Gazprom Neft Board of Directors reviews the company’s strategic development
The Gazprom Neft Board of Directors has reviewed and taken note of information on the implementation of the company’s development strategy to 2030.
Adopted by the Board of Directors in November 2018, Gazprom Neft’s current development strategy outlines the company’s key strategic objectives to 2030, and the means of achieving these, consistent with new challenges and recent changes in the global economy.
Oil-industry trends in 2020 have been impacted by reduced demand and lower prices for oil and oil products, the spread of the COVID-19 pandemic, and limits on production under OPEC+. In line with changes in the market environment, Gazprom Neft made adjustments to OPEX and CAPEX in 2020, as well as to operations at production assets. The company maintained its financial sustainability, however, ensuring the full continuity of all production processes. Gazprom Neft’s business development activities in 2020, as well as the company’s short-term plans, remain consistent with the long-term quality and development objectives outlined in its current strategy.
Upstream, the company remains focussed on infrastructure development, optimising profitability in developing reserves and increasing oil recovery through cutting-edge technologies, as well as developing non-traditional reserves and implementing new projects. Gazprom Neft began full-scale development of its Zima project (with potential resources of 840 million tonnes of oil) in the Khanty-Mansi Autonomous Okrug-Yugra in 2020, with one million tonnes of hydrocarbons being produced at the flagship asset on this project — the Alexander Zhagrin field — in its first year in development. Peak production at this field will reach 6.5 million tonnes of oil by 2024. The company continues to work on reducing production costs in at the Bazhenov Formation, and expects to achieve viability at fields with developed infrastructure in 2021. Gazprom Neft is actively developing projects in geological prospecting and production, developing technologies for developing “hard-to-recover” oil and offshore assets with the involvement of international and Russian partners. The company acquired subsoil usage rights to 18 license blocks in 2020.
Gazprom Neft continues its programme for developing its refining facilities, directed at increasing refining depth (the “conversion factor”) and efficiency, as well as further reducing environmental impacts. Work has started on a unique Euro+ oil-refining complex at the Moscow Refinery, facilitating full-cycle production as well as allowing the decommissioning of five previous-generation installations. A deep refining complex has been commissioned at Serbian subsidiary NIS, increasing refining depth to a record 99% as well as delivering an almost 40% increase in production of diesel fuels. Construction of a diesel hydrotreatment facility (complete with de-waxing unit) is coming to completion at the Omsk Refinery, as is reconstruction of a catalytic reforming unit. Work on primary and advanced oil refining facilities, and on a delayed-coking unit, is also in its final stages.
The company is continuing the development of its own retail network, and continues to expand its project range. A proprietary ultra-low-sulphur (less than 0.5%) marine fuel, produced at the Omsk Refinery, has been launched on the bunkering market. Russia’s first ever LNG bunkering vessel, the Dmitry Mendeleev, was put to sea at the end of 2020. Production of premium bitumen products is up eight percent, with the company using sea-going bitumen tankers to export high-tech bitumen products to European customers for the first time. Gazprom Neft completed industrial testing of its proprietary advanced diesel hydrotreatment catalyst in 2020, part of the national project to build the country’s first cutting-edge catalyst-production facility in Omsk.
The company’s “Antivirus” programme — directed at protecting Gazprom Neft employees and clients from the COVID-19 pandemic, maintaining the continuity of the company’s activities, as well as its financial sustainability, and supporting those locations in which the company operates — has also proved highly effective.