Environmental Safety

Gazprom Neft implements a set of organizational and technical measures that are designed to consistently reduce negative impact on the natural environment. The measures are based on global best practice and are implemented as part of a uniform policy that ensures environmental safety compliance, efficient planning and a high-degree of integration of environmental measures throughout the Company’s production chain.

The aim of the Company’s environmental activities is to maintain environmentrelated risks at a socially acceptable level. Environmental risks generated by negative impact of Company production facilities on the natural environment are controlled at all stages of environment management, from risk detection to monitoring to enforcement and control over preventive and corrective action.

Such efforts require mobilization of considerable funds, which are invested to develop and adopt innovative technologies, upgrade production equipment, prepare project documents, conduct on-site environmental monitoring and monitoring of the environmental situation, handle industrial and consumer waste, train and re-train specialists, and for other environment-related activities.

Development of existing facilities, commissioning of new fields and acquisition of new production assets generally increases gross emissions of harmful substances into the atmosphere. This means there is an urgent need to adopt measures to reduce such emissions.

In 2011, Gazprom Neft became the first Russian oil company to transfer emission reduction units (ERUs, each representing 1 ton of ŃÎ2), obtained in line with the established procedure for implementation of the Kyoto Protocol mechanism in Russia, from the Russian national register to that of another country. This occurred when the Company transferred about 295,000 ERUs, obtained between August and December 2009, from the Russian Carbon Unit Registry to Japan’s National Carbon Unit Registry.

In 2011, the Company took various steps to raise the efficiency of water resource utilization. Facilities with a treatment capacity of 125 m3/hour were built and commissioned in stage one of a program to upgrade treatment facilities of AT Gazpromneft-Omsk Refinery. At this site, purified and decontaminated residential sewage can be sued as a water input for industrial processes. Work was also carried out to retrofit treatment facilities at the Slavneft-Yaroslavl Refinery, and the cooling towers at Slavneft-YaNOS underwent a major overhaul. The measures improved water supply arrangements at these business units and helped to reduce their water intake needs.

As part of their environmental safety programs, Company subsidiaries and associates are carrying out laboratory control of the quality of surface waters and ground water, design work on environmental protection zones for water intake wells, purchase of boom guards and installation of jetty facilities for cargo handling, as well as construction, repair, and servicing of local purification plants, and other measures. Business units in the exploration and production segment took steps in 2011 to improve safety of submerged crossings and pipelines over waterways.

Since 2009, the Company has been implementing a strategic program to reclaim oil-contaminated land. In 2011, exploration and production units carried out detailed inventory to obtain accurate information on the extent of such land and subsequent reclamation work restored 135 hectares. Work was also carried out to reclaim 5,374 hectares of land that was disturbed during construction of crude oil production facilities.

Efforts to deal with industrial waste have focused on legal compliance, the reduction of environmental impact and of costs in processing of drilling sludge, and maximum reintegration of large-scale waste outputs into the natural environment, thus reducing the cost of land reclamation. The Company makes extensive use of scientific solutions to waste management.

In 2011, the Company created a document regulating activities to design, equip and operate sludge storage, and to develop technologies that would reintegrate drilling waste into soil-generating rock. A scientific document was also prepared to help in identification of land that was disturbed during construction of drilling sludge storage areas. The document contains criteria for possible self-restoration of drilling waste storage facilities, and underlines the need for for sludge treatment and land reclamation. The document should enhance the efficiency and quality of work to reclaim land used for sludge storage.

The HSE activities of Gazprom Neft are described in detail in the Company’s 2011 Report on Sustainable Development.