ENERGY FOR PEOPLE - JSC Gazprom Neft

7INVESTMENT: TECHNICAL RE-EQUIPMENT AND DEVELOPMENTOF THE COMPANYEnergy for lifeENERGY FOR PEOPLEINVESTMENT:TECHNICAL RE-EQUIPMENT ANDDEVELOPMENT OF THECOMPANYThe large-scale business development plansin all spheres entail considerable investment.The total amount of investments to maintainthe current activities and for furtherdevelopment, including buying assets on themarket, before 2020 will rise to 80 bn USD.Due to the price recovery of oil and petroleum products JSC Gazprom Neft hasalready in 2009 increased the Investment program by 35% compared to the initialBusiness plan (excluding the acquisition of Sibir Energy). The total amount ofinvestments in 2009 was 5.5 bn USD. Capital investments of JSC Gazprom Neft in“organic growth” and traditional asset maintenance in 2009 was 2.6 bn USD whichis 22.5% less than the capital investments of 2008:AAcapital investment in oil production decreased by 32.2% and totaled 2.0 bn USD;AAoil refining in 2009 received 334 mln USD which is almost 2-fold more (+76.7%)than the money allocated in 2008;AAmore investments than the previous year were allocated for sales of petroleumproducts: 188 mln USD (+ 18%);AAother investments amounted to 64 mln USD.1.7 bn USD was allocated in 2009 for the purchase of Sibir Energy; and 0.5 bnUSD — for the purchase of NIS. Total investments in ‘non-organic’ growthamounted to 2.8 bn USD.In 2010 the Company plans to increase the amount of investments in “organicgrowth” to a significant extent: up to 4.0 bn USD, including investments inexploration and production — by 32%, in oil refining — 137%, in sales of petroleumproducts — by 63%. Acquisition of new major assets in 2010 is not planned.Implementation of the large-scale Investment program in 2010 should solve thefollowing major tasks:AAMaintaining the current production level at traditional assets, with a productiondrop rate of not more than 3%;AAActivation of exploration activities and the start of development of new deposits:Ravninny, Severo-Romanovsky, Vorgensky, Ort’yagunsky plots, Messoyakhskiyeand Kuyumbinskiye groups of deposits, Novoportovskoye fields; and foreignprojects: Venezuela, Libya, that will allow the production level to reach 100 mlnTOE by 2020;AARenovation of oil refineries to meet technical regulations: transition to Euro-4starting from 2012, and to Euro-5 — from 2015, and increasing production of highoctane gasolines;AARenovation of the NIS refinery as per the terms of the acquisition deal;AARenovation and rebranding of filling stations, and entry into premium segments ofoils markets;AAIn oil related services a large-scale program to replace drilling machines with newequipment to be purchased is planned.Meanwhile, the Company’s operating results in 2010-2012 will be mainlydetermined by traditional assets whose efficiency cannot be improved toa significant extent, taking into account the drop in production and the growth ratesof natural monopolies. Stable results are planned to be achieved in oil refining,and the renovation program will start affecting revenues in 2012. In sales the majorgrowth is planned to be achieved after the year 2011.62