RNG SUSTAINABLE DEVELOPMENT REPORT

2019 Development strategy 6 6.1 Mining development Contents 6.2 Innovation 6.3 Quality control system 6.4 Safety and labor protection 38-58 6.5 Fire safety 6.6 Industrial and technical safety 6.7 Traffic safety service 6.8 Digitalization of process control systems 6.9 Environmental care Sustainable Development Priorities Regional presence 1 and reporting principles 7

7.1 Climatic and environmental conditions 4-7 59-63 7.2 Infrastructure projects 7.3 Social projects 7.4 Educational projects 2 Key Sustainability Indicators 8 Corporate Social Responsibility

8.1 Personnel Management 8-11 64-73 8.2 Social projects in Mirny 8.3 Interaction with the small indigenous minorities of the North 8.4 Assistance to the villages of Suldyukar and Tas-Yuryakh 8.5 Natural Park Support 8.6 Participation in cultural projects 3 Message from CEO of RNG company 9 Social Activity

9.1 Quality Day Conference 12-15 74-77 9.2 The first oil and gas forum

Board of Directors International Cooperation 4 and Management 10

10.1 Technological cooperation 16-21 78-82 10.2 Membership in international organizations 10.3 Membership in Russian social organizations 10.4 Membership in self-regulatory organizations

Company profile Glossary 5 5.1 Resource base 11 5.2 Financial performance 5.3 Key facts 5.4 Capital construction 22-37 5.5 Logistics 83-85 5.6 ISO Standards 5.7 Developed infrastructure 1 Sustainable Development Priorities and Reporting Principles RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

Sustainable Development Priorities

Innovation Environmental care

Investments Technical and Industrial in human capital Safety

Partnerships with international Charity companies

Sustainable Territorial Development business model

Reporting Principles

The methodological basis for the preparation of the Sustainability Report is ISO Compliant based on the standards for the Global Reporting Initiative, a global reporting ISO initiative. RNG annually publishes information on sustainable development projects on the official website and thereby adheres to the principles of transparency and openness in its work.

6 7 2 Key Sustainability Indicators RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

Oil production 0.9 Revenue 25.958 million tons bln. RUB

0.1 0.09 2.135 0.013 2017 2018 2019 2017 2018 2019

Gas production Operating costs 17.027 0.9 bln. cubic meters (including production costs, administrative expenses and sales expenses), bln. RUB 3.244 0.05 2.032 0.0003 2017 2018 2019 2017 2018 2019

Year-end assets 40.653 Acquisition 19.097 bln. RUB of materials, 26.797 24.196 equipment and 10.165 services 8.439 bln. RUB

2017 2018 2019 2017 2018 2019

Authorized Salaries, other 3.8 capital payments and 3.2 bln. RUB 7.5 7.5 7.5 employment benefits 2.6 bln. RUB

2017 2018 2019 2017 2018 2019 Payments to the Extra capital 0.724 bln. RUB FCMIF and PFR bln. RUB 0.626

1,218 1,218 1,218 0.492

2017 2018 2019 2017 2018 2019 Taxes and Mandatory 5.4 Payments bln. RUB

0.926 0.28

2017 2018 2019

10 11 3 Message from CEO of RNG company RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

Message from CEO of RNG company

The basic values of our company include the comprehensive development of human potential and active participation in economic, social, cultural and environmental projects in the region where we are present. The most important part of RNG JSC policy is industrial and technical safety and labor protection. The company annually allocates financial resources to maintain a high level of security in the areas of exploration, production and transportation of hydrocarbons. The Eastern blocks of the Srednebotuobinsky oil and gas condensate field have a process control and emergency protection system manufactured by the American company Emerson, the leading manufacturer of such equipment. The company prioritizes environmental protection. RNG JSC environmental experts constantly monitor the state of the air, soil, water resources and biological diversity. One of the key tasks for us is to participate in the social, cultural and economic development of the Republic of (Yakutia). Our employees participate in a number of educational projects as experts. The company is the general sponsor of publishing projects on Yakutia’s history and nature. We provide financial support to the small indigenous minorities of the Far North and are in constant contact with the leaders of the tribal communities. RNG JSC is one of the largest employers in the Mirny district of the Republic of Sakha (Yakutia). The company employs two and a half thousand people. And we strive to create a large number of jobs, while ensuring the protection of the rights of each employee. The company’s mission is to maintain and strengthen its own economic potential through the current business model, fulfillment of all obligations to the state, employees, contractors, creditors and investors, as well as contributing to the development of the region in which we operate.

Vladimir Rakitin

14 15 4 Board of Directors and Management RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

Board of directors

Frederick Matthew Thomas Ponsonby (born 1958) is a British peer Graduated from Novosibirsk State University (NSU), Faculty of who was appointed a Lord on April 19, 2000. Geology and Geophysics with a degree in Geophysical Methods of From 1984 to 1986, he worked as an oil engineer at Charterhouse Search and Exploration of Minerals in 1973; Gennady attended the Petroleum. graduate school of the Faculty of Mathematics of NSU, specializing in “Development of methods for solving inverse problems of From 1989 to 1992, he worked as a senior petroleum engineer at geophysics with the aim of forecasting for oil and gas”. LASMO PLC. Gennady ALFERENKO From 1973 to 1985 he worked as the head of the NSU research group From 1994 to 1998, he worked as chief engineer at Phibro Energy, for forecasting oil and gas fields in Eastern Siberia and Sakhalin. being responsible for international research and production projects. Member of the Board of Directors From 1985 to 1992, he was the creator, president and Chairman of Lord Ponsonby was a non-Executive Director of the Emerald Energy the Board of Directors of the Social Inventions Fund. PLC from August 15, 2003 to December 1, 2008 and Chairman of the Frederick Board of Directors of Yakut Energy Limited (formerly major shareholder In 1992, he served as Chairman of the Board of Directors of the Matthew Thomas of Taas-Yuryakh Neftegazodobycha) from January 2013 to the end of Europe-America 500 international consortium to organize and 2013 and Aladdin Oil & Gas AS since July 20, 2010. finance the commercial launch of a satellite from the Plisetsk Space PONSONBY Station to the US Pacific (Seattle) with the participation of the Lord Frederick Matthew Thomas Ponsonby was Chairman and CEO Russian Military Industrial Complex, the Naval Space Forces and Chairman of the Board of Rosehill Energy PLC. He was appointed to several EU government the Naval fleet. bodies, including the Council of Europe in 1997-2001 and the of Directors Organization for Security and Cooperation in Europe in 2001-2010. From 1994 to 1998, he worked as the head of the National Fund and the Strategic Resources of Forum. He is the President of the British-Uzbek public organization. From 1998 to 2000 he worked as the director of Arthur Andersen Currently, Lord Ponsonby is the Chairman of the Board of Directors Company, organizing meetings of the leaders of direct investment of the Eastsib Holding Company Limited and RNG, its wholly owned in the Russian economy. subsidiary. From 2001 to 2002, he worked as an Advisor to the Chairman of the Management Board of JSC Gazprom Bank, and Deputy Chairman of the Strategic Planning Council; member of the analytical working group on long-term investments in the gas industry under the Administration of the President of Russia; Member of the Patriarchal Nikolai Pinchuk holds a PhD in Economics. He was awarded the title Board of Trustees for the revival of the Valaam Monastery. of Distinguished Geologist (the Republic of Sakha (Yakutia). From 2002 to 2007 he worked as Director for Strategic Development He is recognized as a Russian Federation Class II Active State Adviser. at Ernst & Young; Member of the Board of the Council for the Economic Revival of the Russian Orthodox Church, chaired by His Since 1993, he has held the office of supervisor at the Regional Policy Holiness Patriarch of Moscow and All Russia Alexy II, Knight of the Department and is a panel member of the Russian State Committee Order of St. Sergius of Radonezh II degree. Since 2003 - Member of Nikolai PINCHUK for Geology and Use of Mineral Resources. the Board of the Valery Gergiev Foundation. From 1996 to 2001, he was the Russian Federation Deputy Minister Member of the Board From 2005 to 2008 - Member of the Board of Directors, Advisor to of Natural Resources. the President of CJSC Standard Bank. of Directors In 2002, he chaired the Russian Fund for Geological Heritage. From 2008 to 2011 - Senior Advisor to DLA Piper, Russia. Since 2007 - Strategic Advisor to PwC, Russia. Since May 15, 2020 - Member of the Board of Directors of RNG.

From 1999 to 2000, Yury Vilochkin held the position of Deputy Head of Administration for the Russian Ministry of Railways. Alexander Bondarenko is a member of the Association of From 2004 to 2010, he was the Vice President at JSCB EVROFINANCE International Petroleum Negotiators (AIPN), Guild of Investment MOSNARBANK. and Financial Analysts (GIFA) and the Chartered Institute of Supply and Procurement (CISP). From 2010 to 2013, he worked as the Chief Security Officer for PJSC Sberbank (Northwest Branch). In 2000-2014 he held the positions of Senior Vice President, Yury VILOCHKIN Deputy President and Chairman of the Management Board at JSCB From 2013 to 2014, he was the Vice President at “Soyuz” Corporation. EVROFINANCE MOSNARBANK. Member of the Board Alexander BONDARENKO From 2014 to the present, he has been the First Deputy Chief Executive In 2009–2016 he was a partner at the International Law Firm Wragge of Directors Officer of OJS “Intestate Development Corporation”. Chairman of the Investment Lawrence Graham CIS LLP. Committee to the Board From 2002 to 2006 he was a member of the Board of directors at of Directors NTV, TNT and NTV-Plus TV channels. Vasiliy Kholmogorov holds the title of Distinguished Lawyer (Republic From 2005 to 2010 he was a member of the Board of directors at of Sakha (Yakutia) and Russia). He is a Distinguished Officer at Russia’s PRIME-TASS Business News Agency. Investigative Committee and a Distinguished Officer with the Russian From 2010 to 2011: Member of the Moscow Exchange (MOEX) Board’s Federation Prosecutor General’s Office. Corporate Governance Committee and Member of the National From 1990 to 1994, he worked as a prosecutor in the Republic of Sakha Settlement Depository Board’s Internal Audit Commission (Yakutia). Vasiliy KHOLMOGOROV In 2013–2014 he was a supervisory director in JSCB EVROFINANCE From 1994 to 2004, he was the Russian Federation Deputy Prosecutor MOSNARBANK. General. In 2000, he was also appointed as the head of the Main Investigative Member of the Board In 2008-2013 - Chairman of the Board of Directors, member of the Department at the Russian Federation Prosecutor General’s Office. of Directors Board directors of Taas-Yuryakh Neftegazodobycha LLC. From 2004 to 2006, he worked as the Advisor to the Russian Federation Prosecutor General and was awarded the Order of the Badge of Honour.

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Management board

In 2008, Vladimir Rakitin graduated from the Plekhanov From 1986 to 2000, Sergey Nazarov worked as the Lead Russian Economic University, majoring in Finance and Credit. Geologist of the Production Department and Head of Reservoir Engineering Department for SNGDU-2 at In 2013, he received his PhD in Economics. Nizhnevartovskneftegaz (which was later restructured in From 2007 to 2010, he worked as the Direct Investment Project OJSC Tyumen Oil Company). Manager at EVROFINANCE MOSNARBANK. From 2001 to 2005, he was the Chief Geologist at the oil and From 2010 to 2014 he was a senior tax advisor at the Moscow gas production directorate and the Chief Geologist at OJSC Vladimir RAKITIN Orenburgneft, a subsidiary of TNK-BP. office of Lawrence Graham (CIS) LLP. Sergey NAZAROV CEO From 2005 to 2010, he was the Deputy Chief Executive Officer Deputy CEO, and Chief Geologist at LLC “Chepakovskoye” Oil and Gas Chief Geologist Production Company. From 2010 to 2011, he worked as the Deputy Chief Executive Officer and Chief Geologist for LLC RN-Sakhalinmorneftegaz. From 2012 to 2014, he was the Chief Geologist at LLC Taas- Yuryakh Neftegazodobycha.

From 1998 to 2011, Evgeny Cherykayev held the position of Oil and Gas Production Foreman, Lead Technologist of the Oil and Gas Production Workshop, Shift Supervisor at the Central Dispatch Office, and Deputy Head of the Central Dispatch Office at OJSC Orenburgneft. Evgeny Cherykayev held the position of Chief Engineer at Taas-Yuryakh Neftegazodobycha LLC. Evgeny CHERYKAEV Deputy CEO, Chief Engineer Konstantin Shikin has vast experience in the construction of oil and gas facilities in Eastern Siberia; he is the holder of various personal awards, such as the Order of Friendship and the Order of the Badge of Honour. He was awarded the title of Emeritus Builder of the Russian Federation. In 2005 -2015 he was a CEO at Vostoksibelektromontazh. He is also a member of Board of directors at PJSC Konstantin SHIKIN Elektromontazh.

From 2002 to 2007, Aleksandr Uskov was the Lead Engineer for Deputy CEO at LLC Pipeline Construction at OJSC Surgutneftegaz, “Fedorovskneft” VostSibSpetsMontazh Oil and Gas Production Department. (wholly-owned subsidiary of RNG Group of Companies) From 2007 to 2012, he was the Supervisor for Technical Construction Supervision at the Uvat Project led by LLC TNK- Uvat. From 2012 to 2014, he was the head of a stand-alone Tyumen Alexander USKOV division at LLC Taas-Yuryakh Neftegazodobycha. Deputy CEO, Head of the Capital Construction Department

20 21 5 Сompany profile RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

5.1 Resource base 5.2 Financial performance

In August 2019, RNG the Eastern blocks of the Srednebotuobinsky oil and The company strives to boost its investment appeal through the effective implementation gas condensate field (EB SB OGCF) were put into commercial operation. On of projects and strong overall financial performance. 01/01/2018, the volume of recoverable reserves (P1 + P2 categories) within the licensed subsoil area was equal to 27.8 million tons of oil, a fact confirmed by the State Committee for Mineral Reserves (protocol No.528484 from 26/12/2017). The field is being developed based on the “Technological Scheme of Development Capital Investment, mln. RUB EBITDA, bln. RUB for the Eastern blocks of the Srednebotuobinskoye Oil and Gas Condensate Field” (Protocol of the Central Development Commission No. 7187 from 26/12/2017). Its 1,308 592 1,808 835 gas reserves are equal to 14.3 bln m3. 4.9 4.9 56 By the beginning of 2020, RNG had produced the first million tons of oil 26 2.8 from the EB SB OGCF. The average daily production volume is now more than QI QIII 2.4 3 thousand tons, compared to 1.6 thousand tons a year earlier. The company 71 75 sends the extracted oil to the East Siberia – Pacific Ocean trunk pipeline. The assessment of the State Reserves Commission was confirmed by the QI QII QIII QIV DeGolyer and MacNaughton Worldwide Petroleum Consulting company as part of the audit of the Eastern blocks of the Srednebotuobinsky oil and gas 1,583 386 2,162 730 CAPEX, bln. RUB condensate field.

67 25 3 QII QIV 2.7 43 87 2.0 2.1

Exploratory drilling Industrial construction QI QII QIII QIV Mineral exploration Equipment not included in the construction estimates Taxes and Payments under contracts Turnover, bln. RUB compulsory with companies controlled 8.3 payments by the state 7.8

5.2 4.6 5.4  6.07 bln. RUB listed bln. RUB listed in 2019 from 2014 to 2019

QI QII QIII QIV

The share of procurement of materials and services from Russian and foreign manufacturers, bln. RUB 4.6 4.0 4.1

2.4

0.744 - Russian suppliers 0.123 - Foreign suppliers 2017 2018 2019

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5.3 Key facts Construction Personnel

mln m3

2,500 1.2 dumped cluster sites and infield Employees in the driveways company

1,900 employees working in the oil field km km 31pipelines were 15high voltage power built lines were built Motor Transport and Specialty Vehicles

600  units are used by the group of companies at the site

300  construction fleet units

Field support base in the SB OGCF

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Map of the CCP and Well Clusters

Group

wells №1 Water intake water structure on the Taas Yureh River

Well 6343 including utility system: Group - gas pipeline - 4.65 km wells №2 Technical water heater on group wells№1

Group P507 including utility system: gas pipeline - 0.13 km wells №3

Group wells №10 including utility system: - technical passage - 0.3 km - in- eld owline - 0.3 km - water tunnel - 0.3 km

P508 including utility system: Group - technical passage - 0.3 km wells №10 - in- eld owline - 0.3 km - high voltage line 35 kW - 2.1 km Group wells №4 P506 including utility system: - technical passage - 0.1 km - gas pipeline - 0.1 km EB SB OGCF Group wells №5

Group wells №6 Open-cast №15

Loop of in- eld owline Gas pipeline - 15.2 km group wells №7- CPF 2.97 km

P502 including utility system: Group - gas pipeline - 0.34 km wells №7

Adjusting of the 3rd phase

Group wells № 8 including utility system: - technical passage - 2.5 km P509 including utility system: - in- eld owline - 3.1 km - technical passage - 0.3 km - water tunnel - 3.0 km Group - in- eld owline - 3.9 km wells №8 - water tunnel - 0.3 km Group wells №12 Group wells №8 including utility system: - technical passage - 2.5 km - in- eld owline - 3.1 km - water tunnel - 3.0 km

P16 including utility system: - technical passage - 2.5 km - in- eld owline - 1.65 km

Group wells№ 11 including Open-cast №8 utility system: - technical passage - 1.4 km - in- eld owline - 14.1 km - water tunnel - 13.74 km Group wells №11 Open-cast №20

Oil pipelines construction

Designed oil pipelines

Oil pipelines construction

Designed oil pipelines

Gas pipelines construction

Designed gas pipelines Open-cast №20 Operating water tunnel

Oil pipiline from CPF to tie-in point Designed water tunnel

Oil pipe lines CB SB OGCF - OTPS№12 to OTPS №12 Taas Yuryakh Neftegazodobycha LLC

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5.4 Capital construction Construction laboratory and non-destructive testing 1,000 employees  laboratory involved in construction projects

800 km  Internal the total length of driveways supported by building control the company at the required technical level (Department of Capital Construction)

150 ton carrying capacity Zoomlion truck crane purchased by the company. It is designed to carry out reconstruction work at various facilities and is one of the most powerful truck cranes in the region 2 Independent 744.44 m Construction Control Reconstruction area of the company’s office in Mirny. Three floors were built (“StroyTest Engineering” LLC)

Construction of the bridge across the Malaya Botuobuya River

Construction of the bridge Construction of the bridge across the Malaya Botuobuya River across the Malaya Botuobuya River

30 31 –

RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

5.5 Logistics 5.6 ISO Standards

– Base with a railway line near the river port of Ust-Kut; The company has GOST ISO 9001-2011 “Quality Management – Production base leased from the American oilfield Systems”, GOST R 54934-2012 (OHSAS 18001: 2007) services company, Halliburton; “Occupational Safety and Health Management System”, GOST R ISO 14001-2016 (ISO 14001: 2015) “Environmental System – 6-ton lifting capacity floating crane in the port of ; management” certificates. – “Boets” tugboat with a 500 ton loading capacity barge; – “Vitimets” tugboat with a loading capacity of 200 tons; – “Codr” tugboat with a loading capacity of 140 tons; – “Ermak” tugboat with a loading capacity of 140 tons;

– “Victoria” tugboat with a loading capacity of 200 tons Preparation of the “Vitimets” (ports of Ust-Kut and Lensk). tugboat for the river navigation season

6 tons lifting capacity floating crane “Boyets” tugboat with a 500 tons in the port of Lensk loading capacity barge 5.7 Developed infrastructure

Developed infrastructure allows RNG to provide services for the transportation of oil from fields of other subsoil users in the region and the delivery of raw materials to the Transneft pipeline system.

Base with a railway line near the river port of Ust-Kut

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Power complex CNG filling stations The first phase of the energy complex based on a gas piston engine manufactured by the American company Caterpillar In December 2019, was launched in February 2019 and has a capacity of 5 MW. a natural gas filling Currently, 5 blocks have been installed and put into compressor station (CNG operation. filling station) designed to refuel its own fleet in Associated petroleum gas that comes through the pipeline the Eastern blocks of the from the Central oil collection point on the Eastern blocks of Srednebotuobinsky field the Srednebotuobinsky field is used as an energy source. was put into operation. RNG plans to launch the second and third phases of the The supplier is a leading power complex and increase the total electricity production manufacturer of equipment capacity to 12 MW. for CNG filling stations GRAF S.p.A. (Italy). Compressed gas (compressed up to 200 atm), which has greater frost resistance (especially important during critically low temperatures in the Yakut winter) is used as fuel. The company plans to gradually transfer the vehicle fleet to compressed natural gas. RNG is currently testing the first batch of Shacman X3000 CNG gas tractors.

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Map of licensed sites

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

Bakhchinsky South- "Surgutneftegas" Syuldyukarsky West Kempendyayski “EastSib Holding” USRF* Bagdynsky "Surgutneftegas" “Live diamonds of Yakutia” Mirnyi Stanahsky Kuyabylansky "Surgutneftegas" Almaznyi r. Vilyuy Tuobuya Irelyachsky "Irelyakhneft"

r. Ulahan-Botuobuya Kempendyayski Myrninsky Srednevilyuchansky USRF Kubalahsky "INK" Zaria "Surgutneftegas" Suntarsky "Rosneft" "INK" Yuryakhsky Tektyuysky "Surgutneftegas" "Alrosa-Gas" Hoptolokhsky Namansky Tas-Yuryakhskoe Vilyuysko- “Tuymadaneftegaz” USRF The North Blocks eld Dzherbinsky "Alrosa-Gas" "Gazprom" "Surgutneftegas" Verhne- Tas-Yuryakh dzhunkunsky Dzhunkunsky Verhnevilyuchnskoe eld "INK" "Gazprom" Verkhnemarhachansky "INK" Verkhnebiryuk “EastSib Holding” Ergezheysky “Siberian oil company” Murbaysky "Lensk-Gas" The Central Blocks Monulahsky “EastSib Holding” "Taas-neftegazdobycha" “EastSib Holding” Mukhtinsky The Eastern Bloсks “Tuymadaneftegaz” Srednebiryuk “RNG” Ulugursky South- "Lensk-Gas" "Rosneft" dzhunkunsky "INK" Otradninskoe eld GDK Kurungsky "Lensk-Gas" Lensk Neft Srednelensky Marha "Taas-neftegazdobycha" Betinchinsky "Rosneft" Byuksky Hotogo-Murbaysky “EastSib Holding” "INK" "VSNK" Nizhnegerbinsky "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 "Gazprom" r. Horonohsky 1200 mm Nyuya-Iuzhnaia “Siberian oil company” "Surgutneftegas" USRF Cheredey

Irkutsk region

r. Lena Macha Olekminsky "Rosneft"

KuduKuyol

Peledui

Dikimda Vitim

Tokkinsky “EastSib Holding”

Chara RNG acts as an agent for the exploration and development of sites belonging to companies that are part of EastSib Holding

* - unallocated subsoil reserve fund

36 37 6 Development strategy RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

6.1 Development of oil production

RNG aims to increase oil production over the next 5 years to 1.2 million tons per year. To achieve this, company specialists and partner organizations are developing a plan to increase oil recovery through: • development of a reservoir pressure maintenance system; • implementation of the exploration program; • implementation of the approved well drilling schedule; • implementation of the plan for design and survey work and the construction of ground-based infrastructure facilities (OPS, the second stage of the central control center, expansion of the energy complex to 10 mW).

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6.2 Innovations

Implementation of the seismic technology The company invests in innovative technologies in hydrocarbon exploration and production. A seismic team was created in 2019 based on the “Syuldyukar Geologorazvedka” company, which along with RNG is part of EastSib Holding. The company purchased 5 new broadband NOMAD vibrators from the French company Sercel, a recognized international manufacturer of seismic equipment. Today, the company operates modern Sercel 508 XT seismic acquisition systems, NOMAD-65NEO vibrators and GPS Trimble R8GNSS topographic equipment. Vibration is a much more effective method of exploration compared to traditional explosive and impulsive technologies in Eastern Siberia. Explosive technologies are unsafe and wasteful. Pulse technologies do not always allow specialists to obtain sufficient information about the geological structure of the site. Last year, the company’s specialists designed and prepared sites for further exploration. In 2019 and Q1 of 2020, the total area of exploration work was more than 500 sq.km. Modern geophysical equipment is one of the most complex high-precision devices. Staff working and maintaining the data registration system are trained in the French and Russian divisions of Sercel Company. Field parties are equipped with geophysical workshops and laboratories for setting up, repairing and testing equipment. The number of employees in the seismic team is 139 people.

Innovative drilling technology RNG specialists successfully applied the new design of the hook-shaped well when developing the Eastern blocks of the Srednebotuobinskoye field. The new design enables the bypassing of the aquifer, thereby avoiding flooding the oil reservoir. A “hook” is a horizontally-inclined well that runs along a complex hook-shaped path. The path is set so that the well is drilled downward first to open and refine the section of the formation, to determine the best reservoir layers and their angles, then the intersection of the SOC and KSS followed by resistance of the resistivity sensor below 10 Ohms. This decrease flattening on the horizontal part of the barrel, which reduces is a signal to flatten the horizontal section of the well 2-3 meters errors concerning absolute depth; to avoid unwanted proximity higher than the depth of the oil hole. with the gas cap and correctly position the part of the barrel If the level of gas-oil contact is not determined during the that will be used for oil production. drilling process, the well may turn out to be ineffective due to Before laying such wells, experts analyze information the incorrect depth of the wiring. To avoid this, other companies from neighboring wells (pilot, exploratory), build a geological drill an additional pilot (test) shaft, which takes up to 7 days of model and predict the depth of the roof of the reservoir, the work and 250 meters of drilling. A hook-shaped well eliminates level of gas and oil-water contacts, which subsequently are the need for a pilot shaft and shortens drilling times, as well as our anchor points. During drilling, using the LWD technology, reducing additional penetration from an average of 250 to 140 the geological service continuously monitors the well for 24 meters. hours, estimates deviations from the anchor points according to the original model, and quickly transmits it to the drilling team with adjustments in the well trajectory. Even in the case when the determination of GNA is ambiguous, the level of GSS is determined with a high degree of confidence by reducing the

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6.3 Quality Control System Construction laboratory and non-destructive testing laboratory Chemical analysis laboratories There are two laboratories at the EB SB OGCF The company controls the quality of construction work at all its facilities. that monitor the quality of oil and diesel fuel. The Several laboratories are involved in quality control: a soil laboratory, a laboratory laboratory has 24 employees. specializing in concrete, cement, a laboratory specializing in gravel and a non- destructive testing laboratory. To monitor the quality of diesel fuel, the following indicators are determined: • density; • sulfur content; Welding quality control • kinematic viscosity; The company uses the following methods • cold filter plugging point; for welding quality control: visual and • pour point; measuring control, radiographic control, • fractional composition. ultrasonic control, capillary and leak detection, as well as electrical control.

When monitoring the quality of oil, the following indicators are determined: Seal quality control • density; Methods of controlling the quality of seals: • water content; the density is checked by the cutting ring • content of mechanical impurities; method, weighing in water and in a neutral • content of chloride salts.; liquid; by pycnometric methods; by volume • sulfur content; displacement method, the seal is checked • saturated steam pressure; by test immersion, by standard compaction • paraffin content; method, the elastic modulus is checked by Testing concrete samples • fractional composition; dynamic loading method; the compaction • kinematic viscosity; coefficient is checked by a calculation method. • organochlorine content; • hydrogen sulfide, methyl and ethyl mercaptans. Cementing quality control Quality control of cement material: sampling, grinding fineness, density of normal The quality of commercial oil is monitored cement paste, setting time. throughout the entire preparation process and Concrete quality control: sampling, during acceptance operations. mobility, rigidity, average density, porosity, temperature, composition selection, sampling and production of control samples, Laboratories are equipped with: hardening, storage and transportation of • Automated apparatus for determining the samples, compressive strength, strength by fractional composition, manufactured by non-destructive testing (elastic rebound), Herzog, Germany; frost resistance basic and accelerated • Аutomated apparatus for determining the methods, water permeability accelerated fractional composition, manufactured by method, density. Orbis, Netherlands; • Automated apparatus for determining the limiting temperature of filterability of diesel Determination of the grain composition of crushed stone fuels, manufactured by ISL, France; • Оil and oil product sulfur analyzers manufactured by Horiba, Japan; • Chromatographic complexes for determining the composition of oil and gas manufactured by Chromatek, Russia; • X-ray fluorescence wave dispersion analyzer for determining the mass fraction of chlorine manufactured by SPECTRON, Russia.

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6.4 Health & Safety 6.5 Fire safety

The main principles of the Company’s work are to ensure A professional fire brigade was established in labour safety and respect for nature in the implementation of 2015 and is part of the fire safety, civil defense and industrial projects. The primary mechanism of environmental emergency situations department. 17 people are management is managing all systems under the requirements involved in the work of the brigade. The team is of international standards ISO 9001, ISO 14001, and OHSAS divided into 2 fire stations, with distinct locations: at 18001. The Company operates under the current legislation of the central control center and at the NPU-100. Each the Russian Federation, international standards and internal compartment has one fire truck. Each machine is documents of the Company. RNG sets higher requirements for constantly filled with 8,000 liters of water and 450 contractors in the field of quality, labour protection, industrial liters of foaming agent. and environmental safety. The Company pays attention The fire brigade personnel have all necessary to improving the professional level of its employees. RNG protective equipment: special suits, helmets, gloves developed and approved the “Plan for the Prevention and and shoes. Elimination of Emergency Oil and Petroleum Products Spills on the Territory of the Eastern Blocks of the Srednebotuobinskoye Also, to protect the personnel of the fire brigade, Field”. all necessary equipment was purchased, including breathing apparatus for working in smoky conditions. Contracts with specialized subcontractors for the maintenance RNG’s hazardous production facilities (where To protect the forest leased areas from forest fires, oil exploration, production, processing, transportation, mobile block boxes with fire-fighting equipment were storage and use of oil and oil products are carried out, as purchased. For foam fire extinguishing of steel tanks well as to prevent gas, oil and water inflows and open gas RVS-5000 at the Central oil collection point there is a Fire brigade and oil fountains during the construction, well servicing and three-fold supply of foaming agent. exercises workover) have been signed. The activities of all the Company’s personnel in workplace health and safety issues are described in the job and production Actions in fighting manuals. The main regulatory document in the field of labour forest fires protection and industrial safety (LP and IS) in the Company is the “Regulation on the organization of industrial control over A professional fire brigade conducts compliance with industrial safety requirements at hazardous patrols of leased forest areas in the daytime production facilities of RNG”, approved by the CEO of the and at night during periods of special fire company. regime introduced by the administration of the Mirny and Lensky districts. The company There are also several internal documents (orders) in purchased mobile block boxes with fire the field of workplace health and safety, such as “On the fighting equipment designed to protect Implementation of Production Control” (relating to workplace leased forest areas. health and safety), “On the Organization of Production Control during the Operation of Lifting Structures”, “On the The team has repeatedly participated in Organization of Technical Supervision of Safe Operation of extinguishing forest fires in the territory of Pressure Vessels” and others. Mirny district, assisting the administration of Mirny district and forestry. RNG deployed specialists and equipment to assist in the fight against forest fires near the villages of Suntar, Tas-Yuryakh and other settlements. The team received a letter of thanks from the Forestry Department of the Republic of Sakha (Yakutia) for providing assistance in extinguishing forest fires. At least three times a month, specialists primary fire fighting equipment. At the conduct training sessions on extinguishing present time, installation and commissioning potential fires at RNG facilities, including of equipment is underway. The company evacuating personnel. plans to conduct training for a professional fire brigadeto obtain a license from the Before the end of 2020, it is planned Russian Emergencies Ministry in the area to commission the fire extinguisherof ​​“installation, maintenance and repair of maintenance stations (repair, reloading, primary fire fighting equipment”. The license testing, painting of cylinders) at the NPU- will allow the RNG Fire Safety Department to 100 fire station. The company purchased conduct full maintenance of its own primary a complete set of equipment for servicing fire fighting equipment.

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6.6 Industrial 6.7 Traffic safety and technical safety service

The company has concluded the following agreements for servicing A road safety service was organized to work on the prevention of road hazardous production facilities: accidents. The main objectives of the service is to create road safety systems and prevent traffic accidents. The tasks of the service also - on the liquidation of emergency oil product spills at oil production, include: storage and treatment facilities and an agreement for servicing • development, implementation of measures to ensure trouble-free gas distribution and gas consumption networks by the gas rescue operation of company vehicles, improving the professional skills of service. In these areas, agreements have been concluded with drivers; the emergency rescue team LLC ASF Security Service. The rescue team is in a constant state of readiness for the localization and • organization of the «Road Safety» campaign; liquidation of accidents at oil, gas and gas production, storage and • monitoring the activities of other divisions of the enterprise related to treatment facilities; resolving issues of ensuring road safety, efficient use of vehicles; • monitoring the release of serviceable vehicles, equipped in accordance - on the liquidation of gas and oil manifestations. In this area, an with the Rules of the road for vehicles on the line; agreement has been concluded with the emergency rescue team LLC Upstream Service. This emergency rescue unit is in a state of • allow only qualified drivers to drive vehicles; constant readiness for the localization and liquidation of accidents • Inspection of road conditions on routes; at oil production facilities. • organization of pre-trip and other medical examinations for drivers, monitoring the availability and correctness of registration of travel and freight documents; • monitoring whether employees comply with the rules and standards of labor protection, production, labor discipline, internal labor regulations; Training and professional • monitoring (escorting) the transportation of dangerous, bulky goods development by special rolling stock.

The company annually pays for the following employee training and professional development courses: - labor protection for engineers (24 employees); - labor protection at work at heights (82 employees); - gas and oil manifestation (96 employees); - first аid service (197 employees); - sling work (44 employees); - cradle worker training (22 employees); - serving pressure vessels (41 employees); - air sampling (56 employees); - training on the right to handle hazardous waste (4 employees); - attestation and certification of welders at the National Agency for Welding Control (12 employees); - industrial safety (5 employees).

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6.7 Digitalization OIS Production and USOI In 2019, employees of the company launched the OIS Production system and USOI (system of process control systems of operational production accounting, the formation of daily reports). Both systems - developed by Russian specialists- allow the tracking of dozens of processes and operations: accounting and control of oil production, optimization of field development and operation, standardization of business processes, a monitoring system for maintaining reservoir Automated Process Control System (APCS) pressure, automation of the work of supervisors and so on. In 2018, RNG purchased a process control and emergency protection system manufactured by the American company Emerson. The system allows for a safer System Tasks: • Online tracking of data from production oil, and more efficient production process. • сstandardization of business processes; gas and other wells by reading information The automation system of technological processes is designed to implement • reducing the impact of the «human factor» from Controlwave control system sensors centralized control of the technological process of extraction, preparation, in business processes; from Emerson international company. storage and transport of extracted products; life-supporting systems for • automation of routine operations; monitoring the state of the fire and gas situation, as well as effective protection • optimization of field development and Eldoc System has been implemented for the and timely shutdown of the technological process in case of an accident threat operation; digitalization, cataloging and visualization and its localization, according to specified algorithms. • decision support; of geological documents: • optimization of operating and investment • includes a set of programs and costs. applications for the work of specialists The technology consists of various independent systems: from the geology, development and OIS Production system – in order to maintain Distributed Control System (DCS) automated control of technological drilling departments. Programs enable operational information on the condition structures. DCS is also intended to protect the life and health of production quick research results, production reports of wells, process oilfield information for personnel, technological equipment, and the environment by detecting and from the field and drilling reports; accounting for oil, liquid, gas production, notifying at an early stage leaks of hydrocarbons, as well as preventive measures pumping agents into formations: • daily replenishment of data with the in case of explosions. • includes a set of application programs results of well drilling, core surveys, deep The Emergency Protection System (TEPS) ensures the safety of the process with the help of which geologists, oil and gas samples, seismic surveys, and equipment in order to protect personnel, equipment, material assets and the technologists, and chemical analytical scientific research, magnetic exploration, environment. TEPS is completely independent of the distributed control system, laboratory operators interact to evaluate gravity exploration, geological and and stopping the latter will not lead to failure of this safety-keeping system. and control the technological parameters hydrodynamic models, etc. The Automatic Fire and Gas Safety System (TAFGSS) is a special certified of the wells, including prevention of an system designed for the timely detection of fire and gas hazards, as well as emergency operation. light and sound alerts of central control personnel, and automatic control of the corresponding fire extinguishing installations. The telemechanics system is designed to control and manage field facilities Connection (single wells, crane platforms, SOD receiving-launch units), remote auxiliary RNG Energo LLC is implementing a project for laying facilities, and objects of external production transport systems (oil, gas, a fiber-optic communication line from the territory condensate). of the Eastern Blocks to the Mirny – Lensk highway with further connection to the fiber-optic network of PJSC FGC UES, connecting offices in Moscow, Mirny and EB SB OGCF to form one fiber-optic network and automate the receiving of information from drilling rigs. This communication line will not only provide high-speed digital communications and Internet access to production facilities and shift camps, but will also become a backup communication line for the village of Tas-Yuryakh, where the construction of FOCLs of PJSC Rostelecom is currently being completed.

Implementation of electronic document management RNG has an electronic document management system. Acts, accounts, orders, financial reports, contracts, applications for the selection of personnel, the procurement of goods and services, inventory accounting are all passed through an electronic system.

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6.8 Environmental Care

Environmental monitoring Taking care of water resources The responsible attitude of the company to issues The company protects the water life of of preserving the ecological balance in the region Yakutia. In 2018-2020, ecologists from RNG is a priority. released 500 thousand Peled baby fish The company conducts environmental (salmon family) into the rivers of Yakutia. monitoring along the Eastern blocks of the The fish were raised in the laboratory at Srednebotuobinskoye oil and gas field following the Chernyshevsky fish hatchery. The the approved Program for 2016-2020, agreed spawn were released into the tributary with the Ministry of Ecology, Nature Management of the Vilyui reservoir, the Aan’aah river, and Forestry of the Republic of Sakha (Yakutia) which flows through the territory of the (10-09/6-1665 from 06/04/2016). . According to the results of research by scientists of the Russian Specialized organizations (such as The Ammosov Federation Research Institute of Fishery and North-Eastern Federal University Research Oceanography, it is the Vilyui reservoir and its Institute for Applied Ecology of the North, accredited laboratories: Federal State-Funded tributaries that have the necessary food base Healthcare Institution “Center for Hygiene and for salmon fish, the right temperature regime Epidemiology in the Republic of Sakha (Yakutia)”, and all other conditions for its survival and Federal Government Institution “Center for reproduction. In 2021, environmentalists Laboratory analysis and Technical Measurements of the Company plan to release more than in the Republic of Sakha (Yakutia)” and others) are 200,000 fry, and from 2022 more than involved. 180,000 fry will be released annually.

Care for the diversity of the wildlife of Yakutia Hunting and fishing are prohibited on the territory of the Eastern blocks of the Srednebotuobinskoye oil and gas field. In 2019, for the first time during observation, flocks of swans and wild ducks could be seen in the area of the raw water intake facility built by the company on the river Taas-Yuryakh The design of the water intake structure allows it to work without using the Taas-Yurekh River resources. The reserves are replenished by flood waters.

Water intake structure on the Taas Yureh River, built by the company. Net pit volume 500,000 m3

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Solid waste disposal Protection of atmospheric air • Annual effective monitoring of emissions of harmful substances into the air is conducted The company is planning to put a waste disposal site into service on the territory of the by the accredited laboratory of the Center for Hygiene and Epidemiology of the Republic of Eastern blocks of the Srednebotuobinskoye oil and gas field. To neutralize oxidation Sakha (Yakutia), alongside with the instrumental monitoring of emissions from vehicles waste, the company purchased an incinerator that disposes waste of hazard classes (“AutoTest-01.02” devices and “Meta-01MP” smoke meter). III to V.

Technical data: • capacity - 10 thousand tons • service life - 25 years • square footage - 2.29 ha • the map for the waste of iv hazard class disposal, with a capacity of 17,856 m3 • sludge storage pits for oil-contaminated waste — 1,600 m3 • sludge storage pit for oil-contaminated soil - 500 m3 • SEER prior approval No. 19 dated 24/08/2018 • to be commissioned in 2020

Land and forest protection • Approval and completion of 193 lease agreements for State Forestry land plots with an area of 3,312.56 ha of forest development projects; • 6 lease agreements for industrial land; •12 lease agreements for forest plots with an area of • The company has permits for the disposal of wastes of I – IV hazard classes; 291,68 ha are to be registered; • The company is licensed to handle hazardous waste; • The total area of forest plots in the Eastern Blocks of Srednebotuobinskoye oil and gas field is 3, 604.24 ha; • Sludge pits of well pads No. 1, 2, 3, 4, 5, 6, 7 are registered in the State Register • In 2015-2019, 531,89 ha of land were reclaimed on the of Waste Disposal Facilities; Eastern blocks of the Srednebotuobinskoye oil and • Availability of a document on approval of standards for waste generation and limits gas field and transferred back to the State Forestry. for their disposal.

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Mulching

When mulching, the company uses equipment manufactured by the German company AHWI GmbH. The company applies mulching technology everywhere, as the method has a beneficial effect on the soil and plants: • retains water in the soil; • reduces the number of weeds; • prevents soil overheating in summer and freezing in winter; • prevents soil erosion; • prevents the formation of crust on the soil, which improves the absorption of water into the soil; • preserves soil friability; • mulch plants form more subordinate roots.

Reclamation program

Three quarries (Khoyuk, Botuobinsky, Kudulakhsky) with a total area of 100 hectares were reclaimed in 2018.

RNG land reclamation by years:

• 2015 – 144.02 ha • 2019 – 24.85 ha

Reclamation helps to restore soil fertility. Reclamation is carried out sequentially in two stages: technical and biological. The technical stage includes planning, slope formation, • 2017 – 87.9761 ha • 2020 - 49.0 ha removal and application of the fertile soil layer, the installation of hydraulic and land reclamation facilities, and the burial of toxic overburden. The biological stage includes a set of agrotechnical and phytomeliorative measures aimed at improving the agrophysical, • 2018 – 105.08 ha agrochemical, biochemical and other properties of the soil.

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7.1 Climatic and environmental 7.2 Infrastructure projects conditions VostSibSpetsMontazh LLC, a subsidiary of RNG, is building a bridge across the Malaya Botuobuya River as part of the construction of the Vilyuy A-331 federal highway. The RNG operates in the Mirninsky District of and low temperatures. The average monthly commissioning of the bridge is scheduled for the end of the Republic of Sakha (Yakutia) - in severe air temperature in January falls within the October 2020. The project was presented at the investment climatic conditions and at a considerable range of -28 °C to - 40 °C. Temperatures in forum “Western Yakutia - new opportunities” in Mirny. A two- distance from industry and educational winter may reach -53-57°C. lane bridge 192 meters long will be built in the 1,157 km of institution centres. The Eastern Blocks of the the Vilyui highway and will connect the Mirny and Suntarsky Srednebotuobinsky oil and gas condensate In summer, the maximum temperature districts. In the course of the work of the company, it is also field are located within the Lena-Vilyui Plain reaches +30°C. Snow cover of flat surface necessary to equip access asphalt roads to the bridge. of the , in the area areas is 35-50 cm. The number of snow cover between the Lena and Vilyui river, in the days is 200 per year. VostSibSpetsMontazh also concluded a state contract for mid-channel of the Ulakhan-Botuobuya (the the repair of one of the key transport arteries of the Republic right tributary of Vilyui). The hydrography of of Sakha (Yakutia) of the A-331 Vilyuy highway on the route the district is also represented by the Taas- The main feature of the engineering- Tulun - Bratsk - Ust-Kut - Mirny - . We are talking about Yuryakh river and several other smaller ones. geological conditions of the field is the work on the km 1 295+000 - km 1 310+ 585 section. The length widespread development of permafrost of the site is more than 15 kilometers. The customer is FKU The climate of Mirninsky District is severe rocks that lie to a depth of 400 m. The «Management of the public highway of federal importance» continental, with long, harsh winters and maximum thickness of seasonal thawing of Vilyui «of the Federal Highway Agency.» According to the short warm summers: the average duration 3.5–3.9 m is typical for watersheds covered contract, VostSibSpetsMontazh is due to complete work by of winter is seven months, with clear weather with pine forests. . October 31, 2020. The Vilyuy highway is the only transport corridor between the Irkutsk region and Yakutia through which cargo is delivered for the development of large deposits in the west of Yakutia.

Office reconstruction in Mirny RNG completed the reconstruction of the office in Mirny, as a result, the office’s working space increased by 500 square meters, amounting to 1,500 square meters. The company strives to create the most comfortable environment for employees.

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7.3 Social projects

Employees of RNG are in constant contact with representatives of tribal communities and villages. The company provides assistance in solving everyday social problems. The RNG supplies drinking water to a school in the village of Tas-Yuryakh and in the village of Suldyukar. The company filled in two roads between the school, kindergarten and club in the village of Tas-Yuryakh. The work was completed by its own staff and using special equipment. Crushed stone was provided by GPP Yakutsky Dolerit LLC.

7.4 Educational projects The company participates in educational projects of the Mirny district. Employees of RNG are specialists in the field of automation, production management, oil and gas production in educational projects of Mirny College of Technology. In the project “Process factories for training personnel for the oil and gas industry”, the company is an expert in the field of exploration, production of oil and gas in difficult climatic conditions. RNG also implements the program “Management of changes in the vocational training system for the region’s economy”, developed by the Moscow School of Management SKOLKOVO REGION-PROFI in cooperation with Mirny College. Employees of RNG regularly give lectures on oil and gas topics in educational institutions. Every year, students of specialized universities in the format of student teams participate in a paid summer internship at the field.

Student teams The company annually conducts recruitment of student teams among students at higher educational institutions and secondary specialized educational institutions for paid work in the Eastern blocks of the Srednebotuobinsky field. In 2018, summer student teams took part in the construction of the Central oil collection point at the field. The company paid for the work, provided housing, meals and a transfer from the city of Mirny to the Eastern blocks of the Srednebotuobinsky field. RNG provides expert and technological support in organizing the project “Factory of processes for training personnel for the oil and gas industry”. The project was launched by Mirny District Technical College.

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8.1 Personnel Creating comfortable working conditions The company strives to create the most comfortable Management working conditions. A dining room, a gym, a laundry, a bathhouse and its own bakery are available at the EB SB OGCF The company strives to create a comfortable working Personnel structure fishing base. The maintenance of high-level living conditions environment, invests in human capital and is guided by the by gender, % is overseen by a separate group of staff. principles of equality, openness and justice. The company purchases food products directly from Investments in human capital provide the basis for 11 manufacturers and delivers them to the EB SB OGCF using sustainable business development, improving the quality various logistical means: in winter by car, and in summer by company employees’ lives and residents of the region. river transport. The company purchases monthly products 2019 with a limited shelf life from local suppliers totaling more than 3 million rubles per month. Nutrition plans take in to account special climatic conditions: standards for energy Facts 89 indicators of nutrition in the northern part of the country are high. The daily caloric requirement in the Far North is 3,450 In 2019, the number of employees increased by 27.5% kcal per day. and amounted to more than 2,500 people. The need for - male The company has created 6 food outlets. In addition to the expanding staff is largely related to the launch of the EB SB - female large dining room at the support base of the field and the OGCF into commercial operation. Most employees (87%) are dining room at the central processing center, there are food directly involved in the Republic of Sakha (Yakutia), where the outlets in shift camps near the villages of Novy, Svetly and company’s main production facilities are located. The average Suntar, as well as near the Yuzhnosuldyukarsky site. age of employees is 39 . 23 people are involved in catering operations: 2 senior The company is one of the key employers of the Republic Personnel structure cooks, 13 cooks, a technologist, 7 kitchen workers. Chefs work of Sakha (Yakutia). In 2019, RNG entered into an agreement by categories, % according to technological maps developed by the research with the Republican State Employment Committee on mutual institute of public catering. All routings are entered in the cooperation in the implementation of the priority project of the 13 1C: Food Combine program. A monthly menu plan is formed, Republic of Sakha (Yakutia) “Local personnel in industry”. As of which indicates how many servings of each meal needs to be the end of 2019, the share of the local population working in prepared per month. the company is about 10% of the total number of employees. 2019 19

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Personnel growth indicators, number of People - workers - managers - specialists

2,500 2,000 1,500 Personnel structure by regional distribution, % 2017 2018 2019 3 10

Personnel dynamics by age, age 2019

43 87 39

- Moscow - other regions - The Republic of Sakha (Yakutia) 2018 2019

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The company strictly monitors compliance with the quality 8.2 Social projects of supplied food products through the Mercury program. A technologist at the field carries out incoming control, checks the state of the packaging, as well as the availability in Mirny of conformity certificates. In each dining room there is a In 2018, Suldyukarneftegaz LLC (part of Eastsib Holding) special process in which the paramedic gives an organoleptic signed an agreement on socio-economic cooperation with evaluation of all dishes after tasting before each general meal. the Mirny City municipality. The company is implementing The field also has a water treatment plant with the latest a number of projects together with the City. In particular, Atlantus bactericidal plant with a capacity of 100 cubic meters during the reconstruction of the Myrninsky office on Tikhonov per day. Monthly water analysis is carried out in the laboratory Street, landscaping of the adjacent territory was completed: of Rospotrebnadzor in the city of Mirny. A water treatment paving slabs in the square in front of the office building were plant with the Ermak bactericidal plant, with a capacity of 48 completely replaced, a drainage system was installed, and cubic meters per day, is also located at the central processing lifts for pedestrians with wheelchairs and people with limited center.. mobility were installed. Every year, landscaping and flower planting along Tikhonov Street is carried out.

ВIn 2018, RNG participated in a movement to support families with Employee motivation children with disabilities. Together with the social policy department In 2019, RNG began to implement a employee motivation of the city of Mirny, company system, and launched a project to pay annual remuneration Average monthly representatives provided financial based on the achievement of key performance indicators THEsalary of company support to families. In the same established by the business plan. employees is 8% higher year, the company was the main compared with the average The company provides a comprehensive social package, sponsor of the first celebrations for monthly nominal accrued which includes: the Day of the Oil Worker in Mirny. salary for “Production of This event marked the growing role - payment of one-time financial assistance for various life crude oil and natural gas” situations; of the oil and gas industry in the life workers (according to the of the diamond-rich region. - voluntary health insurance for certain categories of Federal State Statistics employees; Service). As part of the cooperation - annual medical examinations paid by the company; between LLC Suldyukarneftegaz and the Mirny district, surveys - compensations aimed at protecting health and getting a were paid for the construction of a good rest; new solid waste landfill. The new - payment of travel to vacation sites and back for employees landfill will eliminate the need for living in the Far North and other remote areas; the garbage dump, which is located - payment of charter flights for the delivery of shift workers within the city. Furthermore, g in to the Republic of Sakha (Yakutia). the near future garbage collection and sorting will take place at a considerable distance from the village. The transfer of the MSW landfill is also necessary for the construction of a new modern airport in Mirny. RNG employees annually participate in the parades on May 1. This colorful event is a traditional and favourite holiday for all locals. Employees of the company are responsible for preparing the parade column and each time they try to present original compositions in order to raise the profile of the oil industry among local residents.

Students of the Mirny industrial technical school study welding

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8.3 Interaction with the indigenous minorities of the North

The company carries out extraction and production activities, including on the territory of the indigenous peoples of the North in the Republic of Sakha (Yakutia). RNG is committed to maintaining a balance between the implementation of its strategic plans and the interests of these indigenous peoples preserving their cultural heritage and also the environment. When developing deposits, the company strictly monitors the observance of indigenous peoples’ rights and engages in dialogue with them. The company provides financial support to tribal communities of small nations and works to preserve the national identity of the peoples of the North. Over the past few years, RNG has allocated more than 50 million rubles to charity projects. Among the beneficiaries of financial assistance are the tribal communities and public organizations: Botuobuyinsky nasleg, tribal communities «Botuobuyya» and «Sulakyyt», and the «Society of Foresters of Yakutia.» In particular, in 2019, the company significantly increased its volume of annual payments The opening of the Friendship Bridge across the Tas-Yuryakh River, which connected the A331 to the Mirny district of the Republic of Sakha (Yakutia); to Botuobuyinsky village, and to Vilyui federal highway and the licensed section of the Eastern blocks of the SB OGCF Botuobuya and Sulakyyt communities. The company is responsible for the territory on which it conducts its business activities. RNG built a bridge over the Taas-Yurekh River, During computer science class, students filed an application for the development and carrying out of a state ethnological examination which provided village residents with year- will learn 3D modeling, master the control of of the South Suldyukarsky license area. Ethno-examination is a scientific study on the impact round access to their tribal and hunting quadcopters, and virtual reality helmets. For of industrial projects on the original habitat of indigenous peoples of the northern territories estates. lessons in life safety, mannequin simulators in accordance with the requirements of the Law of the Republic of Sakha (Yakutia) dated April and mats for cardiopulmonary resuscitation, 14, 2010 No. 820-З N 537-IV . In addition, the company allocated funds wound simulator kits, wire tires, and first- to create school No. 9 at the educational aid kits were purchased. Thanks to this center «Growth Point». This contribution to necessary equipment and through practical the region’s educational and social spheres skills, students will learn how to provide first was noted in his letter of thanks by the Head aid. 8.4 Assistance to the villages of the Mirny District Rishat Yuzmukhametov. “Growth Point” is a federal project aimed The Growth Point project aims to of Suldyukar and Tas-Yuryakh at providing education within the digital and develop children’s digital, technological and humanitarian profile, developed on the basis At the end of April 2020, the companies contaminated industrial water got into the humanitarian skills and consists of four of the regional system “Modern School” (part SuldyukarNefteGaz and RNG, which are rivers Irelyakh, Malaya Botuobuya, and then main areas: Technology, IT, Life Safety and a of the national project “Education”). The goal part of Eastsib Holding, delivered crushed Vilyui. project site with three sones: chess, media of the Growth Point project is to narrow the stone to the village of Suldyukar in order to and Coworking. A separate space has been The first consequences of the disaster gap between urban and rural schools. strengthen the soil around the local school created for each subject in the school. were felt by the inhabitants of Suldyukar, building, as this area floods with the arrival which is located 30 km from the mouth of of the spring rains. Malaya Botuobuyi. The village of Suldyukar is the capital of To restore the livelihoods of the affected the Sadynsky national Evenki litter, and the areas, a delivery of self-cleaning filters only place in the Mirny district of the Republic with programmable electronic systems of Sakha (Yakutia), where the indigenous (manufactured in the USA) was organized. peoples of the Far North live. The population ALROSA Airlines took part in the campaign, is 380 people. which delivered the equipment via a Il-76 This is not the only example of help. In cargo plane from Moscow Zhukovsky Airport autumn 2018, the company donated filters to its destination. (enough for three years of safe operations) The company also provides support to the for the water treatment plant in the village of village of Tas-Yuryakh; for example, through Suldyukar, which was most affected by water building a bridge and various roads. pollution in the Irely and Vilyui rivers in the Mirny district. River pollution in the Republic In 2017, RNG solved another problem along of Sakha (Yakutia) occurred on August 17, with GPP «Yakut Dolerite». To equip the main Crushed stone delivery for arranging A school room equipped 2018. After heavy rains, dams broke through street and square, more than 1,000 m3 of the area around a local school in the as part of the Growth Point the dredge ground, and a large amount of dolerite stone was required. Later, VSSM LLC village of Suldyukar project

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Musk ox in the park aviary 8.5 Natural park support 8.6 Participation in cultural projects Since 2014, Suldyukarneftegaz LLC has been actively participating in the life of the Living “RNG” was the general sponsor of the publication of the Diamonds of Yakutia Natural Park. Notably, a Trekol all-terrain vehicle was purchased and “Mammoths of the Russian Arctic” book, written by Yuri handed over to the park administration. This vehicle is needed in order for the park staff to Burlakov and Alexey Tikhonov. The book describes significant carry out environmental monitoring and scientific activities. paleontological findings over the past 30 years, across regions In 2018, the company introduced the concept of the development of the natural park, of the Russian Arctic. The publication is aimed at a wide range which includes not only improving the infrastructure, but also expanding its functionality. The of readers, including local historians, students, students of implementation of the new construction concept of the park will improve animal welfare and general educational institutions, members of polar clubs. With increase accessibility for visitors of all ages. It will also expand the possibilities of scientific the financial support of “RNG”, a photo album named “Nature and educational activities, increase the tourism potential of the Mirny district and improve of the Land of Olonkho” and dedicated to Yakutia’s nature was the ecological situation.. published.

Noble deer

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9.1 Quality Day Conference

The company is holding scientific conferences called “Quality Day” for the fourth year in a row. Participants in the oilfield services market discuss new technologies for exploration, drilling and the production of hydrocarbons. Representatives of the largest international partner companies of RNG, such as Halliburton, Baker Hughes, Schlumberger, take part in the conference.

9.2 The first Oil and Gas Forum

In August 2019, RNG organized the First Oil and Gas Forum. The forum was attended by the leaders of the Republic of Sakha (Yakutia), the largest subsoil users, as well as representatives of foreign corporations present in the region. Attendees discussed prospects for the development of the energy market not only in Yakutia, but throughout Eastern Siberia. At the ceremony, the Eastern blocks of the Srednebotuobinsky oil and gas condensate field were put into commercial operation with the participation of the Head of the Republic of Sakha (Yakutia) Aisen Nikolaev, the leaders of the Mirny district and RNG.

The first oil and gas forum, august 2019

76 77 10 International cooperation RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

10.1 Technological Cooperation

RNG’s technological partners in implementing energy projects in the Republic of Sakha (Yakutia) are international oilfield services companies such as Halliburton, Baker Hughes, National Oilwell Varco (NOV), Scientific Drilling, Schlumberger.

10.2 Membership of International Organizations RNG is a member of the American-Russian Chamber of Commerce (USRCC), headquartered in Houston (Texas) with offices in Chicago (Illinois) and New York (New York). USRCC is a non-profit organization established in 2009 with the goal of facilitating the development of business cooperation between the two countries in various fields, from oil and gas to aerospace.

10.3 Membership of Russian Social Organizations

RNG is a member of the Russian Union of Industrialists and Entrepreneurs, the Russian Gas Society, the Chamber of Commerce and Industry of the Republic of Sakha (Yakutia), and the Association of Oil Producers (AssoNeft).

10.4 Membership of self-regulatory organizations RNG and its subsidiaries are members of various self- regulatory organizations in Russia. Self-regulatory organizations (SRO) are non-profit organizations that unite business entities based on the production of goods (work, services) or the market of goods (work, services) produced, or unites certain types of professional activities. Self-regulatory organizations regulate the professional activities of market participants beyond the basic minimum requirements as determined by the state.

80 81 11 Glossary RNG / SUSTAINABLE DEVELOPMENT REPORT RNG / SUSTAINABLE DEVELOPMENT REPORT

EAGZU — Automatic Group Metering Units LD — Logistics Department

APCS — Automated Process Control System LUO — Loading-Unloading Operations

AP — Asia Pacific MRP — Maintenance of Reservoir Pressure

APG — Associated Petroleum Gas OAP — Oil Acceptance Point

CC — Contractual Commission OGPT — Oil and Gas Production Tax

CDD — Closed Distribution Device OGR — Oil and Gas Refinery

CES — Central Engineering Service OPS — Oil Pumping Station

CGTU — Complex Gas Treatment Unit PCM — Production and Construction Management

COCP — Central Oil Collection Point PFR — Pension Fund of the Russian Federation

CWO — Current Wells Overhaul POL — Petrol, Oil and Lubricants

DBS — Department of Buildings and Structures PS — Pipeline System

DO — Diesel Oil RF — Russian Federation

DSiT — Directorate for Construction and Transport RPS System — Reservoir Pressure Support System

EB SB OGCF — Eastern blocks of the Srednebotuo- SDWIE — Solid Domestic Waste and Industrial Efflu- binsky oil and gas condensate field ents

EIA — Energy Information Administration; a principal SHC — Shift Housing Complex agency of the U.S. Federal Statistical System responsible for collecting, analyzing, and SMQQIO —System for Measuring the Quantity and disseminating energy information Quality Indicators of Oil

ESPO — oil transferred via East Siberia-Pacific SS — Service Station Ocean pipeline SSM — Security Service Management FBI SCMR — Federal Budget Institution “State Com- mission for Mineral Reserves” STC — Scientific and Technical Council

FCMIF — Federal Compulsory Medical Insurance TC — Technical Conditions Fund TOP — Trial Operation Project FEFD — Far Eastern Federal District TTD —Technological Transport Department FSB — Field Support Base VIOC — Vertically Integrated Oil Company GSW — Geophysical Surveys of Wells WTLD — Warehouse and Transport Logistics Depart- GER — Geological Engineering Research ment

GTS — Gas Transportation System

II — Inventory Items

IP — Insertion Pointти

84 85 Member Russian Union Member of the Chamber Certificate of Industrialists and of Commerce and Industry GOST ISO 9001-2011 Entrepreneurs of the Republic of Sakha (Yakutia) Quality management system

Member Member of the Certificate GOST R 54934-2012 Research Institute of Applied Assoneft US-Russia Chamber (OHSAS 18001:2007) Ecology of the North of Commerce Health and safety management system

Member Certificate GOST R ISO 14001-2016 of the Russian Gas (ISO 14001:2015) Society Environment management system

Office in Moscow Office in Yakutsk Head office in Moscow 677007, Yakutsk, 121099, Moscow, Novy Arbat st. 27. Glukhoi lane 2, building 1, Telephone: +7 (495) 662-71-33 Portal business centre, 3rd floor, office 313. Fax +7 (495) 287-95-18 Telephone: +7 (4112) 33-50-90 E-mail: [email protected] Fax: +7 (4112) 33-50-99 E-mail: [email protected] 129090, Moscow, 1st Troitskaya lane 12, building 5. Office in Samara Telephone : +7 (495) 662-71-33 443110, Samara, Fax: +7 (495) 287-95-18 Lesnaya st. 23, building 100, E-mail: [email protected] office 207. Telephone : +7 (927) 761-34-99 Office in Mirny E-mail: [email protected] 678170, Mirny, Tikhonova st. 12, building А. Office in Lensk Telephone: +7 (495) 287-95-19 678144, Lensk, E-mail: [email protected] Pervomaiskaya st. 32, building А, office 1 E-mail: [email protected] Office in Ust-Kut 666780, Irkutsk Region, Ust-Kut, Office in Irkutsk Lugovaya st. building 21/22. 664009, Irkutsk, Shiryamova st. 38/1 Telephone : +7 (495) 662-71-35 E-mail: [email protected] E-mail: [email protected]