Sustainable development

Health, Safety, Environment. Climate change.

HSE MANAGEMENT PRINCIPLES

Strategic Guidelines

Rosneft understands its responsibility for the health, safety and well-being of its employees, contractors and local communities from its operating activities, as well as for the protection of the environment in the regions of its operations.

The global economy faced huge challenges in 2020 with the coronavirus pandemic causing many disruptive changes across all industries. In these current challenging conditions the Company has continued to focus on maintaining high occupational safety standards; together with enhanced controls and efficient risk management processes to ensure accident-free operations; ensuring safe labor conditions for employees and implementing programs to minimize environmental impacts. The Company has also continued to strengthen its carbon management agenda to manage physical risks associated with the impacts of climate change and the energy transition.

HSE Management Principles

In December 2018, the Rosneft Board of Directors approved the Company’s strategic development guidelines related to the implementation of the United Nations (UN) Sustainable Development Goals. Thus, the mission, values, goals and strategic guidelines of the Company are consistent with the 17 United Nations Sustainable Development Goals.

The company also focused on five priority SDGs to help guide the work of its operations: “Good Health and Well-being”, “Clean and Affordable Energy”, “Decent Work and Economic Growth”, “Climate Action” and “Partnerships for the Goals”. In support of these priority goals, Rosneft strengthened its HSE risk management system, improved the HSE goverance processes and procedures, strengthened its carbon management goverance processes and increased its focus on competency development planning. The company also improved its monitoring of HSE programs to improve implementation and embedding across all operations.

In 2020, Rosneft adopted the international standard for occupational health and safety management systems – ISO 45001:2018 while maintaining its conformance with the requirements of the Environmental management system – ISO 14001:2015. Rosneft Headquarters and 66 Group Subsidiaries received certificates of conformance with these international management system standards after the completion of independent audits in 2020.

HSE goals of the Company

Rosneft strives to continuously conduct accident-free operations, maintain safe working conditions for employees and contractors, support the health of communities in the areas of the Company’s operations and minimize environmental impacts from its operations. HSE performance is benchmarked against international peers.

The Company has also invested in a number of environmental improvement projects and environmental programs to achieve its strategic environmental goals defined in the Rosneft-2022 Strategy.

Rosneft’s ‘2030 Environmental Vision’ was reviewed by the Committee for Strategy and Sustainable Development of the Board of Directors in 2020. This vision outlines Rosneft’s 2030 environmental operating principles, the technical environmental programs and goals to 2030 and the areas for alignment with the UN Sustainable Development Goals and 2030 national environmental goals of the Russian Federation.

From commitments to actions

Five meetings of the company’s HSE Committee were held in 2020 to review HSE performance, review progress of key HSE programs and agree the HSE priorities of the Company. Progress against the Company’s HSE targets is reviewed on a quarterly basis, first by the HSE Committee, which includes representatives of the Company's management, and then by Rosneft’s Board of Directors.

Meetings of the Carbon Management Sub-committee were also held on a quarterly basis to review progress against actions in Rosneft’s 2020 Carbon Management Plan. In August 2020, a team was established by the Carbon Management Sub-Committee to develop a long term Carbon Management Plan to 2035. This plan was reviewed and approved by the CEO and the Board of Directors in December 2020 and then communicated externally. At the end of 2020, the status of the Carbon Management Sub-committee was upgraded to the Carbon Management Committee reporting directly to the Chief Executive Officer.

Ensuring the safety and health of our people is the highest and unconditional value of Rosneft

The highest priority of the company is the safety of all employees, contractors, operations and the communities in which the Company operates. Rosneft strongly believes that 'all accidents are preventable'.

The HSE priorities for 2020 included the development, introduction and implementation of key industrial safety and occupational safety programs that focused on leadership and safety culture, compliance with the Golden Rules of Safety, contractor safety management and road safety. In 2020, the Company delivered all necessary health and safety activities, with the overall spending of ca. RUB 48 bn due to employee remote working and additional epidemic-related measures helping to protect employee health.

Leadership and safety culture

HSE Leadership commitments are in place for top managers of the Company, as well as both General Directors and other top managers in Group Subsidiaries. Leaders demonstrate this commitment by personal example as they discuss health, safety and environmental risks with employees and contractors while they are planning or conducting operational activities, and also work with them to identify opportunities for improved HSE performance. In addition, managers at all levels define clear HSE guidelines in accordance with the unified “Leadership Principles” of the Company which ensure safe working conditions for all employees and contractor organizations.

Employees and contractors, wherever they work, must adhere to the “Golden Rules of Safety” and take measures to stop work if the safety or health of any person is at risk. There are also trade union representatives across who have the authority to provide additional support to ensure compliance with occupational safety procedures.

The Company is committed to continuously developing the capability and competence of employees especially in areas of the highest occupational safety risks. This contributes to strengthening the processes to preserve worker health; reduces the exposure to personal or process safety risks and increases the focus on environmental protection from operational activities. These capability development programs include specific internal corporate HSE training, external safety training, direct coaching and through information shared in HSE interventions and Corporate and Subsidiary HSE campaigns based on specific identified risks.

In 2020, over 25,000 subsidiary employees were trained internally on the following HSE courses: “Procedure for the Internal Investigation of Incidents”, “HSE Risk Management” and “HSE Leadership”.

As part of cooperative arrangement with the National University of Oil and Gas “Gubkin University”, the Company’s internal trainers together with staff of the Gubkin University prepared a number of distance training courses for Group Subsidiaries' managers and their deputies, with 355 Group Subsidiary managers successfully trained in 2020.

In November and December 2020, a number of employees from both the Corporate Offices and Group Subsidiaries were trained on Requirements of international standards ISO 45001:2018 and ISO 14001:2015. Internal audit of HSE IMS for ISO 45001:2018 and ISO 14001:2015. to be able to build the capability and understanding of the requirements of these HSE management systems.

The HSE priorities for 2020 were:
  • Developing leadership and safety culture;
  • Embedding the Golden Rules of Safety;
  • Improving contractor safety;
  • Reducing road traffic accidents;
  • Implementing Process Safety improvements;
  • Improving the Risk-based approach to operational activities;
  • Developing a 2035 Carbon Management Plan;
  • Development of an Environmental Vision to 2030.

In the fourth quarter of 2020, the HSE Department organized a survey of Group Subsidiary employees on the topic of occupational safety culture, including questions on motivation; HSE risk assessment; Golden Safety Rules; personal protective equipment; attitudes towards occupational safety; incident reporting; HSE communications and compliance with Covid-19 Company protocols and hygiene practices. The results from the survey provided many important HSE insights and also demonstrated an improving safety culture among our employees.

LEADERSHIP AND SAFETY CULTURE

In 2020, the Company commenced its carbon management training for Executives and senior representatives of Central corporate functions with over 15 sessions delivered. Training will continue across all the Company Group Subsidiaries in 2021. Company specialists were also trained on the ISO 14064 standard related to the system of accounting, monitoring and reporting of greenhouse gas emissions, which was conducted by external certified trainers. Information sessions were also held for managers and employees of various departments of the Company's central office and the Group Subsidiaries, including those involved in development of the methane leak detection pilot projects. In 2021, a corporate training programme on carbon management will be delivered across all Company Subsidiaries.

One of the most important priorities of the Company is the preservation of the environment for the benefit of present and future generations. The Company's expectation is that each employee incorporates individual actions to protect the environment in work planning and execution while complying with all environmental requirements, thereby contributing to Rosneft's growing environmental culture. Last year, at all levels of the Company, meetings were held were held on the topic “Environmental Culture and Environmental Protection Leadership”. Managers at all levels, from top managers to line managers of operational units of the Group Subsidiaries, held video and audio conference meetings (due to Covid 19 restrictions) to clarify environmental issues, increase employee involvement and awareness of environmental compliance and encourage employees to participate in actions to protect the environment, both at work or at home.

The 7th Rosneft General Corporate Congress of Ecologists was attended by top managers of the Company, heads and specialists of the Company's structural units and more than 200 Group Subsidiaries as well as representatives of Rosneft's international partners – Equinor and BP. One of the focus areas of the Congress was the discussion of the progress towards Strategy-2022 goals and the Company's long-term environmental management and carbon management goals. In addition, measures were also discussed to align these Company goals with the UN Sustainable Development Goals, Russian Federation's National Goals and 2035 Energy Strategy. Also included in the Congress agenda were specific topics on industrial ecology, conservation of biological diversity and the use of new environmental technologies for environmental monitoring and improving operational performance. A separate item on the agenda of the Congress was the topic of socially responsible investing (ESG) and the importance of environmental indicators to the Company's investment case.

Golden Rules of Safety

Despite the limitations caused by the coronavirus infection, additional measures were implemented in 2020 to embed the Golden Rules of Safety in all Rosneft Group Subsidiaries with access to the Training and Development Portal and Distance Learning corporate training systems. A distance learning “Golden Rules of Safety” interactive training program was launched in 2020 and this program will be widely shared with the Group Subsidiaries to maximize availability to Company employees. In 2020, 130 thousand employees completed the “Golden Rules of Safety” training conducted by internal trainers.

>130,000 employees completed the “Golden Rules of Safety” training conducted by internal trainers

Safety of employees of the Company and contractors

In 2020, in addition to the management of HSE risks from operational activities, the Company also managed the significant risk of the spread of the coronavirus infection across the operations. In response, Rosneft took responsible steps to prevent the spread of the virus, protect the Company’s employees and contractors and ensure the continuous operation of production facilities. This was achieved through the planning and organization work, including shift rotations, maintaining strict sanitizing precautions, introducing tight control and quarantine measures, work zoning and work monitoring. Employees were required to undergo compulsory medical examinations and were provided with personal protective equipment at the required level. All controls were carried out in compliance with legal and corporate standards and requirements.

New regulations and procurement procedures for the qualification and admission of contractors to the Company's facilities were also implemented in 2020. A new risk assessment procedure to rank contractors of potential HSE risk from the nature of their operational activities was also introduced. HSE expectations and requirements for contractors are included within their contractual obligations. These improvements in the contractor management procedures allowed the Company to effectively manage risks and minimize injuries and accidents during operational activities.

Road-traffic safety

The Company's 'Vehicle Safety Management System' sets requirements for Company, contractor and sub-contractor drivers, vehicles and equipment.

In 2020, the Company approved the Rosneft Concept for Road Safety 2020–2022 as part of the transport safety management system to prevent road traffic accidents. This concept takes into account the main goals and objectives of the Decree of the President of the Russian Federation dated May 07, 2018 No. 204 and the Road Safety Strategy of the Russian Federation for 2018–2024, including:

  • Reduction of injury rates and incident severity from road traffic accidents;
  • Compliance with HSE legal requirements for driving;
  • Continuous improvement of road traffic safety performance indicators;
  • Eliminating accidents due to vehicle malfunctioning or due to health risks of drivers;
  • The use of a risk-oriented ‘barrier’ approach in the road traffic safety management process.

In addition, the following priority activities were implemented as part of this 2020-2022 Road Safety plan to reduce driving safety risks:

  • Defensive driving training programs for drivers;
  • Installation of in-vehicle monitoring systems (IVMS – GLONASS), video recorders, the use of portable vehicle speed measurement devices;
  • Creation of the unified corporate telematics platform for GLONASS satellite monitoring of the Company's vehicles;
  • Publication of articles on road safety in regional/corporate media; and
  • Implementation of a Communication support plan.

During the year, Group Group Subsidiaries and contractors also organized accident prevention campaigns “We are for road safety – 2020”, “Safe road – 2020” and “Beware, Children!” to contribute further to the reduction in road traffic accidents.

Process safety

The Company uses a risk assessment approach using prevention and response barriers to plan and implement programs and activities. This is both to reduce the number of major accidents resulting from leaks and integrity incidents as well as to minimize any consequence resulting from their occurence.

In 2020, the Company launched the start of a new 5-year pipeline integrity program (2020 - 2025) for risk assessing and improving the reliability of pipelines. with twenty-three (23) oil and gas production subsidiaries being part of the Program. The main goals of the Program are to:

  • Reduce field pipeline failure rate by 20 % vs 2019;
  • Increase the scope of in-line inspections to pro-actively monitor the condition of pipelines;
  • Select, test and implement new technologies that ensure corrosion and scale protection;
  • Develop and implement tools for operational control and analysis of the operation and condition of the field pipeline fleet.
23
oil and gas subsidiaries participate in the 2020–2025 Pipeline Reliability Improvement Programme

The scope of this program includes the reconstruction of 7,000 km of pipelines and completing maintenance repairs to 6,000 km of pipelines on the transportation network

Risk-oriented approach

The HSE risk management process was updated to include uniform assessment criteria and decision-making levels as well as the introduction to the risk prevention safety barrier approach. These changes were introduced across 135 Oil and Gas subsidiaries from 2019–2020 where subsidiaries carrying higher risk activities were prioritized, in addition to those which were certified against the ISO 45001 and ISO 14001 management system standards.

An important result of the implementation of the HSE risk management process in all Group Subsidiaries is the identification of weaknesses in existing safety barriers. These findings will help to prioritize strengthening of the most critical safety barriers linked to the highest risk activities and operations. This will contribute significantly to reducing serious accidents and occupational safety risks for employees and contractors in the operations, as well as reduce incidents that can negatively impact the environment.

In 2020, there was significant focus to analyze the strength and condition of safety risk barriers at facilities located in the Arctic zone of the Russian Federation and permafrost regions, as well as in tank farms.

In 2020, to support the implementation of the risk barrier approach, guidelines were developed to assess and analyze the risks associated with fires and well control safety. In addition, several typical risk bow-tie diagrams were developed to create a standardized approach to conducting these risk assessments and to improve the level of understanding of the overall strength of operational safety barriers across various activities.

Environmental responsibility

Green investments

In 2020, the Company implemented a number of activities and investment projects to minimize its environmental footprint. During the period 2018–2020 "Green investments" for reduction of flaring of associated petroleum gas (APG), investment in pipeline reliability; improvement in wastewater treatment, improvement in waste management practices and remediation of contaminated land, was around 120 bln RUB.

~RUB 120 bln spent by Rosneft on green investments in 2018–2020
Green investments

Carbon management - risk and opportunity management

In December 2020, the Company's Board of Directors reviewed and approved the Rosneft 2035 Carbon Management Plan. This plan was approved by the CEO and outlines a long-term approach to reducing the Company’s carbon footprint in alignment with the global energy transition to a low-carbon economy. The main goals of the Plan are:

  • the prevention of 20 million tons of CO2-equivalent (Scope 1 and 2) absolute greenhouse gas emissions from forecasted growth;
  • the reduction of Upstream GHG intensity (Scope 1 and 2) by 30 % against a 2019 baseline;
  • the reduction of methane intensity to below 0.25%
  • the achievement of ‘zero routine flaring’ of associated gas by 2035.

Implementation of the plan will help to strengthen Rosneft's position as one of the leaders in the global energy market in the context of the energy transition process and to allow maximum monetization of the Company's proven reserves.

Non-greenhouse gas emissions

In 2020, the Company reduced the volume of non-GHG air pollutants by 14 %, with some of this reduction resulting from the implementation of the APG utilization program. One of the key measures for the implementation of this program in 2020 was the commissioning of priority APG utilization facilities at Yurubcheno-Tokhomskoye field of the East Siberian Oil and Gas Company.

14% reduction in air pollutant emissions in 2020

Water protection

One of the Company’s strategic priorities is to minimize the demand for fresh water in alignment with the United Nations Sustainable Development Goals. This is achieved through the implementation of infrastructure modernization projects and the use of the best available technologies. In 2020, the company continued to reduce the volume of contaminated wastewater disposal by the construction and upgrade of water treatment facilities as part of the refinery modernization program. The upgraded waste-water treatment facilities of Bashneft-Ufaneftekhim also reached its operating design capacity, while efficiency of other water treatment facilities were improved. Local treatment facilities and a recycling water supply unit were commissioned at NZMP LLC in February 2020 while facilities for the treatment and disposal of wastewater were commissioned at Rospan International JSC in October 2020.

Drilling waste and oily waste handling

In 2020, the Company reduced the previously accumulated volume of drilling waste by around 1.3 mln tons and processed around 850,000 tons of oily waste. Rosneft is working continuously to improve the contracting processes for waste management and the execution of modern waste management practices to maintain the improved rates of waste management.

>4.7
mmt drilling waste processed by Rosneft in 2020

Land remediation

The Company continued to implement measures for land protection and rehabilitation with more than 500 hectares of contaminated land reclaimed in 2020.

Improvement of the efficiency of oil spill management

Rosneft is continuing to improve its spill prevention, management planning and response preparedness for emergency response teams building on the improvements that have already been made by the Company. The Company has now centralized the spill prevention and response organizational function to drive the implementation of measures to prevent environmental damage from both on-shore pipeline ruptures and from environmental accidents in the shelf area of the Russian Federation.

Given the importance of the Arctic natural ecosystems, Rosneft has also developed a wildlife response action plan as part its offshore project work. This plan focuses on the rescue and rehabilitation of wildlife in the event of oil and chemical spills. This action plan is a part of each Oil Spill Response (OSR) plan and it provides guidance to the RN Group Subsidiaries and project teams for the planning and management of response efforts for vulnerable species in their areas.

Biodiversity conservation

The Company pays special attention to activities aimed at biodiversity conservation. In December 2019 Rosneft and the Ministry of Natural Resources and Ecology of the Russian Federation signed the Cooperation Agreement for a national project ‘Ecology’ which focuses on cooperation on biodiversity conservation. The goal of the project is to assess the current natural state and population dynamics of key species in the marine and terrestrial ecosystems of the Arctic. These species include the wild reindeer, ivory gull, Atlantic walrus and polar bear which are listed in the Red Book of the Russian Federation.

In 2020, as part of this work, expeditionary field work was carried out to study the polar bear habitats on the Novaya Zemlya archipelago (Cape Zhelaniya) and the walrus populations on the islands of the Franz Josef Land archipelago as well as the Oran Islands and Victoria island. In addition, during the field work in July-August 2020, work was organized on Vize Island to study the ivory gulls. The actual cost of these activities in 2020 was more than 119 mln rubles.

The Company has continued the work started in 2016 to publish scientific data obtained from both field research work conducted in collaboration with the leading research institutes of Russia, and those collected by Rosneft itself from its field operations. As a result of this work, Rosneft published both the "Environmental Atlas for the Barents Sea" and the "Species as biological indicators of the state of Arctic marine ecosystems" in 2020. In the autumn-winter period of 2020, field research was conducted on the wild reindeer species on the Taimyr Peninsula and in Evenkiya. Scientists from the Siberian Federal University and the Arctic Research Center used aerial surveys as well as satellite transmitters placed on tagged collars for remote tracking of migration routes. The research was conducted using daily observations at fixed locations as well as by using motorized monitoring along the banks of the Kheta and Khatanga rivers. Over 50 samples were also taken for further laboratory research to improve scientific knowledge of the health, diets and habitats of these species.

The Group Subsidiaries carried out large-scale work to enhance the population of aquatic species according to preliminary results, more than 70 mln juvenile fish species were released into the river systems of Russia. The largest production subsidiary of Rosneft, RN-Yuganskneftegaz made the greatest contribution to this release with more than 55 million juveniles of Siberian sturgeon, muksun and peled raised in fish hatcheries as part of river ecosystem preservation measures. All juveniles were released into the rivers of the Ob-Irtysh basin.