ANNUAL REPORT 2020 2 EASTSIB HOLDING / ANNUAL REPORT 2020 3

Contents

Address from the Chairman of the Board of Directors...... 3 Address from the Chairman Summary...... 4 Advantages...... 4 of the Board of Directors Major Events...... 5 Future Plans...... 5 Development...... 5 Board of Directors...... 6 Advisory Board...... 7 Dear shareholders and investors! Structure of Eastsib Holding...... 8 Frederick Matthew Profiled Committees...... 9 Thomas Ponsonby The Eastsib Holding Group of Companies achieved a positive financial result Project Group OIL...... 10 in 2020 and prepared to implement some significant promising projects, Licence fund...... 12 despite low oil prices, the changing tax environment and restrictions on oil Geological exploration...... 14 production. Drilling...... 16 RNG JSC is one of the key companies of the holding engaged in the Production...... 17 development of the Eastern blocks of the Srednebotuobinsky oil and gas Oil Services...... 18 condensate field (EB SB OGCF). By the beginning of 2020, it had produced the first million tons of crude oil. Project Group APG USE...... 22 Re-injection of gas into the reservoir...... 22 In December, a new gas and condensate field was opened at the Murbaysky licence area. The holding’s team proposed to name the field after Ivan Energy complex...... 23 Menshikov, the man who led the development of the Central, Eastern Gas-engine fuel...... 23 Blocks and the Kurung section of the SB OGCF, in memory of his services to Project Group LOGISTICS...... 25 the oil and gas industry and the republic. Ivan Menshikov passed away in Purchase and storage...... 26 2019. For his many years of work, he was awarded the titles of “Honorary Transport...... 27 Oilman” and “Excellent Underground Surveyor”, and for his contribution to the economy of the region, he was awarded the title of “Honoured Worker Project Group CONSTRUCTION...... 29 of the National Economy of the Republic of (Yakutia)”. Engineering and survey work...... 30 Thanks to the work of geologists, the oil and gas reserves at the holding’s Infrastructure projects...... 31 fields have increased, and its own seismic crew has held a second field Information Technology...... 33 season. In addition to the search and production of hydrocarbons, we are Automation...... 34 actively developing construction and logistics. In the accounting year, the Digitalisation...... 35 Eastsib Holding Group of Companies completed the construction of two highways on the “” federal highway, which connected the Staff...... 37 Region with the capital of Yakutia. Number, composition, regional distribution...... 38 High standards of corporate governance are consistently maintained. In Staff make up by category...... 39 the first half of the year, an Advisory Board headed by Klaus Mangold was Staff make up by age...... 39 established. The main task of the Advisory Board is to ensure the most Social Responsibility...... 41 effective and consistent management of the holding and its structures. Industrial safety...... 42 In 2020, we had a long journey, where we encountered many difficulties. Assistance to the healthcare system...... 42 The Covid-19 pandemic has become an unprecedented challenge and a Solid waste disposal...... 43 test of strength for everyone. Eastsib Holding took all necessary measures Pollution prevention...... 44 to protect the health of its employees, promptly moved some of the staff Biodiversity conservation...... 44 to remote operation mode and conducted a set of preventive activities. In addition, the holding’s companies helped the healthcare system of the Quarry reclamation...... 44 Republic of Sakha (Yakutia). Fire prevention measures...... 45 Educational and outreach projects...... 46 Eastsib Holding continues to make a significant contribution to the socio- Helping local communities...... 47 economic development of the region. At the end of 2020, 5.66 billion rubles were transferred to the budgets of all levels and extra-budgetary funds in Membership in professional associations...... 47 the form of taxes and obligatory payments. Partners...... 48 I am proud to say that, despite all the obstacles, Eastsib Holding remains Basic Terms...... 50 true to its principles: maintaining the financial stability and efficiency of its constituent companies, ensuring their long-term development,

Cover photo: conscientiously fulfilling all obligations and carrying out production The bridge over the Malaya Botuobuya River, built by Eastsib Holding Group of Companies activities without harming the environment. The Eastsib Holding Group of in the Republic of Sakha (Yakutia), provides year-round travel on the federal highway. Companies is steadily developing and confidently moving forward. 4 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 5

Key quantitative Summary Major events indicators of 2020 which Eastsib Holding includes exploration, operational and service companies • Accumulated oil production at the EB SB OGCF exceeded 1mil tons characterise the operating in the Russian Federation. • RNG JSC was included in the list of backbone enterprises of the Russian activities of Eastsib Eastsib Holding Group of Companies is represented in the following fields: fuel and energy complex Holding’s subsidiaries • Oil and gas production • RNG Procurement LLC acquired a warehouse complex in • Electric power • Seismics • A promising gas condensate field was discovered, which was named after I. M. Menshikov REVENUE • Preparation and sale of associated petroleum gas (APG) • Two bridges were built in the Mirninsky and Suntarsky districts of the • Logistics Republic of Sakha (Yakutia): the bridge over the Malaya Botuobuya • Construction River and the bridge crossing over the Sasar-Yuryakh River. Both bil rub. facilities are included in the federal programme for the construction 26.18 ($ 353.78 mil) The goal of Eastsib Holding is to maximise the value of assets, to support of the Vilyuy highway the effective activities of the group’s companies with a well-established production safety system that does not cause environmental damage. • A solid waste landfill was built at the EB SB OGCF

Tasks of Eastsib Holding: • Engineering competencies were consolidated TAXES AND OBLIGATORY • Improving operational efficiency • The APG re-injection project has been developed PAYMENTS TO BUDGETS OF ALL LEVELS • Forming development prospects, including expanding the project • The project of pilot operation of the Yuzhno-Syuldyukarsky licence portfolio area has been prepared • Improving drilling efficiency using new technologies • A programme for generating electricity using APG has been • Developing in-house production and service divisions to reduce reliance implemented 5.66 bil rub. on external contractors ($ 76.49 mil) • Environmental conservation • Developing human capital and increasing employment in the Republic of Sakha (Yakutia) Future Plans PAYMENTS UNDER CONTRACTS IN FAVOUR • Harmonious management of the economic, environmental and social • Further development of the EB SB OGCF aspects of operational activities OF STATE CONTROLLED • Geological exploration and infrastructure design at other licenced COMPANIES Eastsib Holding is increasing the capitalisation and investment sites attractiveness of its constituent companies. The growth of performance • Connecting the second main oil pipeline of Taas-Yuryakh indicators is the main criterion of the long-term strategy. Neftegazodobycha LLC to increase both daily and annual oil production 5.5 bil rub. The priority vector of Eastsib Holding in 2019-2020 was to ensure the • Developing the construction and logistics subdivisions of RNG JSC ($ 74.32 mil) stable development of one of the key companies, RNG JSC. The company is developing the EB SB OGCF. RNG JSC is included in the list of backbone • Introducing new technological solutions and modernising business processes enterprises of the Russian fuel and energy complex, compiled by the Ministry of Energy, and has a significant impact on the development of the • Human resource development Capital Republic of Sakha (Yakutia). • Further participation in the socio-economic development of the Republic of Sakha (Yakutia) investments in 2021 Advantages On the Eastern blocks • Licence for producing hydrocarbons at the EB SB OGCF, one of the Development largest in Eastern Taking into account the continuous growth of oil consumption in the Asia - 8 873 • The close proximity of the main Eastern Siberia - Pacific Ocean oil Pacific region, Eastsib Holding considers oil export through the Eastern mil rub. w/o VAT ($ 120 mil) pipeline and the gas pipeline Siberia – Pacific Ocean (ESPO) pipeline to be the key and most attractive channel for the sale of hydrocarbons from an economic perspective. On the neighbouring areas • Highly qualified specialists with experience in the oil and gas sector, project financing, as well as in the field of state regulation Since the launch of the ESPO project, the eponymous oil grade has received worldwide recognition and now has every chance to become a • Introduction and use of the latest technologies 2 969 marker grade, thereby ensuring effective sales. mil rub. w/o VAT ($ 40.12 mil) 6 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 7

Board of Directors Advisory Board

Biographical information: In the first half of 2020, an Advisory Board was established at Eastsib • Born in 1958 Holding, headed by Klaus Mangold. • Studied Physics at Cardiff University and Oilfield Engineering at Imperial College London (UK) The main task of the Advisory Board is effective and consistent management of the holding, providing professional advice to the management. • Holder of the official hereditary title of Lord • Member of the House of Lords of Great Britain

FREDERICK MATTHEW Positions held: THOMAS PONSONBY • 1981–1984: Data Engineer at Geoservices Chairman of the Board • 1984–1986: Oil Engineer at Charterhouse Petroleum of Directors • 1986–1988: Oil Engineer at Petrofina • 1988–1989: Senior Commercial Engineer at Texas Eastern • 1989–1992: Senior oil Engineer at LASMO PLC • 1997–2001: Commissioner of the Council of Europe • 1994–1998: Chief Engineer at Phibro Energy • 1998–2002: Executive Chairman at Euroinvest LTD KLAUS MANGOLD • 2001–2005: Independent Director at Acorn Oil & Gas LTD Chairman of the Advisory Board • 2003–2008: Independent Director at Emerald Energy PLC • 2005–2009: Independent Director at Fairfield Energy LTD • 2005–2011: Chairman of the Board of Directors and CEO of Rosehill Energy PLC Biographical information: • 2010: Chairman of the Board of Directors at Aladdin Oil & Gas AS • Born in 1943 • 2001–2010: Commissioner of the Organisation for Security and Cooperation in • Studied Law and Economics at the universities of Munich, Geneva, Paris, London, Europe Heidelberg and Mainz • 2012–2013: Independent Director of Yakut Energy LTD (formerly the main shareholder of Taas-Yuryakh Neftegazodobycha LLC) • Honorary Senator of the University of Freiburg • From 2014: Chairman of the Board of Directors of RNG JSC • Honorary Consul of the Russian Federation in Baden-Wurttemberg • Commander of the Legion of Honour

Positions held: Biographical information: • 1983–1990: Chairman and Member of the Management Board of Rhodia AG • Born in 1952 • 1991–1994: Chairman of the Executive Board of Quelle AG • Studied Law at the University of North London (UK) • Barrister, member of the Middle Temple Law Chamber Middle Temple (UK) • 1995–2003: Chairman of the Executive Board of DaimlerChrysler Services AG ANTONIS • 2000–2010: Chairman of the German Committee for Economic Relations in Eastern PASCHALIDES Positions held: Europe • 1980–2007: Founder and manager of the law firm Eliades & Paschalides Member of the Board • 2003: Chairman of Mangold Consulting GmbH • 2007–2008: Senior partner and director of the energy law department at Antonis of Directors Paschalides & Co LLC • 2003–2013: member of the Supervisory Board of Metro AG • 2008–2011: Minister of Energy, Trade, Industry and Tourism of Cyprus • 2004–2020: Chairman of the Supervisory Board of Rothschild in and the CIS • 2011: Managing director of the law firm Antonis Paschalides & Co LLC • 2007–2019: member of the Board of Directors of Alstom SA (France) • 2008–2019: Chairman of the Supervisory Board of Rothschild GmbH (Germany) • 2009–2019: member of the Supervisory Board of Continental AG, member of the Supervisory Board Alstom AG (Germany) • 2010–2019: Chairman of the Supervisory Board of TUI AG • 2011–2017: member of the World Advisory Council of Ernst & Young (USA) Biographical information: • Born in 1982 • 2013–2016: member of the Supervisory Board of Swarco AG (Austria) CONSTANTIA • Studied Business Management at the University of Sunderland (UK) • 2018: Chairman of the Supervisory Board of Knorr-Bremse AG CHRISTODOULOU Positions held: Member of the Board • 2010–2013: Member of the Board of Directors of Finfund Limited, which at the of Directors time was one of the shareholders of Taas-Yuryakh Neftegazodobycha LLC • 2013: Participated in the successful sale of the share of Taas-Yuryakh Neftegazodobycha LLC to NK Rosneft PJSC 8 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 9

Structure Profiled Committees

Eastsib Holding of Eastsib Holding Managing the multi-level structure of the Eastsib Holding Group of Companies requires a highly effective system of corporate control. The holding has a clear organisational hierarchy with the division of responsibilities for interaction, management and audit. Profiled Committees have been established under the Board of Directors of one of the key companies of Eastsib Holding – RNG JSC. RNG JSC Investment Committee Committee Structure: Exploration and production of hydrocarbons Committee Chairman Committee Members Bondarenko Rakitin Vladimir Sergeevich Aleksander Valeryevich Chief Executive Officer Biographical Information: Perov Denis Dmitrievich RNG Holding LLC RNG Gas LLC • Born in 1972. Head of Economic Analytics • Studied International Economic Relations in Saint Department Management of the holding companies Gas trading Petersburg State University of Economics and Finance Uskov Aleksander Nikolayevich • Completed a Private Equity Course at London Business School Deputy CEO & Head of Capital • PhD in Law Sciences Construction Department • Holds CIIA Diploma (Certified International Investment Analyst) Eastsib Positions held: Yakimov Yury Anatolyevich Deputy CEO & Head of Well Drilling RNG Energo LLC • 1991–1993: Minority Shareholder and Director of Modern TV and Radio Geologorazvedka LLC Department Exploration and production of hydrocarbons Infrastructure (electric and telecom) • 1994–1998: Managing Director, Head of Department of Monetary and Financial Operations at the St. Petersburg Branch of the Imperial Bank Grechikho Pavel Anatolyevich • 2005–2010: Member of the Board of Directors at PRIME-TASS Business Deputy CEO & Chief Geologist News Agency • 2000–2014: First Vice President and Deputy Chairman of the Management SyuldyukarNefteGaz Board at Evrofinance Mosnarbank JSCB RNG Procurement LLC • 2008–2013: Member of the Board of Directors, Chairman of the Board of LLC Directors at Taas-Yuryakh Neftegazodobycha LLC Exploration and production of hydrocarbons Logistics • 2008–2016: Partner at Wragge Lawrence Graham CIS LLP • From 2016: Chairman of the Investment Committee of the Board of Directors of RNG JSC Monulakh Geologorazvedka LLC VostSibSpetsMontazh LLC Audit Committee Hydrocarbon exploration Construction Committee Structure: Committee Chairman Committee Members Kolgomorov Vasiliy Vasilyevich Vilochkin Yury Mikhailovich Biographical Information: Member of the Board of Directors • Born in 1943 Alferenko Gennady Petrovich VMCH • Graduated from the Sverdlovsk Institute of Law YakutStroyProekt LLC Member of the Board of Directors Geologorazvedka LLC • Distinguished Lawyer of the Republic of Sakha (Yakutia) and Exploration and production of hydrocarbons Construction Russia • Honorary Employee of the Investigative Committee of the Russian Federation • Honorary Employee of the Prosecutor’s Office of the Russian Federation • Awarded the Order of Honour Positions held: TKN Syuldyukar • 1990–1994: Prosecutor of the Republic of Sakha (Yakutia) Geologorazvedka LLC • 1994–2004: Deputy Prosecutor General of the Russian Federation Geologorazvedka LLC • 2000–2004 : Head of the Main Investigative Department at the Russian Exploration and production of hydrocarbons Seismics Federation Prosecutor General’s Office • 2004–2006: Advisor to the Prosecutor General of the Russian Federation • 2005–2008: Advisor to the President-Chairman of the Management Board of VTB Bank PJSC • 2009-2010: Advisor to the CEO of Rosvino LLC Murbay YakutVzryv LLC • 2010-2015: Advisor to the President-Chairman of the Management Board Geologorazvedka LLC of Evrofinance Mosnarbank JSCB Exploration and production of hydrocarbons Mining operations • From 2015: Member of the Board of Directors of RNG JSC • From 2020: Chairman of the Auditing Committee of RNG PROJECT GROUP OIL 12 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 13

Licence fund

Suldyukar Nyurbinsky "Rosneft" r. Vilyuy lgyattinsky Svetly "Rosneft" r. Vilyuy Chernyshevsky Arylakh

Bakhchinsky "Surgutneftegas" West Kempendyaysky “ USRF* Bagdynsky km2 "Surgutneftegas" 26 469.8 “Live diamonds of Yakutia” Mirny Total licence areas Stanahsky Kuyabylakhsky "Surgutneftegas" Almaznyi r. Vilyuy Tuobuya Irelyachsky "Irelyakhneft"

r. Ulahan-Botuobuya Kempendyaysky Mirninsky Srednevilyuchansky USRF Kubalahsky "INK" Zaria "Surgutneftegas" Suntarsky "Rosneft" "INK" Yuryakhsky Tektyuysky "Surgutneftegas" mil t "Alrosa-Gas" Hoptolokhsky Namansky 62.889 Tas-Yuryakhskoe Vilyuysko- “Tuymadaneftegaz” USRF The North Blocks eld Dzherbinsky Extractable oil reserves "Alrosa-Gas" "Gazprom" "Surgutneftegas" Verhne- Tas-Yuryakh dzhunkunsky Iktekhsky (excluding resources) Dzhunkunsky Verhnevilyuchanskoe eld "INK" "INK" "Gazprom" "INK" Verkhnebiryuk “ Ergezheysky “Siberian oil company” The Central Blocks "Lensk-Gas" "Taas-Yuryakh “ Neftegazodobycha" “ Mukhtinsky The Eastern Bloсks “Tuymadaneftegaz” Srednebiryuk “ Ulugursky South- "Lensk-Gas" "Rosneft" 3 dzhunkunsky bil m "INK" Otradninskoe eld GDK 74.481 Kurungsky "Lensk-Gas" "Lensk Neft" Srednelensky Marha "Taas-Yuryakh "Rosneft" Extractable oil reserves Byuksky Neftegazodobycha" Hotogo-Murbaysky “ "INK" "VSNK" Nizhnegerbinsky (excluding resources) "Rosneft" “Surgutneftegas” Borulahsky Kaderginsky USRF Urinsky USRF “Tuymadaneftegaz” "VSNK" “Tuymadaneftegaz”

Chayandinskoye “Power of Siberia”1420 mm gas pipeline Lensk eld Okleminsk “ESPO” oil pipeline Cheredeysky The main directions of the resource "Gazprom" r. Horonohsky 1200 mm Nyuya-Iuzhnaia “Siberian oil company” base development strategy of Eastsib "Surgutneftegas" USRF Holding are conducting geological Cheredey “ exploration in new search zones, studying and preparing for production. Eastsib Holding Group of Companies Irkutsk region on the territory of the Republic r. Lena of Sakha (Yakutia) holds licences Macha Olekminsky for the development of the EB "Rosneft" SB OGCF, Yuzhno-Syuldyukarsky, KuduKuyol Monulakhsky, Murbaysky, Betinchinsky, Verkhnemarkhachansky and Tokkinsky licence areas, as well as Peledui the Kiryanovsky licence area on the territory of the Taimyr Dolgano-Nenets Dikimda Vitim Municipal District of . The total licence areas “ of Eastsib Holding in Yakutia are 26 469.8 km2.

Chara

* - unallocated subsoil reserve fund 14 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 15

Geological exploration

The development of the resource base is largely ensured by the improvement of geological “ exploration technologies and implementing new exploration projects.

1 3 At the Murbaysky licence area, located on the territory of the Lensky Exploration work on the site was carried out by Syuldyukar district of the Republic of Sakha (Yakutia), 90 km north of Lensk and 120 Geologorazvedka LLC, by means of the company’s own high-class seismic km southeast of Mirny, in 2020, a promising gas condensate field was survey party. The 135 employees of the company are provided with the discovered jointly by Murbay Geologorazvedka LLC and RNG JSC, named latest equipment (the 508XT telemetry system for recording seismic data after I. M. Menshikov. For the I. M. Menshikov field, the estimates for the and five NOMAD-65 seismic vibration units of the French company Sercel initial geological / recoverable reserves of gas are for category C1-4, 219/3 are used for conducting ground surveys) and are ready to perform the 720 million m3, for category C2-23, 886/20, 611 million m3. assigned geological tasks at a high professional level in the amount of at least 500 km2 for the winter field season. In 2020, at the Yuzhno-Syuldyukarsky site, located in the Mirny district of the Republic of Sakha (Yakutia), 10 km west of the city of Mirny, work In the future, Eastsib Holding plans to use “green seismic exploration” in was completed on the operational calculation of reserves and on the the region. The use of the new “green seismic” technology will increase preparation of a project for the trial operation of the Syuldyukarskoye field. productivity and improve the quality of the received data, without impacting Both documents were successfully defended in the State Commission on the environment. Mineral Reserves (GKZ) and the Central Commission for the Development Schlumberger, a partner of Eastsib Holding, provided significant assistance of Mineral Deposits (CCD) of the Federal Agency for Subsoil Use. in geological exploration at the Syuldyukarskoye field in 2020. Together, a unique Pulsar instrument based on the co - logging method was used to study the target and prospective horizons, as well as work on multi- stage proppant-acid hydraulic fracturing. In the future, this will allow for an intensification of the inflow and increase the profitability of production, which is especially important for fields with difficult-to-recover reserves.

Photos: 1. Seismic vibration system NOMAD-65 NEO 2. Shift camp on the Yuzhno- Syuldyukarsky LA 3. Vibration source NOMAD-65 NEO 4. Workplace of geophysicists- 2 4 operators 16 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 17

Drilling Production

In 2020, 33 wells were drilled at the licence areas of Eastsib Holding, of which there are 29 exploration wells and 1 exploration well at the EB SB OGCF and 2 exploration wells and 1 HLW at other sites. Exploration wells at the EB SB OGCF included 21 wells without a pilot trunk, 4 wells with a pilot, 1 fishbone with a pilot, 1 fishbone without a pilot and 2 HLW. One of the key tasks of the technological development of Drilling and development of production wells are carried out using the the Eastsib Holding Group of latest technologies in cooperation with the largest international oilfield 1 060 mil t “ Companies is increasing the service companies, Baker Hughes, Schlumberger, Halliburton and National Oil production in 2020 effectiveness of drilling. Oilwell Varco.

EB SB OGCF Exploration (29): – 21 wells without pilot; – 4 wells with pilot; – 1 fishbone with pilot; > 33 km – 1 fishbone without pilot; – 2 HLW Length of drilling production wells using the fishbone method Exploration projects (1): – 1 exploration well

Yuzhno-Syuldyukarsky licence area – 1 HLW; – 1 exploration well 102 wells Murbaysky licence area Current well stock – 1 exploration well

Total wells drilled as of 01.01.2021

Name Total Total hydrocarbon reserves for Eastsib Holding Eastern Blocks SB OGCF 121 Group of Companies (including production in 2020) Without pilot 74 With pilot 21 EASTSIB HOLDING Fishbone 6 Units А+В1+C1 В2+C2 А+В1+В2 +C1+C2 HLW 10 Exploration wells 10 Oil reserves

Yuzhno-Syuldyukarsky LA 5 Geological th. t 94 049 387 653 481 702 Search and exploration 4 Extractable th. t 25 338 37 551 62 889 HLW 1 Murbaysky LA 3 Gas reserves Search and exploration 3 Geological mil m3 16 141 67 437 83 778 Monulakhsky LA 1 Extractable mil m3 14 219 60 262 74 481 Search and exploration 1 Condensate reserves Betinchinsky LA 2 Search and exploration 2 Geological th. t 286 795 1081

TOTAL 132 Extractable th. t 213 602 815 18 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 19

Oil Services In 2019-2020, Schlumberger performed an open-hole reservoir test using a two-packer MDT system with deep sampling, and assessed the energy state of the reservoir using pressure measurements at 30 points. The obtained Since 2014, the following companies have been providing services in the data on reservoir pressure and selected deep fluid field of well construction: Halliburton, Schlumberger, Baker Hughes and samples allowed to develop an optimal strategy for the Eastsib Holding Group of NOV. When drilling horizontal production wells, not only are standard LWD exploitation of deposits in the area of the 7th and 11th Companies cooperates with logging systems used, but also advanced high-tech services that allow the well pads of the EB. leading foreign oilfield service remote mapping of reservoir boundaries, measuring the properties and “ companies, uses modern nature of the occurrence of productive strata using the nuclear magnetic When selecting the core, the Eastsib Holding Group of software products and high-tech method, as well as density and gamma imagers. Companies has experience in using the world’s leading equipment which is optimally techniques. So, together with Halliburton, the Glider suited for the development of In 2019-2020, together with Schlumberger, the Geoflex technology for in - system was implemented, which ensured the safety of subsurface in Yakutia. Thanks depth geological study of the mineralogical composition of the sludge of sampling and protection of the core from the penetration to the interaction with leaders the Botuobinsky horizon was implemented at three production wells of of drilling mud. of the oilfield services market, the EB SB OGCF, which allowed for the lithotyping of sediments and the the Eastsib Holding team has identification of zones with the best reservoir properties during drilling in In 2020, several key geological exploration projects were unique engineering solutions. order to increase the efficiency of horizontal well drilling. launched at the Syuldyukarskoye and Otradninskoye fields Expanding the boundaries of together with Schlumberger. These include the additional its capabilities, constantly In 2019, Baker Hughes performed an in-depth analysis of the seismic- study of target and prospective horizons with the unique developing technological geological and hydrodynamic models of the EB SB OGCF, as well as a Pulsar instrument based on the CO-logging method. In cooperation, Eastsib Holding subsequent analysis of the state of development of the field. In the course addition, multi-stage proppant-acid hydraulic fracturing brings its contribution to the of the work, a two-level reservoir pressure support system was modelled is being carried out to improve oil recovery. This type industry. with water injection into the oil rim and gas re-injection into the gas cap. of inflow intensification will allow for an increase in the Based on the project, in 2020, promising areas for drilling multi-hole wells profitability of production in the future, which is especially were localised and the well stock of the reservoir pressure support system important for places with hard-to-recover reserves. was revised. In parallel with Baker Hughes, a project on the processing In the field of geological exploration, the Eastsib Holding Group of Companies and interpretation of micro seismic monitoring data has has extensive experience in the application of high-tech GIS complexes in been launched, which aims to improve the efficiency Drilling horizontal wells pilot and exploration wells. In 2020, the geological structure of the Osinsky of multi-stage hydraulic fracturing by determining the using the fishbone method and Yuryakhsky prospect horizons was refined, the reservoir properties direction and width of fractured fractures. and the nature of the reservoir rock saturation were evaluated, and the In 2020 in the field of development, together with geologic structure of the Osinsky and Yuryakhsky prospect horizons were Schlumberger, a project was prepared to calculate the This technology involves drilling multi-barrel evaluated as a result of the Schlumberger GIS based on high-resolution reverse injection of APG produced at the EB SB OGCF, (multi-hole) wells with a special trajectory, in resistance and acoustics imagers (FMI and SonicScanner technologies), as which significantly reduced the cost of gas utilisation, as which numerous segments branch off from a well as nuclear-magnetic method studies (CMR technology). well as maintaining the reservoir pressure in the gas cap. single horizontal shaft in different directions. So a structure is formed that resembles the shape of a fish skeleton. The peculiarity of the technology is that the Technologies applied in 2020: direction of horizontal wells significantly increases the coverage of oil-saturated areas of • GeoFlex Schlumberger technology was applied at wells 7100, 6300 and 6012 of the the reservoir compared to a traditional horizontal Srednebotuobinskoye field and a study of the mineralogical composition of the target Botuobinsky well. Fishbone also requires less drilling work horizon was carried out than the construction of a horizontal well. This technology allows for the increase of the flow • Conducting hi-tech WL in well 6903 to clarify the geological structure of the Osinsky and Yuryakhsky rate of hydrocarbons from the productive section horizons of the well.

• Conducting MDT Schlumberger in well 7000 to gather data on reservoir pressure and properties of The construction of six multi - hole horizontal deep fluid samples wells according to this method with a design of three to eight horizontal wells has been • Implementing the Halliburton Glider system at the 512P well to protect the core from drilling mud completed. Total penetration is 33,322 sq. m. The leading service companies participating • Carrying out Pulsar CO-logging in wells 3P and 15P of the Yuzhno-Syuldyukarskoye field and in wells in the implementation of projects for drilling 314-5 of the Otradninskoye field for an additional study of target horizons in the cased chamber such wells are Baker Hughes, Schlumberger, Halliburton and National Oilwell Varco. • Multi-stage proppant-acid hydraulic fracturing in well 1P-HLW for enhanced oil recovery PROJECT GROUP APG USE 22 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 23

The programme for generating electricity using APG will increase the level of “ the efficient use of APG, and in the future, abandon the purchase of electricity.

Eastsib Holding considers the efficient use of APG as an important part not only of “ the technological and economic agenda, but also of the reputational component of the 1 responsibility to society in terms A project is underway to of environmental protection. convert the fleet to gas Reverse injection of gas into the reservoir engines. Vehicles running In 2020, the project for the construction of a complex of facilities for the “ on traditional fuel are being converted to use re-injection of APG into the reservoir commenced at the EB SB OGCF. 4 compressed natural gas. This The complex of facilities is planned to be put into operation by the end transition is due to of 2021. Within the framework of the gas investment programme, the Energy сomplex both economic reasons following infrastructure is to be created: and the environmental make • construction of a complex gas treatment plant with a gas compressor Back in 2019, a 5 MW power complex was put into operation at the EB SB up of “blue fuel”. station with a capacity of 0.65 billion m3 a year for gas injection and an OGCF. The APG produced at the field is used to generate electricity to meet the field’s own needs. outlet pressure of 250 kg/cm2; Reverse gas injection is one of • construction of high-pressure gas pipelines to gas-fired wells; The second phase of the project will be launched in 2021. After the the ways to maintain reservoir • construction of new wells and conversion of existing wells for gas expansion of the power complex capacity, one of the key companies of the pressure in the oil fields. This injection into the reservoir. holding, RNG JSC, will be able to stop purchasing electricity. “ method allows for the rational utilisation of associated The project involves more than 40 local companies and suppliers of Following on from RNG JSC, other Eastsib Holding companies also plan petroleum gas. equipment, materials and measuring devices. The Russian subsidiary of the to provide their own sources of electricity to the licence areas being developed. For example, Syuldyukarneftegaz LLC has already conducted Chinese company Jereh, one of the leaders in the production of integrated an expert examination of the project documentation and engineering complexes of oil and gas equipment for the efficient and environmentally surveys and received a positive conclusion. Construction and installation safe development of oil fields, was chosen as the supplier of the gas works are planned for the summer of 2021. compression and injection unit. The compressors are manufactured by the leading American mechanical engineering companies Ariel and INNIO (Waukesha trademark, formerly General Electric). Gas engine fuel

Expanding the gas-engine fleet is primarily carried out by the planned 5 replacement of cars that have run out of life with gas-engine equipment of domestic and Chinese production. Instead of diesel fuel, compressed gas (compressed to 200 atm.) will be used, which has a greater frost resistance which is especially important at critically low winter temperatures in Yakutia. Eastsib Holding has purchased a fleet of Shacman X3000 CNG gas tractor units in China, running on combined natural gas, with an average consumption of 45 cubic meters per 100 km. Part of the diesel-fueled fleet has been switched to dual-fuel operation, with gas consumption accounting for 35% of fuel consumption. The use of eco-friendly fuel is supported by the authorities of Yakutia. The Photos: region plans to expand the network of gas filling stations. In 2020, the motor 1. 3D model of the gas re- injection project at the RNG rally “From St. Petersburg to Mirny on natural gas” took place which was JSC field in Yakutia attended by representatives of Eastsib Holding. The campaign, initiated by 2-3. Unloading of equipment the Government of the Republic, demonstrated the advantages of gas fuel for gas re-injection in the port of Vladivostok and allowed us to obtain up-to-date statistics that will help improve the gas 4. Energy complex filling infrastructure of the republic. 2 3 5. Shacman F3000 truck PROJECT GROUP LOGISTICS 26 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 27

Eastsib Holding Group of Companies is successfully 2 188 th. m developing its own fleet “ in the Lena River basin, Area of the three storage bases consisting of five tug-barges. The goal for 2021 is to increase the load capacity. 1 2 Purchase and storage With the commissioning of the base in Lensk, cargo is sent directly to the work sites at the fields, bypassing the central warehouse of the field The logistics service of Eastsib Holding Group of Companies is responsible base, which increases the speed and efficiency of logistics operations. for the organisation of procurement, transportation and storage of goods The key task of the logistics direction for the near future is developing the 39.6 th. t in the holding, and is represented by RNG Procurement LLC. infrastructure and fleet in the Lena River basin. Weight of cargo delivered Every year, more than 50,000 units of goods are purchased for at least The warehouse infrastructure includes a base in Ust-Kut with an area in 2020 5 billion rubles. The employees of RNG Procurement have the experience of 3 hectares with a warm warehouse of 1000 m2 with a reconstructed and expertise necessary for implementing complex projects related to the railway entrance with a length of 450 meters; a base in Lensk with an area purchase of oversized and non-standard cargo, as well as for their delivery of 7 hectares of hard surface with three hangars with an area of 1600 m2 to remote and hard-to-reach areas and the company has Chinese-speaking and a berth on the Lena River, which is equipped with a floating crane PK- specialists. 810 with a load capacity of 6 tons and a base of NPU-100 (near the RNG Procurement is implementing procurement procedures based on the of Tas-Yuryakh) with an area of 8.8 hectares. Yakutia is a region with recommendations of the Chartered Institute of Procurement & Supply. difficult climatic conditions. The Institute’s recommendations are developed in accordance with the Transportation Its remoteness from the consultations of more than 3,000 specialists and scientists from different “ production centres requires the In 2020, the total volume of cargo transported on winter roads amounted fields. use of non-standard logistics to 10,413 th. tons, of which 2,214 th. tons were occupied by fuel, and 8,199 solutions. Eastsib Holding Group Transparency of procurement plays a significant role. Eastsib Holding th. tons accounted for equipment and other inventory. 435 vehicles were of Companies comprehensively Group of Companies works only with proven manufacturers, purchasing involved in the transportation. uses road and river transport materials and equipment from leading Russian and foreign manufacturers. which allows for building The choice in favour of foreign companies is made if there is no competitive The main load fell on the river fleet, consisting of floating vessels, five the most optimal routes for offer on the Russian market. Domestic manufacturers almost completely tugboats with barges of 200 tons, 200 tons and 500 tons, as well as two supplying equipment, allowing provide Eastsib Holding facilities with construction materials and ferry barges of 100 tons each. the holding to become and equipment. During the navigation period, 29,184 th. tons of cargo were delivered, independent transport and Among foreign suppliers are predominantly high-tech companies which including 8,749 th. tons of fuel and 20,453 th. tons of other cargo. logistics operator. produce instrumentation, automation, control systems, geodesic, seismic The work of RNG Procurement LLC at the end of the navigation season was equipment and construction equipment. The key foreign partners are noted by the company’s partners. One of the oldest logistics operators of Emerson, AUMA, Endress + Hauser, Yokogawa Electric, Sercel, Sulzer the Irkutsk region and the Republic of Sakha (Yakutia), Rechservis LLC, sent Chemtech, Trimble, MAN, Mercedes, Komatsu, Volvo, Hitachi, Waukesha, a letter of thanks to the company with appreciation for cooperation and Ariel, Benninghoven. high professionalism. Open competitions are held both by sending direct requests to manufacturers, and by placing information on the company’s websites and electronic trading platforms. The main criteria for choosing a counterparty are the reputation of the manufacturer and the reliability of the supplied equipment. In 2020, an important stage in the work of the structure was the acquisition of a warehouse complex in Lensk. The location of the complex near the

river port and the oil depot provides the division with independence in the Photos: acceptance, storage and transport of cargo in the Lena basin. 1. Warehouse base in Lensk 2. Floating crane PK-810 3 3. Unloading barge in the port of Lensk PROJECT GROUP CONSTRUCTION 30 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 31

4 mil $ 217,3 m Investments in the purchase Length of road bridges built of a complex of road in 2020 construction equipment 1 3 Engineering and survey work Infrastructure projects

Eastsib Holding Group of Companies invested $ 4 million in the acquisition In 2020, VostSibSpetsMontazh LLC carried out work on the arrangement of a complex of road construction equipment. The technology for a long- of 6 well pads at the fields and built 32,622 km of technological driveways lasting road surface which is most suitable for the conditions of Yakutia and two road bridges with a length of 25.5 m and 191.8 m, respectively. was mastered. Road quality compliance with local climatic conditions is The area of territory which has obtained year-round communication with ensured using the purchased relocatable asphalt plant of the German federal highways due to these driveways and structures is more than company Benninghoven, as well as multi-stage construction control. 12 housand hectares. In 2020, Yakutstroyproekt LLC carried out major repairs of roads and 111 km YakutStroyProekt LLC specialises in engineering and environmental technological driveways with a length of 178.5 km, and VostSibSpetsMontazh Kilometres of technological research and is engaged in the construction and commissioning of LLC carried out repairs of 32.2 km of roads under state contracts. driveways built in Yakutia transport and infrastructure facilities in the field, as well as the extraction in 2020 and processing of dolerite (a local rock, similar to granite in its durability When developing promising fields, simplicity and ease of access to the qualities) into crushed stone used in road construction. In 2020, developed areas are crucial for the profitability of projects. YakutStroyProekt LLC carried out complex engineering and survey work and laboratory studies at 62 different sites, equipped 5 well pads in the fields, built 78.8 km of technological drives, processed 746 million m3 of One of the difficulties of rock mass and laid 365 thousand m3 of crushed stone from dolerite, the working in the Republic of Sakha use of which can significantly reduce the cost of road construction in the (Yakutia) is poor transport Republic of Sakha (Yakutia). “ connection due to the extremely In 2020, the employees of YakutStroyProekt LLC were awarded for their harsh climate, long distances special contribution to the implementation of a set of measures aimed at and the complex landscape. improving the efficiency of road infrastructure in the Republic of Sakha The construction of (Yakutia). Alexander Uskov, Deputy General Director of the company, technological driveways, roads received a commendation for his contribution to the implementation and bridges is a primary task of the national project “Comprehensive Plan for the Modernisation and in the development of the Expansion of the Municipal Infrastructure”. resource base and production capacity.

Photos: 1. Benninghoven asphalt concrete plant 2. Road construction equipment and Zoomlion truck crane with a load capacity of100 tons 3. Bridge over the Malaya Botuobuya River, connecting two districts of the republic and providing year-round travel on the federal highway 4. Opening of the bridge over the Malaya Botuobaya River 2 4 32 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 33

INFORMATION ТECHNOLOGY (IT) 34 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 35

Eastsib Holding Group of Companies implements digital technologies at every stage of “ the production chain, both in exploration and production, 3 as well as in logistics and service operations. Digital Digitalisation transformation creates Based on geographical and production-functional factors, the Eastsib additional competitive Holding Group of Companies is constantly expanding the engineering advantages. Further competencies of its employees. The issues of digital transformation of development in this direction is the staff training system are coming to the fore, gradually replacing the aimed at finding new, including 1 classical system associated with the non-productive costs of finance and breakthrough, opportunities for working time. the use of digital technologies in Automation all areas of business. For several years, the training system OLYMPOKS, developed by the In 2020, a major project was completed to lay a fiber-optic communication company Termika, has been implemented and actively used, and today it line that connects the EB SB OGCF and the office of RNG JSC in Mirny. The is the best programme for conducting online training and certification in line is equipped with operator class communication equipment, which the field of industrial production. The system uses all the IT advantages. provides two communication channels of 10 GB/s. Therefore, the EB The challenge for IT development in 2020 was the lockdown. Eastsib Holding SB OGCF is provided with high-speed communication and access to the Group of Companies promptly transferred employees to remote work. Internet. In 2020, with the commissioning of new pads and single wells, Almost all the companies of the holding are enterprises of a continuous the existing automated process control system was also expanded as cycle, so their work continued even during the period of restrictions. part of the third stage of the construction of central field facilities and a telemechanics system. Today, the automated process control system, Several major projects were carried out in the sector of applied solutions for equipped with modern and highly reliable equipment of the American document management and management accounting. New management company Emerson, fully ensures trouble-free management of the accounting programmes, 1C: Document management, 1C: Enterprise production complex of technological facilities. Accounting CORP, 1C: TO-IR and others have been introduced with broader functions. Considering the current trends towards the constant expansion of the scientific capacity of production processes, Eastsib Holding plans to introduce progressive methods of technical development of personnel and innovative production solutions in the future.

Photos: 1-3. Control panels of the automated process control system (APCS) 4. Drilling rig operation 2 4 telemetry 36 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 37

STAFF 38 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 39

Staff make up by category, %

Number, composition, 63% regional distribution Workers 15% In 2020, due to the release of Eastsib Holding Group of Companies to the Managers project level for oil and gas production, bringing the number of operational wells to the planned indicators, as well as the completion of the main construction work on putting the field into commercial operation, the Eastsib Holding Group of number of employees compared to 2019 remained almost unchanged and Companies is one of the 38 amounted to about 2.5 thousand employees. At the same time, it should largest employers Average age of employees be noted that despite the general economic instability and problems in 22% “ in the Republic of Sakha the oil and gas industry caused by the difficult epidemiological situation in Specialists (Yakutia) and strives to the country, the group of companies did not make redundancies in 2020, create more jobs, while as a result of which it was possible to maintain the main strategic staff In the number of employees at the end of 2020, the share of workers ensuring the protection of composition. decreased slightly compared to the previous period, from 68 to 63%, while the rights of each employee. the share of managers increased from 13 to 15%, and the share of specialists Eastsib Holding is interested The overall staffing ratio of enterprises is on average more than 83%, and and employees increased from 19 to 22% of the total number of employees. in developing the human the permanent staffing ratio is more than 73%. Such indicators give the resource potential of Staff numbers company confidence in staff security in the long term. (excluding part-time staff) specialists and new forms As in previous years, by geographical location, the largest number of of cooperation between ambitious leaders. Currently, employees (about 83%) is in the Republic of Sakha (Yakutia), where the Staff make up by age, % 2 538 2 493 main production facilities of the Eastsib Holding Group of Companies a team of highly qualified 1 988 are located. Just under 12% of staff is concentrated in the head office in professionals has been Moscow. formed, and systematic work continues to create 33% career and social elevators, 40-49 providing talented young 17% people with opportunities 50-60 for promotion.

3% 60 and older

9% under 30 38% 30-39

2018 2019 2020 1 Due to the involvement of young specialists and constant work with educational institutions of secondary and higher education in the Staff structure republic, the company’s staff has been gradually rejuvenating for the past by geographical distribution, % two years. The average age of employees decreased by 4 years in 2019- 83,00 2020 to 38 years.

Eastsib Holding continues to actively participate in priority social and human resources projects jointly with the Government of the Republic of Sakha (Yakutia), such as “Local Personnel in Industry” (from 2021 to 2022), in the roadmap programme for creating new jobs in industry (from 2021 to 2025). Joint staff programmes are being implemented in cooperation with the State Committee for Employment of the Population of the RS (Yakutia), the relevant Ministry of Industry and Geology of the RS (Yakutia), district 11,70 administrations, district and republican employment centres. Photos: As a result of implementing these measures, the share of the local 1,40 2,30 1. Employees of the chemical- 0,40 0,10 0,40 0,70 population working at the enterprises of the holding has been at least 10% analytical laboratory 2. Vehicle maintenance 2 Mirny Moscow Tyumen Samara Irkutsk Ust-Kut Lensk of the total number of employees for several years now. SOCIAL RESPONSIBILITY 42 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 43

Industrial safety The health and safety of employees and safe working conditions are a constant priority in the activities of Eastsib Holding Group of Companies. Sustainable progress in the field of occupational health and safety can only be achieved if there is a conscious improvement in the safety culture on the part of all employees. In Eastsib Holding Group of Companies, systematic measures are being taken to introduce a safety culture, which allows us to minimise the level of injuries and eliminate accidents. The Eastsib Holding Group of In order to prevent the spread of a new coronavirus infection, daily Companies, on moving towards temperature monitoring of employees was promptly introduced in all its strategic goals, strives to offices of Eastsib Holding Group of Companies and at production sites, 10 000 t/y “ create value for stakeholders sanitary conditions were strengthened, and all employees were provided Capacity of the landfill site at every stage of their work, with medical masks and antiseptic agents. Official inspections by for waste disposal building long-term partnerships Rospotrebnadzor found compliance with the necessary requirements for with government authorities Covid-19 prevention. and local communities. 4 Eastsib Holding creates jobs, promotes education and Solid waste disposal culture, and provides assistance to the local population by Assistance to the healthcare system In 2020, a special landfill for thermal neutralisation of solid household and industrial waste was built and put into operation at the EB SB OGCF, implementing significant social In the difficult epidemic situation, Eastsib Holding provided assistance designed not only for the disposal of waste from Eastsib Holding Group of and environmental projects. to the republic’s health care system. As part of a large-scale programme, Companies, but also for the needs of the Mirny district of the Republic of A responsible attitude to the since April 2020, medicines, personal protective equipment and medical Sakha (Yakutia). The landfill with a total area of 2.29 hectares is designed environment is a fundamental appliances have been regularly delivered to the Mirny Central District to operate for 25 years and consists of a waste incineration zone in a principle in production Hospital. Eastsib Holding Group of Companies handed over bedside special incinerator, a zone for waste disposal of hazard class IV (with activities. Eastsib Holding monitors, a mobile box for transporting patients, protective suits, a lung a capacity of 17.9 thousand m3), sludge accumulators of oil-containing Group of Companies is aware ventilator, UV irradiators, equipment for defrosting blood plasma, and the waste (1.6 thousand m3) and oil-contaminated soil (500 m3), as well as the of its responsibility to society latest multifunctional operating tables to the doctors. The ongoing project economic zone. in this matter, objectively of assistance to medical institutions won first place in the category “Social assessing and striving to and Environmental Initiative” of the All-Russian award “MediaTek”. When designing the landfill, the specialists of the Eastsib Holding Group of minimise environmental risks, Companies considered all environmental and sanitary requirements. The and increasing investments construction was carried out according to the latest standards, certified in environmental protection equipment was purchased, and fire and emergency safety was provided. programmes. Reliable emission filtration systems and the design features of waste storage sites allow for minimising the negative impact on the atmosphere and landscape near the landfill. In particular, the area of the protective zone of the landfill is 3.3 thousand hectares and to arrange this, Eastsib Holding has taken a long-term lease of 193 separate forest areas surrounding the 1 2 landfill.

Photos: 1. Mirny Central District Hospital 2. Delivery of operating tables to doctors 3. Installation of multifunctional operating table 4. Opening a landfill for waste disposal 5. Incinerator installation in 3 5 operation 44 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 45

Pollution prevention Eastsib Holding Group of Companies adheres to high standards of industrial safety and takes care of the ecology of the Russian Far East, ensuring that natural resources are used carefully and that environmental laws are strictly observed. Specialists regularly conduct environmental monitoring in accordance with the approved programme agreed with the Ministry of Ecology, Nature Management and Forestry of the Republic of Our own fire safety, civil defence and emergency mil Sakha (Yakutia). The purpose is to monitor the state of the environment > 1 and determine its background indicators and to obtain reliable and timely services help eliminate Juvenile salmon released into “ and prevent fires in the information reflecting the current state of the ecosystem. the rivers of Yakutia Mirny district. A team of 16 employees has 3 extinguished more than 20 Biodiversity conservation fires during their work. An important part of Eastsib Holding’s environmental policy is related to Fire prevention measures To protect the natural park the reproduction of aquatic bioresources. Therefore, a programme is being “Living Diamonds of Yakutia” implemented to artificially populate reservoirs with valuable fish species. An important area for Eastsib Holding Group of Companies is the fire from fire, the fire brigade In 2018-2020, ecologists of Eastsib Holding released more than one million protection of production facilities, forest areas and nearby settlements. The flew by helicopter and spent juvenile salmon into the rivers of Yakutia. fire service of Eastsib Holding is one of the best in the republic. In 2020, the two weeks in the field. service was awarded the certificate of honour of the Department of Forest The conducted studies have shown that the state of the studied water area Relations of the Republic of Sakha (Yakutia). Firefighters have the latest is within the normal range and no deviations from the natural functioning mobile and technical equipment. The team is included in the schedule of indicators of coastal ecosystems have been uncovered. trips of the Mirny garrison of the fire department. Professional firefighters with specialised education and experience in EMERCOM cooperate with the unified dispatchment services of the Mirny and Lensk districts of the Quarry reclamation Republic of Sakha (Yakutia). During the fire-hazard period, forests are Eastsib Holding Group of Companies is implementing a programme patrolled, and fires are monitored. The Service regularly conducts training to recultivate quarries to restore soil fertility. The work is carried sessions. out sequentially and consists of two stages: technical and biological. The technical stage provides for the planning, formation of slopes, 1 removal and application of a fertile layer of soil, the device of hydraulic engineering and reclamation facilities. The biological stage includes a complex of agrotechnical and phytomeliorative measures aimed at improving the agrophysical, agrochemical, biochemical and other properties of the soil.

4 5

Photos: 1. Releasing young salmon 2. Quarry reconstruction 2 6 3-6. Fire brigade 46 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 47

Educational and outreach projects In 2020, Eastsib Holding Group of Companies became a partner of the New Economics School (NES). The main grant programme will allow gifted students from different regions of the country to get an education ina leading economic university. In addition, partial grants, which provide discounts on tuition from 30 to 100%, will be distributed among 20 successful students of master’s and applied programmes. Non-resident students will have part of their living expenses covered. An important area of cooperation in 2020 was the creation of two named professorial positions. Eastsib Holding also provided targetted financial support to the St. Petersburg Educational Center “Two Wings”, which includes a theater of the same name, the school of choreography and the School of Performing Arts. Currently, the centre trains 70 students. The Two Wings Centre implements charitable and missionary projects such as performances, 2 concerts, festive leisure programmes in orphanages, boarding schools, hospitals, homes of the elderly, in weekend and general education schools Helping local communities in St. Petersburg, the Leningrad Region and other regions. Eastsib Holding Group of Companies’ assistance to local communities In addition, in 2020, the group of companies participated in the in the reporting year was mainly focused on infrastructure projects. In implementation of the “Point of Growth” programme, which is part of particular, in the village of Almazny, the company paved the road in front the national project “Education” and is aimed at providing education of the school and the exit route before the start of the school year. within the digital and humanitarian profile. The specific objectives of the In the village of Syuldyukar, the administrative centre of the Sadyn National “Point of Growth” programme are to reduce the gap between urban and Evenki Nasleg, work was carried out to strengthen the ground around the rural schools. Eastsib Holding has allocated funds for the creation of an school building, which was in danger due to the flooding of the school educational center of the “Point of Growth” programme at school No. 9 in territory by the spring flood. In addition, constant assistance is provided the village of Tas-Yuryakh in the Mirny district of the Sakha Republic. The in providing drinking water to remote settlements. Also, on a gratuitous centre has created separate spaces for teaching children in the following basis, the budget institutions of the village of Tas-Yuryakh are supplied areas: “Technology”, “Computer Science”, “Personal and Social Safety” and with purified water. a project area for three zones – chess, media and coworking. In order to preserve the national culture, the group of companies actively participates in the implementation of the social and economic development programme of the Botuobuyinsky Nasleg MO for 2017-2021. In 2020, the contribution of Eastsib Holding Group of Companies to the social sphere was noted in the letter of thanks by the Head of the Mirny district.

Membership in professional associations In 2020, one of Estsib Holding’s key companies, RNG JSC, became a member of the Russo-British Chamber of Commerce and the Franco-Russian Chamber of Commerce and Industry. Eastsib Holding relies on long-term cooperation with world market leaders. Leading suppliers of equipment, technical equipment and services for drilling wells, and exploration and production of oil and gas reserves became the partners of the holding. Among them are large international companies from the United States, France, Great Britain, Italy, Germany and China. Membership in the Franco- Russian Chamber of Commerce and Industry connects the holding with more than 400 potential partners. In turn, the Russo-British Chamber of Commerce has been supporting companies from Russia and Great Britain since 1916, developing economic relations, investment and trade between the two countries. By joining international associations, Eastsib Holding Photos: 1. Educational Centre plans to engage its specialists in broad public activities, and participate in Point of Growth 1 forums, seminars and conferences. 2. Road paving in Tas-Yuryakh 48 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 49

Main Servicing Banks Surveyors Partners

DNV GL PJSC Rosbank Geological exploration Geophysical work and field development Software

PJSC Geotek JSC OT OIL Seismorazvedka Udmurtneftegeofizika LLC PJSC Sberbank

OIS Solutions Sigma-Geo Geological laboratories LLC JSC Sitibank ROXAR Koretest Service LLC Research Centre Gas InformPlast LLC (Group of Companies Oiltim) Conceptual Design ROGII CJSC NPC Tvergeofizika

CJSC GeoSeisKontrol NPC ThyssenKrupp AG RAS and IFRS auditors Oil Services Project work Ernst & Young Ltd. Geographical Centre SPBGU LLC

Schlumberger JSC Hyprovostokneft KPMG

FGBU VNIGNY

Volga TEK Engineering Legal consultants Halliburton International Inc.

JSC Pangea Allen & Overy Legal Services PJSC VNIPIGAZDOBYCHA

Baker Hughes Insurance partners Petrotreis LLC Technology Partners

JSC SOGAZ

Estimating oil and gas reserves Emerson National Oilwell Varco Insurance broker Willis DeGolyer& McNaughton East Siberian Yokogawa Electric Corporation Environmental Consultants Engineering Company, LLC Centre for Scientific Research, Engineering, and Geology of Fossil Institute of Applied Ecology Raw Materials, TsNIP GIS LLC of the North

Caterpillar Scientific Drilling Drilling contractor Institute of Biological Problems of the Cryolithozone SB RAS

Jereh VPT-Neftemash LLC Republican Information and NPF Zenit LLC Analytical Centre for Environmental Monitoring 50 EASTSIB HOLDING / ANNUAL REPORT 2020 EASTSIB HOLDING / ANNUAL REPORT 2020 51

Basic terms

EIA – Energy Information Administration – A division of the US RPM – Reservoir pressure maintenance Department of Energy, a federal statistical agency which dis- tributes information about energy and electricity. TOP – Trial operating project

ESPO – Brand of Siberian oil supplied via the Eastern Sibe- HO – Handling operations ria-Pacific Ocean Pipeline DAP – Oil delivery and acceptance point AGMU – automated group measurement units RF – Russian Federation APCS – Automated Process Control System SMQO – System for measuring oil quantity and quality indicators АPR – Asia Pacific Region RPM system – Reservoir pressure maintenance system EB SB OGCF – Eastern Blocks of the Srednebotuobinskoye oil and gas condensate field SS – Service station

SHC – Shift housing complex ip – inset point

VIOC – Vertically integrated oil company WSW – Well servicing and workover

ESPO – Eastern Siberia – Pacific Ocean pipeline system SMW and IW – Solid municipal waste and industrial waste

WL – Well logging C&M – Commodities and materials

GPE – Geological prospecting and exploration PS – Pipeline system

GTI – Geotechnical investigations TS – Technical specification

GTS – Gas transportation system GTU – Gas treatment unit

FL – Fuel and lubricants LMD – Logistics management department

CC – Contract commissions BSMD – Building and structure maintenance department

DF – Diesel fuel SSD – Security service directorate

FEFD – Far Eastern Federl District WTLD – Warehousing and transportation logistics directorate

CS – Closed switchgear SVD – Service vehicles directorate

OGCF – Oil and gas condensate field FBI SCM – Federal Budgetary Institution “State Commission on Mineral Reserves” MET – Mineral extraction tax OGPS – Oil and gas production shop STC – Scientific and technical council CETS – Central engineering technology service OR – Oil refinery CPF – Central oil collection facility OPS – Oil pumping station

FSB – Field support base

APG – Associated petroleum gas Contact information Address: Cyprus, Nicosia, 1066, Themistokli Dervi, 48, Centennial Building, office 701-A Tel.: + 357 22 375 047 Fax: + 357 22 375 058 E-mail: [email protected]