LOOKING INTO THE FUTURE
ANNUAL REPORT
OF THE TATNEFT COMPANY
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT 2015 year-end Annual Report has been prepared on a uniform integrated
basis incorporating the requirements applicable to annual reports of public companies and
the corporate accounting standards applicable to sustainable development. The Integrated
Annual Report considers the principles of the Corporate Governance Code recommended
for use by the Letter of Bank of Russia No. 06-52/2463 dated 10 April 2014.
The Annual Report of the Company on the information disclosure corresponds to the
requirements of the following documents:
− Federal Law No. 208-FZ «On Joint Stock Companies» dated 26 December 1995.
− Federal Law No. 39-FZ «On the Securities Market» dated 22 April 1996.
− Regulations of the Central Bank of the Russian Federation No. 454-P «On the Disclosure
of Information by Issuers of Securities» approved 30 December 2014, registered by the
Ministry of Justice of the Russian Federation on 12 February 2015.
- Letter of Information of Bank of Russia No. IN-06-52/8 «On Disclosure of Report on
Observance of the Principles and Recommendations of the Corporate Governance Code in
the Annual Report of Public Joint Stock Company» dated 17 February 2016
As related to the sustainable development aspects the integrated Company is focused on
compliance with the following standards:
− Global Reporting Initiative (G4) Guidelines for annual reports on sustainable development;
− AA 1000 Stakeholder Engagement Standard;
− ISO 26000 Guidance on Social Responsibility Standard;
− Social Charter of Russian business;
− International Standard of Integrated Reporting (www.theiirc.org/international-ir-
framework/).
The Annual Report of Public Joint Stock Company «TATNEFT» for 2015 has been
preliminarily approved by the Board of Directors of PJSC TATNEFT. Minutes No.13
dated 25 May 2016.
FORWARD-LOOKING STATEMENTS
This annual report, in addition to the actual data of the previous period, contains some forward-looking statements.
These statements, in particular, include statements about future operational results, plans and/or forward-looking
statements with respect to future economic and financial performance, goals and objectives of the Company regarding
the development plans, including those relating to products and services.
The forward-looking statements may include the information concerning anticipated or expected revenue, profit (loss),
net profit (loss) in respect of shares, dividends, capital structure and other financial matters.
The content of these statements is forward-looking and is accompanied by the words «expects», «anticipates», «plans»,
«intends», etc. Due to their specific nature, the forward-looking statements are subject to inherent risk and uncertainties,
both general and specific. There is a risk that the future actual results may materially differ from those plans, objectives,
expectations, estimates and intentions expressed in such forward-looking statements, or may not be implemented due
to a number of different factors.
CONTENTS
ABOUT THE COMPANY
01
Joint Address to Shareholders, Investors and Partners .......................................................................................................... 02
The Company’s Mission ....................................................................................................................................................... 04
Equity Holding Structure of PJSC TATNEFT ........................................................................................................................... 06
Development and Continuity of the Company’s Strategic Initiatives.......................................................................................... 09
Business Model ................................................................................................................................................................... 10
Finanical Position and Strengthening the Assets Structure ...................................................................................................... 12
Major Industrial Factors Affecting the Company’s Activity in 2015 ............................................................................................ 18
Model of Sustainable Development of the Company ............................................................................................................... 20
OPERATIONS
22
Upstream ............................................................................................................................................................................ 24
Downstream........................................................................................................................................................................ 30
Petrochemicals ................................................................................................................................................................... 36
Heat & Power Energy ........................................................................................................................................................... 38
CORPORATE MANAGEMENT
40
Management of the Company ............................................................................................................................................... 42
PJSC TATNEFT’s General Shareholders’ Meeting .................................................................................................................. 44
Board of Directors of PJSC TATNEFT .................................................................................................................................... 46
Composition of the PJSC TATNEFT’s Board of Directors ......................................................................................................... 48
Committees of the Board of Directors ................................................................................................................................... 54
Executive Bodies ................................................................................................................................................................. 58
Composition of the PJSC TATNEFT’s Management Board ...................................................................................................... 60
Corporate Practice .............................................................................................................................................................. 64
Corporate Management Practices Report .............................................................................................................................. 66
Personnel Management ....................................................................................................................................................... 72
Control Bodies .................................................................................................................................................................... 76
Integrated Risk Management System .................................................................................................................................... 78
Information Disclosure ......................................................................................................................................................... 82
Awards and Nominations ...................................................................................................................................................... 88
FINANCIAL RESULTS
90
Accounting Statements Prepared in Accordance with Russian Accounting Standards.
Auditor’s Opinion ................................................................................................................................................................. 92
Accounting Reports of PJSC TATNEFT, FY 2015 ..................................................................................................................... 94
Essential Aspects of the Accounting Policy and Presentation of
the Accounting Statements for 2015 FY ................................................................................................................................. 97
Consolidated Financial Statements in Accordance
with International Financial Reporting Standards as of and for the Year Ended December 31, 2015.
Independent Auditor’s Report ............................................................................................................................................. 106
Consolidated Statements of Financial Position ..................................................................................................................... 108
Consolidated Statements of Profit or Loss and Other Comprehensive Income ........................................................................ 109
Consolidated Statements of Changes in Equity .................................................................................................................... 111
Consolidaed Statements of Cash Flows ............................................................................................................................... 112
Notes to the Consolidated Financial Statements ................................................................................................................... 114
SOCIAL RESPONSIBILITY
164
Social Investment .............................................................................................................................................................. 166
Inofrming on the Activity Related to Sustainable Development
and Corporate Social Responsibility .................................................................................................................................... 167
Social Reponsibility of the Company Towards Its Employees ................................................................................................. 168
Social Infrastructure Development ...................................................................................................................................... 174
Charitable Activities ........................................................................................................................................................... 175
Registry of Corporate Social Projects .................................................................................................................................. 176
Interaction with the Stakeholders ........................................................................................................................................ 178
The Company’s Responsibility towards the Stakeholders ...................................................................................................... 179
Corporate Standards and Regulations for Interaction with Concerned Parties ......................................................................... 180
Declaration of the TATNEFT Company on Interaction with Customers .................................................................................... 182
Delcaration of the TATNEFT Company on Human Rights Observance .................................................................................... 183
INDUSTRIAL SAFETY AND ENVIRONMENTAL POLICY
184
Ensuring Industrial and Environmental Security, Occupational Health and Nature Conservation ............................................... 186
GRI GR Table..................................................................................................................................................................... 200
List of Abbreviations ........................................................................................................................................................... 204
Contact Details .................................................................................................................................................................. 206
02
01
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
JOINT ADDRESS TO SHAREHOLDERS,
INVESTORS AND PARTNERS
Dear Shareholders, Investors and Partners!
TATNEFT Company successfully accomplished all of the planned programs in 2015. In the difficult macroeconomic
environment the Company implemented a set of production and economic compensatory measures to maintain
the Company’s status in the group of the leaders of the Russian fuel and energy complex.
In order to ensure a sustainable economic and financial situation and improve operational profitability within the
framework of the formation of the Company’s Development Strategy until 2025 the work was continued on
improving the corporate business model and organizational structure of the TATNEFT Group of Companies.
The volume of crude oil production of the TATNEFT Group amounted to 27.2 mln tonnes in the reporting year. The
Company is developing deposits of high-viscosity oil as one of the strategic resource assets. The accumulated oil
production volume from Ashalchinskoye field exceeded 930 thousand tonnes of HVO since the beginning of the
development. Continuous improvement of technologies and introduction of new equipment contribute to
maintaining the volume of commercial production at conventional oil fields, as well as to successful development
of hard-to-recover oil reserves.
The Company controls replacement of hydrocarbon reserves by implementing appropriate comprehensive
programs. The Company’s proved reserves amount to 869.8 mln tonnes.
As part of accomplishing the strategic objective to increase the volumes of production and sales of new types of high value-
added products the TANECO Refining and Petrochemical Plants Complex produced 1.4 mln tonnes of diesel fuel complying
with the ecological «Euro-5» standard in 2015. The total volume of crude oil processed during the reporting year amounted
to 8.6 mln tonnes, while the light products yield accounted for more than 70%. The construction of the second stage of the
Complex is underway in order to increase the volume of oil refining up to 14 million tonnes of crude oil per year.
Expansion of the modern high-quality products output is also underway at the enterprises of the Petrochemical
Complex. The products of «Nizhnekamsktekhuglerod» Factory correspond to high-quality analogs of foreign
manufacturers and are popular in the domestic market. They are supplied to 28 importing countries. The tire
factories of the Company manufactured 12 million tires in the reporting year with 23% of them sold on the external
market. The export deliveries geography of our tire products covers 47 countries. The production capacity of the
Nizhnekamsk solid steel cord tire factory was brought to the full design level last year with the total number of the
tires manufactured since the factory was put into operation amounting to 3 million pieces. The factory provides
72% of the total volume of solid steel cord tires produced in Russia.
The reporting year witnessed modernization of Nizhnekamsk CHP in order to improve the efficiency and reliability
of power supply to the refining and petrochemical facilities of the Company’s Nizhnekamsk industrial hub, which
essentially increased the CHP plant’s capacity.
The Company continues developing its retail sales network. High quality of fuel, including the Company’s own
production, modernization of the filling stations and introduction of additional services enhance its competitiveness
and strengthen the Company’s position in this business segment. By the end of 2015 the network of the TATNEFT’s
filling stations increased to 692 stations with the sales volumes of oil and gas products through its own network of
filling stations accounting for 18.3% increase versus 2014.
The implemented investment policy provides for a qualitative improvement in the structure of the TATNEFT Group’s
assets. The share of proceeds from the operating segment «processing and sale of petroleum and petroleum
products” is growing. The Company was holding down the rate of operating expenses growth, which allowed
reducing the expenses per ruble of marketable products.
The Company’s net profit amounted to 85 billion rubles in 2015. The Company’s level of capitalization increased
by 40% versus 2014. The Company maintains a high level of the PJSC TATNEFT’s shares dividend yield.
Following the socially responsible business principles the Company complies with the high requirements of the
corporate environmental and social standards. The Company implements large-scale environmental measures
and programs for support of health, education, cultural and sports, which contribute to the development of the
social infrastructure in the regions of the Company’s activities.
The achieved status of the Company is the result of full-scale efforts of all the Company’s enterprises. We express
gratitude to the workforce of the TATNEFT Group of Companies for their professionalism and hard work aimed at
achieving maximum results.
The Company’s management appreciates the trust of the shareholders and constructive interaction with investors
and partners. In future we shall strictly adhere to the accepted commitments and plans.
We consider the unstable situation in the economy related to geopolitical problems, the fall in the global price of
oil, volatility of the national currency exchange rate, external constraints for Russian business to be a challenge
and a stimulus to the development and search for reserves. We are sure, that the accumulated production potential,
further improvement of the corporate management system and high competence of the staff are the basis for the
stable operation of the Company in the future, maintenance of its position in the industry, international recognition
and successful implementation of strategic initiatives!
R.N. Minnikhanov
President of the Republic of Tatarstan,
Chairman of the Board of Directors of PJSC TATNEFT
N.U. Maganov
General Director,
Chairman of the Management Board of PJSC TATNEFT
02
03
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
OUR MISSION CONSISTS IN ENSURING THE PROGRESSIVE
DEVELOPMENT OF THE COMPANY AS ONE OF THE LARGEST
RUSSIAN VERTICALLY INTEGRATED COMPANIES PRODUCING OIL
AND GAS, REFINED PRODUCTS, PETROCHEMICALS BASED ON
THE EFFICIENT ASSET MANAGEMENT OF THE SHAREHOLDERS,
MANAGEMENT OF NATURAL RESOURCES AND CORPORATE
SOCIAL RESPONSIBILITY.
The principal business assets are located in the territory of the Russian Federation, the business
projects are carried out in the domestic and foreign markets.
PJSC TATNEFT is a corporate centre of the TATNEFT Group, which consolidates management of
investment, financial and production processes of all business-segments in order to achieve the
maximum operating performance within the Company’s development strategy.
Coordination of the activity of the companies constituing the part of the Group is aimed at ensuring
high efficiency of the subsidiaries’ activity, transparency of decision-making and risk management.
The key function of the Group’s corporate centre is to increase the shareholder value and investment
attractiveness of the Company.
The Company represents the interests of about 44 thousand Russian and foreign shareholders.
Stable financial position and positive financial performance provide a high level of dividend yield of the
TATNEFT shares.
The dividend policy is based on the strict observance of the legitimate rights and interests of the
shareholders in accordance with the mission and strategic goals aimed to increase the Company’s
capitalization and the level of dividend yield on invested capital as a result of efficient asset
management of the shareholders.
TOTAL CONSOLIDATED
ASSETS OF THE TATNEFT
GROUP
NET ASSETS
OF PJSC TATNEFT
NET PROFITS
OF PJSC TATNEFT
04
05
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
EQUITY HOLDING STRUCTURE OF PJSC TATNEFT
Shares of PJSC TATNEFT are traded in the Russian and
international stock markets for over 20 years and they are
considered to be the most representative instruments in
the securities market. The stock owners of the Company
are shareholders from over 30 countries.
The ordinary and preferred shares of the Company are
listed in the 1st level MICEX Quote List - Moscow Stock
Exchange. The highest level of quotation of shares of
PJSC «Tatneft» on the Moscow Stock Exchange reflects
the Company’s compliance with all conditions and
whether the listing rules, following the best practices
of corporate governance, financial transparency and
compliance with the liquidity requirements. PJSC
TATNEFT shares are included in the MICEX basic index
calculation base, which is the main indicator of the
Russian stock market.
28.5 % of the share capital are converted into the
global American Depositary Receipts (ADRs). Listing
of depositary receipts on the London Stock Exchange
are classified as the «standard» status (ATAD symbol).
The depositary receipts are traded in the Xetra system
of Deutsche Bourse Group. Since 2009 the ADRs have
been traded on the US over-the- counter (OTC) market
organized by OTC Markets Group – Pink Sheets.
The Company’ equity capital is equal to 2 326 199
thousand rubles, including 2 326 199 200 preferred and
ordinary shares 2 326 199 200. Nominated value of each
share is amounted to RUB 1.
DIVIDEND POLICY OF THE COMPANY IS BASED
ON THE ECONOMICALLY SOUND APPROACH TO
PROFIT DISTRIBUTION TO PROPERLY BALANCE
THE SHORT-TERM INTERESTS (PROFIT-MAKING)
AND LONG TERM INTERESTS (COMPANY
DEVELOPMENT) OF SHAREHOLDERS.
Information on each class (type) of shares
Securities (sort and type)
As of December 31, 2015 there were 44 471 shareholders
registered in the Register of PJSC TATNEFT shareholders.
Among them the largest owners (nominal holders) of the
Company’s shares were as follows:
• Non-banking Credit Organization, Closed Joint Stock
Company National Settlement Depository owns
59.6013% of shares,
• Joint Stock Company “Central Depository of the
Republic of Tatarstan” owns 30.4483% of shares.
PJSC TATNEFT Equity Holding Structure as of
December 31, 2015
TOTAL NUMBER OF SHARES
INCLUDING:
Ordinary shares
PJSC TATNEFT
Foreign shareholders
Russian shareholders
Preferred shares
PJSC TATNEFT
Foreign shareholders
Russian shareholders
2 326 199 200
2 178 690 700
504 860*
2 178 185 840
147 508 500
93 467*
147 415 033
*without ownership through the Russian nominee holders
As of the end of 2015 the value of one ordinary share of
PJSC TATNEFT amounted to RUB 315.5 (US$ 4.35) on the
Moscow Stock Exchange, one preferred share - RUB 198.1
(US$ 2.73).
THE COMPANY ENSURES EQUALITY OF
CONDITIONS FOR ALL SHAREHOLDERS
REGARDLESS OF THE NUMBER OF SHARES
THEY OWN AND LOCATION OF SHAREHOLDERS,
AND TREAT THEM EQUALLY IN REALIZING
THEIR POSSIBILITIES TO PARTICIPATE
IN THE PROFITS OF THE COMPANY BY
RECEIVING DIVIDENDS.
preferred registered uncertified
shares
ordinary registered uncertified
shares
Form of issuance of securities
registered uncertified
registered uncertified
State registration number of the securities issuance
Date of statutory registration of the securities issuance
Nominal value of the securities
Currency of nominal value of the securities
Number of securities in the issuance
Total number of shares issued
2-03-00161-A
26.10.2001
1
RUB
147 508 500 pcs.
147 508 500
1-03-00161-A
26.10.2001
1
RUB
2 178 690 700 pcs.
2 178 690 700
06
Dividend Policy
The Company recognizes dividends as one of the key
indicators of investment attractiveness of the Company
and is committed to raising its dividends on the basis of
consistent earnings growth. The Board of Directors while
developing the recommendations on the dividend amount
to the General Meeting of shareholders (per share) is based
on the amount of net profits of the Company and proceeds
from the premise that the amount paid out in dividends shall
be at least 30% of net profits determined according to the
Russian Accounting Standards (RAS).
The principles and conditions of decision-making on the
payment (declaration) of dividends, the procedure for
determining the dividend amount and payment are defined
in the Regulations on the Dividend Policy of PJSC TATNEFT
approved by the Board of Directors of the Company. The
Regulations are based on observance of the shareholders’
rights, stipulated by the legislation of the Russian
Federation and best practices of corporate governance.
The Company ensures maximum transparency of the
dividend policy.
The amount of dividends on the ordinary and preferred
shares of PJSC TATNEFT recommended by the Board
of Directors to the General Meeting of Shareholders
on the results of operations in 2015 will amount to
RUB 10.96 (1096% of the nominal value of shares).
Dividend decision indicating payment itself, its amount and
form is taken by the General Meeting of the Company’s
Shareholders based on the recommendations of the
Board of directors. The recommendations of the Board
of directors indicating amount of the dividends according
to the results of reporting period, payment order, as
well as record date are presented to the shareholders
in accordance with the effective legislation for taking
final decision on the General Meeting of the Company’s
Shareholders.
Information about the decision taken by the General
Meeting of the Company’s Shareholders regarding
dividends payment, its amount and payment order is
published on the official web-site of the Company (www.
tatneft.ru) in Russian and English, as well as on the web-
site of the news agency authorized for carrying out activities
related to disclosure of the Company’s information.
History of the dividend payments for the last five completed fiscal years
Type of Shares
% of the
face value
Dividend
amount,
RUB
% of the
face value
Dividend
amount,
RUB
% of the
face value
Dividend
amount,
RUB
% of the
face value
Dividend
amount,
RUB
% of the
face value
Dividend
amount,
RUB
2010
2011
2012
2013
2014
Total amount of dividends
(RUB BLN)
Net proceeds share
(according to RAS) allocated
at dividends payment
11.7
30%
16.5
30%
20.0
30%
19.2
30%
24.6
30%
Ordinary shares
Preferred shares
502%
502%
5.02
5.02
708%
708%
7.08
7.08
860%
860%
8.60
8.60
823%
823%
8.23
8.23
1058%
10.58
1058%
10.58
Date of decision on dividends
payment
Annual General
Meeting of
Shareholders at
year-end 2010 held
June 23, 2011.
Minutes No. 18 dd.
28.06.2011
Annual General
Meeting of
Shareholders at
year-end 2011 held
June 29, 2012.
Minutes No. 19 dd.
03.07.2012
Annual General
Meeting of
Shareholders at
year-end 2012 held
June 28, 2013.
Minutes No. 20 dd.
02.07.2013
Annual General
Meeting of
Shareholders at
year-end 2013 held
June 27, 2014.
Minutes No. 21 dd.
02.07.2014
Annual General
Meeting of
Shareholders at
year-end 2014 held
June 26, 2014.
Minutes No. 22 dd.
30.07.2015
Date of payment
August 21, 2011
August 27, 2012
August 26, 2013
July 29, 2014
(payment to
the nominee
shareholder).
August 19, 2014
(payments to
the registered
shareholders).
July 29, 2015
(payment to
the nominee
shareholder).
August 19, 2015
(payments to
the registered
shareholders).
07
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
EFFICIENCY
THE CONSISTENT IMPLEMENTATION OF THE COMPANY’S STRATEGIC
OBJECTIVES PROVIDES SUSTAINABLE OUTPUT GROWTH AND POSITIVE
FINANCIAL PERFORMANCE FOR MORE THAN 20 YEARS.
SUSTAINABILITY AND STABILITY
THE POSITIVE PERFORMANCE RESULTS OF THE COMPANY IN DIFFICULT
MACROECONOMIC CONDITIONS OF THE LAST PERIOD OF 2014-2015
REFLECT THE QUALITY POTENTIAL OF ITS BUSINESS MODEL ABLE TO
WITHSTAND IMPACT OF THE NEGATIVE SECTORAL AND MARKET FACTORS.
RESPONSIBILITY
STRICT OBSERVANCE OF THE RIGHTS AND LEGAL INTERESTS OF
SHAREHOLDERS AND ALL THE STAKEHOLDERS IS EXPRESSED IN THE
FULFILLMENT OF THE COMPANY UNDERTAKEN OBLIGATIONS IN THE
PRINCIPAL ACTIVITY AND VOLUNTARY SOCIAL INITIATIVES.
The capitalization of PJSC TATNEFT at the 2015 year-
end amounted to RUB 716.6 billion, which represents
39.6 % growth as compared to 2014.
716.6
DEVELOPMENT AND CONTINUITY
OF THE COMPANY’S STRATEGIC INITIATIVES
STRATEGIC INITIATIVES
Icons
АКТУАЛИЗАЦИЯ СТРАТЕГИЧЕСКИХ
ИНИЦИАТИВ В 2015 ГОДУ
Ensure the financial sustainability and
economic stability
Increasing the long-term shareholder value of the
Company and ensuring high operating return on the
investment of the business segments on the basis of
effective corporate management of natural resources,
industrial, intellectual and professional assets
Stabilize the volumes of profitable oil
& gas production on the developed
license fields and development of new
fields including high viscosity oil fields
and hard-to-recover oil fields in the
territory of the Republic of Tatarstan
Increase the commercial oil & gas production of
oil & gas fields, oil recovery enhancement on the
developed license fields and development of new
fields including high viscosity oil fields and hard-to-
recover oil fields in the territory of the Republic of
Tatarstan while cutting the operating unit costs and
investment expenditures
Expand the hydrocarbon resource
portfolio outside the Republic of
Tatarstan and the Russian Federation
Expand the hydrocarbon resource portfolio
outside the Republic of Tatarstan and the Russian
Federation
Increase the production volumes and
sales of highly competitive finished
products through development of
refineries and petrochemical plants
Increase the production volumes and sales of
highly competitive finished products - high value-
added goods according to the international
environmental standards and long-term market
requirements, develop in-house refinery and
petrochemical production capacities.
322.1
299.8
307.6
344.6
263.2
201.7
114.6
513.4
475.0
471.6
Formulate and implement the
innovative engineering policy
Strengthen the technological capacity of the
Company through effective investments in the
development and modernization of the production
capacities, advanced technology development
and enhancement of efficient use of facilities
and technologies, improvement of efficiency of
resource saving programs.
Ensure a high level of the corporate
social responsibility and environmental
responsibility
Ensure a high level of the corporate social
responsibility and support environmental balance
during carrying out production and commercial
activities of the Company.
0.5
5.5
18.5
3.6
22.1 22.1
34.1
85.9
70.6
53.3
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
The compliance of indicators to the strategic initiatives is indicated by appropriate marking in the report text
08
09
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
BUSINESS MODEL
PJSC TATNEFT GROUP STRUCTURE PROVIDES THE OPERATIONAL PROCESSES FROM OBTAINING
PRODUCTION LICENSES TO SALES OF PETROLEUM AND PETROCHEMICAL PRODUCTS IN THE
DOMESTIC MARKET AND FOR EXPORT. THE COMPANY ASSETS ARE ALLOCATED AMONG THE
BUSINESS SEGMENTS OF UPSTREAM AND DOWNSTREAM.
In 2015, the Company successfully achieved its objectives to strengthen the quality and profitability of the corporate assets,
ensure the production level growth and replenishment of reserves, improve the added value through the production of high
quality refined products and the efficient allocation of resource and production potential, development of in-house refinery
capacity, enhancement of returns on the investments made in the tyre production. The result of the year was the achievement
of all the planned production volumes and positive financial performance.
PJSC TATNEFT
is a corporate
centre of the
TATNEFT Group
Management processes
Business Structure
Business structure of the Company provides
for maximum efficient utilization of resource
assets and production facilities based on
project and process management as a part of
uniform investment policy:
l consolidation of the technological and
intellectual potential;
UPSTREAM
Ensuring the production gain
and replenishment of reserves
l Strengthening the resource base
l Geographical expansion of production assets
l Development of hard-to recover reserves, especially high
viscosity oil fields
l control of effectiveness and quality of all the
processes;
DOWNSTREAM
l creating of business growth points and
operating earnings;
l intersegmental costs cutting;
l strengthening the financial sustainability;
l risk management;
l formation of the uniform production corporate
standards;
l coordination of cooperation with the external
business environment.
Qualitative strengthening of the core assets structure
and enhancement of operating efficiency of business
segments in the following activity areas:
l Petroleum refining
l Petrochemical production
l Sales of crude oil and petroleum products
l Retail network of petroleum products
l Heat-and-Power generation
Support of the core activity
Creating conditions for sustainable
development of the Company
l Development of own innovative and technological capacity in all
business segments
l Environmental activity
l Social activity
THE COMPANY’S STRATEGIC GOAL IS TO DOUBLE ITS VALUE UP TO 2025:
• INCREASE ANNUAL OIL PRODUCTION VOLUME OUT TO 30 MLN TONNES
• INCREASE PETROLEUM REFINING VOLUME UP TO 14 MLN TONNES UP TO 2018
• INCREASE VOLUME OF PETROLEUM PRODUCTS SALES THROUGH THE RETAIL
NETWORK OF FILLING STATIONS BY 1,5 TIMES
• STRENGTHEN PETROCHEMICALS BUSINESS SEGMENT
THE BUSINESS MODEL BASED ON THE UNIFIED STRATEGY INTEGRATES THE POTENTIAL OF
CORE DIVERSIFIED ASSETS IN THE EXPLORATION AND PRODUCTION, PETROLEUM REFINING,
PETROCHEMICAL PRODUCTION, SALES OF CRUDE OIL AND PETROLEUM PRODUCTS, ENSURING
THE VALUE CREATION AND PROVIDING CONDITIONS OF LONG-TERM SUSTAINABLE DEVELOPMENT
TAKING INTO ACCOUNT EXTERNAL INFLUENCING FACTORS.
•
X C H A N G E R A T E S
T RANSPORT RATES • TECHNOLOGICAL A
In-house refined products meeting
the international standards
N
D E
N
VIR
E • E
T
A
N R
Geographical proximity of the crude oil production centre
to the trade channels of crude oil and petroleum products
Own retail network of filling stations for retail sales of petroleum products
Own logistics and marketing center for sales of tyre products
O
N
M
E
N
T
A
L
S
T
A
N
D
A
R
D
S
•
C
O
M
P
E
S MARGINALITY • IN F L A TI O
L
E
S
A
P
The proximity to the supply
source of synthetic rubber,
availability of the own carbon
black production
High-technology products
production lines of tyre
products
Geographical proximity
to large clusters of car
assembly plants
Potential to increase the
market share of solid
metal cord tyres and
passenger car tyres
S
L
A
C
I
M
E
H
C
O
R
T
E
P
E S O F CRUDE OIL AN
T R O L E UM PRODUC
T
D
S
P
E
T
R
O
L
E
U
M
R
E
F
ININ
G
High technological level of
in-house refinery with capacity
of high yield of light fractions of
petroleum products
Potential production of high-
added value products and
products with high share of
added value
Vicinity of the refining facilities
near traditional production
areas in the territory of the
Republic of Tatarstan
VALUE CREATION
,
EXPLORAT I O N ,
OIL PRODUC T I O N
T
I
T
I
V
E
E
N
V
I
R
O
N
M
E
N
T
•
Y
C
I
L
O
P
E
T
A
R
D
N
N A
TIO
A
X
A
LIE
P
P
U
F S
N O
TIO
A
C
O
L
L
A
E
R
•
C
R
U
D
E
O
I
L
A
N
D
P
E
T
R
O
L
E
U
M
P
R
O
D
U
C
T
S
P
R
I
C
E
S
A
T
T
H
E
W
O
Strengthening the resource base, replenishment
of the produced hydrocarbons with the commercial reserves
Preparation of the feedstock base, efficient reserves put into development
Maintaining the planned production growth rates and oil recovery efficiency in the
mature field and in development of new oil fields while cutting the operating unit
costs and investment expenditure through application of innovative
technological solutions
R
L
D A
N
D D
O
M
N
A
M
E
S D
T
C
U
D
O
R
ESTIC MARKETS • PETROLEUM FEEDSTOC K A N D P E T R O L E U M P
EXTERNAL IMPACT FACTORS
T • T
E
K
R
D A T T H E W ORLD MA
10
11
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
FINANCIAL POSITION
AND STRENGTHENING THE ASSETS STRUCTURE
Priorities of the corporate financial policy comprise the
provision of reliable funding sources at minimum cost with
maximum efficient utilization of the circulating capital. The
financial and economic potential of the Company ensured
timely investment in the priority projects and funding of all
expenses and payments, including capital expenditures,
repayment of long-term loans and dividends. The total
amount of investment in the Company amounted to 97.2
billion rubles in 2015. Revenue of the TATNEFT Group
amounted to 552.7 billion rubles in 2015. Net profit and
EBITDA of the Group amounted to 105.8 billion rubles and
155.6 billion rubles, respectively in 2015.
Revenue of PJSC TATNEFT (net of VAT, excise duties and
export duties) amounted to 463 billion rubles in 2015, which
is up by 18% as compared to the level of 2014. The increase
of revenues in 2015 as compared to 2014 year was due to
production increase, as well as growth of light petroleum
products sales share in the whole sales structure.
Profit before income tax in 2015 increased by 7.2% as
compared to the corresponding period of the previous
year and amounted to 111.5 billion rubles. The key profit
increase driver in 2015 as compared to 2014 was the
growth of the revenue from sales in the reporting period.
In 2015 PJSC TATNEFT gained 85 billion rubles of net profit,
up 3.6% as compared to 2014 index (according to RAS).
The total amount of accrued taxes and payments of PJSC
TATNEFT in 2015 amounted to 263 billion rubles..
The Company’s balanced policy provides for gradual
reduction of the level of funding raised by the parent
company TATNEFT. The loan balance on foreign currency
credits as of 31.12.2015 decreased to USD 204.6 million to
USD 49.3 mln, in the complete absence of ruble loans.
ASSETS STRUCTURE OF THE TATNEFT GROUP
(BASED ON IFRS)
REVENUE STRUCTURE OF THE TATNEFT GROUP
(BASED ON IFRS)
37.3%
42.4%
45%
45%
2015
798.7
bln rubles
16.4%
3.9%
2015 год
552.7
bln rubles
3%
7%
Upstream
Downstream
Petrochemicals
Corporate and others
FINANCIAL PERFORMANCE OF THE COMPANY
PROCEEDS OF THE
GROUP
(BASED ON IFRS, RUB BLN)
EBITDA
(BASED ON IFRS, RUB BLN)
NET PROCEEDS OF THE
GROUP
(BASED ON IFRS, RUB BLN)
NET PROCEEDS OF
PJSC TATNEFT
(ПО РСБУ, МЛРД РУБ)
NET PROFIT OF PJSC
TATNEFT
(ПО РСБУ, МЛРД РУБ)
476.4
455.0
552.7
155.6
127.7
123.7
105.8
97.7
78.3
392.4
363.5
463.0
82.1
85.0
63.9
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THE COMPANY CONSISTENTLY STRENGTHENS THE STRUCTURE OF ITS CORE ASSETS
AS PART OF THE VERTICAL INTEGRATION STRATEGY IN ORDER TO ACHIEVE AN OPTIMAL
BALANCE OF THE CORE OPERATIONAL SEGMETNS: UPSTREAM AND DOWNSTREAM.
INVESTMENT POLICY IMPLEMENTED BY THE COMPANY ENSURED POTENTIAL OF THE FURTHER
DOWNSTREAM PROCEEDS GROWTH DUE TO ADDED VALUE, PRODUCED ON THE BASIS OF
DOWNSTREAM PROCESSING OF HYDROCARBON RESOURCES
The period since 2005 until 2015 saw quality changes of the Company’s investment policy related to formation of
own downstream block. Share of investment allocated to downstream development increased by 22 percentage
points from 5% in 2005 to 27% in 2015, while maintaining level of investment into upstream among the total
investment amount. This allowed to increase value of consolidated assets of the Company by 2.8 times from 282.1
bln rubles in 2005 to 798.7 bln rubles at 2015 year-end with simultaneous growth of both segments.
Currently share of upstream segment in the assets structure of the TATNEFT Group is amounted to 37%, while
share of downstream segment is amounted to 42%. Strengthening of the assets structure has allowed the
Company to approach optimal balance of these business segments in the terms of proceeds, reached 45%/45%
ratio in 2015 with significant increase of total amount of consolidated proceeds (552.7 bln rubles at 2015 year-end).
I
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VOLUME OF INVESTMENTS
OF THE TATNEFT GROUP
ASSETS STRUCTURE
OF THE TATNEFT GROUP
(BASED ON GAAP USA (2005) AND IFRS (2015))
REVENUE STRUCTURE OF THE
TATNEFT GROUP
(BASED ON GAAP USA (2005) AND IFRS (2015))
Total
798.7
bln rubles
37%
21%
42%
Всего
300.4
bln rubles
64%
10%
26%
Total
552.7
bln rubles
45%
10%
45%
Total
282.1
bln rubles
Total
18.7
bln rubles
76%
5%
Total
97.2
bln rubles
61%
34%
5%
62%
27%
2005
2015
2005
2015
2005
2015
+22%п
+29.3 bln rubles
+37%п
+19%п
+325.6 bln rubles
+169.0* bln rubles
Change of proportion and amount of
investment into downstream
Change of proportion and value of
downstream assets
Change of proportion and amount of
downstream revenue
*Without consideration of standards
differences
2013
2014
2015
2013
2014
2015
2013
2014
2015
2013
2014
2015
2013
2014
2015
Upstream
Downstream
Other segments
12
13
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
Upstream
Historically, the main resource base of the Company is
located within the Republic of Tatarstan, where in 2015 the
Company had reached a record high oil production across
PJSC TATNEFT over the last two decades in the amount of
26.9 mln tonnes that was up 704 ths tonnes as compared
with 2014. Overall, the total oil production across the Group
amounted 27.2 mln tonnes.
Even though most of the oil fields the Company owns are
mature, for the time being TATNEFT has been the only oil
producing company in Russia ensuring since 2000 a
sustainable production growth with ongoing improved oil
production and enhanced oil recovery techniques. At
year-end 2015, in terms of oil production addition, the
Company ranked second (+2.7%) only to Bashneft (+11%)
among the Russian vertically integrated oil companies.
In spite of the challenging economic situation and plunging
oil prices the Company continued realization one of its
activities of strategic importance i.e. ultra-viscous oil (UVO)
development project at the Ashalchinsky field: in 2015,
production amounted 376.4 ths tonnes and was up 60%
versus last year; overall, since the beginning of pilot
commercial development at year-end 2015 the ultra-
viscous oil produced totaled as high as 930 ths tonnes. For
2016, the UVO production is targeted at the level not less
than 531 ths tonnes.
The proved oil reserves were estimated by Miller & Lents
Ltd. in the quantity of 869.8 mln tonnes. In 2015, the proved
oil reserve replacement ratio showed 166%.
Outside the Republic of Tatarstan within the Russian
Federation, the licensed areas held by the Company
produced 322 ths tonnes of oil with 4.9 % growth.
The key element of TATNEFT’s operations is improvement
and development of new oil recovery techniques.
Development of advanced and science intensive
technologies as well as expansion of scope and range of
production services rendered consolidate innovation
capacity of the Company and ensure one of the significant
competitive advantages of PJSC TATNEFT in the industry.
Large-scale implementation of tertiary EOR techniques,
high level of operating management culture as well as
improved service contractor management model position
the Company as a leader among the largest vertically
integrated oil companies. The Company has the lowest
weighted average tariff for oil transportation to European
markets among other Russia’s large vertically integrated oil
companies.
For 2016 and the coming years the Company’s top
strategic priorities in this business segment are as follows:
• boost oil production and enhance oil recovery efficiency
at conventional oil fields in Tatarstan through extensive
implementation of novel equipment and technologies;
attain production level up to 2 mln of tonnes;
• develop UVO deposits at the Ashalchinsky field and
• realize a pilot operation program for the Domanikovian
• provide cost-effective oil production growth with
lowering specific operating and investment costs.
oil production;
Downstream
The Company continues implementing its business
diversification strategy. In 2015, the overall refinery
feedstock across the Group totaled 9.4 mln tonnes,
of which 9.2 mln tonnes of petroleum feedstock were
processed at the TANECO Complex including 8.6 mln
tonnes of crude oil.
The primary processing capacity utilization of the refinery
was 115%. TANECO ranks first among Russia’s oil
refineries as regards this performance parameter (the
industry average performance is about 89 %).
In 2015, 18 off-site facilities were commissioned, and
the lube base stock plant, which is unique by the Russian
standards, increased its output. The tests run prove that
TATNEFT’s lube base stocks have good cold flow properties,
volatility and color properties and high viscosity index.
Based on the results of the All-Russian Competition
«Russia’s Top 100 Products 2015»
the TANECO product such as Euro-5 diesel fuel was listed
among the best commodities. The high-quality of the diesel
fuel was proved by the results of the independent tests
run by the KAMAZ Research and Development Center at
the central laboratory of fuels and lube oils. The Chevron
Lummus Global (US) Licensor acknowledged the output
quality as well, indicating that it meets all up-to-date world
requirements.
In the year under report, installation of new processing
units as well as start-up operations of the commissioned
processing units were going on at the Refinery Complex.
In 2016, it is planned that the work will continue as regards
to competitive growth: finish construction and installation
operations and begin integrated testing operation of the
process units such as naphtha hydrotreatment, delayed
coking with coke shipping yard, isomerization, naphtha
splitter, first stage of aromatics production complex.
Currently, the second phase of TANECO is being
constructed that is another crude oil distillation unit CDU-
VDU-6. Plans for 2016 provide for starting up the catalytic
reforming and light naphtha isomerization units and
launching the production of Regular-92 and Premium-95
motor gasolines of the Euro-5 emission standard.
It is very important for the Company’s downstream
business efficiency to have an access to the Sever product
pipeline that will make it possible to significantly cut down
the costs for diesel fuel transportation to the foreign
markets.
TATNEFT GROUP OIL PRODUCTION (MLN TONNES)
Thanks to advanced and innovative EOR implementation
the Company has been incrementing its oil production
over the years in spite of the high reserve depletion rate
while maintaining competitive expenditure level. Creating
the long-term high-quality producing asset portfolio the
Company produces the historical oil fields within the
Republic of Tatarstan and expands its geographic reach
prospecting and exploring for oil beyond Tatarstan.
26.5
+ 2.7 %
27.2
25.3
2005
2014
2015
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TANECO’S PORTION IN PRIMARY CRUDE OIL
PROCESSING IN THE RUSSIAN FEDERATION
ACCOUNTED FOR 3%.
As at the beginning of 2016, the petroleum feedstock
conversion rate was 74.4% (average for Russian
refineries – 73.9%), light product cut was 71.87%
(average for Russian refineries – 58.1%).
Petroleum product output across the TATNEFT Group
made up 9.3 mln tonnes. Over 2010 through 2015
petroleum product output to crude oil production ratio
increased from 0,8% to 34,1%.
14
THE COMPANY SETS OUT THE FOLLOWING
PRIORITIES FOR THE UPCOMING YEARS
IN THE DOWNSTREAM BUSINESS:
• full completion of the first phase of TANECO and
• reaching of conversion depth as high as 97.0%
beginning of its second phase construction;
after full commissioning of the Complex, while
having Nelson complexity index not less than 12;
• full conversion to light petroleum products
• development of high margin marketing channels
production in the future;
for TANECO’s new high quality products in the
Russian regions and abroad.
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15
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
Retail Business (retail network of filling stations )
Tire Industrial Complex
Heat and Power Generation
PJSC TATNEFT retail network of filling stations is the
fourthlargest retailer ranked after Lukoil, Rosneft and
Gazpromneft.
The competitive advantage of the Company’s retail network
is the large-scale and broad covering of almost all the most
attractive regions of Russia, especially the Volga region
and Central Federal District with high growth prospects and
attractive retail margins.
An additional competitive advantage is availability of its
own high-quality and highly competitive product - TANECO
diesel fuel, which has no analogues in Russia and in many
ways superior to the Euro-5 fuel standard.
After completion of the motor gasoline production block
at TANECO the retail network of the Company will be fully
provided with its own high-quality products and that will
allow to significantly strengthen its competitive position.
The main strategic objectives of the Company in the Retail
Business segment are as follows in the coming years:
• modernization of filling stations;
• expansion of the retail network of filling stations;
• increase of daily output of filling stations;
• quality improvement of sales proposition at the filling
stations, including through the development of non-fuel
offer at the filling stations.
The 2015 year proved to be difficult in general for the tire
production complex of the TATNEFT Group. The main
negative factor was the reduction of the tire market due
to the crisis developments in the economics. There was
a growing trend of shift in demand towards cheaper tires
of B and C segments in the Russian tire market due to the
decline in personal income.
The long-term prospects of the tire market remain
encouraging, and the competition among the tire
manufacturers in the market of the Customs Union will
increase. At the same time, the devaluation of the national
currency creates certain advantages for the domestic
tire manufacturers in the local market as related to the
price competition with imported products, as well as
new opportunities to increase exports. The anti-dumping
duties were introduced for import of truck tires into the
countries of Eurasian Economic Union in December of
2015, which can potentially reduce the import of cheap
low-quality tires from Asia.
Despite the industry-wide negative factors, the tire
production rose in 2015 due to increased demand for the
Company’s products, which resulted in improved financial
and economic performance of the petrochemical segment.
This increase was especially noticeable in demand for
modern solid metal cord truck tires – Kama brand.
KAMA Scientific & Technical Center, which is a part of the
TATNEFT Group’s Tire Industrial Complex developed and
put into production over 40 models of new tires of various
sizes and purposes in 2015.
The Company has its own generating assets enabling to
improve energy supply sustainability of the production
divisions and TANECO as well as boosting competitive
edges of the Group in general. The utilities realizes
activities to improve reliability and efficiency of heat and
power generation as well as reduce energy resource loss
and consumption.
In 2015, the Nizhnekamsk CHP completed the project to
increase its power capacity from 380 to 730 mW.
Commissioning of the turbine units will demothball the
long-term forcedly suspended generating facilities of the
Nizhnekamsk CHP, which in the future will increase power
energy supply and enhance the plant operating flexibility to
the market fluctuations.
Modernization of the Nizhnekamsk CHP allows to generate
some part of the power energy in a condensing mode in
other words no matter how much heat is supplied to heat
consumers.
In 2015, the Almetyevsk Heat Networks Company put into
service three small CHPs with overall power capacity of 24
mW. Small CHP’s produces heat and power energy
cogeneration with high combustion efficiency.
SALES OF OIL AND GAS PRODUCTS
THROUGH RETAIL FILLING STATIONS
(MLN TONNES)
2.06
+ 1 8.2 %
2.43
The competitive advantages
include in-house production of
petroleum products, including
TANECO diesel fuel superior to
Euro-5 standard in many
aspects. Construction and
modernization of filling stations
are conducted with high level of
technical equipment.
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PRODUCTION OF TIRE PRODUCTS
(MLN PCS)
11.6
+ 3 %
12.0
Production of the
competitive products
allowed to raise tire
production by 3% as
compared to 2014 and to
retain market share, despite
negative dynamics of the
market in general, and to
ensure the positive dynamics
of financial indicators.
2014
2015
2014
2015
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IN 2015, NIZHNEKAMSK CHP
GENERATED POWER ENERGY
1.28 BLN KWH
The Company is implementing feedstock
source diversification programs (natural
gas, oil fuel, oil coke) for the Nizhnekamsk
CHP which will make it possible to improve
operating efficiency of the plant through
optimum fuel type selection according to the
market situation as well as reduce power and
heat delivery disruption risks.
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ADDED VALUE
OVER THE PERIOD BEGINNING FROM
2005 IN THE COURSE OF THE COMPANY’S
VERTICAL INTEGRATION CONSOLIDATION
THE ADDED VALUE OUTPUT HAS GROWN
2.5 TIMES AS MUCH.
In 2015, the added value production including
petroleum product output amounted to 308.1
bln rubles that was up 16.6 % against 264.2 bln
rubles in 2014.
In 2015, the added value portion in overall
commodity output accounted for 73.2% versus
71.9% in 2014.
ADDED VALUE OUTPUT GROWTH,
BLN RUBLES.
264.2
+ 1 6.6 %
308.1
123.4
300
200
100
0
2005
2014
2015
ADDED VALUE PORTION IN OVERALL
COMMODITY OUTPUT
100%
73.2%
2015
Overall commodity output
Added value portion
16
17
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
MAJOR INDUSTRIAL FACTORS
AFFECTING THE COMPANY’S ACTIVITY IN 2015
TATNEFT COMPANY IS A MAJOR SUBSURFACE USER, OPERATOR AND SUPPLIER OF OIL AND GAS
RESOURCES, MANUFACTURER OF PETROCHEMICAL PRODUCTS. THE COMPANY’S REVENUES
DIRECTLY DEPEND ON THE GLOBAL MARKET ENVIRONMENT, PRIMARILY, ON DEMAND FOR
RAW MATERIALS AND GLOBAL CRUDE OIL PRICES ON THE INTERNATIONAL MARKET. OTHER
DETERMINANTS OF THE CORPORATE FINANCIAL AND ECONOMIC PERFORMANCE INCLUDE
TRANSPORTATION COSTS, MARKET CONDITIONS, REFINING COSTS, TAX BURDEN, CURRENCY
FLUCTUATIONS ETC.
The Tatneft Company is a registered taxpayer and conducts
most of its activities in the Russian Federation, including
the Republic of Tatarstan, federal subject of the Russian
Federation.
The Company considers all macroeconomic and industry
factors when planning and carrying production, treatment,
transportation and storage of oil & gas, oil & gas products,
as well as materials used in production.
Proceeds, profitability and growth of the Company
significantly depends on crude oil and petroleum products
prices. World oil prices are historically exposed to
significant changes caused by many factors, including
supply and demand at the world and regional markets,
reflecting expectations regarding future supply and
demand for crude oil and petroleum products, world and
regional economic situation, possibilities and wishes of
Organization of Petroleum Exporting Countries (OPEC)
members and other oil producing countries to set and
maintain defined production and pricing level, national and
foreign government regulation, prices and availability of
alternative fuels, prices and availability of new technologies,
political and economic events in the oil producing
regions, especially in the Far East and in the North Africa,
regulations and actions of the country governments and
international organizations, including export restrictions,
taxes and sanctions.
The general situation in the industry during the reporting
period was determined by global macroeconomic factors
conditioned by the sharp drop in oil prices in the world
market. In 2015, the average price for Urals oil was USD
51.2/bbl versus USD 97.3/bbl of the previous year. By
the end of 2015, world oil prices reached minimum value
(in dollar terms) over the last 10 years. Meanwhile the
oversupply of oil in the world market reached record high.
The general political situation and the economic sanctions
had a negative impact on the domestic economy, which
led to the devaluation of the national currency. Industrial
production index was 96.6% in 2015 as compared to 2014.
Meanwhile the index of fossil fuels extraction made 100.3%
18
versus the 2014 year. The foreign policy did not significantly
change in 2015: the sanctions imposed by Western
countries against some Russian companies and sectors
are still binding. There are still difficulties with the Russian
companies’ access to external financing. Protracted drop
in oil prices led to a partial reduction of the investment
programs of the Russian oil producing companies and
refineries, which had a negative impact on the equipment
manufacturers for oil and gas industries. At the same time,
the Russian crude oil production reached another historical
peak owing to development of new deposits and enhanced
oil recovery of brownfields.
The oil production volume increased to 534 million tonnes
in the Russian Federation (including gas condensate) in
2015 (101.4% as compared to 2014). Most of the vertically
integrated oil companies maintained the positive dynamics
of the crude oil production. Increase in production was
provided in new regions of the Eastern Siberia, the North
of Krasnoyarsk territory, Far East and stabilization of
production in the brownfields. According to the data from
the Central Control Administration of the Fuel and Energy
Complex of the Russian Ministry of Energy the production
drilling meterage increased by 11.7 % in 2015, and the
exploration drilling meterage decreased by 17.7%. At the
same time the capital investments in this period increased
by 9.6 % on current basis.
January 1, 2015 saw the entry of fundamental changes of
the tax system, the so-called “big tax maneuver”, provided
for by Federal Law No. 366-FZ of November 24, 2014 “On
Amendments to Part Two of the Tax Code of the Russian
Federation and Certain Legislative Acts of the Russian
Federation”.
It implies the gradual significant reduction of export duties
on crude oil and light oil products with a simultaneous
increase in the export duty on dark oil products and
the mineral extraction tax rate (MET) on oil and gas
condensate. These changes will lead to greater profitability
of high-technology oil refining in Russia and partial
shutdown of outdated refineries. At the end of 2015 the
Stated Duma on the proposal of the Government of the
Main trends observed in the Russian retail market of
petroleum products include continuing consolidation of
retail networks by the vertically integrated oil companies
(VIOC), construction of new filling stations and the
purchase of existing independent operators, development
of fuel and non-fuel offers, continued strengthening the role
of the State, improved quality environmental requirements
to petroleum products.
Despite the trends towards import substitution, the share
of imported tire products in Russia is still high, particularly
high proportion of Asian manufacturers, particularly China.
It is important to note that the decline in rubber prices
continued in 2015 both in dollars and in rubles (despite
of the national currency devaluation), which allowed
manufacturers to avoid a profit slump due to sales
slowdown.
In 2015, the growth rates of energy demand in the Russian
Federation (+ 0.2%) were lower than rates planned by the
Government (+1.1% forecast of the Ministry of Energy
2014). Large-scale introduction of new and retrofit power
generating capacities, as well as insufficient disposal rates
of outdated capacities (installed capacity of power plants
in Russia increased by 1.3% or 3.1 GW in 2015) against
the background of the general economic slowdown in the
Russian Federation and the Republic of Tatarstan have led
to increased competition in the industry.
Russian Federation decided to freeze the export duty for
2016 at the rate of 42% on the level of 2015, instead of
planned reduction to 36% (Federal Law No. 324 FZ dated
November 28, 2015, Russian Federation Government
Regulation No. 1290 dated November 30, 2015), in this
respect the changes will not affect 2017, required legal
export duty will be 30%. This fact mitigated the impact
of the tax maneuver on refining margins, however, ha a
negative impact on profitability of crude oil production.
The primary crude oil processing in the Russian Federation
amounted to 282 million tonnes in 2015 (down 2% as
compared to 2014). Reduction of the processing was
connected with the increased tax burden on exports of
black oil products, which takes place in the framework of
the «big tax maneuver».
The Russian oil companies continued the large-scale
modernization of the refineries aimed at improving the
processing depth, increasing yield of motor gasoline
components and improving the fuel environmental
standards. Over the past year, within the framework of the
so-called quadripartite agreement concluded between
the Federal Antimonopoly Service of Russia (FAS),
Federal Service for Ecological, Technological and Nuclear
Supervision, Federal Agency for Technical Regulation and
Metrology and the oil companies the Company put into
operation and completed the reconstruction of 11 facilities.
The commissioning periods of 16 facilities were postponed
by the Ministry of Energy of Russia from 2015 to 2016-2020.
Motor gasoline production amounted to 39.8 million tonnes
in 2015, up 4% as compared to 2014. Production of Euro-5
gasoline amounted to 33.1 million tonnes, which is up 17%
as compared to the previous year. The production volume
of diesel fuel production totalled 76.1 million tonnes,
decreased by 1.6%, of which compliant
with Euro-5 – 55.7 million tonnes (23% more compared to
the previous year). Production of jet fuel amounted to 9.7
million tonnes in 2015, which is 11% lower than the volume
of its production in 2014.
Due to the negative macroeconomic factors and fall in oil prices, the Company has formed a bailout program of anti-crisis
measures including priority projects ranking subject to maintaining full-scale production plans, measures to optimize
general and administrative expenses, reduce production costs, increases in labor productivity, strengthen control to
prevent vendor-prices growth and improve the tender procedures. The Company has identified the imported equipment
substitution as the most important priority to reduce costs, which was also connected with introduction of economic
sanctions in 2014.
19
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
MODEL OF SUSTAINABLE DEVELOPMENT OF THE COMPANY
THE TATNEFT COMPANY BUILDS ITS BUSINESS IN ONE OF THE MOST CAPITAL- INTENSIVE INDUSTRIES
OF THE SUBSOIL MANAGEMENT AND REPRODUCTION OF ENERGY RESOURCES REQUIRING ENHANCED
CORPORATE RESPONSIBILITY IN ALL THE SEGMENTS OF PRODUCTION AND ECONOMIC ACTIVITIES,
FINANCIAL, SOCIAL, ENVIRONMENTAL ACTIVITY. THE COMPANY CONSISTENTLY DEVELOPS ITS
CORPORATE PRACTICES.
THE COMPANY IS AWARE THAT THE LONG-TERM SUSTAINABLE BUSINESS DEVELOPMENT IS
INSEPARABLE FROM SOCIAL PROGRESS AND SUSTAINABLE DEVELOPMENT OF THE WHOLE
SOCIETY, AND CONTRIBUTES SIGNIFICANTLY TO THE SOCIAL AND ECONOMIC DEVELOPMENT OF
THE BUSINESS ACTIVITY REGIONS AND THE COMMUNITY AS A WHOLE. TATNEFT MAKES DECISIONS
TAKING INTO ACCOUNT SOCIAL, ENVIRONMENTAL AND OTHER POTENTIAL IMPACTS.
The oil & gas sector in the structure of the national economy determines the overall dynamics of its development, including
the formation of financial resources and stable social sphere. This imposes additional responsibility on the Company, which
is implemented in the targeted programs and voluntary corporate social initiatives.
In the context of the world energy market transformation the Company recognizes its responsibility to shareholders,
investors, partners, employees and society as a whole and is committed to maximize the use of its capacity for sustainable
development.
The Company considers the long-term prospects and short-term plans for core business operations – development of in-
house resource and production potential and improvement of the financial results in direct interrelation with the social and
environmental aspects.
Society
Economics
Environment
S O C I AL SPHERE
Law compliance
Respect for
human rights
Planning the Company’s activities is
including the social aspects:
• support of social and economic
development of the regions of the
business activity;
• support development of
healthcare, education, culture and
sports;
and services;
segments of the population;
• support of socially vulnerable
• provision of high quality products
• continuous quality improvement
• commitment to follow changing
• provision of reliable information
requirements of the Customers;
of the products;
about the Company’s products.
The Company’s activities provide for:
Key priorities of the Company:
Positive public opinion
Product assurance
Good working
conditions
• participation in infrastructure
development of domestic Fuel &
Energy complex;
• value added chain;
• support of local economies;
• innovation;
• ensuring financial stability and
economic resilience for the
TATNEFT Group’s enterprises;
• development of own R&D base,
integrated with the leading
industry scientific centers.
• ensure safe working conditions,
health protection of the personnel
and communities living in the
regions of the Company’s
business activity;
• reduce the technological
• rational use of natural resources.
environmental impact;
The Company performs a package
of measures aimed at maintaining
the environmental conditions in
the regions within the normative
allowable level, corresponding to
self-recovery potential of natural
ecosystems.
Creation of
working places
SUSTAINABLE
DEVELOPMENT
Environment
protection
Value added
chain
Support of local
economies
E
C
O
N
O
Use of recycled
materials
Use of clean energy
resources
CORPORATE SOCIAL RESPONSIBILITY IS A CRUCIAL PART OF THE COMPANY’S STRATEGY.
PRINCIPLES OF THE SOCIAL RESPONSIBILITY ARE INTEGRATED INTO THE COMPANY’S
ACTIVITIES AND IMPLEMENTED IN ITS RELATIONS WITH THE STAKEHOLDERS. SOCIAL
RESPONSIBILITY POLICY IS IMPLEMENTED IN ACCORDANCE WITH IS0 26000 STANDARD.
M
I
C
S
P
H
E
R
E
Innovation
Infrastructure
development
Energy saving
Waste processing
V I R
N
E
O N M E
E
R
E
H
P
L S
A
T
N
20
21
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
OPERATIONS
PROVED RESERVE
REPLACEMENT RATIO
INCREMENTAL OIL
PRODUCTION ACROSS
TATNEFT GROUP
PETROLEUM PRODUCT
OUTPUT TO CRUDE OIL
PRODUCTION RATIO
ACROSS TATNEFT GROUP
PETROLEUM PRODUCT
SALES INCREASE THROUGH
OWN FILLING STATION
NETWORK
PETROCHEMICAL
COMPLEX’S COMMODITY
OUTPUT GROWTH
22
23
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
UPSTREAM
As at the beginning of 2016, the Company’s proved hydro-
carbon reserves stood at 869.8 mln tonnes according to the
independent evaluation made by Miller and Lents as per the
Petroleum Resources Management System of the Society of
Petroleum Engineers (SPE-PRMS) standards.
The proved reserves to the current oil production ratio
amounted to 30 years that is a secured potential for long-
term and sustainable development. In 2015, proved reserve
replacement ratio accounted for 166%.
The Company has been implementing the programs target-
ed at a rapid building up its producing assets and their di-
versification including exploration activities using advanced
oil prospecting techniques as well as ensuring increased
efficiency and improved practices to develop producing
fields with cost control.
The primary goals are strengthening the resource base, re-
placing hydrocarbon production with commercial reserves,
creating a raw material base and efficient bringing reserves
into development, sustaining production at mature fields
through application of innovative technology solutions and
ensuring planned rates of production growth while reducing
specific operating and capital expenditures.
UPSTREAM BUSINESS SEGMENT
KEY COMPETITIVE ADVANTAGES
HIGH RESERVES-TO-PRODUCTION RATIO.
ADVANCED OIL PRODUCTION TECHNIQUES AND
INNOVATIVE ENGINEERING TOOLS AND EQUIPMENT
IMPLEMENTATION INCLUDING THOSE TO DEVELOP
ULTRA-VISCOUS OIL FIELDS.
GEOGRAPHIC PROXIMITY OF UPSTREAM CENTER TO
KEY DOWNSTREAM REGIONS.
IMPROVED ECONOMIC EFFICIENCY PROGRAMS.
LOWER SPECIFIC OPERATING AND INVESTMENT
EXPENDITURES.
24
Creating the long-term high-quality producing asset
portfolio, the Company, concurrently with producing the
historical oil fields within the Republic of Tatarstan as well
as developing the ultra-viscous oil reservoirs, has been
expanding its geographic reach carrying out its oil search
and exploration operations within the licensed areas in the
Republic of Kalmykia, Orenburg, Samara and Ulyanovsk
Regions, Nenets Autonomous District and beyond the Rus-
sian Federation. The activities are underway to determine
the Domanikovian oil production prospects.
Reserves Growth Dynamics
Key Indicators
Proved Oil Reserves (pursuant
to evaluation by Miller & Lents),
mln. tonnes
2013
847.3
2014
851.5
2015
869.8
The Company’s total investment in hydrocarbon explora-
tion, development and production amounted to 60.6 bln
rubles in the year under report.
In 2015, the Company together with its eight (8) subsidiar-
ies held 98 licenses within the Russian Federation.
In 2015, the oil production across PJSC TATNEFT totaled
27.2 mln tonnes and was 2.7% higher against previous
year’s output level. The oil output has reached its peak
over the last twenty-three years. PJSC TATNEFT produced
26.9 mln tonnes of oil in 2015. The oil production at the
Company’s licensed areas within the Russian Federation
outside the Republic of Tatarstan amounted to 322 ths
tonnes (307 ths tonnes in 2014).
The meterage covered by development drilling at PJSC
TATNEFT fields totaled 738.5 ths m in the year under report.
352 new producing wells were brought into operation.
The average production rate of new wells was 10 tonnes per
day. 347 wells were completed as water injectors.
The Company yearly gains the additional production thanks
to highly efficient well intervention programs implemented
at the oil fields, improved operational efficiency using the
state-of-the-art technologies and production profitability
control.
COMPANY PURSUES ITS TARGETED PROGRAMS TO BOOST COST-EFFECTIVE OIL
AND GAS PRODUCTION, IMPROVED OIL RECOVERY AT ITS PRODUCING LICENSED OIL
FIELDS AND ROBUST DEVELOPMENT OF NEW OIL FIELDS INCLUDING ULTRA-VISCOUS
AND HARD-TO-RECOVER OIL WITHIN REPUBLIC OF TATARSTAN
Oil Production over 2013 through 2015
Key Indicators
TATNEFT Group Oil Production, mln tonnes
PJSC TATNEFT Oil Production, mln tonnes
2013
26.4
26.1
2014
26.5
26.2
2015
27.2
26.9
PJSC TATNEFT Well Stock as at 1.01.2016
Well Category
Operating Producing Wells, including:
Active producing wells
Inactive producing wells
Producing well testing & completion and
waiting on testing & completion
Well Count
22258
20191
2058
9
PJSC TATNEFT Exploration and Production Segment
Key Performance Indicators over 2013 through 2015
Indicators
2013
2014
2015
Average Daily Oil Production, t/d
71526
71843
73773
Active Producers’ Average Daily Oil
Production Rate, t/d
3.8
3.8
3.9
Operating Injecting Wells
10369
10399
10692
Active Injecting Wells
Total Drilling, ths m
Development Drilling, ths m
9501
9558
9871
450.2
430.4
757.3
430.5
410.2
738.5
Sustaining Production within Republic of
Tatarstan
In the year under report, the Company invested 27.7 bln ru-
bles in primary resource base, which is historically located
within the Republic of Tatarstan.
In Tatarstan the Company owns five (5) exploration licenses
for geological prospecting and subsequent development
of discovered oil fields on the western and northern slopes
of the South Tatar Arch, in the northeast of the Republic
of Tatarstan and on the slopes of the South Tatar Arch, in
the north-eastern part of the Republic of Tatarstan, on the
south-eastern slope of the North Tatar Arch, on the east-
ern flank of the Melekessky Depression. One (1) license is
granted for the Apastovsky area located in the west of the
Republic of Tatarstan for geological prospecting, explo-
ration and production of hydrocarbons. In addition, the
Company holds one (1) geological prospecting license to
explore for and appraise hydrocarbons within the Agbya-
zovsky area located in the northeast of Tatarstan.
In the year under report, six (6) structures were brought
into deep drilling and 11 structures were prepared for deep
drilling.
LARGE OIL FIELDS WITHIN REPUBLIC OF TATARSTAN
Oil Production by PJSC TATNEFT’s Largest Oil
Fields within Tatarstan in 2015
Oil Fields
Oil Production, ths t
Romashkinskoye
Novo-Yelkhovskoye
Bavlinskoye
Bonduzhskoye
Pervomaiskoye
Sabanchinskoye
15513
2646
1152
264
363
534
RUSSIA
KAZAN
Bondyuzhskoye
Pervomaiskoye
NABEREZHNYE CHELNY
Romashkinskoye
Novo-Elkhovkskoye
ALMETYEVSK
Sabanchinskoye
Bavlinskoye
I
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M
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G
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25
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
CREATING LONG-TERM HIGH-QUALITY PRODUCING ASSET PORTFOLIO,
COMPANY OPERATES HISTORICAL OIL FIELDS AS WELL AS CARRIES OUT ITS OIL
PROSPECTING AND EXPLORATION ACTIVITIES WITHIN LICENSED AREAS OUTSIDE
REPUBLIC OF TATARSTAN AND RUSSIAN FEDERATION
Ultra-Viscous Oil Field Development
(Sheshminski Horizon)
Sustaining oil production within Russian
Federation outside Republic of Tatarstan
Oil and Gas Production outside Russian
Federation
The Company invested over 30 bln rubles in ultra-viscous oil
development during the year under report.
Five (5) ultra-viscous oil deposits of the Sheshminsky horizon
are under development (4 deposits of the Ashalchinskoye
field and 1 deposit of the Langujevskoye field).
A great deal of appraisal and development drilling was
accomplished in 2015 along with oilfield surface facilities
construction operations.
As at January 1, 2016, 441 producing wells were completed
by drilling at the ultra-viscous oil fields (including 332 wells in
2015), 1 596 appraisal wells were drilled (including 976 wells
in 2015). Bitumen drilling operations are performed by 15
crews.
Overall, since the beginning of the pilot development, in
2015, cumulative ultra-viscous oil production totaled 930 ths
tonnes, including as many as 376.4 ths tonnes produced in
2015. The average daily oil production in December 2015
was 1 177 tonnes.
The investments in oil production in the Russian Federation
outside the Republic of Tatarstan amounted to 2.3 billion ru-
bles, of which 20% invested in development and exploratory
drilling, 64% in capital construction of infrastructure facilities
and completion of Gas Treatment Plant installation at the
Irgizskoye oil field, 7.5% in seismic survey techniques and
exploration issue-related activities, 5% in well intervention
programs. The Company has its operations in the Samara,
Orenburg, Ulyanovsk Regions, the Nenets Autonomous Dis-
trict and the Republic of Kalmykia.
During 2015, 24 oil fields were operated, including two (2)
fields, which were placed into test production (North Hayahi-
nskoe and Podveryuskoe fields) in the Nenets Autonomous
Okrug. Oil was produced from 122 wells, including 118 wells
and 4 wells operated in the Samara and Orenburg Regions,
respectively. The Company made a lot of efforts for drill-
ing and completion of new wells in the Samara Region. One
structure was placed into deep drilling and three structures
were prepared for deep drilling. Four new wells were put
on-stream. The average production rate of new wells was
14.4 tonnes per day.
Contract blocks in Libya and Syria
PJSC TATNEFT had to suspend the exploration program
within its contract blocks in Libya and Syria since 2011 to date
due to the unstable political situation.
Force majeure has been in place for all contract blocks in
Libya since 18.08.2014. Based on the previously performed
3D seismic survey (350.2 km² of 547 km²) processing and
interpretation of obtained field data was performed. The
final report was made for 3D seismic data interpretation
results. Based on the results three prospects were projected
for drilling.
Plans for 2016 call for keeping monitoring the unfolding situa-
tion closely in these countries in order to resume
operations once the situation turns for the better and
the safety has been secured for the field operating staff.
Contract between PJSC TATNEFT and Turkmenoil State
Concern
Since the beginning of the production program realization
under the service contract for IOR and oil production at the
Goterdepe oil field being effective from 2010, as at Janu-
ary 1, 2016, the oil production had totaled 123.1 tonnes
(against the target of 94.7 thousand tonnes).
Altogether, 63 workovers were performed in 40 wells,
including primarily inactive wells and those waiting on
abandonment. Downhole pumping units were run and set
in 32 wells, of which 26 operating wells yield additional daily
production of 104 tonnes per day.
All wells were completed with surface facilities and automa-
tion equipment using the PJSC TATNEFT affiliated com-
pany’s manpower. Teleautomation and dispatching control
with displaying the real-time data in the central control
station was implemented. The area with reservoir mainte-
nance system was placed into operation in the periodic duty
consisting of two (2) injecting wells and two (2) bore pits on
five (5) responding wells.
ULTRA-VISCOUS OIL PRODUCTION GROWTH
376.4
236.9
145.6
400
300
200
100
0
73.3
41.5
2011
2012
2013
2014
2015
2016 ULTRA VISCOUS OIL PRODUCTION TARGET
IS 531 THOUSAND TONNES
I
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M
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P
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Y
G
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T
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S
BENEFITS GRANTED BY GOVERNMENT
OF RUSSIAN FEDERATION ARE SIGNIFICANT
INCENTIVES FOR COMPANY TO SET UP
PROGRAMS TO PRODUCE ULTRA-VISCOUS OIL
AS PRODUCING FEEDSTOCK ASSET RESERVE
In 2015, preferential tax rates with a reduction factor
were enjoyed for 80 % or higher depleted fields,
small fields with the reserves (Initial Recoverable
Reserves) being less than 5 million tonnes and the
depletion of less than or equal to 5%, fields with
in-situ oil viscosity of more than 200 and less than
10 000mPa*s, as well as zero mineral recovery tax
rates applied for the crude oil with a viscosity of
more 10 000mPa*s for the Domanikovian deposits
and oil fields in the Nenets Autonomous District.
The oil production for such fields totaled 20 890.5
thousand tonnes, including ultra-viscous oil with
over 10000mPa*s viscosity produced in the amount
of 376.425 thousand tonnes.
26
IN CONTEXT OF COMPANY’S STRATEGY DEVELOPMENT UP TO 2025, QUANTITATIVE TARGETS
ARE CURRENTLY BEING SET UP FOR OIL PRODUCTION AT FIELDS UNDER EXPLORATION AND IN
NEW HYDROCARBON PROMISING AREAS OUTSIDE REPUBLIC OF TATARSTAN.
PJSC TATNEFT GEOGRAPHIC REACH IN EXPLORATION
AND PRODUCTION OUTSIDE REPUBLIC OF TATARSTAN
Nenets AD
Ulyanovsk Region
Samara Region
Republic of Kalmykia
Syria
Libya
Republic of Tatarstan
Orenburg Region
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P
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27
M
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
COMPANY’S OPERATIONAL POLICY IS FOCUSED ON IMPLEMENTING HIGHLY
EFFICIENT AND ECONOMICALLY JUSTIFIED WELL INTERVENTION PROGRAMS AND
ENSURING IMPROVED OIL RECOVERY EFFICIENCY
IMPROVED OIL AND GAS PRODUCTION EFFICIENCY
Oil Field Exploration and Development
Well Drilling
Oil and Gas Production
Ultra-Viscous Oil Treatment
The hydrocarbon prospects are predicted using the artificial
intelligence techniques and the leads are defined by field
seismic and geochemical methods using a complex prob-
ability parameter (CPP) for hydrocarbon potential.
Geochemical survey to search for oil and gas utilizes
passive hydrocarbon adsorption, low-frequency seismic
sounding (LSS), geological-geophysical technology to
optimize selection of well drilling locations (GTO LS), elec-
tromagnetic sounding (EMS), “Stratimegic” new software
package for 3D seismic data processing. NMR tomographic
logging tool is used to identify shallow reservoirs saturated
with ultra-viscous oil.
Silicate baths are placed within productive intervals as well
as G-grade cement and stage-cementing collars are used
to improve well cementing quality.
Horizontal and multilateral wells are used to sustain and
boost oil production from oil fields that predominantly
contain hard-to-recover reserves. Horizontal completions
help to reduce the projected well stock and recover more
oil reserves as well as improve reservoir sweep efficiency
and implement selective flooding across the section when
used as injection wells. In 2015, 129 horizontals (including
32 slim holes) and 4 multilaterals were brought into
operation.
The primary method to identify residual oil reserves for
mature fields is the reservoir characterization, modeling
and simulations based on updated estimate of remaining
reserves, which enable to analyze and predict areas with
unlocked reserves and calculate efficiency rate of planned
activities with the highest degree of accuracy.
Lightweight cement slurry technology is applied for well
casing cementing using a lightweight foamglass made from
the P-D Tatneft-Alabuga Fiberglass, LLC product with the
quality being highly competitive with its import analogues.
In 2015, the lightweight foam glass was used in
construction of six (6) wells.
COMPANY’S OPERATIONS ARE FOCUSED ON
ATTAINING MAXIMUM EFFICIENCY OF ALL
TECHNOLOGICAL PROCESSES
TATNEFT MAINTAINS ONE OF BEST MEAN TIME
BETWEEN REPAIRS (MBTR) PERFORMANCE FOR
WELL OPERATIONS AMONG LARGE COMPANIES
IN RUSSIA’S OIL INDUSTY.
2015 MTBR PERFORMANCE SHOWED
1 074 DAYS ACROSS PJSC TATNEFT.
This high performance was attained thanks to imple-
menting highly efficient and innovative technologies as
well as high-quality and timely maintenance of oilfield
equipment.
Well Workover
Formation hydraulic fracturing technology makes it
possible to stimulate oil producing well operation and
improve well injection capacity. Total of 3 901 fracs had
been performed since the beginning of hydrofracing
technique implementation. In 2015, 649 frac jobs were
done with 62 new wells fractured immediately after drilling.
As a result of fracturing the flow rate increased by 4.5
tonnes per day. The additional oil production amounted to
more than 11.1 mln tonnes.
APRS-40N Workover Rigs are designed to perform
workover jobs on ultra-viscous oil wells: running tubing for
steam injection (1 and 2 lifting string assemblies),
installation of downhole pumps (ESP and PCP units),
changing-over of CSS wells for production/steam injection,
well servicing (ESP replacement, preparing for well
logging).These workover rigs were purchased as a part of
import substitution program (as substitute for Canadian
workover rigs К-54). Totally, these workover rigs performed
405 workover jobs in 2015..
PJSC TATNEFT has been vigorously developing dual
completions technologies to produce multiple reservoirs
using one well to improve oil field development efficiency.
Dual completion to produce two and multiple reservoirs with
one well allows to simultaneously produce zones with variable
reservoir properties and parameters and improve economic
efficiency of individual wells and reduce amount of drilling
operations. As at January 1, 2016, dual completion
production technology was used to operate 1 641 wells.
Since the beginning of dual completion operation the
cumulative additional production for dual completion
producing wells totaled 10 442 thousand tonnes of oil. Since
the beginning of dual completion operation the average oil
production rate increased by 3.1 tonnes per day per well. In
2015, dual completions were installed in 222 wells. Dual
completion injection improves economic viability of individual
wells by bringing other development targets or different
property zones of same reservoir in production and reduces
the amount of drilling operations due to using a single
wellbore. Dual completion injection technology was
implemented in 716 injection wells, including 76 wells in
2015. Additional oil produced by responding producing wells
since the beginning of implementation had amounted to 1
966.2 thousand tonnes. More than 2 thousand dual
completion installations for both production and injection are
currently in operation with the cumulative additional oil
production exceeding 12 mln tonnes of oil.
Chain drive for sucker-rod down-hole pumps PC 60 (with
3m stroke length) is effective to reduce hydrodynamic drag
forces in a downhole section of a sucker-rod pumping unit by
1,7 times, ensure continuous operation of marginal wells,
lower specific energy consumption to lift 1 m3 oil production
by 10-20 %, extend the service life of downhole equipment,
minimize well repairs.
PC 80 (with 6m stroke length) allows sucker rod pumping
operation of high flow rate wells (up to 100 m3/d), including
high viscosity oil with high salt content and asphalt, resin, and
paraffin materials, wells with additional small-size production
casings without compromising the productivity, lowering the
dynamic loads, extending the service life of downhole
equipment during prolific well operations reducing specific
energy consumption to lift 1 m3 oil production by 50% and
more as compared with ESP unit. By the end 2015, the chain
drive count made 2 027 units.
Ultra-viscous oil is treated by the Company to the marketable
condition using a process of «hard» thermochemical heat
dehydration at the temperature of 90°C using coalescers and
electrical dehydrators, which makes it possible to upgrade
ultra-viscous oil to the 1-st quality group and lower capital
costs for sedimentation equipment.
Reservoir Pressure Maintenance
Corrosion-resistant tubing extends tubing service life
by 2-2.5 times in injection wells. The corrosion-resistant
tubing strings were installed in 6 979 wastewater and
produced water wells (90% of the total well stock),
including 294 injection wells in 2015.
M1-X Packer is designed to protect production casings
from a high pressure and corrosion damage. The packer
allows to lower work time expenditures for workovers and
well service operations, downhole logging and injection
well tests.
The M1-X packers were installed in 4 904 injection wells,
including 440 injection wells in 2015. Altogether, a variety of
packer designs ensures a trouble-free operation of 69.2%
of the injection well stock.
IN OIL FIELD EXPLORATION AND DEVELOPMENT
ALONG WITH CONVENTIONAL TECHNOLOGIES,
NEW TECHNOLOGIES ARE APPLIED TO IMPROVE
PRODUCTIVITY AND ECONOMIC EFFICIENCY
OF ALL OIL AND GAS PRODUCTION PROCESSES.
ACCORDING TO THOMSON REUTERS BASED ON
RESULTS 2015 TATNEFT WAS LISTED AMONG
TOP TEN GLOBAL LEADERS AS REGARDS TO OIL
EXPLORATION AND PRODUCTION INVENTION
QUANTITY. MOREOVER, COMPANY WAS
RECOGNIZED AS ABSOLUTE LEADER IN REGION
ENCOMPASSING EUROPE AND MIDDLE EAST
28
29
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
DOWNSTREAM
COMPANY’S STRATEGIC GOAL IS GROWTH OF OUTPUT AND SALES OF
HIGHLY COMPETITIVE COMMODITY PRODUCTS WITH HIGH ADDED VALUE IN
COMPLIANCE WITH GLOBAL ENVIRONMENTAL STANDARDS AND LONG-TERM
MARKET REQUIREMENTS
The Company has been developing its Downstream Business
Segment committed to achieve the maximum vertical integra-
tion synergy i.e. balance of crude oil production and refining,
optimum crude oil placement on domestic and foreign mar-
kets in highly competitive environment to gain the maximum
operating profit margin.
In 2015, the total investments in the downstream business
amounted to 30.2 billion rubles that is more than 30% of
Group’s total investments. The downstream business por-
tion in the TATNEFT Group’s consolidated revenue in the year
under report accounted for 45%, which corresponds to 45%
of the upstream segment revenue portion.
Crude oil deliveries
In 2015, the crude oil produced by the TATNEFT Group was
delivered on the domestic market including oil refining with
full utilization of its oil refining capacities as well as was
exported to the far and near abroad countries.
Ongoing monitoring of key drivers and trends of global and
domestic markets including crude oil and oil product prices,
taxation and rate policy of the state, foreign exchange rates,
ability to optimize transportation costs enable the Company
to determine marginality of delivery destinations in uncertain
market conditions.
Over the past years, the downstream business segment has
been consolidated leading to increase in the total value of the
Group’s assets. Currently, it contributes 42 % of the total value
of the Group’s assets.
The downstream assets make up a block of oil refining and
gas processing capacities, crude oil and petroleum product
sales resources, Company’s own chain of filling stations.
One of the key priorities to ensure the long-term sustainable
development of the Company is manufacturing and marketing
highly competitive commodity products with high added value.
Overall, in 2015, 9.1 mln tonnes of the total crude oil pro-
duced by the Group were supplied to be converted into oil
and gas refined products.
In 2015, the TATNEFT Group produced the petroleum prod-
ucts in amount of 9.3 million tonnes. Over the period of 2010
through 2015, the petroleum products to crude oil production
ratio across the Group increased from 0.8% to 34.1%.
COMPANY’S PLANS TO INCREASE OUTPUT OF
LIGHT OIL PRODUCTS RESPOND TO RUSSIAN
LEGISLATION IMPROVEMENT ENCOURAGING
PRODUCTION OF PREMIUM CLEAN FUELS.
A traditional delivery route remains to be crude oil export to
far abroad countries. In 2015, crude oil was delivered in the
amount of 10.4 tonnes. The near abroad deliveries totaled
1.3 mln tonnes of crude oil.
In 2015, The Company supplied 6.6 mln tonnes of crude
oil to the Russian oil refineries with the major volume (6.2
mln tonnes) delivered to supply a feedstock to TAIF-NK’s
Refinery.
Since the beginning of TANECO Complex commissioning
in 2011 crude oil supplies have been structurally redistrib-
uted. Currently, more than 30% of the total crude oil sales is
delivered to be converted into oil and gas derivatives at the
Company’s own oil refining facilities
Apart from its own resources TATNEFT provides marketing
and sales operations for independent oil companies’ crude
oil. Thus, in 2015, crude oil sales totaled 2.1 mln tonnes of
including:
• export (far abroad and near abroad) – 0.4 mln tonnes;
• domestic market (Russian Refineries) – 1.7 mln tonnes.
TATNEFT Group Crude Oil Suрply Distribution
over period of 2013 through 2015 (ths. tonnes)
Наименование
Crude oil supplies for oil and gas
refined product output, including
числе:
JSC TANECO
Far Abroad Export
Near Abroad Export
Domestic supplies (Russian refineries),
including:
2013
2014
2015
8 643
9 449
9 079
7 675
8 395
8 623
11 397
8 480
10 398
558
698
1 311
5 905
7 386
6 600
PJSC TAIF-NK
5 367
6 196
6 241
IT IS IMPORTANT FOR COMPANY’S CRUDE
REFINING EFFICIENCY TO HAVE AN ACCESS TO
“SEVER” PETROLEUM PRODUCTS PIPELINE
THAT WILL MAKE IT POSSIBLE TO CUT DOWN
SIGNIFICANTLY TRANSPORTATION COSTS TO
DELIVER DIESEL FUEL TO FOREIGN MARKETS.
DELIVERY DESTINATIONS FOR CRUDE OIL PRODUCED BY COMPANY
OVER 2010 THROUGH 2015
0.6
(2%)
8.6
(33%)
16.4
(63%)
9.1
(33%)
10.4
(38%)
2010
2015
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0.5
(2%)
6.6
(24%)
1.3
(5%)
CRUDE OIL AND PETROLEUM PRODUCT SALES (IFRS), MLN TONNES
26.9
30
28.1
26.2
19.6
18.5
18.0
20.0
9.4
10.3
11.1
11.1
3.1
2.9
4.5
20
10
0
Far Abroad Export
Near Abroad Export
Domestic Market Deliveries
Feedstock Supplies for Oil and
Gas Refined Products
2009
2010
2011
2012
2013
2014
2015
Crude oil
Petroleum products
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31
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
COMPANY IS MAKING
FOCUSED EFFORTS TO
CONTINUE CONSTRUCTION
OF TANECO COMPLEX IN
LINE WITH CUTTING EDGE
AND MOST ADVANCED
TECHNOLOGIES AND
PETROLEUM REFINING
ENVIRONMENTAL
COMPLIANCE.
TANECO COMPLEX CONSTRUCTION
MILESTONES 2005-2018
Decision on Project Implementa-
tion
Complex Construction & Installa-
tion Start
Operation Start
Hydrocracking Unit Operation
Start-up
Lube Base Stock Plant Commer-
cial Operation Start
Commissioning of delayed coking
unit (vacuum tower bottoms con-
version), naphtha hydrotreatment,
naphtha splitter, heavy coker gas
oil hydrotreatment, isomeriza-
tion, catalytic reforming, catalytic
cracking
Primary refining to be increased
up to 14 mln tonnes per year
2005
2007
2011
2014
2015
Beginning
from 2016
(by stages)
2018
32
Oil Refining
TANECO Complex Current Operation
Gas Processing
Main refining runs at the TANECO Complex and Elkhovsky
Crude Oil Refining Plant facilities operating at full capaci-
ties. In 2015, the total petroleum feedstock refining volume
across the Group amounted to 9.4 million tonnes, of which
9.2 million tonnes of petroleum feedstock, including 8.6
million tonnes of crude oil, were processed at the TANECO
Complex. In 2015, the investments in its own refining capac-
ity development amounted to more than 26 billion rubles
with the most spent to continue the TANECO Complex
construction while ensuring a stable operation of the exist-
ing facilities.
TANECO Complex Petroleum Feedstock Processing
over period of 2014 through 2015 (ths tonnes)
Year
Processing feedstock
Crude oil
Gas condensate
Vacuum gasoil
Other
2014
2015
8 908
8 511
10
184
204
9 157
8 650
9
238
260
Feedstock Processing over 2014 through 2015
(ths tonnes)
Product
Processing feedstock
Crude oil
Other
2014
2015
197
165
33
197
168
29
TANECO REFINERY COMPLEX
KEY COMPETITIVE ADVANTAGES
HIGH TECHNOLOGY LEVEL OF ITS OWN TANECO OIL
REFINING COMPLEX BUILT BASED ON STATE-OF-
THE-ART WORLD PROVEN TECHNOLOGIES.
SETTING UP CRUDE OIL REFINING BUSINESS CLOSE
TO TRADITIONAL OIL PRODUCTION OPERATIONS
WITHIN REPUBLIC OF TATARSTAN.
PRODUCTION CAPACITY FOR HIGH ADDED VALUE
OUTPUT ACCORDING TO WORLD ENVIRONMENTAL
REGULATIONS AND LONG TERM MARKET
REQUIREMENTS.
TANECO Complex Process Unit Rated Capacities
Unit
CDU-VDU-7
Naphtha Stabilization Unit
Visbreaker Unit
Elemental Sulphur Recovery Unit
Hydrocracking Unit
Hydrogen Production Unit
Lube Base Stock Plant
Rated capacity, ths
per year
7 000.0
1 100.0
2 400.0
279.0
2 900.0
100.0
250.0
In 2015, the TANECO Complex commercialized the fol-
lowing new petroleum product output such as lubricating
compounds, hydrotreated oil fuel, winter and Arctic diesel
fuel, ТС-1, PT, Jet-A aviation fuels. The Lube Base Stock
Plant was commissioned into commercial operation, which
is unique for Russia. As at the beginning of 2016, crude oil
conversion rate was 74.4%, light oil product cut was 71.87%.
The main objective of the Company for the coming years
in the refining business segment is construction of the
2nd phase of TANECO with crude oil conversion rate to be
achieved as high as 94% and Nelson Index to be not less
than 12 (after bringing all refining capacities into operation
to full extent).
PETROLEUM PRODUCT OUTPUT
TO CRUDE OIL PRODUCTION RATIO
GROWTH ACROSS GROUP, MLN
TONNES
30
25
20
15
10
5
0
26.1
27.2
9.3 (34.1%)
0.2 (0.8%)
2010
2015
Crude Oil Production
across Group
Petroleum Product Output
across Group
In 2015, associated petroleum gas (APG) was gathered in
amount of 899.5 mln. m3 that was 15.9 mln m3 higher than
in 2014. In addition, 16.4 mln m3 of associated petroleum
gas was procured from independent oil companies. In 2015,
the associated petroleum gas was delivered to the Gas Pro-
cessing Plant as much as 814.6 mln m3 that was 19.6 mln m3
higher than in 2014. The Company utilized 66.5 mln m3 for
own needs and delivered 28.8 mln 3 m to external com-
panies. The associated petroleum gas utilization rate was
95.17%. Along with APG Natural Gas Liquids (LNGs) are
delivered from the Integrated Oil Treatment Facility (IOTF)
to the Gas Processing Plant. In 2015, the LNG volume
processed was 284.9 ths tonnes that was 8.4 ths tonnes
higher than in 2014.
In 2015, the sour gas processed was up with 196.2 mln.
m3 of sour gas delivered for processing (12.6 mln. m3
higher than in 2014). In 2015, the Company invested 0.53
bln rubles in reconstruction and upgrading of its own gas
processing facilities.
TATNEFTEGASPERERABOTKA Division’s Feedstock
Processing over 2014 through 2015 (ths.tonnes)
Product
Processing feedstock
Associated petroleum gas
IOTF LNGs
2014
2015
1 242
1 276
966
276
991
285
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ASSOCIATED PETROLEUM GAS
UTILIZATION RATE EXCEEDS 95% IN
TATNEFT. THIS IS ONE OF THE HIGHEST
RATES IN INDUSTRY.
The Company continues to develop an integrated
utilization program for associated petroleum gas
(APG), which in 2015 outstripped the standard value
set out by the Russian Government. The company
plans to bring this value up to 98% through activities
implemented under the NGDU Yamashneft and
Elkhovneft Gas Gathering Network. Associated
petroleum gas is a valuable hydrocarbon component
for production of a wide range of premium-quality
gas products in petrochemical and energy sectors.
33
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
COMPANY PLANS TO STRENGTHEN ITS POSITONS IN PETROLEUM PRODUCT RETAIL
SALES THROUGH HIGH QUALITY OF FUELS INCLUDING ITS OWN PRODUCED ONES,
FILLING STATION UPGRADING, BETTER SUPPORT SERVICE AND FILLING STATION CHAIN
GEOGRAPHICAL EXPANSION
Petroleum product sales through retail filling
station chain
The Tatneft-branded filling station chain encompasses 692
facilities including 567 stations in 24 regions within the Rus-
sian Federation, 110 stations within Ukraine and 15 stations
in the Republic of Belarus. In 2015, 28 new filling stations
were placed into service including 6 autogas fueling sta-
tions and 15 autogas fueling terminals at the operating
filling stations in the Russian Federation as well as 2 filling
stations in the Republic of Belarus.
Petroleum Product Sales
Indicators
Russian Federation, including :
Oil Products
Gas Products
Ukraine,including:
Oil Products
Gas Products
Belarus, including:
Oil Products
Gas Products
Total
* including taxes
2015.
tonnes
ths rubles*
2 355 903
2 166 743
189 160
61 613
52 415
9 198
17 319
15 465
1 854
2 434 835
83 930 438
79 750 875
4 179 563
3 797 106
3 390 068
407 038
872 845
802 272
70 573
88 600 389
Over the year, as part of the TATNEFT’s investment program
for distribution infrastructure development, the Company
spent 4.2 mln. rubles, including 3.78 mln. rubles invested in
the Russian Federation, 405.6 mln. rubles in the Republic of
Belarus and 11 mln. rubles in Ukraine.
GROWTH OF PETROLEUM PRODUCT
SALES THROUGH TATNEFT RETAIL
FILLING STATION CHAIN (THS TONNES)
2434.8
2500
2058.8
1664.5
2000
1500
1000
500
61.8
0
1978.6
2355.9
1590.4
12.4
64.7
15.6
61.6
17.3
2013
2014
2015
Within Russia
Within Belarus
Within Ukraine
34
Petroleum product quality
Energy and resource efficiency
Customer support service
TATNEFT-branded filling station chain is one of the most
reliable supplier of warranted quality fuel on the domestic
market. There is an effective quality control system for
petroleum products put in place in its retail sales network
using high-end technologies and equipment.
The leading positions and competitive advantages of the
TATNEFT fuel filling stations assure and consolidate its
own petroleum product business existence. The TANECO
diesel fuel distributed at the retail terminals has no ana-
logues in Russia and exceeds the Euro-5 standard by many
parameters. As a result of the All-Russian contest the fuel
was listed in the “100 Best Goods of Russia 2015”. The fuel
passed through bench tests and running trials including
those run by the central laboratory of fuels and oils at the
“KAMAZ” Research and Development Center. The engine,
which ran on the TANECO diesel fuel, as compared with
its rivals showed higher net engine power and torque as
well as lower fuel consumption. Moreover, the harmful
content of the engine exhaust pollutants such as nitrogen
oxides and total hydrocarbon was well below that of diesel
fuel from other manufacturers. The sulfur content in the
TANECO diesel fuel is below 3 ppm against 10 ppm permis-
sible by GOST standard. The optimum cetane value of the
diesel fuel is up to 60 (with no additives) as compared with
the commonly accepted value of at least 51, which reduces
specific fuel rate and increase engine efficiency.
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TATNEFT FILLING STATION CHAIN
KEY COMPETITIVE ADVANTAGES
PRESENCE ALMOST IN ALL MOST LUCRATIVE
REGIONS IN RUSSIA, INCLUDING VOLGA REGION
AND CENTRAL FEDERAL DISTRICT.
BENEFICIAL IN GENERAL LOGISTIC LOCATION OF
FILLING STATIONS IN URBAN INFRASTRUCTURE
AND ALONG MAIN HIGHWAYS.
AVAILABILITY OF ITS OWN HIGHLY COMPETITIVE
COMMODITY SUCH AS
TANECO EURO-5 DIESEL FUEL.
SUPPORT SERVICE EXPANSION
Vapour recovery units (VRU) are installed at the filling
stations and tank farms to reduce the loss of petroleum
products and significantly improve the environmental
situation around filling stations and tank farms.Over 40 %
of filling stations in Russia are accommodated with pellet
heating systems. Conventional filling stations were shifted
to automatic operation mode and new automatic stations
were constructed.
Support service
In 2015, the revenues from sales of related products and
support services in the filling stations was up 44% and
amounted to over 1.8 billion rubles including 1.7 bln. rubles
in Russia. The sales revenues increased thanks to construc-
tion and reconstruction of 26 filling stations where new up-to-
date design of operating buildings with 60 to 250 m2 trading
spaces. These filling stations accommodate fast food outlets
(23 pcs.) where one can buy hot drinks and national bakery
food, and 3 filling stations have got full café services. In ad-
dition, there is a new service introduced at the filling station
facilities such as a self-service car wash. The Company plans
to develop the associated services extending its marketing
offers of additional services to improve service quality of and
increase sales revenue.
The retail filling station network ensures high standards of the
range of fuel commodities, associated services and customer
support. The customer portal fzs.tatneft.ru contains complete
information on the retail sales network activities. The mobile
application allows to get information about the nearest gas
stations, fuel prices and additional services. Automated call
control system enhances service quality control at fuel filling
stations and allows to immediately respond to requests and
get feedback and preferences of customers.
There is an active system of discount cards in place with a
variety of customer loyalty programs:
• accumulation discount allowing to accumulate bonuses
depending on amount of fuel purchased and at the
same time get a liquid motor fuel discount up to 4% and
autogas fuel discount up to 8%;
• 3% and 6% fixed discounts for any purchased amounts
of liquid motor and autogas fuels, respectively.
In 2015, together with Devon-Credit Bank the Company was
realizing a program, where customers received 4 % dis-
count if they paid for petroleum products by the bankcards.
RETAIL SALES CHAIN PRESENCE IN REGIONS OF RUSSIA
AND BEOYND
BELARUS
15 FILLING
STATIONS
UKRAINE
110 FILLING
STATIONS
St. Petersburg
and Leningrad Region
Arkhangelsk
Region
Tver
Region
Moscow
and Moscow
Region
Yaroslav
Region
Vladimir
Region
Nizhny Novgorod
Region
RUSSIA
567 FILLING
STATIONS
Brest
Region
Vitebsk
Region
Minsk
Region
Gomel
Region
Poltava
Region
Kharkov
Region
Voronezh
Region
Penza
Region
Republic
of Mariy-El
Chuvash
Republic
Udmurt
Republic
Ulyanovsk
Region
Republic
of Tatarstan
Sverdlovsk
Region
Volgograd
область
Samara
Region
Republic
of Bashkortostan Chelyabinsk
Region
TOTAL OF 692
FILLING STATIONS
Krasnodar
Territory
Stavropol
Territory
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35
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
PETROCEMICALS
IN ORDER TO CREATE NEW COMPETITIVE ADVANTAGES FOR TIRE BUSINESS COMPANY
WILL CONTINUE TO STREAMLINE ITS PRODUCTION AND WIDEN RANGE OF INNOVATIVE
TIRE COMMODITIES WITH HIGH QUALITY PERFORMANCE AS WELL AS STRENGTHEN ITS
MARKETING SYSTEM AND IMPLEMENT PRODUCT BRAND MANAGEMENT PROGRAMS
The petrochemical assets are consolidated in the Tatneft-
Neftekhim Complex including carbon black and tire busi-
nesses historically incorporated in the Company’s business-
structure, as well as enterprises to provide a supply chain of
product sale on domestic and export markets.
The basic infrastructure of the petrochemical complex
incorporates the following manufacturing facilities: Nizh-
nekamskshina, Nizhnekamsk Truck Tire Factory, Nizh-
nekamsk Solid Steel Cord (SSC) Tire Factory, which reached
its design capacity in the year under report.
The Complex includes Research & Development Center
developing manufactured product line and technological
solutions. The Complex’s marketing and logistic center is
KAMA Trading House.
The petrochemical assets are managed in accordance with
a unified corporate strategy of the Company focused on in-
creased production and sales of finished products with high
added value. The target priorities and values are defined in
the Tire Complex Product Portfolio and Marketing Strategy
up to 2017 approved by PJSC TATNEFT’s Board of Directors.
Currently, the work is underway to update the Strategy for
2017 through 2025.
In 2015, the commodity output manufactured by the Pet-
rochemical Complex enterprises totaled 43.1billion rubles,
which was 14.5% higher as compared with 2014. The sales
revenue amounted to 38.8 billion rubles in 2015 with 11.2%
increase over the actual of 2014. As part of the compensato-
ry measures taken by the Company during 2014-2015 due to
the negative economic and market factors, the actions were
realized to optimize costs, phase out imported products,
and improve efficiency of organizational structure.
At year-end 2015, the Russian tire market shrank by 19%
overall as compared with the year 2014 for all groups of
tires. At the same time, the market share of tires produced at
the tire plants of the Company increased to a record in 2014
and accounted for 20%. A significant share of the Russian
solid steel cord tire market is supplied by the Nizhnekamsk
SSC Tire Factory. In 2015, the tire manufacturer’s output
reached three million tires in total for the entire period of its
operation.
In 2015, the Company invested 0.5 billion rubles to develop
the Petrochemical Complex. The investment portfolio 2016
will amount to 0.73 billion rubles that is in the line with its
plans to increase commodity output and sales.
Key technical and economic performance
In the year under report, the petrochemical business-seg-
ment expanded its output of competitive products, con-
ducted marketing activities that helped to keep the market
share in spite of its negative trends in general and to ensure
the positive financial results.
Performance Indicators
Tire output, mln pcs.
Tire sales, total, mln pcs
Carbon black output, ths tonnes
2015.
11.99
11.86
117.1
PETROCHEMICAL COMPLEX
COMMODITY OUTPUT GROWTH,
BILLION RUBLES
43.1
37.6
%
+ 1 4.5
PETROCHEMICAL COMPLEX SALES
REVENUE GROWTH, BILLION RUBLES
38.8
34.8
%
+ 1 1.2
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2014
2015
36
Carbon black production
Tire business
In 2015, Nizhnekamsktekhuglerod produced 117.1 ths
tonnes of carbon black.
At reporting year-end, the commodity output totaled about
4 bln rubles.
Sales revenue increased by 7.9% as compared with 2014
and amounted to 3.96 bln rubles.
The product range includes 14 carbon black grades with 6
grades being the largest production output.
The Nizhnekamsktekhuglerod plant’s products are of a high
quality and competitive with the same products of foreign
manufacturers and exported to 28 countries including Tur-
key, Poland, Bulgaria and other countries.
Carbon black is sold on both domestic and foreign markets.
At year-end 2015, domestic supplies accounted for 78% that
was 90.2 ths. tonnes in absolute terms. The carbon black
output export accounted for 22% that was 26.0 ths tonnes.
The Company’s tire manufacturing complex occupies a sig-
nificant share in the Russian tire production business sup-
plying its tires to the domestic automakers such KAMAZ,
GAZ, AVTOVAZ as well as to the vehicle assembling plants
of Volkswagen, Fiat and other foreign carmakers. Every fifth
car owner in Russia chooses the tires of KAMA or KAMA
EURO brands.
In 2015, the tire works of the Complex manufactured 12
million tires, including 875 thousand highly demanded solid
steel cord tires (SSC-tires). 76% of total tire sales was sup-
plied to the domestic market. The export geography spans
47 countries.
A new business line to restore SSC truck tires was set up
jointly with the foreign partners. Total tire sales made 11.9
mln pieces.
2015 Tire Sales Across End Markets (ths.psc)
End Market
Russian primary market (automakers)
Russian after-market
Export
2015
1.761
7.447
2.656
TIRE COMPLEX
KEY COMPETITIVE ADVANTAGES
PROXIMITY TO THE SYNTHETIC RUBBER SUPPLY
SOURCE. ITS OWN ESTABLISHED CARBON BLACK
PRODUCTION.
HIGH TECHNOLOGY LINES. ITS OWN RESEARCH
AND DEVELOPMENT CENTER.
GEOGRAPHIC PROXIMITY TO LARGE CLUSTERS OF
AUTO ASSEMBLY PLANTS.
SSC TRUCK AND CAR TIRE MARKET SHARE GAIN.
SERVICE CENTER DEVELOPMENT.
2015 TIRE MARKET SUPPLIES
78%
Domestic supplies
Export geography
covers 47 near
and far abroad
countries
22%
Far and Near Abroad
Export
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37
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
IMPROVING ENERGY EFFICIENCY IS A STRATEGIC PRIORITY FOR COMPANY
TO REDUCE ITS OPERATING EXPENDITURES AND END PRODUCT COST
REFLECTING ITS COMMITMENT TO SUSTAIN BALANCED ECOSYSTEM.
HEAT & POWER ENERGY
Nizhnekamsk combined heat and power plant
(CHP)
During the year under report, the Company continued to
develop its heat–and-power energy sector, which includes
the following enterprises: Tatneft-Energosbyt Management
Company, Nizhnekamsk CHP and Almetyevsk Heating Net-
works, by implementing
the generating capacities modernization program using
effective and innovative technologies and advanced equip-
ment and facilities.
The first phase of the CHP modernization project was
accomplished with the new 350 MW power unit commis-
sioned in Nizhnekamsk CHP. After that, it is planned to shift
partially to a new fuel type such as petroleum coke that
will start to be produced at TANECO Complex in 2016. The
modernization made it possible to supply sufficient energy
to the main production facilities at the Nizhnekamsk indus-
trial hub. In parallel, the Company has been developing the
Almetyevsk heating networks to supply heat to the regional
infrastructure facilities.
The long-term sector development provides for power
and heat generating for the TANECO Refinery Complex,
Nizhnekamskshina, NZSH SSC plants as well as oil produc-
tion and other industrial facilities and utilities. With the heat
and power energy generation, including minor energy, the
Company will be able to ensure the secured and uninter-
rupted heat and power energy supply to its own produc-
tion facilities as well as external customers while reducing
significantly heat and electricity procurement costs.
In 2015, the electric power was generated in the quantity of
1 275.2 mln kWh. Company’s own electric power consump-
tion amounted to 161.2 mln kWh with
1 114 mln kWh sent to the grid.
In 2015, the heat energy delivered amounted to
3 293.4 thousand Gcal. In 2015, per unit results were as
follows:
• specific fuel consumption for net output power energy
• specific fuel consumption for net output heat energy
was 325.1 g/kW h;
was 142.8 kg/Gcal.
In 2015, Nizhnekamsk CHP Plant delivered 1 392.3 ths Gcal
to PJSC Nizhnekamskneftekhim and 1 107.9 ths Gcal to JSC
TANECO.
38
Nizhnekamsk CHP basic specifications
Energy efficiency
Design Capacity
electric power
heat power
Main fuel
Back-up fuel
Installed capacity as at 1.04.2016
electric power
heat power
510 mW
1945 Gcal-hr
natural gas
mazut (М-100)
730 mW
1580 Gcal-hr
CHP Performance
Key Indicators
Power generation
Specific fuel consumption for net output
power energy
Unit
mln kWh
g/kW h
2015
1275.2
325.1
Specific fuel consumption for net output heat
energy
kg/Gcal
142.8
Almetyevsk heating networks
The heat generation amounted to 737.4 thousand Gcal
at year-end 2015. The thermal energy sold amounted to
623.3 thousand Gcal.
The proportions in the heat sales structure accounted for
72.2% for population, 14.5% for budgetary organizations
and 13.3% for industry.
In 2015, the economic effect as a result of the energy sav-
ing and energy improved efficiency program amounted to
4 401.7 thousand rubles.
TANECO REFINERY COMPLEX
KEY COMPETITIVE ADVANGTAGES
ITS OWN AVAILABLE POWER GENERATING
ASSETS MAKE IT POSSIBLE TO ENHANCE ENERGY
SUPPLY RELIABILTY FOR OIL REFINING AND
PETROCHEMICAL CAPACITIES OF COMPANY
AS WELL AS MAIN PRODUCTION FACILITIES OF
NIZHNEKAMSK INDUSTRIAL HUB.
PJSC TATNEFT Energy and Resource Efficiency
Program up to 2020.
In the situation where natural monopolies keep on rais-
ing their tariffs for energy resources and transportation
services and where hydrocarbon lifting cost is up due to
tightening of the subsoil use regulations, the Company
makes every effort to accumulate maximum reserves for
saving in all business activities including energy saving.
The Company makes its focus on initiatives to implement
energy efficient technologies and use renewable sources
energy.
The PJSC TATNEFT’s corporate program of energy and
resource efficiency for the period up to 2020 provides for
the committed activities to accumulate maximum reserves
for savings in all business lines including energy saving.
The program envisages a step-by-step reduction of the
overall fuel and energy consumption of through two-
phased implementation of the program activities. By 2020,
the fuel and energy consumption is planned to be lowered
by 13.5% compared with 2007 (the program beginning
year). To date, the energy resource savings for first five
years of the program implementation have accounted for
28.7% against the base consumption.
In 2015, the savings gained from the measures focused on
lower consumption and rational use of material and natural
resources amounted to 7.5 bln. rubles. The funds were
used to offset the additional costs associated with sustain-
ing the cost-effective oil production of the Company in the
context of high depletion rates of the oil fields.
Fuel and energy consumption
Description
Thermal energy, total
including industrial consumption
Boiler and furnace fuel, total
including industrial consumption
Unit
2015
Gcal
1 682 278
Gcal
1 637 185
TOE
TOE
329 654
329 023
Electric energy, total
mln. kWh
3 908.3
including industrial consumption
mln. kWh
3 888.8
Motor gasoline
Fuel diesel
GAS
tonnes
2 843.2
tonnes
1 887.4
tonnes
80.3
COMPANY HAS BEEN REALIZING
INTEGRATED RESOURCE
CONSERVATION PROGRAM. MEASURES
IMPLEMENTED DURING 2011 THROUGH
2015 RESULTED IN SAVING OVER 311
THS TONNES OF FUEL OIL EQUIVALENT
THAT MADE IT POSSIBLE FOR COMPANY
TO BRING ITS FUEL AND ENERGY
REQUIREMENT DOWN 4.8%.
The program involves 25 entities of the TATNEFT Group
as well as service companies.
The Company saved 60 ths tonnes of fuel oil equivalent
of energy resources in the year under report. 928 ac-
tion items were accomplished under the program with
411 measures performed to save energy.
ENERGY AND RESOURCE EFFICIENCY
PROGRAM RESULTS OVER 2014
THROUGH 2015
Power
energy saving
measures
646
Measures
270
6.1
bln rubles
saved through
efficient use
of inventories
928
Measures
411
7.5
bln rubles
saved through
efficient use
of inventories
2014
2015
I
N
O
T
A
T
N
E
M
E
L
P
M
I
Y
G
E
T
A
R
T
S
39
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
CORPORATE
MANAGEMENT
CAPITALIZATION
GROWTH BY 2014
CAPITALIZATION
AMOUNT
PJSC TATNEFT’S
SHAREHOLDERS
40
41
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
MANAGEMENT OF THE COMPANY
Management Bodies Structure
Management Bodies
Corporate Management System
GENERAL SHAREHOLDERS’ MEETING
Supreme Management Body of PJSC TATNEFT
General Shareholders’ Meeting
shall delegate overall management of Company’s
activities to the Company’s Board of Directors
Audit Commission
Independent Auditor
BOARD OF DIRECTORS
Performs overall management
of the Joint Stock Company’s operations.
GENERAL DIRECTOR
Sole Executive Body.
Reports to the Board of Directors
and to General Shareholders’ Meeting.
He is Chairman of the Management Board.
MANAGEMENT BOARD
Collegial Executive Body
Executive Office
Management of the Company’s ongoing activities is
provided by the Executive Office, structural divisions,
business segment coordinators, as well as by authorized
representatives in the management bodied of subsidiaries
and affiliates.
Corporate Management Committee
HR & Remuneration Committee
Information Disclosure Committee
Audit Committee
Internal Audit Department
Secretary of the Board of Directors
Corporate Secretary Office
KEY POLICY AREAS OF THE CORPORATE
MANAGEMENT
• Ensuring implementation of the strategy and
• Improving the organizational structure and
ongoing activities of the Company
introducing uniform corporate standards of the
TATNEFT Group
• Improving the motivation system and KPI of the
• Constructive interaction with investors,
Company’s management.
business partners, public authorities and non-
governmental organizations interested in the
activities of Company
• Implementation of the openness and
transparency principles
A General Shareholders’ Meeting is a supreme managing
body of the Company. The General Shareholders’ Meeting
delegates overall management of the Company’s activities to
the Company’s Board of Directors.
General Director of PJSC TATNEFT is the Company’s
Chief Executive Officer. The collegial executive body of the
Company is the Management Board, headed by the General
Director. General Director and Management Board are
accountable to the Board of Directors and to the General
Shareholders’ Meeting.
Areas of responsibility are distributed among members
of the Board of Directors and the Management Board,
including the Deputies of the General Director. The
motivation system is applied at the Company for top
executives to ensure effective management.
There is a system of the Company officials’ powers and
responsibilities distribution by the areas of the Company’s
activities established to ensure the efficiency business
segment management.
The overall control over financial and economic activities of
the Company is carried out by the Audit Commission.
According to information available to the Company there is
no conflict of interests for members of the Board of Directors
and the Executive Bodies.
The corporate management is in line with the strategic
priorities of the Company, and is aimed at achieving quality
results in the production and business activities, ensuring
fiscal sustainability and economic growth, increasing
investment attractiveness and the Company’s shareholder
value in the long-term.
There is an Investment Committee established in the
Company, chaired by the General Director of PJSC TATNEFT.
The Committee considers promising projects and the
efficiency of current investments. All projects undergo the
procedure of examination and evaluation.
PJSC TATNEFT is a corporate Group center for the
operation of enterprises, which form business segments
of the Company. The TATNEFT Group status, forms of
management and relations pattern of the parent Company
and the Group members are regulated by the Provision on
the TATNEFT Group, approved by the PJSC TATNEFT’s
Board of Directors.
The organization of the TATNEFT Group management
is based on a single mission and development priorities
while respecting fair interests of all members of the Group.
There are relevant policies and regulations, which form
the mechanisms of corporate relations worked out in the
Company for ensuring uniform principles of management and
transparency of the Company’s subsidiaries and affiliates.
INTERNAL DOCUMENTS DEFINING THE
CORPORATE MANAGEMENT SYSTEM
• Articles
• Provision on the General Shareholders’ Meeting
• Provision on the Board of Directors
• Provisions on Committees of the Board of Directors
• Provision on the General Director
• Provision on the Management Board
• Provision on the Audit Commission
• Provision on the Corporate Secretary
• Provision on the Internal Audit Department
• Corporate Management Code
• Internal documents, defining the distribution
of powers and responsibilities of the Executive
Office senior management and employees by the
activity areas
INTERNAL DOCUMENTS REGULATING THE
CORPORATE MANAGEMENT PRACTICE AND
PROCEDURE
of the Board of Directors
by the Company’s management
• Internal documents, defining distribution of powers
• Provision on dividend policy
• Provision on payment of remuneration to members
• Provision on payment of remuneration to members
• Provision on information policy
• Provision on the procedure of access to insider
• Register of uniform corporate standards
of the Audit Commission of PJSC TATNEFT
information
42
43
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
PJSC TATNEFT’S GENERAL SHAREHOLDERS’ MEETING
INTERACTION WITH SHAREHOLDERS
Supreme management body of PJSC TATNEFT.
The General Shareholders’ Meeting was held on
June 26, 2015 in the reporting year.
CONTINUOUS INTERACTION OF THE MANAGEMENT WITH SHAREHOLDERS ENSURES EFFECTIVE
SHAREHOLDERS’ ASSETS MANAGEMENT AND SUSTAINABLE DEVELOPMENT OF THE COMPANY.
The procedure for holding the General Shareholders’
Meeting fully provides for respecting the rights of the
shareholders.
The procedure for preparation, convening, holding and
summarizing the General Shareholders’ Meeting of the
Joint Stock Company is determined by the Provision on the
General Shareholders’ Meeting of PJSC TATNEFT.
The Joint Stock Company holds Annual General Meetings
of Shareholders once a year, not earlier than two months
and not later than six months after the fiscal year end. In
addition to the Annual General Meeting there may be an
extraordinary meeting of shareholders convened. The
Company provides shareholders with information on
the agenda of the General Shareholders’ Meeting in the
amount and in time for them to choose a reasonable stance
on the issues, and to take a decision on participation
in the meeting and the manner of such participation.
Each shareholder is entitled to attend the meeting in person
or by proxy. The shareholders will receive from the Board
of Directors and executive bodies of the Company the
detailed and reliable report on the ongoing corporate policy
and production and business activities of the Company at
the General Shareholders’ Meeting. The Company’s Board
of Directors will prepare a report to shareholders for each
agenda item of the day reflecting the Board’s position,
as well as individual opinions of the Board of Directors
members, if any.
Shareholders shall decide on the most important issues
of the Company’s activities. Such issues as election of
members of the Board of Directors, Audit Commission
members, approval of the Company’s auditor, approval
of the annual report and annual accounting (financial)
statements, including the report on the financial results of
the Company’s operations, distribution of profits, payment
of dividends for the financial year shall be mandatory
addresses issues.
In case of election the Company’s Board of Directors shall
provide the shareholders with detailed information about
the biography, experience and skills of each candidate,
and shall also strive to ensure personal presence of the
candidates.
Decisions Taken by the General Meeting of Shareholders:
1. The Joint Stock Company’s annual report for 2014 was
approved.
2. The meeting approved annual financial statements
including profit and loss statements (profit and loss
accounts) of the Joint Stock Company for 2014.
3. The meeting approved distribution of profits for the
financial year.
4. Decision was taken to make payment of dividends for
2014 as follows:
a) for preferred shares of PJSC TATNEFT in the amount
of 1058% of the shares’ face value;
b) for ordinary shares of PJSC TATNEFT in the amount
of 1058% of the shares’ face value.
July 15, 2015 was set as the date for defining persons
entitled to receive dividends. The term of the dividends
payment was specified in accordance with the current
legislation. The dividends payment had to be made in cash.
5. The PJSC TATNEFT’s Board of Directors was elected.
6. Members of the Joint Stock Company’s Audit
Commission were elected.
7. ZAO «PricewaterhouseCoopers Audit” was approved
as the PJSC TATNEFT’s Auditor for the year to perform
the statutory audit of the annual financial statements for
2015 prepared in accordance with Russian accounting
rules.
8. The General Meeting approved an updated version of
the PJSC TATNEFT’s Articles.
9. The General Meeting approved an updated version
of the Provision on holding the General Meeting of
Shareholders of PJSC TATNEFT.
10. The General Meeting approved an updated version
of the Provision on the Board of Directors of PJSC
TATNEFT.
11. Introduction of a change in the Provision on the General
Director of PJSC TATNEFT.
12. Introduction of a change in the Provision on the PJSC
TATNEFT’s Management Board.
13. Introduction of a change in the Provision on the on the
Audit Commission of PJSC TATNEFT.
The adoption of decisions on the agenda items of the
General Shareholders’ Meeting was carried out by voting
ballots in the manner prescribed by the law and the
Joint Stock Company’s Articles. The formulations of the
meeting’s decisions necessarily specified the majority
vote and dissenting opinions on the decisions taken. The
reliability of the protocol was certified by signatures of the
meeting’s Chairman and the Secretary.
IMPROVEMENT OF MECHANISMS AND FORMS OF INTERACTION WITH SHAREHOLDERS IN THE
LIGHT OF NEW SHAREHOLDERS EMERGENCE AND FORMULATION OF FURTHER GOALS BY THE
SHAREHOLDERS ENHANCE THE CORPORATE MANAGEMENT QUALITY.
Ensuring Legal Rights
of Shareholders
Information
Policy
Dividend
Policy
Interest Conflict
Avoidance
The Company guarantees
compliance with and
observance of legal rights
and interests of all the
Company’s shareholders
regardless of the number
of shares they own, as
set out by applicable
laws of the Russian
Federation, requirements
and recommendations of
stock markets regulators,
where the shares of the
Company circulate, and
the Company’s Articles.
The Shareholders
participate in the
Company’s Activities,
exercising their rights
and responsibilities and
on the basis of their
voluntary initiatives
aimed at improving the
management of the
Company’s operations.
The Company provides
shareholders with
access to documents
in accordance with the
applicable law.
.
The shareholders are
entitled to receive
information about the
Company’s activities to the
extent necessary for them
to take well-considered
and sound decisions.
The procedure for the
information disclosure is
provided in accordance
with the applicable law,
requirements of the stock
market and the Provision
on the Information Policy
and the Provision on the
use of Insider Information
and the procedure
of informing on the
securities’ transactions.
The Company strives to
ensure the most reliable
and effective methods and
forms of communication,
including advanced
information technologies
application for reaching
the highest possible
quality of interaction with
the shareholders.
The Joint Stock Company
recognizes dividends as
one of the key indicators of
the Company’s investment
attractiveness and is
committed to increase
the value of dividends on
the basis of the consistent
earnings growth.
The Board of Directors
of the Joint Stock
Company determines
the amount of dividends
recommended to the
General Shareholders’
Meeting based on
the economically
sound approach to the
distribution of profits and
respect to the balance
of short-term (revenue
generation) and long-
term (development of the
Company) interests of the
shareholders.
The Joint Stock Company
provides equal conditions
for all shareholders in
exercising their rights
for participation in the
Company‘s profits through
receiving dividends.
The Company’s corporate
management system
includes a set of rules
and procedures to avoid
conflicts of interest
between the Company’s
management bodies and
its shareholders, as well
as between shareholders,
if the conflict affects the
interests of the Company,
detection and resolution
of all possible general
and specific problems
relating to the rights of
the shareholders. In case
of a conflict arising there
are mechanisms provided
to take all necessary
and possible measures
to complete the conflict
settlement, as well as
the create the conditions
excluding the conflict in
future.
This work is carried out
by the authorized division
interacting with the Board
of Directors committees,
Internal Audit Department
and other relevant
divisions of the Company.
44
45
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
BOARD OF DIRECTORS OF PJSC TATNEFT
ACTIVITIES OF THE PJSC TATNEFT’S
BOARD OF DIRECTORS IN 2015
Remuneration of the Board of Directors’ Members
A list of Main Issues Discussed at the Board of Directors Meetings in 2015
The Board of Directors performs general management of
PJSC TATNEFT, develops general corporate strategy and
oversees its implementation, participates in the creation
of effective internal control mechanisms over financial and
economic activities of the Company, as well as the risk
control system, defines basic parameters of the budget
and the control of its implementation, helps ensuring the
timely disclosure of full and accurate information on the
Company’s activities, and takes decisions on key projects
and significant transactions.
The procedure of formation, status, composition,
functions, goals and objectives, powers of the Board of
Directors, the procedure for its work and cooperation with
other Company’s management bodies are identified by the
Articles and the Provision on the Board of Directors.
There are 15 members in the composition of the Board of
Directors, including three independent directors*, 7 non-
executive and 5 executive directors.
Remuneration to members of the Board of Directors of
PJSC TATNEFT is paid on the basis of the “Provision on
payment of remuneration to members of the Board of
Directors and the Audit Commission of PJSC TATNEFT.
The remuneration of the Board of Directors is formed
of fixed and variable portions. The fixed remuneration
portion It is defined by the Provision and it is indexed
simultaneously with the change of tariffs and salaries of
the PJSC TATNEFT’s employees. The variable part of the
remuneration of the Board of Directors members is formed
according to the following key performance indicators:
year compared with the previous year;
• the ratio of the Company’s capitalization level for the
• the ratio of the cost of dividends to net profit (compared
• the additional profitability amount versus the baseline
with the previous year);
profitability.
Participation of independent and non-executive Directors in
the work of the Board of Directors provides for maintaining
a balance between interests of different groups of the
shareholders, which contributes to the objectivity of the
decisions taken, and the strengthening the confidence in
the Company on the part of investors and shareholders.
The remuneration amount of the Board of Directors
members is set by the decision of the General
Shareholders’ Meeting and includes remuneration for the
performance the Board of Directors member’s duties and
remuneration for the performance of duties of the Board of
Directors’ Committee Chairman.
There were changes made in the composition of the Board
of Directors in the June 2015: the retired members of the
Board M.L. Voskresenskaya, Gosh Sushovan and V.P.
Lavushchenko were replaced by newly elected members
Yu.L. Levin, L. Gerech and A.D. Khalimov.
In 2015, the total remuneration sum paid to the Joint Stock
Company’s members of the Board of Directors amounted to
RUB 138,798,909.95, including remuneration for participation
in the work of the Board of Directors, salaries of Executive
Directors, bonuses and other forms of remuneration.
There were 13 full-time and one in absentia meeting of the
Board of Directors held during the reporting year
Compensations to members of the Joint Stock Company’s
Board of Directors amounted to RUB 4,373, 432.09.
Upon the recommendation of the Executive Body the Board
of Directors considers main results of the Company’s
financial and business activities, determines the list of
transactions that may affect the Company’s performance
and supervises them, ensures development and approval
of the comprehensive risk management system and the
system of monitoring compliance with internal procedures,
defines the Company’s control system over subsidiaries
and affiliates and supervises the information disclosure on
the Company’s activities.
independence criteria have been defined by the Listing Rules of JSC MICEX
46
COMPOSITION OF THE BOARD OF DIRECTORS
5
3
7
Independent Directors
Executive Directors
Non-Executive Directors
1.
2.
On the Annual General Meeting of the PJSC TATNEFT’s Shareholders on the results of 2014.
About candidates to the Board of Directors, Audit Commission of PJSC TATNEFT and proposals on the agenda items of
the Annual General Meeting of shareholders on the results of operation for 2014.
3. On measures to ensure the financial stability of the Company in the conditions of declining world oil prices.
4.
On the results of the Internal Audit Department operations in 2014 and approval of the Department’s work management
plan for 2015.
8.
5. On the performance, efficiency and strategy of further development of the «Tatneft-Neftekhim» Management Company
6. On the Results of financial and economic activities of PJSC TATNEFT in 2014.
7.
On the Program of supporting research activities the in the area of crude oil production and refining in collaboration with
leading research and educational institutions located in the territory of the Republic of Tatarstan.
On the expanding the scope of works with unconventional hydrocarbons in the framework of scientific «Domanik» and
«Bitumen» testing grounds and the plans for oil production and geological and technical activities at PJSC TATNEFT for
2016-2017.
On establishment of Committees under the Board of Directors of PJSC TATNEFT.
9.
10. On the progress of implementing the environmental program of PJSC TATNEFT for the period 2000 - 2015.
11. The program implementation progress to improve the production system efficiency, improve the management methods
and structure at PJSC TATNEFT
12. On the plans of crude oil production and geological and technical activities at PJSC TATNEFT for 2016.
13. On the state of the PJSC TATNEFT’s resource base to maintain crude oil production in the Republic of Tatarstan.
14. On the results of financial and economic activities of subsidiaries and affiliates of the TATNEFT Group of Companies.
15. On the results of implementing measures to improve the financial sustainability of the PJSC TATNEFT’s divisions.
16. On the implementation of PJSC TATNEFT’s investment program for crude oil in 2015 and the draft investment program for 2016.
17. On the performance and strategies of the «Tatneft-Neftekhim» Management Company with regard to further
development of the tire manufacturing complex enterprises.
Participation of the Board of Directors members at the Board meetings
28.01.
2015
27.02.
2015
26.03.
2015
27.04.
2015
22.05.
2015
26.06.
2015
(2BDM)
28.07.
2015
26.08.
2015
29.09.
2015
21.10.
2015
27.11.
2015
Total
29.12.
2015
(2BDM)*
Full Name
R.N. Minnikhanov
N.U. Maganov.
N.G. Ibragimov
Yu.L. Levin (since June 26, 2015)
R.R. Gayzatullin
L. Gerech (since June 26, 2015)
R.Kh. Muslimov.
R.R. Sabirov
Yu.V. Sorokin.
M.Z. Taziyev
Sh.F.Takhautdinov
A.K. Khamaev.
R.S. Khisamov
R.Kh, Khalimov (since June 26, 2015)
R.F. Steiner
M.L. Voskresenskaya (till June 26,
2015)
Soushovan Ghosh (till June 26, 2015)
V.P . Lavushchenko. ( till June 26, 2015)
A.T. Yukhimets
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*One meeting on Dec. 29, 2015 was conducted in absentia
14
14
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9
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14
47
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
COMPOSITION OF THE PJSC TATNEFT’S
BOARD OF DIRECTORS
Rustam N.
MINNIKHANOV
Nail U.
MAGANOV
Nail G.
IBRAGIMOV
Mariya L.
VOSKRESENSKAYA
Radik R.
GAIZATULLIN
Laszlo
GERECH
Chairman of the Board of
Directors of PJSC TATNEFT
General Director of PJSC
TATNEFT
PJSC TATNEFT’s Board of
Directors’ Member
Chairman of the PJSC
TATNEFT’s Management
Board
Member of PJSC TATNEFT’s
Board of Directors
First Deputy General
Director for Production –
Chief Engineer
of PJSC TATNEFT.
PJSC TATNEFT’s
Management Board
Member.
Independent member of the
JSC TATNEFT’s Board of
Directors
Audit Committee Member
of JSC TATNEFT’s Board of
Directors
*till June 26, 2015
PJSC TATNEFT’s Board of
Directors’ Member
Audit Committee Member of
the PJSC TATNEFT’s Board
of Directors.
Independent member of the
PJSCTATNEFT’s Board of
Directors
Member of the PJSC
TATNEFT’s Board of
Directors Audit Committee
Member of the PJSC
TATNEFT’s Board
of Directors HR and
Remuneration Committee
*Since June 26, 2015
Born in 1957.
1978 – graduated from
Kazan Agricultural Institute,
specializing as a mechanical
engineer.
1986 – Institute of Soviet
Trade.
1996-1998 – Minister of
Finance of the Republic of
Tatarstan.
From July 1998 till March
2010 headed the Government
of the Republic of Tatarstan.
President of the Republic of
Tatarstan since March 2010.
Born in 1958.
Born in 1955.
Born in 1955.
Born in 1964.
Born in 1953.
1983 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician I.M.
Gubkin.
From July 2000 to November
2013 – First Deputy General
Director – Head of Crude
Oil and Petroleum Products
Sales Department of PJSC
TATNEFT.
He was appointed General
Director of PJSC TATNEFT in
November 2013.
1977 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician I.M.
Gubkin.
First Deputy General Director
for Production – Chief
Engineer of PJSC TATNEFT
since 2000.
Graduated from Moscow
Financial Academy in1977.
She has A US CPA Certificate
and she is a certified
Russian Auditor. Director of
Brentcross Ltd. since 2004.
1985 – graduated from
Kazan Agricultural Institute
specializing in «Accounting
and business analysis in
agriculture”.
Head of the Ministry of
Finance of the Republic of
Tatarstan since June 2002.
1977 – graduated from
the Moscow Institute of
Petrochemical and Gas
Industry named after
Academician I.M. Gubkin
specializing in Development
and Complex Mechanization
of oil fields.
1995 – graduated from the
Oxford Business University.
Since 2015 – Managing
Director of MOL Oman, Oman
Branch Office in Muscat.
COMPOSITION OF THE PJSC TATNEFT’S
BOARD OF DIRECTORS ENSURES THE
OPTIMAL BALANCE OF THE BOARD OF
DIRECTORS MEMBERS’ COMPETENCE
REQUIRED FOR IMPLEMENTATION OF
STRATEGIC OBJECTIVES AND ONGOING
TASKS OF THE COMPANY.
48
Non-executive director
Executive Director
Executive Director
Independent Director
Independent Director
Независимый директор
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – 0.000176.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital– 0.019749.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.020806.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
49
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Sushovan
GOSH
Vladimir P.
LAVUSHCHENKO
Yuri L.
LEVIN
Renat Kh.
MUSLIMOV
Rinat
K. SABIROV
Valery Yu.
SOROKIN
Mirgaziyan Z.
TAZIYEV
Shafagat F.
TAKHAUTDINOV
Independent Member of the
PJSC TATNEFT’s Board of
Directors
Chairman of the Audit
Committee of the PJSC
TATNEFT’s Board of Directors
Member of the HR and
Remuneration Committee of
PJSC TATNEFT
*till June 26, 2015
Member of JSC TATNEFT’s
Board of Directors
Deputy General Director
in Economics of PJSC
TATNEFT
Chairman of the JSC
TATNEFT’s Board of
Directors Information
Disclosure Committee
*till June 26, 2015
Independent member of the
Board of Directors
Chairman of the PJSC
TATNEFT’s Board of
Directors Audit Committee
Member of the PJSC
TATNEFT’s Board
of Directors HR and
Remuneration Committee
*Since June 26, 2015
Member of PJSC TATNEFT’s
Board of Directors’
Born in 1957.
Born in 1949.
Born in 1953.
Born in 1934.
Graduated from the college
of Queen Maria, London
University of Electric and
Electronic Developments
and Institute of Accountants-
Experts in England and Wales.
Managing Director of SGI
Group Ltd. since.
1972 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
1984 – graduated from the
post-graduate course of
VNIIOENG.
Deputy General Director for
Economics and Finance of
PJSC TATNEFT since 1997.
1975 – graduated from the
Moscow Finance Institute
В 1957 – graduated from
Kazan State University.
1979 – post-graduate studies
at the Institute of World
Economy and International
Relations.
Managing Partner of BVM
Capital Partners Ltd since
2001.
State Consultant to President
of the Republic of Tatarstan
on development of crude oil
and gas fields since June
2007, Professor of the Crude
Oil and Gas Geology Chair of
Kazan (Volga)State University.
Independent Director
Executive Director
Independent Director
Non-executive Director
% share in the Joint Stock
Company’s authorized
capital- none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – 0.045465.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.048194.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none
% share in the Joint Stock
Company’s authorized
capital– 0.057136.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.060445.
Member of PJSC TATNEFT’s
Board of Directors. Member
of the PJSC TATNEFT’s
Board of Directors Corporate
Management Committee.
Member of the PJSC
TATNEFT’s Board of Directors
HR and Remuneration
Committee. Member of the
PJSC TATNEFT’s Board
of Directors Information
Disclosure Committee
Born in 1967.
1991- graduated from the
physics faculty of Kazan State
University.
1994 – graduated from the
post-graduate course of the
Kazan State Technological
University.
1998 – had a training course
under the President’s
program for managerial staff.
2006 till June 2010 headed
the Division of Oil and Gas
Complex of the Cabinet of
Ministers of the Republic of
Tatarstan.
In June 2010 he was appointed
Assistant to the President of the
Republic of Tatarstan.
Non-executive Director
Member of the PJSC
TATNEFT’s Board of
Directors
Member of the PJSC
TATNEFT’s Board of Directors
Member of the PJSC
TATNEFT’s Board of
Directors
Advisor to Chairman of the
PJSC TATNEFT’s Board of
Directors
Born in 1964.
Born in 1947.
Born in1946.
1986 – graduated from the
Kazan State University.
General Director of JSC
Svyazinvestneftekhim since
2003
1972 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin
1971 – graduated
fromMoscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
Head of NGDU «Almetyevneft”
of PJSC TATNEFT since
January 2005.
1999 till November 2013 –
General Director of PJSC
TATNEFT.
Starting November 2013 –
Assistant to President of the
Republic of Tatarstan on the
oil industry issues, Advisor to
Chairman of PJSC TATNEFT’s
Board of Directors.
Non-Executive Director
Executive Director
Non-Executive Director
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – 0.006448.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.006541.
% share in the Joint Stock
Company’s authorized
capital – 0.116503.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.123914.
50
51
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Rustam Kh.
KHALIMOV
Azat K.
KHAMAEV
Rais S.
KHISAMOV
René
STEINER
Member of PJSC TATNEFT’s
Board of Directors
Deputy General Director
of PJSC TATNEFT
for Development and
Production of Oil and Gas
*since June 26, 2015
PJSC TATNEFT’s Board of
Directors’ Member
Member of the PJSC
TATNEFT’s Board of
Directors
Deputy General Director –
Chief Geologist of PJSC
TATNEFT
Independent Member of
the PJSC TATNEFT’s Board
of Directors.
Chairman of the PJSC
TATNEFT’s Board
of Directors HR and
Remuneration Committee
Audit Committee Member of
the PJSC TATNEFT’s Board
of Directors
Born in 1965.
Born in 1956.
Born in 1950.
Born in 1964.
1987 – graduated Moscow
Institute of Petrochemical and
Gas Industry n.a. Academician
I.M. Gubkin.
2010 to 2011 – Director of
PJSC TATNEFT’s Branch in
Libya.
2011 – 2015 – Head of
NGDU “Elkhovneft” of PJSC
TATNEFT.
1978 – graduated from Kazan
Aviation Institute, specialty –
mechanical engineer.
2000 – graduated from the
Law Faculty of Kazan State
University.
Appointed the First Deputy
Minister of Land and Property
Relations of the Republic of
Tatarstan in December 2008.
Deputy General Director
of PJSC TATNEFT for
Development and Production
of Oil and Gas since 2015.
Appointed Head of the
Ministry of Land and Property
Relations of the Republic of
Tatarstan in March 2009.
1978 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
Deputy General Director –
Chief Geologist of PJSC
TATNEFT since October 1997.
.
He has a degree in economics
and graduated from Technical
High School in Zurich in
1989. Bachelor of Swiss
Banking – Zurich, 1992. Since
2011, co-founder, Program
Director of the Private Equity
FIDES Business Partner AG,
Switzerland.
Executive Director
Non-Executive Director
Executive Director
Independent Director
% share in the Joint Stock
Company’s authorized
capital – 0,000056
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share in the Joint Stock
Company’s authorized
capital – 0.01876.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.019746.
% share in the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
Secretary of the Board of Directors and the PJSC TATNEFT’s
Corporate Secretary Office
The Secretary of the Board of Directors and the Company’s Corporate Secretary’s
Office provide in the Joint Stock Company for the orderly preparation and holding
of the General Shareholders’ Meeting, activities of the Board of Directors and
Committees of the Board of Directors, the Joint Stock Company compliance with
requirements of the applicable law, Articles and internal documents of the Joint Stock
Company, which guarantee the rights and legitimate interests of shareholders,.
Rustam M. Khisamov, who previously was in the position of the PJSC TATNEFT’s
Securities Office Head, was appointed Head of the Corporate Secretary Office on
7 December 2015, The competence of the Corporate Secretary Office includes
maintaining an effective system of interaction among all participants of corporate
relations, including subsidiaries and affiliates of the Joint Stock Company, and
monitoring the abidance of the Joint Stock Company’s subsidiaries and affiliates
to the corporate procedures related to the implementation of the of shareholders
and other participants of corporate relations rights ensuring interaction of the Joint
Stock Company with a specialized registrar, depositories, with public administration
bodies authorized to carry out regulation of corporate relations and with the securities
market, as well as with other securities market participants.
The Corporate Secretary Office provides for the organization and follow-up of the
legal requirements with regard to public disclosure of information, including the
preparation and disclosure of information in the form of the annual report, quarterly
issuer’s reports, essential facts, as well as documents and information related to the
issuance and circulation of securities on a stock exchange, provision of documents
and information at the request of shareholders, proper storage of the Joint Stock
Company’s corporate documents. In order to improve the corporate practice
efficiency, the Corporate Secretary Office performs monitoring the Company‘s
existing procedures efficiency and prepares the annual report of the Board of
Directors on the state of the Joint Stock Company’s corporate management and
prospects for its development. The reports on the corporate management are formed
in accordance with the Rules of exchange trading and disclosure requirements on the
corporate management in the Company to all interested parties.
Alexander T.
YUKHIMETS
Secretary of the PJSC
TATNEFT’s Board of
Directors.
Maintenance of the PJSC
TATNEFT’s Board of
Directors activities.
Based on proposals the
Board of Directors’ Members
and the Management Board
Members the Secretary the
Board of Directors prepares
and submits for the Board’s
approval work plans of the
Board of Directors and
performs organizational
functions for preparation of
the Board meetings.
The competence of the
Secretary of the Board
of Directors includes
preparation of the Board
meetings, formation,
preliminary examination
and systematization of
materials on the agenda
of the meetings, as well
as preparation of draft
decisions.
The Secretary of the Board
of Directors provides to
the Board members the
information necessary for
making decisions on the
agenda issues.
52
53
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
COMMITTEES OF THE BOARD OF DIRECTOR
CORPORATE MANAGEMENT COMMITTEE
Committee Composition
Chairman
Viktor I. Gorodny – member of the Management Board
of PJSC TATNEFT, Deputy General Director – Head of
Property Department of PJSC TATNEFT.
Members of the Committee:
Natalia E. Dorpeko – Consultant of PJSC TATNEFT’s
General Director.
Valery D. Ershov – member of the Management Board,
Head of PJSC TATNEFT’s Legal Department.
Vasiliy A. Mozgovoy – Assistant to General Director of
PJSC TATNEFT, Corporate Finances.
Rinat K. Sabirov – member of the Board of Directors of
PJSC TATNEFT, Assistant to President of the Republic
of Tatarstan, Member of the Corporate Management
Committee, Member of the HR and Remuneration
Committee.
Nurislam Z. Syubaev – ember of the Board of Directors,
Head of PJSC TATNEFT’s Strategic Planning Department –
Advisor to General Director on external economic activity
and financial/banking issues.
Rais S. Khisamov – member of the Board of Directors of
PJSC TATNEFT, Deputy General Director – Chief Geologist
of PJSC TATNEFT (till June 26, 2015).
Rustam M. Khisamov – Head of Securities Office of the
Property Department of PJSC TATNEFT (till June 26, 2015).
Denis V. Tsovma – Deputy Head of Securities Office of the
Property Department, PJSC TATNEFT (till June 26, 2015).
Basic Functions and Work Areas of the
Committee in 2015
The main objective of the Committee was preliminary
review and preparation of recommendations to the Board
Directors on the development and improvement of the
corporate management system in the Joint Stock Company
(regulation of relations between the shareholders, the
Board of Directors and the Joint Stock Company’s
management, as well as interaction with the subsidiaries of
the Joint Stock Company and other stakeholders).
The Committee initiated and provided for organizational
support in improving the corporate management
procedures, as well as adoption of new and updating
of existing corporate documents in accordance with
changes in the applicable legislation and general corporate
standards.
• Working out recommendations on implementing
provisions of the Corporate Management Code and
ensuring the requirements of the Listing Rules approved
by the Bank of Russia and the Russian Government.
• Provision of advice and preliminary consideration of the
materials for the corporate restructuring in the Joint
Stock Company, affecting interests of the shareholders.
• Monitoring the Joint Stock Company’s compliance
with legislation on joint stock companies, regulations,
regulatory acts, as well as legal rights and interests of
the shareholders.
• Assistance to the Board of Directors and General
Director in assessing the quality of corporate relations
and the corporate management system development in
the Joint Stock Company (regulation of the relationship
between the shareholders, Board of Directors and
the Joint Stock Company’s management, as well as
interaction with the subsidiaries of the Joint Stock
Company and other interested parties).
• Making recommendations on the preparation and
• Making recommendations on amendments to the
holding of the Annual General Shareholders’ Meeting.
Articles and other internal documents of the Joint Stock
Company, which approval is within the competence of
the General Shareholders’ Meeting and the Board of
Directors.
• Development of recommendations on the draft
internal documents aimed at improving the corporate
management in the Joint Stock Company.
AUDIT COMMITTEE
Committee Composition
Chairman
Yuri L. Levin, Member of the PJSC TATNEFT’s Board of
Directors, Independent, Director Managing Partner of BVM
Capital Partners Ltd (since June 26, 2015).
Sushovan Ghosh, member of the Board of Directors of
PJSC TATNEFT, Independent Director. Managing Director
of SGI GROUP LTD. Member of the HR and Remuneration
Committee of PJSC TATNEFT (till June 26, 2015).
Committee Members
Mariya L. Voskresenskaya, member of the Board
of Directors of PJSC TATNEFT, Independent Director.
Director of Brentcross Ltd (till June 26, 2015).
Radik R. Gayzatullin, member of the Board of Directors,
Minister of Finance of the Republic of Tatarstan.
Laszlo Gerech, member of the Board of Directors of PJSC
TATNEFT, Independent Director. Managing Director of
“MOL West Oman B.V. Oman Branch”. Member of the HR
and Remuneration Committee (since June 26, 2015 ).
René Frederic STEINER, Member of the PJSC TATNEFT’s
Board of Directors, Independent Director, Program
Director of the Private Equity FIDES Business Partner
AG, Switzerland, Chairman of the HR and Remuneration
Committee.
Basic Functions and Work Areas of the
Committee in 2015
The Committee assisted the Board of Directors in
exercising control over the reliability of financial statements
of PJSC TATNEFT, compliance with laws and regulations,
selection of independent auditors, the work of the
independent auditors and the internal audit system, control
of financial and economic activities, as well as other duties
within the Committee’s competence.
• Coordination of the external auditors and the Internal
Audit Department activities, as well as review of their
reports on a regular basis.
the Internal Audit Department operations.
• Introduction of proposals to improve the efficiency of
• Review and analysis of quarterly financial statements.
• Review and implementation of the independent auditors
reports on the state of internal control systems of PJSC
TATNEFT and development of recommendations for
their improvement.
• Discussions with independent auditors and the Internal
Audit Department about the scope, focus areas and the
timing of their audits.
• External auditors’ independence validation.
• Providing the advice to the Board of Directors on the
selection of independent auditors for PJSC TATNEFT
(both by IFRS and by RAS).
• Preliminary review of the interested parties’ transactions
and transactions with parties related with PJSC
TATNEFT to be submitted for approval by the Board of
Directors of PJSC TATNEFT.
Committees of the PJSC TATNEFT’s Board of Directors have been established in order to assist the Board of Directors
on key issues of the corporate practice and improve the mechanisms of the Company’s interaction with shareholders and
investors. The Committees operate on the basis of the applicable legislation, the Joint Stock Company’s Articles, Provision
on the Board of Directors and Provisions on the Committees approved by the Board of Directors. The membership of the
Committees is determined by the Board of Directors. The Company provides to the Board of Directors detailed information
about the biography, experience and skills of each candidate for membership in the Committee.
54
55
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
HR & REMUNERATION COMMITTEE
INFORMATION DISCLOSURE COMMITTEE
Committee Composition
Chairman
René Frederic STEINER, Member of the PJSC
TATNEFT’s Board of Directors, Independent Director,
Program Director of the Private Equity FIDES Business
Partner AG, Switzerland
Members of the Committee
Laszlo Gerech, Member of the PJSC TATNEFT’s Board
of Directors, Independent Director. Managing Director of
“MOL West Oman B.V. Oman Branch”, Member of the Audit
Committee of PJSC TATNEFT’s Board of Directors (since
June 26, 2015)
Sushovan Ghosh, member of the Board of Directors of
PJSC TATNEFT, Managing Director of SGI Group LTD (till
June 26, 2015).
Yuri L. Levin, Member of the PJSC TATNEFT’s Board of
Directors, Independent Director Managing Partner of BVM
Capital Partners Ltd, Chairman of the PJSC TATNEFT‘s
Board of Directors Audit Committee (since June 26, 2015).
Rinat K. Sabirov, member of the Board of Directors of
PJSC TATNEFT, Assistant to President of the Republic
of Tatarstan, Member of the Corporate Management
Committee, Member of the HR and Remuneration
Committee.
Basic Functions and Work Areas of the
Committee in 2015
The Committee assisted the Board of Directors of PJSC
TATNEFT in improving personnel policies and strengthening
of mechanisms for motivating employees and managers of
the Company. The Committee’s area of work was to improve
the quality of the Board of Directors operation through the
preliminary review and preparation of recommendations on
the issues of creating conditions for attraction of qualified
professionals to the Joint Stock Company’s Management and
the necessary incentives for their efficient operation.
• Development of a methodology for evaluating
performance of the Board of Directors as a whole,
Committees of the Board of Directors, Chairman of the
Board of Directors and individual performance of the
Board of Directors members for the purpose of working
out the principles and criteria for determining their
remuneration.
• Development of a methodology for assessing
performance of the Joint Stock Company’s
Management Board members and heads of structural
divisions of the Joint Stock Company for the purpose of
developing the principles and criteria for determining
their remuneration.
• Criteria determination for selection and a preliminary
assessment of candidates: to members of the Board of
Directors, members of the Management Board, to the
position of General Director, to the position of the heads
of the PJSC TATNEFT structural divisions.
• Working out suggestions on defining essential
terms of contracts with members of the Board of
Directors, General Director and the PJSC TATNEFT’s
Management Board members.
• Regular monitoring of legislation and the latest standards
in the field of personnel management, development of
recommendations for changes in the internal documents
of PJSC TATNEFT within the Committee’s competence
and submitting them to the Board of Directors.
• Working out recommendations on the PJSC TATNEFT’s
personnel policy, including those regarding the
system of the Company’s employees’ motivation, and
submitting them to the Board of Directors.
The Committees carry out their activities in close cooperation with the Board of Directors, Management Board,
Executive Directorate, Internal Audit Department, Corporate Control Department and other departments and divisions
of the Company.
Committee Composition
Chairman
Basic Functions and Work Areas of the
Committee in 2015
Iskandar G. Garifullin, Management Board member,
Chief Accountant – Head of Accounting and Reporting
Department of PJSC TATNEFT (since June 26, 2015).
The Committee coordinated and monitored procedures to
ensure the rights of shareholders and other stakeholders in
a timely and necessary manner to fully provide information
on the activities of the Company.
Vladimir P. Lavushchenko, member of the Board of
Directors, member of the Management Board, Deputy
General Director of PJSC TATNEFT for Economics (till June
26, 2015)
The main Committee’s objective is improving the
information disclosure procedure on the Company’s
activities
Deputy Chairman
Viktor I. Gorodny, member of the Management Board,
Deputy General Director, Head of the Property Department
of PJSC TATNEFT, Head of the Corporate Management
Committee (till June 26, 2015).
Committee Members:
Nuriya Z. Valeyeva, Head of Technical and Economic
Information and Advanced Experience Extension Office,
PJSC TATNEFT.
Vladlen A. Voskoboynikov, member of the Management
Board, Head of Consolidated Financial Reporting
Department of PJSC TATNEFT.
Vasiliy A. Mozgovoy, Assistant to General Director of
PJSC TATNEFT, Corporate Finances.
Rinat K. Sabirov, member of the Board of Directors of
PJSC TATNEFT, Assistant to President of the Republic
of Tatarstan, Member of the Corporate Management
Committee, Member of the HR and Remuneration
Committee.
Evgeny A. Tikhturov, Member of the Management Board,
Head of PJSC TATNEFT’s Financial Department.
Denis V. Tsovma, Securities Office Deputy Head, Property
Department of PJSC TATNEFT (till June 26, 2015)
Aleksander T. Yukhimets, member of the Management
Board, Secretary of the Board of Directors of PJSC
TATNEFT (till June 26, 2015)
In the frame of the obligatory information disclosure and
information disclosure on a voluntary basis, as well as
assisting the subsidiaries in establishing the procedure of
the information disclosure and submitting.
• Ensuring compliance of the corporate information
disclosure policy with applicable laws and requirements
of stock exchanges which the Company’s shares are
presented at.
• Supporting execution of the internal regulation
«Mechanisms for disclosure control and disclosure
procedures». The Information Disclosure Committee
carries out mid-term evaluations and provides for
monitoring current Company’s disclosure procedures.
• Working out recommendations on amendments to the
«Mechanisms for disclosure control and disclosure
procedures».
• Coordination of annual reports and other documents
preparation to the disclosure of information, study
and making recommendations regarding the annual
Company’s annual reports to shareholders, current
reports, press releases on earnings and other documents
disclosing essential information on the Company’s
activities.
• Working out preliminary recommendations on the
voluntarily disclosed information ensuring full and
comprehensive understanding of the Company’s activities
by all stakeholders.
• Analysis of the current voluntarily information disclosure
practices and submitting its recommendations to
responsible officials for discussion.
• Monitoring of the best international and Russian practices
of the information disclosure procedures to improve
corporate disclosure mechanisms of the obligatory
information disclosure and information disclosure on a
voluntary basis
• Monitoring the timely disclosure procedures.
56
57
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
EXECUTIVE BODIES
ACTIVITIES OF THE PJSC TATNEFT’S
MANAGEMENT BOARD IN 2015
GENERAL DIRECTOR
MANAGEMENT BOARD
Sole executive body.
Collegial executive body of the Company.
General Director is appointed by the Board of Directors.
N.U. Maganov has been General Director of PJSC
TATNEFT since November 2013 till present time.
General Director is Chairman of the Management Board of
PJSC TATNEFT.
Powers of the General Director are determined by the Joint
Stock Company’s Articles and the “Provision on General
Director of PJSC TATNEFT”.
General Director manages the ongoing activities in
accordance with the corporate Company Development
strategy.
General Director determines the organizational structure
of the Company oversees the rational use of resources,
solves organizational issues of the Company’s business
structure management and social guarantees to personnel
provision, including, without limitation:
Meeting decisions;
members to the Board of Directors;
• ensuring execution of the General Shareholders’
• presentation of candidates for the Management Board
• allocation of responsibilities among the Management
• organization of the Management Board work, as
• approval of the Joint Stock Company’ internal
Chairman of the Management Board meetings,
Board members;
documents, except for internal documents, which
approval is referred by the Joint Stock Company’s
Articles to the competence of the General
Shareholders’ Meeting, the Board of Directors and the
Management Board;
• determination of the of the Joint Stock Company’s
organizational structure, approval of the Joint
Stock Company’s manning table, branches and
representative offices, approval of job descriptions and
salaries;
position of the First Deputy General Director;
• introduction to the Board of Directors candidates for the
• conclusion of employment contracts with employees of
• ensuring the drafting, conclusion and execution of the
the Joint Stock Company;
Collective Agreement.
The Management Board is formed by the Board of
Directors and is composed of the Chairman and
members of the Management Board. Quantitative
composition of the Management Board is determined
by the Board of Directors. The procedure of formation,
status, composition, functions, goals and objectives, the
Management Board powers, the procedure of its work and
interaction with other Company’s management bodies are
defined by the Provision on the Management Board. The
Management Board meetings are held in accordance with
the Management Board plan of operation.
The core competences of the Board:
• participate in the development of prospective and
current plans of the Joint Stock Company’s activity,
representation of
on their fulfillment;
• Plans to the Board of Directors, preparation of reports
• Joint Stock Company’s participation in commercial and
• implementation of the Joint Stock Company’s programs
non-profit organizations;
of financial and investment activity within the powers
received from the Board of Directors;
• coordination of production programs of subsidiaries;
• regular reporting to the Board of Directors on the
financial condition of the Joint Stock Company, and
transactions as well as
• decisions that can have a significant impact on the Joint
Stock Company‘s condition.
Remuneration of the Management Board Members
Payments to members of the Management Board are
made in accordance with basic conditions of the contracts
concluded for the performance of duties of the Management
Board members, including implementation of decisions of
the General Shareholders’ Meeting, the Board of Directors,
and participation in working out the Joint Stock Company’s
development plans, as well as enhancing the effectiveness of
the of Company and its subsidiaries work plans.
In 2015, the total remuneration of the Joint Stock
Company’s members of the Management Board amounted
to 44,765,829.47, rubles including remuneration for
participation in the work of the Management Board, salary,
bonuses and other forms of remuneration. Compensation
to the members of the Joint Stock Company’s Management
Board members of amounted to 739,640 rubles.
List of Issues Reviewed at the Meetings of the Management Board in 2015
1. On the interest in the «TATNEFT-Tsentroresurs» Limited Liability Company.
2. On the interest in the «Zelenaya Roshcha» Limited Liability Company.
3. On the establishment of a limited liability company with the main activity to provide airports with fuel and lubricants.
4. On the interest in the limited liability company «TATNEFT-Neftekhimservis».
5. Execution of the consolidated budget. Results of declaration of the structural divisions and subsidiaries. Relevant
information on the status of mutual settlements that depend on the structural divisions. Details of the mutual settlements
with the budget at all levels. Information characterizing the financial and economic condition of the Company.
6. On the amount of voluntary contributions to the public housing under the program of the social mortgage housing
construction in 2015.
7. Involvement in the establishment of the «TATNEFT-Resource Nefteproduct” Limited Liability Company.
8. «Environmental Program of PJSC TATNEFT for the period 2016 – 2020».
Participation of Board members in the Management Board meetings in 2015
Full Name
N.U .Maganov
N.G. Ibragimov
V.P. Lavushchenko
V.I. Gorodny
N.M/ Glazkov
F.L. Schelkov
R.N. Mukhamadeyev
I.G. Garifullin
E.A. Tikhturov
N.Z. Syubaev
V.D. Ershov
V.A. Voskoboynikov
R.S. Nurmukhametov
A.V. Vakhitov
A.T. Yukhimets
02.02.2015
02.03.2015
06.04.2015
01.06.2015
06.07.2015
05.10.2015
04.12.2015
Total
l
l
l
l
l
l
l
l
l
l
l
l
–
l
l
l
l
l
l
l
–
l
l
l
l
–
–
l
l
l
l
l
l
l
l
l
l
l
l
l
–
–
l
l
l
l
l
l
l
l
l
l
l
l
l
l
–
l
l
l
l
l
l
l
l
l
l
l
l
l
l
–
l
l
l
l
l
l
l
l
l
–
l
l
l
l
l
–
l
l
l
l
l
l
l
–
l
l
l
l
l
–
l
l
l
7
7
7
7
7
5/2
6/1
7
7
7
5/2
2/5
5/2
7
7
58
59
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
COMPOSITION OF THE PJSC TATNEFT’S
MANAGEMENT BOARD
Nail U.
MAGANOV
Nail G.
IBRAGIMOV
Anvar V.
VAKHITOV
Chairman of the
PJSC TATNEFT’s
Management Board
General Director
PJSC TATNEFT
PJSC TATNEFT’s Board of
Directors Member
First Deputy General
Director for Production –
Chief Engineer of
PJSC TATNEFT since 2000.
PJSC TATNEFT’s Board of
Directors Member.
Director of OOO «TATNEFT-
Neftekhim» Management
Company.
Vladlen A.
VOSKOBOINIKOV
Head of PJSC TATNEFT’s
Consolidated Financial
Statements Department.
Member of the PJSC
TATNEFT’s Board of
Directors Information
Disclosure Committee
Iskandar G.
GARIFULLIN
Nikolay M.
GLAZKOV
Victor I.
GORODNY
Valery D.
YERSHOV
Chief Accountant – Head of
Accounting and Reporting
Department of
PJSC TATNEFT
Chairman of the
PJSC TATNEFT’s Board of
Directors Committee for
Information Disclosure
* till February 01, 2016
Deputy General Director
for Capital Construction of
PJSC TATNEFT
Deputy General Director –
Head of Property
Department of
PJSC TATNEFT
Chairman of the
PJSC TATNEFT’s Board
of Directors Management
Committee
Head of PJSC TATNEFT’s
Legal Department.
Born in 1958.
Born in 1955.
Born in 1951.
Born in 1965.
Born in 1960.
Born in 1960.
Born in 1952.
Born in 1949.
1983 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
July 2000 to November
2013 – First Deputy General
Director – Head of Crude
Oil and Petroleum Products
Sales Department of PJSC
TATNEFT. Appointed General
Director of PJSC TATNEFT in
November 2013.
1977 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
2000 till present time – First
Deputy General Director for
Production – Chief Engineer
of PJSC TATNEFT.
1980 – graduated from
Kazan Institute of Chemical
Technology.
1993 – graduated from the
Southern Alberta Institute of
Technology in Calgary.
April 2014 till present
time – Director of «TATNEFT-
Neftekhim” Management
Company.
2005 till present time
Head of PJSC TATNEFT’s
Consolidated Financial
Statements Department
1981 – graduated from Kazan
Finance and Economics
Institute named after V.V.
Kuibyshev.
1997 till February 01, 2016 –
Chief Accountant – Head of
Accounting and Reporting
Department of PJSC
TATNEFT.
1988 – graduated from Kazan
Construction Engineering
Institute.
2008-2010 – Head of
Construction Department of
PJSC TATNEFT.
2010 till present time –
Deputy General Director for
Capital Construction of PJSC
TATNEFT.
1978 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
1995 till present time –
Deputy General Director –
Head of PJSC TATNEFT’s
Property Department since.
1978 – graduated from Kazan
State University named after
V.I. Ulyanov-Lenin.
2002 till present time – Head
of Legal Department of PJSC
TATNEFT.
% share in the Joint Stock
Company’s authorized
capital – 0.000176.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – 0.019749.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.020806.
% share the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – 0.014105.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.014986.
% share the Joint Stock
Company’s authorized
capital- none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – 0.000254.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
60
61
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Vladimir P.
LAVUSHCHENKO
Rustam N.
MUKHAMADEEV
Rafael S.
NURMUKHAMETOV
Nurislam Z.
SYUBAEV
Evgeny A.
TIKHTUROV
Fyodor L.
SHCHELKOV
Alexander T.
YUKHIMETS
PJSC TATNEFT’s General
Director Deputy for
Economics and Finance,
PJSC TATNEFT’s Board of
Directors’ Member
PJSC TATNEFT’s General
Director Deputy for HR &
Social Development
Head of NGDU
«Leninogorskneft» of PJSC
TATNEFT.
Head of PJSC TATNEFT’s
Strategic Planning
Department – Advisor to
General Director on external
economic activity and
financial/banking issues.
Member of the Corporate
Management Committee of
the Board of Directors since
December 25, 2014
Head of the PJSC
TATNEFT’s Finance
Department
Member of the PJSC
TATNEFT’s Board of
Directors Information
Disclosure Committee
1996 till February 25, 2016
-Deputy General Director of
PJSC TATNEFT for General
Issues
Secretary of the PJSC
TATNEFT’s Board of
Directors
Member of the PJSC
TATNEFT’s Board of
Directors Information
Disclosure Committee
Born in 1949.
Born in 1952
Born in 1949.
Born in 1960.
Born in 1960.
Born in 1948.
Born in 1948.
1972 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician I.M.
Gubkin.
1977 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. Academician
I.M. Gubkin.
1984 – graduated from
post-graduate course of
VNIIOENG.
2001 till present time –
Deputy General Director for
HR & Social Devrlopment.
1974 – graduated from the
Ufa Oil Institute.
1989 till present time –
Head of the NGDU
«Leninogorskneft» of PJSC
TATNEFT.
1982 – graduated from
Moscow Institute of National
Economy n.a..V. Plekhanov
2002 till present time –
Head of Strategic Planning
Department of PJSC
TATNEFT – Advisor to General
Director on external economic
activity and Financial/banking
issues
В 1982 – graduated
from Moscow Institute of
Management named after
S. Ordzhonikidze.
1972 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n. a. I.M. Gubkin.
1972 – graduated from
Moscow Institute of
Petrochemical and Gas
Industry n.a. I.M. Gubkin.
1999 – till present time
Head of PJSC TATNEFT’s
Department of Finance since.
Deputy General Director of
PJSC TATNEFT for General
Issues since1996 until present
time.
1995 till present time –
Secretary of the PJSC
TATNEFT’s Board of
Directors.
Doctor of Economics.
1997 till present time –
Deputy General Director for
economics of PJSC TATNEFT.
% share the Joint Stock
Company’s authorized
capital – 0.045465.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.048194.
62
% share the Joint Stock
Company’s authorized
capital – 0,004204.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0,004264.
% share the Joint Stock
Company’s authorized
capital – 0.010465.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.010107.
% share the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – none.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
% share the Joint Stock
Company’s authorized
capital – 0.029929.
% share of the Joint Stock
Company’s ordinary shares
owned by the person –
0.031524.
% share the Joint Stock
Company’s authorized
capital – 0.000284.
% share of the Joint Stock
Company’s ordinary shares
owned by the person – none.
63
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
CORPORATE PRACTICE
THE COMPANY’S CORPORATE PRACTICE IS BUILT ON THE RESPONSIBLE ATTITUDE
TOWARDS THE SHAREHOLDERS AND IS BASED ON THE UNDERSTANDING THAT THE
LONG-TERM INVESTORS MUST HAVE A CLEAR UNDERSTANDING OF THE STRATEGIC
OBJECTIVES AND PROSPECTS FOR THE COMPANY’S DEVELOPMENT, AS WELL AS DEEP
INSIGHT THAT THEIR RIGHTS WILL NOT BE VIOLATED.
The Company’ corporate management system is based on strict compliance with requirements of the Russian legislation,
listing requirements, recommendations of the Russian Corporate Management Code, international standards of corporate
behavior and business ethics and the principles of openness and transparency.
LEGISLATION
LISTING RULES
CODES / PRINCIPLES
Federal laws:
Listing Rules:
“On Joint Stock Companies”,
“On Securities Market”,
“On Central Depository”
CBR Regulations
“On information Disclosure”
CBR Regulations
“On the securities admission
to organized trading”
CJSC “MICEX Stock Exchange”
(Moscow Exchange Holding)
London Stock Exchange
Deutsche Borse (Xetra)
CBR Corporate Management
Code approved by the Russian
Government
Corporate Management Code
of PJSC TATNEFT
Corporate Policy and
Regulations
BEST PRACTICE
GUIDELINES
Principles of the European
Bank for Reconstruction and
Development (EBRD)
Principles of the Organization
of Economic Cooperation and
Development (OECD )
Recommendations of the
Russian Institute of Directors
and National Council of
Corporate Management
GRI
Corporate Management Priorities
The Company develops the corporate management system on the integration of key priorities that form a single platform for
the management of the Company’s shareholder value and enhancement of the assets structure quality.
Increase of investment attractiveness and shareholder
value of the Joint Stock Company on the basis of long-
term fiscal sustainability and economic growth with
maintenance of a high level of social responsibility
Constructive interaction of
shareholders and investors
with the Board of Directors
and executive bodies for
the joint development of
objectives and effective
decision-making
Arrangement of the
strategic and investment
planning process
effectiveness and
implementation of the
production and business
activities plans
Professional and ethical
responsibility of the Board
of Directors members,
Executive Management,
officers and employees of
Company
A comprehensive system
ensuring a high level
of competence and
effective staff motivation
mechanisms
Preservation and improvement of the assets structure
quality through improving the ownership and
organizational structures of the Company’ vertical
integration
Maintaining a high business
reputation of the Company
and the corporate social
responsibility
Formation of mechanisms
for the prevention and
settlement of corporate
disputes
Ensuring transparency of
the Company ‘s activities
Integrated risk-
management system
The Company’s corporate management is a system of relations between the shareholders, Board of Directors,
management and all stakeholders. TATNEFT Company strictly complies with all legal requirements, the Listing
Rules and it has been consistently introducing into the Company’s corporate practice all newly formulated rules
and recommendations on the corporate management and business ethics since its incorporation, following the
development of the international and national corporate law. The Company is aware that the use of advanced
corporate management standards improves the trust of the shareholders and investors, enhances the Company’s
potential for intra-defining factors of the investment attractiveness and the Company’s value growth.
PJSC TATNEFT is in the top quotation list (first level) of the Moscow Stock Exchange (JSC MICEX Listing Rules), which
defines the relevant requirements to the Company’s level of corporate management by the regulators of the securities
market of the Russian Federation. The Company is guided by the principles of the national corporate management, set out in
the Corporate Management Code, approved by the Bank of Russia and the Russian Federation Government in 2014.
The Corporate Management Code of PJSC TATNEFT reflects compliance of the corporate management principles and
practices implemented by Company with the principles and provisions set out in the National Code. The Code has been
formed in accordance with the Civil Code of the Russian Federation, the Federal Law «On Joint Stock Companies» and other
regulatory legal acts of the Russian Federation and the Articles of PJSC TATNEFT.
The Company was one of the first in Russia to adopt the Code, which name already in the first edition of 2004 had included
the “corporate management” concept, reflecting the Company’s understanding of the future development trends of the
procedural issues in corporate relations. The Company Code was updated in 2010 in the second edition. The Company’s
principles of corporate management are fundamental for the TATNEFT Group and they are implemented through corporate
policies in key areas of the corporate practice, standards and regulations. The reporting year was the year of shaping the
third edition of the PJSC TATNEFT’s Corporate Management Code. The new version includes a more detailed description of
procedures to ensure compliance with the shareholders’ rights, work arrangements of the Board of Directors, the procedure
for the election and operation of independent directors and activities of the Board of Directors’ Committees, Corporate
Secretary Office, risk management mechanisms, prevention and resolution of corporate conflicts and conflicts of interest,
developed and formalized in the corporate reporting year. Great importance is paid in the Code to the description of the
Joint Stock Company’s dividend policy. In general, the new edition of the Company’s Code accumulates the vast Company’s
previous years experience in corporate practices and approaches oriented to advanced national and international standards.
The plans provide for the approval of the new PJSC TATNEFT’s Corporate Management Code version at the meeting of
the Board of Directors in its new composition to be elected at the Annual General Shareholders’ Meeting of the Joint Stock
Company for the next corporate year.
In the conditions of developing and improving the national corporate practice the Company interacts with committees of
the Moscow Stock Exchange, Russian Institute of Directors, National Council on Corporate Management, RSPP Corporate
Relations Committee, monitors domestic and international corporate procedures implemented both on a mandatory and
voluntary basis. The Company participated in public consultations on the report of the Bank of Russia «On the improvement
of corporate management in public joint stock companies», which took place from December 2015 to March 2016, which
resulted in the joint meeting of the Working Group on examination and improvement of the corporate law held by the National
Council on the corporate management and the RSPP Corporate Relations Committee. In terms of the international corporate
standards the Company adheres to the principles of the Organization for Economic Cooperation and Development (OECD)
adopted in the third version of G20/OECD as one of the fundamental standards of the financial systems stability.
Comment of the Central Bank of the Russian Federation: “The corporate management is a key issue in creating
an efficient market economy based on the rule of law. Therefore, the corporate management problems go up to the
state level. Having equal production, financial and other basic metrics companies, with a good reputation in the field of
corporate management are much more expensive”.
64
65
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
CORPORATE MANAGEMENT PRACTICES REPORT
COMPLIANCE WITH PRINCIPLES AND RECOMMENDATIONS OF THE CORPORATE
MANAGEMENT CODE, RECOMMENDED BY THE BANK OF RUSSIA AND THE
GOVERNMENT OF THE RUSSIAN FEDERATION
Interaction with Shareholders
Board of Directors
The basis of the Joint Stock Company’s corporate system is ensuring fair and equitable treatment of all shareholders in
exercising of the right to participate in the management of the Joint Stock Company. The procedures in effect at PJSC
TATNEFT ensure equality of conditions for all shareholders - owners of shares of the same category, including minority and
foreign shareholders, and their equal treatment by the Joint Stock Company.
The internal document defining basic procedures for the preparation, convening and holding the General Shareholders’
Meeting is the Provision on the shareholders’ meeting of PJSC TATNEFT. The Joint Stock Company undertakes to inform the
shareholders of the General Shareholders’ Meeting at least 30 days prior to the date of holding the General Shareholders’
Meeting, and provide access to the information not less than 20 days prior to the date of the General Shareholders’ Meeting.
Appropriate materials for the shareholders shall be posted on the Internet sites of TATNEFT and the news agency the at:
http://www.tatneft.ru, http://disclosure.skrin.ru/disclosure/1644003838.
In order to secure more complete understanding of the Company’s activities by the shareholders and the possible adoption
of the most informed decision the Joint Stock Company provides additional information in the sections of the Annual Report,
in the form of reports to the General Shareholders’ Meeting and by posting materials on the site of the Joint Stock Company
in all areas of Company’s activities. Moreover, additional information shall be published in the media. The procedure of
delivering the fullest possible information to shareholders is defined by internal documents, including the Company’s
Information policy.
In the course of preparation and holding the General Shareholders’ Meeting the Joint Stock Company offers the
shareholders the opportunity to pose questions on the Company’s activities to the members of the Board of Directors,
General Director, members of the Audit Commission and the control bodies, the members of the Board of Directors’
committees: Audit, Corporate Management, HR & Remuneration, Information Disclosure, Chief Accountant of the Joint
Stock Company, as well as to candidates for the Joint Stock Company’s controls Bodies.
The Joint Stock Company takes responsible attitude to the inadmissibility principle of actions that lead to an artificial
redistribution of corporate control (making a decision on payment of dividends on preferred shares in the situation of a
limited financial capacity, a decision on non-payment dividends of the stipulated by Joint Stock Company’s Articles on the
preferred shares if there are sufficient resources for their payment), as entrenched in the Articles and the internal documents
of the Joint Stock Company.
The Joint Stock Company shall ensure equality of conditions for all shareholders and equal treatment in the exercise of
their right to participate in profits of the Joint Stock Company through the receipt of dividends, regardless of the stake, and
location of shareholders.
Dividend Policy
The dividend policy of PJSC TATNEFT is based on strict observance of the legitimate rights and interests of the
shareholders and is aimed at ensuring a high level of dividend yield on the capital invested by the shareholders on the
basis of the efficient shareholders’ assets management. The Joint Stock Company assumes in its dividend policy that
the amount of funds available for dividends, is at least 30% of the net income determined in accordance with Russian
Accounting Standards (RAS). The history of dividend payments reflects the Company consistency in maintaining a high
level of the dividend yield while maintaining a balance of short-term (receiving income in the form of dividend payments)
and long term (investments in the development of the Company) shareholders’ interests. In the reporting corporate year,
the Board of Directors approved the Provision on the dividend policy of PJSC TATNEFT, formalizing the principles and
conditions for making a decision on payment (announcement) of the dividends, as well as the procedure for determining
the amount and payment of the dividends. The Provision on the dividend policy has been posted on the website of the
Joint Stock Company.
The Board of Directors of PJSC TATNEFT implements strategic management the of Joint Stock Company, determining the
long-term key priorities and strategic objectives of the Company and its subsidiaries, which form then TATNEFT Group of
Companies, key performance metrics of the Company’s activities, as well as principles and approaches to organizational
management structure. The Board of Directors supervises the activities of executive bodies of the Joint Stock Company,
determines the Joint Stock Company’s policy on remuneration of the Board of Directors’ and executive bodies’ members.
One of the key mechanisms for ensuring sustainable Company’s development is a system of risk and internal control
management. The procedure for election, competence and powers of the Board of Directors is determined by the PJSC
TATNEFT’s Articles and the Provision on the Company’s Board of Directors. According to the above-mentioned documents,
the most important issues are addressed at the meetings of Board of Directors held in person. The list of such issues is as
recommended by the Corporate Management Code of the Bank of Russia.
The Board of Directors consists of 15 members. In the corporate reporting year, there were five executive, seven non-
executive and three independent directors in the composition of the Board of Directors.
Independent directors
In the corporate reporting year, there were changes in the composition of independent directors. As of the date of holding
the General Annual Meeting of Shareholders on the results for 2014 there were the following independent directors in the
composition of the Board of Directors: Mariya L. Voskresenskaya, Ghosh Sushovan, and Rene Frederick Steiner. In 2014, the
total term of Mariya L. Voskresenskaya and Ghosh Sushovan as members of the Board of Directors exceeded seven years.
In accordance with independence criteria defined by the Corporate Management Code, a person holding the office of the
Issuer’s Board of Directors member in the aggregate more than 7 years can not be recognized as an independent Director,
and there were nominated and elected new candidates of independent directors: Gerech Laszlo and Yuri Levin to the Board
of Directors for 2015 corporate year. In accordance with the accepted in the Company corporate practice, a preliminary
assessment of the candidates’ compliance with the criteria of independence for members of the Board of Directors was
carried out by the Corporate Management Committee in conjunction with the HR & Remuneration Committee.
Regarding the number of independent directors in the Joint Stock Company, the Provision of the Corporate Management
Code of the Bank of Russia recommends no less than one-third of independent directors in the Board of Directors and it
is not in full agreement with the Listing Rules of the Moscow Stock Exchange, which state that the number of independent
directors should be at least one fifth of the Board of Directors composition. As of the current period the Company considers
that the quantitative composition of the Board of Directors and distribution of executive, non-executive and independent
directors’ portions optimally corresponds to the balance of competencies of the Board of Directors’ members to work out
and implement strategic decisions and control execution of current tasks.
Committees of the Board of Directors
According to the Provision on the Board of Directors PJSC TATNEFT, determining the right to the Board of Directors for preliminary
consideration of the most important issues of the Joint Stock Company to create committees, there are four committees of the
Board of Directors established: Audit Committee, Corporate Management Committee, HR & Remuneration Committee, and
Information Disclosure Committee. The procedure of establishment, powers and competencies of the committees are defined by
Provisions on committees. The Provisions comply with recommendations of the Corporate Management Code, recommended by
the Bank of Russia. The Committees have been operating in the Joint Stock Company since 2004.
The Audit Committee was established to assist the Board of Directors in monitoring the reliability of the Company’s financial
reporting, compliance with requirements of laws and regulations, selection of independent auditors, checking of independence,
independent auditors work and the Company’s internal audit system. Including the chairman, there are three independent
directors in the structure of the Committee, and one non-executive director.
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PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
The HR & Remuneration Committee was established with the purpose of preliminary consideration and preparation of
recommendations to the Board of Directors to make decisions on matters within the competence of the Board of Directors in the
area of formulating priority directions of the Joint Stock Company’s activities on personnel policies and remuneration of the Joint
Stock Company’s control bodies. Including the chairman, there are three independent directors in the structure of the Committee,
and one non-executive director.
The Corporate Management Committee was established for the purpose of preliminary consideration and preparation of
recommendations to the Board of Directors to make decisions on the development and improvement of the Joint Stock
Company’s corporate management system (regulation of the relationship between shareholders, the Board of Directors and the
Joint Stock Company’s management, as well as interaction with subsidiaries of the Joint Stock Company and other stakeholders).
The Committee’s competence includes assessing the quality of corporate management.
The Information Disclosure Committee is an advisory body of the Board of Directors and it is intended for objective and
independent assistance to the Board of Directors and the Executive Management to ensure fulfillment of the Company’s
information disclosure obligations. The main objective of the Committee is to improve the information disclosure procedure on the
Company’s activities in the framework of both information obligatory disclosure and information disclosure on a voluntary basis, as
well as assisting the subsidiaries in arranging the procedure of disclosing and submitting the information.
Self-Assessment of the Board of Directors
The Board of Directors on a regular basis assesses the results of all key decisions taken at the meetings of the Board of
Directors of and their role in achieving the strategic objectives, including intermediate steps in response to changing external
factors influencing the Company’s activities and, if necessary, takes appropriate measures, which is a reflection of the Board of
Directors operation effectiveness. The Company’s Board of Directors pays close attention to the effectiveness of the corporate
management mechanisms in order to achieve the maximum financial and operating results based on the qualitative interaction
between the shareholders, the Board of Directors and management team.
Internal Evaluation of the Corporate Management
In order to improve corporate management practices the company performs an internal assessment of the corporate
management system compliance with requirements of the securities market regulators and the effectively proven corporate
practice taking international standards into account. The assessment is based on the key quality indicators of the corporate
management: shareholders’ rights and relations with other stakeholders, composition and work effectiveness of the
management and control bodies and information disclosure. When assessing the Company assumes that the practice of
the corporate management and the Joint Stock Company functioning must be transparent for the shareholders, investors
and other interested parties. In 2015, the assessment of the Company’s corporate management practices was performed
by the Corporate Management Committee of the Board of Directors of PJSC TATNEFT with participation of the Company’s
corporate adviser. The assessment results and proposals for improvement of the corporate management practice were
presented to members of the Board of Directors and the Company’ Director General, which was the basis for drawing
and approving the schedule of activities to ensure to the fullest possible to the fullest possible extent compliance with
new Moscow Stock Exchange Listing Rules, in the conditions of the transient period, as well as the Provisions of the
Corporate Management Code, recommended by the Bank of Russia. Appropriate modifications of the PJSC TATNEFT’s
internal documents for approval by the General Meeting of Shareholders of PJSC TATNEFT in June 2016 were prepared in
accordance with changes in the current legislation and the Civil Code of the Russian Federation.
Corporate Secretary Office
Effective interaction with shareholders, coordination of the Joint Stock Company’s activities for the protection of rights and
interests of the Shareholders, support of the Board of Directors effective work is provided by the Secretary of the Board of
Directors and the Corporate Secretary’s Office of PJSC TATNEFT. The unit was formed in 2015 and Rustam M. Khisamov, who
previously held the position of the Company’s Head of Securities Office, was appointed as Chief of Staff of the Corporate Secretary
Office. In February 2016 the Board of Directors of PJSC TATNEFT approved the Provision on the Corporate Secretary.
Remuneration Policy of the Company
The Company’s remuneration policy is based on the priorities of attracting, motivating and retaining individuals possessing
competences and qualifications necessary for solution of the Company’s strategic and operational tasks. Remuneration to
the members of the Board of Directors, executive bodies and other key management employees of the Joint Stock Company
is made in accordance with the remuneration policy adopted by the Company.
The procedure for remuneration payment, including salaries of the Joint Stock Company’s management bodies members,
who are the Company’s employees, bonuses, remuneration for participation in the work of the managing bodies: Board of
Directors, Management Board, compensations granted to members of the Board of Directors, executive bodies and key
management employees of the Joint Stock Company are regulated by relevant internal documents.
The system of remuneration of the executive bodies and other key executives of TATNEFT Company adopted in Joint Stock
Company provides for remuneration dependence on the results of the Company’s operation and the personal contribution to
the achievement of goals and objectives, including the ones on the basis of a long-term incentive approach.
Risk Management System
In order to minimize possible risks and consequences associated with the industry, macroeconomic, country exposure,
political, technological, social and other risks there is an integrated risk management system operating in the Company,
which includes internal control procedures.
Principles and mechanisms of the corporate risk management are based on international approaches in this field and ensure
compliance with internal regulations and the standards applicable, which also embrace subsidiaries of the Joint Stock
Company.
The integrated approach includes the management of external and internal risks, and allows identifying and monitoring
potential and actual risk factors at all stages of business planning to provide for reasonable confidence in achieving strategic
and operational goals Company.
The responsibility for quality control of organizing the risk management and internal control systems in accordance with
the Provision on Internal Audit of PJSC TATNEFT, approved by the Joint Stock Company’s Board of Directors, has been
impose on the Company’s Internal Audit Department. The Head of the Internal Audit Department, accountable to the PJSC
TATNEFT’s Board of Directors, is appointed and removed from office by the decision of the Joint Stock Company’s Board of
Directors.
There is anti-corruption policy in operation in the Company, formalized by the internal document defining a set of policies and
procedures designed to prevent corruption.
68
69
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Information policy
Statements Disclosure
The Company implements the principle of openness and transparency. The information policy principles and mechanisms are
defined by the Provision on Information Policy, approved by the PJSC TATNEFT’s Board of Directors. The Company provides for
disclosing information about the activities of PJSC TATNEFT and its subsidiaries, which form the Group.
TATNEFT Company disclose the annual consolidated financial statements together with the auditor’s report, and the
consolidated interim condensed financial statements together with the assessment review of the consolidated interim
condensed financial statements.
The internal procedure «Control mechanisms for information disclosure and procedures the information disclosure» establishes
procedures to ensure coordination of all Company’s services and divisions, related to the disclosure of information or which
activities may lead to the disclosure of information. The information disclosure, as defined by law, is provided by the Corporate
Secretary Office of PJSC TATNEFT. The Company’s information in general provided on the current activities is provided bt the
Company’s Press Service.
The control over proper disclosure and compliance with the information policy is carried out by the PJSC TATNEFT’s Board
of Directors. The Information Disclosure Committee of the Board of Directors carries out interim assessments and monitors
disclosure procedures operating in the Company.
The Company promptly discloses full, timely and accurate information to enable informed decision making by shareholders and
investors.
Meetings of the General Director and members of the Company’s executive bodies with investment and industry analysts on
the activities and plan of the Company’s strategic development are held on a regular basis. Publication of accounting (financial)
statements of the Joint Stock Company is accompanied by presentations with the participation of the management bodies’
members and key executives of the Company.
The TATNEFT Company’s Official Internet Site works in Russian and English versions. All relevant information, including the
notice of the General Shareholders’ Meeting, the annual report of the Joint Stock Company, the annual report on the Company’s
activities, the IFRS and the essential facts are disclosed in the Russian and English languages.
TATNEFT COMPANY - PRINCIPLES OF DISCLOSURE
RELIABILITY OF
INFORMATION
The Joint Stock Company provides information in
accordance with the principles of fair and unhindered
access.
THE COMPANY’S
OPENNNESS
COMPLETENESS
OF INFORMATION
COMPLIANCE
WITH DISCLOSURE
DEADLINES
The Joint Stock Company provides for disclosure of biographical data of the Board of Directors members, including
information on whether or not they are independent directors, as well as prompt information disclosure about the loss of an
Independent Director status by a member of the Board of Directors.
The Joint Stock Company discloses information on the capital structure in accordance with the Corporate Management
Code recommendations.
The Joint Stock Company’s Annual Report provides additional information recommended by the corporate management
Code:
controlled entities during the past year;
absentia) meetings, participation of each member of The Board of Directors in the meetings,
• overview of the most significant transactions, including related transactions made by the Joint Stock Company and its
• report on the work of the Board of Directors for the year, containing, inter alia, information on the number of full-time (in
• report on the work of the Committees of the Board of Directors, including the main areas of the committees’ work;
• information about direct or indirect possession of the Joint Stock Company Joint Stock Company’s shares by members of
• information on any conflict of interests of the members of the Board of Directors and other executive bodies (including
the Board of Directors and other executive bodies;
those associated with participation of the mentioned persons in the competitors’ managing bodies of the Joint Stock
Company);
• description of the remuneration system of the Board of Directors members, including the total remuneration amount of
the managing bodies - the Board of Directors and the Management Board for the year.
Significant Corporate Actions
The PJSC TATNEFT’s Articles define a list (criteria) of significant corporate actions, which consideration is referred to within
the competence of the Joint Stock Company’s Board of Directors.
The procedure of making significant corporate actions, defined by internal documents of the Company, allows shareholders
to promptly receive full information about such actions providing them with an opportunity to influence them committing such
actions, and ensuring compliance and the adequate level of protecting their rights in the commission of such actions.
THE JOINT STOCK COMPANY SHALL PROVIDE INFORMATION AND DOCUMENTS REQUESTED BY
THE SHAREHOLDERS IN ACCORDANCE WITH THE PRINCIPLES OF FAIR AND UNHINDERED ACCESS.
ACTIONS, WHICH MATERIALLY AFFECT MATERIALLY BOTH THE SHARE CAPITAL STRUCTURE AND
THE FINANCIAL POSITION OF THE JOINT STOCK COMPANY AND, ACCORDINGLY, IN THE POSITION
OF SHAREHOLDERS (MAJOR CORPORATE ACTIONS), THE COMPANY SHALL CARRY OUT ON FAIR
TERMS, ENSURINGJBSERVANCE OF THE RIGHTS AND INTERESTS OF THE SHAREHOLDERS, AS WELL
AS OF THE OTHER STAKEHOLDERS.
70
71
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
PERSONNEL MANAGEMENT
There is an integrated HR management system in effect
at the Company aimed at maintaining a high professional
level of workers and specialists involved in all aspects of the
Company’s activities.
Key priorities of the personnel management policy:
• maximizing the involvement of human resources;
• training of employees on a continuous basis;
• strengthening motivation of each employee and the
• ensuring decent living standards for every employee.
whole team of the Company;
The Company’s personnel management policy is aimed at
maintaining the status of a highly responsible employer for
workers with the skills and motivation to bring the maximum
benefit for the Company.
The basic principles of human resource management are:
• focusing on efficiency and quality of the work;
• priority to internal promotion;
• opportunities for learning and improvement;
• decent working conditions and benefits;
• professionalism;
• professional excellence and continuity;
• complexity and consistency;
• support of talents;
• responsibility;
• cooperation.
The principles and objectives in the field of human resource
management, as well as corporate values with respect
to employees are identified in the Human Resources
Management Policy of TATNEFT Company.
Implementation of the personnel management policy is
reflected in the relevant standards, defining the procedure
of hiring employees, opportunities for professional and
career development of the employees, material and non-
material stimulation system, social support.
There is a Code of Ethical Principles in effect in the
Company, which defines the norms of the intra-business
culture.
Number of staff
Personnel Motivation
Personnel Certification
In 2015, the average number of employees at PJSC
TATNEFT was 20,635 persons. The total personnel number
of the Group amounted to 73 thousand persons (for the
enterprises consolidated under IFRS).
There were 2,092 employees hired for the job in Company
in 2015, accounting for 10.1% of the average number of
employees. During the year, the personnel turnover at
PJSC TATNEFT amounted to 3.5%, which was less than the
industry average.
There is a unified procedure for the recruitment of staffset5
up at the Company. The priority right for vacancies have
employees of the Company, who by its characteristics meet
the requirements to the candidates.
When hiring the staff, preference is given to local residents,
who have appropriate qualifications and practical
experience in the area of the Company’s activity. The share
of the senior managers from the local population in the
main regions of the Company’s operations is nearly 100%.
The Company and its main subsidiaries, constituting
TATNEFT Group of companies, carry out activities at
the place of legal registration in the Russian Federation.
Accordingly, the major part of the Company’s personnel
operates in the Russian Federation.
The Company considers remuneration of labor as part of an
integrated material and non-material incentive system for the
staff, allowing the Company to maintain a competitive edge,
attracting and retaining qualified and motivated employees. The
basic principles in the Company’s remuneration policy are: the
relationship of the work results and achievement of objectives,
fairness and transparency, ensuring wage competitiveness.
The remuneration system is focused on the motivation of
employees to quality and efficient work and is determined
by the importance and complexity of the problems solved by
the employee, the results of the structural division and the
Company as a whole, individual results of the employee work,
level of professional qualification and certification results of the
employee.
The main income of the personnel is formed by the salary
and the benefits package. The salary consists of the tariff
(permanent) portion, according to the single tariff scale, and
the bonus (variable) portion. The share of the permanent part
in the salary is 60 %, while 40 % fall on the variable portion.
The social benefits package provides to the employees an
appropriate volume of social benefits and guarantees.
Income Structure of the PJSC TATNEFT Employees for
2015
Indicator
Salary, incl
Permanent Portion
Variable Portion of
Social payments
Values
89 %
60 %
40 %
11 %
Certification of the personnel is an integral part of the
human resource management system, aimed at the
implementation of the corporate strategy, and it is made
in accordance with the Labor Code and the relevant
regulations.
The aim of the personnel certification is to identify
compliance of the employees’ competence with their
qualification requirements and assessment of the
possibilities for their further career development.
The aspects of the Company’s personnel certification
are regulated by the «Standard of Personnel Certification
at PJSC TATNEFT”. The standard establishes a uniform
procedure for certification of personnel in all divisions
of the Company and it is recommended for application
in subsidiaries and affiliated companies constituting the
TATNEFT Group of Companies.
Percentage of employees subject to periodic assessment
of performance and career development accounts for
about 1/3 of the total number people working at PJSC
TATNEFT.
TO IMPROVE THE INVOLVIMENT EFFICIENCY
OF THE STAFF IN THE ACHIEVEMENT OF
STRATEGIC OBJECTIVES AND IMPLEMENTATION
OF CURRENT PLANS THERE IS A CORPORATE
SOCIAL NETWORK RESOURCE IN EFFECT AT THE
COMPANY THAT ALLOWS SHAPING PROJECT
TEAMS, PROVIDING FOR RAPID EXCHANGE OF
INFORMATION AND ORGANIZING PROFESSIONAL
COMMUNITIES.
DISTRIBUTION OF STAFF BY
COUNTRIES
99.8%
EMPLOYEES PAYROLL BUDGET
(RUB BLN)
AVERAGE MOTHLY SALARY
(RUB ‘000)
0.01%
0.19%
Russian Federation
Turkmenistan
Other
11.7
10.5
13.2
15
10
5
0
47.7
42.3
53.3
60
40
20
0
2013
2014
2015
2013
2014
2015
72
73
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Personnel Training and Development
The Company is focused on the establishment of an
integrated continuous education system aimed at
continuous improvement and development of the staff
in line with strategic objectives, including training and
retraining of workers, professionals, senior and middle level
managers.
Training of workers is carried out at the corporate
personnel training center and its eight branches under the
programs of the employees professional training – 273
persons, programs of the workers’ additional training
of – 148 persons, further training programs managers and
specialists – 73 persons.
The professionals training and skills development are
carried out in specialized educational institutions of the
region and the Russian Federation.
The Company’s professionals participate in the
Management Staff Training Program for national economy
organizations of the Russian Federation («Presidential
Program»). Over 150 persons got training in the frame of
this program during 1998-2015 period.
Creation of the Company’s continuous professional
education system was supported by the Government
of Tatarstan and in close cooperation with the relevant
institutions.
In the current period, there are more than 300 students in
the areas of training relevant to the Company’s operations
areas enrolled in the Kazan (Volga) Federal University,
Almetyevsk State Petroleum Institute, the Kazan National
Research University of Technology and other educational
institutions.
Funds from the federal and republican budgets are used
every year to organize together with leading universities
in the Republic of Tatarstan special contract training of
professionals in order to attract young professionals
to PJSC TATNEFT. 278 graduates from specialized
educational institutions of higher and secondary vocational
education were recruited by the structural divisions of PJSC
TATNEFT in 2015.
Every year the Company establishes scholarships to
encourage students who have distinguished themselves in
their studies and the scientific work. 111 students used to
receive special scholarships of PJSC TATNEFT in 2015.
Prospective employees of the TATNEFT Group enterprises
every year get training under the «Oil and Gas Business»
program. There were several large-scale educational
programs implemented in collaboration with the Oil and
Gas Business Institute In 2015. 74 professionals took a
training course under the international modular program
«Oil and Gas Production Shop Manager».
The program objective is improving the professional skills
and competence of the oil and gas production shops
managers and their assistants, project managers, as well
as engineers and technicians on the basis of an integrated,
multi-disciplinary approach with the involvement of leading
domestic and foreign experts from the USA, Norway,
Germany, Great Britain, etc. Training sessions were
conducted in the Russian and English languages. The trainees
defended diploma works in June 2015. The best works were
presented and assessed by the Company’s management.
75 Professionals of the Geological Service began training
at the Oil and Gas Business Institute under a six-module
program «Geo-technologies of oil and gas production».
During the reporting period, five training modules were
completed in 2015 and the final Module No. 6 will be
completed in March 2016.
The program «Young Leader of the Oil & Gas Company” as
formed for young professionals – winners of the TATNEFT
Company’s scientific conference.
The organized program included visits to the production
facilities of TATNEFT Company (Ashalchinskoe Field,
TANECO Refining and Petrochemical Plants Complex,
SSC Tire Factory, OOO Tatneft-Neftekhim Management
Company) and PJSC LUKOIL (Bayandyskoye
field, Yaregskoye field, OPU-5 NSHU «Yareganeft”,
«PechorNIPIneft» Institute and others). When visiting
MODULAR PROGRAM “OIL AND GAS
PRODUCTION SHOP MANAGER”
MODULAR PROGRAM «YOUNG LEADERS OF
THE OIL & GAS COMPANY”
Module 1. Modern oil and gas business and its
technological components. Resources and reserves of
oil and gas and methods of geological studies. Geology.
Analysis of sedimentary basins and petroleum systems.
Petrophysics. Geology. Analysis of sedimentary basins and
petroleum systems. Petrophysics. Comprehensive analysis
of reservoirs.
Module 2. Engineering design of oil and gas fields
development. Best practices of reservoir hydrodynamic
modeling. The oil and gas business development.
Module 3. Modern technologies of drilling, exploration
and exploitation wells. Integrated approach to well design
today. Modern methods of analysis of the well test data.
Performance and efficiency of water flooding in the
development of oil fields.
Module 4. Oil and gas fields infrastructure development
and production of hydrocarbons. Development of enhanced
oil recovery methods. Analysis of the complex fields
development and their operation.
Module 5. The valuation of fossils containing subsoil
areas. Economic efficiency calculation of exploration and
field development projects. Economic appraisal of projects
in exploration, drilling and production. Decision making and
risk analysis. Value and cost of information.
Module 6. Management of complex integrated projects
in the oil and gas industry. Integrated research and
development of oil and gas fields. Strategy, leadership and
changes in the oil and gas Companies.
Module 1. «The strategy, leadership and control of
changes in oil and gas Companies»: The strategic
management systems in oil and gas Company. Creation of
the strategic objectives system. The companies’ strategic
alliances, examples of the largest alliances in the oil and gas
business, technological and financial aspects of strategic
alliances. Technology case: «Modern technologies of field
development at a later stage. Innovations and high-viscosity
oil. Service works organization». Technology Case «Modern
technologies of oil refining and petrochemistry. Related
businesses development». The global oil and gas industry:
leadership, innovations and increase in labor productivity
Module 2. «Oil and gas business development»: integrated
project management and risk management system. Project
management practice on the example of developing the
Bovanenkovo gas condensate field. Modern technologies
of oil refining and petrochemistry. Related business
development. Oil and gas business development (competition
for access to finite resources). Technology Case: Process
control in the development of high-viscosity oil fields in the
Komi Republic.Development of innovations’ system in the
Norwegian oil industry.
Module 3. «The knowledge economics and the oil and
gas business in Norway. Project management, advanced
oil and gas technologies»: Government control. The oil and
gas industry and the knowledge economics in Norway.
Modern approaches to the organization of production
and management of large oil and gas projects. Design,
construction, maintenance and development of oil fields.
Business case «Decision making and risk analysis in the
exploration, drilling and production».
the production facilities the young professionals shared
their experiences and discussed the problem of the
high-viscosity oil production, equipment applied for the
construction of wells, workover, thermal mining method of
oil extraction and its applicability to Ashalchinskoye field,
thermal reservoir drainage method and others. Testing of
the course participants was arranged at the end of the first
two modules.
The program included training of the professionals in
Norway - Oslo, Stavanger. The educational program
participants visited Aker Solutions Company, Norwegian Oil
Museum, Norwegian Petroleum Directorate, IOR Norway
2015 Conference on the enhanced oil recovery methods.
The participants also discussed topics related to decision-
making and risk analysis in the exploration, drilling and
production. The final stage of the third training module
was defending of the qualification thesis by each the
participants in the program.
One of the educational projects opened in 2015 was the
Company’s professionals training under the program
“MBA of mining industries» at the MBA Graduate School
of the Kazan (Volga) Federal University. For two years, the
professionals will attend the course of 14 training modules
in MBA Post-Graduate School of the Kazan University and
St. Petersburg International Institute of Management and at
one of the mining industries’ enterprises.
The Institute of Petroleum Technologies of the Kazan
Federal University together with the Center for Continuing
Education, Management, Quality and Marketing have
arranged training under the professional skills improvement
program of «Metrological measurement assurance of oil
and oil product amounts at the oil producing companies.
Reliable accounting organization».
ALL IN ALL, THERE WERE 18,713 COMPANY’S
EMPLOYEES, WHO RECEIVED TRAINING AND
ATTENDED PROFESSIONAL DEVELOPMENT
PROGRAMS DURING THE PAST YEAR,
INCLUDING:
•
•
•
WORKERS – 10,825,
MANAGERS – 4,364
PROFESSIONALS AND EMPLOYEES – 3,524.
THE COMPANY ALLOCATED ABOUT RUB 160
MILLION FOR TRAINING AND RETRAINING OF
WORKERS, PTOFESSIONALS AND MANAGERS
74
75
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
CONTROL BODIES
Audit Commission
Internal Audit
Internal Control
Independent Auditor
The Audit Commission is a standing elected body of the
Joint Stock Company, exercising control over financial and
economic activities of the Company.
The In-house audit is carried out in the framework of the
annual plan approved by the Board of Directors.
The Commission shall be elected by the General Meeting
of Shareholders and is accountable to it. Members of the
Audit Commission can not simultaneously be members
of the Joint Stock Company’s Board of Directors, or hold
other positions in the Joint Stock Company’s management
bodies.
The competence of the Audit Commission provides
for carrying out in-house auditing of the financial and
economic activity of the Joint Stock Company for the year,
as well as the one based on the decision of the General
Shareholders’ Meeting,
the Joint Stock Company’s Board of Directors, on its own
initiative or at the request of a shareholder (shareholders)
of the Joint Stock Company, holding in the aggregate
at least 10 percent of the Joint Stock Company’s voting
shares.
The Audit Commission shall present its opinion on the
results of the annual audit in accordance with the rules
and procedures of conducting financial reporting and
accounting to the Board of Directors not later than forty
days prior to the annual meeting.
The General Meeting of PJSC TATNEFT’s shareholders
elected the Audit Commission in the following composition
for the corporate reporting year:
Audit Commission Chairwoman
Ranilya R. Gizatova
Members of the Audit Commission
Yusupov Saria Kashibulhakovna
Ksenia G.Borzunova
Oleg M. Matveev
Venera G. Kuzmina
Nikolay K. Lapin
Liliya R. Rahimzyanova
Nazilya R. Farkhutdinova
Tatiana V. Tsyganova
The audit considers the in-house control system over the
operating process efficiency, compliance with the law and
the property safe-keeping and integrity. The audit is carried
out on the basis of the risk-oriented approach. Report on
the results of the internal audit is sent to the Company’s
management bodies and to the Audit Committee.
Subsequently, the Internal Audit Department monitors the
implementation of measures and steps and informs the
Company’s management and the Audit Committee during
the rectification of identified deficiencies.
There were 11 audits conducted in 2015. In addition, the
Department participated in 30 unplanned projects on
various aspects of financial - economic activity following the
instructions of Company’s management.
2015 witnessed monitoring the implementation of action
plans on the basis of 2009-2015 audits. The information on
all cases of non-fulfillment of the action plans was initially
submitted to relevant departments management, and then
– to the General Director.
Internal audit procedures are an integral part of the
corporate management system and they include targeted
actions of the Board of Directors and the Company’s
management bodies, aimed at improving the risk
management process and increasing the likelihood of
achieving preset goals.
There were amendments introduced in the Provision
on the Internal Audit Department of PJSC TATNEFT in
the corporate reporting year to improve the corporate
management practices. A new version of the Provision was
approved by the Board of Directors in March 2016.
The Internal Control Service is involved in audits of structural
divisions and subsidiaries of the TATNEFT Group of
Companies.
The corporate control function provides for methodological
support of the administrative staff, structural divisions of the
TATNEFT Group of Companies in terms of compliance with
tax laws and accounting regulations. This feature contributes
to ensuring compliance with legislative standards and
reduction of the tax and financial risks in the Company.
In 2015, there were planned routine monitoring operations
carried out to assess compliance with the legislation on oil
accounting, as part of the internal corporate controls, as
well as on the organization of separate accounting of oil for
MET differentiation purposes in the oil and gas producing
divisions of the Joint Stock Company. The legal and tax
documents expertize was carried out on a continuous basis.
The Joint Stock Company every year invites an external
auditor for the purpose of an independent assessment of
the reliability of the accounting (financial) statements of the
Joint Stock Company’s reports prepared in accordance
with IFRS and RAS.
The candidates for the position of the Joint Stock
Company’s external auditors are preliminarily considered
by the Audit Committee of the PJSC TATNEFT’s Board of
Directors, which recommendations are the basis for further
approval of the external auditor in accordance with the
applicable legislation.
The decision of the General Shareholders’ Meeting
approved ZAO «PricewaterhouseCoopers Audit» as the
Joint Stock Company’ external auditor of the RAS financial
statements for the 2015.
ZAO «PricewaterhouseCoopers Audit» was also approved
by the Board of Directors decision, as the auditor of the
consolidated Joint Stock Company’s statements under
IFRS for 2015.
There is a «Hotline» in operation at the Company, which is an available information channel for communication with the
Company’s management, which enables to respond quickly to the information received and take necessary corrective
actions. The system is configured in such a way that none of the requests will be left without attention. The scope of
persons entitled to apply through the «hot line» is not limited. Minority shareholders have the opportunity to appeal to
the management, members of the Board of Directors and the Audit Commission. Using the «hot line», the shareholders
have the opportunity to inform the General Director and members of the Board of Directors of the existing background
for conflicts or other issues arising, which consideration can contribute to better management.
The Company relies on applications of its own employees, employees of subsidiaries and contractors, consumers of
products and services, residents of the Company’s operations regions. If requested, the applicant does not have to give
the name and contact details. There are no restrictions on the applications’ subjects, but the main purpose of the «hot
line» is to collect information about problems, abuses and deficiencies, make adjustments and improve performance.
The «hot line» applications acceptance is made in two ways: a free Federal phone number 8-800-100-4-112. From
8.00 to a.m. to 10.00 p.m.: conversation with the operator and the answering machine is working during the rest of
the day; and Email tn@88001004112.ru, on which you can send not only text messages, but also attach files with
additional materials, photographs, and so on. Messages receiving and processing functions have been transferred to
an independent operator.
After a preliminary evaluation of the information received it is distributed to the heads of «specialized» areas
corresponding to the application category. Further on the information is checked, resulting in making a decision. The
information about the messages received and the actions taken shall be brought up to the Company’s General Director.
76
77
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
INTEGRATED RISK MANAGEMENT SYSTEM
THE COMPANY CONSIDERS ALL RISK FACTORS, WHICH AFFECT THE COMPANY’S PRODUCTION AND
BUSINESS ACTIVITIES AND TAKES ALL POSSIBLE STEPS TO REDUCE THE IMPACT OF RISKS ON THE
COMPANY’S OPERATIONS BASED ON THE INTEGRATED RISK MANAGEMENT SYSTEM.
The operation and the Company’s operation financial results depend on many factors, including changing oil prices, market
conditions, macroeconomic and domestic economic policy of the State, primarily the tax volatility of the national currency
and the dollar rate, inflation, technology development, environmental aspects, labor market dynamics and other factors.
Decisions of the Company’s control bodies associated with the strategy and the current industrial and economic activities of
Company are prepared taking into account all available information relating to the possible development scenarios and all
reasonably foreseeable options of changes and the assumptions used in this planning.
Given the presence of the formed over many years high-tech base of crude oil production and processing, the Company
has a stable platform for the Company’s development and it can adjust the plans, as required. At the same time, since the
implementation of major investment projects in the Company usually takes several years, any significant adverse prerequisite
assumptions inherent in making decisions on the implementation of a project may have a negative impact on the operations
and profitability results of the Company.
In the process of planning and reaching goals set monitoring of real and potential external and internal risks is carried out and
the measures are taken to prevent them. In the event of any risk detection at the Company there are mechanisms to minimize
them and to minimize their negative effects. The corporate risk management system includes procedures for internal analysis
and the risks identification control at all stages of investment projects and operational processes. All risk categories are
described in the TATNEFT Company’s quarterly reports. Measures taken by the Company to register and manage the risks
are described in the internal documents of the Company.
The Company is implementing a comprehensive program of measures to overcome adverse situations related to industry
risks, including continuous monitoring, analysis and forecasting the dynamics of oil and other Company’s products
prices with appropriate adjustment of the Company’s business plans and its strategic development. There are technical
and organizational measures worked out and implemented at the Company, which minimize the impact of technical and
environmental risks.
The financial position of the Company and the possibility to adapt to different market situations allow for the Company’s
prompt responding to market changes and making adjustments to the Company’s plans. Responsible services of the
Company carry out constant monitoring and analysis of financial markets, allowing to assess the Company’s ability of
attracting the necessary financing on acceptable terms, which is taken into account in the formation of the investment
program.
The Company has shaped a comprehensive program of measures to overcome adverse situations related to industry
risks, including continuous monitoring, analysis and forecasting the dynamics of oil and other Company’s products
prices with appropriate adjustment of the Company’s business plans and its strategic development. There are technical
and organizational measures worked out and implemented at the Company, which minimize the impact of technical and
environmental risks.
Corporate Integrated System of Risks Management
TATNEFT Group Management
Ensuring Business
Process Efficiency
Business Process
Quality Control
Corporate Risks
Control
Key Elements of Risk Management
The mechanism of quality assessment of all possible factors,
which can significantly affect the performance of production and
financial activities of the Group and have a direct
or in indirect impact on the current operations
and strategic plans of the Company
The system of uniform corporate standards,
regulating basic processes of industrial, financial and economic
activities of TATNEFT Company,
its structural divisions and entities of the Group
Identification of Risks
Ensuring the regulations of the production
financial and business process activities
Avoidance or Minimization of Risks
Prevention of risks in the framework of regulations
Monitoring of Risk Management
quality control of corporate standards performance
identification of emerging risks in the course of business processes and implementation of new projects
assessment of personal responsibility of officials
The analysis of risk factors considers all aspects of the
market, industry, socio - economic, political, financial, market competition and other conditions of the Company, its
subsidiaries and affiliates operation.
At the same time taken into account are all intra-corporate factors: management, production, HR, social, environmental.
Currently such procedures are provided for basic production and corporate blocks.
Risks Control
Production Activity
Corporate Management
78
79
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
INDUSTRY RISKS
Risk of Oil and Refined Products Prices
Environmental Risks
Revenues, profitability and the Company’s growth are largely dependent on the price of oil and oil products. The world oil prices
have historically been subject to significant changes over a wide range under the influence of a variety of factors, which include:
petroleum products;
• international and regional supply and demand (reflecting, inter alia, expectations of future supply and demand) for oil and
• global and regional economic situation;
• macroeconomic policies;
• weather conditions;
• domestic and foreign government regulation;
• prices and availability of alternative fuels;
• price and availability of new technologies;
• ability and willingness of members of the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing
• political and economic events in oil-producing regions, in particular, in the Middle East and North Africa;
• regulations and actions of the governments of Russia and other countries and international organizations, including
countries to establish and maintain certain levels of production and prices;
export restrictions, taxes and penalties.
World oil prices continued their decline during 2015, reaching minimum values by the end of the year (in dollar terms) over the
past 10 years. There was also devaluation of the ruble against the US dollar. The main costs incurred by the Company, related to
production activities and capital expenditures are denominated in rubles. The Company’s financial position and the ability to adapt
to different market situations allow for the Company’s prompt response to changes in the market and making corrections in the
Company’s plans.
Technical Risks
Exploration, development and equipping of new oil fields, maintenance of the existing wells in operating condition, drilling of new
wells, as well as transportation of oil and oil products are by nature very complicated and capital-intensive processes. Enhanced
oil recovery requires additional investments, while the role of these methods increases with the deposits depletion. Accordingly,
the cost of the deposits development basic infrastructure is increasing. The Company’s capabilities to maintain and increase oil
production at the licensed areas are dependent on the access to the oil recovery and enhanced oil recovery technologies, as well
as success in their application.
The oil and gas sector is subject to a high degree of environmental risks. Despite the extensive environmental protection
measures the Company, given the specificity of the activities, there is a risk of penalties for violation of environmental
regulations. In addition, there exists possibility of revision of the international, federal and regional environmental regulations
in terms of their further tightening. The Company implements a wide range of environmental measures aimed at minimizing
the impact of industrial activity on the environment, and it is one of the recognized leaders in Russia in this area. The
Company constantly monitors developments in the area of environmental control and adheres to the best practices in this
area, regardless of the legal requirements.
Risks Associated with Products Quality
The opinion about the Company among the consumers of the Company‘s products, sold through the retail network, is
based on assessing the quality of products and services sold, which impacts the sales’ volumes and profitability of this
segment.
The Company continuously monitors the quality of oil and gas products sold through a network of filling stations,
expanding the range of services offered to clients at the filling stations and taking other steps to improve the quality of
service. In addition, the Company continuously informs its customers and the Company’s counterparties on its activities
through publication of materials and press releases on the Internet, dissemination through the mass media, as well as
through mobile applications.
There are free telephone lines in operation for the purpose of receiving feedback and complaints on the quality of products
and services rendered to customers operating network stations. The Company has adopted and applies procedures for
the prompt response to the complaints and claims of the customers with the aim of eliminating their causes. In addition
to the regular information disclosure (mandatory and voluntary), the Company provides all the necessary information on
the Company’s financial position and stability, if requested by the customers and counterparties, taking into account the
legislation requirements.
Due to the fact that the core products sold by the Company (crude oil, oil and gas products) are homogeneous and are
produced in strict compliance with the requirements and standards in effect, and the Company is one of the largest
Russian oil companies with more than 65-year history, the concept of fiscal sustainability or financial position of the
Company among the main counterparties (buyers) of the Company’s products has no significant impact on their taking a
decision on cooperation with the Company.
80
81
Description of financial risks is presented in the «Financial Results» Section of the annual report.
All risk categories are disclosed in the TATNEFT Company’s quarterly reports.
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
INFORMATION DISCLOSURE
The Company complies with all applicable legal requirements in relation to information disclosure by public companies.
Following the principle of maximum transparency of the business, we provide for regular, efficient, affordable, reliable and
meaningful disclosure. An important channel of information disclosure is the Company’s official website. Presented on the
website pages there are data for all major activity areas, the sustainable Company’s development, as well as the information
for shareholders and investors, press releases and news, annual reports. An important source of information disclosure are
quarterly reports and Annual Reports, which the Company annually issues in preparation for the Annual General Meeting of
Shareholders.
Information subject to mandatory disclosure under the Russian standards (in the form of essential fact messages or
information on the data, which could have a significant impact on the value of the Company’s securities).
Ser.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Message Content
Notice of the date of compiling the list of the Issuer’s of registered securities or documentary Issuer's
securities holders subject to mandatory centralized custody for the purposes of implementation
(realization) of rights vested by such equity securities
Message on the procedure of access to information contained in a quarterly report.
Message about disclosure of the Company’s affiliated entities list on the Internet page.
Notice of holding the meeting of the Board of Directors (Supervisory Board) and its agenda.
On convening and holding the general meeting of members (shareholders) of the Issuer, as well as about
the decisions taken by the general meeting of members (shareholders) of the Issuer.
Messages about accrued and/or paid income on the Issuer's securities.
Message of the Issuer’s default to the holders of the securities issued
Disclosure of Annual (interim) accounting (financial) statements of the Company.
Message on certain decisions adopted by the Board of Directors (Supervisory Board) of the Joint Stock
Company
Report on the decisions taken by the General Meeting of members (shareholders) of the Issuer.
Report on the procedure of access to information contained in the Annual Report 2014.
Date of disclosure
27.02.2015
13.02.2015, 15.05.2015,
13.08.2015, 16.11.2015
12.01.2015, 01.04.2015,
01.07.2015, 01.10.2015
Monthly
27.02.2015
29.07.2015,19.08.2015
19.08.2015
30.03.2015 Annual
Statements, 28.04.2015,
29.07.2015, 29.10.2015
28.01.2015, 27.02.2015,
27.03.2015, 27.04.2015,
26.06.2015, 26.06.2015,
21.10.2015, 29.12.2015
30.06.2015
01.07.2015
12. Message about rating assignment to equity securities and (or) to the Issuer or about a change of the rating
23.01.2015, 23.01.2015
agency on the basis of the agreement concluded with the Issuer
13.
14.
15.
16.
Message on data of recognizing the release of the Issuer’s securities as failed or invalid.
17.02.2015 (9 messages)
Message on the person’s acquisition of the right to have control over a certain number of votes assigned to
the voting shares (stakes) that constitute the authorized capital of the Issuer.
22.05.2015
Notice of the date of defining the persons entitled to exercise rights under the registered equity securities.
30.06.2015
Message on accrued income on equity securities.
30.06.2015
According to international standards (in the form of press releases and publication of reports in accordance with the rules of the London Stock
Exchange)
Publication of the annual consolidated financial statements under IFRS for 2014
Publication of the consolidated interim condensed financial statements under IFRS for the 1st quarter of
2015 (unaudited).
Publication of the consolidated interim condensed financial statements under IFRS for the six months of
2015 (unaudited).
02.04.2015
15.06.2015
27.08.2015
Publication of the consolidated interim condensed financial statements under IFRS for the first nine months
of 2015 (unaudited).
27.11.2015
17.
18.
19.
20.
82
Information on Major Transactions Executed by the Company in the Year Reported
PJSC TATNEFT PJSC TATNEFT did not make any major transactions in 2015
Information on the Related Party Transactions made by the Company in the year Reported
Transaction
Execution Date
Transaction
Approval Date
Company’s Body
approving the
transaction
Information about the person(s) interested in the transaction, subject of the transaction and its essential
terms
1
2
3
4
02.03.2015
27.02.2015.
JSC TATNEFT’s
Board of Directors
Type and subject of the transaction: Supplementary Agreement to Contract No.
430/13.02-06/13 dated October 23, 2013
The transaction content including civil rights and responsibilities, which
establishment, modification or termination the transaction pursues:
Increasing the amount of Sale and Purchase Contract of inventory items including spare
tools and accessories (spare parts) to the equipment for the facilities of the Refinery and
Petrochemical Plants Complex in Nizhnekamsk.
Party to the transaction: JSC TANECO
Amount дополнительного соглашения: RUR 300 000 000.00 (three hundred million).
The monetary valuation of the property under the transaction amounts to RUR 300 000 000
accounting for 0.052% of the Company’s assets book value as of September 30, 2014.
13.05.2015
28.01.2015
JSC TATNEFT’s
Board of Directors
Type and subject of the transaction: Supplementary Agreement No. 2 to Guarantee
Contract No. 85130007/1 dated September 30, 2013.
05.08.2014
27.02.2015
JSC TATNEFT’s
Board of Directors
The transaction content including civil rights and responsibilities, which
establishment, modification or termination the transaction pursues:
Provision of guarantee between JSC TATNEFT n.a. V.D. Shashin and OJSC «Sberbank of
Russia» to ensure the fulfillment of obligations of JSC TANECO under the Agreement on
granting of bank guarantees with the limit of RUR 10 000 000 000 (ten billion) concluded
between JSC TANECO and OJSC «Sberbank of Russia» in the person of «Bank of
Tatarstan” branch No. 8610.
Date of obligations performance under the transaction, parties and beneficiaries
under the transaction, the transaction amount in money terms and in percentage of
the issuer’s assets:
Beneficiary: JSC TANECO
Bank: OJSC «Sberbank of Russia».
Signing date: May 13, 2015/
Validity period: three years from the date of the contract conclusion.
Amount: RUR 11 250 000 000.00 (eleven billion two hundred fifty million): the
aggregate liability limit of JSC TATNEFT for the provision of guarantees.The monetary
valuation of the property under the transaction amounts to RUR 11 250 000 000.00
accounting for 1.97% of the Company’s assets book value as of September 30, 2014.
Type and subject of the transaction: Agreement on lodging the guarantee facility for the
debt ceiling No. 0802/5/2014/1175.
The agreement on the lodging of the guarantee line for the debt ceiling (hereinafter
referred to as the Agreement) between JSC TATNEFT n.a. V.D. Shashin (hereinafter
referred to as the Principal) and OJSC «AK BARS» Bank (hereinafter referred to as the
Guarantor).
The transaction content including civil rights and responsibilities, which
establishment, modification or termination the transaction pursues:
The Agreement on lodging the guarantee line for the debt ceiling (hereinafter referred to
as the Agreement) between JSC TATNEFT n.a. V.D. Shashin (hereinafter referred to as the
Principal) and OJSC «AK BARS» Bank (hereinafter referred to as the Guarantor).
• the maximum limit, which may be provided by the bank guarantee at the same time
(hereinafter referred to as “guarantee line”, «debt ceiling”): RUR 1.6 billion (One billion
six hundred million);
83
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
1
2
3
4
1
2
3
4
• validity of each bank guarantee: according to the Tax Code of the Russian Federation,
• Agreement shall enter into force upon its signing and shall remain valid until August 4,
but not more than fifteen (15 ) months;
2017, inclusive.
Date of obligations performance under the transaction, parties and beneficiaries
under the transaction, the transaction amount in money terms and in percentage of
the issuer’s assets:
Principal: JSC TATNEFT n.a. V.D. Shashin
Bank: JSC «AK BARS» Bank.
Signing date: August 05, 2014
Contract validity period: August 04, 2017
Transaction amount: RUR 1 624 000.00 (one billion, six hundred twenty-four million).
The monetary valuation of the property under the transaction amounts to RUR 1 624
000.00 (one billion, six hundred twenty-four million) accounting for 0.28% of the
Company’s assets book value as of September 30, 2014
26.06.2015
26.06.2015
JSC TATNEFT’s
Board of Directors
Type and subject of the transaction:
Supplementary Agreement No. 1 to Guarantee Contract No. 01/47/TNHS-TN/PR-R.
The transaction content including civil rights and responsibilities, which establishment,
modification or termination the transaction pursues:
• Supplementary Agreement to Guarantee Contract No. 01/47/TNHS-TN/PR-R with PJSC
ZENIT Bank (hereinafter referred to as the «Issuing Bank») on the following material terms
and conditions specified in the attached Agreement:
• the Guarantor shall undertake to the Issuing Bank to be jointly liable with OOO «Tatneft-
Neftekhimsnab” (hereinafter referred to as the Client) for the full implementation of the last
of its obligations under Contract No.01/47/TNHS-R on the terms of lodging letters of credit
(hereinafter referred to as the Contract) between the Issuing Bank and the Client on the
following conditions:
• the Issuing Bank shall open irrevocable uncovered documentary letters of credit
(hereinafter referred to as Letter of Credit/Letters of Credit) in favor of foreign suppliers
(hereinafter referred to as Beneficiary/Beneficiaries) honored by the Issuing Bank
(hereinafter referred to as the Paying Bank) by the payment/deferred (for the period
specified in the Letter of Credit terms) payment against presentation of documents
corresponding to the letter of credit terms, and carries out the letter of credit maintenance
operations. In this case the letter of credit is advised by the bank specified in the Client’s
credit application (hereinafter referred to as the advising bank);
• Contract validity period: till October 02, 2015. The obligations under the Contract during the
period of its validity, shall be executable irrespective the expiry of the Contract;
• Total liabilities shall not exceed USD 14 000 000.00 (fourteen million and 00/100) US
• the validity of each Letters of Credit opened under this Contract (the period within which the
documents specified in the Letter of Credit shall be submitted to the Paying Bank) shall not
exceed 180 (one hundred eighty) calendar days from the date of opening of each of the
Letters of Credit;
• the grace period shall not be more than 180 (one hundred eighty) calendar days from the
• the Client shall be obliged to pay a fee for the use of the Letter of Credit to the Issuing Bank
(herein and hereinafter a «Letter of Credit» shall mean each of the letters of credit opened in
accordance with the transaction concluded in the framework of the Contract) in the amount
of 2% (two per cent) per annum on the Letter of Credit amount less the amount paid by the
Issuing Bank in favor of the Beneficiary;
• payment of the compensation amount shall be made by the Client on a monthly basis on the
last business day of each calendar month for the previous billing period. The commission
for the first accrual period shall be paid not later than the opening date of the letter of credit;
date of the letter of credit documents;
• in case of non-performance or improper performance of the above obligations by the
Client, the latter shall pay a penalty to the Issuing Bank at the rate of 0.1% (zero point one
percent) of the amount of unsettled obligations for each day of delay.
dollars;
• Guarantee Contract validity period: till October 31, 2015;
• The maximum Guarantor’s amount of liability under the Guarantee Contract shall not
exceed USD 14 000 000.00 (fourteen million and 00/100) US dollars.
Date of obligations performance under the transaction, parties and beneficiaries
under the transaction, the transaction amount in money terms and in percentage of
the issuer’s assets:
Beneficiaries: OOO «Tatneft - Neftekhimsnab «.
Bank: OJSC “ZENIT Bank”.
Signing date: June 26, 2015
Contract validity: October 31, 2015
Transaction amount: USD 14 000 000.00 (fourteen million and 00/100) US dollars. The
monetary valuation of the property under the transaction: USD 14 000 000.00 (fourteen
million and 00/100) US dollars accounting for 0.13% of the Company’s assets book value
as of March 31, 2015.
26.06.2015
26.06.2015
JSC TATNEFT’s
Board of Directors
Type and subject of the transaction:
Supplementary Agreement No. 1 to Guarantee Contract No. 02/47/TNHS-TN/PR-R.
The transaction content including civil rights and responsibilities, which
establishment, modification or termination the transaction pursues:
• the Guarantor shall undertake to the Issuing Bank to be jointly liable with OOO «Tatneft-
Neftekhimsnab” (hereinafter referred to as the Client) for the full implementation of the
last of its obligations under Contract No.01/47/TNHS-R on the terms of lodging letters
of credit (hereinafter referred to as the Contract) between the Issuing Bank and the
Client on the following conditions:
• the Issuing Bank shall open irrevocable uncovered documentary letters of credit
(hereinafter referred to as Letter of Credit/Letters of Credit) in favor of foreign suppliers
(hereinafter referred to as - Beneficiary/Beneficiaries) honored by the Issuing Bank
(hereinafter referred to as the Paying Bank) by the payment/deferred (for the period
specified in the Letter of Credit terms) payment against presentation of documents
corresponding to the letter of credit terms, and carries out the letter of credit
maintenance operations. In this case the letter of credit is advised by the bank specified
in the Client’s credit application (hereinafter referred to as the advising bank);
• Contract validity period: till October 02, 2015. The obligations under the Contract during
the period of its validity, shall be executable irrespective the expiry of the Contract;
• Total liabilities shall not exceed USD 9 600 000.00 (nine million six hundred thousand
• the validity of each Letters of Credit opened under this Contract (the period within which
the documents specified in the Letter of Credit shall be submitted to the Paying Bank)
shall not exceed 180 (one hundred eighty) calendar days from the date of opening of
each of the Letters of Credit;
• the grace period shall not be more than 180 (one hundred eighty) calendar days from
• the Client shall be obliged to pay a fee for the use of the Letter of Credit to the Issuing
Bank (herein and hereinafter a «Letter of Credit» shall mean each of the letters of credit
opened in accordance with the transaction concluded in the framework of the Contract)
in the amount of 2% (two per cent) per annum on the amount of the Letter of Credit less
the amount paid of payments by the Issuing Bank in favor of the Beneficiary;
the date of the letter of credit documents;
and 00/100);
• payment of compensation shall be made by the Client on a monthly basis on the last
business day of each calendar month for the previous billing period. The commission
for the first accrual period shall be paid not later than the opening date of the letter of
credit;
• in case of non-performance or improper performance of the above obligations by the
Client, the latter shall pay a penalty to the Issuing Bank at the rate of 0.1% (zero point
one percent) of the amount of unsettled obligations for each day of delay.
• Guarantee Contract validity period: till October 31, 2015;
• The maximum Guarantor’s amount of liability under the Guarantee Contract shall not
exceed USD 9 600 000.00 (nine million six hundred thousand and 00/100).
84
85
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
1
2
3
4
1
2
3
4
Date of obligations performance under the transaction, parties and beneficiaries
under the transaction, the transaction amount in money terms and in percentage of
the issuer’s assets:
Beneficiaries: OOO «Tatneft - Neftekhimsnab «.
Bank: OJSC “ZENIT Bank”.
Signing date: June 26, 2015
Contract validity: October 31, 2015
Transaction amount: USD 9 600 000.00 (nine million six hundred thousand and 00/100).
The monetary valuation of the property under the transaction: USD 9 600 000.00 (nine
million six hundred thousand and 00/100) accounting for 0.09% of the Company’s assets
book value as of March 31, 2015.
23.10.2015
26.06.2015
JSC TATNEFT’s
Board of Directors
Type and subject of the transaction:
Guarantee Contract No. 03/47/TNHS-TN/PR-R.
The transaction content including civil rights and responsibilities, which
establishment, modification or termination the transaction pursues:
• the Guarantor shall undertake to the Issuing Bank to be jointly liable with OOO «Tatneft-
Neftekhimsnab” (hereinafter referred to as the Client) for the full implementation of the
last of its obligations under Contract No.01/47/TNHS-R on the terms of lodging letters
of credit (hereinafter referred to as the Contract) between the Issuing Bank and the
Client on the following conditions:
• the Issuing Bank shall open irrevocable uncovered documentary letters of credit
(hereinafter referred to as Letter of Credit/Letters of Credit) in favor of foreign suppliers
(hereinafter referred to as - Beneficiary/Beneficiaries) honored by the Issuing Bank
(hereinafter referred to as the Paying Bank) by the payment/deferred (for the period
specified in the Letter of Credit terms) payment against presentation of documents
corresponding to the letter of credit terms, and carries out the letter of credit
maintenance operations. In this case the letter of credit is advised by the bank specified
in the Client’s credit application (hereinafter referred to as the advising bank);
• Contract validity period: till July 1, 2018. The obligations under the Contract during the
period of its validity, shall be executable irrespective the expiry of the Contract;
• Total liabilities shall not exceed USD 30 000 000.00 (thirty million and 00/100);
• the validity of each Letters of Credit opened under this Contract (the period within which
the documents specified in the Letter of Credit shall be submitted to the Paying Bank)
shall not exceed 180 (one hundred eighty) calendar days from the date of opening of
each of the Letters of Credit;
• the grace period shall not be more than 180 (one hundred eighty) calendar days from
• the Client shall be obliged to pay a fee for the use of the Letter of Credit to the Issuing
Bank (herein and hereinafter a «Letter of Credit» shall mean each of the letters of credit
opened in accordance with the transaction concluded in the framework of the Contract)
in the amount of 1,75% (one point seventy five per cent) per annum on the amount of
the Letter of Credit less the amount paid of payments by the Issuing Bank in favor of the
Beneficiary;
the date of the letter of credit documents;
• payment of compensation shall be made by the Client on a monthly basis on the last
business day of each calendar month for the previous billing period. The commission
for the first accrual period shall be paid not later than the opening date of the letter of
credit;
• in case of non-performance or improper performance of the above obligations by the
Client, the latter shall pay a penalty to the Issuing Bank at the rate of 0.1% (zero point
one percent) of the amount of unsettled obligations for each day of delay.
• Guarantee Contract validity period: till December 31, 2018;
• The maximum Guarantor’s amount of liability under the Guarantee Contract shall not
exceed USD USD 30 000 000.00 (thirty million and 00/100).
26.10.2015
21.10.2015
PJSC TATNEFT’s
Board of Directors
26.10.2015
21.10.2015
PJSC TATNEFT’s
Board of Directors
Date of obligations performance under the transaction, parties and beneficiaries
under the transaction, the transaction amount in money terms and in percentage of
the issuer’s assets:
Beneficiaries: OOO «Tatneft - Neftekhimsnab «.
Bank: OJSC “ZENIT Bank”.
Signing date: June 23, 2015
Contract validity: December 31, 2015
Transaction amount: USD 9 600 000.00 (nine million six hundred thousand and 00/100).
The monetary valuation of the property under the transaction: USD 30 000 000.00 (thirty
million and 00/100).
The monetary valuation of the property under accounting for 0.09% of the Company’s
assets book value as of March 31, 2015.
Type and subject of the transaction: Supplementary Agreement No. 3 to Subordinated
Loan Agreement No. 0002/30/681/12-004/2008.
Content of the transaction, including civil rights and responsibilities for the
establishment, modification or termination of which the transaction pursues:
• Deposit term: without a maturity date;
• Deposit amount: RUR 3 600 000 000.00 (three billion six hundred million and 00/100);
• The Bank shall pay to the depositor interest in the amount of 15.00 (fifteen) percent per
• Other conditions: in accordance with requirements of the Central Bank of the Russian
Federation’s Provision «On the method of determining the value of own funds (capital)
of credit institutions (« Basel III“)” No. 395-P, which entered into force on 01.01.2014.
annum of the deposit amount.
Party to the transaction: PJSC TATNEFT.
Bank: JSC «Bank ZENIT».
Signing date: October 26, 2015.
Supplementary Agreement amount:
RUR 1 500 000 000.00 (one billion five hundred million and 00/100).
Monetary valuation of the property under the transaction: RUR 1 500 000 000.00 (one
billion five hundred million and 00/100) accounting for 0.24% of the Company’s assets
book value as of the last reporting date of June 30, 2015;
Type and subject of the transaction: Supplementary Agreement No. 2 to Subordinated
Loan Agreement No. 12-001/2013.
Content of the transaction, including civil rights and responsibilities for the
establishment, modification or termination of which the transaction pursues:
• Deposit term: without a maturity date;
• Deposit amount: RUR 3 600 000 000.00 (three billion six hundred million and 00/100);
• The bank shall pay to the depositor interest in the amount of 15.00 (fifteen) percent per
• Other conditions: in accordance with requirements of the Central Bank of the Russian
Federation’s Provision «On the method of determining the value of own funds (capital)
of credit institutions (« Basel III“)” No. 395-P, which entered into force on 01.01.2014.
annum of the deposit amount.
Party to the transaction: PJSC TATNEFT.
Bank: JSC «Bank ZENIT».
Signing date: October 26, 2015.
Supplementary Agreement amount:
RUR 3 600 000 000.00 (three billion six hundred million and 00/100).
Monetary valuation of the property under the transaction: RUR 3 600 000 000.00 (three
billion six hundred million and 00/100) accounting for 0.58% of the Company’s assets book
value as of the last reporting date of June 30, 2015.
As part of the voluntary information disclosure, the Company published detailed information on the ongoing production,
corporate and social activities of PJSC TATNEFT and the Group of Companies in 2015 on a systematic and regular basis. The
information was provided in the format of publications in corporate, industry and public republican and Russian mass media.
86
87
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
AWARDS AND NOMINATIONS
PUBLIC ASSESSMENT OF THE COMPANY’S OPERATIONS IN 2015
International and All-Russian Awards/Nominations
1
Contest/Rating
2
Organizers
3
Republican Awards/Nominations
1
International Exhibition "Energy.
Resource Efficiency"
Government of the Republic of
Tatarstan
Nail U. MAGANOV, General Director of PJSC TATNEFT, was awarded the title
«Honored chemist of the Republic of Tatarstan”.
Winner Diploma in the nomination “New Products”: liquid strainer
for protection of brazed plate heat exchangers with improved
performance;
Winner Diploma in the nomination «Energy Efficient Products»:
submersible electric motor with a high power factor;
Winner Diploma in the nomination «Best news service E-»Oil
Newspaper» for coverage of energy and resource saving issues.
Winner Diploma
Nail U. MAGANOV, General Director of PJSC TATNEFT was
awarded a commemorative medal «XXVIIth World Summer
Universidade 2013 in Kazan"
Rustam Kh. KHALIMOV, Head of NGDU "Elkhovneft", was awarded
the "Honorary Oilman" title.
Vyacheslav M. CHICHKOV, Director of OOO “Tatneft-AZS Center,
was awarded the "Honorary Oilman" title.
Alexander N. EVSEYEV, Chief Power Engineer - Energy
Department Head of PJSC TATNEFT was awarded the honorary
title of "Honored Power Engineer of Russia".
Nationwide campaign "Patron of the
Year "
Ministry of Culture of the Russian
Federation & the Council under the
President of the Russian Federation
on Culture and Art
Ministry of Energy
of the Russian Federation
Ministry of Energy
of the Russian Federation
Ministry of Energy
of the Russian Federation
Ministry of Energy
of the Russian Federation
Bugulma Mechanical Plant was awarded a diploma and a
gold medal in the nomination “Energy and Resource Saving
Technologies".
International Specialized Exhibition
"Gas. Oil. New Technologies to the
Far North"
Ministry of Energy
of the Russian Federation
9 experts of the Company awarded titles of the contest winners in
the nomination “Professional Engineers” (based on the IInd round
results)
XV All-Russian contest
«Engineer of the Year 2014»
5 Company’s professionals were awarded the title «Professional
Engineer of Russia» (according to the I round results);
2 professionals of the Company were awarded the contest winners
title the in the nomination “Engineering Art of the Young».
The Electronic Oil Newspaper and the «Oil and the Life were
named among “TOP” 10 best corporate newspapers and
magazines.
All-Russian Union of Scientific and
Engineering Public Organizations,
International Union of Scientific and
Engineering Associations, Academy
of Engineering Sciences n. a. A.M.
Prokhorov, Interregional Public Fund
to promote scientific and technical
progress
Independent rating of the industrial
companies’ corporate publications.
Business on Portal «Production
Management».
Contest/Rating
2
Organizers
3
Republican contest
«Manager of the year tin he
Republic of Tatarstan”
Government of the Republic
of Tatarstan,
Ministry of Economy of the
Republic of Tatarstan
The following persons were the winners:
Leonid S. ALYOKHIN, General Director of JSC TANECO in the nomination “For the
environmental safety of production»;
Malik S. KAYUMOV, Head NGDU “Jalilneft» in the nomination “For the formation of
safe and healthy working conditions»;
Renat A. NUGAYBEKOV, Director of OOO “TMS Group” Management Company in the
nomination “For the implementation of the «Lean Production» methodology:
Rinat G. KARISOV, General Director of OOO “TNG-Group” in the nomination “For
active investment activity».
TATNEFT Company was recognized as «The best enterprise on invention and
rationalization in the Republic of Tatarstan» receiving a large cup and a diploma of
the National Society of Inventors and Innovators.
9 professionals of the Company were awarded the first prize for a number of
engineering inventions: «Method of welding large size metal shells”, “Method of
manufacturing an eccentric pipe adaptor», « Method of bending a metal pipe»;
“Best Invention of
Tatarstan" Contest.
12 professionals of the Company were awarded the second prize for the invention
«Method of isolation and management of reserves development drained by a
horizontal well and a device for the process implementation»;
8 professionals of the Company were awarded the third prize for a group of
inventions: «Method for identification of oil-saturated formations», «Method of the oil
deposit development» and «Method of the oil deposits development with application
of thermal flooding».
OOO “Tatspetstransport” Division: Contest Winner; NOU «CPC - Tatneft» Contest
Diploma Winner
“Quality in 2014” Contest
Regular 92 gasoline (AI-92-K5) produced at the Elkhovskaya refining plant of NGDU
“Elkhovneft" ranked among the best products.
Independent laboratory
tests.
OOO "Nizhnekamsk Truck Tire Factory": Contest Diploma Winner
OOO “Elkhovtransservis»: review contest winner
OOO “Tatneft- TransServis Aznakaevo”: runner-up in the nomination “Best
organization in the area of occupational safety and health among enterprises of utility
vehicles»
Independent laboratory
tests.
Review contest for the best
organization in the field of
occupational safety and
health among national
enterprises of the transport
complex.
Academy of Sciences of
the Republic of Tatarstan,
Ministry of Education of the
Republic of Tatarstan and
the Society of Inventors and
Innovators of the Republic of
Tatarstan.
Government of the Republic
of Tatarstan
Kazan Institute of Organic and
Physical Chemistry n.a. A.E.
Arbuzov
Kazan Institute of Organic and
Physical Chemistry n.a. A.E.
Arbuzov
Ministry of Transport and
Roads of the Republic of
Tatarstan.
PJSC TATNEFT: Nominee of the contest
The team of PJSC TATNEFT n.a. V.D. Shashin was awarded a Letter of
Commendation for conscientious and fruitful work for the benefit of the Republic of
Tatarstan.
Republican contest
"Philanthropist of the Year"
Government of the Republic
of Tatarstan
Ministry of Industry and Trade
of the Republic of Tatarstan.
88
89
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
FINANCIAL
RESULTS
90
91
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
ACCOUNTING STATEMENTS PREPARED IN ACCORDANCE WITH
RUSSIAN ACCOUNTING STANDARDS
AUDITOR’S OPINION
To the Shareholders and Board of Directo rs of Public Joint Stock Company TATNEFT n.a. V.D. Shashin
Company’s responsibility for the Accounting Statements
Audited Entity
Public Joint Stock Company “TATNEFT” named after V.D. Shashin (PJSC TATNEFT n.a. V.D. Shashin)
The Company’s management is responsible for preparation and fair presentation of the said of the said Accounting Statements
in compliance with the rules on preparing accounting statements set out in the Russian Federation and for the internal control
system necessary to prepare the accounting statements that are free from material misstatements whether due to fraud or error.
State Registration Certificate No. 632 issued by the Ministry of Finance of Tatarstan Republic on January 21, 1994.
Auditor’s Responsibility
Certificate of Entry in the Unified State Register of Legal Entities registered before July 1, 2002, Registration No. 1021601623702
dated July 18, 2002 issued by the Interdistrict Inspectorate of the Ministry for Taxes and Duties of the Russian Federation No.
16 for Republic of Tatarstan.
Principal place of business: 75 Lenin Street, Almetyevsk 423450, Republic of Tatarstan, Russian Federation
Auditor
Joint Stock Company “PriceWaterhouseCoopers Audit” (JSC PwC Audit) having its place of business at: 10 Butyrsky Val, Mos-
cow 125047, Russian Federation.
Certificate of State Registration of Joint-Stock Company No. 008.890 issued by the Moscow Registration Chamber on Febru-
ary 28, 1992.
Our responsibility is to express an opinion on the fair presentation of the accounting statements based on our audit. We con-
ducted our audit in accordance with the Federal Auditing Standards and International Standards on Auditing. These standards
require the compliance with the applicable ethical rules as well as audit planning and carrying out in such a manner that gives
sufficient confidence that the accounting statements are free of material misstatements.
The audit included auditing procedures aimed at obtaining the audit evidence that prove the numeric values in the accounting
statements and disclose of the information contained therein. The choice of the auditing procedures is the subject matter of our
judgment which is based on assessment of the risk of material misstatements, whether due to fraud or error. During the assess-
ment of the risk we considered the internal control system procuring preparation and accuracy of the accounting statements in
order to select appropriate auditing procedures but not to express the opinion if the internal control system is efficient. The audit
also included the assessment of the proper nature of the applied accounting policy and soundness of the estimates obtained by
the management of the Company as well as the evaluation of the overall presentation of the accounting statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to express an opinion on the fair presentation
of the accounting statements.
Certificate of Entry in the Unified State Register of Legal Entities registered before July 1, 2002, Registration No. 1027700148431
dated August 22, 2002 issued by the Moscow Interdistrict Inspectorate of the Ministry for Taxes and Duties of the Russian Fed-
eration No. 39.
Opinion
Member of the Non-commercial Partnership “Audit Chamber of Russia” (NP APR), which is a self-regulating organization of
auditors – Registration number 870 in the Register of NP APR members.
Basic State Registration Number in the register of auditors and auditor organizations - 10201003683
We have audited the enclosed accounting statements of PJSC TATNEFT n.a. V.D. Shashin (hereinafter referred to as the Com-
pany) which comprise the Balance Sheet as at December 31, 2015, Profit and Loss Account, Statement of Capital Changes,
Cash Flow Statement for 2015, Notes to the Balance Sheet and Profit & Loss Account (hereinafter jointly referred to as the
“Accounting Statements”).
In our opinion, the accounting statements present fairly in all material respects the financial standing of the Company as at
December 31, 2015, and the results of its financial and economic activities and cash flows for 2015 in conformity with the rules
on preparing the accounting statements set out in the Russian Federation.
March 28, 2016
Moscow, Russian Federation
M.E. Timchenko, Director
JSC PriceWaterhouseCoopers Audit
92
93
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
ACCOUNTING REPORTS OF JSC TATNEFT, FY 2015
Balance Sheet
Indicator Description
ASSETS
I. FIXED ASSETS
Intangible assets
Research and development results
Intangible exploration assets
Tangible exploration assets
Fixed assets
incl. incomplete capital investments
advance payments given for procurement and construction of
fixed assets
Income-bearing investments in tangible assets
Financial investments
Deferred tax assets
Other fixed assets
assets retirement obligations
TOTAL for section I
II.CURRENT ASSETS
Reserves
incl. raw materials and supplies
Work in progress costs
Finished products and goods for resale
Goods shipped
Other reserves and expenses
Value added tax on acquired assets
Accounts receivable
incl. noncurrent nondelinquent accounts receivable (that are
due beyond 12 months after the reporting date)
incl. buyers and customers
Advances paid
Other debtors
incl. current nondelinquent accounts receivable (that are due in
the next 12 months after the reporting date)
incl. buyers and customers
Advances paid
Other debtors
Financial investments (except for cash equivalents)
Cash and cash equivalents
Other current assets
TOTAL for section II
BALANCE
94
Line Code
As of December
31, 2015
As of December
31, 2014
As of December
31, 2013
Indicator Description
Line Code
As of December
31, 2015
As of December
31, 2014
As of December
31, 2013
thousand RUB
Balance Sheet (continued)
thousand RUB
1110
1120
1130
1140
1150
1151
1152
1160
1170
1180
1190
1191
1100
1210
1211
1212
1213
1214
1215
1220
1230
1231
1232
1233
1234
1235
1236
1237
1238
1240
1250
1260
1200
1600
363 181
425 495
4 298 721
1 181 376
307 582
325 099
4 256 953
1 133 728
214 621
232 576
4 254 890
872 660
185 402 361
121 288 999
118 676 649
79 479 182
27 392 755
26 918 477
9 896 607
8 688 542
10 224 252
2 302 366
1 888 783
2 353 517
234 265 798
213 205 328
181 387 339
-
-
-
37 433 580
40 578 570
58 476 393
29 293 324
29 232 592
29 507 230
465 672 878
382 985 042
366 468 645
27 195 783
26 948 648
18 037 804
2 581 938
412 249
1 994 190
225 794
1 828 258
203 094
21 045 366
17 399 856
12 503 140
2 615 128
6 700 323
2 783 281
541 102
628 485
720 031
3 708 117
4 308 690
4 209 301
107 136 545
82 279 954
78 004 349
6 348 987
6 656 414
5 103 757
128 897
582 784
1 535 471
363
188
-
6 219 727
6 073 442
3 568 286
100 787 558
75 623 540
72 900 592
56 610 370
47 652 992
51 062 327
27 710 973
18 816 538
13 148 509
16 466 215
9 154 010
8 689 756
28 266 335
45 942 537
43 638 757
8 393 083
34 916 922
20 649 731
19 634
17 200
25 194
174 719 497
194 413 951
164 565 136
640 392 375
577 398 993
531 033 781
LIABILITIES
III. CAPITAL AND RESERVES
Authorized capital (share capital, registered fund, contributions of
partners)
1310
Repurchased shares
Revaluation of noncurrent assets
Capital surplus (without revaluation)
Reserve capital
Undistributed profit (uncovered loss)
TOTAL for Section III
IV. LONG-TERM LIABILITIES
Borrowings
Deferred tax liabilities
Estimated liabilities
Other liabilities
TOTAL for Section IV
V. SHORT-TERM LIABILITIES
Borrowings
Accounts payable
incl. suppliers and contractors
Liabilities to the state non-budgetary fund
Taxes and dues payable
Advances received
Dividends payable
Other creditors
Deferred revenues
Estimated liabilities
Other liabilities
TOTAL for Section V
BALANCE
1320
1340
1350
1360
1370
1300
1410
1420
1430
1450
1400
1510
1520
1521
1522
1523
1524
1525
1526
1530
1540
1550
1500
1700
2 326 199
2 326 199
2 326 199
( - )
( - )
( - )
10 546 619
9 799 512
8 753 243
441 293
252 710
30 813
1 364 610
1 341 864
1 144 326
530 650 255
471 369 384
409 441 456
545 328 976
485 089 669
421 696 037
1 568 072
3 144 387
8 602 514
10 372 405
7 067 728
7 808 535
33 486 117
29 975 977
29 554 090
-
-
-
43 656 703
43 492 769
44 430 353
2 396 685
8 739 722
29 855 108
47 072 098
38 349 893
33 552 337
26 585 497
19 086 327
11 027 550
462 037
337 717
294 098
10 059 307
8 982 193
11 295 169
2 939 963
6 432 831
3 045 001
133 304
117 215
102 707
6 891 990
3 393 610
7 787 812
3 568
4 478
5 389
1 934 345
1 722 462
1 494 557
-
-
-
51 406 696
48 816 555
64 907 391
640 392 375
577 398 993
531 033 781
95
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
Profit and Loss Statement FY 2015
Indicator Description
Line Code
FY 2015
FY 2014
thousand RUB
ESSENTIAL ASPECTS OF THE ACCOUNTING POLICY AND
PRESENTATION OF THE ACCOUNTING STATEMENTS FOR 2015 FY
Revenues
Cost of goods sold
Gross profit (loss)
Selling expenses
Administrative expenses
Mineral exploration and evaluation expenses
Profit (loss) on sales
Participation capital
Interest receivable
Interest payable
Other income
Other expenses
Profit (loss) before taxation
Current income tax
incl. permanent tax liabilities (assets)
Changes in deferred tax liabilities
Changes in deferred tax assets
Miscellaneous
Adjusted tax on the profit for the consolidated group of taxpayers
Net profit (loss)
INFORMATIONAL
Surplus on revaluation of fixed assets not included in the net income (loss) for the
period
Result from other operations not included in the net income (loss) for the period
Total profit/loss for the period
Basic earnings (loss) per share
Diluted earnings (loss) per share
2110
2120
2100
2210
2220
2230
2200
2310
2320
2330
2340
2350
2300
2410
2421
2430
2450
2460
2465
2400
2510
2520
2500
2900
2910
462 962 074
392 357 674
(306 851 332)
(273 175 758)
156 110 742
119 181 916
(36 617 097)
(27 499 377)
-
-
(72 494)
(2 199)
119 421 151
91 680 340
707 955
9 845 751
2 477 770
6 462 835
(3 801 044)
(3 307 602)
19 168 972
75 906 110
(33 833 924)
(69 161 023)
111 508 861
104 058 430
(28 308 902)
(20 643 017)
(4 237 239)
(2 395 201)
1 769 891
(2 563 870)
-
45 445
(6 557)
-
(611)
1 210 130
85 008 738
82 061 062
826 602
1 241 831
188 583
221 897
86 023 923
83 524 790
38.28
-
36.95
-
Main Approaches to Preparation of the Annual Accounting Statements
Financial accounting in the Company is performed in accordance with Federal Law No.402-FZ of December 06, 2011 “On
Accounting”, Provision on Accounting and Reporting in the Russian Federation approved by Order of the Russian Federation
Ministry of Finance No.34n dated July 29, 1998, current accounting regulations (RAS), as well as the accounting policy of the
Company. The accounting statements of the Company for 2015 were prepared in compliance with the mentioned Accounting
Law, accounting regulations and policy. The annual accounting statements for 2015 were compiled according to the forms
developed and approved by the Company in accordance with the Order of the Ministry of Finance No. 66n of July 02, 2010
“About formats for corporate accounting statements”. The data of the accounting statements are presented in thousands of
Russian rubles.
Assets and Liabilities Denominated in Foreign Currency
Accounting for assets and liabilities denominated in foreign currencies is carried out in accordance with RAS 3/2006 “Account-
ing of Assets and Liabilities Denominated in Foreign Currencies”, and approved by Order No. 154n of November 27, 2006 of
the Finance Ministry of the Russian Federation.
The exchange rate difference is reflected in the accounting and financial statements for the concerned reporting period with
the due date of payment or which the financial statements were executed for.
The exchange rate difference arising from conversion of the organization’s assets and liabilities denominated in foreign cur-
rency used for performing activities outside the Russian Federation into rubles is credited to the company’s capital surplus.
The exchange rate difference on other activities is credited to financial results of the organization as other income and ex-
penses. The currency exchange rate gains and losses are recognized in the Profit and Loss account in the “Other income” or
“Other expenses”.
For accounting business transactions in foreign currencies there was the official exchange rate applied of the foreign currency
to the ruble valid on the date of transaction. Cash on foreign currency accounts in banks and on hand, financial investments
(except shares), and settlement funds in foreign currencies (except the funds received and paid advances and pre-payment or
earnest money) are reflected in the financial statements as amounts calculated on the basis of the currency official exchange
rates valid on the reporting date. The currency exchange rates amounted to RUB 72.8827 to USD 1.00 as of December 31, 2015
(RUB 56.2584 as of December 31, 2014; RUB 32.7292 as of December 31, 2013); RUB 79.6972 to EURO 1.00 (RUB 68.3427 as
of December 31, 2014; RUB 44.9699 as of December 31, 2013).
Intangible Assets
As a part of intangible assets there are software programs for computers reflected; inventions; useful models; production
secrets (know-how); trademarks and service marks, licenses for mineral geological exploration and production, licenses for
mineral production, exploration and evaluation expenditures of mineral resources (transferred from the intangible exploration
assets after confirmation of the commercial viability of oil production in the field).
Intangible assets are reflected in the accounting records at historic cost in that reporting period when received the documents
confirming the Company’s exclusive rights to the results of intellectual activity or means of individualization irrespective of in-
tangible assets used in production, performance of works or rendering of services, for administrative purposes.
96
97
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
The value of intangible assets shall be repaid by the straight-line depreciation method at the rates specified on the basis of the
due date of the useful life.
Depreciation is not charged for intangible assets with an indefinite period of the useful life.
Tangible exploration assets are depreciated by straight-line depreciation method during the period of their useful life.
Depreciation costs for targets of tangible exploratory assets are included in the costs of prospecting, evaluation and explora-
tion of mineral resources for relevant license blocks.
Depreciation charging is performed through accumulation of appropriate amounts in a separate account. Depreciation on in-
tangible assets is reflected in the accounting period, which they refer to and is charged regardless of the company’s operating
results in the reporting period.
Intangible exploration assets as licenses for geological subsurface study are depreciated by straight-line method during the
period of their useful application. Depreciation costs for aforementioned targets are included in the costs of prospecting,
evaluation and exploration of mineral resources for relevant subsurface areas.
The useful life of intangible assets is annually verified for the purpose of clarification. In case of substantial change of the period
duration (by more than twenty percent) within which the asset is intended to be used, its useful life is defined. The resulting ad-
justments are reflected in the accounting and financial reporting at the beginning of the year as changes in the estimated values.
Acquisition costs incurred for exploration and mining licenses, as well as the costs of prospecting, evaluation and exploration
of mineral resources are not depreciated until the commercial feasibility of oil production is confirmed in the relevant license
block of mineral resources and approval of the order of commercial field development.
Value adjustment of intangible assets of homogeneous groups at fair market value is not performed.
Expenses for Research & Development, Development and Engineering Works
Expenses for the research & development, development and engineering works are accounted in the amount of actual ex-
penses incurred during performance of these works.
The expenses for the research & development, development and engineering works which have produced positive results and
started to be used in the work are expensed written off as expenses of ordinary activities starting with the month following the
month when the company started the actual application of the mentioned works results in the production manufacturing (work
performance, service rendering) or for administrative needs of the company.
Writing off the costs of each performed research & development, development and engineering work which have produced
positive results is made during the useful life of R & D results (which should not exceed 5 years).
The commercial feasibility of oil production is considered to be confirmed at the moment of approval of the reservoir manage-
ment plan in the license area of mineral resources.
The Company performs annual verification of exploration assets depreciation as of December 31 of the calendar year, as well as
in the case of cessation of their recognition when confirming commercial feasibility of oil production in the relevant license block.
For the purposes of verifying exploration assets for depreciation the aforementioned assets are categorized by mineral re-
source blocks indicated in the licenses.
Impairment loss of exploration assets is reflected in the profit-and-loss statement in line code “Other expenses”. Furthermore,
the Company applies the reversal of impairment loss to exploration assets.
The Company ceases recognition of exploration assets in relation to a certain licensed block of mineral resources when con-
firming commercial feasibility of oil production in the relevant licensed block or recognizing lack of prospects of mineral re-
sources production in this area.
The expenses for the research & development, development and engineering works which have not produced positive results
are written off to the financial result as miscellaneous expenses in the reporting period.
When confirming the commercial feasibility of oil production in the licensed block of mineral resources the Company performs
reclassification of exploration assets:
Exploration assets
The Company considers the following to be exploration assets as a part of tangible exploration assets:
facilities;
• expenses for acquisition and construction of prospecting, exploration and advance producing wells, as well as other oilfield
• expenses for acquisition and rig-up of the equipment for prospecting, exploration and advance producing operation wells.
• According to the Company the intangible exploration assets include the following types of exploration costs:
• acquisition costs of licenses for geological study of subsurface, licenses for geological exploration and production of min-
• costs of prospecting, evaluation and exploration of mineral resources: expenses for geological, geochemical, geophysical
works, as well as expenses for acquiring geological information on the subsurface from the third parties, including state
authorities, and expenses for drilling key, appraisal and structural wells.
eral resources;
The Company considers the following exploration costs as expenses for regular types of activity: expenses for maintenance of
the structural divisions organized solely for or performance and coordination of works on exploration, evaluation and prospect-
ing of mineral resources, as well as expenses for maintenance and repair of tangible exploration assets.
• tangible exploration assets are included in the category of fixed assets at residual value;
• intangible exploration assets are included in the category of intangible assets at residual value.
The Company writes off the exploration assets to other expenses, if they are not able to provide economic benefits in the future.
Fixed Assets
Land plots, buildings, facilities, machinery, equipment, transport vehicles and other relevant assets of over 12 months asset life
and cost over 40 000 rubles are reflected in the fixed assets.
The Company annually revaluates fixed assets based on the current value (replacement asset value) at the end of the report-
ing period.
The fixed assets put into operation before January 1, 2002 are depreciated at uniform depreciation rates approved by Decree
No.1072 of the USSR Council of Ministers dated October 22, 1990 “On Uniform Depreciation Rates of Full Cost Recovery of
Fixed Assets of the USSR National Economy”; and those assets put into operation from January 1, 2002 are depreciated at the
rates calculated on the basis of useful life. The classification of fixed assets included in depreciation groups approved by the
Order No. 1 of the Government of Russian Federation dated January 01, 2002 is used as one of the information sources about
the useful life periods. For this purpose the following useful life periods are specified for fixed assets put into operation starting
from January 1, 2002 by depreciation groups.
98
99
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
The straight line depreciation method is used for depreciation calculations.
Inventories
Fixed asset group
Buildings
Facilities, including:
Wells
Machinery and equipment
Useful life of items of fixed assets (number of years)
Before 01.01.2002
After 01.01.2002
25-50
10-25
10-15
5-15
8 -31
4 -31
6 -11
1,5-21
Depreciation is not charged on land plots and natural resources sites.
Changing the original value of fixed assets as they were included for accounting purposes is allowed in cases of completion,
retrofit, renovation, modernization, partial liquidation and revaluation of the fixed assets.
The “Raw Materials and Supplies” line of the balance sheet reflects raw materials, basic and auxiliary materials, purchased
semi-finished products and components, fuel, packaging, spare parts, construction and other materials.
The line of the inventories also reflects the assets, which meet the conditions necessary for the recognizing them as fixed as-
sets of the cost no more than 40 000 rubles per unit.
The inventories are recorded at the actual cost of their acquisition with the exception of VAT and other recoverable taxes (ex-
cept as provided by the legislation of the Russian Federation). Disposal of the inventories is carried at the average cost.
The inventories, which are obsolete, wholly or partially have lost their original quality, or which current market value is de-
creased, are reflected in the balance sheet less the reserve provision for impairment of the material values.
Repair expenses of fixed assets items are included at actual costs and referred to the reporting period in which they were done.
Finished Products, Goods and Sales Expenses
The line of “Construction in progress” includes the costs of construction and erection works, acquisition of buildings, facilities,
equipment and other tangible objects of long-term use, other capital works and expenses. This line reflects the cost of capital
construction projects before their putting into operation, after which the structures are transferred into fixed assets.
In addition to this, the “Construction in progress” line reflects the costs associated with the lease of land for construction of
future wells.
Leased fixed assets are reflected in the line of “Income-bearing Investments in Tangible Assets”.
Financial Investments
Financial investments are accepted for accounting at original cost.
Financial investments defining the fair market value are reflected in the financial statements as of the end of the reporting year
at current market value by adjusting their evaluation on the previous reporting date.
Finished products are reflected in the balance-sheet at the full actual production cost (including management expenses).
In shipment of oil, petroleum products and gas products assessment is carried out by the average cost method for each group
of products.
Sales expenditures are written off to the results of the Company’s financial and economic activities without differentiating be-
tween the sold and unsold products.
Goods Shipped
The accounting item “Goods Shipped” reflects shipped products, the title for which was not transferred to buyers.
This line also reflects the real estate property transferred to the buyer by the delivery-acceptance act before the moment of
state registration of the transfer ownership.
Financial investments for which there is no definition of the fair market value are reflected in financial statements as of the re-
porting date at original cost after deduction of the reserve amount formed for their depreciation.
Accounts receivables
Financial investments are reflected as part of the current assets if the expected duration of their possession is less than 12
months after the reporting date. Other financial investments are included in fixed assets.
On disposal of financial investments for which the current market value cannot be determined, their value is formed on the
basis of the assessment determined by:
• on disposal of shares or bonds - at original cost of the first-time financial investments acquisition (FIFO method);
• on disposal of bills - at original cost of each unit of financial investments accounting.
On disposal of financial investments, for which the current market value is not determined, their value is determined by the
organization on the basis of the last assessment.
Gains and losses of financial investments disposal are reflected in the profit and loss statement as part of other income and
expenses.
Indebtedness of buyers and customers is determined on the ground of prices established by contracts concluded between the
Company and buyers (customers) taking into account all discounts (extra charges). Indebtedness unrealistic to be recovered
is written off from the balance if it is proved to be such.
The indebtedness not paid within the time limits stipulated in contracts and not secured with respective guarantees is shown
after deduction of accrued reserves for bad debts. These reserves constitute a conservative assessment carried out by the
Company with regard to the part of debts which is likely not to be paid. The reserve is created for each doubtful debt outstand-
ing (depending on the financial condition (solvency) of the debtor and an estimated probability of debt repayment in whole or
in part) on the basis of the receivables inventory, made for the last day of the reporting month.
Income and expenses generated in the creation and recovery of allowance for doubtful debts in one financial year are reflected
in the profit and loss statement in the lines “Other Income” or “Other Expenses”.
100
101
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
Cash and Cash Equivalents
Estimated Liabilities
In accordance with the RAS 23/2011 “Report of Cash Flows” approved by Order No. 11n of the Ministry of Finance of Russia
dated February 02, 2011 the cash equivalents include highly liquid investments that can easily be converted into the known in
advance amount of cash and are subject to an insignificant risk of value change.
The Company refers the bank deposits placed for maximum 3 months period to the cash equivalents.
In the Statement of Cash Flows:
• cash balances and cash equivalent balances in a foreign currency at the beginning and at the end of the reporting period
are reflected in the rubles amount, which is determined in accordance with RAS 3/2006. Differences arising in connection
with the conversion of the organization’s cash flows and cash equivalents in foreign currency exchange rates on different
dates are reflected in the cash flows statement as the impact of foreign currency exchange rate changes against the ruble.
• indirect taxes (VAT and excise duties) as part of the proceeds from buyers and customers, payments to suppliers and con-
tractors and payments to the budget system of the Russian Federation or reimbursement of out of it are reflected as bal-
anced result in the line of “Other Income” (“Other Payments”).
The cash flows are reflected in the statement of cash flows on a net basis in the following cases:
• cash receipts from certain entities stipulate the relevant payments to other entities (cash flows of the commission buyer or
agent in connection with the performance of commission or agency services (except for payment for services themselves);
income from the counterparty against the reimbursement of utility payments and performance realization of these pay-
ments in leasing and other similar relationships et c.);
• cash flows differ in quick return, large sums and short payback periods (purchase and resale of financial investments, short-
• cash flows on short-term deposits (more than three months but less than one year), which relate to financial investments.
term investments (up to three months) using the proceeds from borrowings et c.
Cash flows on deposits are disclosed in Tabular Format 3 “Investments” in the Notes to the Balance Sheet and Profit & Loss
statement.
The Company acknowledges its estimated liability for remuneration payment based on the results of the year. The amount
of monthly payments under the estimated liability is determined based on the monthly deduction payments and the actual
expenses amount of the labor costs. Percentage of contributions under the estimated liability is calculated by the ratio of the
annual planned expenditure for the labor payment to the planned total labor costs.
Further, based on the Provision “Estimated Liabilities, Contingent Liabilities and Contingent Assets (RAS 8/2010)” approved by
the Order of the Russian Ministry of Finance No. 167n of December 13, 2010, the Company recognizes estimated liabilities on
unused vacations by the employees.
The estimated liability value of unused vacations is determined based on the total number of days of the unused vacation for
each employee of the average daily earnings and insurance premiums accrued on the specified reserve.
The actual amount of the vacation allowance (including the compensation amount for unused vacation) accrued to the employ-
ee in the accounting is ascribed due to the acknowledged amount of the estimated liability to the unused vacation payment.
An inventory of the estimated liability for unused vacation payment is carried out as of the last day of each quarter, which results
are reflected by the estimated liability adjustments.
In accordance with the requirements of the regulations (Federal Law No. 2395-1 “On Subsoil”, No. 7-FZ “On Environmental
Protection” etc.), the terms of license agreements for the right to use the subsoil the Company recognizes in the accounting
records and financial statements the estimated liabilities on liquidation of fixed assets, as well as commitments for remediation
of lands in the fields after completion of the oil and gas production.
Estimated liabilities are formed for all real estate oil & gas assets. Estimated liabilities on fixed assets retirement and restora-
tion of natural resources are calculated by groups of the fields. The value of estimated liability is recorded at the present value
(discounted cost).
Authorized Capital, Surplus Capital and Reserve Funds
Accrued estimated liabilities at initial recognition, as well as the newly introduced fixed assets are included in the “Other fixed assets”.
The authorized capital is reflected in the amount of the face value of ordinary and preferred shares purchased by the shareholders.
The surplus capital of the Company includes exchange differences arising from the conversion of the organization’s assets and
liabilities value expressed in foreign currency used to perform activities outside the Russian Federation into rubles. In addition,
the revaluation surplus of fixed assets resulting from revaluation classified in the additional capital is reflected in the “Revalua-
tion of Fixed Assets” line. Revaluation surplus in case of the fixed asset item disposal is transferred from the capital surplus to
the undistributed profit of the Company.
Depreciation of assets on liquidation liabilities is accrued on a monthly basis in proportion to the oil production volume. The
amount of monthly depreciation is determined for each group of the fields and Oil & Gas Production Division based on the
amount of oil produced during the current month and the amount of assets on liquidation liabilities attributable to 1 tonne of oil
reserves on deposits of the group at the end of the previous reporting period.
Accrual of interest due to the increased present value as we approach the period of performance estimated liability is recorded
in the profit and loss statement in the line of “Interest payable”.
In accordance with the legislation the Company established a reserve fund in the amount to 5% of the authorized capital
formed out of net profits of the Company. The reserve fund is intended to cover the losses of the Company for bonds redemp-
tion and repurchase of the Company’s shares if other funds are unavailable.
Adjustment of estimated liabilities on the fixed assets retirement and restoration of natural resources due to the review of core
indicators of calculation (forecast inflation rate, discount rate, discount period) is recorded in the profit and loss statement in
the line of “Other income”.
In accordance with the constituent documents the Company establishes the Employee share ownership fund which is formed
out of net profits of the Company. Contributions to this fund are made in accordance with the methodology approved by the
“Regulations on Bonus Certificates of PJSC TATNEFT.
Loans and Borrowings
In accordance with RAS 15/2008 “Accounting of expenses on loans and borrowings” approved by Order No.107n of the Minis-
try of Finance of Russia dated October 06, 2008 the principal amount of the loan (credit) received from the lender is accounted
in accordance with the terms of the loan agreement (credit agreement) in the amount of actually received monetary assets or
in cost estimate of other items stipulated by the contract.
102
103
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
Indebtedness under received loans and borrowings as well as accrued interest is reflected in the balance sheet line of “Bor-
rowings”.
Indebtedness under the received loans and borrowings as well as accrued interest for accounting is subdivided into short-term
indebtedness (which repayment period does not exceed 12 months under the terms of contract) and long-term indebtedness
(the repayment period of which is over 12 months under the terms of contract).
The long-term indebtedness is transferred to short-term indebtedness at the moment when there are 365 days left before
repayment of the principal amount.
Interest on received loans and borrowings is recognized as other expenses of that period in which they were made, except for
the part to be included in the value of the investment asset.
Expenses of received loans and credits are directly attributable to acquisition and/or creation of the investment asset are
included in the cost of the asset and are repaid through depreciation except where charging of the asset depreciation is not
provided by the accounting rules.
Inclusion of expenses on received loans and borrowings in the original value of the investment asset is terminated on the first
day of the month following the month of accepting the asset for accounting as a fixed asset, intangible asset or R & D expenses.
Sales Revenue Recognition
Revenue from sales of goods, products and (execution of works, service rendering) is recognized as and when the ownership
of the products is transferred to the customers (as works are executed, services are rendered to the customers). Revenues are
reflected in the accounting statements less value added tax, excise duties, customs duties.
The item “Other income” include the income which is not included in the revenue: revenue from the sale of fixed assets, con-
struction in progress and other assets, foreign currency sale, income from changes in estimates on fixed assets liquidation and
restoration of natural resources, foreign exchange differences and other similar income.
Expenses
The administrative expenses include the maintenance expenditures of the Executive Office. The mentioned expenses are al-
located on a monthly basis between the oil-and-gas production divisions in proportion to the planned volume of oil production
(in natural terms).
Administrative expenses in the oil-and-gas production divisions are distributed between the calculation items for production
of oil, associated petroleum gas, production of other products (works, services) on a pro rata basis to their total production
expenses less the deductions, taxes and other obligatory payments.
The item “Other expenses” include expenses which are not related to the manufacture and sales of products, execution of
works, rendering of services, purchase and sale of goods .
Accounting of Profit Tax Calculations
The Company has been a responsible member of the consolidated group of taxpayers (hereinafter referred to as CGT) from
January 1, 2012. In 2015, the CGT included four members. Since 2016, the composition of the participants has been expanded
to five members.
The Company independently forms the accounting information on income tax in accordance with RAS 18/02. In this regard,
temporary and permanent differences are determined by the Company based on its revenues and expenses included in the
consolidated tax base of the CGT in accordance with the norms of the Tax Code of the Russian Federation. The amount of the
current income tax is determined on the basis of the Company’s accounting information and recognized in the profit-and loss
statement in the line 2410 “Current income tax”. The difference between the amount of the current income tax calculated by
the Company for inclusion in the consolidated tax base of the CGT and the amount of funds due and payable by the Company
based on the terms of the agreement on CGT establishment in the profit-and loss statement, is reflected in the line 2465
“Adjusted tax on the profit for the consolidated group of taxpayers” and included in determination of net income (loss) of the
Company without participating in generation of the profit (loss) before taxation.
The outstanding amount of CGT income tax on CGT as a whole, to be paid by the Company as a responsible CTG participant to
the budget, is reflected in the Company’s balance sheet in the line 1523 “Taxes and dues payable”.
The overpaid amounts of CGT income tax to the budget is reflected in the balance sheet in the line 1238 “Other debtors”.
The outstanding amount upon settlements with the CGT members on CGT income tax (interim payment) is reflected in the
balance sheet separately in the items of the current assets in the line 1238 “Other debtors” and short-term liabilities in the line
1526 “Other creditors” of the balance sheet, respectively.
The Company as a responsible CGT member reflects the income tax assessment and payments to the participants in the
framework of the agreement on CGT establishment with account 78 “Settlements with the CGT members”.
In preparation of the accounting statements the balanced (net) amounts of deferred tax asset and deferred tax liability are
reflected in the balance sheet.
Correction of errors in the accounting and reporting
An error identified in the accounting and financial statements is recognized to be essential if the ratio of the error to the nu-
merical indicator of the relevant group of balance sheet items of the Company, or item of the profit-and-loss statement of the
Company for the reporting period is minimum five percent. Otherwise, the error is insignificant.
104
105
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
PJSC TATNEFT, ANNUAL REPORT 2015
CONSOLIDATED FINANCIAL STATEMENTS IN ACCORDANCE
WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2015
106
107
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENTS
OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
ASSETS
Cash and cash equivalents
Restricted cash
Accounts receivable, net
Short-term financial assets
Inventories
Prepaid expenses and other current assets
Prepaid income tax
Total current assets
Long-term accounts receivable, net
Long-term financial assets
Investments in associates and joint ventures
Property, plant and equipment, net
Deferred income tax assets
Other long-term assets
Total non-current assets
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term debt and current portion of long-term debt
Accounts payable and accrued liabilities
Taxes payable
Income tax payable
Total current liabilities
Long-term debt, net of current portion
Other long-term liabilities
Decommissioning provision, net of current portion
Deferred income tax liability
Total non-current liabilities
Total liabilities
Shareholders’ equity
Preferred shares (authorized and issued at 31 December 2015 and 2014 – 147,508,500 shares; nominal
value at 31 December 2015 and 2014 – RR1.00)
Common shares (authorized and issued at 31 December 2015 and 2014 – 2,178,690,700 shares;
nominal value at 31 December 2015 and 2014 – RR1.00)
Additional paid-in capital
Accumulated other comprehensive income
Retained earnings
Less: Common shares held in treasury, at cost (55,491,000 shares and 55,514,000 shares at 31
December 2015 and 2014, respectively)
Total Group shareholders’ equity
Non-controlling interest
Total shareholders’ equity
Total liabilities and equity
108
Note
31 December
2015
31 December
2014
Note
Year ended 31
December 2015
Year ended 31
December 2014
Sales and other operating revenues, net
552,712
476,360
6
7
8
9
10
7
11
12
13
18
14
15
16
18
15
17
13
18
19
19
19
24,600
318
60,151
13,055
32,042
48,033
1,030
41,548
1,635
46,059
25,323
32,462
31,157
2,418
179,229
180,602
2,248
48,469
5,632
1,364
29,893
7,212
557,778
507,586
2,535
2,800
619,462
798,691
5,281
43,488
18,202
1,940
68,911
12,880
4,119
33,352
21,771
72,122
141,033
2,982
3,295
552,332
732,934
15,859
37,999
14,440
166
68,464
12,888
2,960
44,779
21,599
82,226
150,690
746
746
11,021
11,021
85,170
1,639
532,821
(3,083)
628,314
29,344
657,658
798,691
87,482
1,888
457,915
(3,087)
555,965
26,279
582,244
732,934
COSTS AND OTHER DEDUCTIONS
Operating
Purchased oil and refined products
Exploration
Transportation
Selling, general and administrative
Depreciation, depletion and amortization
Loss on disposals of property, plant and equipment, investments and impairments
Taxes other than income taxes
Maintenance of social infrastructure and transfer of social assets
Total costs and other deductions
OTHER INCOME/(EXPENSES)
Foreign exchange gain, net
Interest income
Interest expense, net of amounts capitalized
Loss from equity investments
Other income, net
Total other income
Profit before income tax
INCOME TAX
Current income tax expense
Deferred income tax expense
Total income tax expense
Profit for the year
OTHER COMPREHENSIVE INCOME/(EXPENSES):
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments
Unrealized holding gains/(losses) on available-for-sale securities
Items that will not be reclassified to profit or loss:
Actuarial (losses)/gains on employee benefit plans
Other comprehensive (loss)/income
Total comprehensive income for the year
20
13
20
13
18
13
21
21
12
(108,294)
(102,614)
(59,913)
(1,856)
(30,149)
(48,871)
(25,052)
(6,031)
(54,478)
(2,100)
(23,209)
(43,355)
(21,121)
(1,799)
(137,380)
(117,060)
(4,665)
(4,091)
(422,211)
(369,827)
2,283
11,023
(7,691)
(2,172)
3,684
7,127
14,876
6,944
(5,482)
(313)
1,415
17,440
137,628
123,973
(30,954)
(902)
(21,376)
(4,920)
18
(31,856)
(26,296)
105,772
97,677
318
222
(789)
(249)
649
(270)
620
999
105,523
98,676
109
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
CONSOLIDATED STATEMENTS
OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (CONTINUED)
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Note
Year ended 31
December 2015
Year ended 31
December 2014
Attributable to Group shareholders
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
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m
t
s
u
d
a
n
o
i
t
a
s
n
a
r
t
l
PROFIT ATTRIBUTABLE TO:
- Group shareholders
- Non-controlling interest
TOTAL COMPREHENSIVE INCOME IS ATTRIBUTABLE TO:
- Group shareholders
- Non-controlling interest
BASIC AND DILUTED EARNINGS PER SHARE (RR)
Common
Preferred
WEIGHTED AVERAGE SHARES OUTSTANDING (MILLIONS OF SHARES)
Common
Preferred
19
19
98,930
6,842
105,772
98,681
6,842
105,523
43.56
43.53
2,123
148
92,227
5,450
97,677
93,226
5,450
98,676
40.61
40.58
2,123
148
Balance
at 1 January 2014
Profit for the year
Other comprehensive
income/(loss) for the year
Total comprehensive
income/(loss) for the
year
Treasury shares
- Acquisitions
- Disposals
Disposal of non-
controlling interest in
subsidiaries
Dividends declared
Balance
at 31 December 2014
Profit for the year
Other comprehensive
(loss)/income for the year
Total comprehensive
(loss)/income for the
year
Treasury shares
- Acquisitions
- Disposals
Acquisition of non-
controlling interest in
subsidiaries
Disposal of non-
controlling interest in
subsidiaries
Dividends declared
Balance
at 31 December 2015
2,270,607
11,767 87,482
(3,102)
(818)
1,284
423
384,376
481,412
22,570 503,982
-
-
-
78
(302)
380
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
(63)
78
-
-
-
-
-
92,227
92,227
5,450
97,677
620
649
(270)
-
999
-
999
620
649
(270)
92,227
93,226
5,450
98,676
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
(63)
78
-
-
-
-
78
15
(63)
78
78
-
(18,688)
(18,688)
(1,819)
(20,507)
2,270,685 11,767 87,482 (3,087)
(198) 1,933
153
457,915 555,965
26,279 582,244
-
-
-
23
(21)
44
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,312)
-
-
-
-
-
4
(5)
9
-
-
-
-
(789)
-
318
-
98,930
98,930
6,842
105,772
222
-
(249)
-
(249)
(789)
318
222
98,930
98,681
6,842 105,523
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4
(5)
9
-
-
-
4
(5)
9
(2,312)
1,220
(1,092)
-
(2,963)
(2,963)
-
(24,024)
(24,024)
(2,034)
(26,058)
2,270,708 11,767 85,170 (3,083)
(987)
2,251
375 532,821
628,314
29,344 657,658
110
111
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
CONSOLIDATED STATEMENT
OF CASH FLOWS
CONSOLIDATED STATEMENT
OF CASH FLOWS (CONTINUED)
Note
Year ended 31
December 2015
Year ended 31
December 2014
Note
Year ended 31
December 2015
Year ended 31
December 2014
OPERATING ACTIVITIES
Profit for the year
Adjustments:
Depreciation, depletion and amortization
Income tax expense
Loss on disposals of property, plant and equipment, investments and
impairments
Effects of foreign exchange
Equity investments loss/(gain) net of dividends received
Change in provision for impairment of financial assets
Change in fair value of trading securities
Interest income
Interest expense
Other
Changes in operational working capital, excluding cash:
Accounts receivable
Inventories
Prepaid expenses and other current assets
Trading securities
Accounts payable and accrued liabilities
Taxes payable
Notes payable
Other non-current assets
Net cash provided by operating activities before income tax and interest
Income taxes paid
Interest paid
Interest received
Net cash provided by operating activities
105,772
97,677
25,052
31,856
6,031
1,501
2,172
1,862
(30)
(11,023)
7,691
(4,912)
(16,608)
(776)
2,771
1,303
885
3,999
(1)
333
157,878
(27,792)
(1,032)
11,462
140,516
21,121
26,296
1,799
10,036
313
(165)
(283)
(6,944)
5,482
32
7,456
(4,054)
(9,206)
1,294
6,423
(2,094)
(2)
205
155,386
(24,012)
(1,378)
6,487
136,483
INVESTING ACTIVITIES
Additions to property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investments
Purchase of investments
Proceeds from/(purchase of) certificates of deposit, net
Issuance of loans and notes receivable, net
Change in restricted cash
Net cash used in investing activities
FINANCING ACTIVITIES
Proceeds from issuance of debt
Repayment of debt
Dividends paid to shareholders
Dividends paid to non-controlling shareholders
Purchase of treasury shares
Proceeds from sale of treasury shares
Proceeds from issuance of shares by subsidiaries
Net cash used in financing activities
Net change in cash and cash equivalents
Effect of foreign exchange on cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
26,27
8,11
8,11
(92,872)
(62,574)
895
-
(42,072)
13,517
(543)
1,317
1,248
77
(117)
(7,598)
(2,176)
(718)
(119,758)
(71,858)
12,072
(24,914)
(24,008)
(2,034)
(5)
9
57
16,742
(50,501)
(18,674)
(1,819)
(37)
37
60
(38,823)
(54,192)
(18,065)
1,117
41,548
24,600
10,433
1,580
29,535
41,548
112
113
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 1: Organisation
PJSC Tatneft (the “Company”) and its subsidiaries (jointly referred to as “the Group”) are engaged in crude oil exploration,
development and production principally in the Republic of Tatarstan (“Tatarstan”), a republic within the Russian Federation.
The Group also engages in refining and marketing of crude oil and refined products as well as production and marketing of
petrochemicals (see Note 22).
The Company was incorporated as an open joint stock company effective 1 January 1994 (the “privatization date”) pursuant
to the approval of the State Property Management Committee of the Republic of Tatarstan (the “Government”). All assets and
liabilities previously managed by the production association Tatneft, Bugulminsky Mechanical Plant, Menzelinsky Exploratory
Drilling Department and Bavlinsky Drilling Department were transferred to the Company at their book value at the privatization
date in accordance with Decree No. 1403 on Privatization and Restructuring of Enterprises and Corporations into Joint-Stock
Companies. Such transfers were considered transfers between entities under common control at the privatization date, and
were recorded at book value.
The Group does not have an ultimate controlling party.
As of 31 December 2015 and 31 December 2014 the government of Tatarstan, including through its wholly owned company JSC
Svyazinvestnefteknim, controls approximately 36% of the Company’s voting stock. These shares were contributed to JSC Svy-
azinvestneftekhim by the Ministry of Land and Property Relations of Tatarstan in 2003. Tatarstan also holds a “Golden Share”, a
special governmental right, in the Company. The exercise of its powers under the Golden Share enables the Tatarstan govern-
ment to appoint one representative to the Board of Directors and one representative to the Revision Committee of the Company
as well as to veto certain major decisions, including those relating to changes in the share capital, amendments to the Charter,
liquidation or reorganization of the Company and “major” and “interested party” transactions as defined under Russian law. The
Golden Share currently has an indefinite term. The Tatarstan government, including through JSC Svyazinvestneftekhim, also
controls or exercises significant influence over a number of the Company’s suppliers and contractors.
The Company is domiciled in the Russian Federation. The address of its registered office is Lenina St., 75, Almet’evsk, Tatarstan
Republic, Russian Federation.
Note 2: Basis of presentation
The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”). The Group first adopted IFRS for the fiscal year ended 31 December 2012, with a date of transition to IFRS
on 1 January 2011.
These consolidated financial statements have been prepared on a historical cost basis, except for initial recognition of financial
instruments based on fair value, revaluation of available-for-sale financial assets and financial instruments categorized at fair
value through profit or loss.
The entities of the Group maintain their accounting records and prepare their statutory financial statements principally in accordance
with the Regulations on Accounting and Reporting of the Russian Federation (“RAR”). The accompanying consolidated financial
statements have been prepared from these accounting records and adjusted as necessary to comply with IFRS. The principal differ-
ences between RAR and IFRS relate to: (1) valuation (including indexation for the effect of hyperinflation in the Russian Federation
through 2002) and depreciation of property, plant and equipment; (2) foreign currency translation; (3) deferred income taxes; (4)
valuation allowances for unrecoverable assets; (5) consolidation; (6) share based payment; (7) accounting for oil and gas properties;
(8) recognition and disclosure of guarantees, contingencies and commitments; (9) accounting for decommissioning provision; (10)
pensions and other post retirement benefits and (11) business combinations and goodwill.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involv-
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
ing a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in Note 4.
Reclassifications. Certain reclassifications have been made to previously reported balances to conform to the current year
presentation; such reclassifications had no effect on net income profit for the year, shareholders’ equity or cash flows.
Note 3: Summary of Significant Accounting Policies
Functional and Presentation Currency. The presentation currency of the Group is the Russian rouble.
Management has determined the functional currency for each consolidated subsidiary of the Group, except for subsidiaries located
outside of the Russian Federation, is the Russian Rouble because the majority of their revenues, costs, property and equipment
purchased, debt and trade liabilities are either priced, incurred, payable or otherwise measured in Russian Roubles. Accordingly,
transactions and balances not already measured in Russian Roubles (primarily US Dollars) have been re-measured into Russian
Roubles in accordance with the relevant provisions of IAS 21 The Effects of Changes in Foreign Exchange Rates.
Under IAS 21 revenues, costs, capital and non-monetary assets and liabilities are translated at historical exchange rates pre-
vailing on the transaction dates. Monetary assets and liabilities are translated at exchange rates prevailing on the reporting
date. Exchange gains and losses arising from re-measurement of monetary assets and liabilities that are not denominated in
Russian Roubles are recognized in the profit or loss for the year.
For operations of major subsidiaries located outside of the Russian Federation, that primarily use US Dollar as the functional
currency, adjustments resulting from translating foreign functional currency assets and liabilities into Russian Roubles are
recorded in a separate component of shareholders’ equity entitled foreign currency translation adjustments. Revenues, ex-
penses and cash flows are translated at average exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate
on the dates of the transactions).
The official rate of exchange, as published by the Central Bank of Russia (“CBR”), of the Russian Rouble (“RR”) to the US Dollar
(“US $”) at 31 December 2015 and 2014 was RR 72.88 and RR 56.26 to US $, respectively. Average rate of exchange for the
years ended 31 December 2015 and 2014 were RR 60.96 and RR 38.42 per US $, respectively.
Consolidation. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group has
the power to direct relevant activities of the investee that significantly affect their returns, exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidi-
aries are consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that
control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Acquisition – related costs are expensed as incurred. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis at the non-controlling
interest’s proportionate share of the acquiree’s net assets or at fair value.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as
goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is
less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recog-
nised directly in the profit and loss for the year.
114
115
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unre-
alised losses are also eliminated unless the cost cannot be recovered.
Associates and joint ventures. Associates and joint ventures are entities over which the Group has significant influence (directly or
indirectly), but not control, generally accompanying a shareholding of between 20 and 50 percent of the voting rights. Investments
in associates and joint ventures are accounted for using the equity method of accounting and are initially recognised at cost. Divi-
dends received from associates and joint ventures reduce the carrying value of the investment in associates and joint ventures. Other
post-acquisition changes in Group’s share of net assets of an associate and joint ventures are recognised as follows: (i) the Group’s
share of profits or losses of associates or joint ventures is recorded in the consolidated profit or loss for the year as share of result of
associates or joint ventures, (ii) the Group’s share of other comprehensive income is recognised in other comprehensive income and
presented separately, (iii); all other changes in the Group’s share of the carrying value of net assets of associates or joint ventures are
recognised in profit or loss within the share of result of associates or joint ventures.
However, when the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate or
joint venture, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate or joint venture.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the
Group’s interest in the associates and joint ventures; unrealised losses are also eliminated unless the transaction provides evi-
dence of an impairment of the asset transferred.
The Group reviews equity method investments for impairment on an annual basis, and records impairment when circumstanc-
es indicate that the carrying value exceeds the recoverable amount.
Current/Non-current presentation. Group presents current and non-current assets, and current and non-current liabilities,
as separate classifications in its Consolidated Statement of Financial Position.
Group discloses for each asset and liability line item that combines amounts expected to be recovered or settled in period no
more than 12 months after the reporting period are disclosed as current; and more than 12 months after the reporting period
as non-current.
Cash and cash equivalents. Cash represents cash on hand and in bank accounts, which can be effectively withdrawn at any
time without prior notice. Cash equivalents include highly liquid short-term investments that can be converted to a certain cash
amount and mature within three months or less from the date of purchase. They are recognized based on the cost of acquisition
which approximates fair value.
Restricted cash. Restricted cash represents cash deposited under letter of credit arrangements, which are restricted under
various contractual agreements. Letters of credit are used to pay contractors for materials, equipment and services provided.
Restricted balances are excluded from cash and cash equivalents for the purposes of the consolidated statements of financial
position and of the consolidated statement of cash flows and disclosed separately.
Financial assets. All financial assets are initially recognised when an entity becomes a party to the contract, they recognised
at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The
Group‘s financial assets include cash and cash equivalents, deposits, securities, trade and other receivables, loans issued.
Financial assets have the following categories: (a) loans and receivables; (b) available-for-sale financial assets; (c) financial
assets at fair value through profit or loss.
Loans and receivables. Loans and receivables is a category of financial assets with fixed or determinable payments that are
not quoted in an active market. Subsequent to initial recognition loans and receivables are measured at amortised cost using
the effective interest method, less any impairment losses. The accrued interest is included in the profit and losses for the year.
Allowances are provided for estimated losses and for doubtful debts based on estimates of uncollectible amounts. These esti-
mates require the exercise of judgment and the use of assumptions.
The losses arising from impairment are recognized as selling, general and administrative expenses in the consolidated state-
ments of profit or loss and other comprehensive income.
Financial assets at fair value through profit or loss. A financial asset is classified at fair value through profit or loss category
if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at fair value
through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value
in accordance with the Group’s documented risk management or investment strategy. Financial assets at fair value through
profit or loss are measured at fair value, and changes therein are recognized in profit and loss for the year.
Available-for-sale financial assets. Available-for-sale financial assets are non-derivative financial assets that are desig-
nated as available-for-sale or are not classified in any of the above categories of financial assets. Available-for-sale financial
assets include investment securities which the Group intends to hold for an indefinite period of time and which may be sold in
response to needs for liquidity or changes in interest rates, exchange rates or equity prices.
Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign
currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented within
equity. Unquoted equity instruments whose fair value cannot be measured reliably are carried at cost less any impairment losses.
When an investment is derecognized the cumulative gain or loss in equity is also reclassified to profit and loss for the year.
The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group of financial as-
sets is impaired. Prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities
are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss (measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized
in the other comprehensive income) is recognized in the profit and loss for the year as a reclassification adjustment from other
comprehensive income.
Financial liabilities. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, net of
directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings.
Financial liabilities are recognised initially at fair value. Subsequent to initial recognition, these financial liabilities are measured
at amortised cost using the effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an exist-
ing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit and loss for
the year.
The Group does not use derivative financial instruments.
The Group does not offset assets and liabilities unless required or permitted to by an IFRS.
Inventories. Inventories of crude oil, refined oil products, materials and supplies, and finished goods are valued at the lower
of cost or net realizable value. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated cost of completion and selling expenses. The Group uses the weighted-average-cost method. Costs include both
direct and indirect expenditures incurred in bringing an item or product to its existing condition and location.
Prepaid expenses. Prepaid expenses include advances for purchases of products and services, insurance fees, prepay-
ments for export duties, VAT and other taxes. Prepayments are carried at cost less provision for impairment.
116
117
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Prepayments to acquire assets are transferred to the carrying amount of the asset once the Group has obtained control of the
asset and it is probable that future economic benefits associated with the asset will flow to the Group. Prepayments for services
such as insurance, transportation and others are written off to profit or loss when the goods or services relating to the prepay-
ments are received.
If there is an indication that the assets, goods or services relating to a prepayment will not be received, the carrying value of the
prepayment is written down accordingly and a corresponding impairment loss is recognised in the profit or loss for the year.
Mineral extraction tax. Mineral extraction tax (MET) on crude oil is defined monthly as an amount of volume produced per
fixed tax rate (RR 766 and RR 493 per ton in 2015 and 2014, respectively) adjusted depending on the monthly average market
prices of the Urals blend and the RR/US $ exchange rate for the preceding month. The base tax rate formula for MET is modi-
fied by benefit for fields whose depletion rate exceeds 80% of proved reserves as determined under Russian resource clas-
sification. The Company receives a benefit of 3.5% per field for each percent of depletion in excess of the 80% threshold. Tax
benefit is calculated using tax rate of RR 530 per ton (в 2014: RR 493 per ton).
The ultimate amount of the MET on crude oil depends also on geographic location of the oil field (for certain regions zero tax
rate may be applied depending on the volume of crude oil produced and period of field development). Also a zero MET tax rate
applies to the production of highly viscous crude oil with viscosity of more than 10,000 Megapascal second in reservoir condi-
tions. MET for production of highly viscous crude oil with viscosity between 200 and 10,000 Megapascal second is eligible to
tax benefit calculated using tax rate of RR 530 per ton (2014: RR 493 per ton).
MET is recorded within Taxes other than income tax in the Consolidated Statements of Profit or Loss and Other Comprehensive
Income.
Value added tax. Value added tax (VAT) at a standard rate of 18% is payable on the difference between output VAT on sales of goods
and services and recoverable input VAT charged by suppliers. Output VAT is charged on the earliest of the dates: either the date of
the shipment of goods (works, services) or the date of advance payment by the buyer. Input VAT can be recovered when purchased
goods (works, services) are accounted for and other necessary requirements provided by the tax legislation are met.
Export of goods and rendering certain services related to exported goods are subject to 0% VAT rate upon the submission of
confirmation documents to the tax authorities.
VAT related to sales and purchases is recognized in the Consolidated Statements of Financial Position on a gross basis and
disclosed separately as Prepaid expenses and other current assets and Taxes payable.
Oil and gas exploration and development cost. Oil and gas exploration and development activities are accounted for using
the successful efforts method whereby costs of acquiring unproved and proved oil and gas property as well as costs of drilling
and equipping productive wells, including development dry holes, and related production facilities are capitalized.
Other exploration expenses, including geological and geophysical expenses and the costs of carrying and retaining undevel-
oped properties, are expensed as incurred. The costs of exploratory wells that find oil and gas reserves are capitalized as ex-
ploration and evaluation assets on a “field by field” basis pending determination of whether proved reserves have been found.
In an area requiring a major capital expenditure before production can begin, exploratory well remains capitalized if additional
exploration drilling is underway or firmly planned. Exploration costs not meeting these criteria are charged to expense.
Exploration and evaluation costs are subject to technical, commercial and management review as well as review for impairment
at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When indicators
of impairment are present, resulting impairment loss is measured.
If subsequently commercial reserves are discovered, the carrying value, less losses from impairment of respective exploration
and evaluation assets, is classified as development assets. However, if no commercial reserves are discovered, such costs are
expensed after exploration and evaluation activities have been completed.
Property, plant and equipment. Property, plant and equipment are carried at historical cost of acquisition or construction
less accumulated depreciation, depletion, amortization and impairment.
Proved oil and gas properties include the initial estimate of the costs of dismantling and removing the item and restoring the
site on which it is located. The cost of maintenance, repairs and replacement of minor items of property are expensed when
incurred within operating expenses; renewals and improvements of assets are capitalised and depreciated during the remain-
ing useful life. Cost of replacing major parts or components of property, plant and equipment items are capitalised and the
replaced part is retired.
Advances made on property, plant and equipment and construction in progress are accounted for within Construction in progress.
Long-lived assets, including proved oil and gas properties at a field level, are assessed for possible impairment in accordance
with IAS 36 Impairment of assets, which requires long-lived assets with recorded values that are not expected to be recovered
through future cash flows to be written down to their recoverable amount which is the higher of fair value less costs to sell and
value-in-use.
Individual assets are grouped for impairment purposes at the lowest level for which there are identifiable cash flows that are
largely independent of the cash flows of other groups of assets - generally on a field-by-field basis for exploration and produc-
tion assets, at an entire complex level for refining assets or at a site level for service stations. Impairment losses are recognised
in the profit or loss for the year.
Impairments are reversed as applicable to the extent that the events or circumstances that triggered the original impairment
have changed. The reversal of impairment would be limited to the original carrying value less depreciation which would have
been otherwise charged had the impairment not been recorded.
Long-lived assets committed by management for disposal within one year, and meet the other criteria for held for sale, are ac-
counted for at the lower of amortized cost or fair value, less cost to sell. Costs of unproved oil and gas properties are evaluated
periodically and any impairment assessed is charged to expense.
The Group calculates depreciation expense for oil and gas proved properties using the units-of-production method for each
field based upon proved developed oil and gas reserves, except in the case of significant asset components whose useful life
differs from the lifetime of the field, in which case the straight-line method is applied.
Oil and gas licenses for exploration of unproved reserves are capitalised within property, plant and equipment; they are depre-
ciated on straight-line basis over the period of each license validity.
Depreciation of all other property, plant and equipment is determined on the straight-line method based on estimated useful
lives which are as follows:
Buildings and constructions
Machinery and equipment
Years
30-50
10-35
Gains and losses on disposals of property, plant and equipment are determined by comparing proceeds, if any, with the car-
rying amount. Gains and losses are recorded in Gain/(loss) on disposals of property, plant and equipment, investments and
impairments in the Consolidated Statements of Profit or Loss and Other Comprehensive Income.
Capitalisation of borrowing costs. Borrowing costs directly attributable to the acquisition, construction or production of as-
sets that necessarily take a substantial time to get ready for intended use or sale (qualifying assets) are capitalised as part of
the costs of those assets.
118
119
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
The Group capitalises borrowing costs that could have been avoided if it had not made capital expenditure on qualifying assets.
Borrowing costs capitalised are calculated at the Group’s average funding cost (the weighted average interest cost is applied
to the expenditures on the qualifying assets), except to the extent that funds are borrowed specifically for the purpose of ob-
taining a qualifying asset. Where this occurs, actual borrowing costs incurred less any investment income on the temporary
investment of those borrowings are capitalised.
Capitalisation of borrowing costs includes capitalising foreign exchange differences relating to borrowings to the extent that
they are regarded as an adjustment to interest costs. The gains and losses that are an adjustment to interest costs include the
interest rate differential between borrowing costs that would be incurred if the entity borrowed funds in its functional currency,
and borrowing costs actually incurred on foreign currency borrowings.
The portion of the foreign exchange movements is estimated based on interest rates on similar borrowing in the Group’s func-
tional currency. The foreign exchange gains and losses eligible for capitalisation are assessed on a cumulative basis.
Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use or sale.
Employee benefits, post-employment and other long-term benefits. Wages, salaries, contributions to the social insur-
ance funds, paid annual leave and sick leave, bonuses, and non-monetary benefits (such as health services and kindergarten
services) are accrued in the year in which the associated services are rendered by the employees of the Group. The Group has
various pension plans covering substantially all eligible employees and members of management. The pension liabilities are
measured at the present value of the estimated future cash outflows using interest rates of government securities, which have
the same currency and terms to maturity approximating the terms of the related liability. Pension costs are recognised using
the projected unit credit method.
The cost of providing pensions is accrued and charged to staff expense within operating expenses in the Consolidated State-
ments of Profit or Loss and Other Comprehensive Income reflecting the cost of benefits as they are earned over the service
lives of employees.
Remeasurements of the net defined benefit liability arose as the actuarial gains or losses from changes in assumptions and
from experience adjustments with regard to post employment benefit plans are recognised immediately in other comprehen-
sive income. Actuarial gains and losses related to other long-term benefits are recognised immediately in the profit or loss for
the year.
Past service costs are recognised as an expense immediately.
Plan assets are measured at fair value and are subject to certain limitations. Fair value of plan assets is based on market prices.
When no market price is available the fair value of plan assets is estimated by different valuation techniques, including dis-
counted expected future cash flow using a discount rate that reflects both the risk associated with the plan assets and maturity
or expected disposal date of these assets.
In the normal course of business the Group contributes to the Russian Federation State Pension Fund on behalf of its em-
ployees. Mandatory contributions to the Fund are expensed when incurred and are included within staff costs in operating
expenses.
Stock-based compensation. The Company has a share-based compensation plan (the “Plan”) for senior management and
directors of the Company. Under the provisions of the Plan, share-based bonus awards (“Awards”) are issued on an annual
basis to the Company’s directors and senior management as approved by the Board of Directors. Each Award provides a cash
payment at the settlement date equal to one of the Company’s common shares multiplied by the difference between the lowest
share price for the preceding three years as of the grant date and the highest share price for the preceding three years as of
each year-end. Share prices are measured based on the weighted average daily trading price as reported on the Moscow Ex-
change MICEX-RTS (MOEX). Awards are subject to individual annual performance conditions and are generally settled within
90 days after the Company’s Management Committee approval.
The liability at 31 December 2015 and 2014 is determined based on the final expected bonus payments. The Awards are rec-
ognized as expense over the annual service period, net of forfeitures, with a corresponding liability to accounts payable and
accrued liabilities.
Decommissioning provisions. The Group recognizes a liability for the fair value of legally required or constructive decommis-
sioning provisions associated with long-lived assets in the period in which the retirement obligations are incurred. The Group
has numerous asset removal obligations that it is required to perform under law or contract once an asset is permanently taken
out of service. The Group’s field exploration, development, and production activities include assets related to: well bores and
related equipment and operating sites, gathering and oil processing systems, oil storage facilities and gathering pipelines.
Generally, the Group’s licenses and other operating permits require certain actions to be taken by the Group in the abandon-
ment of these operations. Such actions include well abandonment activities, equipment dismantlement and other reclamation
activities. The Group’s estimates of future abandonment costs consider present regulatory or license requirements, as well as
actual dismantling and other related costs. These liabilities are measured by the Group using the present value of the estimated
future costs of decommissioning of these assets. The discount rate is reviewed at each reporting date and reflects current
market assessments of the time value of money and the risks specific to the liability. Most of these costs are not expected to be
incurred until several years, or decades, in the future and will be funded from general Group resources at the time of removal.
The Group capitalizes the associated decommissioning costs as part of the carrying amount of the long-lived assets. Changes
in obligation, reassessed regularly, related to new circumstances or changes in law or technology, or in the estimated amount
of the obligation, or in the pre-tax discount rates, are recognised as an increase or decrease of the cost of the relevant asset to
the extent of the carrying amount of the asset; the excess is recognised immediately in profit and loss.
The Group’s petrochemical, refining and marketing and distribution operations are carried out at large manufacturing facilities.
The nature of these operations is such that the ultimate date of decommissioning of any sites or facilities is unclear. Current
regulatory and licensing rules do not provide for liabilities related to the liquidation of such manufacturing facilities or of retail
fuel outlets. Management therefore believes that there are no legal or contractual obligations related to decommissioning or
other disposal of these assets.
Income taxes. Effective 1 January 2012, the Company has established the Consolidated Taxpayer Group which currently in-
cludes 4 companies of the Group. Income taxes have been provided for in the consolidated financial statements in accordance
with legislation enacted or substantively enacted by the end of the reporting period. The income tax charge comprises current
tax and deferred tax and is recognised in profit or loss for the year, except if it is recognised in other comprehensive income or
directly in equity because it relates to transactions that are also recognised, in the same or a different period, in other compre-
hensive income or directly in equity.
Current tax is the amount expected to be paid to, or recovered from, the taxation authorities in respect of taxable profits or
losses for the current and prior periods.
Deferred income tax is provided using the balance sheet liability method for tax loss carry forwards and temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred
income tax assets and liabilities are recognised for all deductable or taxable temporary differences, except:
• Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that
• In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of
is not a business combination and, at the time of the transaction, affects neither the accounting nor taxable profit or loss;
the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foresee-
able future; and
• Where it is not probable that future taxable profit will be available against which the deductible temporary differences and
the carry forward of unused tax credits and unused tax losses can be utilised.
Deferred tax balances are measured at tax rates enacted or substantively enacted at the end of the reporting period, which
are expected to apply to the period when the temporary differences will reverse or the tax loss carry forwards will be utilised.
120
121
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Deferred tax assets and liabilities are netted only within the individual companies of the Group.
Income tax penalties expense and income tax penalties payable are included in Taxes other than income tax in the Consoli-
dated Statements of Profit or Loss and Other Comprehensive Income and Taxes payable in the Consolidated Statement of
Financial Position, respectively. Income tax interest expense and payable are included in Interest expense in the Consolidated
Statements of Profit or Loss and Other Comprehensive Income and other accounts payable and accrued expenses in the Con-
solidated Statement of Financial Position, respectively.
Share capital. Ordinary shares and non-redeemable preference shares with discretionary dividends are both classified as
equity.
Dividends paid to shareholders are determined by the Board of directors and approved at the annual shareholders’ meeting.
Dividends are recorded as a liability and deducted from equity in the period in which they are declared and approved.
Treasury shares. Common shares of the Company owned by the Group at the reporting date are designated as treasury
shares and are recorded at cost using the weighted-average method. Gains on resale of treasury shares are credited to ad-
ditional paid-in capital whereas losses are charged to additional paid-in capital to the extent that previous net gains from resale
are included therein or otherwise to retained earnings.
Earnings per share. Preference shares are not redeemable and are considered to be participating shares.
Basic and diluted earnings per share are calculated by dividing profit or loss attributable to ordinary and preference share holders by
the weighted average number of ordinary and preferred shares outstanding during the period. Profit or loss attributed to equity hold-
ers is reduced by the amount of dividends declared in the current period for each class of shares. The remaining profit or loss is allo-
cated to common and preferred shares to the extent that each class may share in earnings if all the earnings for the period had been
distributed. Treasury shares are excluded from calculations. The total earnings allocated to each class of shares are determined by
adding together the amount allocated for dividends and the amount allocated for a participation feature.
Revenue recognition. Revenues from the production and sale of crude oil, petroleum and petrochemical products and other
products are recognized when risks and rewards of ownership are transferred and collectability is reasonably assured. Rev-
enue is measured at the fair value of the consideration received or receivable taking into account the amount of any discounts
and other incentives. Purchases and sales of inventory which are of a similar nature and value with the same counterparty that
are entered into in contemplation of one another are combined, considered as a single arrangement and netted against each
other in the Consolidated Statements of Profit or Loss and Other Comprehensive Income. Revenue includes only economic
benefits which flow to the Group. Taxes and duties arising on the sale of goods to third parties do not form part of revenue.
Transportation expenses. Transportation expenses recognised in the consolidated statements of profit or loss and other
comprehensive income represent all expenses incurred by the Group to transport crude oil and other products to end custom-
ers (they may include pipeline tariffs and any additional railroad costs, handling costs, port fees, sea freight and other costs).
Compounding fees are included in Selling, General and administrative expenses.
Interest income. Interest income is recognised on a time-proportion basis using the effective interest method.
Note 4: Critical accounting estimates and judgements in applying accounting policies
The Group makes estimates and assumptions that affect the amounts recognised in the consolidated financial statements and
the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated
and are based on management’s experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
Management of the Group also makes certain judgements, apart from those involving estimations, in the process of applying
the accounting policies. Judgements that have the most significant effect on the amounts recognised in the consolidated fi-
nancial statements and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within
the next financial year include:
• Estimation of oil and gas reserves;
• Useful life of property, plant and equipment;
• Decommissioning provisions;
• Impairment of long-lived assets;
• Consolidation.
Estimation of oil and gas reserves. Oil and gas development and production assets are depreciated on a unit-of-production
(UOP) basis for each field or group of fields with similar characteristics at a rate calculated by reference to proved or proved
developed reserves. Estimates of proved reserves are also used in the determination of whether impairments have arisen or
should be reversed. Also, exploration drilling costs are capitalized pending the results of further exploration or appraisal activ-
ity, which may take several years to complete and before any related proved reserves can be booked.
Proved and proved developed reserves are estimated by reference to available geological and engineering data and only in-
clude volumes for which access to market is assured with reasonable certainty. Estimates of oil and gas reserves are inherently
imprecise, require the application of judgment and are subject to regular revision, either upward or downward, based on new
information such as from the drilling of additional wells, observation of long-term reservoir performance under producing con-
ditions and changes in economic factors, including product prices, contract terms or development plans. The Group estimates
its oil and gas reserves in accordance with rules promulgated by the Oil and Gas Reserves Committee of the Society of Petro-
leum Engineers (SPE) for proved reserves.
Changes to the Group’s estimates of proved and proved developed reserves affect prospectively the amounts of depreciation,
depletion and amortization charged and, consequently, the carrying amounts of oil and gas properties. It is expected, however,
that in the normal course of business the diversity of the Group’s portfolio will limit the effect of such revisions. The outcome of,
or assessment of plans for, exploration or appraisal activity may result in the related capitalized exploration drilling costs being
written off in the profit and loss for the year.
Useful life of property, plant and equipment. Based on the terms included in the licenses and past experience, manage-
ment believes hydrocarbon production licenses will be extended past their current expiration dates at insignificant additional
costs. As a result of the anticipated license extensions, the assets are depreciated over their useful lives beyond the end of the
current license term.
Management assesses the useful life of an asset by considering the expected usage, estimated technical obsolescence, re-
sidual value, physical wear and tear and the operating environment in which the asset is located. Differences between such
estimates and actual results may have a material impact on the amount of the carrying values of the property, plant and equip-
ment and may result in adjustments to future depreciation rates and expenses for the period.
Other property, plant and equipment are depreciated on a straight-line basis over their useful economic lives. Management
periodically, at the end of each reporting period, reviews the appropriateness of the assets useful economic lives and residual
values. The review is based on the current condition of the assets, the estimated period during which they will continue to bring
economic benefit to the Group and the estimated residual value.
Decommissioning provisions. Management makes provision for the future costs of decommissioning oil and gas production
facilities, wells, pipelines, and related support equipment and for site restoration based on the best estimates of future costs
and economic lives of the oil and gas assets. Estimating future decommissioning provisions is complex and requires manage-
ment to make estimates and judgments with respect to removal obligations that will occur many years in the future.
122
123
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Changes in the measurement of existing obligations can result from changes in estimated timing, future costs or discount rates
used in valuation.
Certain new standards, amendments to standards and interpretations have been issued that are mandatory for the annual periods
beginning on or after 1 January 2016 or later, and which the Group has not early adopted:
The amount recognized as a provision is the best estimate of the expenditures required to settle the present obligation at the
reporting date based on current legislation in each jurisdiction where the Group‘s operating assets are located, and is also sub-
ject to change because of revisions and changes in laws and regulations and their interpretation. As a result of the subjectivity
of these provisions there is uncertainty regarding both the amount and estimated timing of such costs.
IFRS 9, Financial Instruments: Classification and Measurement (amended in July 2014 and effective for annual periods be-
ginning on or after 1 January 2018). The standard reflects all phases of the financial instruments project and replaces all previous of
IFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. The Group
is considering the implications of the standard, the impact on the Group and the timing of its adoption by the Group.
The Group’s petrochemical, refining and marketing and distribution operations are carried out at large manufacturing facilities.
The nature of these operations is such that the ultimate date of decommissioning of any sites or facilities is unclear. Current
regulatory and licensing rules do not provide for liabilities related to the liquidation of such manufacturing facilities or of retail
fuel outlets. Management therefore believes that there are no legal or contractual obligations related to decommissioning or
other disposal of these assets.
Sensitivity analysis for changes in rates, and other estimates:
Discount rate
Impact on decommissioning provision
Change in
At 31 December 2015
At 31 December 2014
+1%
-1%
(7,892)
10,534
(9,890)
13,103
Information about decommissioning provision is presented in Note 13.
Impairment of long-lived assets. The recoverable amounts of cash-generating units and individual assets have been deter-
mined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of
estimates and assumptions, including future oil prices, expected production volumes and refining margins appropriate to the
local circumstances and environment. It is reasonably possible that these assumptions may change and may then require a
material adjustment to the carrying value of the Group’s assets.
At 31 December 2015 management assessed whether there is any indication of impairment of long-lived assets. Management
believes that there is no any impairment loss that should be recognized at 31 December 2015.
Consolidation. The Company made significant judgements related to significant subsidiaries which are controlled by the
Group, even though the Group holds less than half of the voting rights of these subsidiaries.
The Company considers that the Group has control over several entities even though it has less than 50% of the voting rights.
This is because the Company has power over the investee, has rights to variable returns of the investee, and has the power to
affect variable returns.
Additional information is disclosed in Note 25.
Note 5: Adoption of new or revised standards and interpretations
A number of amendments to current IFRS and annual improvements also approved for application in Russia Federation became ef-
fective for the periods beginning on or after 1 January 2015 and but did not have any significant impact on the Group’s consolidated
financial statements:
periods beginning 1 July 2014).
• Defined Benefit Plans: Employee Contributions - Amendments to IAS 19 (issued in November 2013 and effective for annual
• Annual Improvements to IFRSs 2012 (issued in December 2013 and effective for annual periods beginning on or after 1 July 2014.
• Annual Improvements to IFRSs 2013 (issued in December 2013 and effective for annual periods beginning on or after 1 July 2014).
IFRS 15, Revenue from Contracts with Customers (issued on 28 May 2014 and effective for the periods beginning on or af-
ter 1 January 2018). The new standard introduces the core principle that revenue must be recognised when the goods or services are
transferred to the customer, at the transaction price. Any bundled goods or services that are distinct must be separately recognised,
and any discounts or rebates on the contract price must generally be allocated to the separate elements. When the consideration varies
for any reason, minimum amounts must be recognised if they are not at significant risk of reversal. Costs incurred to secure contracts
with customers have to be capitalised and amortised over the period when the benefits of the contract are consumed.
IFRS 16, Leases (issued in January 2016 and effective for annual periods beginning on or after 1 January 2019). The new
standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. All leases result in the lessee
obtaining the right to use an asset at the start of the lease and, if lease payments are made over time, also obtaining financing. Accord-
ingly, IFRS 16 eliminates the classification of leases as either operating leases or finance leases as is required by IAS 17 and, instead,
introduces a single lessee accounting model. Lessees will be required to recognise: (a) assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value; and (b) depreciation of lease assets separately from interest on lease
liabilities in the income statement. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a
lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.
The Group is currently assessing the impact of new standards on its consolidated financial statements.
The following other new pronouncements are not expected to have material impact on the Group when adopted:
January 2016).
beginning 1 January 2016).
nual periods beginning 1 January 2016).
for the periods beginning on or after 1 January 2016).
May 2014 and effective for the periods beginning on or after 1 January 2016).
• IFRS 14, Regulatory deferral accounts (issued in January 2014 and effective for annual periods beginning on or after 1
• Accounting for Acquisitions of Interests in Joint Operations - Amendments to IFRS 11 (issued on 6 May 2014 and effective
• Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38 (issued on 12
• Agriculture: Bearer plants - Amendments to IAS 16 and IAS 41 (issued on 30 June 2014 and effective for annual periods
• Equity Method in Separate Financial Statements - Amendments to IAS 27 (issued on 12 August 2014 and effective for an-
• Annual Improvements to IFRSs 2014 (issued on 25 September 2014 and effective for annual periods beginning on or after
• Disclosure Initiative Amendments to IAS 1 (issued in December 2014 and effective for annual periods on or after 1 January
• Investment Entities: Applying the Consolidation Exception Amendment to IFRS 10, IFRS 12 and IAS 28 (issued in December
• Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28
• Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12 (issued in January 2016 and effective for
• Disclosure Initiative - Amendments to IAS 7 (issued on 29 January 2016 and effective for annual periods beginning on or
(issued on 11 September 2014 and effective for annual periods beginning on or after 1 January 2016).
2014 and effective for annual periods on or after 1 January 2016).
annual periods beginning on or after 1 January 2017).
1 January 2016).
2016).
after 1 January 2017).
All above new standards, amendments to standards and interpretations are approved for application in Russian Federation except for
Amendments to IFRS 10 and IAS 28 and those of them issued in 2016.
124
125
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Note 6: Cash and cash equivalents
Cash and cash equivalents comprise the following:
Cash on hand and in banks
Term deposits with original maturity of less than three months
Total cash and cash equivalents
At 31 December 2015
At 31 December 2014
12,273
12,327
24,600
8,077
33,471
41,548
As of 31 December 2015 the majority of cash and cash equivalents are held in Bank Zenit and its subsidiaries, Sberbank,
Svyaz-bank and The Ural Bank for Reconstruction and Development. As of 31 December 2014 the majority of cash and cash
equivalents are held in Bank Zenit and its subsidiaries, Sberbank, Raiffeisenbank, VTB and Ak Bars Bank. Bank deposits rep-
resent deposits with original maturities of less than three months. The fair value of cash and term deposits approximates their
carrying value.
The credit quality of cash and cash equivalents balances may be summarised as follows:
Investment grade rating
Non-investment grade rating
No external rating
Total
At 31 December 2015
At 31 December 2014
Cash on hand
and in banks
Term deposits
Cash on hand
and in banks
Term deposits
1,758
9,053
1,462
-
4,758
7,569
12,273
12,327
287
6,486
1,304
8,077
-
33,264
207
33,471
Investment grade ratings classification referred to as Aaa to Baa3 for Moody’s Investment Services, as AAA to BBB- for Fitch
Rating and as AAA to BBB for Standard and Poor’s Rating, respectively.
The estimated fair value of short-term and long-term accounts receivable approximates their carrying value.
Analysis by credit quality of trade and other receivables is as follows:
Not over due and not impaired
56,896
4,059
40,784
4,803
At 31 December 2015
At 31 December 2014
Trade receivables
Other financial
receivables
Trade receivables
Other financial
receivables
Past due but not impaired
- less than 90 days overdue
- 91 to 180 days overdue
- over 180 days overdue
Total past due but not impaired
Individually determined to be impaired (gross)
- less than 90 days overdue
- 91 to 180 days overdue
- over 180 days overdue
Total individually impaired
Less provision for impairment
Total
852
417
-
1,269
-
-
1,517
1,517
(1,517)
58,165
60
59
56
175
-
-
451
451
(451)
4,234
1,333
246
-
1,579
-
-
19,880
19,880
(19,880)
42,363
134
40
83
257
-
-
447
447
(447)
5,060
Movements in the provision for impairment for trade and other receivables are as follows:
Provision for impairment at 1 January
(Provision for impairment)/recovery during the year
Amounts written off during the year as uncollectible
Foreign exchange gain/(loss)
Change in Group structure
2015
2014
Trade receivables
Other financial
receivables
Trade receivables
Other financial
receivables
(19,880)
(498)
18,111
750
-
(447)
(4)
-
-
-
(12,110)
(4)
9
(7,813)
38
(517)
58
6
-
6
Note 7: Accounts receivable
Short-term and long-term accounts receivable comprise the following:
Short-term accounts receivable:
Trade receivables
Other financial receivables
Less provision for impairment
Total short-term accounts receivable
Long-term accounts receivable:
Trade receivables
Other financial receivables
Less provision for impairment
Total long-term accounts receivable
Total financial assets within trade and other receivables
At 31 December 2015
At 31 December 2014
Provision for impairment at 31 December
(1,517)
(451)
(19,880)
(447)
As of 31 December 2014 the Group had receivables from ChMPKP Avto of US $334 million, relating to the sale of crude oil to
Ukraine (Kremenchug refinery), which had been fully provided for (Note 24). During the year ended 31 December 2015 the
receivables were written off against the provision due to bankruptcy and subsequent liquidation of the debtor (intermediary in
the crude oil sales transaction).
58,170
3,891
(1,910)
60,151
1,512
794
(58)
2,248
62,399
61,591
4,748
(20,280)
46,059
650
761
(47)
1,364
47,423
126
127
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Note 8: Short-term financial assets
Short-term financial assets comprise the following:
Loans and receivables:
Notes receivable
Other loans (net of provision for impairment of RR 23 million and RR
50 million as of 31 December 2015 and 2014)
Certificates of deposit
Financial assets at fair value through profit or loss:
Held-for-trading
Total short-term financial assets
At 31 December 2015
At 31 December 2014
5,596
3,617
2,594
1,248
13,055
3,536
3,156
16,111
2,520
25,323
During the year ended 31 December 2015 purchases of certificates of deposit and cash proceeds from certificates of deposit
were RR 91,851 million and RR 112,368 million, respectively.
During the year ended 31 December 2014 purchases of certificates of deposit and cash proceeds from certificates of deposit
were RR 78,425 million and RR 71,287 million, respectively.
During the year ended 31 December 2015 cash issuance of notes receivable and other loans and cash proceeds from notes
receivable and other loans were RR 4,149 million and RR 7,190 million, respectively.
During the year ended 31 December 2014 cash issuance of notes receivable and other loans and cash proceeds from notes
receivable and other loans were RR 5,185 million and RR 6,485 million, respectively.
The estimated fair value of loans and receivables approximates their carrying value.
Financial assets at fair value through profit and loss comprise the following:
Held-for-trading: Russian government debt securities
Corporate debt securities
Equity securities
Total financial assets at fair value through profit and loss
At 31 December 2015
At 31 December 2014
85
562
601
1,248
152
1,705
663
2,520
Information on trading securities issued by related parties is disclosed in Note 23.
128
Note 9: Inventories
Materials and supplies
Crude oil
Refined oil products
Petrochemical supplies and finished goods
Total inventories
Note 10: Prepaid expenses and other current assets
Prepaid expenses and other current assets are as follows:
Prepaid export duties
VAT recoverable
Advances (Note 27)
Prepaid transportation expenses
Other
Prepaid expenses and other current assets
Note 11: Long-term financial assets
Long-term financial assets comprise the following:
At 31 December 2015
At 31 December 2014
11,861
6,436
7,586
6,159
32,042
10,924
8,799
7,634
5,105
32,462
At 31 December 2015
At 31 December 2014
6,678
9,473
28,985
1,192
1,705
48,033
14,177
5,788
7,289
1,621
2,282
31,157
At 31 December 2015
At 31 December 2014
Loans and receivables:
Notes receivable (net of provision for impairment of RR 318 million as of
31 December 2015 and 2014)
Loans to employees (net of provision for impairment of RR 1,414 million
as of 31 December 2015)
Other loans
Certificates of deposit
Available-for-sale investments (Note 26)
Total long-term financial assets
4,181
1,262
1,963
17,774
23,289
48,469
3,571
2,636
2,353
16,581
4,752
29,893
129
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
The fair value of long-term financial assets is estimated by discounting the future contractual cash inflows at the market inter-
est rate available to the Group at the end of the reporting period. The carrying amounts and fair values of long-term financial
assets are as follows:
Notes receivable
Loans to employees
Other loans
Certificates of deposit
Total long-term financial assets
Carrying amounts
Fair values
At 31 December
2015
At 31 December
2014
At 31 December
2015
At 31 December
2014
4,181
1,262
1,963
17,774
25,180
3,571
2,636
2,353
16,581
25,141
3,872
1,262
1,545
17,567
24,246
3,292
2,636
1,852
11,578
19,358
During the year ended 31 December 2015 purchases of long-term certificates of deposit were RR 7,000 million.
During the year ended 31 December 2014 purchases of long-term certificates of deposit were RR 460 million.
During the year ended 31 December 2015 cash issuance of long-term notes receivable and other loans and cash proceeds
from long-term notes receivable and other loans were RR 4,142 million and RR 558 million, respectively.
During the year ended 31 December 2014 cash issuance of long-term notes receivable and other loans and cash proceeds
from long-term notes receivable and other loans were RR 5,235 million and RR 1,759 million, respectively.
Note 12: Investments in associates and joint ventures
Investments in associates and joint ventures comprise the following:
Name of an investee
Associates and joint ventures:
Bank Zenit
Other
Total
Ownership percentage
at 31 December
Net book value
as 31 December
Group’s share of
profit/(loss) for
2015
2014
2015
2014
2015
2014
25
20-75
25
20-75
5,246
386
5,632
7,131
81
7,212
(2,111)
(61)
(2,172)
402
(715)
(313)
The country of incorporation or registration is also their principal place of business. For all major associates and joint ventures
the country of incorporation is the Russian Federation.
The table below summarises the movements in the carrying amount of the Group’s investment in associates and joint ventures:
Net book value at 1 January
Share of result of associates and joint ventures
Share of other comprehensive income/(loss) of associates and joint ventures
Reclassification on loss of control/disposal of associates (reclassification on obtaining control)
Others
Net book value at 31 December
130
2015
7,212
(2,172)
222
-
370
5,632
2014
7,778
(313)
(270)
(14)
31
7,212
The condensed financial information of the Group’s equity basis investments is as follows:
Sales/interest income
Net (loss)/income
Other comprehensive income/(loss)
Total comprehensive (loss)/income
Total assets
Total liabilities
Note 13: Property, plant and equipment
Year ended 31 December 2015
Year ended 31 December 2014
Bank Zenit
32,318
(9,498)
902
(8,596)
314,817
293,771
Other
3,496
(139)
-
(139)
6,502
6,138
Bank Zenit
26,617
1,636
(1,098)
538
335,097
305,447
Other
6,513
(722)
-
(722)
6,406
6,074
Oil and gas
properties
Buildings and
constructions
Machinery and
equipment
Construc-tion in
progress
Total
Cost
As of 31 December 2013
340,725
153,770
118,514
106,809
Additions
Disposals
Changes in Group structure
Transfers
Changes in decommissioning provision
As of 31 December 2014
38
(3,199)
-
23,882
(12,988)
348,458
-
(1,723)
(6)
27,525
-
825
(1,355)
(2)
26,615
-
64,912
(3,313)
(7)
(78,022)
-
179,566
144,597
90,379
Depreciation, depletion and
amortisation
As of 31 December 2013
Depreciation charge
Disposals
Changes in Group structure
As of 31 December 2014
Net book value
As of 31 December 2013
As of 31 December 2014
Cost
158,527
23,659
8,928
(2,975)
-
4,570
(309)
(2)
55,749
8,394
(1,127)
-
164,480
27,918
63,016
-
-
-
-
-
182,198
183,978
130,111
151,648
62,765
81,581
106,809
90,379
481,883
507,586
As of 31 December 2014
348,458
179,566
144,597
Additions
Disposals
Changes in Group structure
Transfers
Changes in decommissioning provision
As of 31 December 2015
41
(2,912)
-
31,945
(17,631)
359,901
-
(467)
(345)
7,494
-
1
(1,166)
(8,007)
12,547
-
90,379
101,884
(4,553)
(1)
(51,986)
-
186,248
147,972
135,723
719,818
65,775
(9,590)
(15)
-
(12,988)
763,000
237,935
21,892
(4,411)
(2)
255,414
763,000
101,926
(9,098)
(8,353)
-
(17,631)
829,844
131
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Depreciation, depletion and
amortisation
As of 31 December 2014
Depreciation charge
Disposals
Changes in Group structure
As of 31 December 2015
Net book value
As of 31 December 2014
As of 31 December 2015
Exploration and evaluation assets included in Oil and Gas assets above, net book value:
164,480
9,589
(2,703)
-
27,918
4,744
(310)
(158)
171,366
32,194
63,016
10,734
(692)
(4,552)
68,506
-
-
-
-
-
255,414
25,067
(3,705)
(4,710)
272,066
183,978
188,535
151,648
154,054
81,581
79,466
90,379
135,723
507,586
557,778
At 1 January 2014
Additions
Reclassification to development assets
Charged to expense
At 31 December 2014
Additions
Reclassification to development assets
Charged to expense
At 31 December 2015
12,230
904
(823)
(988)
11,323
430
(150)
(4,558)
7,045
Advances for construction of RR 12,326 million and RR 11,841 million at 31 December 2015 and 2014, respectively are included
within construction in progress.
For the years ended 31 December 2015 and 2014, operating and investing cash flows used for exploration and evaluation activi-
ties amounted to RR 1,856 million and RR 430 million and RR 2,100 million and RR 904 million, respectively.
As stated in Note 3, the Group calculates depreciation, depletion and amortization for oil and gas properties using the units-of-pro-
duction method over proved or proved developed oil and gas reserves depending on the nature of the costs involved. The proved or
proved developed reserves used in the units-of-production method assume the extension of the Group’s production license beyond
their current expiration dates until the end of the economic lives of the fields as discussed below in further detail.
Social assets. During the years ended 31 December 2015 and 2014 the Group transferred social assets with a net book value
of RR 22 million and RR 1 million, respectively, to local authorities. At 31 December 2015 and 2014 the Group held social assets
with a net book value of RR 5,459 million and RR 5,442 million, respectively, all of which were constructed after the privatiza-
tion date.
The Group’s oil and gas fields are located principally on the territory of Tatarstan. The Group obtains licenses from the govern-
mental authorities to explore and produce oil and gas from these fields. The Group’s existing production licenses for its major
fields expire, after their recent extension, between 2026 and 2038, with other production licenses expiring between 2018 and
2044. The economic lives of many of the Group’s licensed fields extend beyond these dates. Under Russian law, the Group is
entitled to renew the licenses to the end of the economic lives of the fields, provided certain conditions are met. Article 10 of the
Subsoil Law provides that a license to use a field “shall be” extended at its scheduled termination at the initiative of the subsoil
user if necessary to finish production in the field, provided that there are no violations of the conditions of the license. The legis-
lative history of Article 10 indicates that the term “shall” replaced the term “may” in August 2004, clarifying that the subsoil user
has the right to extend the license term so long as it has not violated the conditions of the license. In August 2006, the term of
the Group’s license to produce oil and gas from the Group’s largest field, Romashkinskoye, was extended through 2038. And
the license to produce oil and gas from the Group’s second largest field, Novo-Elkhovskoe, was extended through 2026. The
Group’s right to extend licenses is, however, dependent on the Group continuing to comply with the terms of the licenses, and
management has the ability and intent to do so.
Management plans to request the extension of the licenses that have not yet been extended. The Group’s current production
plans are based on the assumption, which management considers to be reasonably certain, that the Group will be able to ex-
tend all existing licenses.
These plans have been designed on the basis that the Group will be producing crude oil through the economic lives of the fields
and not with a view to exploiting the Group’s reserves to maximum effect only through the license expiration dates.
Management is reasonably certain that the Group will be allowed to produce oil from the Group’s reserves after the expiration
of existing production licenses and until the end of the economic lives of the fields. “Reasonable certainty” is the applicable
standard for defining proved reserves under the SEC’s Regulation S-X, Rule 4-10.
The social assets comprise mainly dormitories, hotels, gyms and other facilities. The Group may transfer some of these social
assets to local authorities in the future, but does not expect these to be significant. The Group incurred social infrastructure
expenses of RR 4,643 million and RR 4,090 million for the years ended 31 December 2015 and 2014, respectively, for mainte-
nance that mainly relates to housing, schools and cultural buildings.
Decommissioning provisions.
The following tables summarize the Group’s decommissioning provisions and decommissioning costs activities:
Balance, beginning of period
Unwinding discount
New obligations
Release of existing obligations
Changes in estimates
Balance, end of period
Less: current portion of decommissioning provisions (Note 16)
Long-term balance, end of period
2015
2014
45,738
55,037
5,337
502
(27)
(18,133)
33,417
(65)
4,397
328
(708)
(13,316)
45,738
(959)
33,352
44,779
In 2015 the Group recorded the change in estimate for oil and gas properties decommissioning due to the change in discount
rate, estimated cost per well and expected long-term inflation rate
Key assumptions used for evaluation of decommissioning provision were as follows:
Discount rate
Inflation rate
At 31 December 2015
At 31 December 2014
9.75%
5.85%
11.67%
7.75%
132
133
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Note 14: Other long-term assets
Other long-term assets are as follows:
Prepaid computer programs
Prepaid license agreements
Other long-term assets
Total other long-term assets
Note 15: Debt
Short-term debt
Foreign currency denominated debt
Current portion of long-term debt
Other foreign currency denominated debt
Rouble denominated debt
Current portion of long-term debt
Other rouble denominated debt
Total short-term debt
Long-term debt
Foreign currency denominated debt
US $2.0 bln 2010 credit facility
US $75 mln 2011 credit facility
US $144.5 mln 2011 credit facility
EUR 55 mln 2013 credit facility
Other foreign currency denominated debt
Rouble denominated debt
Other rouble denominated debt
Total long-term debt
Less: current portion of long-term debt
Total long-term debt, net of current portion
Foreign currency debts are primarily denominated in US Dollars.
At 31 December 2015
At 31 December 2014
1,521
59
1,220
2,800
1,985
90
1,220
3,295
At 31 December 2015
At 31 December 2014
3,937
299
31
1,014
5,281
3,144
2,952
4,921
4,038
1,069
724
16,848
(3,968)
12,880
11,887
382
75
3,515
15,859
10,779
2,573
4,273
3,521
2,830
874
24,850
(11,962)
12,888
Long-term debt had the following maturity profile (based on the discounted contractual cash flows):
Due for repayment:
Between one and two years
Between two and five years
After five years
Total long-term debt, net of current portion
At 31 December 2015
At 31 December 2014
2,665
6,714
3,501
12,880
2,848
5,021
5,019
12,888
The Group does not apply hedge accounting and has not entered into any hedging arrangements in respect of its foreign cur-
rency obligations or interest rate exposures.
Short-term Russian Rouble denominated debt. Russian Rouble denominated short-term debt is primarily comprised of
loans with Russian banks. Short-term Rouble denominated loans of RR 1,014 million and RR 3,515 million bear contractual
interest rates of 12.5% to 13.7% per annum as of 31 December 2015 and 8% to 14.85% per annum as of 31 December 2014.
Long-term foreign currency denominated debt. In June 2010, the Company entered into a triple (3, 5 and 7 year) tranches
secured credit facility for up to US $2 billion arranged by Barclays Bank PLC, BNP Paribas (Suisse) SA, Bank of Moscow, Bank
of Tokyo-Mitsubishi UFJ LTD, Citibank N.A., Commerzbank Aktiengesellschaft, ING Bank N.V., Natixis SA, Nordea Bank, The
Royal Bank of Scotland N.V., Sberbank, Société Générale, Sumitomo Mitsui Finance Dublin LTD, Unicredit Bank AG, VTB Bank
and WestLB AG. The loan is collateralized with the contractual rights and receivables under an export contract between Tatneft
and Tatneft Europe AG under which Tatneft supplies no less than 750,000 metric tons of oil in a calendar quarter. The loan
agreement requires compliance with certain financial covenants including, but not limited to, minimum levels of consolidated
tangible net worth and interest coverage ratios. The 7-year tranche bears the interest of LIBOR plus 5%. The 3-year and 5-year
tranches were fully repaid.
In November 2011, TANECO entered into a US $75 million credit facility with equal semi-annual repayments during ten years.
The loan was arranged by Nordea Bank AB (Publ), Société Générale and Sumitomo Mitsui Banking Corporation Europe Lim-
ited. The loan bears interest at LIBOR plus 1.1% per annum. The loan agreement requires compliance with certain financial
covenants including, but not limited to, minimum levels of consolidated tangible net worth and interest coverage ratios.
In November 2011, TANECO entered into a US $144.5 million credit facility with equal semi-annual repayments during ten years
with the first repayment date on 15 May, 2014. The loan was arranged by Société Générale, Sumitomo Mitsui Banking Corpora-
tion Europe Limited and the Bank of Tokyo-Mitsubishi UFJ LTD. The loan bears interest at LIBOR plus 1.25% per annum. The
loan agreement requires compliance with certain financial covenants including, but not limited to, minimum levels of consoli-
dated tangible net worth and interest coverage ratios.
In May 2013, TANECO entered into a EUR 55 million credit facility with equal semi-annual repayment during ten years. The loan
was arranged by The Royal Bank of Scotland plc and Sumitomo Mitsui Banking Corporation Europe Limited. The loan bears
interest at LIBOR plus 1.5% per annum. The loan agreement requires compliance with certain financial covenants including,
but not limited to, minimum levels of consolidated tangible net worth and interest coverage ratios.
Management believes that for the year ended 31 December 2015 and 2014 the Group was in compliance with all covenants
required by the above loan agreements.
134
135
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
The carrying amounts and fair-values of long-term debt are as follows:
US$ denominated fixed rate
US$ denominated floating rate
EUR denominated floating rate
RR denominated fixed rate
Total long-term debt
Carrying amounts
Fair values
At 31 December
2015
At 31 December
2014
At 31 December
2015
At 31 December
2014
1,069
11,017
4,038
724
2,830
17,625
3,521
874
16,848
24,850
1,069
10,383
3,361
724
15,537
2,830
13,910
2,015
874
19,629
The fair value of long-term debts was determined based on future cash flows discounted at the market interest rate available to
the Group at the end of the reporting period.
Note 16: Accounts payable and accrued liabilities
Trade payables
Dividends payable
Other payables
Total financial liabilities within trade and other payables
Salaries and wages payable
Advances received from customers
Current portion of decommissioning provisions (Note 13)
Other accounts payable and accrued liabilities
Total non-financial liabilities
Accounts payable and accrued liabilities
At 31 December 2015
At 31 December 2014
27,816
133
580
28,529
4,746
2,847
65
7,301
14,959
43,488
17,269
117
1,347
18,733
4,187
6,883
959
7,237
19,266
37,999
The fair value of each class of financial liabilities included in short-term trade and other payables at 31 December 2015 and
2014 approximates their carrying value.
Note 17: Other long-term liabilities
Other long-term liabilities are as follows:
Pension liability
Other long-term liabilities
Total other long-term liabilities
Pension liabilities
At 31 December 2015
At 31 December 2014
3,871
248
4,119
2,749
211
2,960
The Group has various pension plans covering substantially all eligible employees and members of management. The amount of con-
tributions, frequency of benefit payments and other conditions of these plans are regulated by the “Statement of Organization of Non-
Governmental Pension Benefits for PJSC Tatneft Employees” and the contracts concluded between the Company or its subsidiaries,
management, and the non-profit organization “National Non-Governmental Pension Fund”. In accordance with these contracts the
Group is committed to make certain contributions on behalf of all employees and guarantees a minimum benefit upon retirement. Con-
tributions or benefits are generally based upon grade and years until official retirement age (age 60 for men and 55 for women), and in
the case of management are based upon years of service. In accordance with the provisions of collective agreements concluded on
an annual basis between the Company or its subsidiaries and their employees, the Group is obligated to pay certain post-employment
benefits, the amounts of which are generally based on salary grade and years of service at the time of retirement.
Principal actuarial assumptions are as follows:
Discount rate
Rate of increase in salary levels
Actuarial rate of NPF
Statutory insurance contributions rate
At 31 December 2015
At 31 December 2014
9.7%
6.27%
3.0%
30.69%
12.75%
7.5%
3.0%
30.47%
Management has assessed that reasonable changes in the principal significant actuarial assumptions will not have a significant
impact on the consolidated statements of profit of loss and other comprehensive income or the liability recognized in the con-
solidated statement of financial position.
Amounts recognized in the consolidated statement of financial position:
At 31 December 2015
At 31 December 2014
Present value of defined benefit obligation
Less: Fair value of plan assets
Net defined benefit liability
Change in the defined benefit obligation amount:
Defined benefit obligation at beginning year
Effect of exchange rate changes
Current service cost
Interest cost
Benefits paid
Remeasurement losses/(gains):
Actuarial losses/(gains) arising from changes in financial assumptions
Actuarial losses arising from changes in demographic assumptions
Actuarial losses - Experience
Past service cost
Other
5,834
(1,963)
3,871
2015
4,379
48
140
558
(677)
643
38
640
65
-
4,379
(1,630)
2,749
2014
5,598
50
189
448
(531)
(1,510)
30
56
101
(52)
Defined benefit obligation at the end of the year
5,834
4,379
136
137
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
The amounts recognized in profit or loss are as follows:
Plan assets structure:
Service cost
Net interest expense
Remeasurement losses/(gains):
Actuarial losses/(gain) arising from changes in financial assumptions
Actuarial losses arising from changes in demographic assumptions
Actuarial losses/(gains) – Experience
Other
Total included in ‘employee benefits expense’
The amounts recognized in other comprehensive income are as follows:
Remeasurement losses/(gains):
Actuarial losses/(gains) arising from changes in financial assumptions
Actuarial losses arising from changes in demographic assumptions
Actuarial losses – Experience
Effect of exchange rate changes
Total included in other comprehensive income
Reconciliation of the opening and closing balances of plan assets’ fair value:
Plan assets at beginning of year
Interest income
Contributions
Benefits paid
Actuarial gain/(loss)
Other
Plan assets at year end
2015
205
350
143
13
153
-
864
2015
229
25
487
48
789
2015
1,630
208
193
(340)
272
-
1,963
2014
272
301
(323)
10
(100)
(52)
108
2014
(845)
20
155
50
(620)
2014
1,830
146
229
(232)
(342)
(1)
1,630
Russian corporate bonds and equity securities of Russian issuers
Russian government and regions bonds
Bank deposits
Foreign government securities
Other
Total plan assets
At 31 December 2015
At 31 December 2014
32.61%
11.6%
33.86%
6.9%
15.03%
100%
34.61%
8.51%
33.84%
10.11%
12.93%
100%
Expected contributions to be paid during the next annual reporting period are RR 625 million.
Note 18: Taxes
Income tax expense comprises the following:
Current income tax expense
Deferred income tax expense
Income tax expense for the year
Year ended 31
December 2015
Year ended 31
December 2014
(30,954)
(902)
(31,856)
(21,376)
(4,920)
(26,296)
Presented below is reconciliation between the provision for income taxes and taxes determined by applying the statutory tax
rate 20% (for the year ended 31 December 2014: 20%) to income before income taxes:
Profit before income taxes and non-controlling interest
Theoretical income tax expense at statutory rate
Increase due to:
Non-deductible expenses, net
Other
Income tax expense
Year ended 31
December 2015
Year ended 31
December 2014
137,628
(27,526)
(3,150)
(1,180)
123,973
(24,795)
(2,545)
1,044
(31,856)
(26,296)
The annual contributions made by the Group are managed by the Fund. The primary investment objectives of the Fund are to
achieve the highest rate of total return within prudent levels of risk and liquidity, to diversify and mitigate potential downside risk
associated with the investments, and to provide adequate liquidity for benefit payments and portfolio management.
No provision has been made for additional income taxes on RR 31,159 million of undistributed earnings of certain subsidiaries.
These earnings have been and will continue to be reinvested. These earnings could become subject to additional tax of ap-
proximately RR 1,964 million if they were remitted as dividends.
138
139
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized
for financial reporting purposes and such amounts recognized for statutory tax purposes. Deferred tax assets (liabilities) are
comprised of the following:
For mineral extraction tax for fields whose depletion rate exceeds a certain threshold the Group received a benefit of approxi-
mately RR 22.1 billion and RR 29.7 billion for the years ended 31 December 2015 and 2014, respectively.
At 31 December 2015 and 2014 taxes payable were as follows:
Tax loss carry forward
Decommissioning provision
Other
Deferred income tax assets
Property, plant and equipment
Inventories
Accounts receivable
Long-term investments
Other liabilities
Deferred income tax liabilities
Net deferred tax liability
At 31 December 2015
At 31 December 2014
4,220
6,670
814
11,704
(29,449)
(980)
(57)
217
(671)
(30,940)
(19,236)
4,508
8,956
778
14,242
(27,458)
(2,370)
(319)
(94)
(2,618)
(32,859)
(18,617)
Mineral extraction tax
Value Added Tax on goods sold
Export duties
Property tax
Other
Total taxes payable
Note 19: Shareholders’ equity
At 31 December 2015
At 31 December 2014
7,401
3,909
2,534
1,360
2,998
7,300
2,694
596
1,419
2,431
18,202
14,440
Deferred income taxes are reflected in the consolidated statement of financial position as follows:
Deferred income tax asset
Deferred income tax liability
Net deferred tax liability
At 31 December 2015
At 31 December 2014
2,535
(21,771)
(19,236)
2,982
(21,599)
(18,617)
Deferred tax assets are recognized for the carry-forward of unused tax losses and unused tax credits to the extent that it is probable
that taxable profits will be available against which the unused tax losses/credits can be utilized.
Tax losses carry forward. At 31 December 2015, the Group had recognized deferred income tax assets of RR 4,220 million
(RR 4,508 million at 31 December 2014) in respect of unused tax loss carry forwards of RR 21,102 million (RR 22,541 million
at 31 December 2014). Tax losses can be carried forward for relief against taxable profits for 10 years after they are incurred,
subject to certain limitations. In determining future taxable profits and the amount of tax benefits that are probable in the fu-
ture management makes judgments including expectations regarding the Group’s ability to generate sufficient future taxable
income and the projected time period over which deferred tax benefits will be realized.
The Group doesn’t have any unrecognised potential deferred tax assets in respect of deductible temporary differences.
Authorized share capital. At 31 December 2015 the authorized share capital consists of 2,178,690,700 voting common shares and
147,508,500 non-voting preferred shares; both classes of shares have a nominal value of RR 1.00 per share. The nominal value of au-
thorised share capital differs from its carrying value due to effect of the hyperinflation of capital contributions made before 2003.
Golden share. JSC Svyazinvestneftekhim, a company wholly owned by the government of Tatarstan, as of 31 December 2015 and
2014 holds approximately 33.59% of the Company’s capital stock (approximately 36% of voting stock). These shares were contributed
to Svyazinvestneftekhim by the Ministry of Land and Property Relations of Tatarstan in 2003. Tatarstan also holds a “Golden Share” – a
special governmental right – in the Company. The exercise of its powers under the Golden Share enables the Tatarstan government to
appoint one representative to the Board of Directors and Revision Commission of the Company and to veto certain major decisions,
including those relating to changes in the share capital, amendments to the Charter, liquidation or reorganization and “major” and “in-
terested party” transactions as defined under Russian law.
The Golden Share currently has an indefinite term. The Tatarstan government also controls or exercises significant influence over a
number of the Company’s suppliers, contractors and customers (see also Note 1).
Rights attributable to preferred shares. Unless a different amount is approved at the annual shareholders meeting, preferred shares
earn dividends equal to their nominal value. The amount of a dividend for a preferred share may not be less than the amount of a divi-
dend for a common share. Preferred shareholders may vote at meetings only on the following decisions:
• the amendment of the dividends payable per preferred share;
• the issuance of additional shares with rights greater than the current rights of preferred shareholders; and
• the liquidation or reorganization of the Company.
The Group is subject to a number of taxes other than income taxes, which are detailed as follows:
The decisions listed above can be made only if approved by 75% of preferred shareholders.
Mineral extraction tax
Property tax
Penalties and interest
Other
Total taxes other than income taxes
140
Year ended 31
December 2015
Year ended 31
December 2014
129,608
5,888
86
1,798
137,380
110,416
5,161
53
1,430
117,060
Holders of preferred shares acquire the same voting rights as holders of common shares in the event that dividends are either not
declared, or declared but not paid, on preferred shares. On liquidation, the shareholders are entitled to receive a distribution of net as-
sets. Under Russian Joint Stock Companies Law and the Company’s charter in case of liquidation, preferred shareholders have priority
over shareholders holding common shares to be paid declared but unpaid dividends on preferred shares and the liquidation value of
preferred shares, if any.
Amounts available for distribution to shareholders. Amounts available for distribution to shareholders are based on the Company’s
non-consolidated statutory accounts prepared in accordance with RAR, which differ significantly from IFRS (see Note 2). The statu-
tory accounts are the basis for profit distribution and other appropriations. Russian legislation identifies the basis of distribution as the
current period net profit calculated in accordance with RAR. However, this legislation and other statutory laws and regulations dealing
141
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
with distribution rights are open to legal interpretation. For the years ended 31 December 2015 and 2014, the Company had a statutory
current profit of RR 85,009 million and RR 82,061 million, respectively.
In June 2015 the shareholders of the Company approved the payment of dividends for the year ended 31 December 2014 in amount of
RR 10.58 per preference and ordinary share. In June 2014 the shareholders of the Company approved the payment of dividends for the
year ended 31 December 2013 in amount of RR 8.23 per preference and ordinary share.
Earnings per share. Preference shares are not redeemable and are considered to be participating shares. Basic and diluted earnings
per share are calculated by dividing profit or loss attributable to ordinary and preference shareholders by the weighted average number
of ordinary and preferred shares outstanding during the period. Profit or loss attributed to equity holders is reduced by the amount of
dividends declared in the current period for each class of shares. The remaining profit or loss is allocated to common and preferred
shares to the extent that each class may share in earnings if all the earnings for the period had been distributed. Treasury shares are ex-
cluded from calculations. The total earnings allocated to each class of shares are determined by adding together the amount allocated
for dividends and the amount allocated for a participation feature.
Profit attributable to Group shareholders
Common share dividends
Preferred share dividends
Income available to common and preferred shareholders, net of dividends
Basic and diluted:
Weighted average number of shares outstanding (millions of shares):
Common
Preferred
Combined weighted average number of common and preferred shares outstanding
Basic and diluted earnings per share (RR)
Common
Preferred
Year ended 31
December 2015
Year ended 31
December2014
98,930
(22,463)
(1,561)
74,906
2,123
148
2,271
43.56
43.53
92,227
(17,474)
(1,214)
73,539
2,123
148
2,271
40.61
40.58
Non-controlling interest. Non-controlling interest is adjusted by dividends paid by the Group’s subsidiaries amounting to RR
2,034 million and RR 1,819 million at 31 December 2015 and 2014, respectively.
Note 20: Employee benefit expenses
Wages and salaries
Statutory insurance contributions
Bonus certificates granted to directors and employees
Pension costs – defined benefit plans (Note 17)
Other employee benefits
Total employee benefit expense
Year ended 31
December 2015
Year ended 31
December 2014
39,018
11,438
1,257
864
2,055
54,632
35,144
10,197
1,235
108
2,467
49,151
Employee benefit expenses are included in operating expenses, selling, general and administrative expenses and Mainte-
nance of social infrastructure and transfer of social assets and other expenses in the Consolidated Statements of Profit or Loss
and Other Comprehensive Income.
Note 21: Interest income and interest expense
Interest income comprises the following:
Interest income from loans and receivables
Unwinding of the present value discount of long-term financial assets
Total interest income
Interest expense comprises the following:
Bank loans
Unwinding of the present value discount of decommissioning provision
Unwinding of the present value discount of long-term financial assets and liabilities
Total interest expense
Less capitalised interest costs
Total interest costs recognised in profit or loss
Note 22: Segment information
Year ended 31
December 2015
Year ended 31
December 2014
10,873
150
11,023
6,852
92
6,944
Year ended 31
December 2015
Year ended 31
December 2014
1,082
5,337
1,272
7,691
-
7,691
1,660
4,123
45
5,828
(346)
5,482
Operating segments are components that engage in business activities that may earn revenues or incur expenses, whose operating
results are regularly reviewed by the Board of Directors and the Management Committee and for which discrete financial information
is available.
Segments whose revenue, result or assets are ten percent or more of all the segments are reported separately.
The Group’s business activities are conducted predominantly through three main operating segments:
consist of transfer of crude oil to refinery and other goods and services provided to other operating segments,
• Exploration and production consists of exploration, development, extraction and sale of own crude oil. Intersegment sales
• Refining and marketing comprises purchases and sales of crude oil and refined products from third parties, own refining
• Petrochemical products include production and sales of tires and petrochemical raw materials and refined products, which
activities and retailing operations,
are used in production of tires.
Other sales include revenues from ancillary services provided by the specialized subdivisions and subsidiaries of the Group, such as
sales of oilfield equipment and drilling services provided to other companies in Tatarstan, revenues from the sale of auxiliary petro-
chemical related services and materials as well as other business activities, which do not constitute reportable business segments.
The Group evaluates performance of its reportable operating segments and allocates resources based on segment earnings, de-
fined as profit before income taxes and non-controlling interest not including interest income, expense, and gains from equity in-
vestments, other income (expenses) and foreign exchange loss or gain. Intersegment sales are at prices that approximate market.
Group financing (including interest expense and interest income) and income taxes are managed on a Group basis and are not
allocated to operating segments.
For the year ended 31 December 2015, revenues of RR 68,833 million or 12% of the Group’s total sales and operating revenues is
derived from one external customer.
142
143
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
For the year ended 31 December 2014, revenues of RR 61,719 million or 13% of the Group’s total sales and operating revenues is
derived from one external customer.
These revenues represent sales of crude oil and are attributable to the exploration and production segment and refining and market-
ing segment.
Management does not believe the Group is dependent on any particular customer.
Corporate and other sales
Elimination of intersegment sales
Total sales and other operating revenues
Year ended 31
December 2015
Year ended 31
December 2014
17,763
(121,535)
552,712
17,585
(113,547)
476,360
(1) - CIS is an abbreviation for Commonwealth of Independent States (excluding the Russian Federation).
(2) - Non-CIS sales of crude oil and refined products are mainly made to Germany, Switzerland, Netherlands and United Kingdom based traders and
Poland based refineries.
Segment sales and other operating revenues. Reportable operating segment sales and other operating revenues are stated in
the following table:
Segment earnings.
Exploration and production
Domestic own crude oil
CIS own crude oil
Non-CIS own crude oil
Other
Intersegment sales
Year ended 31
December 2015
Year ended 31
December 2014
73,486
19,328
150,295
5,864
117,088
75,601
8,825
105,411
4,263
109,215
Total exploration and production
366,061
303,315
Refining and marketing
Domestic sales
Crude oil purchased for resale
Refined products
Total Domestic sales
CIS sales
Refined products
Total CIS sales(1)
Non-CIS sales
Crude oil purchased for resale
Refined products
Total non-CIS sales(2)
Other
Intersegment sales
Total refining and marketing
Petrochemicals
Tires – domestic sales
Tires – CIS sales
Tires – non-CIS sales
Petrochemical products and other
Intersegment sales
Total petrochemicals
Total segment sales
144
15,735
127,592
143,327
15,411
15,411
10,374
72,155
82,529
5,882
3,305
12,218
126,967
139,185
12,087
12,087
10,083
62,329
72,412
5,105
3,399
250,454
232,188
27,641
25,027
6,802
1,999
2,385
1,142
39,969
656,484
6,579
1,486
2,794
933
36,819
572,322
Segment earnings
Exploration and production
Refining and marketing
Petrochemicals
Total segment earnings
Corporate and other
Other income
Profit before income tax
Segment assets.
Assets
Exploration and production
Refining and marketing
Petrochemicals
Corporate and other
Total assets
Year ended 31
December 2015
Year ended 31
December 2014
122,657
16,617
1,482
140,756
(10,255)
7,127
137,628
94,932
16,892
320
112,144
(5,611)
17,440
123,973
At 31 December 2015
At 31 December 2014
297,517
338,852
31,674
130,648
798,691
280,081
294,658
30,094
128,101
732,934
As of 31 December 2015 and 2014 corporate and other segment comprised RR 5,632 million and RR 7,212 million, respectively,
investments in associates and joint ventures.
The Group’s assets and operations are primarily located and conducted in the Russian Federation.
Segment depreciation, depletion and amortisation and additions to property, plant and equipment.
Depreciation, depletion and amortization
Exploration and production
Refining and marketing
Petrochemicals
Corporate and other
Total segment depreciation, depletion and amortization
Year ended 31
December 2015
Year ended 31
December 2014
13,340
7,137
1,995
2,580
25,052
11,633
5,516
1,741
2,231
21,121
145
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Additions to property, plant and equipment
Exploration and production
Refining and marketing
Petrochemicals
Corporate and other
Total additions to property, plant and equipment
Year ended 31
December 2015
Year ended 31
December 2014
19,809
58,163
1,027
5,531
84,530
12,186
32,633
1,254
6,714
52,787
For the years ended 31 December 2015 and 2014 additions to property, plant and equipment of exploration and production segment
are shown net of RR 17,631 million and RR 12,988 million, respectively, associated with changes in the decommissioning provision.
Note 23: Related party transactions
Parties are generally considered to be related if the parties are under common control or if one party has the ability to control the other
party or can exercise significant influence or joint control over the other party in making financial and operational decisions. In con-
sidering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.
Transactions are entered into in the normal course of business with associates, joint ventures, government related companies, key
management personnel and other related parties. These transactions include sales and purchases of refined products, purchases of
electricity, transportation services and banking transactions.
Associates, joint ventures and other related parties
The amounts of transactions for each period with associates, joint ventures and other related parties are as follows:
Revenues and income
Sales of refined products
Other sales
Interest income
Costs and expenses
Purchases of crude oil
Other services
Other purchases
Year ended 31
December 2015
Year ended 31
December 2014
15
294
3,622
103
1,575
597
15
324
2,530
148
527
1,644
For the years ended 31 December 2015 and 2014, the Group sold crude oil on a commission basis from related parties for RR 103
million and RR 148 million, respectively.
At 31 December 2015 and 2014 the outstanding balances with associates, joint ventures and other related parties were as follows:
At 31 December 2015
At 31 December 2014
Assets
Cash and cash equivalents
Restricted cash
Accounts receivable
Notes receivable
Short-term certificates of deposit
Trading securities
Loans receivable
Prepaid expenses and other current assets
Due from related parties short-term
Long-term accounts receivable
Long-term certificates of deposit
Long-term notes receivable
Long-term loans receivable
Due from related parties long-term
Liabilities
Accounts payable and accrued liabilities
Short-term debt
Due to related parties short-term
9,392
211
373
5,085
-
7
428
325
6,258
1,554
421
3,459
4,394
176
515
189
15,821
16,966
14
17,199
4,156
1,715
23,084
(42)
(814)
(856)
6
16,006
3,360
1,614
20,986
(45)
(1,744)
(1,789)
As of 31 December 2015 and 2014, the Group had RR 10,142 million and RR 7,719 million, respectively, in loans and notes re-
ceivable due from Bank Zenit or its wholly-owned subsidiary Bank Devon Credit. These loans and notes mature between 2016
and 2022, bearing interest between 2.23% and 9.99%. As of 31 December 2015 and 2014, the Group has short and long-term
certificates of deposit of RR 17,199 million and RR 20,400 million, respectively, held with Bank Zenit or its wholly-owned sub-
sidiary Bank Devon Credit.
In March 2009 the Group placed a long-term deposit with Bank Zenit for RR 2,140 million payable in 10 years bearing interest
10.85%. In February 2014 an additional agreement was signed, as result of which this deposit will be payable in 15 years with a
new interest rate of 9.35% per annum.
The Group entered into a subordinated deposit agreement with Bank Zenit in January 2013 in the amount of RR 3,600 million
bearing interest of 9% per annum. In October 2015 interest rate was increased to 15% per annum.
146
147
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Russian Government bodies and state organizations
The amounts of transactions for each period with Government bodies and state organizations are as follows:
sary measures to support the sustainability and development of the Group’s business in the current business and economic
environment.
Year ended 31
December 2015
Year ended 31
December 2014
Capital commitments. As of 31 December 2015 and 31 December 2014 the Group has outstanding capital commitments of
approximately RR 59,294 million and RR 36,977 million, respectively, mainly for the construction of the TANECO refinery com-
plex. These commitments are expected to be paid between 2016 and 2018.
Sales of crude oil
Sales of refined products
Other sales
Interest income
Purchases of crude oil
Purchases of refined products
Purchases of electricity
Purchases of transportation services
Other services
Other purchases
-
11,439
1,841
2,865
841
19,141
11,507
20,005
3,867
7,750
1,292
2,841
330
1,653
-
18,821
11,037
15,061
3,287
204
Compensation to key management personnel
As of 31 December 2015 and 2014 total remuneration, including pension cost, for key management personnel was RR 1,797
million and RR 1,582 million, respectively.
For the year ended 31 December 2015, the Company issued 6,261,500 Awards to senior management and directors, all of
which are expected to be settled at a price of RR 200.76 per Award. Final settlement is subject to approval at the Compa-
ny’s Management Committee meeting in July-September 2016. For the year ended 31 December 2014, the Company issued
9,264,850 Awards to senior management and directors, all of which are expected to be settled at a price of RR 133.28 per
Award. The amount of related compensation expense recognized in Selling, General and administrative expenses of the Con-
solidated Statements of Profit or Loss and Other Comprehensive Income for the years ended 31 December 2015 and 2014 was
RR 1,257 million and RR 1,235 million, respectively.
Note 24: Contingencies and commitments
Operating Environment of the Group
The Russian Federation displays certain characteristics of an emerging market. Its economy is particularly sensitive to oil and
gas prices. Tax, currency and customs legislation is sometimes subject to varying interpretations and contributes to the chal-
lenges faced by companies operating in the Russian Federation.
During 2015 the Russian economy was negatively impacted by a decline in oil prices and ongoing political tensions.
The ongoing uncertainty and volatility of the financial markets and other risks could have significant negative effects on the
Russian financial and corporate sectors. Management determined provisions for impairment by considering the economic
situation and outlook at the end of the reporting period.
These events may have a further significant impact on the Group’s future operations and financial position, the effect of which
is difficult to predict.
Management believes the Group’s current and long-term capital expenditures program can be funded through cash flows
generated from existing operations as well as lines of credit available to the Company. The TANECO refinery project has been
funded from the Company’s cash flow with the support of the bank facilities (Note 15).
Management believes the Company has the ability to obtain syndicated loans and other financings as needed to continue
funding the TANECO refinery project, refinance any maturing debts as well as finance business acquisitions and other transac-
tions that may arise in the future.
Taxation. The Russian tax legislation is subject to varying interpretations and changes which can occur frequently. Manage-
ment’s interpretation of the legislation, as applied to the transactions and activities, may be challenged by the tax authorities.
The tax authorities may take a different position in their interpretation of the legislation, and it is possible that transactions and
activities that have not been challenged in the past may be challenged.
New transfer pricing rules were incorporated in the Russian tax legislation as of 1 January 2012. These transfer pricing rules
appear to be more technically elaborate and, to a certain extent, better aligned with the international transfer pricing principles
developed by the Organisation for Economic Cooperation and Development (OECD), as compared to rules applied earlier. The
current legislation allows the Russian Federal Tax Service (hereinafter FTS) to impose additional taxes in respect of controllable
transactions (transactions with related parties and certain transactions with unrelated parties), provided that the transaction
price is not arm’s length.
Given that the practice of implementation of the new Russian transfer pricing rules has not yet developed, the outcome of any
disputes with FTS over applied prices cannot be estimated reliably. Management believes that its pricing policy is arm’s length
and it has implemented internal processes to be in compliance with the new transfer pricing legislation. The Group believes that
its interpretation of the new legislation is appropriate and the Group’s tax position will be sustained.
Environmental contingencies. The Group, through its predecessor entities, has operated in Tatarstan for many years with-
out developed environmental laws, regulations and the Group’s policies. Environmental regulations and their enforcement are
currently being considered in the Russian Federation and the Group is monitoring its potential obligations related thereto. The
outcome of environmental liabilities under proposed or any future environmental legislation cannot reasonably be estimated at
present, but could be material. Under existing legislation, however, management believes that there are no probable liabilities,
which would have a material adverse effect on the operating results or financial position of the Group.
Legal contingencies. The Group is subject to various lawsuits and claims arising in the ordinary course of business. The
outcomes of such contingencies, lawsuits or other proceedings cannot be determined at present. In the case of all known con-
tingencies the Group accrues a liability when the loss is probable and the amount is reasonably estimable. Based on currently
available information, management believes that it is remote that future costs related to known contingent liability exposures
would have a material adverse impact on the Group’s consolidated financial statements.
Social commitments. The Group contributes significantly to the maintenance of local infrastructure and the welfare of its
employees within Tatarstan, which includes contributions towards the construction, development and maintenance of housing,
hospitals and transport services, recreation and other social needs. Such funding is periodically determined by the Board of
Directors after consultation with governmental authorities and recorded as expenditures when incurred.
The future economic development of the Russian Federation is dependent upon external factors and internal measures un-
dertaken by the government to change the tax, legal and regulatory environment. Management believes it is taking all neces-
Guarantees. The Group has no outstanding guarantees at 31 December 2015 and 2014.
148
149
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
Transportation of crude oil. The Group benefits from the blending of its crude oil in the Transneft pipeline system since the
Group’s crude oil production is generally of a lower quality than that produced by some other regions of the Russian Federation
(mainly Western Siberia) which supply through the same pipeline system. There is currently no equalization scheme for differ-
ences in crude oil quality within the Transneft pipeline system and the implementation of any such scheme is not determinable
at present. However, if this practice were to change, the Group’s business could be materially and adversely affected.
Ukrtatnafta. In May 2008, Tatneft commenced international arbitration against Ukraine on the basis of the agreement be-
tween the Government of the Russian Federation and the Cabinet of Ministries of Ukraine on the Encouragement and Mutual
Protection of Investments of November 27, 1998 (“Russia-Ukraine BIT”) in connection with the forcible takeover of Ukrtatnafta
and seizure of shares of the Group in Ukrtatnafta. In July 2014 the arbitral tribunal issued the award holding Ukraine liable for
violation of the Russia-Ukraine BIT and required Ukraine to pay Tatneft US$ 112 million plus interest.
Libya. As a result of the political situation in Libya, in February 2011 the Group had to entirely suspend its operations in that
country and evacuate all its personnel. In February 2013 the Group started the process of resuming its activities in Libya, includ-
ing the return of its personnel to a branch in Tripoli and recommencement of some exploration activities. Due to the deteriora-
tion of security situation in Libya in the second half of 2014 the Group had to suspend all of its operations and announced a
force-majeure under the Exploration and Production Sharing Agreements, acknowledged by the National Oil Company, which
is continuing as of the date of this report. The Group is constantly monitoring the security and political situation in Libya, and
plans to resume its operations once the conditions permit to do so.
As of 31 December 2015 the Group had approximately RR 5,745 million of assets associated with its Libyan operations of which
RR 5,524 million is related to capitalized exploration costs, RR 210 million of inventories and RR 11 million of cash. As of 31 De-
cember 2014 the Group had approximately RR 5,731 million of assets associated with its Libyan operations of which RR 5,503
million is related to capitalized exploration costs, RR 210 million of inventories and RR 18 million of cash.
Note 25: Principal subsidiaries
Set out below are the Group’s principal subsidiaries at 31 December 2015. Unless otherwise stated, the subsidiaries as listed
below have share capital consisting solely of ordinary shares, which are held directly by the Group and the proportion of owner-
ship interests held equals to the voting rights held by Group. The country of incorporation or registration is also their principal
place of business. For all principal subsidiaries the country of incorporation is the Russian Federation, except for Tatneft Eu-
rope AG, which is incorporated in Switzerland.
Name of entity
Principal activity
At 31 December 2015
At 31 December 2014
Tatneft Europe AG
Taneco JSC
TMS group OOO
Burenie OOO
Nizhnekamskshina PJSC
Export oil sales
Oil refinery
Oil lifting services
Drilling services
Tires production
Nizhnekamskiy zavod shin CMK OOO Tires production
Trade House Kama OOO
Tires sales
Tatneft AZS-Centr OOO
Tatneft AZS-Zapad OOO
Oil products sales
Oil products sales
% of
ownership
Interest held
by the Group
% of
ownership
Interest held
by the NCI
% of
ownership
Interest held
by the Group
% of ownership
Interest held by
the NCI
100
91
-
-
73
100
100
100
100
-
9
100
-
27
-
-
-
-
100
91
-
-
58
100
100
100
100
-
9
100
100
42
-
-
-
-
The total non-controlling interest for the year ended 31 December 2015 is RR 6,842 million, of which RR 2,677 million is attrib-
uted to TMS group OOO and Burenie OOO. The total non-controlling interest for the year ended 31 December 2014 is RR 5,450
150
million, of which RR 1,560 million is attributed to TMS group OOO and Burenie OOO. As of 31 December 2015 accumulated
non-controlling interest in TMS group OOO was RR 8,699 million and as of 31 December 2014 accumulated non-controlling
interest in TMS group OOO and Burenie OOO was RR 9,527 million.
The summarised financial information relating to the subsidiaries with material non-controlling interest was as follows:
Current assets
Non-current
assets
Current liabilities
Non-current
liabilities
Revenue
Profit/(Loss)
Year ended 31 December 2015
Taneco JSC
TMS group OOO
Nizhnekamskshina PJSC
Burenie OOO
Total
Year ended 31 December 2014
Taneco JSC
TMS group OOO
Nizhnekamskshina PJSC
Burenie OOO
Total
10,690
1,278
2,411
-
181,959
30,147
3,004
-
25,622
585
3,709
-
155,253
4,751
2,972
-
38,508
33,435
15,344
11,182
6,520
1,977
199
797
14,379
215,110
29,916
162,976
98,469
9,493
14,628
1,380
963
456
183,403
29,344
3,276
970
179,424
1,450
4,935
1,426
13,352
4,902
504
-
37,488
26,866
13,596
14,472
6,786
2,012
(131)
(113)
17,427
216,993
187,235
18,758
92,422
8,554
Note 26: Financial risk management
Financial risk management objectives and policies.
The accounting policies for financial instruments, as described in Note 3, have been applied to the financial statements line items below:
Note
At 31 December
2015
At 31 December
2014
Financial assets
Current
Cash and cash equivalents
Restricted cash
Accounts receivable
Short-term financial assets
Non-current
Long-term accounts receivable
Long-term financial assets
Total financial assets
Financial liabilities
Current
Trade and other payable
Short-term debt and current portion of long-term debt
Non-current
Long-term debt, net of current portion
Total financial liabilities
6
7
8
7
11
16
15
15
24,600
318
60,151
13,055
2,248
48,469
41,548
1,635
46,059
25,323
1,364
29,893
148,841
145,822
(28,529)
(5,281)
(12,880)
(18,733)
(15,859)
(12,888)
(47,480)
151
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
The Group‘s activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and
commodity price risk), credit risk and liquidity risk. The Group‘s overall risk management program focuses on the unpredict-
ability of financial markets and seeks to minimize potential adverse effects on the Group‘s financial performance. The Group
has introduced a risk management system and developed a number of procedures to measure, assess and monitor risks and
select the relevant risk management techniques.
Market risk
Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance
of a business.
The Group takes on exposure to market risks. Market risks arise from open positions in (a) foreign currencies, (b) interest rate
risk and (c) commodity price risk.
a) Currency risk
The Group operates internationally and is exposed to currency risk arising from various currency exposures primarily with re-
spect to the US dollar and the Euro. Foreign exchange risk arises from assets, liabilities, commercial transactions and financing
denominated in foreign currencies.
The table below summarises the Group’s exposure to foreign currency exchange rate risk at the end of the reporting period:
At 31 December 2015
Financial assets
Current
Cash and cash equivalents
Restricted cash
Accounts receivable
Short-term financial assets
Non-current
Long-term accounts receivable
Long-term financial assets
Total financial assets
Financial liabilities
Current
Trade and other payable
Short-term debt and current portion of long-term debt
Non-current
Long-term debt, net of current portion
Total financial liabilities
Russian
Rouble
US dollar
Other
Total
14,721
122
37,990
8,288
2,248
41,566
104,935
9,761
56
20,487
4,767
-
6,903
41,974
118
140
1,674
-
-
-
24,600
318
60,151
13,055
2,248
48,469
1,932
148,841
(24,988)
(1,045)
(1,341)
(3,713)
(2,200)
(523)
(28,529)
(5,281)
(693)
(8,672)
(3,515)
(12,880)
(26,726)
(13,726)
(6,238)
(46,690)
At 31 December 2014
Financial assets
Current
Cash and cash equivalents
Restricted cash
Accounts receivable
Short-term financial assets
Non-current
Long-term accounts receivable
Long-term financial assets
Total financial assets
Financial liabilities
Current
Trade and other payable
Short-term debt and current portion of long-term debt
Non-current
Long-term debt, net of current portion
Total financial liabilities
Effect on pre-tax profit
US $/RR loss
US $/RR gain
b) Interest rate risk
Russian
Rouble
US dollar
Other
Total
37,686
-
34,974
22,184
1,364
24,381
120,589
3,778
127
10,242
3,139
-
5,512
22,798
84
1,508
843
-
-
-
41,548
1,635
46,059
25,323
1,364
29,893
2,435
145,822
(15,964)
(3,590)
(1,661)
(11,484)
(1,108)
(785)
(18,733)
(15,859)
(799)
(8,971)
(20,353)
(22,116)
(3,118)
(5,011)
(12,888)
(47,480)
Increase/decrease in
exchange rate
Year ended 31
December 2015
Year ended 31
December 2014
+10%
-10%
(2,825)
2,825
(68)
68
The majority of the Group’s borrowings is at variable interest rates (linked to the LIBOR rate). To mitigate the risk of significant
changes in the LIBOR rate, the Group’s treasury function performs periodic analysis of the interest rate environment. The
Group does not have a formal policy of determining how much of the Group’s exposure should be to fixed or variable rates.
However, the Group performs periodic analysis of the current interest rate environment and depending on that analysis at the
time of raising new debts management makes decisions whether to obtain financing on fixed-rate or variable-rate basis would
be more beneficial to the Group over the expected period until maturity.
Effect on pre-tax profit
Increase by 100 basis points
Decrease by 100 basis points*
* - floating rate decrease capped at zero.
Year ended 31
December 2015
Year ended 31
December 2014
(188)
70
(264)
50
The sensitivity analysis is limited only to variable rate loans and borrowings and is conducted with all other variables held constant.
The analysis is prepared assuming the amount of variable rate liability outstanding at the reporting date was outstanding for the
whole year. Interest rate on variable rate loans and borrowings will effectively change throughout the year in response to fluctuations
in market interest rates.
The impact measured through the sensitivity analysis does not take into account other potential changes in economic conditions,
which may accompany the relevant changes in market interest rates.
152
153
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
c) Commodity price risk
Commodity price risk is the risk or uncertainty arising from possible movements in prices for crude oil and related products, and their
impact on the Group’s future performance and results of the Group’s operations. A decline in the prices could result in a decrease in
net income and cash flows. The Group’s overall strategy in production and sales of crude oil and related products is centrally man-
aged. Substantially all the Group’s crude oil export sales to Europe are sold under long-term contracts.
The Group assesses on a regular basis potential scenarios for future fluctuation in commodity prices and their impacts on opera-
tional and investment decisions.
However, in the current environment management estimates may materially differ from actual future impact on the Group’s financial
position. Actual results, and the impact on the Group’s operations and financial position, may differ from management’s estimates
of potential scenarios.
Credit risk
Credit risk refers to the risk exposure that a potential financial loss to the Group may occur if a counterparty defaults on its
contractual obligations. The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognized in
the Consolidated Statement of Financial Position.
Credit risk arises from cash and cash equivalents, certificates of deposits, loans and notes receivables, as well as credit expo-
sures to customers including outstanding trade and other receivables.
Credit risks related to accounts receivable are systematically monitored taking into account the customer’s financial position,
past experience and other factors. Management systematically reviews ageing analysis of receivables and uses this informa-
tion for calculation of provision for impairment. A significant portion of the Group’s accounts receivable is due from domestic
and export trading companies. The Group does not always require collateral to limit the exposure to loss; however, in most
cases letters of credit and prepayments are used, especially with respect to accounts receivables from non-CIS sales of crude
oil. The Group operates with various customers and a substantial part of its sales relate to major customers. Although collection
of accounts receivable could be influenced by economic factors affecting these customers, management believes there is no
significant risk of loss to the Group beyond the provisions already recorded.
The Company performs an ongoing assessment and monitoring of the risk of default.
In addition, as part of its cash management and credit risk function, the Company regularly evaluates the creditworthiness of
financial and banking institutions where it deposits cash.
The Group deposits available cash mostly with financial institutions in the Russian Federation. To manage this credit risk, the
Group allocates its available cash to a variety of Russian banks. Management periodically reviews the credit worthiness of the
banks in which it deposits cash. As of 31 December 2015 and 2014 the majority of loans and receivables (Note 8, Note 11) are
held in Bank Zenit which is related party to the Group (Note 23) and other non-investment grade entities with credit rating not
less than BB- according to Standard and Poor’s.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group‘s reputation. In managing its
liquidity risk, the Group maintains adequate cash reserves and debt facilities, continuously monitors forecast and actual cash
flows and matches the maturity profiles of financial assets and liabilities.
The Group prepares various financial plans (monthly, quarterly and annually) which ensures that the Group has
154
sufficient cash on demand to meet expected operational expenses, financial obligations and investing activities for a period of
30 days or more. To fund cash requirements of a more permanent nature, the Group will normally raise long-term debt in avail-
able international and domestic markets.
All of the Group’s financial liabilities represent non-derivative financial instruments.
The following tables summarise the maturity profile of the Group‘s financial liabilities based on contractual undiscounted pay-
ments, including interest payments:
At 31 December 2015
Short-term debt, current portion of long-term and long-
term debt
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
6,005
3,134
7,513
3,876
20,528
Trade and other payable
28,529
-
-
-
28,529
At 31 December 2014
Short-term debt, current portion of long-term and long-
term debt
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
16,662
3,465
5,869
5,496
31,492
Trade and other payable
18,733
-
-
-
18,733
As the amounts included in the table are contractual undiscounted cash flows which include future interest payments, these
amounts will not reconcile to the amounts disclosed in the consolidated statement of financial position for borrowings.
Fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between
market participants at the measurement date. The estimated fair values of financial instruments are determined with reference
to various market information and other valuation techniques as considered appropriate.
The different levels of fair value hierarchy have been defined as follows:
Level 1 – Quoted prices in active markets for identical assets or liabilities that Group has the ability to assess at the measure-
ment date. For the Group, Level 1 inputs include held-for-trading financial assets that are actively traded on markets.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly. For the Group, Level 2 inputs include observable market value measures applied to available for sale securities.
Level 3 – Unobservable inputs for the asset or liability. These inputs reflect the Group‘s own assumptions about the assump-
tions a market participant would use in pricing the asset or liability.
Recurring fair value measurements
The levels in the fair value hierarchy into which the recurring fair value measurements are categorised are as follows:
At 31 December 2015
At 31 December 2014
Level 1
Level 2
Level 3
Total
carrying
value
Level 1
Level 2
Level 3
Held-for-trading investments
Available-for-sale investments
Total
803
-
803
-
445
1,248
1,160
-
1,360
3,504
19,785
23,289
-
3,504
20,230
24,537
1,160
4,752
4,752
-
1,360
Total
carrying
value
2,520
4,752
7,272
155
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY &
ENVIRONMENTAL POLICY
IN MILLIONS OF RUSSIAN ROUBLES
PJSC TATNEFT, ANNUAL REPORT 2015
IN MILLIONS OF RUSSIAN ROUBLES
The description of valuation technique and description of inputs used in the fair value measurement for Level 2 and Level 3
measurements at 31 December 2015 and 2014:
Management of Capital
The primary objective of the Group‘s capital management is to ensure that it maintains a strong credit rating and healthy capi-
tal ratios in order to support its business and increase shareholder value. The Group manages its capital structure and makes
adjustments to it, in light of changes in economic conditions.
The Group considers equity and debt to be the principal elements of capital management. In order to maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, revise its investment program, attract new or
settle existing debt or sell certain non-core businesses.
The Group monitors capital on the basis of its gearing ratio.
Consolidated total borrowings:
– Short-term debt and current portion of long-term debt
– Long-term debt, net of current portion
– Notes payable
Consolidated shareholders’ equity
Debt to capital employed ratio, % (Consolidated total borrowings / Consolidated
shareholders’ equity)
At 31 December 2015
At 31 December 2014
18,421
5,281
12,880
260
628,314
3%
29,006
15,859
12,888
259
555,965
5%
Note 27: Subsequent events
In March 2016 the Company completed the acquisition of 24.99% ordinary shares of PJSC Nizhnekamskneftekhim and 9% ordi-
nary shares of AO TANECO amounting to RR 20,000 million from a government related entity. As of 31 December 2015 cash paid
was recognized in prepaid expenses and other current assets.
At 31 December
2015
At 31 December
2014
Valuation technique
Inputs used
Available-for-sale investments
23,289
4,752 Quoted prices for similar
investments in active markets,
net assets valuation, comparative
(market) approach
Publicly available
information, comparable
market prices
Total
23,289
4,752
Available-for-sale financial assets as of 31 December 2015 and 2014 are comprised of RR 2,300 million and RR 3,585 million,
respectively (8.6% and 11.7%, respectively) of investments in AK Bars Bank shares which are not quoted in any Stock Ex-
change and the fair value of which are measured on AK Bars Bank Group level per IFRS Financial Statements (Net assets value)
and other publicly available information. Available-for-sale financial assets as at 31 December 2015 also include RR 19,785
million in Closed Mutual Investment Fund AK-BARS - Gorizont which holds investments in land. The Group does not exercise
significant influence over this investment and therefore accounts for it as an available-for-sale investment.
There were no changes in valuation technique for Level 2 and Level 3 recurring fair value measurements during the year ended
31 December 2015 (2014: none).
There have been no transfers between Level 1, Level 2 and Level 3 during the period.
Assets and liabilities not measured at fair value but for which fair value is disclosed
Fair values analysed by level in the fair value hierarchy and carrying value of assets and liabilities not measured at fair value are
as follows:
At 31 December 2015
At 31 December 2014
Level 1
Level 2
Level 3
Total
carrying
value
Level 1
Level 2
Level 3
Total
carrying
value
Assets
Cash and cash equivalents
Restricted cash
Accounts receivable
Financial assets
Total assets
Liabilities
Debt
Trade and other payable
Total liabilities
24,600
318
-
-
24,918
-
-
-
-
-
-
-
-
-
-
-
-
-
62,399
36,103
24,600
318
62,399
36,987
41,548
1,635
-
-
98,502
124,304
43,183
(16,850)
(18,161)
(28,529)
(28,529)
(45,379)
(46,690)
-
-
-
-
-
-
-
-
-
-
-
-
-
47,423
42,162
41,548
1,635
47,423
47,944
89,585
138,550
(23,526)
(28,747)
(18,733)
(18,733)
(42,259)
(47,480)
The fair values in Level 3 of fair value hierarchy were estimated using the discounted cash flows valuation technique. The fair
value of unquoted fixed and floating interest rate instruments was estimated based on estimated future cash flows expected to
be received discounted at current interest rates for new instruments with similar credit risk and remaining maturity.
156
157
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
SOCIAL
RESPONSIBILITY
STANDARD OF
THE COMPANY’S
INTERACTION WITH
CONCERNED PARTIES
GUIDANCE ON SOCIAL
RESPONSIBILITY
SOCIAL INVESTMENT
158
159
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
SOCIAL INVESTMENT
INFORMING ON THE ACTIVITY RELATED TO SUSTAINABLE
DEVELOPMENT AND CORPORATE SOCIAL RESPONSIBILITY
Goals and Priorities of the Social Policy in the Activity Regions
The Company develops and implements social programs relying on the following principles:
Openness
The Company strives for
development and imple-
mentation of social pro-
grams based on dialog
and collaboration with the
concerned parties.
Consistency
Social programs are of
regular and systematic
character.
Significance
The Company aspires to
make social programs
targeted as much as
possible, timely and
corresponding to vital
demands of the society.
Efficiency
Funds spent on imple-
mentation of the programs
must sensibly help in
solving problems. Results
of the programs are liable
to regular assessment and
record.
The Company aspires to make its social programs targeted as much as possible and corresponding to vital demands of the
society. Target groups of the social programs developed by PJSC TATNEFT are children and young people, war and labor
veterans, those in need of medical care and rehabilitation, orphaned children, as well as other socially vulnerable population
groups. The Company builds business relationships and interacts with the partners and other concerned parties based on the
corporate social responsibility.
Target Audiences of the Company’s Social Programs
Program on infrastructure development in cities and settlements
Program on health care support in the southeast of the Republic of Tatarstan
Program on development of popular sports and physical culture in the oil region of the Republic of
Tatarstan
Program on hockey development in the southeast of the Republic of Tatarstan
Program on social (targeted) support for population of districts of the Republic of Tatarstan
Program on education support
Program on culture support
Program on spiritual revival
Program on agricultural development
Program on workplace creation
Residents of the activity regions
The Company’s employees
Children
Adults
Coaches
The Company’s employees
Orphaned children
Handicapped people
Veterans
Other socially vulnerable population groups
Schoolchildren
Students
Teachers, professors
Theaters
Museums
Libraries
Cultural establishments
Mosques
Churches
Residents of the activity regions
Residents of rural areas
Unemployed people
Graduates of higher and other educational
establishments
Program on maternity and childhood support
Program on development of large-scale ecological programs
Children
Population
TATNEFT Company has been elaborating annual reports on the sustainable development and social responsibility since 2005.
Since 2014, disclosure of information on the activity related to the corporate social responsibility is carried out as a part of
preparation of the TATNEFT Company’s Annual Report.
This chapter of the Report was elaborated based on the Guidelines on Reporting in the Field of Sustainable Development of
Global Reporting Initiative (GRI), Standard of Interaction with Concerned Parties AA 1000, International Standard ISO 26000
“Guideline on the Social Responsibility” and Social Articles of the Russian Business Community. The Report for 2015 con-
tains standard elements of GRI Guideline version G4 reporting. In addition to the Guideline, GRI Oil and Gas Sector Supple-
ment was applied during the Report elaboration.
Implementation of the GRI Principles
GRI Principle
Our actions
Coverage of concerned parties
Context of sustainable development
Information significance
Information completeness
Principle of balance
Information compatibility
Information accuracy
Timeliness
Clarity
Reliability
The Company makes considerable efforts in order to involve the concerned parties into discussion of
issues related to elaboration of the report, such as determination of the Report content, selection of
performance indicators, etc. To do that, consultations with representatives of the concerned parties,
conferences and seminars are held, questioning is carried out.
The information on the Company’s activity results is presented in the Report in close connection
with its contribution to the sustainable development. The Report shows all key points, indexes
and initiatives related to economic stability maintenance, environmental safety improvement and
strengthening of the social stability.
We strive to include in the report only those issues and indicators that are significant to the concerned
parties and are capable of influencing their decisions. While we determine significance of the issues,
we take into account such factors as goals and objectives of the Company, risks and capabilities,
industry-specific problems, etc.
The Company strives to achieve full disclosure of information in economic, environmental and social
spheres of the activity. The bulk of issues reviewed in the report is enough for the readers to assess
the Company’s performance and its contribution to sustainable development of the society.
In the framework of the principle of balance, the report covers both favorable results of the
Company’s activity and problems that the Company faces. Amount of attention given to various issues
corresponds to their relevance.
The report ensures comparability of the activity results from year to year. Each significant change
related to boundary, coverage or reporting period is explained. To ensure comparability of the
Company’s performance with the results achieved by the other companies, indicators included in the
GRI guidelines and technical protocols were used in elaboration of the report.
We strive to make information provided in the report accurate and detailed enough for the concerned
parties to use it in decision-making with a high level of reliability. Error of quantitative data is
minimized. Proportions and specific values used in the report are complimented with respective
absolute values. Data are provided using common international units and are calculated with standard
coefficients.
The Company is aware of the necessity to present timely information in the report that is why the
report is issued with equal periodicity once a year prior to the annual meeting of shareholders.
We make efforts to make information provided in the report clear, understandable and useful for
different concerned parties. The report contains a glossary and a list of abbreviations, which make
science and technology terms and abbreviations clear.
Information and data provided in the report are based on internal documentation, which can be
assessed by independent parties. Data that can not be supported by documents are not included in
the report.
160
161
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
SOCIAL RESPONSIBILITY OF THE COMPANY
TOWARDS ITS EMPLOYEES
Collective Agreement, Social Benefits and Guarantees
Social Benefits under the Collective Agreement
PJSC TATNEFT takes care of well-being and social security of its employees and their families. The Company provides its
employees with a package of social benefits and guarantees. Obligations on their fulfillment are stipulated in the Collective
Agreement annually concluded between PJSC TATNEFT and the staff, including all employees and non-working pensioners
of the Company.
The Collective Agreement stipulates:
• employees’ benefits and guarantees;
• social protection of young employees;
• support for veterans and pensioners.
Structure of the social benefits and guarantees is stipulated by the Collective Agreement Standard of the TATNEFT Group,
which is advisory for all enterprises of the Group.
In 2015, the Company made amendments and changed size of payments for the following:
• financial aid for retiring employees;
• one-time payment in connection with annual leave;
• estimated payment for every employee in connection with birth or adoption of a child;
• estimated amount of one-time financial aid for employees and pensioners in connection with their jubilee;
• financial aid for families of late employees (pensioners) to cover funeral-related expenditures;
• financial aid for employees having parental leave and caring for children aged 1,5-3.
In accordance with the Collective Agreement of PJSC TATNEFT and on the basis of the general director’s resolution, PJSC
TATNEFT in connection with the celebration of 70th anniversary of 9th May Victory Day provided financial aid at the rate of
RUB 50 thousand for the participants of the Great Patriotic War, RUB 20 thousand for the widows of the Great Patriotic World
participants and RUB 5 thousand for the home front workers.
Employees’ benefits and guarantees
Financial aid for female employees having parental leave and caring for children aged under 3 years
Financial aid at child birth or adoption of a child under 14
Granting a three-day paid vacation to an employee (father) at the release of a baby from the maternity hospital with retention of his average
monthly income
Financial aid in the event of death of an employee’s close relatives
Financial aid for the family of a late employee to cover funeral-related expenditures
Financial aid for orphaned children under 18 who lost both parents, if one of them was employed in PJSC TATNEFT
Financial aid for multi-child families
Financial aid for an employee having dependent disabled children under 18
Financial aid upon retirement
One-time payment in connection with the provision of annual paid leave
Granting at least two hours off weekly or one day off monthly to female employees having children under 16 (disabled children under 18)
Financial aid for an orphaned child under 18 whose parents (or one of them) died in the line of duty at PJSC TATNEFT
Financial aid for single-parent families
Financial aid for employees in connection with anniversary celebration
Funds allocation:
– for buying New Year presents for children of the PJSC TATNEFT’s employees
– for women on the International Women’s Day
Financial aid for family having twins or triples
Benefits for young employees
Interest-free loan for furniture and essential goods acquisition
Financial aid for an employee dismissed for military service in the Armed Forces of the Russian Federation after their return to the same workplace
Financial aid for the first marriage
Benefits for pensioners and veterans
Financial aid on the Victory Day for the Great Patriotic War participants, widows and home front workers
Quarterly financial aid for non-working pensioners who used to work in the system of PJSC TATNEFT for at least 10 years and retired before the
foundation of the National Private Pension Fund
Providing employees who worked in PJSC TATNEFT for at least 10 years with an opportunity of early retirement at the Company’s expense with
retention of the Company's benefits and guarantees for pensioners
Financial aid in the event of death of a pensioner’s close relatives
Financial aid for the family of a late pensioner to cover funeral-related expenditures
Financial aid for pensioners in connection with anniversary celebration
Funds allocation:
– on the Elderly People’s Day
– for women on the International Women’s Day
– on the International Disabled People’s Day
162
163
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Cooperation with the Trade Union
Voluntary Medical Insurance for Employees
Since 1997, PJSC TATNEFT has been implementing the voluntary medical insurance program, which gives employees an op-
portunity for high-quality medical services and therapeutic-resort treatment, if needed. In 2015, the total number of insured
employees made up 21 048 people, RUB 228.7 million was allocated for the program implementation. The TATNEFT Compa-
ny maintains arrangement and payment for the medical and other services under four programs, such as “Outpatient Care”,
“Hospital Service”, “Rehabilitation Treatment” and “Complex Medical Care” programs. In order to reduce the rate of infec-
tious diseases, seasonal immunoprophylaxis was held within the framework of the program (vaccination against seasonal flu
and tick-borne encephalitis).
Arrangement of Health-Improving Activities for Children
Within the bounds of maternity and childhood protection program, the Company annually arranges health-improving activi-
ties for employees’ children at thirteen recreation camps with the capacity of 2 556 beds. All recreation camps offer cozy and
modern blocks, gyms, playgrounds, swimming pools, proper equipment and assistance of well-trained staff. During 2015, the
recreation camps were visited by 10 964 children of employees. PJSC TATNEFT annually provides recreation opportunities
for children whose parents are employed by state-budgeted organizations and compensates half of the recreation pack-
age price. 300 children whose parents are employed by state-budgeted organizations had this opportunity in 2015. Due to
the continuous growth of demand for tours to the recreation camps, at the end of 2013 the Company decided to build new
bedroom blocks at the children recreation camps of Almetyevneft, Elkhovneft and Aznakaevskneft Oil and Gas Production
Boards. Therefore, blocks of the Company’s children recreation camps, which were built and repaired in 2 years, allowed to
invite 1804 more children in 2015 than before the construction.
The interregional trade union of PJSC TATNEFT unites 158 primary trade unions, 664 shop trade unions and 2 774 profes-
sional groups. 99,8% of the Company’s employees are members of the trade union. One of the primary approaches to the
regulation of labor agreements is cooperation of the trade union with the Company’s administration on implementation of
coordinated policy in the sphere of labor relations based on the principle of social partnership. The Collective Agreement,
annually concluded to embrace all employees of the Company, serves as the basis for such cooperation. Each employee has
the right and the opportunity to participate in formation of the Collective Agreement by sending proposals to the trade union
organization. A conciliation commission including representatives of the management of PJSC TATNEFT and the trade union
committee reviews each proposal.
The trade union representatives participate in reviewing of all social-and-labor issues relevant to employees, from restructur-
ing to changes in the field of wages and working hours. 9 commissions were created for goal-oriented control over fulfillment
of the liabilities stipulated in the Collective Agreement:
• commission for social and economic protection of the trade union members;
• legal protection commission;
• workplace protection commission;
• mass organization commission;
• young people’s affairs commission;
• commission for labor and the Great Patriotic War veterans;
• culture, sports and health commission;
• housing and public services commission;
• public catering control commission.
In 2015, the trade union committee held 12 sessions, where committee members reviewed different issues related to protec-
tion of interests of the trade union members, such as control on maintaining safe working environment for personnel, main-
taining social protection level for employees and pensioners, strengthening of labor discipline, arrangement and carrying
out of culture and recreative sports events, etc. The trade union committee in cooperation with the Company’s representa-
tives participates in elaboration, discussion and implementation of proposals aimed at reduction of occupational injuries and
disease rates.
In order to ensure public control in the field of workplace protection, more than 2 900 workplace protection agents work in
primary trade unions of structural subdivisions of PJSC TATNEFT, and they carried out more than 140 thousand inspections of
workplace environment. In 2015, the trade union’s personnel actively participated in meetings and seminars organized by the
Trade Union Federation of the Republic of Tatarstan, The Federation of Independent Trade Unions of Russia, Russian Council
of Oil, Gas and Construction Workers’ Union and International Confederation of Trade Unions.
The Company has a “mobile legal advice office” providing consultations and support for employees on legal issues. In 2015,
144 people received legal assistance. Apart from the legal advice office’s activity, work with letters and addresses from the
trade union members was continued. Over 100 members of the trade union obtained explanations and consultations in 2015.
The trade union committee has trust line, which received more than 500 calls from the employees and non-working pension-
ers in 2015, and practical assistance was provided.
Information on cooperation of the administration and the trade union committee of PJSC TATNEFT is regularly reported to
personnel at meetings and conferences, covered in federal, republican, regional and corporate mass media. “Tribuna” is an
information bulletin issued by the trade union monthly.
The Committee on legal protection of the Trade Union members conducted inspections on labor legislation compliance by
the Company’s subdivisions in the reporting year. In 2015, there were no claims or cases known to the public arising from
violation of human rights or discrimination of the Company’s employees.
164
165
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Housing Policy
Outreach of Young People
Providing employees with support in housing improvement is one of important lines of social policy in PJSC TATNEFT. Nine
residential houses were commissioned for the employees of TATNEFT Company under the social mortgage program in 2015.
The Company’s employees were provided with 1 118 apartments with total area of 79.1 thousand m2 amounted to RUB 2
162.7 million.
In 2016, the Company will continue building houses under the social mortgage program in almost all cities of the southeast
of the republic, where the Company conducts its activities. According to the project on housing construction program, it is
planned to commission 10 houses (1 094 apartments) with total area of 68.8 thousand m2 in 2016. For the purpose of social
support for young people, 30% of apartments commissioned under the mortgage program are allocated to young families.
RUB 74.3 million were allocated to these families for furnishing.
The Company provides non-recurrent loans for the first mortgage installment for the employees participating in the mortgage
program. There is an option of repaying employee’s loan out of the Company’s profit providing that the person would still stay
PJSC TATNEFT’s employee. As of from 2005 to 2015, total size of loan granted to the employees of TATNEFT Company was
amounted to RUB 3 977.8 million.
Non-governmental Pension Provision
For the purpose of the social support for retiring employees, the Company has been implementing a non-governmental pen-
sion provision program since 1997. The program provides employees with an opportunity to form their pension capital on a
parity basis securing respectable level of living at the advanced age. Provisions “On non-governmental pension provision”
stipulate rules, criteria and procedures for non-governmental pension granting, as well as three main pension schemes.
In 2015, the number of the PJSC TATNEFT employees that joined the non-governmental pension provision program amount-
ed to 8 802 people. 9 178 retired people receive additional non-governmental pension. In the reporting year, Company
allocated RUB 195 million for the non-governmental pension provision. In 2015, the non-governmental pension payments
for PJSC TATNEFT’s pensioners through the National Non-governmental Pension Fund were amounted to RUB 177 million
thousand. The Company performs regular communication and explanatory work on terms of the corporate pension program
as well as on the rules of involvement. Information is published at the Internet portal of the TATNEFT Group. Main partner of
PJSC TATNEFT for the implementation of the corporate pension program is the National Non-Governmental Pension Fund
(NNPF). Non-working pensioners, who worked in PJSC TATNEFT for at least 10 years and retired before the foundation of the
National Non-Governmental Pension Fund, are quarterly supported by the Company with extra financial aid to their govern-
ment pensions. There are veteran committees established in the subdivisions of PJSC TATNEFT that continuously support
pensioners together with the administration and the trade union committee. When it is necessary, the Company covers pen-
sioners’ medical and surgery bills, provides aid for housing renovation and replacement of household appliances. In 2015,
RUB 11.9 million was allocated to health improvement of non-working pensioners in health-resorts, while RUB 5.04 million
was allocated within the PJSC TATNEFT’s program of support for veterans. The Company provides financial aid on holidays
and anniversaries.
Work with young people in PJSC TATNEFT is carried out along several main lines: professional and labor fulfilment, scientific
and production, social protection, creative fulfilment, popular culture, sports, cooperation in the informational field, develop-
ment of tolerance and civil position of the Company’s young employees. 29.8 thousand young employees work in the Com-
pany, which makes 32% of total staff. The activity of the Central Council of Young Specialists acts to raise level of production
and creative activity of the Company’s young experts. In order to involve young employees in the Company’s innovative activ-
ity, the Central Council of Young Specialists annually holds conferences and seminars on innovation and invention. In 2015,
young employees made 16 700 rationalization proposals and obtained 80 patents, while economic potential of the implemen-
tation was amounted to more than one billion rubles.
In 2015, employees of PJSC TATNEFT successfully represented the Company at the 3rd National Professional Skills Champi-
onship held in accordance with the WorldSkills standards, and at the 2nd National Championship of Comprehensive Working
Professions in High-Tech Industries WorldSkills Hi-Tech-2015. The Company holds sports events, tourist festivals on a regular
basis. In 2015, young employees of the Company successfully climbed the Mount Elbrus, the highest point in Europe. PJSC
TATNEFT put together its own KVN team, which with support from the Company’s management took part in the games of TV
Premier-league in 2015. Young employees of the Company take an active part in the youth clean-up events on the designated
areas and charity events for the children from orphanages and needy families, carry out active patronage over designated
orphaned children.
INTERACTION
Corporate e-University
Research and practice seminars
and conferences
Professional skills competition
Production management school
Contests and festival
of young people’s creativity
Methods
for Communication
and Cooperation
with the Young
People
KVN
Sports competitions
COMMUNICATION
Corporate mass media
Website of PJSC TATNEFT
Website of PJSC TATNEFT
for the corporate users
Annual report
and election conference
FEEDBACK
Corporate social network
Annual poll
Meetings of the trade
union committee
Meetings with the management
Focus groups
For more information, please see the Company’s website tatneft.ru
For more information, please see the Company’s website tatneft.ru
166
167
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
SOCIAL INFRASTRUCTURE DEVELOPMENT
CHARITABLE ACTIVITIES
THE COMPANY RESPONSIBLY PARTICIPATES IN CREATING CONDITIONS FOR IMPROVING QUALITY OF
LIFE OF ITS EMPLOYEES AND LOCAL POPULATION, IMPLEMENTING TARGETED INFRASTRUCTURE
PROGRAMS ALONGSIDE WITH INTERNAL SOCIAL PROGRAMS. KEY LINES OF CORPORATE SOCIAL
POLICY, WHICH IS GENERALLY FOCUSED ON GETTING MAXIMUM OUTCOME OF THE COMPANY’S
MAIN ACTIVITY, ARE ASSISTANCE IN DEVELOPMENT OF EDUCATION, HEALTHCARE AND SPORTS, AS
WELL AS REDEVOPMENT OF COMMUNITIES AND CITIES. SPECIAL IMPORTANCE IS GIVEN TO
PHYSICAL AND CREATIVE DEVELOPMENT OF CHILDREN.
High-Tech Medical Care
The Company implements integrated programs aimed at support and promotion for the health of employees and local popu-
lation, especially by participating in construction and renovation of health care facilities. The Company gives special impor-
tance to the support of maternity and childhood.
The TATNEFT Company with its significant financial investments in short time implemented program on establishing and put-
ting into service regional medical-diagnostic center under the Medical Sanitary Station of PJSC TATNEFT and Almetyevsk
for delivering high-tech medical care (HMC) on cardiovascular surgery, traumatology and orthopedics, ophthalmology and
urology for the population of the southeast region of our Republic. The center is large and modern multifaceted medical and
preventive establishment having high-skilled talent pool and equipped with the state-of-the-art medical equipment. Over the
past few years, the hospital was equipped with the modern high-tech equipment for the diagnosis and treatment. Public and
republic programs on improving delivery of health care for the people having heart diseases were implemented, high-skilled
experts passed their training in the best clinics of the world.
Medical equipment was purchased for the Central District Hospital of Novosheshminsk and the Hospital No. 3 of Almetyevsk
(State Autonomous Heath Care Institution “Republic Clinical Oncological Dispensary of the Ministry of Healthcare of the
Republic of Tatarstan”). It’s planned to allocate RUB 250 million for the implementation of public contract on the delivery of
high-tech medical care for the population of the southeast of the Republic of Tatarstan in 2016.
Involvement of Employees in Sports and Healthy Lifestyle
Targeted programs on development of adult and kids popular sports include the Company’s participation in construction of
new sport facilities and renovation of those, which are in operation. The Company acts as the organizer of fitness and health
recreation events, sports competitions and hockey tournaments for PJSC TATNEFT prizes. Attention is given to equipping
hockey teams and coaches with kits. Due to the favorable conditions created in the Company, sport has become an inherent
part of oilmen’s everyday life. Modern ice palaces and sports complexes were built in every city of the oil region. 16 Ice Palac-
es were built in the Republic of Tatarstan with the Company’s participation. Over 200 hockey complexes with warm dressing
rooms were renovated and built, 91 teenage hockey clubs were taken under control by efforts of the Company in the period
from 2000 to 2015. Funds for purchase of hockey kits for the teenage clubs’ teams and remuneration for coaches and staff
maintaining the hockey rinks are allocated annually.
Over 17 thousand people spent their vacations at summer camps located on banks of the Kama River and Karabash Reser-
voir in 2015. About 24 thousand people had their rest at the camps and strengthened their health there in the wintertime.
In 2015, the PJSC TATNEFT held XXVIII Corporate Spartakiad, over 10 thousand employees participated in it. During the year,
competitions in 12 different sports, such as table tennis, alpine skiing, cross-country skiing, volleyball (for women and men),
futsal, swimming, kurash wrestling, rope pulling and triathlon, etc. were held. RUB 8.03 million was allocated for the arrange-
ment of the Spartakiad in 2015.
CHARITY IS THE KEY ELEMENT OF CORPORATE SOCIAL POLICY. THE COMPANY SUPPORTS THREE
CHARITY FOUNDATIONS: “GIFTED CHILDREN”, “RUKHIYAT” AND “MERCY”.
“Gifted Children” Foundation
Since 2004, the TATNEFT Company has implemented the program on gifted children support through the “Gifted Children”
foundation. The foundation provides multifaceted assistance and help to the participants of republic, all-Russian and interna-
tional conferences, scientific-and-artistic and technical competitions. Every year the “Gifted Children” foundation holds the
meeting of its awardees, where the foundation honors the most successful participants of the intellectual forums and their
coaches, and that shows meaning of education as one of the crucial components for personal development and improve-
ment, as well as targeting graduates to the higher-priority professions.
Foundation for Spiritual Revival “Rukhiyat”
Support for talented children in the field of culture is carried out by foundation for spiritual revival “Rukhiyat” founded in 1997.
Activity of the foundation includes arrangement of children creativity festivals, holding literature and art competitions, iden-
tification of young talents and assistance for their artistic development, books publication, etc. Since 1998, the “Rukhiyat”
foundation holds the “Land of Singing Nightingales” children creativity festival, which provides talented children from remote
regions of the republic with opportunity to unlock their creativity and perform on the stage in front of wide audience.
“Mercy” Charity Foundation
TATNEFT has been always supporting people in harsh life conditions. In order to provide charity support, the Company
established the “Mercy” charity foundation, through which the Company over years has been providing targeted support to
organizations of veterans and handicapped people, needy families, pupils of orphanages and orphaned students for their
treatment and rehabilitation.
In 2015, PJSC TATNEFT switched its charitable activities to a grant basis. The Company made this decision in order
to raise economic efficiency of its social investment, ensure transparency and publicity of charitable activities. In the
framework of the Grant system implementation, PJSC TATNEFT prepared the Provision and formed the Grant commit-
tee and the expert council. Projects are assessed based on their compliance to the strategic social and environmental
goals and objectives of the TATNEFT Company, timeliness of the problem being solved and importance of the project
for the region of the Company’s activity. Provision and other information about the PJSC TATNEFT’s Grant system are
published on the official website of the Company at tatneft.ru in the Social Policy section.
Main nominations of the Grant system are as follows:
project;
tectural and historical heritage;
• Education and science: support for gifted children and creative young people, as well as socially important scientific
• Social sphere: redevelopment of cities and settlements, renovation and reconditioning of the monuments of archi-
• Environment: population health protection, protection and securing of favorable environment, environmental educa-
• Culture and arts: implementation of new cultural and educational projects; support for gifted people and creative
• Civic and public spirit: search activities, museums, educational programs;
• Sports: support for amateur sports teams, support and development of kids sports and tourism.
teams in the area of culture and arts, assistance to literature development;
tion for the population;
168
169
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
REGISTRY OF CORPORATE SOCIAL PROJECTS FOR 2015
SUBDIVISONS OF THE TATNEFT COMPANY ARE CITY-FORMING FOR MANY CITIES AND
VILLAGES IN THE SOUTHEAST OF THE REPUBLIC. THE COMPANY PROVIDES DOZENS
OF THOUSANDS OF PEOPLE WITH MODERN WORKPLACES AND RESPECTABLE WAGES,
SETS MAIN PART OF LOCAL BUDGETS.
Lines of Social Investments
Program on infrastructure
development in cities and
settlements
Projects
Wedding Palace construction
Reconstruction of the ‘Yunost’ stadium and the Ice Palace
Overhaul of the ‘Yunost’ sports center and the Culture House
Overhaul of housefronts
Repaif of urban streets and roads
Parks and squares improvement
Opening of the museum at the site of the Shugurovsky petroleum bituminous
factory
Reconstruction of the Victory monument
Improvement of the Chernaya river bank
Overhaul of the water supply and disposal system
Construction of terrainkur in forest area near the ‘Ivolga’ health and recreation
resort
Improvement of inner areas adjacent to houses
Holding of the PJSC TATNEFT Spartakiad
Places of implementation
Leninogorsk
Leninogorsk
Leninogorsk
Leninogorsk, Bavly
Almetyevsk, Leninogorsk, Bavly
Leninogorsk, Bavly
Leninogorsk
Aznakaevo
Aznakaevo
Bavly
Bavly
Almetyevsk, Leninogorsk, Elabuga, Karabash
urban-type settlement (Bugulma district)
oil region of the Republic of Tatarstan
Organization and holding of physical education and recreational events
oil region of the Republic of Tatarstan
Sports center construction
Stadiums reconstruction
Nizhnyaya Maktama urban-type settlement
(Alnetyesvsk)
Chistopol, Aznakaevo
Reconstruction of the ‘Jubileyny’ Sports Palace
Construction of multipurpose sports hall
Almetyevsk
Aznakaevo
Construction of sports ground for the school No. 1
Karmasakly village (Leninogorsk district)
Repair of near rink area and chilling machinery in the ‘Lachyn’ ice palace, ‘Iman’
sports center
Works for the construction of sports hall for the ‘Ivolga’ health and recreation
resort were started
Establishment of the Bicycle School
Support for kids and youth boxing
Wrestling and karate support
Development of volleyball, swimming and figure skating
Equestrian sport support
Aktanysh village
Bavly
Karabash urban-type settlement (Bugulma
district)
oil region of the Republic of Tatarstan
Almetyevsk
Almetyevsk
Almetyevsk
Program on development of
popular sports and physical
culture in oil region of the
Republic of Tatarstan
Program on hockey
development in the
southeast of the republic
Purchase of hockey kits for the teenage club’s teams
oil region of the Republic of Tatarstan
Purchase of sports kits, sports equipment and hockey equipment for schools
oil region of the Republic of Tatarstan
91 hockey rinks fitted with warm dressing rooms were reconstructed, built up
and taken under maintenance
Installation of hockey complexes fitted with dressing rooms and lights
Remuneration for coaches
oil region of the Republic of Tatarstan
Kaybitsy, Rybnaya Sloboda, Baltasi,
Almetyevsk and Aznakaevo districts
oil region of the Republic of Tatarstan
Participation in a republican social mortgage program
oil region of the Republic of Tatarstan
Furnishing of apartments acquired by social mortgage
oil region of the Republic of Tatarstan
Provision of loans for employees to cover the first installment under the social
mortgage program
Training and skill improvement of the personnel
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
Science and practice conference for young employees
Almetyevsk
Work with the candidate pool
Work with target groups
Young people’s policy
Personnel certification
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
Program on housing
improvement
Program on skill
improvement and
development of the
Company’s personnel
170
Program on culture support Holding of festive events
Holding of events for young people
Holding of cultural events
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
Purchase of music equipment for cultural establishments
Aznakaevo, Aktyuba urban-type settlement
Overhaul of the Culture Houses
Program on spiritual revival Financial aid for the repair of entrance lobby at Our Lady of Kazan Church
Collective agreement
Leninogorsk, Cheremshan village, Yutazy
village
Almetyevsk
oil region of the Republic of Tatarstan
Program on the social
guarantees provided for the
personnel
Program on support for
veterans and handicapped
people
Program on social
insurance of PJSC
TATNEFT’s employees
Program on health care
support in the southeast of
the republic
Program on maternity and
childhood welfare
Program on non-governmental pension provision
oil region of the Republic of Tatarstan
Purchase of equipment for handicapped people
Almetyevsk
Payment for the utility services for the local communities of handicapped people Almetyevsk
Repair of facilities and improvement of the area owned by the Nursing home
Targeted support for retired people
Therapeutic-resort recreation
Dzhalil urban-type settlement (Sarmanovo
district)
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
Financial aid for veterans, widows, home front workers
oil region of the Republic of Tatarstan
Holding of festive events dedicated to the Victory Day
oil region of the Republic of Tatarstan
Voluntary medical insurance
oil region of the Republic of Tatarstan
Financial aid for carrying out stenting and coronarography surgeries in the
Regional medical-diagnostic center of Medical Sanitary Station of PJSC
TATNEFT and Almetyevsk
Overhaul of the Central District Hospital
Purchase of medical equipment
oil region of the Republic of Tatarstan
Almetyevsk
Medical Sanitary Station of PJSC TATNEFT
and Almetyevsk, the Central District
Hospital of Novosheshminsk, Clinic No. 3
of Almetyevsk, Drug dependence clinic of
Almetyevsk
Purchase of medical equipment and operating room drapes for health care facilities
Arrangement of recreation for children in children’s recreation camps
oil region of the Republic of Tatarstan
Recreation for the children, whose parents are employed by state-budgeted
organizations, in recreation camps
Organization of therapeutic-resort recreation for employees and their children
(“Mother and child”)
Overhaul of six kindergartens
Program on education
support
Overhaul of secondary schools, gymnasiums and lyceums
Program on occupational
safety
Large-scale ecological
program
Almetyevsk State Oil Institute modernization and re-equipment
Overhaul of the professional college No. 65
Fully equipped schoolbags and sports suits for multi-child families were bought as a
part of the “Help to prepare for the school” campaign
Provision of employees with workwear
Workplaces assessment
Safe drinking water supply
Creation of green spaces, parks and squares
Planting of more than 11 thousand trees of different species
Park improvement in the ‘Yashlek’ neighborhood, square improvement on the
Aminov St.
Parks and squares improvement
Central park overhaul
Installation of whirligig in playground
Park construction
For more information, please see the Company’s website tatneft.ru
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
Almetyevsk
Almetyevsk, Sarmanovo, Leninogorsk,
Aznakaevo, Cheremshan districts
Almetyevsk
Almetyevsk
Almetyevsk
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
oil region of the Republic of Tatarstan
Almetyevsk
Almetyevsk
Nurlat
Bavly
Aznakaevo
Novosheshminsk village, Bavly
171
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
INTERACTION WITH THE STAKEHOLDERS
THE COMPANY’S RESPONSIBILITY
TOWARDS STAKEHOLDERS
THE COMPANY PERMANENTLY INTERACTS WITH A WIDE RANGE OF STAKEHOLDERS, CONSIDER-
ING THE MUTUALLY BENEFICIAL RELATIONS WITH THEM AS A CRUCIAL ASSET FOR SUSTAINABLE
DEVELOPMENT. AS PER AA 1000 STANDARD DEFININTION CRITERIA, THE STAKEHOLDERS ARE
ORGANIZATIONS, INDIVIDUALS OR GROUPS WHOSE INTERESTS COULD BE AFFECTED BY THE
COMPANY’S ACTIVITIES.
Ensuring a high level of the corporate social responsibility is
a strategic initiative and a major principle of the Company’s
activity, which implies the transparency and ethical conduct
that contributes to sustainable development and is consist-
ent with the law and international standards.
Fundamentals of the stakeholder engagement:
Identification of the stakeholders;
clients, business partners, and public authorities. A group
of limited influence includes public organizations, invest-
ment analytical companies and credit rating agencies, mass
media communications, specialized institutions of higher
and intermediate vocational education and local compa-
nies, i.e. the stakeholders whose interests can be partially
affected by the Company or which can indirectly influence
the Company.
regarding the Company’s activities;
• analysis of the stakeholders’ needs and expectations
• identification and implementation of communication and
• definition of the Company’s responsibility areas to the
feedback forms for each stakeholder;
key stakeholders.
Guiding principles of the Company’s social responsibility
are as follows:
ers and other stakeholders on its activity;
• to act in accordance with the legislation;
• to be a responsible partner of the government;
• to protect rights of the shareholders;
• to appreciate and respect its employees;
• to openly inform its shareholders, employees, consum-
• to act in accordance with the highest ethical standards;
• to be intolerant to corruption and bribery;
• to use its resources with the maximum efficiency;
• to use up-to-date technological achievements;
• to ensure environmental protection;
• to cooperate with public organizations;
• to strive to make each employee feel proud of the Com-
pany they work for.
The Company’s representation in the business and
public organizations
The Chamber of Commerce and Industry of the Russian Federation
All-Russian Association of Oil and Gas Employers
Russian Union of Industrialists and Entrepreneurs (RSPP)
“Miners of Russia” Non-Profit Partnership
Union of Oil and Gas Producers of Russia
Moscow International Petroleum Club (MMNK)
“Russian Institute of Directors” (RID) Non-Profit Partnership
The National Council on Corporate Governance (NSKU)
Share Issuers Committee of Moscow Exchange
Russian National Committee of the World Petroleum Council
(RNK MNS)
Key stakeholders are divided into two groups according
to their degree of influence on the activity of the TATNEFT
Group and the degree of the Company’s influence on
their vital activity. A group of substantial influence includes
stakeholders which can substantially influence the activity
of the TATNEFT Group or whose interests are substantially
affected by the Company’s activity. These are internal
stakeholders, shareholders and investors, consumers and
Corporate Calendar of the Company’s events for 2015 is detailed on the corporate website tatneft.ru
SHAREHOLDERS
AND INVESTORS
• Dynamic growth of shareholder value and development of the Com-
pany in accordance with the strategic initiatives
• Operating and financial efficiency
• Maintaining business reputation
• Ensuring status of reliable Company
• Ensuring compliance with Moscow Exchange listing rules and Corpo-
rate Governance Code recommended by the Bank of Russia.
EMPLOYEES
BUSINESS
PARTNERS
CONSUMERS
• Workplace safety
• Provision of opportunities for individual and professional development
• Provision of social guarantees
• Ensuring the decent standard of living
• Following the ethical principles of the Company
• Fair competition
• Timely and precise fulfillment of contractual commitments
• Mutually beneficial cooperation
• Provision of high quality products and services
• Continuous improvement of the product quality
• Commitment to follow changing requirements of the consumers
• Provision of reliable information about the Company’s products
LOCAL
COMMUNITITES
AND PUBLIC
ORGANIZATIONS
• Support of social and economic development of the regions of the
business activity
• Support of development of healthcare, education, culture and sports
• Intelligent and efficient environmental management and protection
• Support of socially vulnerable segments of the population
172
173
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
CORPORATE STANDARDS AND REGULATIONS
FOR INTERACTION WITH CONCERNED PARTIES
Concerned Parties
Regulatory Documents
All
Stakeholders
Corporate management code of PJSC TATNEFT
Articles of Association of PJSC TATNEFT
Provisions on the information policy of PJSC TATNEFT
The TATNEFT Company’s hotline work order
Policy of the TATNEFT Group in the field of industrial safety, labor and environmental protection
Integrated risk management system
Corporate standard “Anti-Corruption Policy of the TATNEFT Company”
Shareholders
Provisions on the General Meeting of Shareholders of PJSC TATNEFT
Provisions on the Board of Directors of PJSC TATNEFT
Provisions on the committees under the Board of Directors of PJSC TATNEFT
Business
Partners
Provisions on the procedure for registration of suppliers of goods/works/services in the TATNEFT Company
Regulation on the logistics of structural subdivisions and affiliates of the TATNEFT Company
Provisions on the organization of contractual work in the TATNEFT Company
Provisions on the organization of goods purchasing using electronic trading platform
Regulation on work in the “Trading Procurement Platform” system of the TATNEFT Company
Corporate standard on the accreditation order for prospective suppliers when organizing goods purchasing using electronic
trading platform
Provisions on the order of the Company’s subdivisions interaction on handling of complaints received by the Hotline of the
TATNEFT Company’s trading procurement platform
Provisions on the organization, execution, and automated record keeping of claim-related work in the TATNEFT Company
Regulation on the organization of goods purchasing from the companies manufacturing unique (custom-made) goods
(monopolist manufacturers)
Provisions on the use of insider information and on the procedure for distribution of information on security transactions
Provisions on the safe execution of works performed by third parties at the TATNEFT Company facilities
Provisions on the TATNEFT Group.
Employees
Corporate culture code of the TATNEFT Company
HR management policy
Standard for the Collective Agreement
Standard for personnel hiring and transfer to another job
Standard for personnel dismissal
Standard for personnel adaptation
Provisions on coaching
Standard for working with the candidate pool
Standard for personnel certification
Standard for personnel training and development
Standard for labor discipline
Standard for personnel rewarding
Standard for business trips of employees
Standard for the provision of information on candidates (internal and external) for vacant positions
Rules of internal work order for employees
Regulation on the preparation and holding of the employees conference
Provisions on the insurance of employees against industrial accidents
Provisions on the arrangement of therapeutic-resort activities for employees
Provisions on the system of industrial safety management
System for the assurance of industrial safety
Provisions on production control over compliance with industrial safety requirements at the hazardous production facilities
Procedure for the arrangement of pre-employment and routine medical examinations of employees involved in heavy and harmful
works, as well as works with harmful and/or hazardous production factors
System of the employees’ personal responsibility for occupational safety
Provisions on non-recurrent loans provided for the employees to cover initial installments for housing bought through the
social mortgage system of the Republic of Tatarstan
Provisions on the allocation of loans for private housing construction or participation in joint housing construction (with other
entities involved in housing construction)
Trade Union
Standard for the Collective Agreement
Provisions on the workplace protection committee (commission)
Workplace protection agreement
Veterans and
Pensioners
Provisions on the arrangement of non-governmental pension provision for employees
Provisions on the arrangement of therapeutic-resort activities for non-working pensioners and disabled workers at the expense
Corporate project of targeted support for pensioners
Corporate standard “Requirements on environmental safety for the organizations involved in providing works and services at
the TATNEFT Company’s facilities”
Standard for the interaction of TATNEFT Company with external service providers during service rendering
Standard for the investment and technical policy of the TATNEFT Company for diversification and quality enhancement of oil
services
Regulation on the introduction of changes and approving of changes introduced in the layout of production facilities, defining
limits of liability sharing between service providers and structural subdivisions under the process of service providing for the
TATNEFT Company
Provisions on service for ordering of information technologies at the TATNEFT Company
Provisions on tenders for the submission of goods supply, work performance, and service rendering orders according to the
needs of TATNEFT Company
Regulation on pre-tender and post-tender activities concerning goods supply, work performance, and service rendering
according to the needs of the TATNEFT Company
Provisions on the marketing assessment of materials and equipment with regard to the TATNEFT Company logistics
Consumers
Provisions on the TATNEFT trademark and its use
Standard for production control over products and manufacturing processes
Standard for final inspection and products testing
Procedure for reviewing of claims and requests submitted by tire products consumers
Procedure for the collection and processing of information on consumers satisfaction
Rules for service rendering at filling stations
Local Com-
munities and
Public Organi-
zations
Rules of the TATNEFT Company’s trade practice in respect of diesel fuel realization in the Russian Federation
Agreements with municipal administrations of the cities and settlements in activity regions
Provisions on work with boarding schools graduates and orphaned students of specialized education establishments
Specialized corporate project of the TATNEFT Company aimed at the support for small and medium-sized business
development in the Republic of Tatarstan
Provisions on the participation of the TATNEFT Company in public organizations
174
175
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
DECLARATION OF THE TATNEFT COMPANY
ON INTERACTION WITH CUSTOMERS
DECLARATION OF THE TATNEFT COMPANY
ON HUMAN RIGHTS OBSERVANCE
THE ACTIVITY OF PJSC TATNEFT IS BASED ON THE RECOGNITION AND OBSERVANCE OF HUMAN
RIGHTS. THE COMPANY OBSERVES ALL LABOR RIGHTS OF ITS EMPLOYEES STIPULATED BY THE
INTERNATIONAL LABOR ORGANIZATION (ILO) AND RUSSIAN LEGISLATION. THE COMPAY RESPECTS
EMPLOYEES’ RIGHT TO FORM UNIONS AND RIGHT TO HOLD COLLECTIVE BARGAINING. IN PJSC
TATNEFT, THESE RIGHTS ARE EXERCISED BY PARTICIPATION OF EMPLOYEES IN THE TRADE UNION
ORGANIZATION’S ACTIVITY AND FORMATION OF THE COLLECTIVE AGREEEMENT.
The Company does not exploit forced or compulsory labor. Moreover, the Collective Agreement of PJSC TATNEFT stipulates the
employee’s right to refuse unsafe work, in case of faulty equipment or conditions, which can cause emergencies, with reten-
tion of the employee’s position and average monthly income. The Company provides equal opportunities to all employees
regardless of gender, age, ethnicity or religion. Employee’s personal qualities determined by knowledge, experience and skills
matter the most for making decisions on employment, position agreement, training and employment termination. The Company
enforces the principle of equal remuneration for men and women for the work of equal value. The principle is exercised by use of
a unified wages tariff schedule for all employee categories regardless of gender.
The Company respects family obligations of its employees and establishes working hours in strict compliance with employment
legislation of the Russian Federation, provides parental leaves, social leaves in case of marriage registration, childbirth and
other benefits and protection assisting achievement of the balance between work and private life.
The Company observes requirements of the Labor Code of the Russian Federation and the ILO Convention, which prohibit ex-
ploitation of juvenile labor at works with harmful and/or hazardous conditions. Moreover, PJSC TATNEFT does not carry out any
activities exploiting child labor.
Inspection on observance of employees’ rights are conducted on a regular basis, measures are implemented on prevention of
violation of rights.
ENHANCEMENT OF INTERACTION QUALITY AND ESTABLISHMENT OF LONG-TERM RELATIONSHIPS
WITH CONSUMERS ARE TOP PRIORITY TASKS IN THE CREATION OF THE COMPANY’S COMPETITIVE
ADVANTAGE FORMED ON THE BASIS OF PRODUCT QUALITY CONTROL SYSTEM, HIGH LEVEL OF
SERVICE AND RAISING OF THE CONSUMERS’ AWARENESS. IN THE PROCESS OF COMMUNICATION
WITH PRODUCT AND SERVICE CONSUMERS, THE COMPANY ADHERES TO THE UNITED NATIONS
GUIDELINES FOR CONSUMER PROTECTION AND INTERNATIONAL COVENANT ON ECONOMIC,
SOCIAL AND CULTURAL RIGHTS.
Main principles of interaction with customers are as follows:
Safety. Protection of customer’s health and safety implies provision of such products and services, which are safe and do
not pose any unacceptable risks of damage while using or consuming them. PJSC TATNEFT strictly controls observance of all
regulatory requirements governing product and service quality. The Company assesses the impact of offered products and
services on customer’s health and safety in order to identify possible lines for improvement on all stages of their life cycle. No
cases of non-compliance with regulatory requirements relating to the impact of products and services on health and safety
were fixed in 2015.
Information acquisition. The Company ensures consumers’ access to full, accurate and understandable information, which
facilitates information-based decision-making according to their individual preferences. Concluded product supply contracts
are written in clear, straightforward and understandable language, does not contain unfair contractual liabilities, provide
straightforward and comprehensive information on product price, peculiarities and on contractual terms and conditions. No
cases of non-compliance with regulatory requirements relating to the customers informing of the products and services’
features were fixed in 2015.
Opportunity to choose. Consumers of the Company’s products and services have an opportunity to choose from a range
of products and services offered at competitive prices and with guaranteed satisfactory quality.
Reparation of damages. The Company has precise mechanisms for settlement of claims and disputes with consumers, as
well as measures for their prevention. All instances of providing consumers with products or services of inappropriate quality
are recorded, reasons for inappropriate quality are analyzed, measures for their elimination are developed. Consumer’s dam-
ages are repaired in compliance with the effective legislation.
Favorable environment. PJSC TATNEFT takes a wide range of measures to minimize any negative impact of offered prod-
ucts and services on the environment.
Right to privacy. The Company ensures compliance with this principle by using reliable systems for consumers’ data collec-
tion and protection. Consumers’ data are collected without violation of any effective legislation. Collection of personal data of
the Company’s product and service consumers is limited with information necessary for providing products or services and
communicated with consumers’ consent on a voluntary basis. Protection of collected personal data is performed with the
help of efficient safety means. No claims related to violation of privacy or loss of consumers’ data were reported in 2015.
Honest and responsible marketing policy. The Company exercises only fair marketing practices and protects its consum-
ers against unfair or deceiving advertising and marking. The Company’s activity in the field of product and service promotion,
advertising and marketing complies with legislation of the Russian Federation. No cases of non-compliance of the Compa-
ny’s activity with the legislation on products and services promotion, advertisement and marketing were reported in 2015. No
penalties for violation of the legislation or regulations related to products provision and usage were charged in respect of the
Company in the reporting year.
For more information, please see the Company’s website tatneft.ru
For more information, please see the Company’s website tatneft.ru
176
177
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
INDUSTRIAL SAFETY
AND ENVIRONMENTAL
POLICY
COMPANY ENVIRONMENTAL COMPLIANCE
COMPANY OCCUPATIONAL HEALTH AND SAFETY COMPLIANCE
INVESTED IN FIXED
CAPITAL TO PROTECT
ATMOSPHERIC AIR
178
179
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
ENSURING INDUSTRIAL AND ENVIRONMENTAL SECURITY,
OCCUPATIONAL HEALTH AND NATURE CONSERVATION
COMPANY HAS BEEN IMPLEMENTING ITS TARGETED PROGRAMS TO ENSURE SAFE
WORKING ENVIRONMENT, PROTECT HEALTH OF ITS PERSONNEL AND PEOPLE
LIVING WITHIN COMPANY’S OPERATING AREAS, MITIGATE MANMADE IMPACT ON
ENVIRONMENT AND MAINTAIN SUSTAINABLE USE OF NATURAL RESOURCES.
Industrial safety management system
The Company carries out its health, safety and environment
activities in compliance with the international environmental
standards ISO 14001:2004 and occupational health and safety
OHSAS 18001:2007 in the context of the integrated health,
safety and environment management system. In order to
comply with the requirements of the international standard
OHSAS 18001 the Company developed the Health, Safety and
Environment Program to prevent injuries, reduce risks and ac-
cidents, and contingent losses for 2013 through 2015.
Main activities of Health, Safety and Environment Pro-
gram to prevent injuries, reduce risks and accidents, and
contingent losses for 2013 through 2015.
Item
No.
1.
2.
3.
4.
5.
6.
7.
8.
Activities
Decommissioning, renewal, reconstruction,
modernization of facilities, technological
equipment, technical devices and alarm
warning and protection facilities
Diagnostics, service and preventive
maintenance
Advanced and safe technology application
Construction and expansion of amenities and
other utility facilities
Furnishing workers with personal protective
equipment
Training and skills development
Industrial safety and health activity
improvement
Hazard and risk management, prevention
of injuries, reduction of accidents, risks and
contingent losses
2015 amount,
ths rubles
1 665 805.9
487 872.3
35 479.1
17 022.4
82 862.1
78 133.8
801.1
10 467.3
This year, 165 mln rubles are to be spent to implement the
Company’s Fire Safety Activities for 2011 through 2015. In
2015, there was no fire in the Company.
The PJSC TATNEFT industrial safety system is organized
in accordance with the Federal Law “On industrial safety of
hazardous industrial facilities”, “Rules on the organization
and implementation of industrial control for compliance with
requirements of industrial safety at hazardous industrial facili-
ties” and other industrial safety regulations of the Russian
Federation. The key element of the integrated health, safety
and environment management system is the industrial control
to prevent accidents and incidents and to ensure prepared-
ness of the Company’s divisions to respond to emergencies
and eliminate consequences of accidents and incidents at
hazardous industrial facilities through implementation of com-
plex of organizational and technical measures.
There is the Health, Safety and Environment Department
including the Industrial Safety and Occupational Health Group
functioning in the Company. The Regulation on industrial
control over compliance with industrial safety at TATNEFT’s
hazardous production facilities is in effect providing for the key
specialists and employees from the production and technical
services and departments to be involved in preventive meas-
ure arrangements.
Occupational health and safety spending over time
including per employee
Year
2011
2012
2013
2014
2015
Occupational health and safety
spending, ths rubles
Occupational health and safety
spending per employee, rubles
265 780.4
319 827.3
329 659.0
365 824.6
478 135.8
12 635
15 122
15 863
17 851
23 171
Employees’ Health Care
Occupational Safety and Health Committee
The employees’ health care is ensured through integrated
system of health care delivery, prevention of occupational
accidents and diseases, as well as support healthy lifestyles
among employees, including:
dence of;
• accounting and analysis of employees’ disease inci-
• monitoring of working conditions and rest;
• regular medical examinations;
• mplementation of disease prevention programs, includ-
• control of conditions of dining-rooms and personnel
• recreational activities;
• encouraging healthy lifestyles.
ing vaccination and health resort treatment;
facilities conditions;
A great deal of attention is paid to the sanitary and amenity
conditions. The permanent committees of the operating divi-
sions according to approved schedules check sanitary and
amenity facilities as regards to their technical condition, furni-
ture availability and esthetic look. Upon entering employment
preliminary and subsequently regular medical examinations of
the personnel engaged in hard labour, harmful and hazardous
jobs, and in transport play an important role to reduce inci-
dence of disease. In 2015, not a single case of occupational
disease was recorded among the employees of the Company.
Since 1997, the Occupational Safety and Health Commit-
tee has been in place and effect in PJSC TATNEFT, including
on a parity basis the representatives of the employer and
the trade union committee. The committee consists of 10
people. The main tasks of the Committee is monitoring the
state of conditions and safety and health in the workplaces,
providing workers with personal protective equipment,
compensation for work in harmful and (or) hazardous work-
ing conditions, assessment of risks to workers’ health and
development of measures to prevent occupational accidents
and diseases. The PJSC TATNEFT Occupational Safety and
Health Committee holds its meetings quarterly.
In order to provide support to the authorized occupational
safety and health representatives the Guidelines for exercis-
ing the public oversight of occupational safety and health”
were developed Regulations on the PJSC TATNEFT trade
union authorized occupational safety and health repre-
sentatives were adopted, the PJSC TATNEFT Trade Union
Authorized Occupational Safety and Health Representative
distinguishing badge was designed and made. Every year,
the Company holds a competition “Best Authorized Occupa-
tional Safety and Health Representative of the PJSC TAT-
NEFT”. The winners successfully represent PJSC TATNEFT in
competitions of the Republic and industry levels.
Providing with personal protective equipment
Occupational Safety and Health Agreement
The personnel who work in hazardous or dangerous work-
ing conditions or in special temperature and pollution-related
environment are given certified special protective outfit, shoes
and other personal protective equipment, washing agents and
detergents as established by standard norms. In 2015, the Com-
pany’s spending to provide employees with personal protective
equipment made 82 862.1 thousand rubles.
In accordance with the Labor Code of the Russian Federation
and the Occupational safety and health activities planning
guidelines (Annex to the Resolution of the Russian Federa-
tion Ministry of Labor dated 02.27.95 No. 11) every year in
the structural units of PJSC TATNEFT the occupational Safety
and Health Agreements are signed between the employer
and the trade union organization, which is the Annex to the
Collective Agreement of PJSC TATNEFT. They specify labor
protection measures, timing of their implementation, cost of
work, responsible people for implementation of measures,
the person as well as the number of employees, whom the
working conditions are improved for, and the number of
workers released from physically demanding jobs.
The company assesses the workplaces with regard to working conditions followed by the health and safety compliance
certification. To date, the health and safety compliance certificates have been granted to 12 structural divisions of the
Company. The headcount working at the certified workplaces made 4 601 people in 2015, including 1 644 women.
The employees with a high occupational disease risk, i.e. those, who are busy in workplaces of 3.1, 3.2, 3.3, 3.4 hazard
classes based on dangerous and harmful factors of production environment and working process, are provided with all
guarantees and compensations as stipulated by the Labour Code of the Russian Federation.
180
181
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Pursuant to the standard ISO 14001:2004 the PJSC TAT-
NEFT’s Environmental Management System has been cer-
tified for compliance with, the Company uses a methodolo-
gy of “sequential procedures” that provides for subsequent
actions to be taken based on the data obtained according
to the previous level results.
In 2015, in the course of fulfillment of the extended third
Environmental program anticipated for a period from 2000
through 2015, PJSC TATNEFT continued its goal-oriented
and consistent work to improve environmental security and
technological processes of oil production.
PJSC TATNEFT sets the following goals:
• ensuring safe working conditions, protecting health of
workers and people living in the areas of the Company’s
operations;
• reduction of man-made impact on the environment
• rational use of natural resources
Realizing the health, safety and environment goals provides
for the Company to accomplish the following objectives:
• improving industrial and environmental safety of hazard-
• reduction of negative impacts on the environment by
ous production facilities;
implementing new advanced technologies, equipment,
materials as well as improving process control quality;
• prevention of making of unjustified wastes in technologi-
cal processes of oil production and related operations
with environmentally safe handling of wastes and their
maximum use as a secondary raw material;
• rational use of natural resources and minimization of oil
and gas losses
Environmental management system
The PJSC TATNEFT environmental safety activities are car-
ried out in accordance with the federal law requirements
and in compliance with all applicable environmental rules
and regulations, taking into account the international, fed-
eral and regional regulation requirements, internal regula-
tory documentation and the PJSC TATNEFT Health, Safety
and Environment Policy.
As the third JSC TATNEFT Environmental Program for 2000
through 2015 was completely over and in order to provide
further compliance with the norms and requirements of
the Federal laws as regards to environment conservation,
ISO 14001:2004 international standard, as well as achieve
environmental goals and fulfil commitments to protect the
environment as determined by the Heath, Safety and En-
vironment Policy of PJSC TATNEFT, the corporate program
documents were developed and approved in 2015:
• PJSC TATNEFT Ecological Strategy up to 2020;
• PJSC TATNEFT Ecological Strategy for 2016 through
2020.
The Fundamental Principles of the PJSC TATNEFT Health,
Safety and Environment Policy are as follows:
working conditions and healthy environment;
• recognizing the constitutional right of people to safe
• industrial and environmental safety priority as an inte-
• energy saving and rational use of natural resources dur-
• managerial and investment decision-making based on
ing oil production operations;
gral part of national security;
multi-optional scenarios, taking into account the indus-
trial and environmental safety priorities;
• giving priority to preventive measures over response ac-
tions to eliminate negative environmental impacts.
Certified in 2006, the PJSC TATNEFT Integrated Health,
Safety and Environment Management System (hereinaf-
ter – ISM HSE OS) successfully passed in 2015 through the
re-certification audit for compliance with the international
standards ISO 14001:2004 and OHSAS 18001:2007.
The audit was carried out by the specialists of JSC Bureau
Veritas Certification Russia.
The Company is committed to:
• ensure compliance with current legislation, industrial,
corporate and local regulations governing the Com-
pany’s health, safety and environment activities as well
as other related external requirements the Company has
committed to be met;
• identify and assess industrial hazards and risks, work
out measures to manage and mitigate significant op-
erational risks;
Industrial Environmental Monitoring
The PJSC TATNEFT industrial environmental monitoring
system is implemented in the following areas:
• taking measurements and samples related to the envi-
• maintenance of databases of sources of environmen-
ronment protection;
tal impact and environmental setting, processing and
analysis of data obtained;
places during its operations;
• identify and eliminate occupational hazards at work-
• take all possible measures to prevent the environment
• carry out a set of preventive measures to prevent a
pollutions;
possibility of emergency situations, and should it hap-
pen take measures to mitigate the emergency situation
impact on the environment;
pational diseases;
• carry out a set of measures to prevent injuries and occu-
• provide health, safety and environment training and skill
• require that the contractors carrying out work at produc-
development of the Company’s personnel;
tion facilities of the Company comply with the health,
safety and environment requirements existing in PJSC
TATNEFT;
holders in health, safety and environment activities;
• maintain an open dialogue with all the Company’s stake-
• attain and continuously improve the Company’s health,
• maintain and continuously improve the Integrated
safety and environment performance;
Management System related to the health, safety and
environment;
• ensure compliance with the Integrated Management
System to international occupational health and safety
standards OHSAS 18001: 2007 and the environmental
guidelines ISO 14001:2004;
• report to the public on the Company’s health, safety and
environment activities.
mental requirements;
• determination of impact source conformity with environ-
• analysis and forecast of the environment conditions in
• development of the industrial environmental monitoring
the region;
system in new operating areas.
The industrial environmental monitoring system provides
the following types of monitoring:
• monitoring of sources of environmental impact (emis-
• monitoring of condition of the environment components
sions and discharges of pollutants and waste waters);
(air, surface and underground waters, lands and soils,
geological environment);
• two-level supervisory control of compliance with envi-
ronmental legislation.
The basic system-wide documents for the PJSC TATNEFT
industrial environmental monitoring are the following stand-
ards:
• Regulation on industrial control for environmental pro-
tection (industrial environmental monitoring) in PJSC
TATNEFT (STO TN 128-2014);
• Procedure for industrial control for air protection in
• Regulation on water use compliance in PJSC TATNEFT
PJSC TATNEFT (STO TN 129-2014);
(STO TN 132-2015).
The scientific and methodological support for the Com-
pany’s environmental activities is provided by TatNIPIneft
Institute along with a number of other research institutions
and universities of Tatarstan and the Russian Federation.
182
183
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Environmental security measures
Oilfield Equipment Reliability Improvement
Atmospheric Air Protection and Monitoring
PJSC TATNEFT is particularly focused on the environmental
activities to reduce harmful emissions into the atmosphere,
discharges of pollutants into groundwater and surface water,
soil and subsoil as well as to ensure compliance with the es-
tablished norms of permissible impact on the environment.
Primarily, all these are ensured by maintaining the technical
condition of the oil-field equipment at the appropriate level
and implementing advanced and innovative environmental
technologies as well as through the activities, such as:
• Implementation of the technology to capture light hy-
drocarbon fractions released from storage tank equip-
ment (vapor recovery units);
unit;
• Reducing flared associated gas volumes;
• Associated petroleum gas cleaning at desulphurization
• Repair and replacement of tanks and other storage tank
equipment and anti-corrosive coating application and
equipping with electrochemical protection means;
pipelines;
lating systems;
for collection and disposal of wastes;
zation of technological process and product streams;
• Overhaul and replacement of commercial oil and gas
• Reconstruction of oil treatment facilities with the optimi-
• Construction of storm water drain at industrial facilities
• Mud pit lining and equipping rigs with waterproof circu-
• Overhaul and replacement of oil pipelines and their
• Equipping well servicing and workover crews with spe-
• Monitoring production casings of wells for integrity and
• Sealing of production casings, bringing top of cement to
• Running in additional (intermediate) casings;
• Increase lifetime of downhole equipment using protec-
surface behind surface and production casings;
cial equipment to prevent fluid spills;
sacrificial and inhibitory protection;
behind-casing cross-flows;
tive coatings, M1-X packers, sacrificial protection, cor-
rosion inhibitors and cathodic protection of casing wells.
In 2015, to ensure stable and trouble-free operation of the
production facilities while improving their industrial and
environmental safety the Company manufactured 848.529
km of corrosion-resistant pipes (polymer coated steel
pipe). Cathodic protection was applied to 1 007 well cas-
ings; 559.452 km of pipelines were furnished with electro-
chemical protection. The diagnostic examination was done
in the amount of 2 439.353 km of pipelines.
In order to protect the oilfield equipment and pipelines
against corrosion the Company tested and adapted
dozens of chemical reagent brands. The high-efficient cor-
rosion inhibitors in the quantity of 5 470.997 tonnes were
used in 2015. The domestic corrosion inhibitor SNPH-
6201A was commercially tested as part of the import
substitution program.
The inner surfaces of 195 process tanks (vertical stain-
less steel tanks and horizontal flow settling tanks) were
lined with anticorrosion coating at the crude oil gathering
and treatment facilities of the oil and gas field operating
divisions. 45 vertical steel tanks were repaired. 360 bul-
let tanks and 119 vertical steel tanks were gone through
diagnostic tests.
In order to protect the land, surface and underground
waters 138.38 km of oil pipelines for the oil gathering and
treatment system and 96.93 km of water lines for the reser-
voir pressure maintenance system were overhauled using
corrosion-resistant pipes.
In 2015, a good deal of work was accomplished with regard
to active electrochemical protection, delivery of corrosion
inhibitors, use of corrosion-resistant tubular to replace gas
pipelines as well as major repair (replacement) of worn out
sections.
In 2015, in order to comply with the established limits of
maximum permissible emission of pollutants into the air
and further reduce the emissions:
• major repairs were accomplished for 16.51 km of gas
pipelines. The total costs amounted to 132.635 mln
rubles;
• reconstruction of the NGDU Jalilneft’s flare facilities of
the booster pump station DNS-32 was completed that
will provide soot-free combustion. The investments
totaled 9.695 mln rubles;
• reconstruction (replacement) of the vapor recovery
units at the Aktashskoe Tank Farm of NGDU Elkhovneft
completed. The investments amounted to 33.857 mln
rubles. The vapor recovery units are scheduled to be
brought into operation for 2016;
• oil heating furnaces with waste-heat exchangers were
installed at the Kama-Ismagilovky Sour Crude Oil Treat-
ment Facility of NGDU Leninogorskneft. The invest-
ments amounted to 65.607 mln rubles including 8.651
mln rubles in 2015. The furnaces are scheduled to be
brought into operation for 2016;
• separation and pumping unit of associated petroleum
gas of the 2nd stage separation was under construc-
tion along with reconstruction of the NGDU Yamash-
neft’s booster pump station DNS-210. The investments
amounted to 69.707 mln rubles including 59.374 mln
rubles in 2015;
• Tatneftegazpererabotka Division’s Minnibaevo associ-
ated petroleum gas desulfurization facility reconstruc-
tion continued. The investment totaled 111.972 mln
rubles in 2015;
tion facility started at
• reconstruction of associated petroleum gas desulfuriza-
• the Minnibaevo Gas Processing Plant of the Tatneft-
• The investments amounted to 10.802 mln rubles in 2015;
• reconstruction of the plant-wide flare system started
egazpererabotka Division.
at the Minnibaevo Gas Processing Plant of the Tatneft-
egazpererabotka Division. The total investment amount-
ed to 83.557 mln rubles in 2015.
To ensure compliance with the requirements for establish-
ing the maximum permissible emission limits and meeting
the requirements for granting the emission permits, the re-
construction of the booster pumping station DNS-2 “Vish-
nevaia Poliana” and the Sour Crude Oil Treatment Facility
UPVSN-2 “Kutema” began in NGDU Nurlatneft in 2015.
The amount of investments totaled 14.856 mln rubles in
2015. The newly constructed gas gathering network will be
as long as 122 km and the 1st and 2nd stages gas pipelines
construction cost is estimated to amount to more than 1.8
bln rubles. The gross pollutant emissions into the atmos-
phere in 2015 amounted to 83 868. 674 tonnes, which was 8
434.16 less than that of 2014. In 2015, the specific emis-
sions per tonne of oil production made up 3.115 kg. As a
result of implementation of air protection measures across
the Company for the last 20 years the total emissions of
pollutants into the air from stationary sources had de-
creased by 1.2 times. Application of light hydrocarbon frac-
tion capture technology (vapour recovery units) decreased
the carbon emissions by more than 3.5 times as compared
with the emissions in 1991. Currently, the PJSC TATNEFT’s
facilities operate 44 vapor recovery units. All pollutant emis-
sions into the air from the Company’s stationary sources
are within the established standards of maximum permis-
sible emissions. In 2015, PJSC TATNEFT produced 946 941
ths m3 of APG, gathered and utilized 899 538 ths m3, flared
47 403 ths m3.
For the purpose of fulfilling the schedules to monitor the
established standards of maximum permissible emissions
of pollutants into the air PJSC TATNEFT carried out the
instrumental measurements on 346 stationary emission
sources and ran 3 701 analyses in 2015.
In order to monitor compliance with the sanitary norms and
regulations for air protection in the populated areas, as well
as part of substantiation (defining) of the sanitary buffer
zone sizes the atmospheric air was monitored in the human
settlements located within the area of the Company’s op-
erations and sanitary buffer zones of the production facili-
ties. There were 338 monitoring points. During the activities
15 173 analyses were performed to determine the current
state of the atmospheric air.
The air basin was analyzed for 33 ingredients (hydrocar-
bons, hydrogen sulfide, nitrogen dioxide, carbon monoxide,
etc.) with simultaneous meteorological observations by
measuring a wind speed and direction, temperature and
relative humidity.
184
185
PJSC TATNEFT, ANNUAL REPORT 2015 ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Water conservation and sustainable use
In 2015, a considerable amount of efforts was made to
improve reliability of various-application pipelines and well
designs. To ensure a leak-free operation of oilfield facilities
the Company applies the technologies to:
ing and paint coating application;
• protect the pipes against corrosion by polyethylene lin-
• manufacture pipes in corrosion-resistant versions;
• construct pipelines with effective internal and external
insulation and welding joint protection.
To ensure water resources conservation and their rational
management:
• the reconstruction of modular sewage treatment units
for the circulation water supply system of gas process-
ing facilities continued at the Tatneftegaspererabotka
Division. In 2015, the investments amounted to 34. 811
mln rubles;
• reconstruction of the car wash facility with circulating
water supply and three-stage wastewater treatment was
finished at the central base of the Automobile Transport
Enterprise (ATE) of PJSC TATNEFT. The total estimated
cost of the reconstruction amounted to 24.460 mln
rubles including 1.690 mln rubles in 2015.
The highly reliable packers and corrosion-resistant tubings
were continued to be installed to ensure conservation of
subsoil and fresh groundwater resources. In 2015, pack-
ers were run and set in 524 injection wells and corrosion-
resistant tubing was used in 294 injectors. Totally, since the
beginning of installation, the operating injection well stock
equipped with packers of various designs and corrosion-
resistant tubings had accounted for over 69% and 90%,
respectively.
In 2015, the stormwater sewer systems were installed at
250 oilfield facilities of NGDUs. The amount of investments
totaled more than 50. 9 mln rubles.
PJSC TATNEFT ensures water management in compliance
with the Water Code of the Russian Federation and the
Federal Law “On Subsoil”. In 2015, the use of surface water
bodies was carried out on the basis of 63 water use agree-
ments concluded with the Ministry of Ecology and Natu-
ral Resources of the Republic of Tatarstan (including 48
agreements made in 2015) and 7 resolutions on assignment
for use of surface water bodies. In 2015, PJSC TATNEFT
performed the underground water abstraction operations
on the basis of 51 subsoil use licenses.
Thanks to implementing a variety of EORs and water sus-
tainable use technologies, the quarterly amount of fresh
water intake for reservoir pressure maintenance (RPM) for
the period from 2000 to 2015 had decreased by 18.4 mln
m3 (1.6 times). Moreover, 100% produced water during oil
production and oil treatment operations was re-injected
back into reservoir.
The volume of water utilized in 2015 for PJSC TATNEFT’s
own needs amounted to 29.081 mln m3, including fresh
water in quantity of 28.565 mln m3. The specific amount
of fresh water consumption per tonne of crude oil pro-
duction amounted to 1.061 m3 (1.077 m3 in 2013 and
1.078 m3 в 2014).
In 2015, the specific amount of polluted waste water dis-
charged into surface water bodies per tonne of oil produc-
tion amounted to less than 0.0035 m3 (less than 0.005 m3 in
2013 and less than 0.004 m3 in 2014).
Industrial environmental monitoring of water bodies is car-
ried out by 12 chemical analytical laboratories owned by the
structural units of the Company, as well as the laboratories
of other organizations: OOO UPTZH dlya PPD, the Federal
State-Funded Healthcare Institution “Hygienic and Epide-
miological Center in the Republic of Tatarstan”, the Federal
Budgetary Institution branches of the Centre of Laboratory
Analysis and Technical Metrology for the Volga Federal
District. Water analysis is conducted to check the following
parameters that are typically influenced by oil production:
chloride ion, sulfate ion, total hardness, hydrocarbonates,
pH, calcium, anionic surfactants (surfactant), and crude oil
and petroleum products in dissolved and emulsified state.
In the course of industrial control of environmental protec-
tion, totally in 2015, the Company carried out 110 thousand
analyses of natural water, including 10.554 chemical analy-
ses of water samples that were run by the OOO UPTZH
dlya PPD’s chemical-analytical laboratory. Based on the
results of laboratory studies, in 2015, within the area of the
Company’s operations the water quality in major rivers was
stable. The content of chlorides, crude oil and oil products
in dissolved and emulsified state in the major rivers and in
the vast majority of the springs did not exceed maximum
permissible concentrations (MPC) of harmful substances.
Now the concentrations of these harmful substances are
steadily lowering in the groundwater.
In 2015, 49.9 mln rubles were spent to provide the residents
with clean drinking water in the region.
Conservation and Sustainable Use of Land and
Forest Resources
The land protection measures provide for using modular
build rigs equipped with tank circulation systems with three-
stage mud cleaning systems. This helps prevent liquid spill-
age on the land surface and eliminate construction of earth
pits as well as provides reliable protection of fertile lands on
well-site area against contamination from drilling fluids and
formation waters.
During the year under report, the extensive work was
carried out to reduce the agricultural land allotment for
construction of oil facilities and restore the fertility of the
disturbed land, which became possible due to pad drilling
and well pad construction techniques.
In 2015, 1 498 hectares of land were reclaimed during the
construction of pipelines and other oil facilities.
In order to create a favourable environment within its oper-
ating area and higher greenhouse gas absorption, start-
ing from 2000, PJSC TATNEFT has been realizing special
activity programs for planting of greenery in by-road lanes
along highways and oilfield roads in the oil producing re-
gions of Tatarstan.
TO MAINTAIN SUSTAINABLE USE OF
WATER RESOURCES THERE ARE 62 WATER
METERING UNITS OPERATING AT WATER
INTAKE STRUCTURES (SURFACE AND
GROUNDWATER) INCLUDING FIVE (5) WATER
METERING UNITS INSTALLED DURING YEAR
UNDER REPORT. ALL SEWAGE TREATMENT
UNITS (TATNEFTEGAZPERERABOTKA
DIVISION, NGDU ELKHOVNEFT)
ARE EQUIPPED WITH DISCHARGED
WASTEWATER METERING DEVICES.
THERE IS A NETWORK OF LOCAL
OBSERVATION POINTS TO MONITOR WATER
BODIES IN PLACE WITHIN PJSC TATNEFT
LICENSE AREAS. CURRENT OBSERVATION
SYSTEM CONSISTS OF 1 910 SAMPLING
POINTS. THIS INCLUDES 491 OBSERVATION
POINTS TO MONITOR SURFACE WATER
BODIES (RIVERS, WATER RESERVOIRS)
AND 1 419 OBSERVATION POINTS FOR
UNDERGROUND WATER BODIES.
IN 2015, FOR TWENTIETH CONSECUTIVE
TIME SINCE 1995 PJSC TATNEFT HAD
ORGANIZED AND HELD ANNUAL CONTEST
«MAINTAINING BEAUTY OF LANDSCAPED
SPRING SITES AND IMPROVING WATER
QUALITY». COMPANY WITH EFFORTS
OF ITS DIVISIONS CLEARED, CAPTURED
AND ARCHITECTURALLY REFURBISHED
MORE THAN 500 SPRING SITES WITHIN ITS
OPERATING AREA. SIGNIFICANT SOCIAL
PROJECT OF RECENT YEARS HAS BEEN
PROVIDING LOCAL COMMUNITY WITH
CLEAN DRINKING WATER.
TATNEFT’S PERSONNEL HAD
TRANSPLANTED OVER 442 THOUSAND
SEEDLINGS OF TREES AND SHRUBS
INCLUDING 15 194 SEEDLINGS IN 2015.
IN 2015, YEAR OF PARKS AND SQUARE
GARDENS IN TATARSTAN, COMPANY
LAUNCHED ANOTHER LARGE-SCALE
PROJECT TO CREATE GREEN AREAS, PARKS
AND ALLEYS WITHIN MAIN OPERATING
AREA. AS PART OF PROJECT, MORE THAN
11 THOUSAND TREES WERE PLANTED IN
ALMETYEVSK MUNICIPAL DISTRICT.
186
187
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
Production and consumption waste handling
activities
Oil Spill Emergency Prevention and Response
System
Environmental culture fostering and
environmentalists training and development
Funds committed to ensure ecological safety
and environmental protection
One of the PJSC TATNEFT environmental priority is to re-
duce the man-induced impact on the environment through
selective accumulation, collection and disposal of wastes
generated in oil production processes.
The Company established a complex system to collect and
recycle production and consumption wastes. Moreover, the
wastes are used as a raw material for producing marketable
products.
In 2015, PJSC TATNEFT carried out the hazardous waste
handling activities based on the license to carry out activi-
ties for waste detoxification and disposal of I-IV classes
of danger No. 16-00125 dated 27.06.2014a issued by the
Federal Service for Supervision over Natural Resources
Management (Rosprirodnadzor).
In order to comply with the new requirements of the
Federal Law “On Production and Consumption Waste”
entering into force on 01.07.2016, PJSC TATNEFT was
granted the license No. RPN 16-00158 dated 31.12.2015a
to carry out activities related to collection, transporta-
tion, processing, recycling, disposal and disposal of I - IV
classes of danger waste.
In order to ensure more complete collection of household
solid waste (HSW) generated from daily living activities of
the residents of the settlements within the PJSC TATNEFT’s
operating area, the Company financed the purchase of spe-
cial MSW containers totaling 5.014 mln rubles in 2015.
The total production and consumption wastes generated
2015 amounted to 61 205.8 tonnes (75 327.4 tonnes in
2014). The specific waste volume generated in 2015 per
tonne of crude oil was 2.273 kg (2,873 kg in 2014).
The system of prevention and response to emergency situ-
ations (ES) due to oil spills and protection of people and the
environment from their harmful impact is implemented in
PJSC TATNEFT in two focus areas: complex of engineering
and organizational measures, which are aimed at enhancing
production equipment reliability, timely oil spill detection and
minimizing resulting damages as well as a set of measures
to immediately respond to this type of emergency. Pursuant
to the RF Government Regulations No. 613 from 21.08.2000
“On urgent measures to prevent and eliminate of oil spills
and petroleum products” and No. 240 dated 15.04.2002 “On
procedure for organizing measures to prevent and eliminate
oil and petroleum products spills in the Russian Federation”,
the “Oil spills prevention and response plans” were developed
at the PJSC TATNEFT’s structural units in accordance with the
established procedure, which were approved by the Emer-
gency Ministry of the Russian Federation.
Volunteer emergency rescue teams were formed in the oil and
gas field operating divisions of PJSC TATNEFT with the right to
perform oil spills localization and elimination and gas hazard-
ous works, which were attested by the departmental certifica-
tion commission. The teams are staffed by trained personnel,
equipment and special facilities sufficient for localization and
elimination of oil spills (skimmers to collect oil and petroleum
products from water surfaces, booms, special equipment
mounted on all-terrain vehicles, pumps, tank trucks, vacuum
units, cranes, trucks, excavators, bulldozers, as well as equip-
ment and materials as required by the regulations).
The irreducible material stocks were secured including for
elimination of oil spills in water bodies, there were available
1900 meters of booms, 15 skimmers and 10 tonnes of sorb-
ent. Over 600 stationary oil recovery facilities, booms and
bio-ponds were maintained to prevent oil pollution of surface
water bodies (rivers) and water basins (reservoirs) in the work-
ing condition.
188
In accordance with PJSC TATNEFT’s commitment to main-
tain an open dialogue with all stakeholders with regard to
the Company’s environmental activities the bulk informa-
tion is made available to the public by wide media cover-
age including print and electronic media of topical articles,
stories, press releases and other materials.
PJSC TATNEFT’s total investments in environmental safety
activities by all sources of funding (Opex and Capex) in
2015 amounted to 6 641.725 mln rubles including the
investments assigned for environmental protection and
rational use of natural resources in the amount of 937.946
million rubles.
PJSC TATNEFT makes a lot of efforts for education and
awareness-building of the younger generation. Since 2008,
a contest of children’s drawings under the theme “As long
as the Nature is alive and so am I!” has been held for chil-
dren in southeastern part of Tatarstan. Since 2010, environ-
mental special project of animated films “The Adventures
of Neftyashi and her friends” has been realizing to raise
environmental responsibility, promote kindness and foster
love of country at a very young age.
In 2015, 137 employees of PJSC TATNEFT’s structural sub-
divisions were trained in a 112-hour program “Professional
training of persons to have permit for hazardous waste
management” to ensure environmentally sound manage-
ment of waste production and consumption. In addition,
22 employees of the Company were trained in 72-hour
program “Ensuring environmental safety by managers and
specialists of general business management systems”. The
total training spending amounted to more than 1 mln rubles.
The specific amount of funds allocated by the Company to
ensure ecological security and environmental protection
per tonne of crude oil production amounted to 246 rubles
(208 rubles in 2011, 230 rubles in 2012, 246 rubles in 2013,
238 rubles in 2014).
RESULTS OF LARGE-SCALE ENVIRONMENTAL
MEASURES SHOWED THAT IN 2015 MAN-
INDUCED IMPACT ON ENVIRONMENT IN
PJSC TATNEFT’S OPERATING AREA DID NOT
EXCEED SELF-REGENERATION POTENTIAL
OF ECOSYSTEMS. THAT WAS EVIDENCED BY
LOWER CONCENTRATION OF POLLUTANTS IN
AIR AND UNDERGROUND AND SURFACE WATER
SOURCES.
ENVIRONMENTAL INITIATIVES OF TATNEFT
COMPANY ARE HOT TOPICS AT PANEL
DISCUSSIONS WITH PARTICIPATION
OF PARTNERS, EXPERTS, LOCAL
COMMUNITIES AND MASS MEDIA.
ACTIVE INFORMATION SUPPORT FOR
ENVIRONMENTAL PROJECTS IS PROVIDED
THROUGH PRINT MEDIA, INTERNET
RESOURCES AND TV.
SPENDING FOR ENVIRONMENTAL,
SAFETY AND SUSTAINABLE USE
OF NATURAL RESOURCES,
MLN ROUBLES
7000
6000
5000
4000
3000
2000
1000
0
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
I
N
O
T
A
T
N
E
M
E
L
P
M
I
Y
G
E
T
A
R
T
S
189
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
PUBLIC RECOGNITION
In 2015, the results were summarized with regard to PJSC TATNEFT’s participation in the federal and republican contests
where the Company successfully positioned its achievements in ensuring environmental safety at its oil production facilities:
• As part of celebration of the June 5th Day of Environmentalist, the Non-governmental Environmental Fund named after
V.I. Vernadsky awarded PJSC TATNEFT with a diploma “For active participation in All-Russian Ecological Saturday Work
“Green Spring-2015” for outstanding contribution to the environment improvement and environmental education” as well
as commemorative prize “Green Spring-2015”.
• For the 12th time in a row, PJSC TATNEFT was recognized as the absolute “ECOleader” in the Republic of Tatarstan.
190
PJSC TATNEFT HISTORY OF POLLUTANT
EMISSIONS INTO THE ATMOSPHERE FROM
STATIONARY SOURCES (THS TONNES)
PJSC TATNEFT HISTORY OF FRESH WATER
CONSUMPTION FOR PRODUCTION NEEDS
AND RESERVOIR PRESSURE MAINTENANCE
600
500
400
300
200
100
0
0
8
9
1
5
8
9
1
0
9
9
1
1
9
9
1
2
9
9
1
3
9
9
1
4
9
9
1
5
9
9
1
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
500
400
300
200
100
0
0,2
0,1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
total harmful (polutant) emissions, ths tonnes
including hydrocarbon emissions, ths tonnes
fresh water consumption for own needs, mln m3
specific consumtion of fresh water per tonne oil, m3
DISSOLVED AND EMULSIFIED CONTENT
OF CRUDE OIL AND PETROLEUM PRODUCTS
BY YEAR (ANNUAL AVERAGE VALUES, MG/L)
CONTENT OF CHLORIDE IONS IN MAJOR RIVERS
WITHIN PJSC TATNEFT OPERATING AREA (MG/L)
0,12
0,09
0,06
0,03
0
1200
1000
800
600
400
200
0
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
7
9
1
0
8
9
1
5
8
9
1
6
8
9
1
0
9
9
1
1
9
9
1
2
9
9
1
3
9
9
1
4
9
9
1
5
9
9
1
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
MPC=0.05 mg/l
St.Zai River
Kichui River
Mellia River
Ik River
Sheshma River
MPC=300 mg/l
St.Zai River
Kichui River
Mellia River
Ik River
Sheshma Rive
PJSC TATNEFT WASTE GENERATION AND
MANAGEMENT
150
PJSC TATNEFT ASSOCIATED PETROLEUM GAS
(APG) UTILIZATION
1000
100%
120
90
60
30
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Waste generated from its own production
Given to external enterprises
Processed by its own production
Received from external enterprises
800
600
400
200
0
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
90%
APG production, mln m3
APG utilization, mln m3
APG utilization index, %
191
PJSC TATNEFT, ANNUAL REPORT 2015
ABOUT
THE COMPANY
OPERATIONS
CORPORATE
MANAGEMENT
FINANCIAL
RESULTS
SOCIAL
RESPONSIBILITY
INDUSTRIAL SAFETY
& ENVIRONMENTAL POLICY
PJSC TATNEFT Environmental, Safety and Sustainable Nature Management Performance for 2014-2015
No.
Performance Indicators
1
Gross harmful emissions, total
including:
solid substances
gases and liquids
of which:
sulphur dioxide
carbon oxide
2
3
4
5
6
7
8
9
10
11
12
nitrogen oxide (on conversion to NO2)
hydrocarbons (without volatile organic compounds)
Associated petroleum gas production
Associated petroleum gas utilization
Associated petroleum gas utilization rate
Associated petroleum gas flared
Including due to scheduled maintenance of lifting equipment
withdrawal and production of clean water for Company’s own needs, total
Including from:
surface sources
subsurface sources
other sources
Waste water received from third parties
Clean water consumption, total including for:
household and drinking needs
production needs
other (injection for reservoir pressure maintenance)
Waste water used for reservoir pressure maintenance
Recycled water volume
Sequentially reused water volume
Existing wastes
at year beginning, total
year end, total
13
Wastes generated during year
including oil sludges (III class of hazard)
14
Wastes use, total
including oil sludges (III class of hazard)
15
Detoxification of wastes on enterprise site, total
including oil sludges (III class of hazard)
16
Wastes given to third parties, total
including oil sludges (III class of hazard)
Unit of
Measure
Report
2014
2015
tonnes
92 302.838
83 868.674
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
mln m3
mln m3
%
mln m3
mln m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
ths m3
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
2 813.945
1 246.623
89 488.893
82 622.051
10 251.946
9 474.642
24 289.704
12 749.562
1 359.606
1 407.619
11 298.310
10 258.428
931.430
883.636
95.17
47.793
2.778
946.941
899.538
95.17
47.403
1.651
28 273.52
28 565.03
1 192.22
844.56
1 541.1
974.71
26 236.74
26 058.87
590.28
515.6
28 273.52
28 565.03
780.69
5 294.45
22 198.38
590.28
881.58
7 867.95
19 815.5
515.6
91 179.18
91 180.28
118 964.29
143 491.33
1.8
0.8
75 327.4
32 154.5
17 445.8
1 388.0
490.1
88.6
99 960.6
30 677.9
0.8
0.8
61 205.8
35 274.8
61 76.4
2 607.8
148.5
146.1
78 505.7
34 488.9
17
Disturbed land area:
at year beginning
at year end
18
19
Remediated land area during year
Process loss of hydrocarbons:
oil
natural gas
20
Charges for negative impact on the environment, total including:
pollutant emissions:
normative
Excess
pollution discharges into water bodies:
normative
Excess
waste disposal:
normative
Excess
ha
ha
ha
tonnes
m3
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
317
261
1 643
9 304
0
97 437
4 514
4 514
0
83 627
83 585
42
9 296
9 288
8
462
261
325
1 498
9 603.9
0
198 235
102 929
4 752
98177
86 381
86 370
11
8 925
8 920
5
1 433
21
22
23
Amounts (suits) and fines charged to indemnify for damages caused by non-compliance with
environmental legislation, total
Charges for use of water bodies (water use charge) based on water use contracts
ths rub
407.516
517.045
Fixed capital expenditures committed to environment protection and sustainable natural
resources management:
actual, total
including:
water bodies conservation
air protection
protection of lands from production and consumption wastes
land reclamation
24
Current (operating) expenditures for environment conservation and expenditures for major
repairs of fixed production assets related to environment conservation, total:
including:
air protection and climate change control
waste water collection and treatment
waste handling
conservation and remediation of lands, surface and subsurface waters
environment protection from noise, vibration and other types of physical effects
biodiversity preservation and natural areas conservation
environmental radiation protection
research and development activities to mitigate human impact on the environment
Other environmental activities
ths rub
429 261.9
937 945.9
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
ths rub
69 786.4
34 811.6
241 684.8
828 305.9
0.0
117 790.7
5810772
0.0
74 828.5
5703779
394 173
116 997
148 063
370 168
133 486
157 045
5 070 179
4 937 652
0
24 174
970
54 238
1 979
0
27 924
1 143
74 516
1 845
192
193
PJSC TATNEFT, ANNUAL REPORT 2015 GRI G4 TABLE
GRI G4 Indicator
Strategy and Analysis
G4-1
G4-2
General Director’s address
Description of key impacts, risks and opportunities
Organizational Profile
Name of the organization
Primary brands, products and/or services
Location of the organization’s headquarters
Pgs., comments
2-3
18-19, 22-39, 69,
48-81
Cover
30-38
206
G4-3
G4-4
G4-5
G4-6
G4-7
G4-8
G4-9
G4-10
G4-11
G4-14
G4-15
Number of countries where the organization operates, and names of countries where either the organization has
significant operations or that are specifically relevant to the sustainability topics covered in the report.
27, 34-35, 37
Nature of ownership and legal form
4
Markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries)
30-38
Scale of the organization, including: Total number of employees, Total number of operations, Net sales, Total
capitalization, Quantity of products or services provided
Total workforce by region
Percentage of total employees covered by the Collective Agreement
Explanation whether and how the precautionary principle is addressed by the organization
6, 8, 16-17, 30-34,
36-38, 72, 94-96,
108-113
72
163
81
Externally developed economic, environmental and social charters, principles, or other initiatives to which the
organization subscribes or which it endorses
64-65, 165, 167,
182-183, 185
G4-16
Membership in associations and national or international advocacy organizations
65, 178
Identified Material Aspects and Boundaries
G4-17
G4-18
G4-19
G4-22
G4-23
Report boundaries
Process for defining the report content and the Aspect Boundaries
Aspects identified in the process for defining report content
71, 167
71, 167
71, 167
Description of effect of any restatements of information provided in previous reports, and the reasons for such
restatements
There were no
restatements
Significant changes from previous reporting periods in the Scope, Aspect Boundaries and methods of
measurement used in the report
There were no
changes
Stakeholder Engagement
G4-24
G4-25
G4-26
G4-27
List of stakeholder groups engaged by the organization
Principles for identification and selection of stakeholders with whom to engage
166, 179
178
Approach to stakeholder engagement including frequency of engagement by type and by stakeholder group
66, 166, 178-181
Key topics and concerns that have been raised through stakeholder engagement
66, 166, 178-181
Report Profile
G4-28
G4-29
G4-30
G4-31
G4-32
G4-33
Reporting period for information provided
Date of most recent previous report
Reporting cycle
Contact point for questions regarding the report or its contents
Table showing places of the standard elements in the report
cover
June 2015
Annual
206
200-203
Policy and current practice with regard to seeking external assurance for the report
92-93, 100-107, 167
Corporate Governance
G4-34
G4-35
G4-36
G4-38
G4-39
G4-40
G4-41
G4-42
G4-44
G4-45
G4-46
G4-47
G4-49
G4-50
G4-51
G4-52
Governance structure of the organization, including committees of the highest governance body responsible for
the specific problems
42-44, 46, 48-58,
60-63, 67
Process for delegating authority for economic, environmental and social topics from the highest governance
body to senior executives and other employees
43
Report whether the organization has appointed an executive-level position or positions with responsibility for
economic, environmental and social topics, and whether post holders report directly to the highest governance
body
50, 42, 62
Composition of the highest governance body and its committees
Report whether the Chair of the Board of Directors is also an executive officer
Nomination and selection processes for the highest governance body and its committees
Processes for the highest governance body to ensure conflicts of interest are avoided
Highest governance body’s and senior executives’ roles in the development, approval, and updating of the
organization’s purpose, value or mission statements, strategies, policies, and goals related to economic,
environmental and social impacts
Processes for evaluation of the highest governance body’s performance with respect to governance of
economic, environmental and social topics
Highest governance body’s role in the identification and management of economic, environmental and social
impacts, risks, and opportunities
48-57
He is not, p. 48
46,67
45
46, 58, 67
68
46, 67
Highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes
for economic, environmental and social topics
68
Report the frequency of the highest governance body’s review of economic, environmental and social impacts,
risks, and opportunities
Process for communicating critical concerns to the highest governance body
Nature and total number of critical concerns that were communicated to the highest governance body and the
mechanism(s) used to address and resolve them
Remuneration policies for the highest governance body and senior executives
Process for determining remuneration for the highest governance body members and senior executives
68,47
46-47
47
46-58
46-58
194
195
PJSC TATNEFT, ANNUAL REPORT 2015 Ethics and Integrity
G4-56
Organization’s values, principles, standards and norms of behavior
G4-57
G4-58
Internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to
organizational integrity
Internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters
related to organizational integrity
43, 64-65, 178,
182-183
170
170
Economic Indicators
ЕС1
ЕС3
ЕС4
ЕС6
ЕС7
ЕС8
Direct economic value generated and distributed, including revenues, operating costs, employee wages,
donations and other community investments, undistributed profits, payments to providers of capital and
government
5, 7-8, 12, 96, 108-
163
Coverage of the organization’s liabilities related to pensions plan and defined benefits
Financial assistance received from government
Percentage of senior management that are hired from the local community
Development and impact of infrastructure investments and services supported
Understanding and description of significant indirect economic impacts, including the extent of impacts
172
72
174-177
174-177
174-177
Environmental Indicators
ЕN2
ЕN3
ЕN6
ЕN8
EN10
ЕN20
ЕN21
ЕN22
ЕN23
ЕN24
ЕN27
ЕN29
Percentage of materials used that are recycled input materials
Energy consumption within the organization
Reduction of energy consumption
Total water withdrawal by source
Percentage and total volume of water recycled and reused
Emissions of ozone-depleting substances
NOx, SOx and other significant air emissions
Total water discharge by quality and destination
Total weight of waste by type and disposal method
Total number and volume of significant spills
Extent of impact mitigation of environmental impacts of products and services
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with
environmental laws and regulations
ЕN31
Total environmental expenditures and investments
194, 197-198
39
192, 197-198
192, 198
192, 198
PJSC TATNEFT does
not produce or use
ozone-depleting
substances in its
operations
198
194, 197-198
194, 197-198
There were no spills
188-195
199
195, 199
ПАО «ТАТНЕФТЬ». ГОДОВОЙ ОТЧЕТ 2015
Social Indicators
LA1
LA2
LA4
LA5
LA6
LA7
LA8
LA10
LA11
LA12
LA13
HR3
HR4
HR5
HR6
Total number of new employee hires and employee turnover
Benefits provided to full-time employees that are not provided to temporary or part-time employees, by
significant locations of operation
Minimum notice period regarding operational changes, including whether these are specified in the Collective
Agreement
Percentage of total workforce represented in in formal joint management-worker health and safety committees
that help monitor and advice on occupational health and safety programs
Rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities
Workers with high incidence of high risk of diseases related to their occupation
Health and safety topics covered in formal agreements with trade unions
72
73, 168-169
In accordance with
the Labor Code of
the Russian Federa-
tion (Article 180)
187
187
187
187
Programs for skills management and lifelong learning that support the continued employability of employees
and assist them in managing career endings
74-75
Percentage of employees receiving regular performance and career development reviews
Composition of governance bodies and breakdown of employees according to gender and age group
Rate of basic salary and remuneration of women to men by employee category
Total number of incidents of discrimination and corrective actions taken
Operations and suppliers identified in which the right to exercise freedom of association and collective
bargaining may be violated or at significant risk, and measures taken to support these rights
Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to
contribute the effective abolition of child labor
Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor and
measures taken to contribute to the elimination of all forms forced or compulsory labor
73
183
183
183
183
183
183
HR8
Total number of incidents of violations involving rights of indigenous peoples and actions taken
There were no
incidents
HR12
Number of grievances about human rights impacts filed, addressed and resolved through formal grievance
mechanisms
170
SO5
Confirmed incidents of corruption and actions taken
SO7
SO8
SO11
PR1
PR2
PR3
PR4
PR7
PR8
PR9
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their
outcomes
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws
and regulations
There were no fines
and sanctions
Number of grievance about impacts on society filed, addressed, and resolved through formal grievance
mechanisms
There were
no grievances
Percentage of significant product and service categories for which health and safety impact are assessed for
improvement
Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety
impacts of products and services, by type of outcomes
Type of product and service information required by the organization’s procedures, and percentage of
significant product and service categories subject to such information requirements
Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service
information and labeling, by type of outcomes
Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing
communications, including advertising, promotion, and sponsorship, by type of outcomes
182
182
182
182
182
Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data
182
Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and
use of products and services
There were no fines
There were no
incidents
There were no
incidents
196
197
LIST OF ABBREVIATIONS
Auction of business ideas
Autogas filling station
Almetyevsk State Oil Institute
Anodic grounding electrode
Filling station
Automated Information System
Joint-Stock Corporation
Basin Water Administration
Bugulma mechanical plant (structural subdivision of JSC TATNEFT)
All-Russian Society of Inventors and Innovators
Pump-measuring group unit
Measuring group unit
Main Directorate for Road Traffic Safety
State Complex Nature Zakaznik
Horizontal Settler
State Standards
Hydraulic Fracturing
Fuels and lubricants
Hydraulic structures
Booster pump station
Children’s holiday camp
European Union
United Nations Economic Commission for Europe
Reinforced concrete tank
Closed Joint-Stock Company
Information system
Corporate Information System
Cluster pump station
Kazan (Privolzhsk) Federal University
Corporate social responsibility
Minnibaevo Gas Processing Plant
Moscow Interbank Currency Exchange
Metal-reinforced plastic pipes
Overhaul time
Oil recovery enhancement methods
Ministry of Emergency Situations
Oil and Gas Production Administration (structural division of JSC TATNEFT)
Mineral extraction tax
Value added tax
Nizhnekamsk All Steel Tires Plant
Research and experimental works
Oil-well tubing
Intangible assets
Oil refining and petrochemical complex
Oil refinery
Oil refining installation
ABI
AGZS
AGNI
AZ
AZS
AIS
AO
BVU
BMZ
VOIR
GZNU
GZU
GIBDD
GKPZ
GO
GOST
GRP
GSM
GTS
DNS
DOL
YeS
YeEK OON
JBR
ZAO
IS
KIS
KNS
K(P)FU
KSO
MGPZ
MMVB
MPT
MRP
MUN
MchS
NGDU
NDPI
NDS
NZSh TsMK
NIOKR
NKT
NMA
NP i NKhZ
NPZ
NPU
198
NTTs
NKhK
PJSC TATNEFT
OOO
OOPT
OPR
ORD
ORDiZ
ORZ
ORE
OEZ
PDK
PNG
PPD
PPT
PS
PTs
RVS
RID
RMOO
RT
RF
SVN
SKZ
SKU
SED
TD
TTD
TU
TEK
TETs
UZK
UK
ULF
UPVSN
UPN
UPS
UPTZh for PPD
USO
UTNGP
TsMK tires
TsPK
ShFLU
EIS
EKU
Scientific and Educational Center
Petrochemical Complex
Public Joint Stock Company TATNEFT named after V.D.Shashin
Limited Liability Company
Protected area
Industrial experiment works
Dual Production
Dual Production and Injection
Dual Injection
Dual Completion
Special Economic Zone
Maximum Permissible Emission
Associated Petroleum Gas
Formation pressure maintenance
Polymer coated pipes
Substation
Chain drive
Steel vertical tank
Russian Institute of Directors
Regional Yong People’s Social Organization
Republic of Tatarstan
Russian Federation
Extraviscous oil
Cathodic protection station
Corporate Management Standard
Electronic Document Management System
Trading House
Trading and Technical House
Technical Specifications
Fuel and energy complex
Heat Power Plant
Delayed coking unit
Administration Company
Light hydrocarbon fraction recovery
High-Sulfur Oil Treatment Installation
Oil Treatment Installation
Preliminary Water Removal Installation
Administration of Process Fluid Preparation for Formation Pressure Maintenance (structural subdivision of JSC TATNEFT)
Sulfur Removal Installation
TATNEFTegazpererabotka Administration (structural subdivision of JSC TATNEFT)
All-steel tires
Personnel Training Center
Broad light hydrocarbon fraction
Electroinsulating connections
Corporate e-University
199
PJSC TATNEFT, ANNUAL REPORT 2015 CONTACT DETAILS
PUBLIC JOINT STOCK COMPANY TATNEFT
ABBREVIATED NAME:
PJSC “TATNEFT”
HEADQUARTERS:
75, Lenin St., Almetyevsk
423450 Republic of Tatarstan
Russian Federation
Tel.: +7 (8553) 30-75-68
MOSCOW OFFICE:
17, Tverskoy Boulevard, Moscow
123104 Russian Federation
Tel.: +7 (495) 937-55-78
KAZAN OFFICE:
71, K.Marx St., Kazan
420111 Republic of Tatarstan,
Russian Federation
Tel.: +7 (843) 533-83-12.
FOR SHAREHOLDERS:
Office of the Corporate Secretary
Tel.: +7 (8553) 31-97-41
THE COMPANY’S AUDITOR FOR REPORTING BASED ON RUSSIAN
AND INTERNATIONAL STANDARDS:
Joint Stock Company “PriceWaterhouseCoopers Audit”
White Square Office Center
10 Butyrsky Val
Moscow, Russia, 125047
Tel.: +7 (495) 967-60-00
THE COMPANY’S REGISTRATOR
OOO “Euroaziatsky registrator”
10, Mir St., Almetyevsk
423450 Republic of Tatarsta,
Russian Federation
Tel.: +7 (8553) 22-10-88
THE COMPANY’S WEBSITE:
tatneft.ru
MONTH AND YEAR OF THE REPORT PUBLICATION:
June 2016
200
REPORT CONCEPT
V.P.Lavuschchenko
A.T.Yukhimets
N.E.Dorpeko
WORKING GROUP FOR REPORT ELABORATION
R.N.Mukhamadeev
V.A.Karpov
R.M.Khisamov
E.A.Tikhturov
V.A.Voskoboinikov
Т.I.Zakharova
V.D.Ershov
R.A.Salakhov
O.A.Sharagina
R.R.Gayfullina
V.G.Fadeev
D.V.Kurochkin
R.I.Khaziev
R.B.Rafikov
R.Sh.Dinmukhamedov
U.M.Piyanzina
DESIGN AND PRINTING
Design To Business | Brand Assistance
tatneft.ru