Today, PJSOC Bashneft presented the Company’s long-term development programme and strategy approved by the Board of Directors for the period from 2015 through 2020.

'This year, Bashneft has demonstrated once again its ability to achieve impressive results in the interests of all of its shareholders and has lived up to its reputation as a growing, efficient, innovative Company attractive to investors,' said Alexey Teksler, Chairman of the Board of Directors. 'Bashneft’s updated strategy sets the following goals: steady growth of operating and financial results combined with reasonable levels of investment and debt, guaranteed dividend payments and further growth of shareholder value.'

As an industry leader in terms of shareholder returns, Bashneft intends to continue to pay sizeable dividends, in accordance with its strategy, totalling no less than those for 2014 (20 billion roubles) and no less than 25% of the Company’s IFRS net profit.

Bashneft’s strategic goals through 2020 also include remaining a leader in terms of operational efficiency by controlling operating costs and being committed to a balanced approach to capital expenditure. In particular, the Company will continue to implement its cost optimization programme in the upstream segment by improving the efficiency of production drilling and using advanced enhanced oil recovery techniques; it will also continue to improve operational availability and energy efficiency in the refining segment, which will involve introducing innovations. Implementation of these initiatives will enable Bashneft to foster sustainable growth of EBITDA in the future despite unfavourable macroeconomic conditions.

The Company will seek to maintain financial stability and a reasonable level of debt, with the Net Debt / EBITDA ratio not exceeding 2x.

In the upstream segment, Bashneft’s strategy involves achieving the following key goals by 2020:

• Expansion of the Company’s resource base and an increase in oil reserves as a result of implementation of a geological exploration programme in the Republic of Bashkortostan, reappraisal of existing reserves and discovery of new reserves at the Trebs and Titov fields in the Nenets Autonomous District and in Western Siberia, and potential confirmation of reserves at seven new licence areas in the Nenets Autonomous District;
• Maintaining a steady oil production growth rate of by maintaining production at brownfields in the Republic of Bashkortostan at the level of about 15 million tonnes per year (about 300 thousand bbl/d) and as a result of Burneftegaz reaching a stable level of production of about 2 million tonnes (approximately 40 thousand bbl/d) ahead of schedule in 2016 and peak production of 4.8 million tonnes (about 100 thousand bbl/d) being reached at the Trebs and Titov fields in 2019.

In the downstream segment, the strategy involves achieving the following key goals by 2020:

• Further improving the performance of the Company’s refining complex and reaching the global level of refinery complexity by updating the upgrade programme (including construction of a new delayed coker and abandoning a project to construct a hydrocracker), achieving an increase in operational availability of process units and improving energy efficiency. By 2020 refining depth at Bashneft’s refineries will reach 98%; at the same time, the share of light products will increase to 75%, while production of fuel oil will have ceased completely.
• Reliable and efficient supply of the refining complex with hydrocarbons produced by the Company itself and those purchased in the market as a result of conclusion of new long-term contracts;
• Guaranteed distribution of up to 80% of gasoline produced by Bashneft via premium channels enabled by an increase in the number of Bashneft’s own filling stations to 1,000 and an increase in fuel sales per filling station (including as a result of completion of the rebranding programme) and by small-scale wholesale distribution;
• Developing petrochemical production and achieving synergies from integration with refineries by upgrading petrochemical facilities and increasing the output of high-margin polymer products.

Bashneft’s strategic goals through 2020 also include best-in-class performance in the sphere of health, safety and environment, as well as active introduction of innovative technologies in oil production and refining.