EXPORTS OF CRUDE OIL AND
PETROLEUM PRODUCTS

EXPORT SALES OF PETROLEUM PRODUCTS

Source: Company data

In 2013, Gazprom Neft Group exported 16.82 million tonnes of petroleum products, including 14.61 million tonnes to non-CIS countries and 2.21 million tonnes to CIS countries. Exports to non-CIS countries grew by 3.40% compared with 2012. The increase in export sales of petroleum product was due to the expansion into new markets and an increased volume of trade.

Exports to CIS countries fell by 5.96% compared to 2012. The overall growth in petroleum product exports during the reporting year was 2.06%.

SALES OF PETROLEUM PRODUCTS TO CIS

Source: Company data

In the reporting year, crude oil exports by Gazprom Neft Group reached 12.34 million tonnes in absolute terms, which was 4.3 million tonnes lower than in 2012. Crude oil exports to non-CIS countries dropped by 41.29% in the reporting year compared with 2012, due to the redistribution of oil exports in favour of CIS countries.

Crude oil exports to CIS countries were 4.05 million tonnes, 62% more than in 2012.

* Including SE

Source: Company data

Source: Company data

Breakdown of crude oil exports from Russia by types of transportation, million tonnes

Source: Company data

GAZPROM NEFT TRADING GMBH

Exports of crude oil and petroleum products are undertaken through the Group trading subsidiary, Gazprom Neft Trading GmbH (Austria), which supplies crude oil and petroleum products to endusers on the international market. Ownership of a trading subsidiary enables centralization of export sales, which is consistent with best practice of most major international vertically integrated (such as BP, SHELL, ExxonMobil, TOTAL, and ENI) and national oil companies (such as Petro China, Aramco, and Kuwait Petroleum.)

The Company has identified the following advantages of channelling crude oil and petroleum product exports through Gazprom Neft Trading GmbH:

  1. Geographical proximity to the main international oil trading centres, lower administrative costs in customer negotiations, less paperwork and faster decision making.
  2. The successful operational track record of Gazprom Neft Trading GmbH in the global oil and petroleum products markets enables Gazprom Neft to make the most of opportunities when implementing large Russian and international production projects (Arctic, Middle East) and refining projects (Vietnamese and German refineries).
  3. The employment of both Russian and foreign experts with experience in international companies and a deep knowledge of global energy markets is a competitive advantage for Gazprom Neft Trading, enabling it to export the Company’s oil and petroleum products to international markets efficiently.
  4. Located in the European Union, Gazprom Neft Trading can develop relations with end consumers in the primary target market more efficiently.
  5. Ability to make faster agreements with contractors without the need for currency regulation and control procedures as required in Russia.
  6. More flexible access to hedging operations through leading international commodity exchanges (ICE, NYMEX) and off-exchange contractors.
  7. Quicker chartering of oil and petroleum product tanker tonnage.
  8. Favourable terms of cooperation with leading international banks: ING, BNP Paribas, RBI, and Credit Agricole, owing to the trading subsidiary’s long-term record in the EU zone.
  9. Minimised risks for the non-submission of documentation required by Russian law to confirm Value added taxVAT zero rate for petroleum product exports, and lower administration costs.

In 2013, Gazprom Neft Trading GmbH sold 9.62 million tonnes of oil and 13.17 million tonnes of petroleum products abroad, including 12.87 million tonnes to non-CIS countries and 0.30 million tonnes to CIS countries. Exports to non-CIS countries grew by 3.5% versus 2012. Petroleum product exports to CIS countries decreased by 16.9% compared with 2012.

KEY STRATEGIC TARGETS OF GAZPROM NEFT TRADING GMBH:

  • Efficient growth in foreign markets through the creation and promotion of oil and petroleum products across the whole value chain. The main target area is the promotion of wholesales of low sulphur diesel fuel in Germany, France and Austria (in 2013, they amounted to 1.3 million tonnes), as well as direct oil supplies to European and Asia-Pacific refineries.
  • Generation of profit from foreign activities, subject to acceptable risk levels and taking into account the Company’s long-term interests.
  • Company integration through efficient supplies to the Group’s subsidiaries abroad.
Crude oil exports by Gazprom Neft Trading GmbH to non-CIS countries, million tonnes

Source: Company data

Source: Company data