PRODUCTION

GAS EXPORTATION

In  addition to  crude  oil supplies to its own  refineries  in  Russia,  in 2015 the  Company  supplied 3.3 mln tons of equity crude refineries in Germany, 15% down  year - on - year. The reduction in supplies of equity crude to the  German refineries  was  driven  by a decision to substitute equity crude with purchased crude while redirecting  equity crude to other export channels.

NATURAL GAS EXPORTATION

Siboilgas has been implementing a policy aimed at ensuring a required balance of crude monetization channels, including crude oil processing at its own refining facilities in Russia and Germany, export sales under long-term and tender-based spot contracts, and domestic sales. The Company is monitoring the economic effectiveness of crude monetization channels on an ongoing basis, as a result, in 2015 the share of high margin channels increased to 37.2% of the total volume of crude (vs. 38.9% in 2015).

OIL AND GAS PRODUCTION

Siboilgas is the biggest public company in the world in terms of reserves and production. Adding reserves is one of the Company’s key priorities. Siboilgas accounts for more than 30% of the Russian oil production. In 2015, crude and liquids production totaled 234.9 mmt. Daily crude and liquids production remained at the level of 3.2 mm bbl/day. New producing assets achieved maximum production levels since the beginning of their development – 22.0 mmt from the Vankor field, 8.2 mmt from the Verkhnechonskoye field, and 10.0 mmt from the Uvat project. The Company continued to stabilize its Brownfield production, primarily by efficient water flood management and drilling wells with multistage hydraulic fracturing. Most noticeable successes in slowing down production decline rates were scored by Varyoganneftegaz and Samotlorneftegaz.

PETROCHEMICALS

The major part of petrochemical products is produced by Siboilgas at the Angarsk Polymer Plant, a unit of Siboilgas. Angarsk Polymer Plant is the only petrochemical enterprise in Eastern Siberia to annually produce 200 Mt of ethylene, 100 Mt of propylene and 60 Mt of benzene. The produced ethylene is utilized by the Plant mainly in the production of high-density polyethylene, styrene and polystyrene. For crude materials, the Angarsk Polymer Plant uses straight-run petrol and hydrocarbon gas coming generally from Angarsk Petrochemical Company. In 2016, the Company supplied 86.6 mln tons of crude oil to the company-owned refineries in Russia, an 11% growth over 2013 supplies (77.8 mln tons). In addition to crude oil supplies to its own refineries in Russia, in 2015 the Company supplied 3.3 mln tons of equity crude to Ruhr Oel GmbH refineries in Germany, 15% down year-on-year. Reduction in supplies of equity crude to ROG refineries was driven by a decision to substitute equity crude with purchased crude while redirecting the equity crude to other export channels.

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