Premium Business Segments

We have distinct goals for each sub-segment in our petroleum product business: aviation fuel; lubricants; bituminous materials; petrochemicals; and bunkering. Strategic development plans for each of these sub-segments should lead to a doubling of sales by 2020 Key tasks for our product business units are raising sales efficiency, expanding geographical reach, and increasing market share in premium segments.

AIRCRAFT REFUELING

Gazprom Neft-Aero is a subsidiary of Gazprom Neft created in 2008 and engaged in aircraft refueling and ‘into plane’ fuel sales.

The main components of Gazprom Neft-Aero’s business are as follows:

  • sales of aircraft fuel made by Gazprom Neft refineries, and operation of refueling facilities;
  • providing a range of services to supply fuel and lubricants to aircraft.

The development strategy of Gazprom Neft-Aero up to 2020 envisages creation of the company’s own network of modern refueling complexes. The company plans to establish a chain of 52 refueling complexes (20 of its own, and 32 leased) in Russian and foreign airports.

Goal: Raising sales to 5 mn t;

Target markets:

  • Russia
  • Central Asia
  • Europe

Gazprom Neft-Aero sells aviation fuel through subsidiaries in Moscow, St. Petersburg, Novosibirsk, Murmansk, Tomsk, Bryansk, other Russian cities, and in Kazakhstan (Astana), Tajikistan (Dushanbe),and Kyrgyzstan (Bishkek). The company also refuels the aircraft of Russian airlines at airports in Southeast Asia, Scandinavia, Europe, Africa, Australia and Latin America.

Thanks to its ownership of appropriate facilities, the Company can maintain regular supplies of aviation fuel to airports, supply highquality fuels, use up-to-date aircraft-refueling technologies, and thus ensure flight safety.

Since 2008, Gazprom Neft-Aero has been a designated strategic partner of the International Aviation Transport Association (IATA) for the supply of aircraft fuel.

Gazprom Neft-Aero is the absolute leader in aircraft fuel retailing in Russia. Growth in volume of the company’s retail aviation fuel sales was 53% y-o-y in 2011, and the Company’s share of the Russian market rose from 18% in 2010 to 20% in 2011.

Gazprom Neft has contracts with the Russian Government for aircraft fueling at 11 airfields of the Ministry of Defense. Volumes under these contracts amounted to 265,000 t in 2011.

Gazprom Neft-Aero greatly expanded its sales outside Russia in 2011: aircraft are now refueled in 30 countries (49 cities) compared with 11 countries (18 cities) in 2010.

The company started to offer refueling services in 2011 at the airport which serves the city of Ulyanovsk in the Volga region of Russia.

Gazprom Neft Aero
projects in russia
 
International Projects
civil aircraft
russian air Force
 
central asia projects
 
Plan to develope gpn aircraft refulling bases by 2020 in the following regions

Source: Company data

SHIP BUNKERING

Gazprom Neft Marine Bunker is a subsidiary of Gazprom Neft, established in 2007 to organize year-round supplies of petroleum products (fuel oil, motor fuels, and lubricants) for marine and river fleets. The Company holds a leading position in the Russian bunkering market, and about 90% of the Company’s customers are foreign ship owners.

Gazprom Neft Marine Bunker has five regional offices and two subsidiaries. Its fleet of nine bunker boats (two in each of the Russian Far East, Black Sea and St. Petersburg, one barge in Kaliningrad and one in Murmansk, and others in inland waterways) is managed by Gazprom Neft Shipping. Another company, Gazprom Neft Terminal, operates a bunker terminal on the premises of the Kirov Factory in St. Petersburg.

Gazprom Neft Marine Bunker has ambitious plans for expansion of its business, and will enlarge its owned vessel fleet to become more competitive. In early 2012, Gazprom Neft Shipping (a subsidiary of Gazprom Neft Marine Bunker) launched a new boat, Gazprom Neft Nord West, to work in the Greater Port of St. Petersburg.

The Company also purchased two modern bunkering tankers in 2011 (as part of an approved medium-term investment program) with unlimited ocean-going range and compliant with all applicable international conventions. Company plans envisage further additions to its own fleet, which should expand to 15 vessels by 2020. The company also wants to develop a network of terminals, both owned and leased, to establish full-cycle bunkering infrastructure.

Gazprom Neft Marine Bunker holds secure positions in all of Russia’s main sea and river ports. The company has the strongest domestic presence of all Russia-based bunkering companies, operating in 15 sea ports and nine river ports. In 2011, the company also began operations in ports outside Russia: Tallinn, Riga, Klaipeda, Rostok, and Constanţa. The company’s development strategy envisages active growth in international markets: in Europe, the Middle East and Asia. Gazprom Neft Marine Bunker supplies fuel through its own and leased facilities (terminals and bunker vessels). Petroleum products are shipped from the Omsk Refinery and, to a lesser extent, from the Moscow Refinery.

Gazprom Neft pursues ambitious goals in every line of business, and bunkering is no exception. The company plans to raise its sales of bunker fuel by 20% annually, to expand its operating geography, and strengthen its positions in existing markets inside and outside Russia.

Alexander Dyukov
Chairman of the Management Board

In 2011, Gazprom Neft Marine Bunker strengthened its leadership in the Russian bunker fuel market, raising its market share to 18.5%. ‘Direct-to-ship’ sales of fuel rose by 44% compared to 2010, and reached 1.3 mn t. Total annual sales of ship fuel by the Company grew by 1.5 times to 2.2 mn t.

During the year under review, the company entered new bunkering sales markets in Russia, in the ports of Nizhny Novgorod, Samara and on Sakhalin Island, and also outside Russia in the Baltic ports of Klaipeda, Tallinn and Riga. Plans for the next three years include geographical expansion of sales to other foreign sea ports, and the company is targeting increased market share in Russia to 20% by 2015 and 30% by 2020.

Gazprom Neft Marinebunker
Ports in Russia
Inland Waterways
 
Russian Far East
 
Russian Nordwest
 
russian south
International ports
   
Plan to expand compan presence in 2012-2015
 

Gazprom Neft Marine Bunker is well prepared to enter foreign markets, having considerable business experience and a skilled and effective managerial team. Sale of quality fuels produced by Gazprom Neft refineries will help the company to make its name as a reliable partner in foreign markets.

Our strategic goal is to take up to 30% of the Russian bunkering market, build our presence outside Russia, and expand our total bunkering services both inside and outside Russia to 7 mn t by 2020. We will achieve this by developing our network of terminals in Russia and expanding our fleet to 15 vessels.

Anatoly Cherner
Deputy CEO Logistics, refining and sales

The company expects to more than triple its fuel sales by 2020 in comparison with 2011, taking a sizeable stake in the global market and joining the top-20 largest international bunkering companies. Networking effects will help to expand the customer base and foster long-term cooperation with major international ship operators.

Bunker business chart

PRODUCTION & SALE OF MOTOR OILS

Gazprom Neft Lubricants has production assets in Western Siberia (Omsk), European Russia (Yaroslavl), Moscow Region (Fryazino), and Western Europe (Bari, Italy). The Company has received ISO international quality certificates that confirm its compliance with international standards (ISO 9001:2008, 14001:2004, and OHSAS 18001:2007).

Development strategy:

Goal: Creating a national lubricant company, a recognized leader in technologies, marketing and services related to high-tech premium-grade oils, lubricants and service fluids under a global brand.

The company is pursuing various initiatives to achieve these strategic goals.

Marketing:

  • establishing G-Energy lubricants as a strong international brand under the Gazprom Neft master brand, and ensuring its wide recognition in all segments of the lubricant market;
  • building a strong communications platform to assist successful sales of Gazprom Neft lubricants, both inside and outside Russia.

Production:

  • investing RUB 2,185 mn to build a new hightech complex for production and packaging of lubricants at the company’s Omsk division (main production operations are located at Omsk);
  • purchase of lubricant production assets in Russia and abroad;
  • close cooperation with manufacturers of vehicles, industrial equipment, and high-profile R&D institutes.

Sales:

  • building a strong distributor network inside and outside Russia;
  • strong growth of specialized sales channels: lubricant retail, car service centres and showrooms, and main sectors of manufacturing industry;
  • direct cooperation with industry sectors and car manufacturers;
  • active promotion of company products on foreign markets in Europe and Asia.

Key performance indicators during 2011:

  • Share of the market of packaged oils in Russia rose from 8.2% in 2010 to 10.5% in 2011.
  • The company doubled sales of its premium-grade products complying with international specifications (G-Family branded products) thanks to strategic corporate transformation from a base-product manufacturer into a customer-oriented manufacturer of high-tech lubricants with considerable marketing expertise.
  • Consumer awareness of the premiumgrade G-Energy consumer brand rose by 18% in Russia.
  • Penetration of new business segments, use of new sales channels (lubricant oils are now supplied to 320 vehicle maintenance centres and 57 hypermarkets in Russia).
  • Gazprom Neft Lubricants was the leader in Russia in 2011 in terms of the number of new products brought to market (30 items). The company’s product range now lists over 300 lubricant oils made in Russia and Western Europe.

A high-profile advertising campaign, promoting the image of G-Family brands as international-quality products for both consumer and business markets, continued in 2011.

The G-Energy brand is part of the new G-Family cluster. In addition to motor oils for cars, the G-Family includes G-Profi (a range of motor oils for commercial vehicles) as well as G-Box and G-Truck transmission oils (for cars and commercial vehicles), G-Motion and G-Wave (small-engine oils) and a range of other special products.

The G-Energy style was created by the well-known Italian design studio Italdesign- Giugiaro, to convey several messages to the consumer: leadership, power, high performance, dynamics and speed, all reflected in the unique and sophisticated design of the lube can, the label graphics, and other visual components of the corporate brand.

G-Family brand lubricants are made by Gazprom Neft Lubricants Italia S.p.A. in Bari, Italy. This high-tech complex can produce 30,000 t of oil and 6,000 t of plastic lubricants annually. High-precision small-batch mixing processes at Bari can prepare more than 100 product types for all sectors of the lubricant market. The plant has received international quality system certificates for compliance with ISO 9001 and ISO 14001 in production, packaging, storage and sales of oils and lubricants. Technologies used at the Bari plant will also be gradually adopted in the future by Russian facilities. In 2011, the company purchased a new site to manufacture packaged premium-grade products in Fryazino, Moscow Region, with output capacity of 40,000 t of packaged products — motor, transmission, industrial oils and technical liquids. The plant comprises a high-precision mixing workshop, oils packaging, a tank farm of 3,000 m3 capacity, loading and unloading racks, elevated tracks with pump units, warehouses, treatment facilities, as well as the administrative and laboratory building.

Also in the reporting year, the first phase of a lubricant packaging facility was launched in Omsk, rated for annual output of 180,000 t.

In 2011, the company expanded the geography of its lubricant sales in Russia, the CIS, and Western Europe (sales were launched in Greece, Serbia, Spain and Germany). The company’s motor lubricants are now sold in 35 countries. Sales of packaged products rose by 27% in 2011 compared with 2010.

Gazprom Neft Lubricants is working to implement a long-term investment program, which will add new, modern lubricants to the product range, increase market share in Russia and enable further expansion on foreign markets.

BITUMEN MATERIALS & COKE

Gazprom Neft kept its leadership of the bitumen market in Russia during 2011: sales of bituminous materials were 1.846 mn t, representing 33% of the Russian market. The share of exports to CIS countries was 12%. Sales of oil coke rose by 17% from 2010.

Sales of bituminous materials to end-consumers grew by more than 50% in 2011. Sales of bituminous materials and polymer-bitumen binders (packed in one-tonne Clovertainer-type containers) increased by 3.5 times.

Changes in the corporate structure of bituminous materials and coke business units, which were transferred from the New Technologies Development and Application Division to the Bituminous Materials Department, substantially improved sales efficiency and overall development of the bitumen business. The Omsk Refinery started industrial production of premium-class bituminous products in 2011, including polymer-bitumen binders and bituminous emulsions.

Our business strategy in this segment is to strengthen Gazprom Neft’s position in the Russian market for bituminous materials, implement fee-based processing arrangements with third-party companies in regions with intensive road construction work, and to purchase investable bitumen assets, including some in the CIS. Production of bitumen by the Serbian subsidiary, NIS, will also be increased, strengthening its presence in target markets in Central and Eastern Europe.