RussNeft: Statement by the President of the Company on the Implementation of Initiatives in the Field of Climate Projects, Sustainable Development and Care for Personnel

Preserving the health of employees, industrial safety and environmental protection in the areas of the Company’s operations – these are the main priorities and the most important conditions for the successful and sustainable development of RussNeft in addressing emerging environmental, social and management issues.

The energy sector in which our Company operates is considered one of the main sources of greenhouse gas emissions. Therefore, we are closely following the climate agenda and the development of green technologies in the production and processing of hydrocarbons.

RussNeft recognizes the importance of measures to prevent global climate change and supports Russia’s efforts to implement the Paris Agreement. We are actively involved in updating sectoral legislation and developing a national system of instruments that legislate for carbon neutrality and reduce CO2 emissions on a global scale.

Our actions to protect the environment are not limited to participation in lawmaking. RussNeft develops its own strategy to reduce greenhouse gas emissions and implements a number of measures to manage climate risks. The Company has an Investment Gas Program to Increase the Useful Use of Associated Petroleum Gas, an Energy Saving and Energy Efficiency Program and an Action Plan for Reforestation. A promising area is the introduction of technologies for capturing and storing CO₂.

The implementation of these programs will reduce the level of flaring of associated petroleum gas, increase the efficiency of its own generation of thermal power, and increase the energy efficiency of equipment used in the production, treatment and transportation of oil and gas. Together, these steps will reduce the negative impact on the environment and reduce the carbon footprint.

To implement a strategy to reduce the carbon footprint on the environment, the Company’s management sets the appropriate goals and objectives, allocates the necessary organizational and financial resources to achieve them, monitors and analyzes the Company’s activities in the field of sustainable development.

Key programs to reduce greenhouse gas emissions.

Goal to reduce greenhouse gas (GHG) emissions

The Company’s activities to reduce greenhouse gas emissions are based on the existing experience in implementing low-carbon projects, comparable to the practice of leading oil and gas companies.

RussNeft’s Climate Strategy sets a target to reduce GHG emissions by 2030. We plan to reduce controlled emissions by 10% from 2019 levels. This is equivalent to a 140,000 tonne reduction in gross greenhouse gas emissions under comparable conditions

Utilization of associated petroleum gas (APG)

The company uses associated petroleum gas to generate heat and electricity for its own consumption. In addition, we send APG to gas processing plants and supply it to gas transmission systems of other organizations. The level of associated petroleum gas utilization in the Company is over 95%. Work in this direction continues at new fields and is defined in the “Investment Gas Program to Increase the Level of Useful Use of Associated Petroleum Gas”. The measures of the program will increase the percentage of useful use of associated petroleum gas to the maximum possible under the technology conditions.

Improving energy efficiency

Improving energy efficiency is one of the strategic directions for reducing GHG emissions. Work in this direction is spelled out in the “Program for Energy Saving and Energy Efficiency Improvement”. It is focused on improving energy efficiency and reducing energy losses as a result of planned annual activities, optimizing equipment for the extraction and processing of oil and gas, and reducing greenhouse gas emissions.

Reforestation activities

The implementation of large reforestation projects helps the Company offset its emissions. The Reforestation Action Plan for the period from 2020 to 2024 envisages the planting of 2 million trees. From 2024 they will absorb 493 tons of CO ₂ annually.

New directions

As part of compensatory measures and activities to reduce greenhouse gas emissions, RussNeft is looking for optimal technological solutions for capturing CO ₂ and pumping it into the reservoir.

Sustainable development and care for staff

The year 2021 has reaffirmed the critical importance of joining forces to combat the COVID-19 pandemic. The comprehensive COVID-19 response program adopted by RussNeft is aimed at protecting employees, ensuring the continuity of production processes and maintaining the financial stability of the Company.

From the beginning of the pandemic to the present day, RussNeft has been doing everything possible to preserve the health and life of its employees, their families, local population, clients and partners. The priorities of the Company remain

• Formation of a safe environment at facilities using a system of regular mandatory testing;
• Creation of observation sites in which shift workers undergo quarantine before entering the field;
• Transfer of a part of employees to a remote mode of work;
• Interaction with municipalities in the places of production activity in order to vaccinate the employees of the Company and contractors.

RussNeft continues to help small-numbered and indigenous peoples of the North, interact with municipalities on equipping medical institutions and providing assistance to vulnerable groups of the population, participate in joint educational projects, and maintain a commitment to a healthy lifestyle and sports.

We measure the success of the Company not only by performance indicators, but also by the value created for society as a whole. We always strive for more – and we will continue to make a meaningful contribution to the preservation of the environment and the development of society.