Message from the Chairman of Rosneft’s Board of Directors
Dear shareholders and investors,
In 2020, Rosneft worked consistently to achieve its sustainable development goals. I am very pleased that despite the global economic turmoil the Company fully achieved its plans in this area.
Therefore the Company's performance has been praised by major international agencies. Rosneft has been named Russia’s best oil and gas company in prominent ESG ratings from Refinitiv, Bloomberg, as well as the CHRB.
In 2020, we significantly improved our position on FTSE Russell’s ESG Index, which includes performance in human rights, indigenous support, workplace conditions, and industrial safety and health. FTSE Russel, a division of the London Stock Exchange, confirmed that Rosneft remains a member of the FTSE4Good Index Series group of international stock indices. It is encouraging to see and a great achievement by Rosneft and its employees that we are ahead of 84% of participants in the ICB's international oil and gas supersector.
In 2020, Rosneft released an updated public statement regarding the Company’s contribution towards the UN Sustainable Development Goals, its stance on human rights, and the Declaration on Respecting Human Rights to be used when interacting with suppliers of goods, works and services.
Rosneft was first in Russia to prepare a comprehensive Carbon Management Plan for the period until 2035 with clear targets to reduce greenhouse gas (GHG) emissions. Rosneft Board of Directors approved the document in December 2020. Its key goals include preventing GHG emissions of up to 20 mmt of CO2 equivalent, reducing upstream emissions intensity by 30%, cutting methane emissions intensity to below 0.25%, and achieving zero routine flaring of associated petroleum gas.
Rosneft is continuing its energy saving and associated petroleum gas (APG) utilization programme seeking to achieve zero routine flaring of APG. Simultaneously, the Company is planning to increase to 25% the share of gas in its production portfolio.
We are working to optimize emissions from power generation and further exploring ways to replace electricity produced by traditional combined heat and power units with power generated from low-carbon and renewable energy sources.
With capacity to use underground storage facilities and Rosneft own depleted fields for Carbon Capture, Utilisation and Storage (CCUS) the Company is well positioned to leverage its existing infrastructure for gas capture and other CCUS purposes, including chemical neutralisation, transportation and storage of carbon.
Rosneft is implementing a comprehensive programme to improve production processes and reduce methane emissions, which are significantly even more harmful for the environment than CO2. The expansion of this programme along with the use of innovative technologies, including drones, laser and thermal imaging devices, and ultrasonic detectors, will help reduce the intensity of methane emissions to below 0.25%.
Natural carbon capture has also been an important element of the Company's effort to reduce its carbon footprint. The Company has set an ambitious goal to unlock the carbon capture potential of Russia’s forests by 2035 with a massive reforestation and ecosystem preservation programme to fight emissions.
Rosneft accomplishments in reducing GHG emissions have been recognized by international partners. We have signed a cooperation agreement in carbon management and sustainable development with our long-term partner and shareholder, BP. While signed in early 2021, the agreement was largely based on the decisions and initiatives that the Company was consistently implementing in 2020.
As Rosneft Board Chairman I believe it is very important that the Company looks beyond 2035 to explore ways of achieving carbon neutrality by 2050.
A company’s ESG performance has become a key factor considered by investors. Rosneft’s strong results across key ESG metrics allowed the Company to continue developing international partnerships and cooperating on promising projects. In 2020, the Company scored a major success by attracting the world’s leading oil and gas companies Equinor and Trafigura to joint projects.
%% of the Krasnoyarsk Geological Research and Analytical Centre (KrasGeoNats). The latter owns 12 licenses for exploration and production of
Trafigura purchased a 10% stake in LLC Vostok-Oil, a promising project in the north of the Krasnoyarsk Region.
Summing up the 2020 results, I would like to emphasise Rosneft’s unique potential and ability to stay the course in today’s turbulent market environment. In these challenging conditions, the Company effectively reinforced its financial position and laid a strong foundation for future projects.
Chairman of the Board of Directors