Joint address

R.N. Minnikhanov President of the Republic of Tatarstan,
Chairman of the PJSC TATNEFT Board of Directors

N.U. Maganov General Director,
Chairman of the PJSC TATNEFT Management Board

In 2018, the Board of Directors adopted the TATNEFT Group Strategy until 2030, accumulating the Company’s ambitious goals based on the previously approved Strategy 2025 that already confirmed its effectiveness at the early stages keeping a steady focus on ensuring a long-term growth in shareholder value. The updated goals are aimed at maximizing business efficiency and return on existing assets. Our priorities are to further strengthen the resource and technological potential, develop innovative forms of production process management and organization, improve margins across all business segments, and sustain a strong position of financial stability and growth of the Company.

In the reporting year, TATNEFT reached a new level of performance as one of the leaders among the most expensive Russian public companies by capitalization, maintaining high level of investment attractiveness. Over the year, the Company’s capitalization increased by 53.5%, reaching RUB 1.7 trillion (USD 24.2 billion) in December 2018. The Group shareholder profit grew by 72% and amounted to RUB 211.8 billion. The return on capital employed of approximately 27.5% is one of the highest in the industry environment. We provide the positive free cash flow generation, which increased by 40% compared to the last year level and amounted to RUB 147.8 billion. The Company’s high operating efficiency is reflected in a 58.7% increase in EBITDA.

In the conditions of persistent price volatility and uncertainty in the oil market, the achieved results demonstrate the efficiency of the Company’s vertically integrated business model and program actions of the management, concentrating its efforts on expanding reserve replacement, ensuring the growth of profitable oil and gas production, developing oil and gas processing, gas chemistry, energy, tire production, machine building, engineering segments, improving the cash flow stability and business process profitability.

The Company’s strategy is based on the principles of innovative development, ensuring a reliable technological base and the integration of digital solutions in management and production. The Company makes significant investments in its own development of technological solutions and equipment.

Implementing capital-intensive business projects, the Company sees the provision of a high level of industrial and occupational safety and environmental protection as a key priority. Consistent activities in this field resulted in the reduction of environmental footprint to the level where there is a potential for self-recovery of ecosystems.

The Company shares the global concern about the climate change and takes into account the fact of formation by energy companies in the process of production activities of a significant amount of greenhouse gas emissions that can adversely affect the climate. Due to the introduction of advanced technologies, increasing the efficiency of accounting and monitoring systems over three years, the Company reduced the total gross emissions of greenhouse gases. To a great extent this is ensured by the efficient use of APG at a level of more than 96%.

We realize that the long-term sustainable business development is based on the human capital development. Staff development programs, professional development, decent wages and social guarantees for employees form a cohesive team of professionals who are committed to the common cause.

Putting into life the principles of high corporate responsibility, the Company makes a large-scale contribution to ensuring favorable living conditions in the territories of its activities, in support of healthcare, science, education, culture and sports.