Message from the Chairman of the Management Board

Alexander Dyukov

Dear Shareholders and Investors,

Evaluating the Company’s work in 2014, I can state that Gazprom Neft adequately met the challenges of the changing macroeconomic situation and demonstrated steady growth in its production indicators. I believe that such difficult periods test the soundness of the strategies we have chosen. From the very beginning, we have relied on sustainable development and efficiency and we continue to build the Company based on these same principles.

Strong Operating Results

2014 was a year full of big and important events. Gazprom Neft began providing European consumers with the first supplies of the new Arctic oil blends: ARCO, which is produced at the Prirazlomnaya platform, and Novy Port from the Novoportovskoye field on the Yamal Peninsula. Commercial operations were launched at the Badra field in Iraq, the Company’s largest foreign production project.

The development of projects in Russia and abroad has enabled Gazprom Neft to achieve record growth in oil production for the Russian oil industry of more than 6% and the Company has also replaced the production volume with new reserves five-fold. In 2014, Gazprom Neft had proved and probable reserves of 2.55 bn TOE, up by more than 11% compared with 2013.

Production Innovations

One of the most important areas of work in 2014 was the introduction of new technologies at mature fields. This resulted in production growth at assets that have already been under development for decades. We managed to achieve such results thanks to an increase in the proportion of high-tech wells — the Company currently occupies leading positions among Russian oil industry enterprises in terms of this indicator.

Modernisation of Oil Refining Assets

The Company increased the volume of oil refining by 2% to 43.48 mn tonnes in 2014. After completing a quality programme and switching to the production of Euro-5 standard fuel, Gazprom Neft in 2014 began implementing the second phase of a programme to modernise its oil refineries with an increase in refinery yield and the output of light petroleum products. Omsk Oil Refinery, the largest refining asset of Gazprom Neft, maintained its commanding lead in the industry in 2014 by refining a one-year record of 21.3 mn tonnes of petroleum feedstock.

Development of Sales Channels

The Company continued to modernise its tank farm facilities and actively developed premium sales of petroleum products: growth in sales in high-margin segments of the market totalled 7.5% in 2014.

Last year the Company took a serious step forward in the development of the bitumen business by establishing a specialised operator — Gazpromneft-Bituminous Materials. After purchasing Russia’s largest polymer-modified bitumen production asset — the Ryazan Petrochemicals Experimental Plant — and launching the production of new generation G-Way Styrelf jointly with France’s Total at the Moscow Oil Refinery, Gazprom Neft became a leader on the modern bituminous materials market in 2014.

We are entering new sales markets and forming our own technological strategy that is synchronised with the long-term business development strategy. This will enable us to more actively develop our own innovative potential and maximise the return on investments in high-tech areas of work. Despite growth in investment activity, the Company intends to maintain dividend payments to shareholders at the level of 25% of net profit.

Plans to improve efficiency of business processes

Given the changed macroeconomic conditions, Gazprom Neft management will focus on improving the efficiency of all the Company’s business processes. Our main objectives in 2015 will be to maintain high rates of production growth and operating efficiency at oil refineries, further develop premium sales channels and improve the level of the Company’s technological efficiency.

I am confident that we have already created a sufficient safety margin to continue to move forward towards our planned strategic goals.

Alexander Dyukov sign

Alexander Dyukov

Chairman of the Management Board, Chief Executive Officer of OJSC Gazprom Neft