ADDRESS BY THE CHAIRMAN
OF THE MANAGEMENT BOARD

A YEAR OF NEW OPPORTUNITIES

Over the past year, Gazprom Neft has continued to strengthen its operational and financial performance. The Company’s 2013 results made it one of the industry leaders in terms of operating profit per BOE produced and growth of adjusted operation profit, subject to the performance of its joint ventures.

Using the most modern and high-tech methods, we have achieved production growth not only at our new projects, but also at mature fields in traditional regions. Our main goals for 2014 include our continuing refinery modernisation programme, the start of production at the Badra field in Iraq, and further expansion of our premium distribution channels.

Dear shareholders and investors,

2013 was a successful year for Gazprom Neft across all its business lines. Despite challenging macroeconomic conditions — higher tax rates and natural monopoly rates subject to the same oil prices — the Company performed very well against its key financial and operating indicators.

By optimising existing fields, actively implementing new technology and increasing its asset portfolio, we saw production increase by 4.3% to more than 62 million tonnes of oil equivalent.

A significant event, not only for our Company, but also for the whole international oil industry, was the first ever production of oil on the Arctic shelf: as a project operator, Gazprom Neft began commercial development of the Prirazlomnoye field in the Pechora Sea.

Gazprom Neft continues to develop its new production cluster in the north of the Yamalo-Nenetz Autonomous District (YaNAD) and the Yamal Peninsula. Preparations are well underway to develop large new fields — the Novoportovskoye and Messoyakhskoye fields (the second project in partnership with Rosneft).

We also increased our share in SeverEnergia by over 40% last year.

The Company is actively employing new technology to develop hard-to-recover reserves at brown fields that were previously considered inefficient. Gazprom Neft’s hard to recover reserve programme approved in 2012 will add another 300 million tonnes of reserves to its development portfolio by 2020. At year-end 2013, over 22 million tonnes of hard to recover reserves were already in development. The active implementation of innovative techniques in this area is clearly demonstrated by the fact that the of the total volume of drilled wells, the share of high-technology wells has increased from 4% to 35% over the last two years, underlining the Company’s position as one of Russia’s oil and gas leaders.

We continue to build up our resource base and were able to increase Quantities of liquid, gaseous and solid hydrocarbons, which, according to engineering and geological information, are most likely to be produced by industrially available methods from known deposits starting from a specific date, under the existing economic conditions, with generally accepted operating techniques, and in compliance with applicable effective national regulationsproven reserves to 1.34 billion tonnes of oil equivalent at year-end 2013. This means that during the past year, we have increased proven reserves by almost 12%, with a reserve replacement ratio of 333%.

Gazprom Neft’s international projects also made good progress last year. We produced the first oil in the Badra field in Iraq and took part in a new project in the north of the country, in Kurdistan.

In the refining segment, the most important event was the completion of a quality programme at all of the Company’s refineries and the switch over to the production of higher class fuels to Euro 5 emission standards, which took place a full 2.5 years earlier than required by law.

In the refinery segment, our focus is now turning to the implementation of a deeper refining programme. As a result, within a few years, refining depth will increase to 95% and our share of light products will be 77%.

At the end of the past year, the average daily sales at filling stations grew by more than 8% to 19 tonnes, a record for the Russian industry. This was made possible by the rebuilding and rebranding of the filling station chain and the implementation of our loyalty programme.

We also extended the line of G-Drive premium fuels and G-Energy and G-Profi premium motor oils with improved environmental characteristics. We are actively developing new premium products, particularly high-quality bitumen. Today, our Company is the largest Russian producer of polymer-bituminous binding materials.

The dividend yield of Gazprom Neft remains at a steady, high level. We have the highest dividend yield in the industry and, despite the growth of our investment activity, the Company intends to maintain dividend payments at 25% of consolidated profits, as calculated under IFRS. In 2014, we will continue to use advanced technology to maintain production levels in our traditional operating regions. We will also launch new large-scale projects both in Russia and abroad, continue to modernise our refineries and develop the retail chain. These actions will help us to ensure further, sustainable growth in the Company`s shareholder value.

Alexander Dyukov
Chairman of the Management Board
OJSC Gazprom Neft