Personnel and Social Programs

The Company’s leading asset is its highly-qualified professionals who are focused on efficiency.

Throughout 2017, the average headcount of Rosneft Group Subsidiaries totaled 302.1 thousandAs per the Business Plan, employees totaled 318 thousand persons as at 31 December 2017., increasing by 48.9 thousand year-on-year. The increase was primarily due to new asset acquisitions (Targin Group of 17 thousand employees), the personnel of Bashneft Group subsidiaries recorded for the whole of 2017, and taking on personnel from third-party service contractors.

The average age of the Company’s personnel did not deviate strongly from previous years, sitting at 40.1 years (39.9 years as at the end of 2016). Executive positions were held by 37.3 thousand employees (32 thousand in 2016), with no significant change in the percentage of executive employees employed by the Company in 2017, at 12.3% (12.6% in 2016).

302.1 thsd employeesPreliminary data. the average headcount of Rosneft Group Subsidiaries in 2017
Average Headcount in 2017
Average Headcount as at 31 December 2017
Workforce Productivity and Organizational Effectiveness

As workforce productivity remains a key priority for the Company, internal methods calculating workforce productivity were updated for the entire Company, its major businesses, and the Group Subsidiaries within major businesses in 2017. The target for workforce productivity across the entire Company was met as of the end of 2017 on a comparable basis, and a list of procedures aimed at the improvement of Rosneft’s workforce productivity has been developed.

Each item on the list was incorporated into the Company’s Long-Term Development Program, which is reported annually. Workforce productivity for the Group Subsidiaries within the Company’s major businesses are taken into consideration as part of the annual business planning procedure when target headcounts are being discussed.

In 2017, corporate structures of Group Subsidiaries were being aligned with the Company’s Regulations on the Procedure for Development and Approval of Group Subsidiaries’ Reorganization, to increase organizational effectiveness within Rosneft, in particular, by bringing the statuses of their business units in line with the pre-approved criteria.

Given the Company scale, this work will continue in 2018.

Talent Pool Management

Rosneft’s talent pool was managed in 2017 through HR committee meetings held under the chairmanship of the Company’s top managers, in which a talent pool was approved for target first-level management positions. The process of automating the Company’s talent pool continued throughout the year, whereby the talent pool data maintenance was introduced to enterprise information systems. The process of automating the Company’s talent pool continued throughout the year, whereby the talent pool data maintenance was introduced to enterprise information systems.

The Company carries out comprehensive work in developing its management talent pool for maintaining requisite levels of skilled personnel through utilizing a multi-stage skills assessment system for candidate selection, by which 7 thousand employees have been assessed since early 2017.

Approximately 3 thousand succession pool members benefited from Rosneft’s training programs throughout 2017.

Personnel Training and Development System

The Company-wide training system covers all focus areas and personnel categories within Rosneft, generating efficient skills through the incorporation of governmental requirements, corporate policies and procedures, and best Russian and international practices.

The training involves teachers from Russian and foreign universities, as well as leading domestic and international training and consulting companies. Training programs are adjusted to the Company’s business requirements.

Version 3.0 of the Rosneft Standard, Employee Training Management, was approved and implemented in 2017 as part of unifying Rosneft’s corporate training methodology. The Standard is an essential document regulating the unified requirements of Rosneft and the Group Subsidiaries for employee training management procedures, it strengthens corporate vocational training prerequisites and has a predominant focus on quality, occupational safety assurance, as well as the prevention and control of accidents and emergencies.

533.3 thousand compulsory vocational, and managerial training man-courses were taught in 2017, exceeding the year’s plan by 24%.

The training programs lay a particular focus on training personnel in line with the Company’s long-term strategy priorities, including programs such as management training, corporate training in Upstream, Oil Refining and Petrochemicals, Sales, and safety culture improvement, as well as informed leadership in HSE, energy efficiency, supply system, and compliance.

CORPORATE TRAINING PROGRAMS IN UPSTREAM

Throughout 2017, 33 corporate training programs in Upstream were implemented and over 868 man-courses were taught.

The Young Engineers Comprehensive Program was continued, involving the career planning and development of young engineers in the upstream business.

Approximately 100 specialists involved in Rosneft’s offshore projects were trained in innovative programs relating to offshore project management, offshore oil and gas field development, engineering surveys for oil and gas field facility construction, and offshore drilling at both the Gubkin Russian State University of Oil and Gas, and Lomonosov Moscow State University.

CORPORATE TRAINING PROGRAMS IN DOWNSTREAM

In 2017, 19 corporate training programs were implemented based on the following Gubkin Russian State University of Oil and Gas programs: Oil Refining and Petrochemicals, Modern Refining Process Technology, Process Preparation, Securing Accident Free and Reliable Operation of All Types of Process Unit Equipment, and Production Planning and Economy at Refining and Petrochemical Facilities.

Under the Company’s retail development strategy, training in corporate service standards is currently in progress for filling stations, marketing, and associated product sales.

Rosneft helped the university’s Department of Supply System Management in the Oil and Gas Sector organize a professional retraining program for supply management, logistics, and procurement systems in the oil and gas industry.

287 Oil Refining and Petrochemicals man-courses were taught in 2017.

Rosneft participates in WorldSkills, a global movement promoting vocational skills, providing preparation of its team members for two categories in the national WorldSkills championship. A member of the Company’s team won a prize in the Laboratory Chemical Analysis category. The second corporate championship was held at the Novokuibyshevsk Refinery.

Development of In-House Training Expertise

48% of training is provided internally through corporate training centers with in-house coaches, experts, and workplace mentors.

Sixty effective training centers were incorporated into the Group Subsidiaries or established at educational institutions in regions of the Company’s operation. The centers are equipped with testing areas and practical training sites, and offer Rosneft employees advanced, vocational, and requisite training.

The Rosneft Corporate Training and Development Center was established at MGIMO University (Odintsovo Branch) alongside the Company’s Technical Skills Center at the Gubkin Russian State University of Oil and Gas.

The Company is developing an internal training system involving in-house coaches, experts, and mentors to retain and share expertise within the Company.

In 2017, Rosneft’s in-house coaches who are full-time employees at the Head Office and Group Subsidiaries trained over 200 thousand Company employees. A total 386 internal Company-wide training courses were developed and taught to 7,838 employees, and over 67 thousand distance learning man-courses were conducted.

Training of Foreign Citizens

Rosneft engages its foreign partners in discussions regarding personnel training for involvement in future joint projects and business projects in the fuel and energy sector.

In 2017, Rosneft continued its joint educational projects with both Cuba Petróleo, Petróleos de Venezuela S.A. (PDVSA) (Bolivarian Republic of Venezuela), and the Mongolian Ministry of Education, Culture and Science. Short-term advanced training courses were arranged for 29 joint venture employees of Rosneft and PDVSA in Venezuela, with the involvement of lecturers from the Gubkin Russian State University of Oil and Gas. Rosneft continued organizing on-the-job training for KazMunayGaz employees at Rosneft’s facilities in Kazakhstan, and cooperated with its foreign partners, ONGC Videsh Ltd. (Republic of India), Pertamina (Indonesia), and major Chinese oil and gas corporations regarding the preparation of joint educational projects.

During top-level negotiations held in Sochi in May 2017, international cooperative agreements were signed between Rosneft, the Polytechnic University of Turin (Italy), the MGIMO University of the Russian Ministry of Foreign Affairs, and the Gubkin Russian State University of Oil and Gas. As detailed in the agreements, the University of Turin provided the first training module from the Practical Engineering and Technologies of Petroleum Production retraining program, titled Renewables, at the Gubkin Russian State University of Oil and Gas in December 2017.

Introducing National Professional Standards

In 2017, the Company continued to introduce professional standards.

In pursuance of Directive of the Russian Government No. 5119p-P13 dated 14 July 2016, Rosneft’s Board of Directors reviewed the Introduction of Professional Standards in the Business of Rosneft and Group Subsidiaries during two meetings.

Since 2015, Rosneft and other oil companies have been participating in the National Council for Professional Qualifications in the Oil and Gas Industry. Pursuant to the Council’s Action Plan, Rosneft has developed five industry standards with the involvement of its Professional Expertise Center, Nefteyugansk Corporate Institute, in 2017.

According to the last monitoring, the Company applies approximately 250 out of over one thousand approved national professional standards,with 30 standards being qualification prerequisites (depending on a subsidiary’s business ). The standards apply to over 36 thousand employees, of whom 90% have an educational background meeting the national standard requirements.

Skills Assessment Framework

Rosneft’s comprehensive personnel assessment framework sets unified knowledge and skill standards for employees across all segments of the Company’s business, including the Administration and Group Subsidiaries.

Employee assessments are carried out as part of the planning process for skills training sessions, during formation of the Company’s talent pool and expert communities, and upon employment or transfer of personnel.

The assessments examine the managerial, corporate, professional, and technical skills of each employee, covering all personnel categories: senior managers, specialists, and on-site workers.

The Company’s skills assessment framework identifies gaps in knowledge, determines priority areas of personnel development, optimizes training costs, and bolsters the knowledge and skillset of employees, as well as their performance.

A project unifying the Company’s corporate information system was further implemented in 2017 in order to accumulate personnel assessment results and integrate them with the shared HR database of Rosneft Group Subsidiaries, Administration, and training resources.

The Company’s corporate and managerial skills assessment is based on Rosneft’s Corporate and Management Skills Model, approved by the Chief Executive Officer in 2016. The Model reflects the Company’s culture and values, and includes an outline of each senior managers’ skills. In 2017, the Company used its Skills Model for over 15 thousand employee assessments.

The professional and technical skills assessment of personnel is based on materials detailed in the Target Innovative Project (TIP) titled The Skills-Based Method for Personnel Development in All Business Segments of the Company.

The project is being implemented with assistance from specialized universities such as the Gubkin Russian State University of Oil and Gas (for Oil Refining and Procurement projects), Tomsk Polytechnic University (for Oil and Gas Production and Offshore projects), as well as leading Russian and foreign consulting companies.

Development will continue throughout 2018 by Corporate Research Energy and Design Institutes for the following business units: Procurement, Energy Efficiency Improvement, Economics, Finance, Accounting and Tax Accounting, Gas Projects, Oil Refining and Gas Processing, Oil and Gas Chemistry, and Energy.

The project is being implemented in response to a government policy on developing the national qualifications system, its outcomes forming the professional standards of the Ministry of Labor and Social Protection of the Russian Federation (Mintrud).

Over 13 thousand people underwent professional and technical skills assessments in 2017.

Youth Policy

Rosneft’s youth policy ensures a steady influx of young, qualified specialists selected from among the top graduates of educational institutions, and as quick and effective an onboarding process as possible.

In line with its youth policy, Rosneft is also actively working on building an external talent pool in its regions of operation, and the Company’s youth training system covers three target audiences: students in Rosneft classes (grade 10 and 11 engineering students), students at specialized universities, and young Company specialists.

Rosneft also implements its youth policy through its corporate higher education program, School – University – Enterprise.

Pre-University Training

The first step of the Company’s higher education program includes pre-university training for school students, providing specialized Rosneft classes at top-ranking schools, lyceums, and gymnasiums in regions where the Company operates.

The formation of class programs is supported by Rosneft Group Subsidiaries, based on a demand for young professionals and the Company’s objective to further build upon its development and capacity.

Rosneft classes are tailored to provide school students with a high-quality secondary education and opportunities to continue their engineering studies at universities, while ensuring that graduates are employed at the Company following a relevant education.

With the Company’s support, 2,615 students attended 111 Rosneft classes that operated successfully in 2017 at a total 58 educational institutions located in 52 cities and settlements of the Russian Federation (25 regions).

The number of Rosneft pre-university training programs for school students is consistently expanding, with more new Rosneft classes opening each year.

In 2017, two Rosneft classes were opened in Mirny, Sakha Republic in Yakutia, and in Bolshoy Kamen in the Primorye Territory. The Rosneft class in Bolshoy Kamen focuses on training specialists in shipbuilding, in response to the rapidly growing shipbuilding cluster in the Russian Far East.

The Pre-University Training project makes a strong positive impact on the Company’s reputation across regions and helps maintain Rosneft’s image of a socially responsible partner of the public education system. Graduates of Rosneft classes who have received relevant higher education are employed at the Company, reflecting the effectiveness of the project.

COOPERATION WITH UNIVERSITIES

Rosneft’s university partnerships are being systematically developed to achieve the following strategic objectives:

  • Ensuring a prerequisite level of qualifications and continuous development of personnel to meet current business needs
  • Building the Company’s external talent pool of young professionals
  • Ensuring a strong talent pipeline for the Company in the long term supporting
  • The national education policy

The Company is taking the following steps in line with cooperative agreements with universities:

  • Implementation of projects to develop the educational and research infrastructure of universities, ensuring Rosneft’s business needs are met with higher quality specialist training
  • The establishment of 20 specialized Company departments, which are currently functioning. In 2017, 57 Company employees were involved in teaching
  • Revision and update of specialist training and higher vocational programs for the Company’s employees
  • Organization of career guidance and publicity events such as Rosneft Days and career fairs, as well as allocation of graduates to positions within the Company
  • Organization of internship and work placements. In 2017, 6,597 students did an internship at Rosneft's enterprises. In 2017, the Company’s Head Office organized long-term internship positions (up to two years) for 79 Master’s students of Rosneft’s partner universities

In 2017, the Company organized the Future of Rosneft festival in Krasnoyarsk and Moscow, in which 170 graduates from Rosneft classes took part.

Opening of Rosneft’s Offshore Drilling Science and Education Center Opening of Rosneft’s Offshore Drilling Science and Education Center at the Gubkin Russian State University of Oil and Gas

SUPPORT FOR EDUCATIONAL INSTITUTIONS

Rosneft provides charitable assistance to educational institutions of varying levels to fulfill its obligations to those involved in the Company’s corporate continuing education framework, as well as to attract young specialists to the Company, thereby building an external talent pool and providing the Company with a long-term talent pipeline. The assistance is aimed at supporting the education program syllabuses and organizing additional education in the disciplines relevant to Rosneft classes, including provision of equipment for specialized classrooms, as well as organizing the professional development of teachers, team-building events, and career guidance events for students. The Company also promotes cooperation with universities and vocational institutions in the collaborative development of educational programs and infrastructure, including the improvement and expansion of facilities, equipment and teaching materials, supporting specialized departments and Master’s courses at partner universities to meet the Company’s strategic project needs, supporting talented teachers and gifted students who aim for professional development within the Company, providing 656 corporate scholarships and 195 corporate grants in 2017, and totaling RUB 870.3 mln in educational assistance.

In its consistent efforts to build an external talent pool, Rosneft’s enterprises employ over one thousand university graduates every year. Each graduate has received full-time education and the status of “young specialist”.

SUPPORTING THE NATIONAL POLICY ON EDUCATION

IN SUPPORT OF THE NATIONAL POLICY ON EDUCATION, THE COMPANY ACCOMPLISHED THE FOLLOWING IN 2017:

Participation of Rosneft representatives in Boards of Trustees and Supervisory Boards of 10 partner universities, the National Intellectual Development Foundation (NIDF), the University gymnasium of Lomonosov Moscow State University, the Security Council of the Russian Federation (for training engineers in shipbuilding and ship repair enterprises), and the Russian Academy of Education

Preparation of cooperative proposals with the Ministry of Defence of the Russian Federation

Comprehensive cooperation with 58 partner universities and specialized regional universities; cooperative agreements signed with Samara State Technical University and M.V. Lomonosov Northern (Arctic) Federal University in 2017

Support of the Case-In International Engineering Championship at 10 partner universities and specialized regional universities


Teambuilding at RN-Yuganskneftegaz Teambuilding at RN-Yuganskneftegaz

WORK WITH YOUNG SPECIALISTS

A total of 4,161 young specialists were employed at 108 Rosneft Group Subsidiaries in 2017. New terms within the Company’s Regulations on Organizing Work with Young Specialists was approved in 2017, with updated requirements and a unified approach to organization and collaboration with young specialists, covering:

  • onboarding
  • training and development
  • recognition and development of potential leaders Progress assessments
  • financial support and social protection

The following measures were taken in 2017 to develop the skills of young specialists:

  • A total of 3,847 man-courses were conducted under professional, technical, and managerial skills development programs
  • Organization of 2,072 young specialists participating in regional and cluster R&D conferences. The Inter-Regional Research and Development Conference was attended by 301 young specialists, 88 of which were prize-winners, and 66 projects were recommended for implementation

In efforts to build up a strategic young talent pool, 349 young specialists from 72 Rosneft Group Subsidiaries underwent performance assessments in the form of competitive business evaluation games from June to September 2017. Based on the game results, 119 young specialists from 49 Group Subsidiaries were selected for possessing a high level of corporate and managerial skills. The selected specialists were recommended for consideration in the Company’s young strategic talent pool and listed as potential candidates for further training as per the target education program, Three Steps, which is aimed at developing young specialists.

In 2017, 62 young specialists were selected based on the results of the competitive business evaluation games that were held the year prior – 55 of them were recommended for the Group Subsidiaries’ strategic talent pool.

Aimed at increasing the efficacy of young professionals councils, the Annual Council Conference for Young Specialists was held in December 2017, attended by 59 participants.

Social Partnership and Social Benefits

More than 15 clarifications and additions were made throughout 2017 in the continued development of the Standard Collective Agreement of Rosneft Group Subsidiaries, improving the benefits, guarantees, and compensations provided to personnel.

A direct result of the Company’s consistent efforts in protecting the health of its employees is the compensation of the lost wage between short-term disability payments and the Group Subsidiaries employees’ average salary, the most significant benefit provided.

Annual meetings were held in 2017 between the Company’s HR and social service representatives with leaders of labor union organizations affiliated with ITUO Rosneft. The meeting held in Moscow in November 2017 covered major concerns of the personnel of Group Subsidiaries, such as providing employees with high-quality seasonal workwear in a timely manner, rehabilitation and healthcare treatment, salaries, and incentives.

The Company has made a leap forward in fostering industrial social partnerships, having established links with the Russian Association of Oil and Gas Employers and signing cooperative agreements aimed at facilitating the inclusion of Rosneft Group Subsidiaries into the Industry Agreement on the Companies of the Oil and Gas Industry and the Construction of the Oil and Gas Industry Facilities.

Social Programs

Rosneft is one of the most socially responsible employers in Russia. In 2017, the Company allocated RUB 28.1 bln to creating optimal working conditions, promoting healthy lifestyles, and providing its employees with healthcare and social guarantees.

For many years, Rosneft’s management has been committed to meeting high social security standards for its employees.

Key Social Policy Costs in 2017

CORPORATE PENSIONS AND SOCIAL SUPPORT FOR VETERANS

The corporate pension program is an integral part of the Company’s HR and social policy, aimed at improving the terms and conditions of private pension schemes for employees.

Pension contributions made by Rosneft Group Subsidiaries under such schemes totaled RUB 6.84 bln, while RUB 462.86 mln in social support was provided to veterans.

The Company’s corporate pension program was implemented at Bashneft Group Subsidiaries in 2017. The Company allocated more than RUB 1 bln in pension contributions under signed contracts of the Non-State Pension Fund (NPF) NEFTEGARANT, providing the employees of Bashneft Group Subsidiaries with additional social security in the form of corporate pension since the beginning of 2017.

The Company’s veteran support program has been providing monthly corporate pension payments via NPF NEFTEGARANT for over 10 years. In the reporting year, corporate pensions under signed veteran contracts were indexed at 5 %, and the average corporate pension provided to veterans is over RUB 1,500 per month. The Company also continues to provide financial assistance to retirees on holidays and subsidize resort treatments, or grant a one-off bonus payment.

The Company intends to maintain a strong focus on the development of its corporate pension program, as it not only helps address social issues, but also provides the Company with a competitive advantage by attracting and retaining the best talent in the industry.

The Company’s veteran support program The Company’s veteran support program has been running for over 10 years

CORPORATE HOUSING PROGRAMS

For over 12 years, the Company has been implementing a comprehensive housing program, a crucial form of incentive as part of the corporate social policy. The initiative enables the Company to attract and retain highly qualified and valuable specialists for the long term by providing housing through particular arrangements:

  • Mortgage lending
  • Provision of corporate apartments
  • Housing construction.

The living conditions of 829 families were improved through long-term mortgages provided by Rosneft in 2017.

Relocated specialists are provided with corporate apartments, the total number of which in the Company’s regions of operation exceeds 1.3 thousand.

Rosneft aims to improve its operations and adopt new technologies by attracting highly qualified specialists from various cities and encouraging them to relocate to its regions of operation. The Company compensates rental payments for apartments leased from the housing market to provide employees with comfortable apartments in new locations. In some cases, housing is built for employees performing Rosneft’s strategic or pilot projects.

WORKING CONDITIONS AND RECREATION

Rosneft continued an integrated program aimed at creating favorable working conditions for its employees in 2017. The program’s key focus is the construction and development of 95 employee housing complexes. Rosneft’s living quarters accommodated for close to 22 thousand employees of the Company and its contractors in 2017.

Standard corporate technical solutions for designing employee housing and supporting facilities were employed throughout the year for the Company’s teams and at its sites and workshops. In 2017, the Company’s expenditure on the development and construction of employee housing, supporting facilities, sites, and workshops totaled RUB 6.5 bln.

Field camps at Vankor Field camps at Vankor

HEALTHCARE AND PERSONAL INSURANCE

Rosneft consistently provides a range of healthcare and personal insurance initiatives to its employees with the primary objective to preserve and bolster health, prevent diseases, promote a healthy lifestyle, and improve quality of life.

The major initiatives include:

  • Provision of emergency and planned medical aid at the Company’s production facilities, including at remote and inaccessible residential employee complexes
  • Voluntary health insurance that provides Rosneft employees access to high-quality healthcare services at the finest Russian medical institutions in addition to the standard government
  • Services provision of resort and rehabilitation treatment for employees
  • Disease prevention through the provision of vaccinations against the flu, tick-borne encephalitis, and cardiovascular diseases
  • Organizing and conducting sporting and recreational events for the Company’s employees
  • Program promoting a healthy lifestyle
  • Reimbursement for membership costs at therapeutic groups and sporting clubs

The Company has adopted uniform standards for on-site medical treatment and emergency aid, as well as for the evacuation of injured or sick persons from its production facilities.

All Rosneft’s health centers have been supplied with modern medical equipment in accordance with its health and safety standards. The Company actively improves the professional qualifications of its on-site medical staff, and has an annual training program aimed at developing and exercizing the practical skills of its employees in medical emergencies, including when the use of air medical services is necessary. Resort treatment and rehabilitation, aimed at extending employee careers and preventing diseases, is an integral part of the social security provided to the Company’s employees, their families, and retirees (veterans of labor). In 2017, Rosneft provided health resort treatment to a total of 70 thousand employees, their families, and retirees both in the Company’s own health resorts and those of third parties.

In 2017, the Company launched its Corporate Program for the Prevention of Cardiovascular Diseases, aimed at exposing and correcting the risk factors of cardiovascular diseases, and continues to implement its Live Longer! program, which provides medical screening of employees’ health while promoting sporting initiatives and involving the Company’s employees in an active lifestyle.

In the reporting year, Rosneft’s voluntary health insurance covered over 274 thousand employees of Group Subsidiaries and the Rosneft Administration. When organizing voluntary health insurance for its employees, the Company focuses primarily on improving the quality of services provided to insured persons, and expanding the accessibility of healthcare services equipped with state-of-the-art medical technology for the treatment of serious diseases.

Rosneft has arranged insurance against occupational fatalities and total or partial disability resulting from an accident for 295 thousand employees of Group Subsidiaries. The insurance covers the territory of the Russian Federation as well as other countries, and is valid both during and outside working hours.