The Management Committee has endorsed the Gazprom oil business development strategy stipulating annual crude recovery to be boosted to 80 mln t by 2020. The oil business will be developed on the vertical integration basis.

Developing the oil activity is a strategically important measure aimed at converting Gazprom into a diversified company, a leader in the global energy market.

Implementing this strategy will help reinforce Gazprom’s standing in the internal and external markets as an efficient multi-profile petroleum company, expand the development of Gazprom’s oil reserves and create additional conditions for enhancing Gazprom’s market capitalization and improving its bottom line.

The Management Committee resolved to submit the strategy for the Board of Directors’ approval.

Reference:

Gazprom owns over 75% of shares in Sibneft. In 2006 the Sibneft Extraordinary Shareholders’ Meeting decided to rebrand the company as Gazprom Neft.

The strategy framing process focused on several development options for Gazprom Group’s crude recovery sector.

The priority was given to the option ensuring viable return on investment and the strongest possible presence in the oil market. Under this scenario, Gazprom is projected to reach an 80 mln t recovery level by 2020 with average annual output to be growing at 4%, which is twofold up on the world’s largest oil companies.

Achieving the 80 mln t notch of crude recovery by 2020 implies stepping activities in the following directions:

• gradually bringing onstream all the Gazprom Neft explored oil fields (taking into account a Gazprom Neft 50% stake in Slavneft);
• bringing into development Gazprom’s reserves;
• expanding the resource base.

In the refining and marketing sector, Gazprom Neft will pursue the objective of expanding refining capacities, exporting part of the oil recovered, ensuring synergy with Gazprom’s processing facilities and developing retail networks.

Gazprom Neft will implement its investment programs self-funded, without any financial support from Gazprom.