Gazprom Neft’s Board of Directors considered the future development of the Company’s international business. Gazprom Neft’s strategy provides for a gradual transformation of the company into an international player. In order to meet this challenge, a diversified portfolio of assets has been formed outside of Russia over the past several years, including projects from all segments of the production chain in extraction, refining and distribution.

 

In particular, the Company has geological exploration and production projects in nine countries in the Balkans, the Middle East, Africa and Latin America. Its crude oil refining projects include two oil refineries (owned by the Serbian company NIS, 56.5% controlled by Gazprom Neft) in Serbia with a total installed capacity of 7.5 million tonnes of oil, as well as oil and lubricant production lines in Italy and Serbia.

 

One of Gazprom Neft’s strategic goals is to reach a production level of at least 10 million tonnes of oil equivalent a year outside of Russia by 2020 and to gain access to 25-30 million tonnes of annual refining capacity abroad.

 

In addition, the Board of Directors considered the prospects for applying new production technologies at the company. Specialists of Gazprom Neft estimate that by using the latest innovations at its existing fields the Company could boost production by 700-950 million tonnes of oil. The Company’s technology portfolio is divided into three groups, according to the challenges that need solving. Specifically, this includes making the development of existing assets more efficient by, among other things, increasing the oil recovery ratio and optimizing costs, as well as engaging in the development of hard-to-recover and non-traditional reserves.

 

By 2020, the contribution from these types of technologies could reach around 35 million tonnes of oil out of a projected 100 million tonnes of oil equivalent production.

 

In order to develop and utilize the potential of new innovations, Gazprom Neft has formed and is currently developing a technology management system that makes it possible to monitor technologies and their utilization, as well as to accumulate and disseminate acquired know-how and experience within the Company.

 

The Board of Directors considered the prospects of shale oil production. Gazprom Neft will gain the experience in shale oil extraction during the development of the Bazhenov Formation at Upper Salym oilfield operated by Salym Petroleum Development (SPD), which is a joint venture of Gazprom Neft and Shell. Experts of Gazprom Neft, Shell and SPD created a road map that defines the steps to achieve the main goal - the development of the Bazhenov formation in the industrial scale.

 

Chairman of the Board of Directors of Gazprom Neft Alexey Miller said: "In contrast to the shale gas extraction, which is quite out of date in Russia, shale oil production is of considerable interest for Gazprom Group and we will work actively on this issue."