Public Joint-Stock Company Gazprom Neft

Financial (Accounting) Statements

As at and for the year ended on 31 December 2020

with Independent Auditor’s Report

Independent Auditor’s Report To the Shareholders and the Board of Directors of Public Joint Stock Company Gazprom Neft Opinion We have audited the accompanying annual accounting (financial) statements of Public Joint Stock Company Gazprom Neft (hereinafter referred to as “Gazprom Neft PJSC”) which comprise the balance sheet as at 31 December 2020, the profit and loss account, the appendices to the balance sheet and the profit and loss account including the statement of changes in equity and the statement of cash flows for the year ended 31 December 2020, and notes to the balance sheet and the profit and loss account including a summary of significant accounting policies. In our opinion, the accompanying annual accounting (financial) statements present fairly, in all material respects, the financial position of Gazprom Neft PJSC as at 31 December 2020, its financial performance and cash flows for the year then ended in accordance with the rules of accounting (financial) statements established in the Russian Federation. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (“ISA”). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Annual accounting (financial) statements section of our report. We are independent of the audited entity in accordance with the Rules of Independence of the Auditors and Audit Organizations and the Code of Professional Ethics of the Auditors, which are conformant to the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the annual accounting (financial) statements of the current period. These matters were addressed in the context of our audit of the annual accounting (financial) statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Revenue recognition During the audit we specially focused on revenue recognition as the amount of revenue is material and revenue streams are formed in different geographical and operating segments. In addition, revenue streams differ in such terms of recognition as the determination of transaction prices and the pattern of transfer of ownership. Despite the high level of automation, a large number of contracts and a significant number of transactions pose a risk of misstatement of this item. Our audit procedures in respect of the risk of material misstatement of revenue included:  assessing the consistency of the application of the revenue recognition accounting policy in relation to a variety of performance obligations;  testing controls and assessing the risk of fraud or error;  verifying the timeliness of revenue recognition and the right to recognised revenue based on the terms of contracts and other documents;

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 receiving confirmation letters from counterparties as at the end of the reporting period. Based on the results of our audit procedures, we considered the position of the audited entity’s management on the revenue recognition to be acceptable. Information about the approaches to revenue recognition is provided in Note 2.19 “Recognition of sales revenue” to the annual balance sheet and profit and loss account; information about revenue figures including information by geographic segments is disclosed in Note 5.13 “Revenue from the sale of goods, products, work and services” to the annual balance sheet and profit and loss account. Assessment of financial investments Investments of the audited entity in the form of long-term and short-term financial investments in shares, units, loans and deposits account for about 70% of the total assets. Due to the significance of financial investments, the variety and multiplicity of transactions with them, as well as the complexity of assessing some of them, we have determined that the assessment of financial investments, both initial and subsequent, can significantly affect results of operations and the financial standing of the audited entity, so this issue is given special attention during the audit. The disclosure of information about financial investments by the audited entity is given in Note 5.7 “Long-term and short-term financial investments”. Our audit procedures with respect to the risk of material misstatement in relation to the assessment of financial investments and the presentation of results thereof in the accounting (financial) statements included, in particular, conducting substantive procedures with respect to testing the accounting records; testing the correctness of the valuation of financial investments for the purposes of accounting and reporting based on data on securities quotations at the reporting date taking into account their tentative assessments made by the Company’s specialists, including: testing for impairment in order to analyze validity of the provision for impairment of financial investments. We have also assessed adequacy of the disclosures made by the audited entity about the accounting policies applied in Note 2.7 “Financial investments”. Based on results of the procedures carried out, we considered the management's position regarding the assessment of financial investments and the presentation of its results in the annual accounting (financial) statements to be appropriate. Other Information Management of the Company is responsible for the other information. The other information comprises the information included in the Annual Report of Gazprom Neft PJSC for 2020 and the Quarterly Issuer’s Report for the first quarter of 2021 but does not include the annual accounting (financial) statements and our opinion on these statements. The Annual Report of Gazprom Neft PJSC for 2020 and the Issuer’s Quarterly Report for the first quarter of 2021 are expected to be provided to us after the date of this auditor’s report. Our opinion on the annual accounting (financial) statements does not cover the other information, and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the annual accounting (financial) statements, our responsibility is to read the other information identified above (when provided to us) and, in doing so, consider whether the other information is materially inconsistent with the annual accounting (financial) statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

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If, upon reviewing the Annual Report of Gazprom Neft PJSC for 2020 and the Issuer’s Quarterly Report of Gazprom Neft PJSC for the first quarter of 2021, we conclude that they contain a material misstatement we shall be obliged to inform thereof the persons responsible for corporate governance. When we read the Annual report of Gazprom Neft PJSC for 2019 and the Quarterly issuer’s report of Gazprom Neft PJSC for the first quarter of 2020, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged with Governance for the Annual Accounting (Financial) Statements The management is responsible for the preparation and fair presentation of the annual accounting (financial) statements in accordance with the rules for accounting (financial) statements established in the Russian Federation, and for such internal control as management determines is necessary to enable the preparation of annual accounting (financial) statements that are free from material misstatement, whether due to fraud or error. In preparing the annual accounting (financial) statements, the management is responsible for assessing the audited entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the audited entity or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the audited entity’s financial reporting process. Auditor’s Responsibilities for the Audit of the Annual Accounting (Financial) Statements Our objectives are to obtain reasonable assurance about whether the annual accounting (financial) statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounting (financial) statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: a) identify and assess the risks of material misstatement of the annual accounting (financial) statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; b) obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the audited entity’s internal control; c) evaluate the appropriateness of accounting policies used, the reasonableness of accounting estimates and related disclosures made by the management of the audited entity;

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d) conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the annual accounting (financial) statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern; e) evaluate the overall presentation, structure and content of the annual accounting (financial) statements, including the disclosures, and whether the annual accounting (financial) statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance of the audited entity with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual accounting (financial) statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

S.M. Shapiguzov (by virtue of the Charter, President of FBK, LLC auditor qualification certificate 01-001230) I.A. Gribov Engagement partner on the audit (auditor qualification certificate resulting in this independent auditor’s report 01-000744)

Date of the independent auditor’s report: 17 February 2021

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Audited entity Auditor Name: Name: Public Joint Stock Company Gazprom Neft Finansovie i Bukhgalterskie Konsultanty (Gazprom Neft PJSC) limited liability company (FBK, LLC) Address of the legal entity within its Address of the legal entity within its location: location: 3-5 Pochtamtskaya St, St Petersburg, 44M Myasnitskaya St, Bldg 2ЛВ, Moscow, 190000, Russian Federation. 101990, Russian Federation. State registration: State registration: Registered on 6 October 1995 by the Omsk Registered by the Moscow Registration Registration Chamber. Statutory registration Chamber on 15 November 1993, registration certificate No. 38606450. Primary state number 484 583. registration number 1025501701686. The registration entry was made in the The registration entry was made in the Unified State Register of Legal Entities on Unified State Register of Legal Entities on 24 July 2002 under primary state registration 21 August 2002 under primary state number 1027700058286. registration number 1025501701686. Membership in a self-regulatory organization of auditors: Member of Sodruzhestvo Association (self-regulated organization of auditors). Primary number of registration entry in the register of auditors and audit organizations of the self-regulatory organization of auditors: 11506030481.

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CONTENTS

ACCOUNTING STATEMENTS

Balance sheet ...... 1 Profit and loss account ...... 4 Statement of changes in equity ...... 6 Cash flow statement ...... 10

Notes to the balance sheet and profit and loss account

I. GENERAL INFORMATION ...... 12 1.1 Background ...... 12 1.2 Registered address (place of business) of the Company ...... 12 1.3 Management bodies of the Company ...... 12 1.4 Control over financial and business operations of the Company ...... 14 1.5 Operations of the Company ...... 15 1.6 Branches and representative offices (territorially autonomous units) ...... 16 1.7 Information about the number of staff ...... 17 II. SIGNIFICANT ACCOUNTING POLICIES AND DISCLOSURES IN FINANCIAL STATEMENTS ...... 17 2.1 Basis for preparation ...... 17 2.2 Assets and liabilities in foreign currency ...... 17 2.3 Current and non-current assets and liabilities ...... 18 2.4 Intangible assets ...... 18 2.5 Prospecting assets ...... 18 2.6 Fixed assets ...... 20 2.7 Financial investments ...... 21 2.8 Other non-current assets ...... 22 2.9 Inventories ...... 22 2.10 Costs of production and sale, production in progress ...... 23 2.11 Accounts receivable and payable ...... 23 2.12 Cash and cash equivalents ...... 24 2.13 Charter capital, additional capital and reserves ...... 24 2.14 Loans received ...... 25 2.15 Provisions and contingent liabilities ...... 25 2.16 Targeted financing (government aid) ...... 25 2.17 Deferred taxes ...... 25 2.18 Profit tax associated with payments within the CTG ...... 26 2.19 Recognition of sales revenue ...... 26 2.20 Information on discontinued operations ...... 26 III. CHANGES TO THE ACCOUNTING POLICY ...... 27 3.1 Changes to the accounting policy in 2020 ...... 27 IV. ADJUSTMENT OF DATA FOR PREVIOUS REPORTING PERIOD ...... 28 V. EXPLANATIONS TO MATERIAL PARAMETERS ...... 30 5.1 Segment reporting ...... 30 5.2 Intangible assets ...... 30 5.3 Prospecting assets ...... 31 5.4 Fixed assets ...... 32 5.5 Other non-current assets ...... 33 5.6 Inventories ...... 34

5.7 Long-term and short-term financial investments ...... 34 5.8 Accounts receivable ...... 37 5.9 Cash and equivalents ...... 38 5.10 Accounts payable ...... 39 5.11 Bank and other loans ...... 40 5.12 Taxation ...... 41 5.13 Revenue from sale of goods, products, work, services ...... 42 5.14 Normal business expenses...... 42 5.15 Other income and expenses ...... 43 5.16 Provisions, contingent liabilities and contingent assets ...... 45 5.17 Hedging foreign exchange and interest rate risks ...... 46 5.18 Capital and reserves ...... 46 5.19 Profit (loss) per share ...... 47 5.20 Security for obligations ...... 47 5.21 Related-party transactions ...... 48 5.22 Events after the reporting date ...... 51 5.23 Information on discontinued operations ...... 51 5.24 Tax risk management ...... 51 5.25 Financial risk management ...... 52

Balance sheet as at 31 December 2020 Codes OKUD Form 0710001 Date (dd, mm, yy) 31 12 2020 Company Gazprom Neft PJSC OKPO 42045241 Taxpayer Identification Number ИНН 5504036333 Type of activity as per wholesale of solid, liquid and gaseous fuel and similar products - OKVED 2 46. 71 Type of incorporation/type of ownership public joint stock company / privately owned as per OKOPF/OKFS 1 22 47 16 Monetary unit: ‘000 rubles as per OKEI 384 Location (address) 190000, St Petersburg, Pochtamtskaya ulitsa d. 3–5, lit. A Accounting statements are subject to mandatory audit V YES NO Auditing organisation/Surname, name, patronymic (if applicable) of the individual auditor FBK LLC Taxpayer Identification Number INN of the auditing organisation / individual auditor ИНН 7701017140 OGRN/ primary state registration number OGRNIP of the auditing organisation / individual auditor 1027700058286

as at 31 Decembeas at 31 Decemberas at 31 December Notes Indicator Code 20 20 20 19 20 18

ASSET I. NON-CURRENT ASSETS

5.2. Intangible assets, incl. 1110 18 968 555 7 713 451 2 370 037 intellectual property rights 1111 18 967 845 7 712 501 2 368 241 other 1119 710 950 1 796

R&D findings results 1120 231 634 199 824 160 809

5.3. Intangible prospecting assets 1130 19 082 113 10 251 609 4 669 883

5.3. Tangible prospecting assets 1140 213 872 622 392 3 067

5.4. Fixed assets incl. 1150 6 037 786 3 352 409 3 601 594 Items of fixed assets incl. 1151 2 238 824 2 084 237 885 413

buildings, structures, machines, equipment and other fixed assets 1153 2 238 824 2 084 237 885 413 capital expenditures in progress 1154 3 798 962 1 268 172 2 716 181

5.7. Financial investments, incl. 1170 1 191 311 391 1 041 596 751 887 001 022 subsidiary investments 1171 903 595 691 686 452 359 509 212 734 affiliates investments 1172 79 722 672 75 130 495 73 830 723 investments in other organizations 1173 3 269 513 3 961 004 3 945 754 long-term loans and debt securities 1174 204 718 085 276 047 463 299 990 357 other 1175 5 430 5 430 21 454

5.12. Deferred tax assets 1180 25 831 067 16 324 681 14 167 776

5.5. Other non-current assets, incl.: 1190 10 888 653 11 677 784 13 143 525 non-exclusive rights property 1191 10 089 201 10 059 827 9 912 780 advanced payments for capital investments 1192 10 549 1 111 309 57 574 other 1197 788 903 506 648 3 173 171

Total for Section I 1100 1 272 565 071 1 091 738 901 925 117 713

1 as at as at as at Notes Indicator Code 31 December 31 December 31 December 20 20 20 19 20 18

ASSET

II. CURRENT ASSETS

5.6. Inventory, incl. 1210 34 775 437 37 802 815 32 772 576

raw materials, consumables, other similar assets 1211 5 059 469 4 664 287 3 375 280

costs of work-in-progress 1212 1 548 954 1 481 734 1 590 762

finished goods and goods for resale 1213 27 326 918 27 490 139 27 778 809

goods dispatched 1215 - 5 369 27 725

non-current assets held for sale 1216 840 096 4 161 286 -

5.12. Value added tax on the assets acquired 1220 14 037 171 8 583 616 24 411 938

5.8. Accounts receivable, incl. 1230 353 814 811 391 324 276 462 205 534

Accounts receivable (due in over 12 months after the reporting date), incl. 1231 67 346 415 173 331 710 129 712 136 other receivables 1234 67 346 415 173 331 710 129 712 136

Accounts receivable (due within 12 months after the reporting date), incl. 1235 286 468 396 217 992 566 332 493 398 buyers and customers 1236 94 583 839 97 767 974 132 270 018 advances paid out 1238 12 498 728 16 269 325 14 490 626 other receivables 1239 179 385 829103 955 267 185 732 754

5.7. Financial investments (excl. cash equivalents), incl. 1240 151 830 380 125 437 352 195 125 835 short-term loans and debt securities 1241 151 830 380 89 437 352 144 284 655 bank deposits 1242 - 36 000 000 50 841 180

5.9. Cash and equivalents, incl. 1250 137 610 283 95 356 222 139 898 658 settlement accounts 1252 45 629 046 17 947 602 7 244 318 foreign currency accounts 1253 47 193 246 30 181 107 7 408 803 other cash and equivalents 1259 44 787 991 47 227 513 125 245 537

Other non-current assets, incl.: 1260 1 104 750 760 836 753 120

other 1262 1 104 750 760 836 753 120

Total for Section II 1200 693 172 832 659 265 117 855 167 661

BALANCE 1600 1 965 737 903 1 751 004 018 1 780 285 374

2 as at as at as at Notes Indicator Code 31 December 31 December 31 December 20 2020 19 20 18

LIABILITIES III. EQUITY AND RESERVES

Charter capital (joint stock capital, charter fund and partner’s contributions) 1310 7 586 7 586 7 586 N oNon-current asset revaluation 1340 5 5 - Additional capital (w/o revaluation) 1350 7 774 326 7 774 326 7 807 598 Reserve funds 1360 379 379 379 Retained earnings (pending loss) 1370 457 600 758 412 724 446 324 320 555 5.18. Total for Section III 1300 465 383 054 420 506 742 332 136 118 IV. LONG–TERM LIABILITIES 5.11. Borrowed assets incl.1410 676 996 069 645 650 185 639 889 335

bank loans due for repayment beyond 12 months from report date 1411269 737 046 269 781 245 285 153 268

other loans due for payment beyond12 months from report date 1412 407 259 023 375 868 940 354 736 067 Deferred tax liabilities 1420 - - - 5.16. Estimated liabilities 1430 606 391 15 869 511 6 178 681 5.10. Other non-current liabilities, incl. 1450 72 134 762 - - advances received 1454 72 107 132 - - other liabilities 1456 27 630 - - Total for Section IV 1400 749 737 222 661 519 696 646 068 016 V. CURRENT LIABILITIES 5.11. Borrowed assets incl. 1510 238 248 551 217 755 313 262 475 146

bank loans due for repayment within 12 months after the reporting date 1511 3 14 980 749 -

other loans due for payment within 12 months 1512 205 760 137 196 225 757 166 853 957 current portion of long term loans and borrowings1513 32 488 411 6 548 807 95 621 189 5.10. Accounts payable, incl. 1520 491 002 083 446 940 152 535 636 517 suppliers and contractors 1521 417 209 071 370 528 637 404 157 846 payable to employees 1522 1 462 5 730 1 780 social security contributions 1523 462 455 423 507 34 486 taxes and duties payable 1524 96 87015 612 14 555 other creditors incl. 1525 49 505 833 75 960 968 26 877 798 advances received 1527 43 547 756 13 107 067 16 692 934 other payables 1528 5 958 077 62 853 901 10 184 864

dividends payable to participants (shareholders) 1529 23 726 392 5 698 104 550 052 Deferred income 1530 548 - - 5.16. Estimated liabilities 1540 21 366 445 4 282 115 3 969 577 Total for Section V 1500 750 617 627 668 977 580 802 081 240 BALANCE 1700 1 965 737 903 1 751 004 018 1 780 285 374

Chief Executive Chief Officer A.V. Dyukov Accountant O.N. Makretskaya (signature) (printed name) (signature) (printed name)

" " February 20 21

3 PROFIT AND LOSS ACCOUNT for 2020 Codes OKUD Form 0710002 Date (dd, mm, yy) 31 12 2020 Company Gazprom Neft PJSC OKPO 42045241 Taxpayer Identification Number ИНН 5504036333 Type of activity as per - Wholesale of solid, liquid and gaseous fuel and similar products OKVED 2 46.71 Type of incorporation/type of ownership public joint stock company/ Private ownership as per OKOPF/OKFS 1 22 47 16 Monetary unit: ‘000 rubles as per OKEI 384

Notes Indicator Code for 2020 for 2019

5.13. Revenue 2110 1 512 791 785 1 809 830 891

incl. from sales of:

oil, oil products and gas 2111 1 479 170 357 1 771 871 615

other 2119 33 621 428 37 959 276

5.14. Cost of sales 2120 (1 360 068 361) (1 567 862 640)

incl. from sales of:

oil, oil products and gas 2121 (1 332 272 998) (1 536 595 347)

other 2129 (27 795 363) (31 267 293)

Gross profit (loss) 2100 152 723 424 241 968 251

5.14. Sales expenses 2210 (148 641 528) (190 976 531)

5.14. Administrative expenses 2220 (39 026 063) (45 859 160)

Profit (loss) from sales 2200 (34 944 167) 5 132 560

5.15. Income from participation in other companies 2310 220 433 088 236 846 327

5.15. Interest receivable 2320 20 746 930 41 173 120

5.15. Interest payable 2330 (43 593 005) (50 658 838)

5.15. Other income 2340 34 039 566 1 845 778

5.15. Other expenses 2350 (43 502 082) (24 525 077)

Profit (loss) before tax 2300 153 180 330 209 813 870

Profit tax, including: 2410 12 511 712 2 908 541

5.12. 2411 3 134 917 626 497 current profit tax 5.12. deferred profit tax 2412 9 506 386 2 156 905

5.12. previous year profit tax 2413 (129 591) 125 139

5.12. Redistribution of income tax within consolidated taxpayers group 2465 (3 141 550) (655 561)

Net profit (loss) 2400 162 550 492 212 066 850

4 Notes Indicator Code for 2020 for 2019

Non-current assets revaluation profit (loss) excluded from the net profit 2510 - - (loss) for the period Profit (loss) from other operations excluded from the net profit (loss) for 2520 - - the period

Profit tax on operations excluded from the net profit (loss) for the period 2530 - -

Total financial result for the period 2500 162 550 492 212 066 850 For reference 5.19. 2900 34 45 Basic earnings (loss) per share (rub.) Diluted earnings (loss) per share 2910 - -

Chief Chief Executive OfficerA.V. Dyukov Accountant O.N. Makretskaya (signature) (printed name) (signature) (printed name)

" " February 20 21 -

5 Appendix 2 to the Order of The Ministry of Finance of the Russian Federation as at 02.07.2010 no. 66n

Equity change statement for 20 20 Codes OKUD Form 0710004 Date (dd, mm, yy) 31 12 2020 Company Gazprom Neft PJSC OKPO 42045241 Taxpayer Identification Number INN 5504036333 Type of activity: Wholesale of solid, liquid and gaseous fuel and similar products OKVED code 46.71 Form of incorporation / ownership Public joint-stock company Private ownership as per OKOPF/OKFS 1 22 47 16 Monetary unit: ‘000 rubles as per OKEI 384

1. Capital flow

Retained earnings Charter capital Treasury shares Additional capital Reserve funds Total Indicator Code (pending loss)

1 23456

Capital value as at 31 December 2018 3100 7 586 (-)7 807 598 379 324 320 555 332 136 118 for 2019 -

Capital increase – total, 3210 - - - - 212 071 132 212 071 132 including: net profit 3211 х х х х 212 066 850 212 066 850 asset revaluation 3212 х х - х - -

earnings directly attributed to capital increase 3213 х х - х - - additional issue of shares 3214 - - - х х- share par-value increase 3215 - - - х - Х corporate restructuring 3216 ------redemption of own shares 3217 х - х х х - other 3219 - - - - 4 282 4 282

6 Form 0710004 p. 2

Retained earnings Indicator Code Charter capital Treasury shares Add-on capital Reserve funds Total (pending loss)

Capital decrease – total, 3220 ( - ) - ( - ) ( - ) ( 123 700 508 ) ( 123 700 508 ) including: losses 3221 х х х х ( - ) (-) asset revaluation 3222 х х ( -)х (-)(-)

expenditures directly attributed to capital decrease 3223 х х ( - ) х(-)(-) share par-value decrease 3224 ( - ) --х-(-) decrease in the number of shares 3225 ( - ) - - х -(-) corporate restructuring 3226 - - - --(-) dividends 3227 х х х х ( 123 700 508 ) ( 123 700 508 ) other 3229 (-) - (-)(- )(-)(-) Change in the additional capital 3230 х х( 33 267 ) - 33 267 х Change in the reserve funds 3240 х х х - -х Change in charter capital 3250 - ххх-х Capital value as at 31 December 2019 3200 7 586 ( - ) 7 774 331 379 412 724 446 420 506 742 for 20 20

Capital increase – total, 3310 - - - - 162 555 369 162 555 369 including: net profit 3311 х х х х 162 550 492 162 550 492 asset revaluation 3312 х х - х - -

earnings directly attributed to capital increase 3313 х х -х - - additional issue of shares 3314 - - - х х - share par-value increase 3315 - - - х х х corporate restructuring 3316 ------redemption of own shares 3317 х - х х х - other 3319 - - - - 4 877 4 877 Capital decrease – total, 3320 ( - ) - ( - ) ( - ) ( 117 679 057 ) ( 117 679 057 ) including: losses 3321 х х х х (-)(-) asset revaluation 3322 х х ( - )х(-) (-)

expenditures directly attributed to capital decrease 3323 х х ( -) х ( - )(-) share par-value decrease 3324 ( - ) - -х -(-) decrease in the number of shares 3325 ( - ) - - х - (-) corporate restructuring 3326 - - - - - ( -) dividends 3327 х х х х ( 117 679 057 ) ( 117 679 057 ) other 3329 ( -) - (-)(-)(-)( -) Change in the additional capital 3330 х х(-) - - х Change in the reserve funds 3340 х х х - - х Change in charter capital 3350 - х х х -х Capital value as at 31 December 2020 3300 7 586 (-) 7 774 331 379 457 600 758 465 383 054

7 Form 0710004 page 3 2. Adjustments due to changes in accounting policy and rectification of errors

as at 31 December Capital changes in 20 19 as at 31 December Indicator Code 20 18 on account of net income other factors 20 19 (loss) Capital – total prior to adjustments 3400 370 588 118 216 871 650 (123 696 226) 463 763 542 adjustment due to: change in accounting policy 3410 (38 452 000) (4 804 800) - (43 256 800) rectification of errors 3420 - - - - after adjustments 3500 332 136 118 212 066 850 (123 696 226) 420 506 742 including:

Retained earnings (pending loss): prior to adjustments 3401 362 772 555 216 871 650 (123 662 959) 455 981 246 adjustment due to: change in accounting policy 3411 (38 452 000) (4 804 800) - (43 256 800) rectification of errors 3421 - - - - after adjustments 3501 324 320 555 212 066 850 (123 662 959) 412 724 446 additional equity prior to adjustments 3402 - - - - adjustment due to: change in accounting policy 3412 - - - - rectification of errors 3422 - - - - after adjustments 3502 - - - - reserve funds prior to adjustments 3403 - - - - adjustment due to: change in accounting policy 3413 - - - - rectification of errors 3423 - - - - after adjustments 3503 - --- treasury shares prior to adjustments 3404 - - - - adjustment due to: change in accounting policy 3414 - - - - rectification of errors 3424 - - - - after adjustments 3504 - - - -

8 Form 0710004 page 4 3. Net asset value

as at 31 December as at 31 December as at 31 December Indicator Code 20 20 20 19 20 18

Net asset value 3600 465 383 602 420 506 742 332 136 118

Chief Chief Executive Officer A.V. Dyukov Accountant O.N. Makretskaya (signature) (printed name) (signature) (printed name)

" " February 20 21 -

9 Cash flow statement for 2020 Codes OKUD Form 0710005 Date (dd, mm, yy) 31 12 2020 Company Gazprom Neft PJSC OKPO 42045241 Taxpayer Identification Number ИНН 5504036333

Type of activity: Wholesale of solid, liquid and gaseous fuel and similar products OKVED code 46.71 Form of incorporation / ownership public joint stock company Private ownership as per OKOPF/OKFS 1 22 47 16 Monetary unit: ‘000 rubles as per OKEI 384

Notes Indicator Code for 2020 for 2019

cash flow from current transactions

Receipts – total 4110 1 190 189 462 1 485 220 811 including:

from sale of products, goods, works and services 4111996 309 833 1 349 539 303

rent and license payments, royalties, fees and other similar payments 4112 622 073 513 133

other receipts: 4113 193 257 556 135 168 375

advance payments from buyers 4114 115 654 897 13 273 647

sales of other properties 4115 30 879 2 277

sales of foreign currency 4116 104 440 574 182

free of charge 4117 - -

5.9. other receipts 4119 77 467 340 121 318 269 Payments – total 4120 (1 683 339 009) (2 032 199 090) including:

to suppliers (contractors) of raw materials, materials, works and services 4121 (1 343 521 303) (1 625 425 961)

payment for the labour of employees 4122 (14 831 391) (15 019 431)

interest on liabilities 4123 (41 893 504) (58 795 599)

corporate income tax 4124 (3 434 890) (11 337 035)

other payments: 4125 (279 657 921) (321 621 064)

customs payments 4126 (33 061 090) (85 029 271)

Insurance payments 4127 (2 515 170) (2 215 401)

advance payments 4128 (12 528 632) (16 911 880)

sale of foreign currency 4129 --

taxes and levies settlements other than income tax 4130 (98 407 059) (77 607 887)

5.9. other payments and transfers4139 (133 145 970) (139 856 625) Cash flow balance from current transactions 4100 (493 149 547) (546 978 279)

Cash flow from investment activities

Receipts – total 4210 399 854 905 431 655 143 including:

from sale of non-current assets (except financial investments) 4211 5 938 563 215 147

from sale of shares (holdings) of other organisations 4212 6 764 394 2 895 316

from loan repayments, sale of debt securities (debt claims) 4213 181 227 726 166 182 458 from dividends, interest payments from financial investments or similar receipts 4214 204 972 341 260 615 128 from participating interest in other organisations other receipts 4219 951 881 1 747 094

Payments – total 4220 (370 743 440) (299 511 555) including: in respect of acquisition, creation, modernisation, reconstruction, and 4221 (17 828 996) (15 708 138) preparations for the use of non-current assets in respect of acquisition of shares (holdings) in other organisations 4222 (275 840 018) (189 387 064) in respect of acquisition of debt securities (debt claims), provision of loans to 4223 (77 074 426) (94 416 353) others interest for debt liabilities included in the cost of investment assets 4224 - -

other payments 4229 - -

Cash flow balance from investment activities 4200 29 111 465 132 143 588

10 Comments Indicator Code for 2020 for 2019

Cash flow from financial activities

Receipts – total 4310 705 451 559 935 666 367 including:

receipt of credits and loans 4311 675 455 309 890 668 712

Owners' (participants') contributions 4312 - -

from issue of shares, increase of stock holdings 4313 --

from issue of bonds, promissory notes and other debt securities 4314 29 996 250 44 994 375

budgetary allocations and other special-purpose financing 4315 - -

other receipts 4319 - 3 280 Payments – total 4320 (209 673 507) (556 796 925) including: shareholders (participants) due to organisation's share (participating interest) 4321 - - redemption or cessation of membership payment of dividends or other profit distribution payments to owners 4322 (93 968 091) (228 242 832) (stakeholders) in respect of discharge (buy-back) of promissory notes and other debt 4323 (115 705 416) (328 554 093) securities, repayment of credits and loans other payments 4329 - -

Cash flow balance from financial activities 4300 495 778 052 378 869 442

Cash flow balance for reporting period 4400 31 739 970 (35 965 249)

Balance of cash and cash equivalents as of the beginning of the reporting period 4450 95 356 222 139 898 658

Balance of cash and cash equivalents as at the end of the reporting period 4500 137 610 283 95 356 222

Effect of exchange rate changes (with respect to Russian rouble) 4490 10 514 091 (8 577 187)

Chief Executive Chief Officer A.V. Dyukov Accountant O.N. Makretskaya (signature) (printed name) (signature) (printed name)

"" February 20 21

11 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

These Notes to the Balance Sheet and Profit and loss account are an integral part to the financial statements of Gazprom Neft PJSC for 2020 prepared pursuant to the applicable laws and regulations of the Russian Federation.

I. GENERAL INFORMATION

1.1 Background

Gazprom Neft Public Joint-Stock Company (Gazprom Neft PJSC, hereinafter the “Company”) was established pursuant to decree No. 1403 of the Russian President On Specifics of Privatization and Transformation into Joint-Stock Companies of State- Owned Companies, Production and Scientific Research Association in the Oil, Oil Processing Industry and Oil Product Supply Sector dated 17 November 1992, No. 872 On Establishment of Open Joint-Stock Company Siberian Oil Company dated 24 August 1995, and decree No. 972 of the Russian Government On Establishment of Open Joint- Stock Company Siberian Oil Company dated 29 September 1995.

In 2018, the Company was re-registered from an open joint-stock company into a public joint-stock company due to the requirement to bring the organizational and legal form of the Company in compliance with the changes to the Russian Civil Code made by Federal Law No. 99-FZ dated 05.05.2014 On Making Changes to Chapter 4 of Part I of the Russian Civil Code and Repeal of Certain Provisions of Russian Laws and Regulations.

The Company’s main shareholder is Gazprom PJSC holding 92.663% of shares; this shareholding did not change during the period.

1.2 Registered address (place of business) of the Company

The Company is registered at 5A 3-5 Pochtamtskya Str., premises 1N, office 2401, Saint-Petersburg, Russian Federation, 190000 (postal address: 3-5 Pochtamtskya Str., Saint-Petersburg, Russian Federation, 190000).

1.3 Management bodies of the Company

General Shareholders’ Meeting of the Company

The General Shareholders’ Meeting is the Company’s supreme management body. The scope of competence, method of convening, holding and proceedings during the General Shareholders’ Meeting of the Company are defined by the federal laws and regulations and the Company’s Charter.

The Board of Directors of the Company

The Company’s Board of Directors performs day-to-day management of the Company’s operations, excluding the matters reserved, pursuant to the federal laws and regulations and the Company’s Charter, to the General Shareholders’ Meeting. The Directors are appointed by the General Shareholders’ Meeting for the term lasting until the next annual General Shareholders’ Meeting.

As at 31.12.2020, the Board of Directors of Gazprom Neft PJSC is composed of the following members:

Alexey Borisovich Miller Chairman of the Management Board of Gazprom PJSC, Deputy Chairman of the Board of Directors of Gazprom PJSC

12 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Vladimir Ivanovich Alisov First Deputy Head of Department of Gazprom PJSC

Alexander Valerievich Dyukov Chief Executive Officer, Chairman of the Management Board of Gazprom Neft PJSC Sergey Ivanovich Kuznets Member of the Management Board of Gazprom PJSC, Head of Department of Gazprom PJSC Vitaly Anatolievich Markelov Deputy Chairman of the Management Board of Gazprom PJSC, Member of the Board of Directors of Gazprom PJSC Aleksandr Ivanovich Medvedev Chief Executive Officer of Zenit Football Club JSC

Sergey Nikolayevich Menshikov Member of the Management Board of Gazprom PJSC, Head of Department of Gazprom PJSC Elena Vladimirovna Mikhailova Member of the Management Board of Gazprom PJSC, Head of Department at Gazprom PJSC Famil Kamil ogly Sadygov Deputy Chairman of the Management Board of Gazprom PJSC Kirill Gennadievich Seleznev Chief Executive Officer of RusKhimAlians LLC

Valery Pavlovich Serdukov -

Mikhail Leonidovich Sereda Member of the Board of Directors of Gazprom PJSC, Chief Executive Officer of Gazprom Treiding LLC, First Deputy Chief Executive Officer of Gazprom Export LLC Gennady Nikolayevich Sukhov Member of the Management Board of Gazprom PJSC, Head of Department at Gazprom PJSC

The current Board of Directors was elected by the Annual General Meeting of Shareholders held on 11.06.2020.

In the period from 01.01.2020 to 11.06.2020, the Board of Directors consisted of:

Alexey Borisovich Miller Chairman of the Management Board of Gazprom PJSC, Deputy Chairman of the Board of Directors of Gazprom PJSC Vladimir Ivanovich Alisov First Deputy Head of Department of Gazprom PJSC

Andrey Igovevich Dmitriev Chief Executive Officer of Gazprom Gazomotornoe Toplivo LLC Alexander Valerievich Dyukov Chief Executive Officer, Chairman of the Management Board of Gazprom Neft PJSC Sergey Ivanovich Kuznets Member of the Management Board of Gazprom PJSC, Head of Department of Gazprom PJSC Vitaly Anatolievich Markelov Deputy Chairman of the Management Board of Gazprom PJSC, Member of the Board of Directors of Gazprom PJSC Aleksandr Ivanovich Medvedev Chief Executive Officer of Zenit Football Club JSC

Sergey Nikolayevich Menshikov Member of the Management Board of Gazprom PJSC, Head of Department of Gazprom PJSC Elena Vladimirovna Mikhailova Member of the Management Board of Gazprom PJSC, Head of Department at Gazprom PJSC Famil Kamil ogly Sadygov Deputy Chairman of the Management Board of Gazprom PJSC Kirill Gennadievich Seleznev Chief Executive Officer of RusKhimAlians LLC

13 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Valery Pavlovich Serdukov -

Mikhail Leonidovich Sereda Member of the Board of Directors of Gazprom PJSC, Chief Executive Officer of Gazprom Treiding LLC, First Deputy Chief Executive Officer of Gazprom Export LLC

Single-Membered Executive Body of the Company

In 2019 and 2020, the single-membered executive body of the Company was the Chief Executive Officer – Alexander Valerievich Dyukov.

Collegial Executive Body of the Company

Pursuant to the Charter, the collegial executive body of the Company is the Management Board.

According to the resolution of the Board of Directors dated 26.12.2020, the Management Board is composed of ten (10) members.

As at 31.12.2020, the Management Board of the Company is composed of the following members:

Alexander Valerievich Dyukov Chief Executive Officer, Chairman of the Management Board of Gazprom Neft PJSC Igor Konstantinovich Antonov Deputy CEO for Security of Gazprom Neft PJSC Alexander Mikhailovich Dybal Deputy CEO for Corporate Communications of Gazprom Neft PJSC Elena Anatolievna Ilyukhina Deputy CEO for Legal and Corporate Affairs of Gazprom Neft PJSC Pavel Anatolievich Kolobkov Deputy CEO for Interaction with Federal Authorities of Gazprom Neft PJSC Kirill Albertovich Kravchenko Deputy CEO for Administrative Affairs of Gazprom Neft PJSC Pavel Valerievich Oderov Deputy CEO for Foreign Economic Activities of Gazprom Neft PJSC Anatoly Moiseevich Cherner Deputy Chairman of the Management Board, Deputy CEO for Logistics, Processing and Sales of Gazprom Neft PJSC Vadim Vladislavovich Yakovlev Deputy Chairman of the Management Board, Deputy CEO for Exploration and Production of Gazprom Neft PJSC Alexei Viktorovich Yankevich Deputy CEO for Economics and Finance of Gazprom Neft PJSC

During 2020, Pavel Anatolievich Kolobkov – Deputy CEO for Interaction with Federal Authorities of Gazprom Neft PJSC and Pavel Valerievich Oderov – Deputy CEO for Foreign Economic Activities of Gazprom Neft PJSC became members of the Management Board of the Company.

1.4 Control over financial and business operations of the Company

The financial and business operations of the Company in 2020 were controlled by the Audit Commission. On 18.12.2020, the Extraordinary General Meeting of Shareholders of

14 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Gazprom Neft PJSC adopted a new version of the Charter which does not provide for the formation of an Audit Commission.

The Company’s Audit Commission that had acted before being dissolved in December 2020 was appointed by the General Shareholders’ Meeting of the Company.

Immediately before its dissolution, the Audit Commission was composed of:

Vadim Kasymovich Bikulov Deputy Head of Division – Head of Department of Gazprom PJSC Mikhail Aleksandrovich Vaygel Head of Section of Gazprom PJSC

Galina Yurievna Delvig Director of the Internal Audit, Control and Risk Management Directorate of Gazprom Neft PJSC Margarita Ivanovna Mironova Head of the Management Board Administration Department of Gazprom PJSC Inna Borisovna Tolstikova Lead Economist of the Management Board Administration Department of Gazprom PJSC

1.5 Operations of the Company

The Company’s principal line of business is sale of crude oil and petroleum products. The Company also carries out other operations, including arranging transportation, lease of assets, provision of commission and other services.

The Company carries out its operations pursuant to the licenses received to perform certain types of operations:  geological study, exploration and production of oil and gas.

The Company holds the following types of licenses:  for geological study including the prospecting and appraisal of mineral resources;  for geological study, exploration and production of minerals;  for geological study including prospecting and appraisal of mineral resources, exploration and production of minerals.

License Date of License holder License block (field) Series Number Type Registration Gazprom Neft PJSC Yuzhno-Novoportovsky СЛХ 02550 НП 20.04.2018 Gazprom Neft PJSC Surovy СЛХ 02551 НП 20.04.2018 Gazprom Neft PJSC Pokhvistnevsky ОРБ 03139 HР 01.06.2018 Gazprom Neft PJSC Kornovarinsky ОРБ 03162 HР 04.02.2019 Gazprom Neft PJSC Zapadno-Rubezhinsky ОРБ 03163 HР 04.02.2019 Gazprom Neft PJSC Nadezhdinsky ОРБ 03164 HР 04.02.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 1 КРР 03218 НП 09.08.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 2 КРР 03226 НП 20.08.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 3 КРР 03227 НП 20.08.2019 Gazprom Neft PJSC Omorinsky КРР 16613 HР 17.10.2019 Gazprom Neft PJSC Pervomaysky ОРБ 03329 HР 27.11.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 4 КРР 03306 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 5 КРР 03307 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 6 КРР 03308 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 7 КРР 03309 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 8 КРР 03310 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 9 КРР 03311 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 10 КРР 03312 НП 05.12.2019 Gazprom Neft PJSC Zapadno-Taymyrksy 11 КРР 03313 НП 05.12.2019

15 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

License Date of License holder License block (field) Series Number Type Registration Gazprom Neft PJSC Zapadno-Taymyrksy 12 КРР 03314 НП 05.12.2019 Gazprom Neft PJSC Severo-Yamburgsky СЛХ 02592 НР 17.02.2020 Gazprom Neft PJSC Khambateysky СЛХ 16630 НР 12.02.2020

During 2020, the following changes took place:

- On 27January 2020, license ОРБ 3138 НР for Savitsky license block was reissued to Savitsky LLC, a subsidiary of Gazprom Neft PJSC.

1.6 Branches and representative offices (territorially autonomous units)

As at 31.12.2020, the Company had 15 territorially autonomous units (hereinafter TAUs).

No. Name of the branch (structural unit) Address 125A Profsoyuznaya street, Moscow 1 Moscow branch 117647 1 Kapotnya, building 3, 2 kvartal, Moscow, 2 Autonomous unit of Gazprom Neft PJSC in Moscow 109429 3 Autonomous unit of Gazprom Neft PJSC in Omsk region 1 Gubkin ave., Omsk, Russia 644035

4 Autonomous unit of Gazprom Neft PJSC in Omsk region 54 Frunze street, Omsk, Russia 644043 Autonomous unit of Gazprom Neft PJSC in Saint- 1A Paradnaya street, Saint-Petersburg, 5 Petersburg at 1A Paradnaya street 191014 6 Autonomous unit of Gazprom Neft PJSC in Noyabrsk 51 Lenin street, Noyabrsk, 629807 Autonomous unit of Gazprom Neft PJSC in Khanty- 7 56 Lenin street, Khanty-Mansiysk, 628011 Mansiysk Autonomous unit of Gazprom Neft PJSC in Saint- 60/129A Moskovsky Propekt, Saint- 8 Petersburg (Moskovsky Propekt) Petersburg, 190013 Autonomous unit of Gazprom Neft PJSC in Moscow 9 17 Nauchny Proezd, Moscow 117246 (Nauchny Proezd) Autonomous unit of Gazprom Neft PJSC in Saint- 2-4 Zoologichesky Pereulok, Saint- 10 Petersburg (2-4 Zoologichesky Pereulok) Petersburg 197198 Autonomous unit of Gazprom Neft PJSC in Saint- 15А Bolshaya Morskaya street, Saint- 11 Petersburg (15А Bolshaya Morskaya street) Petersburg 191186 Autonomous unit of Gazprom Neft PJSC in Saint- 74А Moyka River Embankment, Saint- 12 Petersburg (74А Moyka River Embankment) Petersburg 191000 Autonomous unit of Gazprom Neft PJSC in Saint- 20 Bolshaya Morskaya street, Saint- 13 Petersburg (20 Bolshaya Morskaya street) Petersburg 191186 Autonomous unit of Gazprom Neft PJSC in Saint- 2I Admiralteysky Kanal Embankment, Saint- 14 Petersburg (2I Admiralteysky Kanal Embankment) Petersburg 191000 Autonomous unit of Gazprom Neft PJSC in Saint- 11B Degtyarny Pereulok, Saint-Petersburg 15 Petersburg (11B Degtyarny Pereulok) 191144

In 2020, the following changes took place with respect to TAUs:

Newly established: - TAU: Autonomous unit of Gazprom Neft PJSC in Saint-Petersburg (2I Admiralteysky Kanal Embankment) was established on 05.08.2020 due to new jobs created at this address; - TAU: Autonomous unit of Gazprom Neft PJSC in Saint-Petersburg (11B Degtyarny Pereulok), was established on 22.12.2020 due to new jobs created at this address.

16 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

1.7 Information about the number of staff

The number of the Company’s employees was 1,891, 1,867 and 1,786 as at 31.12.2020, 31.12.2019 and 31.12.2018 respectively.

II. SIGNIFICANT ACCOUNTING POLICIES AND DISCLOSURES IN FINANCIAL STATEMENTS

2.1 Basis for preparation

The Company’s annual accounting (financial) statements were prepared pursuant to Federal Law No. 402-FZ On Accounting dated 06 December 2011, the Regulation on Accounting and Financial Statements in the Russian Federation approved by Order No. 34н of the Ministry of Finance of the Russian Federation dated 29 July 1998, Regulation on Accounting ‘Accounting in Organization’ (PBU 4/99) approved by Order No. 43н of the Ministry of Finance of the Russian Federation dated 6 July 1999, and other rules and regulations included in the system of accounting regulations related to organizations in the Russian Federation.

Due to preparation of consolidated financial statements by the Gazprom Neft Group in accordance with requirements of Federal Law No. 208-FZ dated 27.07.2010 On Consolidated Financial Statements, the Company applies a number of accounting principles of IFRS different from RAS. The Company applies the following standards:  IAS 1 Presentation of Financial Statements – for the purpose of classification of provisions for bad debts and for impairment of inventories as part of expenses for ordinary activities;  IAS 7 Statement of Cash Flows – for the purpose of classifying cash flows in terms of interest received on deposits, cash on hand and repurchase agreements as part of investing activities;

The Company’s accounting policy was approved by the Company’s Order No. 138-П dated 30.12.2019 On Approval of the Accounting Policy of Gazprom Neft PJSC for 2020.

2.2 Assets and liabilities in foreign currency

When accounting for the operations in foreign currencies (including those payable in Russian rubles), the exchange rate for the relevant currency was used as published by the Bank of Russia on the date of the operation.

The value of the cash in bank accounts (bank deposits), cash and payment documents, securities (except shares), cash receivable and payable, including loans provided and received (excluding amounts received and advances paid and advance payments) denominated in foreign currency, is accounted for in the financial statements in the amounts calculated on the basis of the official exchange rates on the reporting dated being:

As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 USD 73.8757 61.9057 69.4706 EUR 90.6824 69.3406 79.4605

The exchange rate differences occurring during the year in relation to the operations with assets and liabilities the value of which is expressed in foreign currencies and when their value is re-calculated as at the reporting date are shown without a breakdown as part of other income and expenses.

17 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

2.3 Current and non-current assets and liabilities

In the balance sheet, the accounts receivable and payable, including loans, is shown as current if the term of their maturity (repayment) is equal to or less than 12 months after the reporting date or is not set.

If accounts receivable and payable, including loans, at the beginning of the reporting period are classified as non-current and during the reporting period it became certain that the accounts receivable and payable will be repaid within 12 months after the reporting date, such accounts receivable and payable are reclassified as current. Such accounts receivable and payable are shown as current at the end of the reporting period.

Financial investments are classified as current or non-current on the basis of the anticipated time of their use (conversion, holding or repayment) after the reporting date.

2.4 Intangible assets

In the balance sheet, the intangible assets are sown at their original cost less the amortization amount accumulated for the whole time of their use.

The intangible assets include the cost of purchasing the exclusive rights to intellectual property (including exclusive rights to software).

The amortization of the intangible assets is calculated using straight-line method. The Company sets the useful life for each kind of the amortized intangible assets when such assets are registered on the basis of the validity period of the rights and the period of control over the asset or the anticipated time of use of such asset during which the Company is expected to receive economic benefit (earnings), but not more than the company’s period of operation.

The Company annually checks the useful life of the intangible asset to ascertain whether it is necessary to adjust it. If the length of the period during which it is planning to use the asset changes significantly, its useful life is subject to adjustment. Any adjustments that arise in connection with the above are shown as changes to estimated values.

The Company does not preform revaluation of intangible assets.

Testing for impairment of intangible assets is carried out is there are any signs of such impairment pursuant to the procedure described in the International Financial Reporting Standards.

2.5 Prospecting assets

In the balance sheet, the costs of developing natural resources and obtaining licenses for the right to use the subsurface, before the fact of confirming commercial viability of production, are shown in lines 1130 Intangible prospecting assets and 1140 Tangible prospecting assets of the balance sheet.

Prospecting assets are recognized for accounting in the amount of the actual cost of acquisition (creation).

(a) Composition of prospecting assets

Intangible prospecting assets include:  the right to perform prospecting and appraisal of mineral resources and (or)

18 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

exploration of mineral resources in accordance with the respective license;  information obtained as a result of seismic, topographic, geological and geophysical studies;  results of exploratory drilling;  sampling results;  other geological information about the subsurface;  expenses for development of design and process documentation for the field.

Tangible prospecting assets include:  equipment (specialized drilling rigs, pumping units, tanks, etc.);  exploration wells that have not yet produced commercial quantities of petroleum.

(b) Procedure for calculating depreciation on prospecting assets

Depreciation on tangible prospecting assets is accrued on a straight-line basis over the estimated useful life, starting from the month following the month when they are recognized in the accounting as prospecting assets.

Intangible exploration assets are not depreciated until commercial viability of their production is confirmed.

In the case of the transfer of intangible exploration assets to other types of assets, for example, inclusion of expenses for performing geological exploration and obtaining information from them, in capital investments (subsequently, in fixed assets) such assets are depreciated in accordance with the procedure established for this type of asset.

After confirmation of commercial viability of production (CVP), depreciation on prospecting assets after CVP is accrued on a straight-line basis over the useful life:  for licenses – for the remaining term of the license;  for design and process documentation – for 5 years;  for results of seismic explorations, exploratory drilling, sampling, obtaining geological information in the course of geological explorations, etc. – for 3 years.

(c) Impairment of prospecting assets

At the end of each reporting year, the Company analyzes the existence of circumstances indicating a possible impairment of prospecting assets.

For the purpose of checking prospecting assets for impairment, such assets are distributed among different parts of petroleum fields.

(d) Transfer of prospecting assets to fixed assets or intangible assets

When commercial viability of production from a subsurface area is confirmed the prospecting assets are tested for impairment and transferred:  to fixed assets – tangible prospecting assets, or  to exploration assets on the basis of post-CVP analysis, reflected in the balance sheet as part of intangible assets – intangible exploration assets that are intended for development and production of petroleum.

Impairment testing of prospecting assets is performed when there is evidence of impairment in accordance with the procedure defined in the International Financial Reporting Standards.

19 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

2.6 Fixed assets

Fixed assets include the assets that meet the requirements set out in the Regulation on Accounting ‘Accounting for Fixed Assets’ (PBU 6/01) approved by Order No. 26н of the Russian Ministry of Finance dated 30.03.2001.

2.6.1 Items of fixed assets

Fixed assets include land plots, buildings, structures, machinery, equipment, means of transportation with the useful life over 12 months.

The real estate objects that were completely built, commissioned and are used, if the title to such facilities has not been registered as required by law, are accounted for separately as part of fixed assets.

The objects that meet the criteria of their recognition as fixed assets and worth RUB 40,000 or less per unit are shown as inventories and are written off as soon as they are commissioned. In order to ensure the integrity and safekeeping of such assets during the production and operation, controls over changes to them have been put in place.

In the financial statements, the fixed assets are shown at their original value including the costs of their upgrade, reconstruction, completion, additional equipment and partial liquidation less the depreciation accumulated during the time of their operation.

The fixed assets are registered on the books at their actual cost of purchase (construction).

Useful life of fixed asset groups as adopted by the Company:

Fixed asset group Useful life of facilities registered on the books (years) before 01.01.2002 starting from 01.01.2002 Structures 5-50 2-30 Transfer devices 10-20 5-25 Computer equipment - 3-7 Machinery and equipment 2-20 2-30

Depreciation of fixed assets is accrued monthly using straight-line method on the basis of their useful life, in accordance with their specifications, manufacturer recommendations, etc.

The earnings and expenses of disposal and retirement of fixed assets are shown in the profit and loss account as part of other income and expenses.

The Company does not preform revaluation of fixed assets.

Fixed assets received under a lease contract or a perpetual use agreement are accounted for by the value specified in the contract/agreement as determined on the date of recognition. If the documents do not specify the value of fixed assets received for temporary possession and (or) use they are reflected in the valuation performed by the Company independently based on the current market value (for land plots – according to the official cadastral value) determined at the date of recognition or, if there are documents from the lessor specifying the value of rental assets (including their book value or original cost), they are reflected at the cost recorded on the lessor’s books.

20 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

2.6.2 Investments in non-current assets

Investments in non-current assets include: - capital construction in progress; - costs of modernization, reconstruction, upgrade, renovation, expansion, maintenance of fixed assets; - creation/acquisition of intangible assets; - acquisition of fixed assets; - creation of prospecting assets; - cost of equipment to be installed in the facilities under construction (reconstruction); - research and development activities in progress.

The value of investments in non-current assets does not include the interest on borrowings because during the reporting period and comparable periods, n borrowings were used directly for purchasing, building and/or manufacturing assets preparation of which for anticipated use requires a long time (over 12 months).

On the balance sheet, the targets of investment in no-current assets are, with due account of their materiality, shown in respective additional lines to line 1110 Intangible assets, 1120 Research and development results, 1130 Tangible prospecting assets, 1140 Intangible prospecting assets, 1150 Fixed assets depending on the type of assets in which such items will be recognized after the relevant investments in non-current assets are completed.

2.7 Financial investments

Financial investments are shown at their original actual cost less the impairment, except the financial investments for which it is possible to determine the current market value as required by law. The latter are revaluated monthly at the current market value. The difference between the value of such financial investments as at the current reporting date and their previous evaluation is included in other income and expenses.

The financial investments for which the current market value is not determined are shown on the balance sheet as at the end of the reporting period at their accounting (balance sheet) value, except the investments in the companies in relation to which as at the above date there are conditions of stable material value reduction. On the basis of the information available to the Company, the calculated value of such financial investments as at the reporting date is determined. The excess accounting (balance sheet) value of such investment over their calculated value is covered by the reserve made to cover the impairment of financial investments, the total amount of such reserve is included in other expenses.

The reserve to cover the impairment of financial investments is adjusted quarterly on the basis of the results of tests for impairment of financial investments.

Financial investments that have sustained significant declines in value or show signs of ceasing operations are reviewed for impairment on a quarterly basis at the reporting date.

Depending on the nature of the financial investments, the procedure of their acquisition and use, the unit of accounting for financial investments may be a contribution into the charter capital, loan agreement, agreement for opening a bank deposit (except for deposits withdrawable on demand or placed for a period of up to 3 months), series of securities issue etc.

Earnings and expenses related to financial investments are shown as other income and expenses.

21 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

2.8 Other non-current assets

Other non-current assets include:  rights to use software products and other non-exclusive rights;  advances paid for capital investments;  commission fees on long-term debt obligations;  other non-current assets.

The rights to use software products and other non-exclusive rights are written off in equal amounts during the periods to which they relate.

2.9 Inventories

The following assets owned by the Company are registered to be accounted for as inventories:  those used as raw materials and other materials in the manufacturing of products, performance of works and provision of services;  intended for sale;  used for the Company’s management purposes;

The Company’s inventories include:  raw materials – inventories used in the production of the products, performance of work, provision of services;  production in progress and semi-finished products made by the Company;  finished products – inventories intended for sale (final result of the production cycle technical and qualitative characteristics of which meet contractual conditions or requirements of other documents when required by law);  goods – inventories purchased or received from other legal entities and individuals for sale;  tools, instruments, fixtures with a useful life of less than one year;  special tools, special fixtures, special equipment, special clothing;  assets which satisfy the criteria of recognition as fixed assets with the value within the limit (RUB 40,000);  other inventories.

The inventories purchased for sale to contractors during performance of any work related to capital repairs or construction and as part of procurement for subsidiaries and other entities are accounted for as goods for resale and the earnings and expenses related to their sale are accounted for as part of earnings and expenses related to core operations.

The inventories are registered on the books at the actual cost.

The materials are evaluated at the time of release for production and other disposal using the average cost method.

The value of special tools, special fixtures, special equipment, special clothing with useful lives up to 12 months is charged as a lump sum to the costs accounts at the time when they are released for operation. The value of special tools, special fixtures, special equipment, special clothing with useful lives over 12 months is written off using the straight-line method on the basis of the present value and the standard rates calculated on the basis of their useful lives.

The goods purchased for sale are evaluated and shown in the accounting records at the cost of their acquisition (purchase price). When such goods are sold, their value is written off at the value equal to average cost.

22 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

For the raw materials and consumables used during the production of products (performance of work, provision of services), the reserve for reduction in value is only made when the current market value of such products (work, services) as at the reporting date is lower than its present cost.

Finished products are accounted for at their present production cost.

The amount of excise tax to be reimbursed from the crude oil budget which falls on the remaining finished products is not distributed by type of finished products and, as at the reporting date, adjusts the value of inventories recorded in line 1213 Finished products and goods for resale.

Valuation of finished products at disposal is carried out by the average cost method.

When finished products (goods) are sold at agency agreements (consignment agreements, commission contracts) or if the title to the products (goods) passes after the date of shipment, the value of such products (goods) as at the reporting date is shown as part of inventories in line 1215 Goods shipped.

2.10 Costs of production and sale, production in progress

The costs of production in progress on the balance sheet include the value of semi-finished products that have not passed all the stages (phases, cycles) provided for by their production process; it is determined at their present value without the general running costs.

The sales expenses are charged monthly in full to the results of financial and business operations, except the transportation expenses which are distributed among the products and goods remaining unsold at the end of the reporting period.

The general running costs are charged monthly as administrative expenses in full to the results of the financial and business operations.

2.11 Accounts receivable and payable

The trade receivables are determined on the basis of the prices as per the contracts between the Company and such buyers (customers) inclusive of VAT.

The trade receivables which were not paid or are highly unlikely to be paid within the time required under the respective contracts and not covered by relevant guarantees, suretyships or any other performance bond are shown in the balance sheet less the reserves made for bad debts.

Bad debt reserves reflect the conservative estimate by the Company of the part of the amounts payable that are likely not to be paid. The reserves made to cover bad debts are shows as part of other expenses. Accrued provisions for bad debts on sales of goods, work and services (trade receivables) are included in business expenses, and other receivables and other advances that are not related to core activities are presented as other expenses.

Accounts receivable include advances paid including prepayments under insurance contracts.

Accounts payable for amounts of prepayments received under oil/petroleum products supply contracts on prepayment terms (including long-term) are accounted for as part of accounts payable (long-term or short-term, depending on the maturity date) including if the contract contains conditions for payment of interest or other remuneration to the buyer for using the

23 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

prepayment. Accrued interest (other remuneration) is recorded as part of line 2330 Interest payable in the profit and loss account.

2.12 Cash and cash equivalents

The cash equivalents include highly liquid financial investments that may be easily converted into a cash amount known in advance and that are subject to insignificant risk of value change. The cash equivalents may include bank deposits opened with lending institutions and repayable on demand or with a maturity of up to three months as well as highly liquid bonds of issuing banks with a maturity of up to three months.

In the cash flow statement, the Company’s cash flows which cannot be unambiguously classified as part of cash flows from current, investment and financial operations are referred to cash flows from current operations.

In the statement of cash flows, the Company’s cash flows related to the income received from bank deposits, cash and repurchase agreements are included in the cash flows from investment operations.

The cash and cash equivalents balance in foreign currency as the beginning and end of the reporting period are shown on the balance sheet and the cash flow statement in rubles in the amount calculated on the basis of the official exchange rate in effect on the relevant reporting date. The receipts and payments in foreign currencies are converted into rubles for the purposes of included in the cash flow statement at the exchange rate published by the Bank of Russia on the date of the operation involving such receipt or payment of foreign currency. The operations of exchanging foreign currency into rubles and vice versa are not recognized as cash flows for the purposes of the cash flow statement.

The difference resulting from recalculation of cash flows and cash and cash equivalents balances expressed in foreign currency at the exchange rate in effect on the dated of the operations in foreign currency and on the reporting dates is included in the line Exchange rate differences of the cash flow statement.

In the cash flow statement, the following are shown without breaking down into subitems:  cash receipts from customers to be transferred to consignees, principals (if the Company is acting as a commission agent or agent);  VAT amounts included in the receipts from buyers and customers, payments to suppliers and contractors and payments to the budget system and VAT reimbursed by it;  the amounts related to provision (receipt) of intragroup loans characterized by fast turnover, large amounts and short terms;  amounts related to buying and selling foreign currency;  transactions of placing and return of cash to and from bank deposits effected during the presorting reporting period (excluding the interest accrued).

2.13 Charter capital, additional capital and reserves

The charter capital amount is equal to the amount required by the Company’s Charter.

Pursuant to the Charter, the Company forms statutory reserves equal to 5% of the charter capital.

The additional capital includes the share premium.

24 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

2.14 Loans received

The debt under the loans received is shown inclusive of the interest payable at the end of the reporting period according to the terms and conditions of the agreements.

Interest under loans received is assessed by the Company as required by the loan and/or facility agreement and are recognized as other expenses during the reporting periods to which such accruals relate.

Additional expenses related to receiving loans are included in equal amounts in other expenses during the term of the loan.

The loan liabilities anticipated for payment within 12 months after the reporting date are shown in the financial statements as current.

2.15 Provisions and contingent liabilities

The Company creates provisions for:  payment of bonuses to employees on the basis of the year-end (quarter results;  payment for annual vacations (including regular and additional vacations);  payments to retiring employees;  payment of bonuses to employees based on results of projects or their phases (milestones, control points);  payments for achieving long-term performance indicators.

The amounts of provisions accrued for the reporting period are shown as expenses related to core operations.

The Company creates estimated provisions for the payment of bonuses based on results of achieving long-term performance indicators. The amount of estimated provisions at the end of the reporting year is determined on the basis of the estimated amount of future expenses for payment of said bonuses at the end of the bonus program cycle. The amounts of estimated provisions accrued during the reporting period are included in administrative expenses.

2.16 Targeted financing (government aid)

The amount of the excise tax deduction for crude oil, bunker fuel and medium distillates which results in increased economic benefits of the Company is deducted from the cost of finished products (goods) when the cost of the corresponding finished product (goods) is reflected in the balance sheet (lines 1213,1215) and the profit and loss account, upon their disposal (write-off).

2.17 Deferred taxes

The Company shows in the accounting records and financial statements the deferred tax assets and deferred tax liabilities, permanent tax assets and permanent tax liabilities, i.e. the amounts that may affect the amount of the current profit tax during the current and/or following reporting periods.

The amount of the current profit tax is determined on the basis of accounting records, the amount of the current profit tax is equal to the amount of the assessed profit tax sown in the tax return for the profit tax in the reporting period, subject to the withheld amount of the tax on dividends received.

25 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Deferred taxes at the reporting date are calculated using the balance sheet method provided for in PBU 18/02. The amounts of deferred tax assets and deferred tax liabilities are shown without breaking down into subitems (wound up) in the balance sheet, except for cases when the Russian Federation tax law provides for a separate formation of the tax base, as part of non-current assets (line 1180 Deferred tax assets of the balance sheet) and non- current liabilities (line 1420 Deferred tax liabilities of the balance sheet) respectively.

2.18 Profit tax associated with payments within the CTG

Starting from 2013, the Company is a designated member of the consolidated taxpayer group (hereinafter the “CTG”)

As the designated member of the CTG, the Company shows assessment of the profit tax and the payments among the members under the agreement for establishment of the CTG using account 78 Payments among members of the annual taxpayer group.

The payments related to the profit tax within the CTG are effected according to the Accounting Principles for Tax Purposes of the Company and Subsidiaries for 2020 and the agreement for establishment of the CTG and the profit tax amount assessed by each member of the CTG on the basis of the amount of all of its income and expenses accounted for tax purposes may differ from the CTG’s profit tax amount payable with respect to such member of the CTG.

The full owed amounts of the profit tax payable with respect to the CTG as a whole are shown in line 1520 Accounts payable with a breakdown in line 1524 Taxes and duties payable.

The amount owed to the Company by a member under the agreement for establishment of the CTG and the budget as relates to the CTG’s profit tax are shown in line 1230 Accounts receivable” with a breakdown in line 1239 Other debtors.

In the Profit and loss account, line 2411 Current profit tax shows the amount of profit tax of the responsible member of the CTG assessed by the Company to be included in the consolidated tax base of the CTG. The difference between the amount of the current profit tax assessed by the Company to be included in the consolidated tax base of the CTG and the amount payable by the responsible member to the responsible member of the CTG is shown in line 2465 Redistribution of profit tax within CTG of the profit and loss account.

2.19 Recognition of sales revenue

The proceeds from sales of goods, products and provision of services are recognized as revenue at the time when the title to goods or products is transferred (or the services are provided). The revenue from sales is shown in the statements less the value added tax, excise tax and other similar mandatory payments.

Export customs duties are shown as part of sales expenses and do not reduce the amount of revenue from sales of goods (work, services).

2.20 Information on discontinued operations

Information on discontinued operations is information that discloses a part of the Company’s activities (such as a segment, part of it, or a set of segments) for production of products, sale of goods, performance of work and provision of services which can be allocated operationally and/or functionally for the purposes of preparing the accounting statements, and in accordance with the decision taken by the Company is subject to termination. Also,

26 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

information on discontinued operations refers to information on ceasing the use of individual assets if such assets are considered long-term assets for sale.

Long-term assets for sale include items of property, plant and equipment or other non- current assets (with the exception of financial investments) that have been discontinued due to a decision to sell them, and there is evidence that resumption of the use of these items is not expected (a management decision has been made, actions have been initiated to prepare the assets for sale, a sale agreement has been concluded, etc.).

At the end of the reporting year, during the period from the date of recognition of the activity as discontinued until the completion of the process of termination of part of the activity, the Company updates the amount of assets reflected in the balance sheet based on possible changes in their market value.

III. CHANGES TO THE ACCOUNTING POLICY

3.1 Changes to the accounting policy in 2020

The accounting policy for 2020 has been amended, which may have a significant impact on the formation of accounting indicators:

1. The Company makes a provision for impairment of financial investments in accordance with the procedure established by the Accounting Regulations PBU 21/2008 Changes in Estimated Values and methodological document M-13.03.05.04-01 Accounting of Provisions for Impairment of Financial Investments. Since 2020, the provision for impairment of financial investments in interest-bearing loans is formed for bad debts of companies belonging to the Gazprom Neft Group based on the percentage of probability that the debt will be repaid taking into account the following criteria: - duration of the debt repayment period; - financial condition of the debtor; - whether the debtor has assets that can be foreclosed on; - economic indicators of the debtor company.

2. The Company includes in current assets those items that meet the criteria for non- current assets for sale in accordance with the procedure established by Accounting Regulations PBU 16/02 Information on Discontinued Operations. A non-current asset for sale is measured at the carrying value of the related item of property, plant and equipment or other non-current asset at the date of its reclassification to a non-current asset for sale.

Non-current assets for sale are not depreciated. For non-current assets for sale, a provision for reducing the value of tangible assets is made.

3. The Company creates a provision for bad debts in accordance with the procedure established by Accounting Regulations PBU 21/2008 Changes in Estimated Values and methodological document M-13.03.07-04 Accounting of Provisions for Bad Debts. Starting from 2020, accrued provisions for bad debts on sales of goods, work and services (trade receivables) are included in business expenses, and other receivables and other advances that are not related to core activities are presented as other expenses.

4. The content of information on how income tax is calculated by the Company which is disclosed in the accounting statements is regulated by Accounting Regulations PBU 18/02 Accounting of Corporate Income Tax. To reflect the current income tax, deferred taxes are calculated at the reporting date (the last day of the month) on the basis of the balance sheet method (the differences between the carrying amount of assets (liabilities) and their value recognized for tax purposes).

27 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

IV. ADJUSTMENT OF DATA FOR PREVIOUS REPORTING PERIOD

Certain figures in columns “as at 31.12.2019” and “as at 31.12.2018” of the balance sheet, cash flow statement and figures in the profit and loss account for 2019 and the statement of changes in equity for 2018 and 2019 were calculated taking into account the adjustments made for the following reasons:

1. Due to a change in the procedure for determining the provision for impairment of financial investments in interest-bearing loans issued to entities belonging to the Gazprom Neft Group, the amount of the provision for impairment of such loans was recognized both retrospectively and in the reporting period.

The following retrospective adjustments were made to the balance sheet and the profit and loss account due to changes in the accounting policy regarding the provision for impairment of financial investments:  Balance sheet data as at 31.12.2018 and 31.12.2019;  Data of the report on financial results for 2019;  Data from the statement of changes in equity as at 31.12.2018, 31.12.2019 and for 2019.

Types of transactions and adjustment amounts:  recognition of a provision for impairment of financial investments for which current market value is not determined (loans issued) in the amount of RUB 48,065,000 thousand as at 31.12.2018 and in the amount of RUB 54,071,000 thousand as at 31.12.2019;  recognition of deferred taxes in respect of provisions for loan impairment in the amount of RUB 9,613,000 thousand as at 31.12.2018 and in the amount of RUB 10,814,200 thousand as at 31.12.2019.

2. Due to a change in the procedure for presenting non-current assets for sale, adjustments were made to the comparative balance sheet data. As a result, non-current assets for sale in the amount of RUB 4,161,286 thousand as at 31.12.2019 were transferred from line 1213 Finished products and goods for resale to line 1216 Non-current assets for sale of the balance sheet.

3. Due to a change in the presentation of provisions for bad debts in the profit and loss account, adjustments were made to the comparative data on accrued provisions for bad debts. As a result, the amount of accrued provisions for bad debts in the amount of RUB 113,015 thousand for 2019 was transferred from line 2220 Administrative expenses to lines 2210 Sales expenses and 2350 Other expenses of the profit and loss account in the amounts of RUB 126 thousand and RUB 112,889 thousand, respectively.

4. Due to a change in the procedure for presenting costs for incomplete long-term transactions, adjustments were made to the comparative balance sheet data. As a result, the costs of an incomplete long-term transaction for the acquisition of shares in a subsidiary in the total amount of RUB 150,764,122 thousand as at 31.12.2019 were transferred from line 1175 Other to line 1171 Investments in subsidiaries of the balance sheet.

5. Due to changes in the presentation of certain intangible assets, adjustments were made to the comparative balance sheet data. As a result, the assets were transferred from line 1238 Advances paid out to line 1262 Other of the balance sheet in the amounts of RUB 245,941 thousand and RUB 337,378 thousand as at 31.12.2019 and 31.12.2018, respectively.

6. Due to a change in the procedure for presenting retained amounts of taxes on income in the form of dividends received from foreign organizations, comparative data were adjusted in the profit and loss account. The tax on income in the form of dividends received from foreign

28 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

organizations in the amount of RUB 129,235 thousand for 2019 was transferred from line 2310 Income from participation in other companies to line 2350 Other expenses of the profit and loss account.

7. The amendments to PBU 18/02 Accounting of Corporate Income Tax which entered into force on 01.01.2020 did not have a significant impact on the accounting (financial) statements.

Adj. Line Amount before Amount after Line name Adjustment No. code adjustment adjustment Balance sheet: Adjustments as at 31.12.2019 1 1170 Financial investments, 1,095,667,751 (54,071,000) 1,041,596,751 including 4 1171 Investments in subsidiaries 535,688,237 150,764,122 686,452,359 1 1174 Long-term loans and debt 330,118,463 (54,071,000) 276,047,463 securities 4 1175 Other 150,769,552 (150,764,122) 5,430 1 1180 Deferred tax assets 5,510,481 10,814,200 16,324,681 2 1213 Finished products and 31,651,425 (4,161,286) 27,490,139 goods for resale 2 1216 Non-current assets for sale - 4,161,286 4,161,286 5 1238 Advances paid out 16,515,266 (245,941) 16,269,325 5 1262 Other 514,895 245,941 760,836 1 1370 Retained earnings 455,981,246 (43,256,800) 412,724,446 (uncovered loss) Adjustments as at 31.12.2018 1 1170 Financial investments, 935,066,022 (48,065,000) 887,001,022 including 1 1174 Long-term loans and debt 348,055,357 (48,065,000) 299,990,357 securities 1 1180 Deferred tax assets 4,554,776 9,613,000 14,167,776 5 1238 Advances paid out 14,828,004 (337,378) 14,490,626 5 1262 Other 415,730 337,378 753,120 1 1370 Retained earnings 362,772,555 (38,452,000) 324,320,555 (uncovered loss) Profit and loss account: Adjustments for 2019 3 2210 Sales expenses (190,976,405) (126) (190,976,531) 3 2220 Administrative expenses (45,972,175) 113,015 (45,859,160) 6 2310 Income from participation 236,716,932 129,395 236,846,327 in other companies 1,3,6 2350 Other expenses (18,276,793) (6,248,284) (24,525,077) 1 2300 Profit (loss) before tax 215,819,870 (6,006,000) 209,813,870 1 2410 Income tax, including 1,707,341 1,201,200 2,908,541 1 2412 Deferred income tax 955,705 1,201,200 2,156,905 1 2400 Net profit (loss) 216,871,650 (4,804,800) 212,066,850 1 2500 Total financial result of the 216,871,650 (4,804,800) 212,066,850 period

29 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

V. EXPLANATIONS TO MATERIAL PARAMETERS

The data as at 31.12.2019, 31.12.2018 and for 2019 in section V of the Notes are provided with the adjustments disclosed in section IV Adjustment of Data for Previous Reporting Period.

5.1 Segment reporting

Operational segments

The Company and its subsidiaries and associated companies (hereinafter “the Gazprom Neft Group”) is a vertically integrated group of oil companies operating in the Russian Federation, CIS countries and in other countries. The main operations performed by the Gazprom Neft Group are exploration, development of oil and gas fields, oil and gas production, manufacturing and sale of oil products. The information, which is systematically analyzed by the persons authorized by the Company to make decisions related to distribution of resources within the Company, is formed in relation to the Gazprom Neft Group as a whole. Information related to reporting segments at the Company level is not prepared because such segments are analyzed by the persons with the relevant powers to make management decisions and distribute resources with respect to the Gazprom Neft Group.

Information on operating segments is not generated at the Company level as segment data is analyzed by persons with appropriate authority to make management decisions and allocate resources in relation to the Gazprom Neft Group.

Geographical areas

The Company identifies the following geographical areas: - international market (except CIS countries); - domestic market (Russian federation); - CIS countries.

Information about the revenue from the sales into the above geographical areas is provided in section 5.13 of these Notes. The Company’s assets are mostly located in the Russian Federation, which is why they investments refer to the same geographical area identified according to the location of the assets – the Russian Federation.

The Company sells crude oil and petroleum products primarily to the related parties. Information about the revenue from sales to the above customers is provided in section 5.20 of these Notes.

5.2 Intangible assets

Table 1. Information about the existence and changes to the intangible assets

Intangible assets - Rights to Incomplete Other total: intellectual investments in property acquisition/ creation of IA Original value As at 31.12.2019 8,628,601 1,391,569 7,205,095 31,937 Received 12,452,738 967,514 11,485,224 - Recognized as intangible assets (657,699) - (657,699) - Retired (250,946) (15,885) (234,832) (229) As at 31.12.2020 20,172,694 2,343,198 17,797,788 31,708

30 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 1. Information about the existence and changes to the intangible assets

Intangible assets - Rights to Incomplete Other total: intellectual investments in property acquisition/ creation of IA Amortization and impairment As at 31.12.2019 (915,150) (884,163) - (30,987) Amortization for the period (302,446) (302,206) - (240) Retired 13,457 13,228 - 229 As at 31.12.2020 (1,204,139) (1,173,141) - (30,998) Depreciated value As at 31.12.2019 7,713,451 507,406 7,205,095 950 As at 31.12.2020 18,968,555 1,170,057 17,797,788 710 Original value As at 31.12.2018 3,120,446 1,165,194 1,919,786 35,466 Received 5,708,309 310,416 5,397,893 - Retired (200,154) (84,041) (112,584) (3,529) As at 31.12.2019 8,628,601 1,391,569 7,205,095 31,937 Amortization and impairment As at 31.12.2018 (750,409) (716,739) - (33,670) Amortization for the period (251,759) (250,990) - (769) Retired 87,018 83,566 - 3,452 As at 31.12.2019 (915,150) (884,163) - (30,987) Depreciated value As at 31.12.2018 2,370,037 448,455 1,919,786 1,796 As at 31.12.2019 7,713,451 507,406 7,205,095 950

In the reporting year, the useful lives and the method of depreciation of intangible assets did not change compared to the previous reporting period.

Intangible assets received by the Company for temporary use amounted to RUB 633,382 thousand, RUB 633,382 thousand, RUB 633,382 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

Intangible assets with fully redeemed value amounted to RUB 764,128 thousand, RUB 423,409 thousand, and RUB 166,385 thousand as at 31.12.2020, 31.12.2019, and 31.12.2018, respectively.

5.3 Prospecting assets

Table 2. Information about the existence and changes to the prospecting assets

Intangible Tangible prospecting assets prospecting assets Original value As at 31.12.2019 10,251,609 622,392 Received 12,074,163 141,750 Reclassified into other types assets (434,676) (276) Retired (2,808,983) (549,994) As at 31.12.2020 19,082,113 213,872 Depreciated value As at 31.12.2019 10,251,609 622,392 As at 31.12.2020 19,082,113 213,872 Original value As at 31.12.2018 4,669,883 3,067 Received 7,267,469 619,325 Reclassified into other types assets (1,002,237) - Retired (683,506) - As at 31.12.2019 10,251,609 622,392 Depreciated value As at 31.12.2018 4,669,883 3,067 As at 31.12.2019 10,251,609 622,392

31 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

In-progress investments in intangible prospecting assets amounted to RUB 5,051,085 thousand, RUB 2,543,831 thousand, and RUB 1,647,330 thousand, as at 31.12.2020, 31.12.2019, and 31.12.2018, respectively.

In-progress investments in tangible prospecting assets amounted to RUB 213,872 thousand, RUB 622,392 thousand, RUB 3,067 thousand as at 31.12.2020, 31.12.2019, and 31.12.2018, respectively.

5.4 Fixed assets

Table 3. Information about the existence and changes to the fixed assets and capital investments in progress Buildings, In-progress Machinery Fixed assets - structures capital Wells and Other FA total: and transfer investment equipment devices in FA Original value As at 31.12.2019 6115,811 - 4,715,743 1,048,567 351,501 1,268,172 Received 1,447,222 - 923,853 507,422 15,947 3,969,330 Put into operation - - - - - (1,438,540) Retired (30,502) - (26,996) (347) (3,159) - As at 31.12.2020 7,532,531 - 5,612,600 1,555,642 364,289 3,798,962 Depreciation As at 31.12.2019 (4,031,574) - (3,295,343) (471,683) (264,548) - Depreciation for the period (1,292,319) - (978,393) (276,996) (36,930) - Retired 30,186 - 26,774 347 3,065 - As at 31.12.2020 (5,293,707) - (4,246,962) (748,332) (298,413) - Depreciated value As at 31.12.2019 2,084,237 - 1,420,400 576,884 86,953 1,268,172 As at 31.12.2020 2,238,824 - 1,365,638 807,310 65,876 3,798,962 Original value As at 31.12.2018 4,124,047 - 3,272,457 451,541 400,049 2,716,181 Received 2,937,302 751,147 1,544,023 608,514 33,618 3,949,325 Put into operation - - - - - (2,937,302) Reclassified into other types (751,147) (751,147) - - - (2,460,032) assets Retired (194,391) (100,737) (11,488) (82,166) - As at 31.12.2019 6115,811 - 4,715,743 1,048,567 351,501 1,268,172 Depreciation As at 31.12.2018 (3,238,634) - (2,618,392) (367,745) (252,497) - Depreciation for the period (972,649) (52,130) (761,684) (114,146) (44,689) - Retired 179,709 52,130 84,733 10,208 32,638 - As at 31.12.2019 (4,031,574) - (3,295,343) (471,683) (264,548) - Depreciated value As at 31.12.2018 885,413 - 654,065 83,796 147,552 2,716,181 As at 31.12.2019 2,084,237 - 1,420,400 576,884 86,953 1,268,172

Table 4. Information about the use of fixed assets

As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 Fixed assets leased out and registered on the balance sheet (depreciated book value) – total, including 32,348 51,242 69,129 Machinery and equipment 32,348 51,242 18,711 Means of transportation - - 50,418 Leased fixed assets registered off balance (value under lease contract or cadastral value) – total, including. 75,678,826 76,061,653 63,314,578 Land plots 241 2,273 976 Buildings, structures and transfer devices, roads 3,423,748 2,394,087 2,393,087 Machinery and equipment 264,626 153,692 46,377

32 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 4. Information about the use of fixed assets

As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 Means of transportation 71,071,866 73,222,546 60,856,554 Other fixed assets 918,345 289,055 17,584

In particular, the depreciated value of fixed assets leased to subsidiaries amounted to RUB 21,391 thousand, RUB 36,528 thousand, and RUB 50,659 thousand as at 31.12.2020, 31.12.2019, and 31.12.2018, respectively.

The most significant assets leased as at 31.12.2020 are the means of transportation: 7 tankers with the value of RUB 70,808,707 thousand (as at 31.12.2019 – 10 tankers with the value of RUB 72,988,860 thousand, as at 31.12.2018 – 8 tankers with the value of RUB 60,628,869 thousand).

The Company leases land plots of 151.5151 ha, 553.9435 ha and 129.3995 ha as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

5.5 Other non-current assets

Table 5. Information about other non-current assets

Non- Active non- Advances Additional Other non- exclusive exclusive paid for VAT on expenses current rights for rights for Other acquisition acquired incurred to Other assets, software software of capital values attract including: products products investments financing Original value As at 19,707,435 13,922,737 4,158,931 7,810 1,332,350 (221,041) 506,648 - 31.12.2019 Received 11,283,242 1,601,005 2068,168 237,390 6,593,038 340,431 443,210 - Reclassified into (1,677,984) - (1,677,984) - - - - - other types assets Retired (8,365,157) - - (169,973) (7,914,366) (119,863) (160,955) - As at 20,947,536 15,523,742 4,549,115 75,227 11,022 (473) 788,903 - 31.12.2020 Amortization - and impairment As at (8,029,651) (8,029,651) ------31.12.2019 Depreciation for (2,029,232) (2,029,232) ------the period As at (10,058,883) (10,058,883) ------31.12.2020 Depreciated value As at 11,677,784 5,893,086 4,158,931 7,810 1,332,350 (221,041) 506,648 - 31.12.2019 As at 10,888,653 5,464,859 4,549,115 75,227 11,022 (473) 788,903 - 31.12.2020 Original value As at 19,486,344 12,049,202 4115,450 90,947 67,701 (10,127) 608,875 2,564,296 31.12.2018 Received 7,732,537 2,099,249 2,199,547 45,584 2,766,423 246,304 375,430 Reclassified into (2,096,658) (2,096,658) other types assets Retired (5,414,788) (225,714) (59,408) (128,721) (1,501,774) (457,218) (477,657) (2,564,296) As at 19,707,435 13,922,737 4,158,931 7,810 1,332,350 (221,041) 506,648 - 31.12.2019 Amortization and impairment As at (6,342,819) (6,342,819) ------31.12.2018 Depreciation for (1,912,546) (1,912,546) ------the period

33 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 5. Information about other non-current assets

Non- Active non- Advances Additional Other non- exclusive exclusive paid for VAT on expenses current rights for rights for Other acquisition acquired incurred to Other assets, software software of capital values attract including: products products investments financing Retired 225,714 225,714 ------As at (8,029,651) (8,029,651) ------31.12.2019 Depreciated value As at 13,143,525 5,706,383 4115,450 90,947 67,701 (10,127) 608,875 2,564,296 31.12.2018 As at 11,677,784 5,893,086 4,158,931 7,810 1,332,350 (221,041) 506,648 - 31.12.2019

5.6 Inventories

Table 6. Information about inventories

As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 Inventories – total: 34 775 437 37 802 815 32 772 576 raw materials and other materials and 6,608,423 6,146,021 4,966,042 production in progress finished goods and goods for resale 27,326,918 27,490,139 27,778,809 goods shipped - 5,369 27,725 non-current assets for sale 840,096 4,161,286 -

The line Finished products and goods for resale as at 31.12.2020 reflects a negative excise tax on crude oil in the amount of RUB (935,306) thousand (as at 31.12.2019 in the amount of RUB (627,619) thousand).

Taking into account that the current market value of the products (work, services) produced by the Company corresponds to or exceeds its actual cost no provision for reducing the value of inventories used in the production of products (performance of work, provision of services) was allocated.

No inventories were pledged.

5.7 Long-term and short-term financial investments

Table 7. Information about the existence and changes to long-term financial investments

Financial Investments in Loans provided investments - subsidiaries affiliates other entities and debt Other total securities Original value as at 1,095,667,751 686,452,359 75,130,495 3,961,004 330,118,463 5,430 31.12.2019 Received original value 372,003,586 295,621,490 4,966,515 991,525 70,424,056 - Written-off original value (142,808,154) (15,124,035) - - (127,684,119) - Exchange differences 18,370,838 - - - 18,370,838 - Changes to current market (20,250) - - (20,250) - - value Transfer due to time (86,511,153) - - - (86,511,153) - Original value as at 1,256,702,618 966,949,814 80,097,009 4,932,279 204,718,085 5,430 31.12.2020 Provision for impairment (54,071,000) - - - (54,071,000) - as at 31.12.2019 Changes to provision for (11,320,226) (63,354,123) (374,337) (1,662,766) 54,071,000 - impairment Provision for impairment (65,391,226) (63,354,123) (374,337) (1,662,766) - as at 31.12.2020 Balance value as at 1,191,311,391 903,595,691 79,722,672 3,269,513 204,718,085 5,430 31.12.2020

34 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 7. Information about the existence and changes to long-term financial investments

Financial Investments in Loans provided investments - subsidiaries affiliates other entities and debt Other total securities Original value as at 935,114,557 509,212,734 73,830,723 3,945,754 348,055,357 69,989 31.12.2018 Received original value 317,063,674 177,239,625 1,299,800 2,500 137,459,624 1,062,125 Written-off original value (186,421,973) - (28) - (185,295,261) ,(1,126,684) Exchange differences (12,132,730) - - - (12,132,730) - Changes to current market 12,750 - - 12,750 - - value Transfer due to time 42,031,473 - - - 42,031,473 - Original value as at 1,095,667,751 686,452,359 75,130,495 3,961,004 330,118,463 5,430 31.12.2019 Provision for impairment (48,113,535) - - - (48,065,000) (48,535) as at 31.12.2018 Changes to provision for (5,957,465) - - - (6,006,000) 48,535 impairment Provision for impairment (54,071,000) - - - (54,071,000) - as at 31.12.2019 Balance value as at 887,001,022 509,212,734 73,830,723 3,945,754 299,990,357 21,454 31.12.2018 Balance value as at 1,041,596,751 686,452,359 75,130,495 3,961,004 276,047,463 5,430 31.12.2019

The loans showed in line 1170 Long-term financial investments were granted at rates from 1.56271% to 6.75%, from 1.64157% to 7.8025%, from 1.78657% to 9.6775% in 2020, 2019 and 2018, respectively. The amount of loans granted for a period of 1 to 3 years is RUB 204,088,475 thousand, RUB 262,139,618 thousand, RUB 231,887,809 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

Information on income from cash on bank deposits and income from loans granted is disclosed in section 5.15 of the Notes.

The provision for impairment of long-term financial investments as at 31.12.2020 was RUB 65,391,226 thousand (RUB 54,071,000 thousand as at 31.12.2019).

During 2020, the following changes occurred in the composition of the Company’s financial investments: - On 19 March 2020, by the decision of the sole participant GPN Middle East Projects LLC was established with the authorized capital of RUB 100 thousand. During 2020, the Company made an additional contribution to the property in the amount of RUB 120,533,406 thousand including an increase in the authorized capital of RUB 3 thousand and the formation of surplus capital of RUB 120,533,403 thousand; - On 10 July 2020, Gazpromneft-Geoshelf LLC was established through reorganization in the form of separation from Gazpromneft-Sakhalin LLC with the authorized capital of RUB 10 thousand. The cost of financial investments after the reorganization into Gazpromneft-Geoshelf LLC and Gazpromneft-Sakhalin LLC amounted to RUB 8,178,791 thousand and RUB 6,225,379 thousand, respectively. The share of the Company in these subsidiaries is 100%; - On 27 July 2020, through an additional contribution to the property of the sole participant a surplus capital of Gazpromneft - Catalytic Systems LLC was formed in the amount of RUB 14,221,347 thousand. On 2 November 2020, an increase in the authorized capital of Gazpromneft - Catalytic Systems LLC was registered. The amount of the authorized capital increased to RUB 7,214 thousand; - On 3 August 2020, by the decision of the sole shareholder Gazpromneft - Terminal LLC was established through reorganization in the form of transformation of Gazpromneft- Terminal JSC. The Company’s share in the authorized capital of Gazpromneft - Terminal LLC after the reorganization amounted to 100%; - On 30 August 2020, GPN - Asset Management LLC was established with the authorized capital of RUB 16,004,900 thousand. The nominal share of the Company’s participation in

35 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

the authorized capital of GPN - Asset Management LLC amounted to RUB 16,000,000 thousand or 99.97%. Payment of the share in the authorized capital was made by paying for ordinary registered shares of Gazpromneft East European Projects JSC which is 100% of the authorized capital of Gazpromneft East European Projects JSC; - On 17 November 2020, by the decision of the sole participant a surplus capital of Gazpromneft - Aero Bryansk LLC in the amount of RUB 6,046,813 thousand was formed through an additional contribution to the property. On 30 November 2020, a 50% stake in Gazpromneft - Aero Bryansk LLC was sold. On 2 December 2020, the Minutes of the Extraordinary General Meeting of Shareholders documented the decision on making additional contributions to the property by the shareholders. The amount of the additional contribution of the Company amounted to RUB 1,942,860 thousand; - On 10 December 2020, the Bank of Russia registered a report on results of the additional issue of shares of Gazpromneft - ONPZ JSC. The number of additional outstanding shares is 873 shares. The total value of the shares under the Share Purchase and Sale Agreement amounted to RUB 227,132,091 thousand; - On 11 December 2020, an increase in the authorized capital of Gazpromneft-ITO LLC was registered. The amount of the authorized capital increased to RUB 2,051,175 thousand through the contribution by Gazprom Neft PJSC. The nominal share of the Company’s participation after the increase in the authorized capital in Gazpromneft-ITO LLC amounted to RUB 1,731,151 thousand, or 84.4%; - During 2020, the Company made an additional contribution to the increase in the authorized capital of the subsidiary company Meretoyakhaneftegaz LLC in the amount of RUB 60,800,000 thousand. The value of the in-progress transaction in the amount of the payment made under the contract is reflected in line 1171 Investments in subsidiaries of the balance sheet.

Table 8. List of material subsidiaries

Shareholding, as at, % Name 31.12.2020 31.12.2019 31.12.2018 Type of operations Exploration, production, processing and sale of crude oil Nafta Industrija Srbije A.D. Novi Sad 56.15 56.15 56.15 and petroleum products, exploration and production of gas Exploration and production of Gazpromneft-Noyabrskneftegaz JSC 98.904 98.904 98.904 hydrocarbons Exploration and production of Gazpromneft-Yamal LLC 90 90 90 hydrocarbons Exploration and production of Gazpromneft-Khantos LLC 100 100 100 hydrocarbons Exploration and production of Gazprom Neft Shelf LLC 100 100 100 hydrocarbons Oil processing and sale of Gazpromneft-Moscow Refinery OJSC 100 100 100 petroleum products Oil processing and sale of Gazpromneft-Omsk Refinery OJSC 100 100 100 petroleum products Operation of automobile fueling Gazprom Neft Corporate Sales LLC 100 100 100 stations and petroleum depots Wholesale trade of motor fuels Gazprom Neft Regional Sales LLC 99.99 99.99 99.99 and other petroleum products Gazpromneft-Center LLC 99.933 99.939 99.933 Retail trade of motor fuels Gazprom Neft Invest LLC 100 100 100 Investment in securities Gazprom Neft Finans LLC 100 100 100 Investment in securities Exploration and production of Gazpromneft-Vostok LLC 99.999 99.999 99.999 hydrocarbons Export of crude oil and petroleum Gazpromneft Trading GmbH 100 100 100 products

36 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 9. Information about the existence and changes to short-term financial investments

Financial Loans Bank investments - total granted deposits Original value as at 31.12.2019 125,695,324 89,695,324 36,000,000 Received original value 54,889,964 54,889,964 - Retired original value (116031,116) (80,031,116) (36,000,000) Exchange rate differences 3,924,400 3,924,400 - Transfer due to time 86,511,153 86,511,153 - Original value as at 31.12.2020 154,989,725 154,989,725 - Provision for impairment as at 31.12.2019 (257,972) (257,972) - Changes to provision for impairment (2,901,373) (2,901,373) - Provision for impairment as at 31.12.2020 (3,159,345) (3,159,345) - Balance-sheet value as at 31.12.2020 151,830,380 151,830,380 - Original value as at 31.12.2018 195,125,835 144,284,655 50,841,180 Received original value 183,429,071 47,328,774 136,100,297 Written-off original value (107,949,601) (58,334,481) (49,615,120) Exchange rate differences (3,468,569) (1,552,151) (1,916418) Transfer due to time (141,441,412) (42,031,473) (99,409,939) Original value as at 31.12.2019 125,695,324 89,695,324 36,000,000 Changes to provision for impairment (257,972) (257,972) - Provision for impairment as at 31.12.2019 (257,972) (257,972) - Balance-sheet value as at 31.12.2018 195,125,835 144,284,655 50,841,180 Balance-sheet value as at 31.12.2019 125,437,352 89,437,352 36,000,000

The provision for impairment of short-term financial investments as at 31.12.2020 was RUB 3,159,345 thousand (RUB 257,972 thousand as at 31.12.2019).

The loans granted included in the line Short-term financial investments are granted at the rate from 0.672% to 7.25%.

Information on income from cash on bank deposits and on income from loans granted is disclosed in section 5.15 of the Notes.

Short-term financial investments primarily reflect loans granted to subsidiaries. This information is disclosed in section 5.21 of the Notes.

5.8 Accounts receivable

Table 10. Existence and changes to accounts receivable

As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 Non-current accounts receivable total: 67,346,415 173,331,710 129,712,136 other 67,346,415 173,331,710 129,712,136 Current accounts receivable total: 286,468,396 217,992,566 332,493,398 buyers and customers 94,599,935 97,776,321 132,295,697 advances paid out 22,871,058 26,641,655 24,872,979 other 180,908,681 104,068,626 185,733,341 bad debt reserve (11,911,278) (10,494,036) (10,408,619)

Line 1234 Other receivables (payments for which are expected more than 12 months after the reporting date) of the balance sheet reflects the following items: - debt on interest-free long-term loans granted to related party entities in the amounts of RUB 25,050,903 thousand, RUB 71,198,229 thousand and RUB 53,994,762 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively. - interest payable on long-term loans granted to related party entities in the amounts of RUB 42,295,019 thousand, RUB 102,133,001 thousand and RUB 75,716,920 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

37 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Line 1239 Other receivables (payments for which are expected within 12 months after the reporting date) of the balance sheet reflects the following items: - debt on interest-free short-term loans granted to related party entities in the amounts of RUB 9,677,764 thousand, RUB 9,641,939 thousand and RUB 105,542,953 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively; - interest payable on short-term loans granted to related party entities in the amounts of RUB 55,199,472 thousand, RUB 9,204,084 thousand and RUB 22,249,617 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively; - outstanding amounts of RUB 0 thousand and RUB 22,535,883 thousand as at 31.12.2020 and 31.12.2019, respectively, in respect of oil payments to related party consignors; - outstanding payments on dividends received from foreign organizations in the amount of RUB 55,788,980 thousand as at 31.12.2020; - outstanding payments for shares and shares sold in the amount of RUB 4,007,757 thousand as at 31.12.2020; - arrears in settlements with the budget for value added tax in the amounts of RUB 44,587,043 thousand, RUB 36,262,549 thousand and RUB 39,387,926 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively; - advance payments for settlements with customs in the amounts of RUB 1,506,131 thousand, RUB 2,931,477 thousand and RUB 3,656,611 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

In line 1238 Advances paid out of the balance sheet, advances are recorded net of the value added tax which amounts to RUB (1,994,255) thousand (RUB 2,420,345 thousand and RUB 1,894,565 thousand as at 31.12.2019 and 31.12.2018, respectively).

Table 11. Changes to bad debt reserves

For 2020 For 2019 Opening balance (10,494,036) (10,408,619) Accrued (1,527,514) (166,531) Reversed 109,772 53,712 Used 500 27,402 Closing balance (11,911,278) (10,494,036)

5.9 Cash and equivalents

Table 12. Composition of cash and equivalents

Parameter As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 Cash in hand 45,629,046 17,947,602 7,244,318 Cash in payment accounts 47,193,246 30,181,107 7,408,803 Bank deposits 44,787,000 47,226,883 125,244,663 Other cash equivalents 991 630 874 Total 137,610,283 95,356,222 139,898,658

There is no cash with restrictions on use.

The amount of funds that can be additionally raised by the Company is RUB 210,012,000 thousand, RUB 154,456,060 thousand, RUB 199,222,123 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

The amount of letters of credit opened in favor of the Company is RUB 29,694,089 thousand, RUB 37,420,081 thousand and RUB 72,279,486 thousand as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

38 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

The cash flows from current operations showed in line 4119 Other receipts of the statement of cash flows include, in particular, the following items: - the receipt of funds from the participants of the CTG for the calculation of the profit tax in the amount of RUB 6,632,776 thousand for 2020 and RUB 12,986,889 thousand for 2019; - the refund of taxes and fees in the amount of RUB 1,892,219 thousand for 2020, RUB 90,844 thousand 2019; - the return of customs payments in the amount of RUB 11,500,000 thousand for 2020 and RUB 0 thousand for 2019; - the receipt of funds under receivables assignment agreements in the amount of RUB 0 thousand for 2020 and RUB 2,750,622 thousand for 2019; - the repayment of grated interest-free short-term loans in the amount of RUB 52,471,812 thousand for 2020 and RUB 102,200,000 thousand for 2019; - other income in the amount of RUB 4,970,533 thousand for 2020 and RUB 3,289,914 thousand for 2019.

The cash flows from current operations showed in line 4139 Other payments and transfers of the statement of cash flows include, in particular, the following items: - the transfers of sponsorship and charity, the transfer of contributions to non-profit partnerships in the amount of RUB 4,347,284 thousand for 2020 and RUB 7,645,366 thousand for 2019; - the transfer under the settlements with other creditors in the amount of RUB 5,897,646 thousand for 2020 and RUB 7,747 thousand for 2019; - the transfer to the settlement of claims in the amount of RUB 1,120,868 thousand for 2020 and RUB 912,742 thousand for 2019; - the payments for banking services in the amount of RUB 569,784 thousand for 2020 and RUB 619,681 thousand for 2019; - the transfer of funds to the participants of the CTG in the amount of RUB 3,038,512 thousand for 2020 and RUB 2,565,985 thousand for 2019; - the payments to the principal in the amount of RUB 106,290,862 thousand for 2020 and RUB 92,443,959 thousand for 2019; - other payments in the amount of RUB 11,881,014 thousand for 2020 and RUB 35,61,145 thousand for 2019.

The cash flows from investment operations showed in line 4214 Receipts from dividends, interest payments from financial investments or similar receipts from participating interest in other organizations includes the income received from bank deposits and repurchase transactions in the amount of RUB 2,508,883 thousand for 2020 and RUB 10,744,639 thousand for 2019.

Cash receipts in the form of interest receivable from the balance on bank accounts in the amount of RUB 951,881 thousand for 2020 and RUB 1,747,094 thousand for 2019 are recorded in line 4219 Other receipts of the statement of cash flows.

5.10 Accounts payable

As at 31.12.2020, line 1520 Accounts payable of the balance sheet shows mainly payables to suppliers of crude oil. The larger part of the accounts payable refers to payments to related parties. More detailed information of the above amounts is provided in Table 20 Information about transactions with related parties.

Line 1527 Advances received of the balance sheet shows advances less the value added tax which is RUB 2,676,137 thousand (RUB 2,346,614 thousand and RUB 2,725,346 thousand as at 31.12.2019 and 31.12.2018 respectively).

39 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Line 1528 Other payments of the balance sheet shows, among other things: - payables to the consignor (principal, grantor) in the amount of RUB 9,225 thousand (RUB 58,678,206 thousand and RUB 44,690 thousand as at 31.12.2019 and 31.12.2018, respectively); - payables for shares/interests purchased in the amount of RUB 1,371,460 thousand (RUB 443,304 thousand and RUB 7,145,925 thousand as at 31.12.2019 and 31.12.2018, respectively).

5.11 Bank and other loans

Table 13 Information about long-term and short-term bank and other loans As at 31.12.2020 As at 31.12.2019 As at 31.12.2018 Long-term bank loans, including: 269,737,046 269,781,245 285,153,268 from 1 to 2 years 40,010,206 -- from 2 to 5 years 99,726,840 269,781,245 285,153,268 over 5 years 130,000,000 -- Long-term other loans, including: 407,259,023 375,868,940 354,736,067 Loans raised upon bonds 171,177,646 166,177,646 120,000,000 Short-term loans 205,760,137 196,225,757 166,853,957 Short-term bank loans 3 14,980,749 - Portion of long-term bank and other loans 32,488,411 6,548,807 95,621,189 repayable within 12 months after the reporting date

Total bank and other loans: 915,244,620 863,405,498 902,364,481

The total amount of bank loans received in 2020 amounted to RUB 73,509,463 thousand (RUB 203 441 258 thousand in 2019), the total amount of loans repaid in 2020 (without the interest) amounted to RUB 102,397,006 thousand (RUB 262,032,995 thousand in 2019), the interest on bank loans paid in 2020 amounted to RUB 13,809,982 thousand (RUB 23,273,580 thousand in 2019).

The weighted average effective interest rate for short-term and long-term bank loans was 4.37%, 6.66% and 6.92% as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

In the reporting year, the interest on bank loans included in other expenses amounted to RUB 13,713,219 thousand (RUB 23,051,222 thousand in 2019).

The total amount of other loans received in 2020 amounted to RUB 1, 453, 455, 647 thousand (RUB 1,572,844,443 thousand in 2019), the total amount of loans repaid in 2020 (without the interest) amounted to RUB 1,424,949,754 thousand (RUB 1,514,331,882 thousand in 2019), the interest on other loans paid in 2020 amounted to RUB 27,409,275 thousand (RUB 35,110,546 thousand in 2019).

The weighted average effective interest rate for short-term and long-term other loans was 6.23%, 6.43% и 6.37% as at 31.12.2020, 31.12.2019 and 31.12.2018, respectively.

In the reporting year, the interest on other loans included in other expenses amounted to RUB 28,961,496 thousand (RUB 27,196,931 thousand in 2019).

Information about the nature and value of security provided with respect to the received bank loans, the entities that provided such security, and about the date of their provision is given in Note 5.20.

40 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

5.12 Taxation

Profit tax

For accounting purposes, the changes in the accounting statements with regard to the tax calculations relating both to the reporting period and to the previous reporting periods are made in the statements prepared for the reporting period in which errors were identified. Incidentally, the income and expenses of prior years identified in the reporting year are reported in “Other income” or “Other expenses” items of the Statement of Financial Results for the reporting year, as well as in “Other” item of the said statement.

The Company showed in its accounting records and in the Statement of Financial results for 2020 the following data:

Table 14. Calculation of the profit tax For 2020 For 2019 Profit (loss) before tax 153,180,330 209,813,870 Profit (loss) before tax (eff. % rate / 20%) (67,866,875) (27,032,458) Profit (loss) before tax 13% 48,788 45,797 Profit (loss) before tax 0% 220,998,417 236,800,531 Deemed profit tax expenses (deemed income) (13,567,033) (5,400,538) Permanent tax liabilities (assets), including: 925,729 2,617,136 Permanent differences increasing/(increasing) taxable profit, including: 4,628,645 13,085,679 Income/expenses not accounted for for tax purposes / in accounting 4,680,768 14,075,532 recovery of provisions in taxation 1,744,702 2,198,440 exchange differences (106,739) (92,823) other (1,690,086) (3,095,470) Deferred tax assets 9,463,306 3,493,381 Temporary deductible differences, including: 47,316,530 17,466,907 For 2020 For 2019 reserve to cover bad debt 1,641,069 420,938 other 45,675,461 17,045,969 Deferred tax liabilities 43,080 (1,336,476) Temporary taxable differences, including: 215,401 (6,682,380) hedging of exchange risks 644,657 402,350 other (429,256) (7,084,730) Taxable profit tax base (45,338,698) (3,162,253) Taxable profit tax base included in CGT (45,338,698) (3,162,253) Profit tax, including 3,005,326 751,636 current profit tax 3,141,259 632,450 profit tax 13% (6,342) (5,953) tax on profit of prior years (129,591) 125,139 Redistribution of profit tax within CTG (3,141,550) (655,561) Net profit (loss) of the reporting period 162,550,492 212,066,850

In 2013, CGT was established in Gazprom Neft Group, the designated member of which is Gazprom Neft PJSC. In 2020, there are 11 members in the CGT.

In 2020 and 2019, the profit tax of entities included in the GCT amounted to RUB 3,155,183 thousand and RUB 10,117,849 thousand, respectively.

Pursuant to the adjusted tax returns for the corporate profit tax for CGT for 2016, profit tax was reduced in 2020 by RUB 3,560 thousand.

41 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Value Added Tax

Line 1220 “Income VAT” shows the VAT amounts invoiced by the Company’s counterparties at the time of purchasing of goods (work, services), and the Company, as at the end of the reporting period, did not accept them for deduction and did not include them into the value of the assets acquired or into expenses.

This line shows the amounts for which the Company expects to make the deduction of, or inclusion into, the VAT amounts within 12 months after the reporting date.

The input VAT amount related to export operations which was not submitted by the Company for deduction to the budget, as at 31.12.2020, was RUB13,637,593 thousand (RUB 8,556,474 thousand and RUB 24,337,396 thousand as at 31.12.2019 and 31.12.2018, respectively).

5.13 Revenue from sale of goods, products, work, services

Table 15 Revenue from sale of goods, products, work, services by region

Domestic market International market CIS Year ended 31.12.2020 Sales of crude oil 96,692,500 356,375,131 18,835,557 Sales of petroleum products 731,636,157 214,466,411 29,252,380 Sales of gas 31,912,221 -- Other sales 33,621,428 -- Total revenue: 893,862,306 570,841,542 48,087,937 Domestic market International market CIS Year ended 31.12.2019 Sales of crude oil 139,595,002 440,233,024 40,266,196 Sales of petroleum products 827,905,673 260,946,447 33,099,935 Sales of gas 29,825,338 -- Other sales 37,884,672 74,604 - Total revenue: 1,035,210,685 701,254,075 73,366,131

The total revenue amount in 2020 reduced by 16.4% (RUB 297.0 billion) due to the cut in prices of crude oil and petroleum products on the global markets, as well as due to the reduction of demand resulting from the Covid-19 pandemic. The reduction of revenue from sales on the global market by RUB 130.4 billion is chiefly explained by the reduction of revenue from sales of oil by RUB 83.9 billion, which was also governed by the price decline and existing oil production restrictions resulting from the OPEC+ agreement.

Revenue on the domestic market in 2020 was RUB 141.3 billion lower than last year. The key indicator of this change was the reduction of revenue from sales of petroleum products by RUB 96.3 billion resulting chiefly from the reduction of refining output in Russia (-3.3%, -.3 million tons), which was caused by the decline in consumer demand.

The reduction of revenue from the sales of crude oil on the domestic market by RUB 42.9 billion is primarily explained by the price fall.

5.14 Normal business expenses.

Table 16 Normal business expenses

Cost item For 2020 For 2019 Cost of materials 688,324,332 913,393,336 Payroll 15,722,119 22,798,849 Social welfare 2,799,286 3,846,560 Depreciation, amortization and depletion 4,054,916 3,511,911

42 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 16 Normal business expenses

Cost item For 2020 For 2019 Customs duties and charges 38,620,727 85,954,393 Other costs 315,574,484 312,471,626 Total by elements 1,065,095,864 1,341,976,675 Present cost of goods, work, services sold 427,860,508 553,006,203 Changes to the balance of finished products and work in 2,419,322 (2,746,477) progress: (Growth)/ Reduction Returnable (negative) excise 52,360,258 (87,538,070) Total normal business expenses 1,547,735,952 1,804,698,331

Other expenses include: For 2020 For 2019 including: Excise 161,277,719 158,730,715 Transport expenses 129,449,901 125,333,952 Other 24,846,864 28,406,959

5.15 Other income and expenses

Table 17 Other income and expenses

Parameter For 2020 For 2019 Interest receivable 20,746,930 41,173,120 Including Income from the bank account balance 951,881 1,747,094 Interest on provided loans 16,496,912 28,392,618 Income on bank deposit 3,298,123 11,033,383 Other 14 25 Interest payable (43,593,005) (50,658,838) Including Interest on received loans (16,441,602) (17,223,698) Interest on loans in foreign currency and rubles (13,713,219) (23,051,222) Interest on bonds (13,438,184) (10,383,918) Income from participation in other entities 220,433,088 236,846,327 Including Dividends 220,433,088 236,846,327 Other income 34,039,566 1,845,778 Including Income from sale of foreign currency - 321,104 Proceeds from sale or other disposal of securities and shares 10,861,349 - Relief from export customs duty 14,287,169 - Income from sale of fixed assets, intangible assets, construction 7,376,510 279,317 in progress, geological exploration assets, materials and other assets Fines and penalties received 1,206,356 805,395 Income from forward transactions 77,394 271,084 Other 230,788 168,878 Other expenses (43,502,082) (24,525,077) Including Expenses related to sale of foreign currency (25,784) - Expenses related to transactions with derivatives (1,666,080) (1,724,437) Exchange rate differences (5,254,162) (651,596) Expenses related to sale of fixed assets, intangible assets, (4,789,729) (166,903) construction in progress, geological exploration assets, materials and other assets Expenses related to sale or other disposal of fixed assets, (1,913,745) (3,326,627) intangible assets and geological exploration assets, as well as goods and materials Fines and penalties paid (1,274,532) (1,139,549)

43 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Table 17 Other income and expenses

Parameter For 2020 For 2019 Bank services (512,945) (884,930) Losses of prior years (2,526,208) (930,575) Social welfare (10,247) (51,662) Expenses related to sale or other disposal of securities and (3,023,655) - shares Charity (4,572,585) (7,616,270) Investment depreciation provision (14,221,600) (6,215,437) Provision for bad debt under other accounts receivable and other (1,413,230) (112,889) advances Other (2,297,580) (1,704,202)

The Statement of Financial Results shows net (without a breakdown) other income/expenses:

1. exchange rate differences equal to RUB (5,254,162) thousand (in 2019 – RUB (651,596) thousand), including: - income of RUB 123,469,523 thousand (in 2019 – RUB 66,104,468 thousand), including from recalculation transactions related to the value of assets and liabilities denominated in foreign currency and payable in foreign currency of RUB 122,638,478 thousand (in 2019 – RUB 63,967,825 thousand) and payable in rubles in the amount of RUB 831,045 thousand (in 2019 – RUB 2,136,643 thousand); - expenses of RUB 128,723,685 thousand (in 2019 – RUB 66,756,064 thousand), including from recalculation transactions related to the value of assets and liabilities denominated in foreign currency and payable in foreign currency of RUB 127,617,116 thousand (in 2019 – RUB 65,446,395 thousand) and payable in rubles in the amount of RUB 1,106,569 thousand (in 2019 – RUB 1,309,669 thousand).

2. transactions related to sale of foreign currency equal to RUB (25,784) thousand (in 2019 – RUB 321,104 thousand), including: - income of RUB 204,690 thousand (in 2019 – RUB 791,123 thousand); - expense of RUB 230,474 thousand (in 2019 – RUB 470,019 thousand).

3. derivative transactions equal to RUB (1,666,080) thousand (in 2019 – RUB (1,724,437) thousand), including: - income of RUB 2,669,473 thousand (in 2019 – RUB 2,477,820 thousand); - expense of RUB 4,335,553 thousand (in 2019 – RUB 4,202,257 thousand).

4. income and expenses of prior years discovered in the reporting period, amounting to RUB (2,526,208) thousand (in 2019 – RUB (930,575) thousand), including: - income of RUB (512 342) thousand (in 2019 – RUB (1 946 912) thousand); - expense of RUB 2 013 866 thousand (in 2019 – RUB (1 016 337) thousand).

5. investment depreciation provision of RUB (14,221,600) thousand (in 2019 – RUB (6,215,437) thousand), including: - income of RUB 257,972 thousand (in 2019 – RUB 177,521 thousand); - expense of RUB 14,479,572 thousand (in 2019 – RUB 6,392,958 thousand).

6. forward transactions of RUB 77,394 thousand (in 2019 – RUB 271,084 thousand), including: - income of RUB 234,536 thousand (in 2019 – RUB 562,981 thousand); - expense of RUB 157,142 thousand (in 2019 – RUB 291,897 thousand).

44 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

7. provision for bad debt under other accounts receivable and other advances of RUB (1,413,230) thousand (in 2019 – RUB (112,889) thousand), including: - income of RUB 109,622 thousand (in 2019 – RUB 51,652 thousand); - expense of RUB 1,522,852 thousand (in 2019 – RUB 164,541 thousand).

5.16 Provisions, contingent liabilities and contingent assets

Provisions

Table 18 Existence and changes to provisions

Parameter At the start of Accrued Used Written off as Transfer to At the end of year surplus / short-term year Recovered provisions In 2020 Long-term 15,869,511 914,94 (293,856) - (15,884,210) 606,391 provisions 6 including: payments to 15,869,511 914,94 (293,856) - (15,884,210) 606,391 employees 6 Short-term 4,282,115 8,213,173 (7,429,642) 416,589 15,884,210 21,366,445 provisions including: payments to 4,282,115 8,213,173 (7,429,642) 416,589 15,884,210 21,366,445 employees , In 2019 Long-term 6,178,681 9,744,162 (53,332) - - 15,869,511 provisions including: payments to 6,178,681 9,744,162 (53,332) - - 15,869,511 employees Short-term 3,969,577 7,022,901 (7,487,020) 776,657 - 4,282,115 provisions including: payments to 3,969,577 7,022,901 (7,487,020) 776,657 - 4,282,115 employees

Contingent liabilities

The Company is a party in a number of lawsuits that were created in the ordinary course of business. Currently existing claims and lawsuits against the Company cannot have a material adverse effect on the Company’s operations or financial position.

The Company is a surety in relation to liabilities of third parties, which is further explained in Note 5.20. According to the Company estimates, no material obligations can be expected to be created in connection with the suretyships given.

Business environment in the Russian Federation

The Company carries out financial and business operations primarily in the Russian Federation, and it therefore incurs the risks resulting from the situation in the economy and on the financial markets of the Russian Federation. The economy of Russia is largely dependent on the global oil and gas prices, which is why significant extensive reduction of oil prices has an adverse effect on the economy of the Russian Federation. In 2017 – 2019, Russia’s economy showed signs of recovery after coping with the recession of 2015 and 2016.

The coronavirus pandemic (COVID-19) in 2020 and the related measures to prevent the spread of infection resulted, in addition to other factors, to a steep drop in oil prices and depreciation of the Russian ruble. The situation on global financial markets remains unstable. The existing economic developments exert a significant impact on the Company’s operations and financial standing.

45 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

The Company’s management is taking appropriate measures to guarantee stable business activity of the Company. Nonetheless, future effects of today’s situation in economy are hard to predict, and current expectations and estimates of the management may differ from reality.

5.17 Hedging foreign exchange and interest rate risks

The Company is exposed to the foreign exchange risk mainly due to the fact that the transactions for realizing and raising financing may be expressed in a foreign currency.

The Company’s foreign exchange risk is greatly reduced due to its assets and liabilities denominated in foreign currency: the current structure of revenue and obligations is acting as a hedging mechanism where multidirectional cash flows balance each other. The Company uses hedging transactions with respect to the above cash flows denominated in foreign currency to prevent instability of the profit and loss parameters mainly for the transactions aimed at raising financing.

The Company’s policy involves hedging the risk of volatility of cash flows due to changes to exchange rates for foreseeable transactions the probability of realizing which is high.

A significant part of the loans and borrowings of the Company were attracted at a variable interest rate (tied to the key rate of the Bank of Russia). To minimize the risk of adverse changes in Euribor and the key rate of the Bank of Russia, the Company’s Treasury conducts a regular analysis of current interest rates in the capital market and, depending on the results of this analysis, makes a decision on the need to hedge the interest rate or to raise borrowed funds at fixed or variable rates.

The financial result of the foreign exchange risk hedging transactions is shown as part of other income and expenses of the Company for the reporting period (Note 5.14).

As at 31.12.2020 and 31.12.2019, the Company has open positions for forwarding contracts and cross currency and interest rate swap with the stated value of $70 million USD and $105 million USD respectively. Such instruments are for hedging the Company’s cash flows. The information regarding the results of the transactions is disclosed in Note 5.15.

The detailed information about the fair value of transactions in progress related to hedging of cash flows ad their performance time is granted in the Note on “Cash Flow Hedging Transactions” of the Consolidated Financial Statements of Gazprom Neft Group for 2020. Note on “Financial Risk Management” also contains information about the financial risk management in the group.

5.18 Capital and reserves

As at 31.12.2020, the Company’s charter capital was 7,586.08 thousand RUB represented by 4,741,299.633 thousand fully paid up ordinary registered shares and did not change in 2020. The par value of a single ordinary registered share is 0.0016 RUB.

The Company’s additional capital (share premium), paid-in in excess of par value, at the end of the reporting period was 7,774,326 thousand RUB.

Because the reserve fund is fully formed, no contributions were made to the reserve fund during the reporting year.

Pursuant to the resolution of the annual General Meeting based on the Company’s results for 2019, it was resolved to pay the dividend of 37,96 RUB per ordinary share (with a total of dividends, resulting from the 6 months of 2019 in a total of 18.14 rubles per ordinary share),

46 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

which amounted to 179,979,734 thousand RUB (dividends for 6 months of 2019 and for 2019 amounted to 86,007,175 thousand RUB and 93,972,559 thousand RUB correspondingly).

At the extraordinary General Meeting on December 18, 2020, it was decided by the results of 9 months of 2020 to pay the dividend of 5 RUB per ordinary share was raised by which amounted to 23,706,498 thousand RUB.

5.19 Profit (loss) per share

Basic profit (loss) per share reflects the amount of the profit (loss) of the reporting year payable to the holders of ordinary shares. It is calculated as the ratio of the basic profit (loss) for the reporting year to the weighted average number of ordinary shares outstanding during the reporting year.

No securities which may have a diluting effect were issued.

5.20 Security for obligations

Table 19 - Security for obligations

Parameter as at 31.12.2020 as at 31.12.2019 as at 31.12.2018 Security for obligations received 5,195,545 4,036,802 6,573,235 Security for obligations given 178,596,756 38,021,342 28,579,771

In November 2016, the Company issued a surety until May 2026 to Sberbank PJSC as security for an agreement on opening a credit line for Gazpromneft Moscow Refinery. The amount of the surety issued amounted to 22,168,372 thousand RUB, 16,952,297 thousand RUB, and 19 148 943 thousand RUB as at 31.12.2020, 31.12.2019, and 31.12.2018, respectively.

In September 2015, the Company issued a surety for a period up to August 2025 to Sberbank PJSC as security for an agreement on opening a credit line for Gazpromneft Shipping LLC. The amount of the surety issued amounted to 6,510,818 thousand RUB, 7,882,934 thousand RUB, and 8,799,009 thousand RUB as at 31.12.2020, 31.12.2019, and 31.12.2018, respectively.

In September 2019, the Company issued sureties until September 2035 to SKF Prirazlomnoye LLC in order to ensure the fulfillment of Gazprom Neft Shelf LLC's obligations. The amount of guarantees issued amounted to 10,887,771 thousand RUB as at 31.12.2020 and 9,656,281 thousand RUB as at 31.12.2019.

In December 2018, the Company issued sureties until December 2026 to Shturman Koshelev LLC in order to ensure the fulfillment of obligations under the lease agreement of Gazpromneft-Shipping LLC. The amount of the surety issued was 4,220,197 thousand RUB as at 31.12.2020 and 3,272,486 thousand RUB as at 31.12.2019.

In November 2016, he Company issued LLC sureties until December 2032 to Shturman Koshelev, Shturman Skuratov LLC, Shturman Shcherbinin LLC in order to ensure the fulfillment of obligations under the lease agreement of LLC Gazpromneft-Shipping. The amount of the surety issued was 35,164,806 thousand RUB as at 31.12.2020.

In September 2020, the Company issued a guarantee to the buyer until 24.09.2025 in order to guarantee the proper fulfillment of obligations of the Seller - Gazpromneft Trading GmbH. The amount of the surety issued was 42,032,643 thousand RUB.

47 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

In November 2020, the Company issued a guarantee to the buyer until November 10, 2023 in order to guarantee the proper fulfillment of obligations of the Seller - Gazpromneft Trading Trading GmbH. The amount of the surety issued amounted to 57,612,149 thousand RUB.

5.21 Related-party transactions

In the course of its ordinary business, the Company makes transactions with the companies which are related parties pursuant to the Russian laws and regulations.

The list of related parties is made on the basis of the nature of relationships between the companies subject to the substance-over-form requirement.

The transaction amounts and balances of payments to and from related parties are shown separately for the following groups of related parties with a different nature of relations with the Company:

Type of authority Description Parent Company In accordance with the powers, shareholders or stakeholders controlling more than 50% of the total number of votes attributable to voting shares (stakes) in the authorized (pooled) capital of the reporting company Subsidiary A company in respect of which the Company has the right to dispose of more than 50% of the votes attributable to voting shares (stakes) in the authorized (pooled) capital of such a company. A company in relation to which there is the right to dispose (directly or through its subsidiaries) more than 20% of the total number of votes attributable to voting shares (stakes) in the authorized (joint) capital of this business company (partnership) or deposits, shares of a given company constituting the authorized (joint) capital and the ability to influence decisions made by such a Company. In particular, a subsidiary of a subsidiary is a subsidiary of the parent company. Affiliate A company in relation to which there is the right to dispose (directly or through its subsidiaries) more than 20% of the total number of votes attributable to voting shares (stakes) in the authorized (joint) capital of this business company (partnership) or deposits, shares of this legal entity constituting the authorized (joint) capital and have a significant impact on the decisions made by such a legal entity. A legal entity and (or) an individual exerts significant influence on another legal entity when it has the opportunity to participate in the decision-making of another legal entity, but does not control it. Significant influence can take place due to participation in the authorized (pooled) capital, provisions of the constituent documents, the concluded agreement, participation in the supervisory board, and other circumstances. Prevailing Persons entitled to control (directly or through their subsidiaries) more than twenty (participating) percent of the total number of votes attributable to voting shares (stakes) in the societies authorized (pooled) capital of the Company. Other Other related parties not listed above.

- Participants of joint activities - Key management personnel: Chief Executive Officer (other persons performing the functions of the single-membered executive body), their deputies, members of the collegial executive body, members of the board of directors - Other related parties.

Material affiliates of Gazprom Neft PJSC are: - Tomskneft VNK and its subsidiaries - Salym Petroleum Development - Messoyakhaneftegaz - SLAVNEFT and its subsidiaries - Arktikgaz

48 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

The main shareholder of the Company is Gazprom. 92.663% of shares of Gazprom Neft is owned by Gazprom.

Related parties in relation to the Company are:

- Enterprises of the Gazprom Neft Group. A complete list of enterprises is given on the Internet resource of Gazprom Neft: www.gazprom-neft.ru.

Table 20 - Information about transactions with related parties

Parent Other related Subsidiaries Affiliates company parties 2020 Sale of crude oil, gas and petroleum - 862,088,553 11,583,698 43,016,499 products Other revenue 3,942 25,202,877 430,665 98,961 Unfinished transactions at the end of the - (103,795,193) (52,553) (59,936) reporting period (including VAT) Transactions unpaid by related parties at the end of the reporting period (including - 67,929,952 952,477 4,560,327 VAT) Purchase of crude oil, gas and petroleum - 590,903,484 206,237,964 22,169,266 products Cost of purchased work, services 3,168,237 90,520,401 44,574,307 8,967,209 Capital procurement - 13,191,638 355,763 79,126 Transactions in progress by related parties at the end of the reporting period (including 222,461 43,251 1,047,684 3,145,300 VAT) [1] Unpaid transactions at the end of the (9,023) (280,727,717) (106,821,935) (864,679) reporting period (including VAT) Loans granted 10,200,000 70,297,715 189,480 893,845 Interest receivable under loans granted 1,778,227 14,245,734 310,218 162,732 Short-term loans granted 53,813,057 160,542,723 - 865,230 Long-term loans granted - 271,819,793 244,214 - Loans received - 613,641,461 4,596,830 - Interest payable on loans received - 4,107,087 13,222 581,774 Interest payable on credits received - - - 1,095,902 Short-term loans received (including - 189,141,803 181,340 16,436,964 interest) Long-term loans received (including - 14,454,277 - - interest) Acquisition of equity investments - 295,621,490 4,966,515 991,525 Dividends receivable - 209,983,720 10,409,371 39,997 Dividends payable 112,594,216 579,785 - - Other expenses - 1,725,204 31,361 2,423,932 Other pending transactions at the end of - 60,367,162 5,274 30,064 the reporting period (including VAT) Other unpaid transactions at the end of the (22,682,155) (3,791,326) (1,353,002) (4,188) reporting period (including VAT) 2019 Sale of crude oil, gas and petroleum - 782,481,179 15,310,473 68,075,099 products Other revenue 4,704 29,580,832 429,823 52,302 Unfinished transactions at the end of the - (4,208,216) (220,252) reporting period (including VAT) Transactions unpaid by related parties at the end of the reporting period (including 77 60,001,352 583,364 6,514,033 VAT) Purchase of crude oil, gas and petroleum - 710,156,766 363,621,157 27,130,958 products Cost of purchased work, services 2,179,332 85,404,434 32,416,772 6,570,660

1 The debt can be repaid in favor of a financial agent under factoring agreements between related parties and non-related party financial agents

49 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Parent Other related Subsidiaries Affiliates company parties Capital purchases - 10,070,747 - 711,677 Transactions in progress by related parties at the end of the reporting period (including 92,821 1,787,477 1,444,859 3,007,698 VAT) Transactions unpaid at the end of the (9,920) (209,497,127) (152,641,233) (793,055) reporting period (including VAT) Loans granted 43,500,000 67,648,138 6,545,491 225,177 Interest receivable on loans granted 2,066,012 25,911,614 190,757 224,235 Short-term loans granted 43,912,487 59,437,009 369,653 4,454,604 Long-term loans granted - 498,027,596 5,422,097 - Loans received - 641,936,250 26,615,082 - Interest payable on loans received - 6,217,802 562,122 87,993 Interest payable on credits received - - - 1,980,648 Short-term loans received (including - (179,967,882) (16,257,875) - interest) Long-term loans received (including - (23,974,194) - (20,000,000) interest) Acquisition of equity investments - 177,239,597 1,299,800 2,500 Dividends receivable - 190,800,452 46,005,878 39,998 Dividends payable 118,355,484 609,451 - - Other expenses - - - 3,875,270 Other pending transactions at the end of 3,216 28,532,372 507,280 47,756 the reporting period (including VAT) Other unpaid transactions at the end of the - (62,132,189) (15) (1,789) reporting period (including VAT)

In the lines "Transactions uncompleted / unpaid by related parties at the end of the reporting period" of Table 20, advances granted and advances received are reflected including VAT.

The line “Other expenses” reflects membership fees and contributions to charity in the amount of 4,180,497 thousand RUB as at 31.12.2020 (3,875,270 thousand RUB, as at 31.12.2019).

Table 21 - Information on cash flows on settlements with related parties

Parent Other related Subsidiaries Affiliates company parties 2020 Cash flows from current operations (3,249,430) (255,857,664) (304,938,152) 11,442,921 Receipts 34,826 635,031,147 11,692,115 45,102,090 Payments (3,284,256) (890,888,811) (316,630,267) (33,659,169) Cash flows from investing activities (8,122,342) (14,137,999) 12,298,546 (768,746) Receipts 45,577,658 330,263,131 19,379,673 249,869 Payments (53,700,000) (344,401,130) (7,081,127) (1,018,615) Cash flows from financial transactions (87,077,801) 588,856,239 (94,130) (26,987,699) Receipts - 612,890,397 4,408,570 44 Payments (87,077,801) (24,034,158) (4,502,700) (26,987,743) 2019 Cash flows from current operations (2,281,820) (705,690,975) (379,685,418) 34,077,257 Receipts 5,035 452,122,416 16,327,967 67,754,261 Payments (2,286,855) (1,157,813,391) (396,013,385) (33,677,004) Cash flows from investing activities (41,846,476) (84,200,416) 38,945,889 (678,152) Receipts 1,653,524 152,145,874 46,791,180 408,232 Payments (43,500,000) (236,346,290) (7,845,291) (1,086,384) Cash flows from financial transactions (211,499,766) 726,283,769 7,488,287 (62,028,635) Receipts - 780,144,738 26,442,837 3,214 Payments (211,499,766) (53,860,969) (18,954,550) (62,031,849)

* Incl. amounts paid to financial agents (not related parties) in accordance with factoring agreements between related parties and financial agents in 2020 – 256,194,994 thousand RUB (230,596,881 thousand RUB in 2019).

50 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Remuneration to key management personnel

The Company includes the members of the Board of Directors and members of the Management Board in the structure of the main management personnel.

Table 22 - Remuneration to key management personnel

Remuneration to key management personnel For 2020 For 2019 Remuneration 2,056,217 2,068,966 Accruals under long-term motivation program 74,077 1,526,869 Total excluding insurance premiums 2,130,294 3,595,835 insurance premiums 297,791 587,456 Total 2,428,085 4,183,291

The Company has a long-term share gains remuneration program, which provides for payments to management for the increase in the value of the Gazprom Neft Group of Companies for shareholders over a certain period.

5.22 Events after the reporting date

In the period from the reporting date to the date of signing of these financial statements, no facts of economic activity were identified that had or may have a significant impact on the financial standing, cash flows or performance of the Company for 2020.

5.23 Information on discontinued operations

In connection with the decision of the Company to sell the assets located in Severo- Samburgsky license area to Meretoyakhaneftegaz LLC, the Company reflected in its balance sheet some non-current assets for sale. The value of such assets as at 31.12.2020 amounted to RUB 840,096 thousand (RUB 4,161,286 thousand as at 31.12.2019).

The expected time when these assets (non-current assets for sale) will be written off is the 1st quarter of 2021.

The before-tax income from sale of non-current assets for sale for 2020 amounted to RUB 105,948 thousand.

The income from sale of non-current assets for sale is shown in line 2340 Other income of the profit and loss account.

5.24 Tax risk management

Russian tax and customs legislation is subject to varying interpretations, and changes, which can occur frequently. The Company management’s interpretation of such legislation, including the allocation of tax payments to the Federal and Regional budgets, as applied to the transactions and activity of Gazprom Neft Group may be challenged by the relevant authorities. The Russian tax authorities may be taking a more assertive position in their interpretation of the tax legislation of the Russian Federation and assessments, and it is possible that approach to the taxation of transactions and activities that was challenged in the past may be challenged in the future. As a result, significant additional taxes, penalties and interest may be assessed. Generally, during a tax audit, fiscal periods remain open to review by the authorities in respect of taxes for the preceding three calendar years. Under certain circumstances reviews by tax authorities may cover longer periods. The years 2018- 2020 are currently open for review. The Company management believes it has adequately provided for any probable losses that might arise from such audits.

51 Notes to the Balance Sheet and Statement of Financial Results of Gazprom Neft PJSC for 2020 (RUB thousand, unless stated otherwise)

Russian legislation on transfer pricing generally complies with the international principles of transfer pricing developed by the Organization for Economic Cooperation and Development (OECD), with certain features. Russian legislation on transfer pricing provides for the possibility of additional tax liabilities for controlled transactions (transactions with related parties and certain types of transactions with non-related parties) if the transaction price does not correspond to the market price. The Company Management has implemented an internal control system in order to comply with the requirements of the current legislation on transfer pricing.

Tax liabilities arising from controlled transactions are determined on the basis of the actual prices of such transactions. There is a possibility that as the practice of applying transfer pricing rules develops further, these prices may be challenged. The impact of such developments cannot be reliably estimated, but the Company Management believes that the risks involved should not have a material impact on its financial position and results of the Company’s operations.

5.25 Financial risk management

Information about the Company’s financial risk management is not shown in these financial statements because the Company’s Management analyses such risks only at the Gazprom Neft Group level. Information about the financial risk management in the Gazprom Neft Group is provided in its annual consolidated financial statements.

Chief Executive Officer A.V. Dyukov

Chief Accountant O.N. Makretskaya

17 February 2021

Seal: Public Joint Stock Company Gazprom Neft Gazprom Neft PJSC INN 5504036333 OGRN 1025501701686

52