2.4. Long-Term Development Program and Progress Report

The Long-term Development Program was elaborated in 2014 as instructed by the President of the Russian Federation Vladimir Putin (Instructions No. Pr-3086 of December 27, 2013) and approved by the Rosneft Board of Directors on December 09, 2014 (Minutes No. 12).

The Long-term Development Program was updated in 2015 to detail the efforts aimed at the achievement of long-term goals, including import substitution, local content in the manufacturing of machinery and technologies, talent development, and activities planned in accordance with the requirements of the Russian Government’s Directives (No. 4955p-P13 of July 17, 2014, No. 7558p-P13 of November 12, 2014, No. 1346p-P13 of March 05, 2015, and No. 2303p-P13 of April 16, 2015 and No. 7389P-P13 of October 31, 2014) and at improvement of the quality of planning. However, the long-term strategic goals and objectives under the Program after the update remain unchanged and are in line with the Company’s development strategy. The updated Long-term Development Program was approved by the Company’s Board of Directors (Minutes No. 10 of December 21, 2015).

The Program details the Company’s strategic development areas, targets, and milestones for all businesses and corporate functions and includes the list of key initiatives aimed at Strategy implementation in the mid-term (3–5 years). The initiatives under the Long-term Development Program till 2030 are used to develop directives for a future business planning cycle.

The main areas, key performance indicators, and activities under the current Innovation Development Program (see Section 6.9) and Energy Saving Program (see Section 6.6) were elaborated taking into account Rosneft Long-term Development Program and fully integrated into the current version of the document. Rosneft Investment Program aims at the fulfillment of the Company’s strategic objectives outlined in the Strategy and Long-term Development Program by key business area (see Section 2.6).

The Long-term Development Program provides for the replenishment of marketable reserves at a minimum level of 100 %, effective production in brownfields, and production increase through the development of new projects, creation of new production clusters on the shelf, development of technologies, and implementation of world-level project management practices, monetization of gas reserves and competitive production growth, optimal configuration of the refineries and maximization of profits in distribution.

When implementing the Program, the Company is guided by business sustainability principles and sets goals to achieve target performance in all key areas.

Ernst and Young, LLC performed an independent audit of the Rosneft Long-Term Development Program and issued the opinion on reliability of data on the Company operations performed to implement the Program for 2015, as stated in the Long-Term Development Program Progress Report, and on correctness of the stated reasons for variance of actual performance indicators of the Company’s operations from the target ones for 2015. The audit opinion was received on April 28, 2016.