Long-term Development Program and Progress Report

The Long-Term Development Program to 2030 was originally established in 2014 pursuant to Instruction No. Pr-3086 of the President of the Russian Federation Vladimir Putin dated 27 December 2013 and approved by the Board of Directors of Rosneft on 9 December 2014 (Minutes No. 12).

Pursuant to Directive No. 4955-P13 of the Russian Government dated 17 July 2014, Rosneft’s Long-Term Development Program should be updated on an annual basis. In 2017, the Program was updated to include revised strategic guidelines reflecting the Company’s new corporate structure, some detailed action plans to achieve long-term goals, and updated initiatives which had been developed pursuant to the Russian Government DirectivesNo. 4955p-P13 dated 17 July 2014, No. 7558p-P13 dated 12 November 2014, No. 1346p-P13 dated 5 March 2015 and No. 2303p-P13 dated 16 April 2015, No. 7389p-P13 dated 31 October 2014, No. 1472p-P13 dated 3 April 2016, No. 4531p-P13 dated 28 June 2016, No. 4750p-P13 dated 4 July 2016, No. 830p-P13 dated 6 February 2017.. The updated Long-Term Development Program was approved by Rosneft’s Board of Directors (Minutes No. 6 dated 17 November 2017).

The Program details the Company’s strategic focus, targets, and goals for all its businesses and corporate functions; it also includes a list of key initiatives for achieving strategic targets and completing the Strategy for the medium term (five years).

The Long-Term Development Program provides a reserve replacement ratio of at least 100%, effective brownfield operations, production growth through launching new projects in Eastern Russia, development of hard-to-recover reserves, robust offshore development, gas production growth on the back of a high-performing long-term sales portfolio, and higher margins across the entire value chain.

Key priorities, KPIs, and actions taken under the current Innovative Development Program, the Import Substitution and Equipment Localization Program, and the Energy Saving Program have been developed to incorporate the provisions of Rosneft’s Long-Term Development Program and are fully integrated within the current version of the Innovative Development Program. The list of KPIs also includes an integrated KPI for innovations. Rosneft’s Investment Program is designed to drive strategic objectives for key businesses detailed in the Strategy and in the Long-Term Development Program.

The Company has completed the 2017 action plan under the Long-Term Development Program for its key businesses and functions. The 2017 progress under the Long-Term Development Program is described in Section Operating Results.

The Company’s independent auditor, Ernst & Young LLC, audited Rosneft’s progress against its Long-Term Development Program. Following the independent audit, the auditor issued an opinion on whether the Long-Term Development Program Progress Report fairly presents the Company’s progress thereunder for 2017, and on the fairness of reasons given therein for deviations of actual results from the Company’s performance targets for 2017. The auditor’s opinion was received on 25 April 2018.