Address by the Chairman of Management Board

Александр Дюков

The year 2014 proved to be highly eventful for Gazprom Neft. The Company sold the first oil from the Prirazlomnoye offshore field in the Russian Arctic shelf on the world market; began pumping at the Badra field in Iraq, and carried out summer ship-to-shore delivery from the Novy Port field in Yamalo-Nenets Autonomous District. While development of refining assets continued apace, the Company also became a market leader in innovative bitumen materials. Gazprom Neft retained its industry-leading growth rate in hydrocarbon production and is developing the technology to get the most out of mature fields.

Given the global changes in the industry, it is difficult to overstate the importance of hard-to-recover reserves, non-traditional production, and the modernization of refinery infrastructure to improve efficiency and product quality. By rising to these challenges with new technologies and management approaches, we are laying the groundwork for continued stable growth in the years to come.

In addition, Gazprom Neft makes a significant contribution to the social and economic development of the regions in which it operates. To more effectively address regional development, in 2013 Gazprom Neft initiated the Home Towns programme for holistic social investment. Home Towns promotes quality of life locally by expanding access to modern urban infrastructure as well as to educational and cultural opportunities. The programme helps to develop social and entrepreneurial initiatives among communities, creating the infrastructure that residents need to improve their lives.

By developing and implementing new approaches, combined with our growing experience in the field, the Company is making good on its commitments to sustainable development and corporate social responsibility. Major environmental safety and conservation projects in 2014 included the development of a fauna preservation programme for the south-eastern Barents Sea, a pilot green seismic exploration project that substantially reduced the need for logging compared with traditional methods, and emission reductions at the Company’s Moscow refinery. Substantially ahead of the deadline set by the Russian government, the Company has transitioned to the Euro 5 standard for environmentally friendly petrol. Thanks to refinery modernization and utilization of associated petroleum gas, in 2014 Gazprom Neft was able to cut gross emissions by more than 14% compared with 2013, and by 52% compared with 2012.

Gazprom Neft is constantly striving to improve safety in the workplace. Expenditure on occupational health and safety and environmental protection amounted to approximately RUB 22 billion in 2014 alone. We selectively source and implement the newest, safest technologies that offer the most value for our workforce and the environment. As a result, workplace incidents at production sites decreased by over 12% in 2014. The company’s strategic goal is to become the industry leader in workplace safety.

Gazprom Neft’s most valuable asset is its people. That is why we take particular care to invest in staff development. We work to keep our employees motivated, engaged, and proficient in their field. Our approach is to employ the best specialists, provide them with good salaries, working conditions, and benefits, and give them everything they need to thrive and make the most of their creative potential. An important element of this is our work with students, recent graduates, and up-and-coming professionals, as we seek to nurture the next generation of Gazprom Neft employees. In 2014, the Company invested over RUB 60 billion in employee social support and development, exceeding the 2013 total by more than 26%.

We continue to move forward with the sustainability work begun in previous years. And with new social and environmental projects coming online, 2015 promises to be the most sustainable year yet for Gazprom Neft

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Alexander Dyukov

Chairman of the Management Board and CEO of Gazprom Neft