Message from the Chairman of Rosneft’s Board of Directors
Gerhard Schroeder Chairman of the Board of Directors
As the Chairman of the Board of Directors, I think it is extremely important that the Company is taking consistent steps to unlock its potential, placing a special emphasis on innovations and environmental protection.
Dear shareholders and investors,
Every year, we see businesses pay increasing attention to environmental, social and governance factors, which have also become a key focus area for the investment community. I can say with certainty that 2019 was a breakthrough year for Rosneft when it comes to sustainable development. As the Chairman of the Board of Directors, I am convinced that it is extremely important for the Company to take consistent steps unlocking its potential, placing a special emphasis on innovations and environmental protection.
Rosneft has joined the UN Global Compact, an initiative that encourages businesses to become more socially responsible. Moreover, we annually release a public statement regarding the Company's contribution towards achieving the 17 UN Sustainable Development Goals.
In line with our development strategy, we aim to become one of the greenest companies by 2022 and rank in the first quartile among global peers in terms of unit GHG emissions. We have already delivered some tangible results. In 2019, we cut fugitive methane emissions by more than 70%. Importantly, this is not a one-off reduction, but a sustainable trend. We have been keeping up the momentum for the last few years, which makes us one of the industry's leaders in minimising the GHG footprint.
Another milestone for both the industry and the global community was our signing of the guidelines for reducing methane emissions across the natural gas supply chain in June 2019. Together with other industry majors supporting this initiative, we will be able to cut these emissions generated by production assets.
Our green investments totalled RUB 35 bln in 2019 and approximately RUB 240 bln over the past five years, with another RUB 200 bln slated to be spent in the coming years as part of our ongoing efforts in this area.
We are encouraged to see our achievements in sustainable development recognised by the public as well as by rating agencies. In 2019, we joined the ranks of industry leaders in the major international sustainability ratings. Rosneft was included in the FTSE4Good Index and became the best Russian oil and gas company in the global CDP Climate and Water ratings, while also winning praise from Bloomberg and Refinitiv for the transparency of its disclosures.
Another driver of Rosneft's investment appeal is its dividend policy, which provides for at least 50% of its net income to be distributed twice a year as dividends. In 2019, the Company paid record high interim dividends of RUB 162.5 bln. Today, we offer our shareholders one of the best returns in the Russian oil and gas industry. Our excellent performance in 2019 will enable us to further increase the size of final dividends.
We are successfully growing our international business, too. The reporting year saw us start direct sales of petroleum products in Germany, which marks an important stage in our history. At present, we make shipments from refineries where the Company is a shareholder to more than 500 customers in Germany, Poland, Czech Republic, Switzerland, Austria and France. But our ambitions go beyond that. Going forward, we plan to expand our sales geography, including by benefiting from a deal to increase our stake in Bayernoil Raffineriegesellschaft to 28.57%. Rosneft remains the third largest oil refining company in Germany, with the total crude oil processing volumes amounting to 12.8 mmtpa.
The development of Zohr, a natural gas field in the Mediterranean Sea offshore Egypt where Rosneft holds a 30% stake, is advancing ahead of schedule. Put on stream as early as in 2017, the field produced 23.4 bcm of gas in 2019. Our participation in this unique project run jointly with global majors strengthens our position as a cutting-edge high-tech company, while also enabling us to build up our offshore development competencies.
That said, we are not going to stay put and will continue moving forward. Therefore, I am confident that in 2020 all our business lines will continue growing fast.