Strategy of the Company

Long-Term Development Programme and Progress Report

Originally developed in 2014In accordance with Instruction of the President of the Russian Federation Vladimir Putin No. Pr- 3086 dated 27 December 2013; approved by Rosneft's Board of Directors on 9 December 2014 (Minutes No. 12). , the Long-Term Development Programme (the Programme) is subject to annual update.In accordance with the Russian Government Directive No. 4955-P13 dated 17 July 2014 and the Long-Term Development Programme.

In 2019, we revised the Programme, taking into account the Company’s performance results, granular action plans to achieve certain long-term goals and updated initiatives drafted 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, 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, No. 276p-P13 dated 17 January 2019.. The updated Programme was approved by the Company’s Board of Directors (Minutes No. 11 dated 23 December 2019).

The Programme details the Company’s strategic focus areas, targets and goals for all business areas and corporate functions. It also includes a list of key initiatives to implement the strategy in the medium term.

The main priorities, key performance indicators (KPIs) and actions plans under the current Innovation Development Programme (Research, Design, and Innovations section), the Import Substitution and Equipment Localisation Programme (Localisation and Development of Industrial Clusters section), the Energy Saving Programme (Energy Efficiency and Energy Saving section) take into account the Programme provisions and are integrated into the current version of the document.

Performance indicators include an integrated KPI for innovations. Rosneft’s Investment Programme aims to help the Company achieve its strategic objectives in key business areas stipulated in the Strategy and the Programme (Investment Programme in 2019 section).

We completed the Programme's key initiatives planned for core businesses and functional units for 2019. For the Programme outcomes in 2019, see the Performance Results section.

Ernst & Young, an independent auditor, reviewed the Programme results. Based on the review, the independent auditor issued an opinion on whether the Progress Report fairly presents the past year's performance under the Programme, and whether the reasons given therein to substantiate deviations of actual results from the 2019 targets are fair. The opinion was received on 21 April 2020.

Разработка трудноизвлекаемых запасов

The Programme envisages a reserve replacement ratio of at least 100%, efficient brownfield operation and production ramp-up driven by new projects in Eastern Russia, development of hard-to-recover reserves, cost-effective offshore development, gas output growth secured by a long-term high-performing sales portfolio, and stronger margins across the entire value chain.

In implementing the Programme, we focus on cost effectiveness and KPI targets for all key initiatives.