INDUSTRIAL, ENVIRONMENTAL, AND OCCUPATIONAL HEALTH AND SAFETY (HSE)

The Company’s key priorities in the area of corporate social responsibility include the improvement of occupational health and safety and the reduction of its environmental impact. The company is committed to constantly improving workplace and environmental safety, consistent with international best practice, and to making full use of innovations developed by Gazprom Neft businesses.

Gazprom Neft complies with national policy requirements for health, safety, environment, and social protection, as well as corporate and international standards.

The Company has a corporate Health, Safety, Environment, and Social Protection Policy (The Health, safety, and the environmentHSE and Social Protection Policy). The Policy is pivotal to the performance and improvement of the HSE and social protection management system that complies with OHSAS 18001:2007 and ISO 14001:2004 international standards and covers all Gazprom Neft production facilities.

A uniform integral indicator has been developed at Gazprom Neft to assess the operation of facilities in terms of key industrial and environmental safety, occupational health and safety, and civil defence indicators: accident and injury rates; implementation of programmes at subsidiaries covering injury prevention, fire, transport and environmental safety; and implementation of civil defence measures. These measures are taken into account when reviewing the annual performance of the Company’s subsidiaries.

Hazardous incidents at facilities

Source: Company data

Hazardous accidents at facilities

Source: Company data

Cooperation with contractors ise an important part of the Company’s HSE and social protection management system. According to the ‘Procedure for managing contractors and cooperative arrangements in the field of industrial, environmental and occupational safety, and social protection’, contractor compliance with the HSE and social protection requirements is a vital pre-qualification criterion. All contractors who provide services to the Company sign an HSE and social agreement that stipulates mandatory compliance with Company HSE standards.

In 2013, scheduled work continued to establish an integrated HSE and social protection system and to improve its efficiency. In pursuit of this goal, the main objectives were to improve this system and to develop programmes and projects, based on an analysis of the status quo and subject to an efficiency assessment. In the reporting year, the auditing of HSE and social protection management systems at subsidiaries continued. Two audits of the HSE and social protection system (at the Omsk Lubricants Plant branch of LLC Gazprom Neft – Lubricants and LLC Gazprom Neft Asia) and two full technical audits (at OJSC Gazprom Neft-NNG, CJSC Gazprom Neft-Terminal) were carried out.

Occupational health & safety

The Company’s key OHS priorities include a continuous improvement in health and safety by reducing accident, occupational injury, and work-related illness rates.

Injury prevention programmes, as well as transport and fire safety programmes, are developed at the Company’s subsidiaries in accordance with the corporate integrated HSE and social protection risk management system. In the event of an incident, the Company carries out an investigation and develops and implements corrective actions. Information about incidents is communicated to all subsidiaries and contractors engaged by the Company and its subsidiaries so that preventive actions can be taken.

The Company spent RUB 12,357,031 thousand on HSE and social protection in 2013 (excluding jointly-owned and foreign assets). As the result of a consistent focus on performance in this area, accident and injury rates decreased in 2013.

The Company is dedicated to its employees’ health and safety. Gazprom Neft offers regular medical examinations for its staff. The Company spent RUB 3,401,715 thousand on occupational health and safety in 2013 (excluding jointly-owned and foreign assets).

In 2013, the Company continued implementing a set of measures to improve road transportation safety, including the development of regulations, conducting monthly safety campaigns, and training staff. In the area of social protection, the Company’s actions were focused on the implementation of national policy and the improvement of employees’ emergency skills, as well as improving the continuity of production facilities in the event of an emergency.

Number of industrial accidents

Source: Company data

Number of fatalities

Source: Company data

Injury rate (LTIFR)

Source: Company data

RECERTIFICATION

In 2013, OHSAS 18001:2007 certificates, valid until 2016, were reissued to CJSC Gazprom Neft-Moscow Lubricants Plant, OJSC Gazprom Neft Moscow refinery, and Omsk Lubricants Plant branch of LLC Gazprom Neft-Lubricants. The successful recertification confirms that the subsidiaries’ management systems comply with the international OHS management system requirements.

REDUCTION OF ADVERSE INDUSTRIAL IMPACTS ON THE ENVIRONMENT AND EFFICIENT USE OF RESOURCES

One of the main business principles of Gazprom Neft and its subsidiaries is the protection of the natural environment and resources. The Company aims to minimise the negative impact of its operations on the environment.

According to the Decree of the President of the Russian Federation “On Holding a Year of Environmental Protection in Russia”, 2013 was declared the Year of Ecology at Gazprom Neft. The Company developed measures to reduce its adverse environmental impact, including over 300 different campaigns to improve waste management and wastewater treatment systems, reduce air pollutant emissions, and decrease APG flaring.

Gazprom Neft thoroughly assesses the environmental and biodiversity impact of its planned and current operations, including growing periods, breeding seasons, and animal migration.

Gazprom Neft has an integrated environmental management system. A certification audit was carried out in 2013, and the system was found to comply with the ISO 14001:2004 international standard. The certification of subsidiaries will be the Company’s next environmental management development focus. In the reporting year, Gazprom Neft-Omsk refinery and Gazprom Neft-Moscow refinery underwent a compliance audit of the Integrated Management System in accordance with ISO 9001, 14001, and OHSAS 18001, and obtained international compliance certificates. Gazprom Neft-Sakhalin also obtained ISO 9001 and 14001 compliance certificates.

* Net of costs associated with capital construction, retrofitting and maintenance of fixed assets, which have a positive environmental impact.

Source: Company data

Current environmental expenditure, RUB million

Source: Company data

IMPROVING AIR QUALITY

Gazprom Neft is implementing measures to improve air quality, by making an inventory of emission sources, developing design and consent documentation, monitoring air components at controlled facilities, and upgrading equipment in order to reduce emissions.

In 2013, an APG flaring system update, using a soot-free regime, resulted in the reduction of air pollutant emissions from APG flaring. The implementation of APG utilisation programmes enabled the Company to reduce greenhouse gas emissions and to close eight flare stacks, which were a source of air pollutant emissions. Thanks these measures, in 2013, the Company’s overall pollutant emissions decreased by 305,900 tonnes (down 28% year-on-year). The APG utilisation level in the Company reached 80% by year-end 2013 (up 14% year-on- year). The Company is an industry leader in terms of APG utilisation rates.

In 2013, the environmental safety programme at Company subsidiaries included such operations as:

  • Modernization of flare systems and redirecting associated gas streams (Gazpromneft Vostok, Gazpromneft Khantos);
  • Retrofitting storage tanks with aluminium pontoons (Slavneft YANOS, Gazpromneft Omsk refinery);
  • Construction and commissioning of vacuum compressor stations (Vyngapurovskoye and Vyngayakhinskoye fields operated by Gazpromneft Noyabrskneftegaz and its affiliate Gazpromneft Muravlenko);
  • Inclusion of gas-contamination control stations (at the OJSC Gazpromneft Moscow refinery buffer zone) in the Moscow Unified Monitoring System;
  • Renovating a bitumen unit (Gazpromneft Moscow refinery);
  • Implementing a project to automatically fill tanker trucks with bitumen and put in place a rail tank wagon filling platform (Gazpromneft Omsk refinery);
  • Renovating Gazprom Neft filling stations and equipping them with the latest technology;
  • Installing automated emission monitoring systems and sampling posts (Gazpromneft Moscow refinery).