REGIONAL POLICY AND LOCAL COMMUNITY DEVELOPMENT

The objective of the Company’s corporate social responsibility (CSR) initiatives in the regions is to improve the social environment and quality of life for local populations, including Company employees and their families. In implementing its CSR activities in the regions Gazprom Neft endeavours to be an initiator of (and a partner in) social and economic change, encouraging the active engagement of interested stakeholders in local social development.

The Company chooses social investment projects based on engagement with stakeholders (residents and representatives of regional government authorities) and by monitoring social well-being. The results obtained enable Gazprom Neft to identify the regions’ social challenges and then develop and implement respective social and charity projects. Advice from representatives of non-profit social organizations plays a key role when creating this project portfolio.

As part of the Home Towns programme, the Company implemented 348 projects in 2013, 59 more than in 2012. The Home Towns geographical scope was also extended: in the reporting year, the first projects in the Orenburg and Kemerovo Regions were implemented.

Total costs associated with the Home Towns programme were RUB 3.7 billion in 2013, up RUB 1.3 billion compared to 2012, of which RUB 2.5 billion was spent on infrastructure investment as part of social and economic agreements with the Russian regions and municipalities and more than RUB 1.2 billion on supporting corporate charitable initiatives.

The Home Towns programme is mainly implemented through social and economic agreements with regional and municipal authorities, and also charitable donations, volunteering campaigns and a social initiative grants competition.

UNDER THE HOME TOWNS PROGRAMME

The Company implements all social and charity projects as part of the Home Towns social investment programme, which determines the main investment areas.

In 2013, the Company made 38 social and economic agreements in cooperation with the regional and municipal authorities of the Yamal-Nenets Autonomous District, Khanty-Mansiysk Autonomous District – Yugra, Nenets Autonomous Districts, Kemerovo, Leningrad, Omsk, Orenburg, Tomsk, and Tyumen Regions.

In the reporting year, the decision was made to introduce a grants competition as a new social investment tool within the framework of the Home Towns programme. The pilot project of the grants competition was implemented in 2013 in the Orenburg Region. The Grants Panel selected 12 projects out of 38 applications received, and provided grants amounting to RUB 1.6 billion. Starting in 2014, similar competitions will be held in the key regions of the Company’s operations.