INVESTMENT ACTIVITIES:

MODERNISING ASSETS
TO ENHANCE OPERATING EFFICIENCY

Gazprom Neft’s investments aim to maximise value, increase efficiency, and help the Company achieve its strategic goals.

Source: Company data

GAZPROM NEFT’S FUNDAMENTAL INVESTMENT PRINCIPLES ARE AS FOLLOWS:
  • Comply with the investment plans as set out in the Company’s approved Strategy;
  • Implement the most efficient projects, and create an optimised investment portfolio;
  • Implement collaborative decision-making and delegate investment decision-making through a hierarchy of responsibility;
  • Minimise the risks associated with project implementation;
  • Adopt a differentiated decision-making approach to projects and control over their progress, depending on the type and complexity of each project; and
  • Undertake mandatory periodical monitoring of project implementation.

The alignment of investment plans with the approved Strategy is ensured by a three-year medium-term investment programme, which aims to achieve clear, detailed medium-term targets as it moves towards the implementation of the Company’s long-term strategic goals. The programme consists of investment projects, with broadly defined financing needs and economic and operating indicators, and a scope proportional to the Company’s investment capacities.

Large-scale development plans in all business segments will require considerable investments. Total investments were RUB 217.5 billion in 2013, a 16% increase over 2012.

  • Capital investment totalled RUB 195.0 billion in 2013 (excluding changes in advances issued and materials used in capital expenditures). Compared with 2012, investments in the exploration and production segment grew by 14.8% due to an increased number of drilling programmes at the Company’s traditional fields and the East area of Orenburg oil and gas condensate field, including a higher number of more technology-intensive horizontal wells to develop complex fields more efficiently, as well as due to the financing of large infrastructure facilities at the Novoportovskoye field in order to prepare for its full-scale development.
  • In 2013, RUB 27.3 billion were invested in oil refining operations, which is 35% lower than in 2012. This reduction was due to the completion of the construction of the catalyst cracking gasoline hydrotreatment and diesel hydrotreatment facilities at the Omsk refinery in 2012.
  • Capital investment in petroleum products sales totalled RUB 17.5 billion in 2013, which is an increase of 8% compared to 2012. This growth is due to the implementation in 2013 of a large-scale programme to bring the filling station chain in line with the Company’s formats and standards in Moscow and the Moscow Region.
  • Other investments totalled RUB 6.2 billion.
  • Exploration and production projects accounted for RUB 14.6 billion, the majority of which were major development projects at the Prirazlomnoye and Messoyakhskoye fields in the Russian Federation.
  • Projects to acquire assets (M&A) accounted for RUB 7.9 billion, including acquisitions in the Marketing and Sales segment and increased participation in subsidiaries.

Longer-term investment projects totalled RUB 22.5 billion in 2013.

In 2014, the Company plans to increase its investments to RUB 304.7 billion.