6.5. ENVIRONMENTAL SAFETY AND ENVIRONMENT PROTECTION

Environmental safety and environment protection are among the top priorities of Rosneft

DEVELOPMENT OF THE ENVIRONMENTAL SAFETY MANAGEMENT SYSTEM: RESULTS OF 2015

71.6 bln RUb

TOTAL ROSNEFT ENVIRONMENT PROTECTION EXPENSES

ROSNEFT BOARD OF DIRECTORS SET TARGET KPI FOR ASSESSMENT OF SET ENVIRONMENT PROTECION GOALS ACHIEVEMENT BY 2025

Environmental mission of the Company — efficient management of the Company’s operations impact on our environment to preserve it for the present and future generations.

Environmental safety and environment protection are among the top priorities of Rosneft. In order to achieve the best performance in this area, the Company is continuously improving its approaches to environmental management and increases the scale of environmental measures and the necessary costs of environmental protection.

The Company’s investments to environment protection (including related ones) amounted to RUB 44.7 bln which is by 65 % more than in 2012. Rosneft total environment protection costs made RUB 71.6 bln

In 2015, the Rosneft Board of Directors approved the Company Policy for environment protection setting the key tasks and principles.

  • compliance with legislation and other applicable to the Company’s activities in the field of environmental protection requirements, including the norms of international law;
  • preservation of favorable environment and biological diversity;
  • the balance of interests of the Company and the Company in the use of natural resources;
  • tolerance to environmental risks;
  • innovation in the implementation of environmental technologies;
  • prioritize preventive measures over measures aimed at localization and liquidation of consequences of hazardous events;
  • openness and reliability of statements of the Company in the field of environmental protection;
  • continuity and consistency in achieving the goals and environmental objectives.

The key goals of environment protection are:

  • reducing the negative environmental impact of economic activities implemented by the Company;
  • rational use of natural resources in the implementation of economic activities of the Company, the adoption of measures for their protection, restoration and rehabilitation of disturbed areas;
  • providing measures for the conservation of ecosystems and biodiversity, including the implementation of offshore projects in the Arctic;
  • improving the efficiency of the Company through the development, system implementation of innovative technologies, the use of global best practices to ensure environmental protection;
  • Maintenance and improvement in the field of environmental management systems among the company, taking into account the risk-oriented approach;
  • ensuring the competence of the Company’s employees by informing and improving the system of ecological education and culture;
  • increasing the responsibility of the Company’s employees and contractors in environmental matters;
  • quick and efficient response and minimizing the negative effects on the environment in the event of emergencies, including the organization of measures to protect wildlife in the areas of oil spills;
  • cooperation with public authorities, partners and other stakeholders, aimed at the development of relations in the sphere of nature management and environmental protection;
  • implementation of appropriate analysis and assessment of the process to determine progress and ensure compliance with the principles set out in the Policy area of environmental protection

In 2015, the Rosneft Board of Directors set targets of the Company’s annual and quantitative indicators to assess the set goals for environment protection by 2025. On an ongoing basis, the monitoring of their achievement is performed.

Target Company’s KPI for environmental protection are:

  • timely implementation of environmental commitments arising from the current operations of the Company;
  • elimination of damages at the Company’s facilities as a result of the activities of third parties by 2026;
  • water resources management and protection of water objects from pollution - increase of the proportion of recycled and re-used water consistently, environmentally safe handling of produced formation water, the introduction of advanced wastewater treatment systems;
  • in the area of air protection - reducing the share of APG flaring, reduction of specific gross emissions.

To achieve the set targets in 2015, a Program for Raising Environmental Efficiency up to 2025 was developed. Annually since 2013 the Company has been performing inventory of ecological obligations in accordance with the Corporate accounting policy.

The Company has implemented voluntary mechanisms of environmental responsibility, has a corporate system of voluntary liability insurance against environmental damages.

In 2015, the certifying organization held regular supervisory audit of IHSEMS compliance with ISO 14001, Ecological management system. Its results confirmed the effectiveness and noted the strengths of the management system.

In 2015, a Program of Preservation of Biological Diversity of Marine Ecosystem in the License Areas of Rosneft in the Russian Arctic was developed and approved, which includes scientific research of marine ecosystems, monitoring and research of indicator species of living organisms, research of the sensitivity of the territory and habitats, collection and analysis of stock information on the state of the environment, monitoring and evaluation of environmental impact of planned and implemented economic and other activities, and other environmental protection measures for preservation of biological diversity in the Russian Arctic as stipulated by the applicable law and licensing agreements.

PUBLIC AND SOCIAL ACTIVITIES OF ROSNEFT IN THE FIELD OF ENVIRONMENTAL SAFETY

ROSNEFT WAS GRANTED THE AWARD FOR ENVIRONMENTAL IMPROVEMENT AND EDUCATION

IN 2015 WE DEVELOPED AND PERFORMED THE PROGRAM FOR PRESERVATION OF BIOLOGICAL DIVERSITY OF MARINE ECOSYSTEMS IN THE LICENSE AREAS OF ROSNEFT

Environment protection is an integral part of Rosneft corporate culture providing sustainable development of the Company.

As one of the leading socially oriented businesses in Russia, the Company pays great attention to environment protection and is an active supporter of important community environmental projects.

In 2015, Rosneft was granted the award for environmental improvement and education.

The Company became a member of the Green Spring-2015 National Environmental Subbotnik. The purpose of the event is to support new formats of environmental education and development of ecological culture in children and young people.

In June 2015 Rosneft took a direct part in the All-Russian children’s environmental festival Eco-Childhood, organized by the Ministry of Natural Resources and Ecology of the Russian Federation. As part of the Festival the Company received a diploma for participation in the establishment of Russian record in the category “The event in the framework of environmental protection and social and educational projects with the participation of the greatest number of different subjects of the Russian Federation” (85 subjects).

In 2015, we held a traditional corporate event “Day of Ecology” for specialists of relevant services of the central apparatus and society groups have been training seminars and trainings. In the Botanical Garden of Peter the Great in St. Petersburg event participants planted a memorial avenue of rhododendron bushes.

DEVELOPMENT OF COOPERATION WITH PUBLIC AUTHORITIES AND NON-GOVERNMENTAL ENVIRONMENTAL ORGANIZATIONS

We are constantly working to ensure the reduction of the negative impact on the environment through the use of technologies, assessed with account of environmental, economic and social factors. Representatives of the Company in accordance with the legislation are involved in the development of specialized manuals of best available technologies, organized by the Federal Agency for Technical Regulation and Metrology, Ministry of Natural Resources of Russia and the Russian Ministry of Energy.

Within the framework of the existing cooperation agreement between Rosneft and the Russian National Committee for the United Nations Environment Program (NP UNEPCOM), Rosneft started cooperation under the Program of the Presidium of Russian Academy of Sciences entitled Fundamental Exploratory Research in the Interests of the Russian Arctic Development and the Environment section (including the Arctic work group) of the Research and Coordination Council of the Federal Agency of Scientific Organizations (FANO).

Throughout 2015, projects and the environmental policy of Rosneft was supported at the sites of the Civic Chamber of the Russian Federation, the Expert Council under the Government of the Russian Federation and public councils at federal executive bodies.

In 2015 Rosneft and WWF Russia performed several meetings regarding preparation of the program “Onpreservation of marine ecosistems biodiversity on the Rosneft’s arctic offshore license areas of Russia and the recent environmental consequencesfrom oil spills at oil producing facilitiesin the framework of the Roadmap of measures for 2015-2016, signed June 30, 2016 to execute Memorandum of Understanding signed June 21, 2013.

The objectives outlined in the Road Map include exchange of best practices and bilateral consultations on issues of social and environmental responsibility and minimizing negative impact on the environment and key habitats of birds and mammals in the Arctic.

One of the strategic goals of the Company is to achieve
recognized leadership in the field of environmental safety
among the world's oil and gas players in 2030