2013 highlights
Annual report JSOC Bashneft 2013
12
2013 highlights
Annual report JSOC Bashneft 2013
13
ABOUT
THE COMPANY
OPERATING RESULTS
CORPORATE GOVERNANCE
APPENDICES
INFORMATION FOR
SHAREHOLDERS AND INVESTORS
Bashneft became the first Russian member of the Inter-
national Petroleum Industry Environmental Conserva-
tion Association (IPIECA) and a member of the Interna-
tional Association of Oil and Gas Producers (OGP).
Bashneft successfully completed a project designed
to create an integrated corporate-wide system for the
management of Health, Safety and Environment and
bring it into compliance with the commonly applied in-
ternational standards. The British Standards Institution
issued the OHSAS 18001 Compliance Certificate and ISO
14001 Compliance Certificate for Bashneft.
Bashneft joined the World’s Top 10 Total Share-
holder Return Creators, also becoming Num-
ber One in the Oil Top 10, based on the 15th
annual report Boston Consulting Group.
Bashneft completed the transaction to sell
their stake in OJSC UPC (Unified Petrochemical
Company) to Joint-Stock Financial Corporation
Sistema.
As part of the non-core assets divestment pro-
ject, Bashneft completed the sale of their 100%
stake in LLC Bashneft-Service Assets to Joint-
Stock Financial Corporation Sistema.
The Project Assurance Committee was estab-
lished, and independent director Charles Wat-
son was appointed Chairman.
The Russian Federation Patents and Trade-
marks Agency (Rospatent) acknowledged the
Bashneft trademark as commonly known from
1 January 2014.
The Company launched production of a new fuel
with improved operational performance and lower
ecological impact under the ATUM brand. Sales
of ATUM-92 were launched at fueling stations across
the Republics of Bashkortostan and Udmurtia.
Bashneft became the preferred bidder for an ex-
ploration and production Licence for Oil Block ER-4
in the Central Burma Basin (841 sq. km).
Bashneft won an auction held in the Republic
of Bashkortostan for the Astashevsko-Sosnovsko-
Nazarovsky subsoil plot (1922.7 sq. km).
JSOC Bashneft announced the launch of a restructuring
programme, to be pursued through the merger with CJSC
Bashneft-Invest, a wholly owned subsidiary incorporated
following a spin-off fromJSFC Sistema. The programme
was devised to put an end to the cross-ownership of the
Bashneft stock, and complete the process of the Com-
pany’s exit from non-core areas of its business.
At the Bashneft Extraordinary General Meeting of share-
holders, a resolution was passed to pay dividends based
upon the performance over 9 months of 2013, amounting
to RUB 199 per ordinary share and per preferred share.
Reorganisation of Bashneft-Region LLC was completed.
As part of this process, the Group established a branch
of Bashneft-Regional Sales. The main objective of the
branch is to carry out small wholesale operations in the
regions. As part of the reorganisation, personnel and
business functions of Bashneft-Region LLC and its re-
gional representative offices were transferred to the
new entity. The retail assets of Bashneft-Region (4 petrol
stations in the Smolensk and Saratov regions) were sold
to Bashneft-Urdmurtia LLC.
Bashneft acquired the Bashneftegazrazvedka (Bashkor-
tostan Oil and Gas Exploration Company), which was the
owner of the Vostochno-Iksky Licence in the Republic
of Bashkortostan (1,111.4 sq. km).
Reorganisation of Geoneft LLC, Bashmineral LLC and
Zirgan LLC. Subsoil drilling licences in the Republic
of Bashkorotstan and Orenburg regions that were previ-
ously held by these companies were transferred to Bash-
neft-Dobycha LLC. Following the reorganisation, Geoneft,
Bashmineral and Zirgan were liquidated.
February 2014
At the Bashneft Extraordinary General Meeting
of shareholders, it was resolved to carry out restruc-
turing through the merger with CJSC Bashneft-
Invest. Another resolution was to reduce the Bash-
neft Charter Capital, and the amended version of the
Company’s charter was also approved.
Bashneft was admitted as a member of the Saint Pe-
tersburg International Commodity Exchange.
March 2014
Bashneft acquired LLC Promenergoresurs, one
of the leading motor fuel retail operators in the town
of Magnitotgorsk in the Chelyabinsk District that had
owned 5 fueling stations and 7 plots of land for the
construction of new stations.
The Federal Subsoil Resources Management Agen-
cy made clarifications to the Group’s licence for the
Trebs and Titov fields in the Nenets Autonomous
District. It specified that refining capacities owned
by the licence holder are defined as capacities
of processing units owned and/or leased by the li-
cence holder and/or affiliated persons of the licence
holder or its members.
Bashneft acquired LLC Burneftegaz, a company
carrying out exploration and production of crude oil
in the Tyumen District. The company had secured
development rights for the Sorovskoe and Torta-
sinskoe fields, whose cumulative C1+C2 reserves
amount to 53.4 million tonnes, as well as exploration
licences for the Severo-Ityakhsky and Vostochno-
Unlorsky subsurface plots.
April 2014
Bashneft and Lukoil established a new joint venture
called Vostok NAO Oil Company LLC. The company
will perform geological studies, exploration and pro-
duction of hydrocarbons at licence areas belonging
to the companies in the Nenets Autonomous District.
Highlights subsequent
to the reporting period
2014
September
October
November
December
February, March, April
2013 highlights
At the beginning of the month,
Bashneft completed the consoli-
dation of its petrochemical assets
within OJSC Unified Petrochemi-
cal Company. On 17 July, the JSOC
Bashneft Board decided to dispose
of its interest in OJSC UPC, and the
matter was put on the agenda of an
Extraordindary General Meeting
of shareholders for endorsement.
At an Extraordinary General Meeting
(EGM), the shareholders resolved to in-
crease the membership of the Bashneft
Board from 10 to 12 Directors, in ad-
dition to electing new members to the
Board.
The retail network re-branding pro-
gramme was launched, based upon
a new Corporate Standard.
At the JSOC Bashneft Extraodinary Gen-
eral Meeting of shareholders, a resolu-
tion was passed to dispose of its interest
in OJSC UPC (Unified Petrochemical Com-
pany). The resolution was adopted in order
to further pursue a strategy of divesting
non-core assets.
Bashneft-Polyus, a Joint Venture estab-
lished by JSOC Bashneft and OJSC LU-
KOIL, commenced production of crude oil
from their joint venture at the Trebs and
Titov oil fields in the Nenets Autonomous
District. According to the current project
schedule by 2020 production is expected to
reach its plateau – circa 4.8 million tonnes
per annum.
Incorporation of a new oilfield services holding was
completed based on LLC Bashneft-Service Assets –
a wholly owned subsidiary.
In order to facilitate the formation of a favorable
environment for further development of the re-
gion’s economy and social sphere, JSOC Bashneft
and Administration of the Orenburg Oblast signed
a Socio-Economic Development Agreement that
will be valid until 2016.
The Bashneft Drilling Support Centre, designed and
constructed by Schlumberger, was opened in the city
of Ufa.
On 27 June 2013, the Annual General Meeting of share-
holders of JSOC Bashneft was convened in Ufa. The
decision was taken to pay dividends of RUB 24 per ordi-
nary and preferred share on the basis of the Company’s
2012 financial results.
Bashneft finalised a deal for the acquisition of 100%
of LLC Alternativa that was the owner of a retail net-
work comprising 12 sites in the Orenburg District.
In line with international best practices in the field
of corporate governance, the Board resolved to estab-
lish the Audit Committee and the Finance, Budget and
Risks Committee.
The Company launched the consolidation of its
petrochemical assets within OJSC Unitied Pet-
rochemical Company (UPC) in order to run it as
a separate business.
The Federal Service for Financial Markets an-
nulled individual registration numbers (codes)
for JSOC Bashneft’s additional share issuances,
effectively combining them with the main issu-
ance of traded shares. At the end of February,
trading in JSOC Bashneft’s newly consolidated
stock commenced on Moscow Exchange.
JSOC Bashneft entered into a new Collective
Bargaining Agreement with its employees for
2013–2015.
New process plants were commissioned
in the Bashneft-Novoil branch – the Sul-
phur Acid Alkylation Plant and Waste Sul-
phur Acid Regeneration Plant. The Com-
pany is continuing with the project in order
to completely switch over to the produc-
tion of the Euro-5 motor fuel grades.
JSOC Bashneft and General Electric
launched pilot tests of power-efficient
membrane technologies, in order to ap-
ply them for bio-treatment of sewage and
effluents at the refining facilities owned
by the Company and other enterprises
of the Northern Ufa Industrial Cluster.
Bashneft won the “IT Leader” Award in the
“Achievements in Creating HP Converged
Cloud” special nomination. The Company
has won the Award three years in a row.
2013
January
February
March
April
May
June
July
August
