020 was approved. The aspects of the HR management system. document links the HR strategy with The results of the study helped to the overall corporate strategy. It is identify the key issues for a constructive also based on social diagnostics, cooperation with the staff. analysis of labor market trends and comparison of the Company’s current In 2009, the Company continued HR management system with that of its the development of standards for competitors. employee motivation and social benefits regulating the assessment of The consistent implementation of positions and determination of grades, the HR management strategy in methods of forming compensation 2009 included development of the packages and assigning individual Company-wide regulations and a set grades to employees across the
Gazprom Neft’s key corporate values
IN BUSINESS: IN SOCIAL REALTIONS:
EFFICIENCY HONESTY LEADERSHIP DECENCY INITIATIVE RESPECT RESPONSIBILITY COOPERATION
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HUMAN RESOURCES DEVELOPMENT Energy for life AND SOCIAL PROGRAMS ENERGY FOR PEOPLE
Company, procedure of granting Personnel expenses, 2007–2009 awards to employees from the CEO’s fund, voluntary medical insurance Expenses 2007 2008 2009 procedure, method of granting, calculating and paying awards Total personnel expenses, millions of 19 958 24 818 28 156 to employees of subsidiaries and rubles (less payroll taxes) affiliates involved in corporate projects, and a number of other standards Including payroll for employees on the list, 19 259 23 238 26 617 constituting the methodological and millions of rubles regulatory basis for a uniform wages and social benefits management Social benefits, millions of rubles 699 1 580 1 539 system.
Gazprom Neft operates in many contests, festivals and other team- age of the Company’s employees regions. Therefore, it is essential for building events. is 39. the Company to create a common corporate culture based on shared In 2010, the Company will conduct Gazprom Neft provides competitive corporate values, principles and a qualitative study of its corporate wages and decent social benefits in conduct standards. In 2009, the culture. The results of these studies will keeping with market trends. In 2009, Company finalized the Corporate be used for preparing a comprehensive the personnel costs rose 13.5% as Ethics Code reflecting the system development program. compared with 2008. of values of Gazprom Neft as an efficient, rapidly growing and socially responsible company. The Code Personnel Gazprom Neft average 1 orientates all employees, regardless characteristics headcount, 2007–2009. of their status or position, as well as the Company’s partners towards such principles as fair and good-faith Gazprom Neft is one of the largest SOURCE: conduct of business, exclusion of dual employers. As a result of geographical COMPANY standards, incorruptibility and honesty, expansion and business development, DATA constructive cooperation and ability to the average number of employees on work in a team and achieve the best the payroll increased by 4% in 2009 50 771 results by the optimal way, attention to compared to the previous year. Over 48 313 48 014 social issues and civilized attitude to the 50 000 Gazprom Neft employees environment. are working in more than 20 Russian regions as well as in Kyrgyzstan, A favorable atmosphere within the Kazakhstan, Tajikistan and Belarus. Company is supported with the Almost one half (46%) of the Gazprom corporate internal communications Neft staff are employed in Yamalo- 31.12.2007 31.12.2008 31.12.2009 system which includes Company-wide Nenets Autonomous District. Omsk media and publications by subsidiaries and the Omsk Region account for and affiliates, regular meetings between 17% of the Company’s staff. About 1 Hereinafter in this section the quoted data covers the staff and the management, 11% are employed in Moscow and the JSC Gazprom Neft and its subsidiaries and affiliates common sports and cultural activities Moscow Region, of which 21% at the in Russia and the CIS, unless otherwise specified in such as sports competitions, creative Corporate Headquarters. The average the text.
50 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Personnel recruitment and training
Cooperation with educational institutions and recruitment of young professionals
Gazprom Neft is interested in recruiting young gifted professionals. Today’s purposeful, energetic and promising university graduates will be the core of the Company’s staff tomorrow.
In 2009, 305 graduates joined the Company. With these new recruits, the Company employs 805 young specialists.
The Company works with young specialists in accordance with the of Oil and Gas agreed to set up a base preparatory department was opened «Procedure of Work with Young department at the University. The in Noyabrsk providing additional Professionals» Standard recommended Company’s staff members teach at the industry-related training for high school for the subsidiaries and affiliates. same-industry education institutions, students. The faculty staff at the To make such work more efficient, evaluating and fostering potential department include instructors from the a new development program is to employees. Thus, the Center’s lead I. M. Gubkin Russian State University of be implemented in 2010, including experts teach at the I. M. Gubkin Oil and Gas. management competencies trainings, Russian State University of Oil and Gas mentor training program, corporate and at the Noyabrsk College. Many 10 best students of the Petrochemical young professionals rally and practical of their former students have already Institute of Omsk State Technical training programs for university students joined the Company. University and Chemical Faculty of the at the Company’s subsidiaries and F. M. Dostoyevsky Omsk State University affiliates. Gazprom Neft information stands were granted personal scholarships are placed at the partner universities by JSC Gazprom Neft-ONPZ this year. Gazprom Neft pays special attention to promoting the career opportunities On November 17, 2009 a meeting cooperation with the leading Russian with the Company. Meetings with the with the new scholarship holders took universities and vocational colleges. Company’s staff not only provided the place at the ONPZ training center. The In 2009, it continued cooperation with students with general information on the Head of the ONPZ HR Department, three strategic partner universities: Company, but also helped find answers Arkady Kuzyukov, informed the students G. V. Plekhanov Saint-Petersburg to a number of topical questions of the operational performance and State Mining University, I. M. Gubkin regarding career opportunities, wages outlooks of the enterprise. Since 2002, Russian State University of Oil and and benefits. the Gazpromneft-ONPZ personal Gas, M. V. Lomonosov Moscow scholarships have been granted to about State University. An agreement was The Company’s subsidiaries and 100 students. concluded with the Moscow Geological affiliates also develop university Exploration School. cooperation programs. Such universities In June 2009, the first Gazprom Neft include the Tyumen Oil and Gas corporate young professionals rally was Jointly with the G. V. Plekhanov Saint- University, Ufa Oil Technical University, held in Omsk with over 120 participants Petersburg Mining University, contests Tomsk Polytechnic University, from all units and enterprises of the were organized for high school V. I. Ulyanov-Lenin Kazan State Company. The purpose of the rally was graduates in the cities of the Company’s University, F. M. Dostoevsky Omsk to develop the young professionals’ presence (Noyabrsk, Omsk), with the State University, Omsk State Technical teamwork abilities and motivation. winners admitted to the university. University, Novosibirsk State University, During the year, about 530 students Samara State Technical University, The teamwork abilities were developed from partner universities received Siberian State Automobile and Road using the Joint Project business game practical training at the Company’s Academy. which consisted of several blocks: «Link enterprises. between generations», «Promotion of The Company keeps developing new ideas», and «Human resources The Gazpromneft Research and programs for talented high school development». Development Center and the students. In 2009, in addition to the I. M. Gubkin Russian State University Gazprom Neft Classes, a regional
51 HUMAN RESOURCES DEVELOPMENT Energy for life AND SOCIAL PROGRAMS ENERGY FOR PEOPLE
Staff professional In 2009 Gazprom Neft launched a large the marketing strategy providing for training professional development project. The uniform service standards in all regions, Company started developing a system the decision was made to set up four The steady and dynamic development of professional competencies by interregional training centers (ITC) of the Company and its competitiveness business areas with the subsequent providing personnel training under depend directly on the skills and assessment and identification of common programs. A training center is professional abilities of its staff. employee development targets. already in operation at Gazpromneft– Therefore, employee training and Asia, covering Kyrgyzstan, Kazakhstan, development as well as creation of The main tool for the employees and Tajikistan. The first group of a strong HR reserve are Gazprom Neft’s development planning is the Individual interregional training centers was strategic goals. Development Plans prepared taking opened at Gazpromneft–Center to into consideration the job requirements, cover central Russia. The projects of Gazprom Neft aims to build assessment results, employees establishing the interregional training a continuous training system meeting development opportunities as well as centers in the Urals and Siberia were the business and corporate culture the immediate managers’ and mentors’ approved. requirements of the Company and opinions. covering all personnel categories and management levels. The Company has The Company works systematically Motivation the «Employee Training Organization with the internal HR reserve. It is and wages Procedure» standard that is very advantageous for the Company recommended to the subsidiaries and to fill important positions for the affiliates. growing business using the internal In 2009, the implementation of the HR reserves. First of all, HR risks large-scale project for improving In 2009, 105.6 million rubles were spent are reduced, as it takes about three the motivation and wages system on employee training. Training was weeks to fill a position from the was continued. The performance provided to 1,290 employees. internal reserve, while it may take up management system with individual to three months to find an external targets for each employee was further Gazprom Neft’s training and candidate. Furthermore, a reservist developed. These targets enable development programs include three employee adapts to the new position evaluation and prompt monitoring main units: within a month, while the adaptation of the personnel efficiency. The AAprofessional training programs of an external recruit would take much introduction of the grading system was aimed at improving knowledge and more time. It is also important that the carried out. skills for specific specializations and Company’s employees see clear career functions; opportunities and outlooks. Grading is the system of ranking AAcorporate management positions depending on their importance competencies development A multi-level HR reserve development for the Company. The criterion for programs; program has been implemented at the assigning a grade is the responsibility AA business insight development Company since 2007. In 2009 it was level in the decision-making process programs. adjusted to ensure more consistently and the scope of work; necessary and efficiently the reliability and HR professional skills, knowledge of the The HR development and training stability of the Company management programs include mandatory, corporate under the conditions of its dynamic and additional training as well as growth. Now the target list of the HR reserve and young professional Company contains about 180 positions: Average monthly wage development. at the Gazprom Neft Corporate at Gazprom Neft, 2007–2009 Headquarters, from Deputy CEOs to (rubles) In 2009, corporate management the heads of some departments; at competency development training was subsidiaries and affiliates — CEOs and provided to 642 employees, five times their subordinates directly responsible SOURCE: as many as in 2008. for operations. COMPANY DATA Modular programs were developed The HR reserve training includes for the comprehensive management managers training at leading Russian 44 227 skills development, such as «Business and foreign universities, trainings and 40 060 Leaders» (at the Moscow business seminars, comprehensive development 33 655 school Skolkovo), «Success Vector», programs for relevant competencies. «Growth Managers», and «Growth Managers+», based on analysis of The personnel training system is tailored the Company’s business needs. It is to the expanding geography of the expected that over 250 people will be Company’s activities and supports 2007 2008 2009 trained under these programs every the implementation of strategies in year. key business areas. Thus, to support
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HUMAN RESOURCES DEVELOPMENT Energy for life AND SOCIAL PROGRAMS ENERGY FOR PEOPLE
Company and business, complexity Cooperation with For this purpose, social packages level, intellectual requirements for the trade unions and relevant costs at the subsidiaries position are also taken into account. and affiliates were analyzed. On The system of grades enables setting this basis, a template of the uniform transparent and uniform personnel The trade union organizations uniting collective agreement was drafted. wages, and training and evaluation more than two thirds of the Company's Once discussed in detail and agreed principles for all enterprises and employees1 participate actively in with the trade union committees, it positions. developing the social policy of the will be introduced at all Gazprom Neft Company and decision-making on companies. The implementation of this system professional and social rights and started in 2006. It became necessary interests of the employees, maintain Social benefits in 2009 amounted to optimize the positions and wages a constructive dialogue between the to approximately 31,000 rubles per structure as the Company grew, its personnel and the management. The employee, 3% down as compared organizational structure developed results of this dialogue on the key with 2008. The slight reduction is due and, accordingly, the internal relations issues of cooperation between the to the optimization of social benefits at had to be arranged and regulated. employees and the Company are a number of subsidiaries and affiliates. At the first stage of the project, an reflected in collective agreements. However, all the key programs, such as evaluation was carried out, a hierarchy The trade union organizations take voluntary medical insurance, insurance of positions was determined, a system part in the resolution of labor disputes, against accidents, free meals, etc. of 23 grades was built (15 for top negotiations with the management of remained in force. and middle managers and 8 for all enterprises. They focus on such issues other positions, including the workers’ as occupational health and industrial Under the corporate voluntary medical ones), a pilot project was launched for safety, assistance to employees in insurance contract, the Company’s implementation of the system at the obtaining quality medical aid and employees receive competent medical Corporate Headquarters. By the end of sanatorium and resort treatment. The advice, and if necessary, medical 2009, the system of grades was fully in efficient work of the Company’s trade treatment at the leading Russian clinics. place at the Corporate Headquarters unions always helps find a balance of In 2009, the Gazprom Neft Employee and at 9 enterprises. The top interests between the employees and Health Program was adopted, managers’ positions were evaluated at the employer. setting uniform corporate healthcare all subsidiaries and affiliates. In 2010, guidelines. most of the subsidiaries and affiliates In 2009, a Coordination Board for are to be included in the grading Cooperation with Trade Unions was Within the framework of the 2009 summer process (except for the workers’ set up at Gazprom Neft. The Board is health campaign, employees were professions). responsible for preparing proposals on granted vouchers to vacation resorts the HR and social policies, coordinating paid for by Gazprom Neft enterprises The efficiency of grading depends cooperation with the trade unions and and trade union organizations. In 2009, directly on how the employees are employees’ representatives within the Company’s subsidiaries and affiliates prepared for the changes. To speed up the framework of social partnership, allocated more than 82 million rubles for and facilitate the personnel adaptation employee social welfare. this program. In 2010, the program is to to the new conditions, the HR managers be continued. Vouchers to sanatoriums and specialists trained at the Corporate and children camps at the Black Sea Headquarters on the positions Social programs resorts will be granted, first of all, to evaluation and grading rules inform employees and their children in the Far employees of the principles of the new Social welfare package North areas. system in detail, help line managers work with the personnel taking account In addition to competitive wages, the of the innovations. Company provides comprehensive Corporate sports activities social packages, including voluntary Employee involvement in career and medical insurance, insurance against Sports and health improvement are professional development planning accidents, free meals, material aid an important area of the Company’s is an important HR management on various occasions (marriage, social policy. By maintaining the principle at the Company. The key birth of a child etc.), material aid energy and health of its employees career planning tools are the Individual for vacation, payment for employee Gazprom Neft facilitates greater Development Plans prepared taking trips, anniversary bonuses, additional productivity, high economic and into consideration the position allowance (childcare, death of the production results. requirements, evaluation results, employee etc.). employee development opportunities The Company has the Sports and as well as the opinions of immediate In 2009, the formation of a uniform Heath Improvement Council headed superiors and mentors. Such plans employee social benefits concept for all by Alexander Dyukov, Chairman enable the employees to see clearly the Gazprom Neft companies was started. of the Gazprom Neft Management link between the Company’s success and their own performance. 1 These data applies to Russian enterprises of the Company.
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HUMAN RESOURCES DEVELOPMENT Energy for life AND SOCIAL PROGRAMS ENERGY FOR PEOPLE
Board. The Council includes Company of employees buying new homes. based pension supplement and medical managers and those of its subsidiaries The reduced interest rates are benefits. Cultural and sports events and affiliates, well-known sportsmen, granted by the decision of the ad hoc are also important for the veterans. Olympic and world champions in Credit Commission of the enterprise. Supporting veterans is not only charity, various sports. This program was first launched in duty to the older generation, recognition Muravlenko and Omsk. of their contribution to the present-day To strengthen the team spirit, the success of the Company. Responsible Company holds corporate sports Early in 2010, employees of attitude to the veterans, showing that competitions and tournaments. Muravlenkovskneft, a branch of JSC the Company duly appreciates the The second summer Gazprom Neft Gazpromneft-Noyabrskneftegaz, moved merits of its people motivates today’s spartakiada in Moscow became to a new home in a 90-apartments employees to work efficiently and a noteworthy event of the year. In house a new house constructed with creatively. addition to football, volleyball, table the funding provided by Gazprom Neft. tennis and weight-lifting, chess was The apartments were granted primarily In September 2009, Gazpromneft- for the first time included in the to large and young families as well as Noyabrskneftegaz held an award competition program. About 300 to veterans of combat operation. The ceremony for the Company’s employees representing teams of the apartments were finished with due veterans. Sergey Filizat, Acting СEO Gazprom Neft Corporate Headquarters workmanship, so the new occupants of Gazpromneft-Noyabrskneftegaz, and regional enterprises competed moved in immediately after receiving the congratulated the veterans and for the title of Company champions. keys. delivered Company Veteran cards and Furthermore, 70 employees who corporate souvenirs to 58 employees. showed high results at the Moscow The Company Veteran title is awarded spartakiada were admitted to the Support for the Company in recognition of outstanding merits. international competitions held by pensioners and veterans Candidates for this title may be men the Sports League of Fuel and Power and women aged over 50, who Companies in Turkey. Gazprom Neft is committed to providing worked continuously at Gazpromneft- care and support for its veterans. Noyabrskneftegaz for at least 25 years Such activities include the creation and were granted governmental and Housing program of veterans’ organizations. One of corporate awards during this period. them is Fakel, a unique association Gazpromneft-Noyabrskneftegaz pays To improve the living standards of of Gazpromneft-ONPZ veterans with the retired Company Veterans a one-time its employees, the Company has more than four thousand members. retirement benefit and a monthly pension launched a mortgage program aimed They are granted free medical aid at supplement. at reducing the interest rates on the Plant’s outpatient clinic, free tickets mortgage credits to some categories to the Rassvet sanatorium, seniority-
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ENERGY FOR LIFE ENERGY FOR PEOPLE 7 CONTRIBUTION TO REGIONAL DEVELOPMENT CONTRIBUTION TO REGIONAL Energy for life 7 DEVELOPMENT ENERGY FOR PEOPLE CONTRIBUTION TO REGIONAL DEVELOPMENT
Gazprom Neft contributes to the socio- Strategy Policy. Another corporate standard, economic development of all the regions of and management Charitable Aid Procedure, was its operation. Many enterprises within the developed and adopted in 2009. The Company are of crucial importance for their decisions to provide such aid are made towns, determining the employment level and The regional policy is based on by the Charity Commission. generating a considerable portion of local tax Gazprom Neft’s development strategy revenues. Gazprom Neft deems it necessary and policies, in line with the regional The implementation of social programs to participate in creating a favorable development strategy of the Russian is the responsibility of the Corporate social climate and raising living standards Federation and socioeconomic Communications Department as well as in the regions of its presence. Through development strategy of its regions of the subsidiaries and affiliates in the social initiatives and charity programs, and individual territories. In 2007 the regions. the Company promotes child and youth Company set up the Regional Policy education, supports healthcare, contributes Commission responsible for planning In managing regional cooperation to the preservation of cultural and historical and coordinating regional socio- programs Gazprom Neft adheres heritage. economic cooperation programs. The to the principles of transparency Commission includes 18 representatives and openness to dialogue with the The Company works consistently to improve from Gazprom Neft’s units and stakeholders. The Company provides the efficiency of its regional programs, subsidiary and affiliates. In 2009, the information on the implementation develops a constructive dialogue with development of the concept of the of regional initiatives through federal regional authorities and the public. Company’s Regional Policy was started, and regional media, intra-corporate based on the experience of regional communications system as well as by cooperation. This document will provide preparing and circulating sustainable strategic guidelines and principles for development reports. the Company to cooperate with Russian regions and municipalities. Special consideration in the process of this work Regional is given to the efficiency evaluation of cooperation the Regional Policy. and social The «Procedure for Preparing investments and Concluding Socio-economic Agreements» Standard aimed at improving the efficiency of cooperation Gazprom Neft plays a noticeable role in with regional administrations was the socio-economic development of the adopted in February 2010 and regions where its enterprises operate, recommended for use at subsidiaries first of all, as a major taxpayer and and affiliates. employer. In 2009, 23 billion rubles were transferred to regional budgets. Gazprom Neft has by now developed essentially the regulations and methods Gazprom Neft provides additional ensuring a system approach to charities support to the territories of its presence within the framework of cooperation with by entering into socio-economic regions. Charity support is provided by agreements with regional and municipal the Corporate Headquarters as well as administrations. Such agreements are by the subsidiaries and affiliates on the aimed at strengthening partnership basis of the uniform corporate Charity relations with the regions and are
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CONTRIBUTION TO REGIONAL Energy for life DEVELOPMENT ENERGY FOR PEOPLE
based on the principles of mutual Company’s contribution to creating a social environment responsibility and mutual benefit. favorable for the long-term regional development The Company assists the regions in implementation of socially important Assistance in implementation of socially important cultural and projects, including construction and sports projects repairs of educational and medical institutions, sports and health facilities, Support of children and youth Social programs of cultural and historical heritage items, the Company in the Support of advanced sports support for adult and children sports, Regions of Russia cultural and leisure events. Special attention is given to supporting Construction and repairs of educational and medical institutions, indigenous people of the North. This sports and health facilities, residental buildings, cultural and historical heritage items work improves socio-economic climate, raising living standards and creating comfortable social environment In 2009 the Company continued the implementation of socio-cultural for the Company employees and cooperation with all of the priority projects as well as supports mass and their families. The efficient regional regions where it was present. It youth sports activities. Aid is provided cooperation also fosters favorable provided support to Khanty-Mansiys to the territory on the whole, and, in business climate for Gazprom Neft Autonomous District, Yamalo- particular, to five municipal entities: and its subsidiaries and affiliates. The Nenets Autonomous District, the Krasnoselkup, Nadym, Purovsky Company views its regional programs Omsk, Tomsk and Tyumen Regions. Regions, towns of Noyabrsk and as strategically important, because Furthermore, the Company expanded Muravlenko. The total amount financial a social environment favorable for the regional cooperation program in assistance to the Autonomous District the long-time regional development is 2009 by entering into socio-economic under the socio-economic agreements necessary for the sustainable, dynamic agreements with the Leningrad and was equal to 180 million rubles. development of the Company and its Murmansk Regions for the first time. better performance. The social investments under regional A stadium was opened in Muravlenko in agreements over the period in question 2009 after the reconstruction financed The Company’s social initiatives amounted to a total of 849 million by Gazprom Neft. A sports and health take account of the needs of each rubles. facility and a youth center were under specific region. Social investments are construction also due to the Company’s proposed by the local administrations, financial support. based on the regional priorities and Yamalo-Nenets Autonomous needs. The Company considers these District Support for indigenous people of the proposals and prepares a portfolio of North is an individual important subject social projects, taking into account Yamalo-Nenets Autonomous District of the Company’s social programs in a number of factors, such as the current is a key region for the Company’s Yamalo-Nenets Autonomous District. economic situation, financial abilities business. Under the socio-economic Gazprom Neft seeks to create of the Company (profit and size of agreement with the Region, Gazprom comfortable living conditions for the business in specific region). Funds are Neft finances the construction indigenous population wishing to allocated for specific programs and and capital repairs of municipal preserve the traditional way of life. cannot be used for any other purposes. social facilities, participates in the Socio-economic agreements with the
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CONTRIBUTION TO REGIONAL Energy for life DEVELOPMENT ENERGY FOR PEOPLE
Gazprom Neft as a major employer in Russian regions
1 Yaroslavl Region 1,2 THOUSAND PEOPLE
2 St.Petersburg and Leningrad Region 1,5 THOUSAND PEOPLE
3 Belarus 0.8 THOUSAND PEOPLE 3 4 Moscow and Moscow Region 2 11,5 THOUSAND PEOPLE JSC Gazprom Neft 6,1 thousand people Sibir Energy 5,4 thousand people
5 Chalyabinsk Region 4 0,4 THOUSAND PEOPLE 1
6 Sverdlovsk Region 1,9 THOUSAND PEOPLE
7 Tyumen Region 12 1,8 THOUSAND PEOPLE 11
8 Kyrgyzstan 1,5 THOUSAND PEOPLE
9 Tadzhikistan 0,1 THOUSAND PEOPLE 6
10 Omsk Region 5 7,8 THOUSAND PEOPLE 7 11 Khanty-Mansi Autonomous Okrug 2,0 THOUSAND PEOPLE 14 JSC Gazprom Neft 1,0 thousand people Sibir Energy 1,0 thousand people 10 15 12 Yamalo-Nenets Autonomous Okrug 2,0 THOUSAND PEOPLE 13 13 Kemerovo Region 2,0 THOUSAND PEOPLE 16
14 Tomsk Region 0,6 THOUSAND PEOPLE
15 Novosibirsk Region 8 1,7 THOUSAND PEOPLE JSC Gazprom Neft 16 Altai Krai Sibir Energy 0,2 THOUSAND PEOPLE 9
64 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
3 2
4 1
12 11
6
5
7
14
10 15
13
16
8
9
65 CONTRIBUTION TO REGIONAL Energy for life DEVELOPMENT ENERGY FOR PEOPLE
This is how the sports-and-fitness center in Noyabrsk will look in 2011. The project costs are covered in full by Gazprom Neft under the socio-economic agreement with the Region. The work on the project started in 2009. The total project financing for 2010-2011 is 450 million rubles. The construction work began in March 2010.
indigenous population are concluded Aid is provided to Oktyabrskoye, Gazpromneft-Khantos won the annual on the annual basis, individually with Khanty-Mansiysk, Surgut and Yugra Black Gold contest held by the each family. As many as over 100 Nizhnevartovsk areas of the District. District Administration in Khanty-Mansiysk such agreements were concluded The main events here are connected in two nominations: «For Socio-economic in 2009. In addition to monetary with the construction or repairs of Partnership» among oil companies compensations, representatives of secondary schools and medical producing over 5 million tons of oil and indigenous people received grants for institutions. «For Efficient Development of Mineral purchasing everything necessary for Resources». Gazpromneft-Khantos traditional trades and housekeeping: In Khanty-Mansiysk area, Gazprom also became a prize winner as the fuels and combustibles, snowmobiles, Neft participated in the financing of «Most Dynamically Developing Vertically mini power stations, boat motors and agricultural development and residential Integrated Company». Almost all large other equipment. One-time aid was construction programs. Russian oil companies operating in the provided during the year. Thus, the region took part in the contest. Company supported the Festival of As in Yamalo-Nenets Autonomous Reindeer Herders, traditional Nenets District, many social programs of the Gazpromneft-Khantos’ environmental celebration. Company are aimed at supporting activities are also highly appreciated in indigenous people of the North. the region, as the technologies used Gazprom Neft promoted employment by the company enable minimizing the Khanty-Mansiysk Autonomous for the local population, acquired fuel environmental impacts. In particular, it District – Yugra and lubricants, snowmobiles, boat was there that the company applied for motors, consumables for traditional the first time in Russia the technology In Khanty-Mansiysk, Gazprom Neft trades. The Company allocated funds of pumping drilling wastes into the layer supports the initiative of the District for constructing a daytime children when developing oil fields in water administration regarding preparations camp for indigenous people in the protection areas. The company personnel for the World Chess Olympic Games village of Russkinskaya, Surgut area. share the experience of using up-to-date 2010. The Company is financing the technologies with other oil companies construction of the Chess Palace. The total amount of charitable aid to operating in the territory. Moreover, the Autonomous District under socio- at the request of the Environmental The Company traditionally finances economic agreements was equal to 330 Protection and Safety Department of annual international film festival, «The million rubles in 2009. Khanty-Mansiysk Autonomous District, Spirit of Fire». Gazprom Neft also Gazpromneft-Khantos’ plants were used provides charitable aid to disabled and for processing wastes of other Khanty- orphan children. Mansiysk enterprises.
66 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Omsk Region
In accordance with the cooperation agreement for 2009-2011, Gazprom Neft participates in the financing of socially important projects and programs in the Omsk Region, including cultural and sports ones. In 2009 the Company entered into socio-economic agreements in the Region for 319 million rubles.
In Tarskyi District, Gazpromneft-ONPZ provides regular support for mass sports activities. In 2009 alone, the Plant participated in the financing of the Winter Spartakiada competitions, Tarskyi semi-marathon, travel of the Tarskyi amateur running team to the International Moscow Marathon. Additional funds were allocated for the investment, scientific and technical and An outpatient clinic was capitally reconstruction of the College’s sports innovation activity in the Murmansk repaired in Tarskyi District due to the ground. Region. financial support of Gazprom Neft. A modern 10 thousand-seat football JSC Gazpromneft-Tyumen provided The Oil Refining Plant also provides stadium suitable for large regional support to more than 600 Tyument aid to educational institutions of competitions is to be constructed Region farms by supplying oil products Bolsherechensk municipal district. in Gatchina. The Company is going at reduced prices during the spring to participate in the financing of this sowing works. With the assistance of Gazpromneft- socially important facility. Vostok LLC, schoolchildren from Tarskyi The Company financed the construction District visited children sanatoriums in of a school extension in Parabelsk 2009. St.Petersburg District and repairs of a kindergarten in the village of Molodezhny, Kargasok Gazprom Neft also continued the co- In 2009, Gazprom Neft continued to District in Tomsk Region. With the aid financing of the Avangard hockey club, support St. Petersburg sports teams, provided by Gazpromneft-Vostok, thus promoting professional sports in including Zenit football club and SKA schoolchildren from Kargasok and the region. Saint-Petersburg Hockey Club whose Parabelsk Districts visited children victories and achievements are the sanatoriums. In addition, the Company supports pride of the Company. Omsk farmers. With the commencement These are only some of the Company’s of sowing works, JSC Gazpromneft- Gazprom-Neft is a largest taxpayer of projects whose importance for Omsk provided quality fuel needed St. Petersburg. In 2009, the Company individuals as well as for the whole for the seasonal works to farmers at received the Best Taxpayer of St. regions can hardly be overestimated. reduced prices. Petersburg diploma from the city Gazprom Neft will further expand Governor, Valentina Matviyenko. The regional cooperation, increasing Company headed the list of twenty the number of social initiatives and Leningrad Region organizations that made the greatest improving their efficiency. contributions to the city budget. In 2009, Gazprom Neft for the In 2009, CEO of Gazpromneft-Kuzbass first time signed the cooperation Vladimir Mill was awarded the medal «For agreement with the Leningrad Region, Other regions of presence Business for the Sake of Creation». The another strategically important award was established by the Kemerovo region for the Company. It was an The Company implements social Region Administration for socio-political, important step in the development projects in all priority areas under the economic, labor achievements as well of cooperation. The agreement cooperation agreements with other as for social activities and charities for focuses, inter alia, on social programs, regions. the socio-economic development of including support for sports activities, Kemerovo Region. first of all, for children and youth. In 2009 Gazprom Neft concluded The Company financed the creation three years’ cooperation agreement of a specialized football group at with the Murmansk Region. The main the Gatchina Pedagogical College. cooperation areas include promoting
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JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Charitiy Just before the commencement of the school year Gazprom Neft’s subsidiaries In addition to financing projects under and affiliates held a series of traditional socio-economic agreements, the charity events to help low-income Company provides targeted charitable families buy schoolbags, textbooks and aid. stationery.
The main charity programs of Gazprom One noteworthy sports event of the Neft are: year was the 3rd Gazprom Neft Cup Ice AA«Support for Children and Youth»; Hockey Children’s Tournament with the AA«Regional Cooperation»; participation of teams from the Omsk AA«Support for Sports». and Tyumen Regions, Yamalo-Nenets and Khanty-Mansiysk Autonomous Although the financial crisis compelled Districts, St. Petersburg. In 2009 the to revise the structure of the Company’s Tournament was held in Salekhard. charity funds, all socially important projects were continued in 2009. The Company continued charitable aid The total budget of charity programs to sports organizations, including the reduced as compared with the year Mini Football Federation of Yamalo- 2008, but in some regions the list of Nenets Autonomous District. charity events even expanded. During the year the Company provided A portion of funds was allocated to charitable support to St. Petersburg’s children’s educational institutions. Thus, cultural institutions, including for example, in 2009 Gazprom Neft Mikhaylovsky Theater and Oktyabrsky fully provided with computers a village Grand Concert Hall. school in Starodubki, Kalachinsky District, the Omsk Region.
69 ENERGY FOR LIFE ENERGY FOR PEOPLE 8 SAFE DEVELOPMENT: INDUSTRIAL AND ENVIRONMENTAL SAFETY, OCCUPATIONAL HEALTH SAFE DEVELOPMENT: INDUSTRIAL Energy for life AND ENVIRONMENTAL SAFETY, ENERGY FOR PEOPLE 8 OCCUPATIONAL HEALTH SAFE DEVELOPMENT: INDUSTRIAL AND ENVIRONMENTAL SAFETY, OCCUPATIONAL HEALTH
Improving industrial safety, occupational Strategy The implementation of the declared health and environmental well-being and management principles and approaches is ensured of the regions where Gazprom Neft by the principled position of the operates is regarded by the Company Company management, introduction of unconditionally as components of its social The corporate HSE (health, safety, up-to-date management mechanisms, responsibility and prerequisites for the environment) Policy encourages all efficient technology solutions, and successful implementation of the long- employees to reduce the frequency of constructive contacts with the term development strategy and efficient injuries at work, occupational diseases, government, expert community, and production management. The Company accidents and adverse environmental public organizations. intends to be a leader in this area among impacts, apply consistently the world oil-and-gas companies, based on best international HSE practices at The Company has developed advanced management methods, innovative all Gazprom Neft enterprises, be a program for introducing the HSE technologies, professional staff and personally responsible for one's Policy and the Integrated Health, constructive relations with the government own and other people’s safety. The Safety, Environment and Civil Protection and the public. The Integrated Safety, Company is committed to complying Management System (HSE and CP) Health, Environment and Civil Protection with legal requirements and focusing on requirements. The implementation Management System currently implemented health, safety and environmental issues. of this program began in 2008 at the Company meets high international with the purpose of improving the standards. These principles and approaches are incident record-keeping, creating reflected in specific commitments a statistical base meeting international that ensure continuous improvement methodologies in order to tune the HSE of the HSE management system in activities to remedy system problems, accordance with international and the key causes of incidents. In 2009, national standards, consistent work an analysis of causes and frequencies for improving working conditions, of incidents was carried out on this industrial and environmental safety and basis and regulations were developed monitoring of the results of this activity. for a uniform approach to these issues at all Company enterprises, full and Corporate HSE Policy covers all of prompt information exchange between Gazprom Neft’s subsidiaries and enterprises. Thus, a firm foundation was affiliates. In accordance with the world’s laid for a new quality of the Company’s best practices the Company extends activity in this area. its requirements to relations with contractors, binding them to comply The Azimuth information and control with the Policy when at Gazprom Neft’s system introduced at Gazprom Neft was sites and facilities. highly appreciated by colleagues in the oil and gas industry. Azimuth integrates «No economic, technical or other all HSE-related information and allows considerations may be taken into us to automate and standardize account, if they contradict the necessity management reporting generation to ensure safety of the production processes, enhance control over staff, population and the environment». compliance with safety requirements. (Gazprom Neft’s HSE Policy). Information on incidents and actions is automatically distributed by the system
72 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Introduction of the HSE Policy and HSE and CP Integrated Management System
2008 2009 2010 2011 2012
Formation of the Development of Better quality of Introduction of System efficiency statistics base. regulations. investigations. corrective action analysis and plans. adjustment. Better record-keeping Training. Industrial monitoring of incidents. and audit. Development of Launch of the Analysis of incidents, integrated projects continuous system exchange of Risk evaluation. and programs. and processes information. Management system improvement mode. analysis.
to all necessary addresses. It ensures Training in modern HSE requirements, workplaces. The employees are a qualitatively new level of transparency, safe driving in accordance with the provided with individual protective gear. promptness of response and a system corporate standards was provided to On-the-job training on occupational approach to analyzing current more than 14 thousand employees of health and safety is organized. Even information. subsidiaries and affiliates. The Company under difficult economic conditions the holds regular meetings for exchanging healthcare costs were not reduced. The Company management focuses information and experience on safety Occupational health is the area of on the development of HSE and CP issues. cooperation between the Company management system, introduction of management and trade unions. safe technologies. Compliance with Reciprocal obligations on these relevant requirements is ensured by all Occupational health issues are reflected in the collective management levels, from CEO down to and safety agreements. a foreman, with the support of HSE and CP specialists. Work at oil enterprises often involves Reducing the frequency of Developing a responsible attitude of potential danger. To minimize threats injuries at work the staff to their own safety and that of to the life and health of people, the other people, involving a wide range Company works consistently to reduce Reducing the frequency of injuries of employees in safety issues is an professional risks and implements at work is a key task in the field of unconditional priority to the Company. programs aimed at preventing injuries occupational health. As the result Gazprom Neft has developed and and occupational diseases. Account of completing the first stage of implements a training program aimed is taken of both technical and man- introduction of the HSE Policy, priority at preventing incidents, injuries at caused components of risk, efforts standards were developed and injury work and occupational diseases. are made to improve the ability to statistics were analyzed. An internal This program is targeted to all respond promptly and efficiently investigations system was introduced, Gazprom Neft employees, including to emergencies and eliminate their enabling identification of the system the management, and supplements consequences. causes of incidents. In 2009, the the statutory forms of training. In incident transparency indicator 2009, more than 700 managers and Gazprom Neft works systematically increased twenty times as compared specialists of the Company received to identify and control harmful and with the year 2007, reaching the level of training in environmental legislation. dangerous industrial factors, evaluate the world’s leading oil companies.
73 SAFE DEVELOPMENT: INDUSTRIAL Energy for life AND ENVIRONMENTAL SAFETY, ENERGY FOR PEOPLE OCCUPATIONAL HEALTH
In 2009, the fatal accident rates On 3 December, Gazprom Neft’s Improving transport safety decreased. The injury rates did not Corporate Headquarters hosted change as compared with the previous a meeting of the Company’s fire and The Company has developed level, which fact, taking into account industrial safety specialists on the a standard to ensure road transportation the stricter requirements to record- practical application of Federal Law safety. This standard provides stricter keeping, evidences a noticeable No. 123-FZ «Technical Regulation requirements to the registration of positive trend1. on Fire Safety Requirements». The traffic accidents. At present, all traffic meeting was attended by more than accidents, including minor ones and 50 specialists from the Company’s those occurring through the fault of third Employee training in regional enterprises. Representatives parties, are to be recorded. In-house occupational health and safety of federal authorities and potential fire investigations are carried out for traffic safety contractors were also invited. The accidents. An analysis of incidents shows that meeting participants discussed in detail the «human factor» is responsible for the requirements of federal legislation Safe driving courses are conducted a considerable portion of cases such as to the development of fire safety on the continuous basis. In 2009, the falling from a height, falling on surfaces, declarations and fire risks assessment training of in-house instructors was jamming between rotating or moving which had to be implemented by started for almost on-the-job training of objects. The training program aimed Gazprom Neft subsidiaries and affiliates drivers. An automobile training simulator at preventing injuries and incidents, in 2010. Based on the meeting results, was acquired to enable the drivers to improving the efficiency of employee the decision was made on the practical develop practical skills for emergency involvement in health and safety issues application of this Federal Law at the helps make Gazprom Neft’s health subsidiaries and affiliates. At the meeting and safety standards a real everyday necessary materials for work on site were practical guide for employees. The distributed. Fatal accidents program has been implemented since rate (FAR) 2008. During its first year, training was In June 2009, the seminar «HSE and provided by the corporate HSE and CP CP Risks Identification, Evaluation and service as well as by instructors from Minimization» was held in Noyabrsk. SOURCE: specialized companies. About 1,000 The seminar participants discussed COMPANY employees at the most responsible the particularities of work under new DATA production units participated in the international HSE and CP requirements program. In 2009, a new phase of the adopted at Gazprom Neft. 30,23 program was started with the institute of in-house instructors established at the Company. 122 in-house instructors Providing employees with indi- were trained: 64 for HSE and CP vidual protective gear 12,39 programs and 58 for safe driving. In 2,53 2009 they trained more than 7,000 The Company has a corporate standard employees of subsidiaries and affiliates for individual protective gear. Based 2007 2008 2009 in corporate HSE and CP programs on the market analysis and operational and more than 7,000 employees in safe tests, the catalogue of individual driving. protective gear that may be purchased for the Company employees was One efficient form of training is regular formed. This catalogue is continuously working meetings and seminars updated. From 2009, the logistics Loss time injury on health and safety issues. The units purchase only such individual frequency rate meetings are attended by managers protective gear that meets Gazprom (LTIFR) of all levels, occupational health Neft’s Specifications and corporate officers, representatives of regulatory style. The working clothes purchased agencies, leading experts. Contractors’ by the Company meet Oеko-Tex SOURCE: representatives are involved as well. It Standart 100, Russian and European COMPANY allows to discuss all goals in this area, safety requirements. Costs of acquiring DATA to develop practical solutions, and individual protective gear amounted
the cooperation shemes between all to 12.5 thousand rubles per employee 1,36 stakeholders. a year. The Company purchases high-quality individual protective gear. For example, Gazpromneft-ONPZ 0,76 0,76 purchased 500 newest fire-proof suits of special poly-meta-aramide fabrics.
2007 2008 2009 1 The data quoted in this section applies to Gazprom Neft and its subsidiaries and affiliates in Russia and CIS, unless otherwise specified.
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SAFE DEVELOPMENT: INDUSTRIAL Energy for life AND ENVIRONMENTAL SAFETY, ENERGY FOR PEOPLE OCCUPATIONAL HEALTH
situations in as real conditions as possible.
The first results of this program are encouraging, as the number of injuries in traffic accidents fell almost two times.
Industrial safety
The safe operation of production facilities, prevention of accidents and the readiness to localize accidents and eliminate their consequences are both management and technical issues. The industrial safety management system at Gazprom Neft is built, in accordance with the requirements of regulatory agencies, and is aimed at reducing the risk of emissions and discharges of hydrocarbons and injuries at work. The corporate regulations and standards in this area are aimed at preventing equipment and constructions failures. On 19 August, more than 300 oil refiners competed at Gazpromneft-ONPZ in rapid The introduction of these standards and correct use of fire-fighting, gas protection equipment, and provision of first aid. with the simultaneous production modernization and introduction of advanced technology solutions helps maintain a high level of readiness for Employees participate in the exercises to avoid serious consequences for emergency situations. The Company with the purpose of preventing the Company’s personnel, assets and has developed an efficient and flexible emergencies and minimizing damage. the environment. No large accidents structure of interaction between units In 2009, 57 such exercises were held occurred at the Company in 2009. for preventing emergencies and at the Company. Most of them were eliminating their consequences. The aimed at extinguishing fires that may special emergency rescue teams set occur at the Company’s production Readiness for emergency up for these purposes have up-to-date facilities. situations equipment and devices for rescue and other works. To maintain and On 10 July, forest fire extinction Gazprom Neft’s HSE and CP policy check their readiness, regular drills exercises were held at Gazpromneft- and standards are aimed at minimizing and exercises are held. For an efficient Khantos with the purpose to perfect joint risks and preventing accidents. It is response to possible emergencies, actions of fire services in extinguishing also very important for the Company to Gazprom Neft subsidiaries and affiliates a large forest fire threatening production cooperate with local bodies of the facilities. Ministry of Emergency Situations. Individual protective gear expenses, rubles per employee
SOURCE: COMPANY DATA
12 200 12 500
6 500
2007 2008 2009
76 JSC GAZPROM NEFT SUSTAINABILITY REPORT 2009
Reduction of adverse Environmental protection Upstream enterprises account for environmental impacts expenses most emissions. The production growth in this sector, commissioning and efficient use of The Company allocates considerable of new facilities and acquisition of new resources funds for environmental measures, production assets involved an increase including equipment modernization, in the gross atmospheric emissions in environmental monitoring, damaged 2009 as compared with the previous The operations of oil companies lands rehabilitation, and environmental year. involve a high level of man-caused training of specialists. environmental impacts, including The Company’s enterprises keep atmospheric emissions, use and In 2009, despite an unstable economic working to reduce pollutant emissions pollution of water and lands. The situation, the Company continued by associated petroleum gas (APG) Company’s environmental strategy investmenting in environmental utilization. In 2009, the volume of burned provides for the minimization of impact reduction programs. The main APG decreased, notwithstanding the these impacts, sustainable use of investment priorities in this area are production expansion. natural resources, and remedying the higher APG (associated petroleum of the environmental «legacy» of gas) utilization rate and production of The emission level kept reducing former times. The Company seeks environment-friendly fuels. in the oil refining sector in 2009 as to fully comply with the current the result of environmental activities environmental legislation, fulfill its at Gazpromneft-ONPZ such as license commitments and compensate Atmospheric emissions replacement of burners in process environmental damage to the maximum furnaces, equipment of tanks with possible extent. The Company pays Reducing atmospheric emissions up-to-date low-emission devices, and much attention to the manufacture of is a strategic goal of the Company. commissioning of a plant ensuring leak- products with improved environmental It is especially important, given that proof loading of oil products. characteristics. Gazprom Neft is rapidly growing. The Company has developed and Gazprom Neft seeks to build Ecological monitoring of the implements a set of programs for a constructive dialogue with all Company’s production facilities and a phased reduction of harmful stakeholders. This dialogue is especially natural environment is conducted atmospheric emissions through important when it concerns projects systematically with the use of the latest equipment modernization, innovative that are of significance to the Company analytical and information technologies. technologies, advanced training of the and the general public. One such The Company’s enterprises have personnel. project was the «Joint Project for environmental analysis centers with APG Utilization in the Ety-Purovskoye laboratories monitoring the quality of soils, atmospheric air, water objects, waste water and drinking Environmental expenditures, mln rubles water. The current background pollution level is determined on the 2007 2008 2009 newly commissioned oil field. The Current costs 577,7 1 018,2 1901 Company’s environment observation and evaluation system enables timely including waste water treatment costs 349,1 138,8 392 identification of adverse man-caused waste treatment costs 43,7 197,3 327 changes and minimization of their water consumption costs 30,7 20,4 369 effects. air treatment costs 12,6 10,8 460 Projects of the calculated sanitary Capital costs 29,9 261,4 172 protection areas of the Omsk and Moscow Oil Refineries were developed and approved in 2009. Based on these projects, calculated boundaries Atmospheric emissions of the sanitary protection areas were set. Additional activities for reducing 2007 2008 2009 environmental impacts were developed Gross atmospheric emissions, thousands 161,8 157,2 202 within the framework of these projects. of tons, including CO 73,0 69,3 74 NOx 10,7 10,4 12 SO2 12,5 12,2 20 Solid substances 3,6 4,7 13 Volatile organic compounds (total) 54,3 32,1 61
77 SAFE DEVELOPMENT: INDUSTRIAL Energy for life AND ENVIRONMENTAL SAFETY, ENERGY FOR PEOPLE OCCUPATIONAL HEALTH
Field» implemented in accordance with course of the project. The hearings was prepared on its basis. Its main Article 6 of the Kyoto Protocol to the participants highly appreciated the way investment projects are construction UN Framework Convention on Climate environmental risks were taken into of gas collection systems, power Change. This project is a breakthrough account: the routes of future pipelines generation, APG metering, and low- for the Company in the Yamal Peninsula, pass far from large bodies of water pressure gas utilization. as Yamal produces almost one half of in order to minimize environmental its atmospheric emissions. The project impacts according to the strictest In 2009, a pipeline from the Ety- also has an international importance construction regulations and in full Purovskoye field and the first stage as an example of cooperation for the compliance with environmental of the gas turbine power plant in the implementation of the Kyoto Protocol. requirements. Based on the results South license territory of the Priobskoye The mechanism of joint projects allows of public hearings, the project was field with the power of 48 MW were to attract investments from partner approved and recommended for constructed and put into operation. The countries for the implementation of implementation. development of a pipeline project for greenhouse gases emission reduction the Shinginskoye field was started. The projects, improve their profitability, implementation of MTIP allowed raising develop and introduce up-to-date Utilization of Associated Gas the APG utilization rate from 35.7% in technologies. The Company’s partners 2007 to 48.1% in 2009. in this project are Mitsubishi Corporation APG is a byproduct of oil industry. and Nippon Oil Corporation, the It is a valuable natural resource that The management efficiency in authors and developers of the AM0009 may be used as a fuel, raw material this area will be improved by the methodology «Projects for recovery for petrochemistry, or for re-pumping automatic APG metering system, the and utilization of gas from oil wells that into the underground layer to design of which was completed in would otherwise be flared.» increase oil production. Burning APG 2009. This system will provide more in flares means not only economic reliable updated information on APG The project provides for collection of losses but environmental damage production and use. associated gas in the Ety-Purovskoye as well, because the greenhouse Field, which was formerly flared. APG gases generated by burning APG is transferred by a specially built gas involve a threat of climatic changes. pipeline to the Vyngayakha compressor An efficient use of APG has been station and then to the main pipeline recognized as an important goal on the connecting Vyngayakha with the national level. It requires serious efforts, Vyngapur compressor station located new investments and appropriate to the south-east. So, APG will be infrastructure. APG utilization is transported to SIBUR’s processing yet another driver for oil industry facilities. As the result of this project, modernization. greenhouse gases emissions will be reduced by about 750,000 tons of СО2 Gazprom Neft implements the Medium- equivalent a year. Term Investment Program for AG utilization and higher efficiency use In April 2009, public hearings on (MTIP) for 2008-2010. The purpose of the project were held. A discussion the program is to upgrade the APG on the purposes of the project and utilization rate to 95% by the year 2012. its effects for the Company and the In 2009, an updated Gas Program region took place with the participation of Gazpromneft-Noyabrskneftegaz CEO Gennady Lyubin, SIBUR JSC Gazprom Neft’s APG Utilization Improvement Program, % representatives, Deputy Mayor of Noyabrsk for Social Issues Viktor Rebrov, Deputies of the Noyabrsk SOURCE: City Duma, oil industry specialists and COMPANY environmentalists, representatives of DATA the public and residents of Noyabrsk
and Muravlenko, and mass media. 95 Representatives of the project partners, Mitsubishi Corporation and Nippon 61 Oil Corporation, attended the public 46,8 48,1 49,3 hearings as observers. 35,7
The hearings covered a wide 2007 2008 2009 2010 2011 2012 range of issues from the quality of environmental improvements to the number of jobs to be created in
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SAFE DEVELOPMENT: INDUSTRIAL Energy for life AND ENVIRONMENTAL SAFETY, ENERGY FOR PEOPLE OCCUPATIONAL HEALTH
Production of fuels with At the same time, the Company A treatment facilities reconstruction improved environmental develops its own power generating project is being developed at the Omsk characteristics facilities. Within the framework of the and Moscow Refineries. Construction Program «Recovery and Improved of advanced closed highly efficient The Company’s oil-refining sector Efficiency of Use of Associated treatment facilities will allow not only works methodically to improve the Petroleum Gas» the Company builds to improve the waste waters treatment environmental friendliness of its fuels, its own generating facilities. At present, quality, but also to reduce significantly increasing their share in the total their aggregate power is 82 MW and in the hydrocarbon emissions. production volume. The new fuels 2013 it is to be increased to 220 MW. produce lower sulfur dioxide emissions. In 2010, Gazprom Neft will finish the The waste waters that Slavneft-YaNOS In addition to the environmental construction of the second stage (48 discharges into the Volga River fully meet effect, this activity will ensure a higher MW) of the gas turbine power station the requirements for Category I fishing competitiveness of the Company’s in the Yuzhno-Priobskoye field. This is waters. Its treatment facilities enable products and facilitate the successful especially important, given that with treatment of waste waters not only operation on new markets. the Company growth and production from YaNOS, but also from neighboring intensification in all main sectors the enterprises as well. All industrial Technical modernization programs demand for energy will increase. wastes undergo full mechanical, carried out in Gazpromneft-ONPZ physicochemical and biological and Moscow Refinery are to improve treatment. the quality and environmental Use of water resources characteristics of fuels. In 2009 water consumption for The Waste treatment Company’s own needs was up by 42 % Energy consumption compared to 2008 due to an increase 90% of the waste accumulated by and energy efficiency in the volume of oil production and the Company’s operations is low- pumping of water into the layer for hazard and practically non-hazardous Oil companies are not only energy maintaining the layer pressure. (Class IV and V). Most of the waste suppliers. They also consume is drilling waste. In 2009, the volume energy in producing and processing The Company’s environmental services of such waste increased due to hydrocarbons and petrochemicals. In monitor the impact of production production growth, additional drilling, 2009, the specific energy consumption processes on bodies of water. Such and commissioning of new well pads. at Gazprom Neft increased in monitoring enables assessment of the However, the growth of this indicator connection with the intensification of effect of production on bodies of water is caused not only by the real increase operations. The Company’s total power and, if necessary, to take measures in the waste volume, but also by more consumption reduced from 5,536 million for improving the local environmental careful record-keeping, in particular, kWh in 2008 to 5,484 million kWh in situation. Minimizing such impacts is the inventorying of sludge pits at 2009 (i.e. by 52 million kWh) due to the purpose of the production updating Gazpromneft-Noyabrskneftegaz and at reduction in the production of liquid by currently going on at the Company. the Muravlenkovskneft branch. 1.9% and oil by 2.8%. Thus, the modernization of the process condensate treatment unit in the The reduction of wastes, which The Company’s consumption of heat KT-1/1 catalytic cracking plant, and inevitably produce an adverse power rose from 314,000 Gcal in 2008 reconstruction of the HVO-3 chemical environmental impact, is one of the to 334,000 Gcal in 2009 due to colder water treatment unit with the change of most important environmental protection weather conditions. the filter washing system from straight objectives and an important component flow to reverse flow at Gazpromneft- for efficiency improvement. Gazprom Neft keeps working to ONPZ enabled a significant improve its energy efficiency and use improvement of the industrial waste Gazprom Neft solves waste problems power resources in a rational way. quality. At present, a project is being by both minimizing the generation and The Company’s enterprises monitor developed for the construction of a new maximizing the recovery of wastes. energy consumption systematically and process condensate treatment unit in implement power saving programs. fuel hydroforming plants and 43-103 The economic effect of energy saving plant. programs at Gazprom Neft’s oil- producing enterprises is increasingly noticeable.
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Unique drilling waste treatment plant Total water consumption and discharges commissioned at Gazpromneft-Khantos. The Company develops the Priobskoye field in the water protection area where 2007 2008 2009 the surface disposal of drilling waste is prohibited. Based on a study of the Total water consumption, million m3 73,9 82,0 105,0 world experience, the Company decided of which, from underground sources 31,4 36,6 59,0 to apply the drilling waste utilization from surface sources 41,1 44,1 46,0 technology, pumping waste into underground layers. Transferred to other consumers 29,1 24,6 23,2 (without use)
The processing unit is built on the left Share of multiple use of water 90,0% 85,5% 81,4% bank of the Irtysh River. The waste Effluent discharge, thousand m3 9,11 21,8 38,0 processing technology used there Transferred to other consumers (after use) 8,42 7,0 11,0 had only been applied before in shelf fields. Solid and liquid drilling waste is discharged into special tanks. With the use of mechanical and chemical treatment, waste becomes a non- hazardous liquid which is subsequently Waste treatment pumped under pressure into a layer at the depth of about 2,000 meters. 2007 2008 2009 Gazpromneft-ONPZ, with its own facilities, processes 100% of the Waste accumulation, thousands of tonnes 393 263 694 generated oil wastes, reusing them as including danger class I 2 2 5 a fuel oil component. danger class II 0 0 0
danger class III 27 28 86 Moscow Refinery has extensive expertise in utilization of oil-containing including oil slimes 23 85 wastes. Since 2003, the technology of danger class IV 335 199 540 bio-utilization has been applied to oil- danger class V 21 32 63 slimes here. This technology is the most Use of waste (including transfer for use to 63 88 40 environmentally-friendly, and provides other entities), thousands of tons for remediation of 4 000 m3 annually. In 2009, development of a comprehensive Waste decontamination and burial 284 319 207 (including transfer to other entities for program for utilization of oil-containing decontamination and burial), wastes accumulated in previous periods thousands of tons started. Balance of waste at the year-end, 321 423 870 thousands of tons New efficient petroleum product storage and transportation technologies include the mobile treatment facility for cleaning the inner surfaces of tanks from solid sediments.
81 SAFE DEVELOPMENT: INDUSTRIAL Energy for life AND ENVIRONMENTAL SAFETY, ENERGY FOR PEOPLE OCCUPATIONAL HEALTH
Waste reduction in various sectors Land contamination control and remediation
Sector Main types of Waste treatment The production activity of oil producing waste companies results in large areas Oil production Drilling waste Placement in specialized storage areas of damaged lands, such as roads, and oil service with subsequent reclamation. transportation corridors, or sludge pits where drilling wastes are accumulated. Processing of drilling waste to make secondary products (construction These lands are to be decontaminated materials). and remediated.
Pumping into a layer. Every year the Company develops Oil processing Oil waste Processing. damaged lands and sludge pits Provision of oil Solid sediments in Cleaning of tank surfaces with remediation programs providing for the products tanks subsequent processing of oil product following work stages: residues removed from the tanks. AAdamaged lands inventorying; AAevaluation of soil pollution; AAdevelopment of design documentation in accordance with Land contamination control and remediation environmental requirements; AAselection of the most efficient 2007 2008 2009 technology of damaged lands remediation; Damaged lands, ha AAefficiency evaluation of remediation beginning of the year 10470,94 11521,10 11552 of oil-polluted areas and sludge pits end of the year 11477,66 11551,85 22530 involving independent experts. contaminated during the year 1175,517 210,91 11126* To remediate lands, the Company remediated during the year 213,5 180,16 148 enterprises apply advanced including oil-polluted lands, ha technologies, use modern chemical and beginning of the year 318,67 207,23 142 biological preparations as well as area- specific perennial plants. end of the year 195,63 141,638 146 contaminated during the year 41,76 38,40 61 The approval and implementation of remediated during the year 209,5 103,63 56 the remediation program for 148 ha of Number of sludge pits sludge pits and oil-polluted lands was the most important result of 2009. 316 beginning of the year 263 288 380 million rubles were spent on sludge end of the year 288 380 324 pits remediation. The efficiency of the built during the year 35 127 82 remediation work was evaluated by remediated during the year 10 35 138 independent experts and research centers.
* In connection with the damaged lands inventorying at Gazpromneft-Noyabrskneftegaz and Taking into consideration the high Muravlenkovskneft, previously unrecorded damaged lands of an area of 9,000 ha were taken stock of, intensity of oil fields development, it which accounts for significant growth of this indicator. is evident that reducing the area of damaged lands is an increasingly important objective. Gazprom Neft implements successfully the advance drilling program which allows us to leave undamaged the lands where no boundaries of the oil and gas zone are confirmed. This technology excludes the necessity of building additional sludge pits.
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APPENDIX. SELECTED TERMS Energy for life 9 AND ABBREVIATIONS ENERGY FOR PEOPLE APPENDIX. SELECTED TERMS AND ABBREVIATIONS
EBITDA reporting system that may be used by which affect, or are affected by, the organizations regardless of their size, Company’s performance. earnings before interest, depreciation activity and location. and amortization. IRMS NO IR Global Rankings X Integrated Risk Management System. (IRGR) nitric oxides. Risk management is a continuous regular process covering risk an overall international ranking identification, assessment, monitoring SO2 system for IR-sites (corporate web- and response on all levels within the sites targeted to the investment sulfur oxide. Company. community), online annual corporate reports, financial information disclosure Assets, enterprises Company procedures, corporate governance in the context of the Report, subsidiaries etc. The ranking is based on a study of in this Report JSC Gazprom Neft and all and affiliates of Gazprom Neft JSC. public companies’ performance under of its subsidiaries and affiliates. the methodology developed by MZ Consult, a leading consulting agency for Charities Corporate investor relations. voluntary activity for the transfer of Communications property, including money, performance interaction, including information of works, provision of services and other ISO 14001 exchange, between the Company and support to individuals or legal entities the International Standardization its stakeholders. on the selfless basis (gratuitously or on Organization’s standard «Environmental preferential terms). Management Systems. Requirements Well utilization rate with Guidance for Use», 2004, one of the most widely used environmental Corporate the ratio of the actual operating time of management standards. Headquarters the wells to their total calendar time over a certain period. the managing company, Gazprom Neft GRI — G3 JSC. Well Pad the third version of the internationally recognized sustainable development Grade the limited oil/gas field area where a special site is prepared for the reporting guidelines developed by the a group of positions of approximately Global Reporting Initiative (GRI). installation of a group of wells, oil and the same value to the Company, i.e. gas production equipment, auxiliary and close by the level of functionality, personnel premises etc. GRI competence, experience and the Global Reporting Initiative, an responsibility requirements. Oil Service international organization with the principal purpose of developing and Stakeholders oil and gas field development service, including drilling of wells, assembly of implementing an authoritative and all individuals and legal entities trusted sustainable development rigs, arrangement of well pads, repairs interested in the Company’s activity, of wells and drilling equipment etc.
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Oil Equivalent Technical Regulation reference fuel. [in the Russian Federation] Sustainable the document (regulatory legal act) Development establishing mandatory requirements Reporting to the items liable to technical regulation (products, including the aggregate of systems and buildings, constructions and structures, processes for collecting, consolidating production, operation, storage, and submitting information reflecting the transportation, sale and disposal balance between financial, operational, processes). social and environmental aspects of the Company’s business, principles Sustainable and mechanisms for taking account of the interests of a wide range of Development stakeholders, managing the interaction development which meets the needs with them in attaining goals important of the present without compromising for the Company and the society. the ability of future generations to meet their own needs. (definition formulated Associated by the UN International Commission for (Petroleum) Gas (APG) Environment and Development in the «Our Common Future» Report. Quoted the mixture of various gaseous from the Sustainability Reporting hydrocarbons solved in oil and emitted Guidelines. Version 3.0. GRI, 2006.) during its production. KhMAO Additives Khanty-Mansi Autonomous Okrug. substances added in small quantities to fuels and technical oils to improve their CFD performances. Central Federal District. HSE Sludge Pit Health, Safety and Environment. the place where drilling wastes are CP stored. Civil Protection. YaNAO IPG Yamalo-Nenets Autonomous Okrug. Individual Protective Gear.
85 CONTACTS Energy for life 10 AND FEEDBACK ENERGY FOR PEOPLE CONTACTS AND FEEDBACK
Your feedback on the issues is very important for us. Gazprom Neft JSC
To comment on the Report or ask any questions, you may contact us by phone, mail, e-mail or fax using the following 125 A Profsoyuznaya ul., Moscow, 117647, Russia contact details: Tel.: +7 (495) 777-3152, 662-7569 Fax: +7 (495) 777-3151, 777-3142 Corporate Communications Department [email protected]
Other contacts are available at the Company’s web-site: http://www.gazprom-neft.com/contacts/
You can also send an e-mail from the Company’s feedback page: http://www.gazprom-neft.com/feedback/
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