ANNUAL REPORT OJSC SEVERNEFTEGAZPROM
2009
SEVERNEFTEGAZPROM
Disclaimer Translation Note The following text in English is a translation from the Russian original version. While every effort is made to ensure that the translation is accurate, there may nevertheless be differences of meaning between this and the original Russian version. Therefore, please, note that the following translation is provided for information only and is not intended for any other use.
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Table of Contents SECTION 1 1.1. 1.2. 1.3. 1.4.
SECTION 2 2.1. 2.2. 2.2.1. 2.2.2. 2.2.3. 2.2.4. 2.2.5. 2.3. 2.4. 2.5.
SECTION 3 3.1. 3.2. 3.3. 3.4.
SECTION 4 4.1. 4.2. 4.3. 4.4.
SECTION 5 5.1. 5.2.
SECTION 6 6.1. 6.2.
SECTION 7 7.1. 7.2. 7.3.
SECTION 8 8.1. 8.2.
GENERAL INFORMATION. COMPANY’S STATUS IN THE INDUSTRY .............. 6 Company’s registration data and geographic location ................................... 7 Yuzhno-Russkoje Field’s background and major development landmarks...... 8 Company’s key performance indicators and priority lines of activity ............... 9 Company’s status in the industry and risk factors ....................................... 10
CORPORATE MANAGEMENT .................................................................... 14 Corporate management practice ............................................................... 15 Control and management bodies .............................................................. 15 General Meeting of Shareholders.............................................................. 15 Board of Directors .................................................................................... 15 Technical Committee at the Board of Directors .......................................... 18 Director General ...................................................................................... 19 Audit Committee ...................................................................................... 20 Company’s Auditor and Registrar.............................................................. 20 Authorized capital, distribution and issue of shares .................................... 21 Dividends ................................................................................................ 22
PRODUCTION PERFORMANCE ....................................................... 24 Raw materials base & geological survey works .......................................... 25 Production drilling .................................................................................... 25 Natural gas production ............................................................................. 26 Sales of natural gas ................................................................................. 27
ACCOUNTING STATEMENTS AND AUDIT COMMITTEE’S OPINION .......... 28 Accounting balance sheet......................................................................... 29 Profit and loss statement for 2009 ............................................................. 33 Audit opinion ........................................................................................... 35 Audit Committee’s report .......................................................................... 39
FINANCIAL AND ECONOMIC PERFORMANCE DATA OF THE COMPANY .... 40 Key performance indicators ...................................................................... 41 Analysis of economic and financial results ................................................. 42
INVESTMENT ACTIVITY ............................................................................ 48 Investment measures ............................................................................... 49 Investment plans...................................................................................... 50
ENVIRONMENTAL PROTECTION AND POWER SAVING .............................. 51 Environmental protection .......................................................................... 52 Industrial safety and labor safety ............................................................... 54 Power saving ........................................................................................... 55
SOCIAL POLICY ........................................................................................ 56 Personnel ................................................................................................ 57 Social assistance of native population ....................................................... 58
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SECTION 9 9.1. 9.2. 9.3. 9.4. 9.5.
DEVELOPMENT PROSPECTS OF THE COMPANY......................................... 60 Industrial activity ...................................................................................... 61 License liabilities ...................................................................................... 61 Scientific research.................................................................................... 61 Project financing ...................................................................................... 62 Ecological and social management ........................................................... 62
APPENDIX 1
REPORT ON COMPLIANCE WITH THE CODE OF CORPORATE CONDUCT. .... 64
APPENDIX 2
INFORMATION ON INTERESTED PARTY TRANSACTIONS AND MAJOR TRANSACTIONS MADE IN 2009 ................................................................ 66 Information on interested party transactions and major transactions made in 2009. ...................................................................................................... 67
APPENDIX 3
CONTACTS AND REFERENCE INFORMATION ............................................. 70 Contact and reference information ............................................................ 71
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2009 Highlights February The Company decided to implement an integrated management system (IMS) in the areas of quality, environment, occupational health and safety meeting the requirements of international standards в ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007.
June The Company held an Annual General Meeting of Shareholders that reviewed the Company’s production and economic performance in 2008. The shareholders approved the Company’s 2008 Annual Report, annual accounting statements and the Company’s Auditor for 2009, and elected new members to the Board of Directors and the Audit Committee. Besides, in order to facilitate the procedure for closing related party transactions, the General Meeting resolved to approve 24 transactions that were to be closed in the following corporate year during the Company’s ordinary activities.
July To refinance the bridge credit received in 2008, within the effort to ensure long-term project financing for the development of Yuzhno-Russkoje Field, the Company obtained from a group of foreign banks headed by Société Générale Bank two short-term multicurrency credits of 193 million EUR and 1,084 million USD (bridge financing with repayment in 2010) against security of OJSC Gazprom and BASF SE in the ratio of 65% and 35%, respectively.
August The design gas production capacity of 25 billion cubic m per year was reached one year before the scheduled time, which was due to increasing the number of producing wells to the design level (142 wells).
September In Urengoy, the Company held an opening ceremony, attended by the Region’s administrators, for an administrative complex comprising a garage unit. Built by OJSC Severneftegazprom, the complex is a modern office building designed for 220 working positions. OJSC Severneftegazprom adopted quality, environment, accident prevention and industrial safety policies and implemented an integrated management system (MS) meeting international standards.
October The Federal Agency for Subsoil Use of the Russian Ministry of Natural Resources resolved to extend the License for geological survey and hydrocarbon material extraction within Yuzhno-Russkoje subsoil area till December 31, 2043. Thus the Company ensured compliance with applicable Russian subsoil laws and foreign banks’ requirements for longterm project financing. The Company commissioned the motor road Urengoy – Krasnoselkup, Yuzhno-Russkoje Field section – Beregovoje Gas Condensate Field. The Company issued additional shares, thereby increasing its authorized capital from 615,374 RUB to 666,662.49 RUB. The funds raised by the issue amounted to 1,639,500,552 RUB.
November E.ON Ruhrgas E & P GmbH became a shareholder of OJSC Severneftegazprom under an asset exchange transaction between OJSC Gazprom and E.ON Ruhrgas AG. As a new shareholder was admitted, an extraordinary General Meeting elected new members to the Board of Directors and the Audit Committee.
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SEVERNEFTEGAZPROM
SECTION 1 GENERAL INFORMATION. COMPANY’S STATUS IN THE INDUSTRY 6
SEVERNEFTEGAZPROM
1.1.
Company’s registration data and geographic location
Severneftegazprom Open Joint Stock Company (“the Company”) was formed by reorganizing Severneftegazprom Limited liability Company and was registered on 15.06.2001 with the State Registration Chamber at the Russian Ministry of Justice (Certificate of registration and making alterations to the State Register of Profit Making Organizations No.R-16625.16 of 15.06.2001). The Company is the assignee of all rights and liabilities of LLC Severneftegazprom, including those specified in obtained licenses, certificates and other documents of entitlement.
Company’s core activities: − − − −
development of Yuzhno-Russkoje Field; extraction, collection, preparation for transport and sales of natural gas; exploration and prospecting; construction management business.
Company’s basic licenses: for geologic survey and extraction of hydrocarbon material within Yuzhno-Russkoje subsoil area, located in Krasnoselkup Area, Yamalo-Nenets Autonomous District, Tyumen Region; series SLH No.11049 NE; date of expiry – 31.12.2043; − for the right to operate explosion hazardous industrial facilities № EV-00-007716. Commencement of the license validity - 07.08.2007. Date of the license expiry 07.08.2012. In addition, the Company has more than 50 permissions (licenses) for other types of activity.
−
The Company is located in Yamalo-Nenets Autonomous District, Krasnoselkup region, the village of Krasnoselkup, Lenina str., 22.. OJSC Severneftegazprom has representative offices in Novy Urengoy, Urengoy and Moscow. The Company has no subsidiaries and affiliated companies.
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SEVERNEFTEGAZPROM Yuzhno-Russkoje Field situated in the northeast part of Western Siberia in Krasnoselkup Area, Yamalo-Nenets Autonomous District, Tyumen Region, in the eastern part of Tazovsky oil-and-gas-bearing area (Pur-Tazovsky oil-and-gas-bearing region) is more than 85 km long and more than 14 km wide. The localities lying nearest to the Field are the village of Krasnoselkup located 90 km east of the Field and the town of Urengoy situated 90 km west thereof. There are three 1,420 mm connecting pipeline runs Zapolyarnoe – Urengoy laid 60 km from the northern boundary of the license area. The nearest railway station is Korotchaevo located 110 km west of the Field boundary. Urengoy is the closest river port and airport with an unpaved runway. Other registration data and contract information may be found in the appendix to this Report.
1.2.
Yuzhno-Russkoje Field’s background and major development landmarks
Yuzhno-Russkoje Field was opened on November 17, 1969, as a result of drilling exploration well No.6 that produced a gas blowout from Cenomanian deposits, when tested. Drilling was performed by the Urengoy oil exploratory expedition. In 1979, the reserves in Cenomanian and Senonian deposits were first evaluated and approved by the USSR State Reserves Committee. Since 1982 Yuzhno-Russkoje Field has been a site for detailed seismic investigations after oil and gas pools were discovered in Lower Cretaceous and Jurassic deposits in Pur-Tazovsky region, whose exploitability was shown by well testing. In 1990, the second phase of prospecting and exploratory drilling started in the above deposits and already by 1993-1994 their exploitability had been confirmed and gas/oil reserves had been evaluated. Today the total gas reserves of Yuzhno-Russkoje Field are about 1 trillion cubic m. The project for development of Cenomanian (PK1) and Senonian 1 (Т1, Т2) deposits of Yuzhno-Russkoje Field was designed by OJSC TymenNIIGiprogaz in 2004. It underlies the 1
Further as the text goes “Turonian”;
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SEVERNEFTEGAZPROM Project for development of Yuzhno-Russkoje Field that was designed by OJSC YuzhNIIgiprogaz in 2006 and received positive opinions from the intra-departmental expert review board and the Main State Expert Review Board. OJSC Gazprom Board’s Regulation No.51 “On high priority measures for the commissioning of Yuzhno-Russkoje subsoil area” of 11.11.2004 provides for YuzhnoRusskoje Field to be developed using project financing methods. Development of the Field started in January 2006. On September 27, 2007, a tie-in was performed to OJSC Gazprom Unified Gas Supply System (64 km) to supply gas from Yuzhno-Russkoje Field. At 03:20 am Moscow Time on October 25, 2007, Yuzhno-Russkoje Field was put into commercial production. A ceremony devoted to the commissioning of Yuzhno-Russkoje Field took place at OJSC Gazprom’s Central Office on December 18, 2007 and was attended by Dmitry A.Medvedev, First Vice Premier and Chairman of OJSC Gazprom’s Board of Directors, and Frank-Walter Steinmeier, Vice Chancellor and Foreign Minister of Germany. In late 2007, following an asset exchange transaction between OJSC Gazprom and BASF AG, the latter’s subsidiary Wintershall Holding AG2 became a shareholder of the Company. In late 2009, an asset exchange transaction between OJSC Gazprom and E.ON Ruhrgas AG resulted E.ON Ruhrgas E & P GmbH becoming a shareholder of the Company (subsidiary of German company E.ON Ruhrgas AG*). Under a Russian-German cooperation project, on June 5, 2009, OJSC Gazprom, Wintershall Holding AG and E.ON Ruhrgas E & P GmbH signed an Agreement of OJSC Severneftegazprom’s Shareholders specifying procedures for shareholder interaction in developing Yuzhno-Russkoje Field. In August 2009, Yuzhno-Russkoje Field reached the design gas production capacity of 25 billion cubic m per year one year ahead the scheduled time.
1.3.
Company’s key performance indicators and priority lines of activity Company’s key economic/financial performance indicators, million RUB Indicator
2009
2008
2007
Gas sales proceeds, VAT exclusive
16,890.50
14,626.80
876.51
Capital investment
12,844.41
21,724.60
24,883.43
Net assets
23,116.66
20,053.41
39.97
Accounts receivable as of the year end
5,374.37
11,853.18
9,018.93
Accounts payable as of the year end
61,191.61
69,919.39
55,372.94
59,590.30
68,442.13
54,452.50
Profit (loss) before tax
1,885.83
-4,292.75
23.37
Net profit (loss)
1,423.75
-3,327.06
0.001
Include credits and loans
Company’s key production performance indicators Indicator
2009
2008
2007
Gross gas production, billion cub m
22.584
15.066
1.256
Marketable gas sales, billion cub m
22.551
15.017
1.217
2
starting from 01 March 2010 because of the change of the legal entity incorporation form it should be considered Wintershall Holding GmbH.
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SEVERNEFTEGAZPROM
Reserves increment as per exploration and prospecting results, including gas, billion cub. m
14.768
48.897
21.402
gas condensate, mln tons
0.068
-
-
933
882
668
Staff on payroll, pers.
Company’s priority lines of activity in 2009: − − − − − − − −
−
1.4.
reaching the Field’s annual design capacity of 25 billion cubic m; meeting all license obligations; further exploration of Turonian (Т1, Т2) gas deposits; exploration & prospecting and reserves increment; implementation of design solutions and measures for the Field development supervision; implementation of environmental measures under applicable Russian laws; obtaining long-term project financing for the Yuzhno-Russkoje Field development project; involvement in socio-economic development of local municipalities – Krasnoselkup and Purovsky Areas, and in carrying out programs for support of the North indigenous minorities; implementation of an integrated management system (MS) meeting international standards ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007, for effective quality, accident prevention, environmental and industrial safety management.
Company’s status in the industry and risk factors OJSC Severneftegazprom is one of the companies in the gas sector of Russia’s fuel and energy industry and part of OJSC Gazprom Company Group. The fuel and energy complex (FEC) plays a key role in the national economy and its development. FEC accounts for the bulk of value-added production of the national GDP, tax and customs payments to the public treasury and currency receipts from exports. The gas industry is the country’s FEC most stable and efficient sector providing for more than 50% of domestic power consumption. Gas has been and is the most environmentally sound and socially attractive energy carrier. Today OJSC Gazprom accounts for 84% of Russian and over 17% of world gas production. OJSC Gazprom has achieved the planned gas production levels by exploiting the existing fields and those put into production, including Yuzhno-Russkoje Field that is of critical importance. Alexey Miller, Chairman of OJSC Gazprom’s Management Board, says: “The commissioning of Yuzhno-Russkoje Field is the most important event for OJSC Gazprom in 2007. This is a striking example of how the Company is implementing its consistent policy aimed to increase its production capacities and create a reliable reserve to provide stable and safe gas supplies to the domestic and external markets. The launch of Yuzhno-Russkoje Field shows OJSC Gazprom’s success in applying new principles of cooperation with the world’s energy giants.” Holding a license for use of the subsoil of Yuzhno-Russkoje Field, OJSC Severneftegazprom engages in gas production, preparation for transport, and natural gas sales in addition to exploration and prospecting. The Company has a steady market for its products and supplies gas under long term delivery contracts. OJSC Severneftegazprom is a fast developing company. OJSC Severneftegazprom’s output of natural gas accounted for about 4.9% of the total gas produced by OJSC Gazprom Company Group in 2009.
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SEVERNEFTEGAZPROM
Financial risks Exchange rate change/inflation risks The Company’s financial standing depends on exchange rate variations as all the Company’s credit and loan liabilities are denominated in foreign currencies (US dollar, euro). As a project implemented in Russia, the Yuzhno-Russkoje Field development project forms cash flows denominated in roubles. Thus in case of rouble devaluation the Company will incur foreign exchange losses that may lead to increased debt service costs in roubles in addition to losses resulting from increased rouble values of liabilities denominated in a foreign currency. Therefore, an effect of variations in the national currency exchange rate on the Company’s financial standing is estimated as significant. Increasing inflation rates in Russia represent a substantial risk as well. Since planned inflation rates determined by the Russian Government tend to grow, it results in cost growth rates exceeding the basic forecast. One of the basic mechanisms employed by the Company to minimize the above risks is the gas selling price formula specified in gas supply contracts, providing for cost overrun coverage, including as regards exchange rate differences.
Interest rate development risks Further development of Yuzhno-Russkoje Field and the existing debt servicing require obtaining a considerable amount of debt financing. Yet the global financial crisis brought about a rise in interest rates on the money market and made credit resources less available to the real sector. In such a situation, the Company will have to seek for more expensive funds to finance its business. Besides, there is a risk that the rates of interest on the obtained credits may increase since they consist of the weighted average rate of interest on interbank credits (LIBOR and EURIBOR) plus margins. Yet the risk is assessed as low, considering that under gas supply contracts the gas price is defined with the formula taking account of interest charges.
Risks related to the Company’s business Sales reduction risk With global economy growth rates slowing down to a recession or even a slump, the demand for hydrocarbon may decline, which, in turn, may have an adverse effect on the Company’s performance. This risk is also aggravated by the fact that the Company has high percentage of fixed expenses (its production leverage level is fairly high) in the general process expenses structure. This fact, in case gas sales decline, prevents production costs from reducing and results in impaired performance. One of the basic mechanisms employed by the Company to minimize the above risk is the terms and conditions of gas supply contracts providing for a forfeit penalty to be paid for failure to take the specified gas amount. The risk is assessed as low.
License risks In developing Yuzhno-Russkoje Field the Company uses a license for exploration and production of hydrocarbon material within Yuzhno-Russkoje subsoil area and a license for operating of explosion hazardous production facilities. Under applicable Russian laws and the licenses the right to use subsoil or carry on the licensed activity may be restricted, suspended or terminated before expiry of validity in case of failure to meet the terms and conditions of license agreements or provisions of the current Russian licensing laws. The Company has fully complied with the terms and conditions of license agreements and taken every measure to meet provisions of the current Russian licensing laws, so this risk is regarded as unlikely to occur.
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Environmental risks The Company’s development of Yuzhno-Russkoje Field is potentially associated with a risk of damaging the environment. The design solutions implemented by the Company in developing and exploiting the Field comply with Russian and international environmental standards. The Company has introduced an integrated environmental and industrial safety management system that meets international standards. Environmental protection is one of the Company’s priority areas.
Technological risks The Company’s production activities are associated with operating hazardous production facilities where destruction of in-service failure of equipment may occur. To minimize such risks, the design solutions provide for implementation of automatic process control systems and process/equipment monitoring, accident prevention and protection systems that ensure reliable, safe and trouble-free operation. Special attention is given to meeting the accident prevention, industrial, fire and blowout safety requirements. The company provides occupational and emergency training for operating personnel and implements, on an ongoing basis, a package of scheduled preventive works and measures aimed to ensure functionality of production processes and reliable operation of equipment, which also reduces technological risks.
Legal risks Legal risks related to the Company’s business are primarily due to possible changes in the laws governing the activities carried on by Company. Risks related to changes in currency laws may indirectly affect the Company’s business because its credit and loan liabilities are denominated in foreign currencies (UD dollar, euro) and their servicing is associated with exchange transactions. The Russian Government is currently implementing a policy aimed at easing the tax burden on Russian taxpayers, so no alterations increasing tax rates are expected to be made to tax laws in the near future. A risk of increased taxes in the short term is regarded as low. If any alterations are made to the current taxation terms and procedures, the Company will allow for such alterations in planning its financial and economic activities.
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SEVERNEFTEGAZPROM Changes in judicial practice connected with the Company’s business and in rules of court procedure are unlikely to have any significant effect on the Company’s business as the Company tries to settle disputes using out-of-court procedures. At present the Company is not involved in any legal proceedings and bears no liability for third parties’ debts.
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SECTION 2 CORPORATE MANAGEMENT
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2.1.
Corporate management practice OJSC Severneftegazprom views corporate management as a tool for providing effective interaction between the Company’s shareholders, Board of Directors and executive body. OJSC Severneftegazprom’s Articles of Association, internal documents and Shareholders Agreement ensure that the shareholders participate in managing the Company in the degree as provided by applicable Russian laws. The Company is seeking to raise the corporate management level and follow the best corporate practice. Information on compliance by the Company with the provisions of the Corporate Conduct Code recommended for use by the Federal Commission for the Securities Market of Russia is given in the appendix to this Report.
2.2.
Control and management bodies
2.2.1.
General Meeting of Shareholders The Company highest management body is the General Meeting of Shareholders. The General Meeting procedure (calling, preparation, summing up etc.) is determined by applicable Russian laws, the Articles of Association and the Regulations for the Company’s General Meeting of Shareholders. In 2009, six General Meetings of OJSC Severneftegazprom’s Shareholders were held. The Annual General Meeting of Shareholders approved the Company’s Annual Report, annual accounting statements and the Company’s Auditor and elected the Board of Directors and the Audit Committee. The Annual General Meeting also considered the issues of payment of dividends and fees to the Board of Directors members. The Extraordinary General Meetings held in 2009 adopted resolutions approving major and related party transactions. These were mainly related to the refinancing of the existing credits within preparation for obtaining long-term project financing and to the gas pricing procedure provided for in gas supply contracts. As an issue of additional shares was undertaken in August 2009, an Extraordinary General Meeting resolved to increase the authorized capital and change the rights for Type A preferred shares and to alter the Company’s Articles of Association accordingly. Within the asset exchange transaction between OJSC Gazprom and E.ON Ruhrgas AG, an Extraordinary General Meeting called in October 2009 approved a revised version of the Company’s Articles of Association. In November, as the new shareholder (E.ON Ruhrgas E & P GmbH) was admitted to the Company, new members were elected to the Board of Directors and the Audit Committee.
2.2.2.
Board of Directors OJSC Severneftegazprom’s Board of Directors carries out general management of the Company’s business subject to the procedures and within the terms of reference as determined by applicable Russian laws, Company’s Articles of Association and Board of Directors Regulations. In the reporting period, the Board of Directors efficiently performed its functions of protecting the shareholders’ interests and controlling the Company management’s effectiveness. In 2009, 14 meetings of the Board of Directors were held, which passed 66 resolutions on the Company’s critical areas of business. The most significant for the Company in the reporting year were the following resolutions adopted by the Board of Directors: refinancing of the multicurrency credit received by the Company in 2008 within preparation for obtaining a long-term project financing; approval of
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SEVERNEFTEGAZPROM the Company’s Annual Work Program and Budget and the gas selling price for 2010; additional issues of shares of the Company placed through private offering; approval of alterations to the long-term gas supply contracts signed by the Company with OJSC Gazprom, CJSC Gazprom YRGM Trading and CJSC Gazprom YRGM Development, which are related party transactions. Under the Company’s Articles of Association, the Board of Directors is composed of 8 members.
Information on the members of the Board of Directors as of December 31, 2009 Medvedev, Alexander Ivanovich – Chairman of the Board of Directors Born on August 14, 1955 in Shakhtersk, Sakhalin Region. Graduated from Moscow Physics and Technology Institute. Academic degree: candidate of economic sciences. from 2002 – Director General, LLC Gazexport; OJSC Gazprom Management Board member from 2008 – Vice Chairman, OJSC Gazprom Management Board; Director General, LLC Gazexport, (LLC Gazprom Export from November 1, 2006) Holds no shares of the Company.
Pavlova, Olga Petrovna Born on August 17, 1953 in Vladivostok. Graduated from Far Eastern State University. Academic degree: candidate of legal sciences. from 2003 – Director, Department for Property Management and Corporate Relations, OJSC Gazprom from 2004 — OJSC Gazprom Management Board member Holds no shares of the Company.
Podyuk, Vasily Grigorievich Born on September 9, 1946 in Kobaki, Kosov Area, Ivano-Frankovsk Region. Graduated from IvanoFrankovsk Institute of Oil and Gas. Academic degree: candidate of engineering sciences from 2002 – OJSC Gazprom Management Board member; Director, Department for Production of Gas, Gas Condensate and Oil, OJSC Gazprom Holds no shares of the Company.
Yatsenko, Sergey Viktorovich Born on May 9, 1960 in Srebnoe, Varva Area, Chernigov Region. Graduated from Zhdanov State University, Leningrad. Academic degree: candidate of economic sciences. 2002 – 2007 – Deputy Director, Financial and Economic Department, OJSC Gazprom from 2007 – First Deputy Director, Financial and Economic Department, OJSC Gazprom Holds no shares of the Company.
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SEVERNEFTEGAZPROM
Dr. Rainer Seele Born on September 2, 1960 in Bremerhaven, Germany. Graduated from University of Göttingen, Germany. PhD in Chemistry 2000 – 2009 – Managing Director, WINGAS GmbH & Co. KG 2002 – 2009 – Member of the Board of Executive Directors, Wintershall Holding AG 2005 – 2009 – Managing Director, Wintershall Erdgas Handelshaus GmbH & Co. KG; Managing Director, WINGAS Holding GmbH from 2009 – Chairman of the Board of Executive Directors, Wintershall Holding AG; Managing Director, Wintershall Erdgas Beteiligungs GmbH Holds no shares of the Company.
Dr. Ties Tiessen Born on March 29, 1957 in Itzehoe, Germany. Graduated from Christian Albrecht University (study of legal and public sciences) at Kiel, Germany 1987 – graduation from 2005 – Member of the Board of Executive Directors, Wintershall Holding AG from 2008 – Chairman of the Board of Executive Directors, Wintershall AG; Managing Director, Wintershall Russland GmbH from 2009 – Managing Director, Wintershall Wolga Petroleum GmbH Holds no shares of the Company.
Dr. Jochen Weise Born on February 20, 1956 in Essen, Germany. Graduated from Ruhr University (Ruhr-Universität) in Bochum, Rhein University (Rheinische Friedrich-Wilhelms-Universität) in Bonn. Academic degree: doctor of law from 2004 – Member of the Management Board, E.ON Ruhrgas AG, Germany Holds no shares of the Company.
Frank Allan Sivertsen Born on August 21, 1957 in Time, Norway. Graduated from Norwegian School of Economics and Business Administration. Master of Business Administration (MBA). 2005 – 2007 – Managing Director, E.ON Ruhrgas UK North Sea, UK from 2008 – CEO, E.ON Ruhrgas E & P GmbH, Germany Holds no shares of the Company.
Information on changes in the composition of the Board of Directors in 2009 Board of Directors composition 01.01.2009 to 29.06.2009
Board of Directors composition 29.06.2009 to 02.11.2009
Board of Directors composition 02.11.2009 to 31.12.2009
Medvedev, Alexander Ivanovich Medvedev, Alexander Ivanovich Medvedev, Alexander Ivanovich Poduyk, Vasily Grigorievich Poduyk, Vasily Grigorievich Poduyk, Vasily Grigorievich Pavlova, Olga Petrovna Pavlova, Olga Petrovna Pavlova, Olga Petrovna Yatsenko, Sergey Viktorovich Karpel, Yelena Evgenievna Golubev, Valery Alexandrovich Reinier Zwitserloot Gerardus Maria
Yatsenko, Sergey Viktorovich Smirnov, Vasily Valerievich Golubev, Valery Alexandrovich Reinier Zwitserloot Gerardus Maria
Yatsenko, Sergey Viktorovich Jochen Weise Frank Allan Sivertsen Rainer Seele
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SEVERNEFTEGAZPROM
Ties Tiessen
2.2.3.
Ties Tiessen
Ties Tiessen
Technical Committee at the Board of Directors The Company set up a Technical Committee for preview of critical issues coming within the terms of reference of the Board of Directors and giving recommendations for the Company to make decisions on such issues. The Technical Committee setting up and operating procedures is regulated by the OJSC Severneftegazprom’s Shareholders Agreement and the Technical Committee Regulations approved by the Board of Directors. The Technical Committee is composed of 8 members (from November 2009) appointed by the Board of Directors. Candidates are nominated by the Company’s shareholders as follows: 4 candidates from OJSC Gazprom, 2 candidates from Wintershall Holding AG and 2 candidates from E.ON Ruhrgas E & P GmbH. The Technical Committee’s primary function is giving recommendations to the Board of Directors on all essential technical issues of the Company’s business, coming within its terms of reference, including approval by the Board of the Long-Term Development Plan and the budget, Draft Additional Plan of Field Development, Additional Plan of Field Development and Annual Work Program and the budget as well as any alterations and/or amendments thereto. The Technical Committee comprising members with extensive expertise in special areas helps enhance efficiency and quality of work of the Board of Directors, thereby providing effective mechanisms of supervision over the Company’s executive body.
Technical Committee composition as of December 31, 2009 Name
Position
Muzychenko, Alexander Alexandrovich
Deputy Director General for Economics and Finance, OJSC Severneftegazprom; Chairman of the Technical Committee
Popov, Alexander Pavlovich
Director General, OJSC Severneftegazprom
Efimochkin, Egor Alexeevich
Deputy Department Director – Manager, Merger and Takeover Projects Office, Integrated International Projects Department, Foreign Economic Department, OJSC Gazprom
Zeigman, Evgeny Mikhailovich
Production Manager, Renovation and New Capacity Development Office, Administration for Production of Gas, Gas Condensate and Oil, Department for Production of Gas, Gas Condensate and Oil, OJSC Gazprom
Edward Mol
Deputy Director General for Development and Strategic Planning, OJSC Severneftegazprom
Robert Frimpong
Technology Director, Wintershall Holding AG
Dr. Peter Reichetseder
Managing Director for Production and Technologies, E.ON Ruhrgas E & P GmbH
Scheuch Rainer
Director General, LLC E.ON Ruhrgas E & P Russia
The Technical Committee members hold no shares of the Company.
In the reporting year the Technical Committee also included: Epikhina, Tatiana Vasilievna until 13.11.2009
OJSC Gazprom
Manager, Intracorporate Prices and Tariffs Office, Economic Expert Analysis and Pricing Department, OJSC Gazprom
Sychev, Dmitry Borisovich until 13.11.2009
OJSC Severneftegazprom
Deputy Director General for Economics and Finance
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SEVERNEFTEGAZPROM
Report of the Company’s Board of Directors on performance in the Company’s priority business areas Under the Federal law on Joint Stock Companies assigns the Board of Directors the most important role in guaranteeing shareholder rights, shaping the Company’s development strategy and ensuring successful financial and economic performance. The Board of Directors evaluates as generally successful the Company’s performance in the priority business areas in the reporting year. In 2009, the Board of Directors held 14 meetings and adopted 66 resolutions on the Company’s critical lines of business. In the reporting year the Board of Directors focused on the issues of financing the Company, in particular, as regards the refinancing of intermediate short-term multicurrency credits obtained in 2008 due to the time of long-term project financing for the YuzhnoRusskoje Field development project being postponed. Also significant for the Company in the reporting year were the resolutions by the Board of Directors on approval of the Company’s Annual Work Program and Budget, including approval of the gas selling price for 2010, using the formula specified in gas supply contract. Most of the resolutions passed in the reporting year were related to the asset exchange transaction between OJSC Gazprom and E.ON Ruhrgas AG that resulted in the latter’s subsidiary E.ON Ruhrgas E & P GmbH becoming a shareholder of the Company.
Fees to the Board of Directors members The fee amount paid to members of the Board of Directors in 2009 totaled 2,040,000 RUB (including the individual income tax). The amount of fee for members of the Board of Directors is approved by the Annual General Meeting of Shareholders.
2.2.4.
Director General Under the Company’s Articles of Association, the Company’s sole executive body is the Director General who manages day-to-day operations. The Articles of Association provides for no collegial executive body to be set up. The Company’s Director General is Popov, Alexander Pavlovich.
Director General’s details: Popov, Alexander Pavlovich Born on June 6, 1965 in Rovnoe, Ochakov Area, Nikolaev Region, Ukrainian SSR. In 1988, graduated from Leninsky Komsomol Industrial University, Tyumen, degree in Oil & Gas Well Drilling. Positions filled over the resent 5 years: 2001 – 2006: Deputy Director General, Chief Engineer- Deputy Director General, OJSC Severneftegazprom 2006 – 2008: Deputy Director General for development, geology and drilling, OJSC Severneftegazprom 09.2008 – 12.2008: acting Director General, OJSC Severneftegazprom From December 24, 2008: Director General, OJSC Severneftegazprom Honorable mention from the Russian Ministry of Energy (2001), OJSC Gazprom Certificate of Honor (2008). The Company’s Director General is remunerated according to an individual time system that provides for payments based on the monthly official salary established in a Remuneration Agreement attached to the Employment Contract, as well as for
19
SEVERNEFTEGAZPROM compensations and incentives. The list of social guarantees and compensations for the Director General is specified in the Employment Contract.
2.2.5.
Audit Committee The Company’s Audit Committee is a continuing internal control body independent of the Company’s management officials. The Audit Committee’s work is governed by the Federal Law on Joint Stock Companies, Company’s Articles of Association and Audit Committee Regulations. In accordance with the Company’s Articles of Association, the Audit Committee is composed of 3 members.
Composition of the Audit Committee as of December 31, 2009 Place of employment
Current position
Mikhailov, Ivan Leonidovich
OJSC Gazprom
Deputy Manager, Office for Supervision over Gas Supply System Entities, Department for Internal Audit and Supervision over Financial and Economic Activities of Subsidiaries and Affiliates, Management Board Administration
Esterlein, Eduard Vladimirovich
Wintershall Russland Financial Director, Moscow Subsidiary GmbH
Judith Buss
E.ON Ruhrgas E & P Managing Financial Director GmbH
Name
The Audit Committee members hold no shares of the Company.
In the reporting year the Audit Committee also included:
2.3.
Maiorets, Maksim Andreevich until 02.11.2009
OJSC Gazprom
Deputy Department Director – Manager, Business Development Office, Foreign Economic Department
Sychev, Dmitry Borisovich until 29.06.2009
OJSC Severneftegazprom
Deputy Director General for Economics and Finance
Company’s Auditor and Registrar The Company’s Auditor inspects its financial and economic operations in accordance with legal acts of the Russian Federation, under a contract signed with the Auditor. The Company’s Auditor, CJSC PricewaterhouseCoopers Audit, was approved by the Annual General Meeting held on June 29, 2009. It is a member of the non-profit partnership “Audit Chamber of Russia” (NPP ACR) which is a self-regulated organization of auditors, registration number 870 in the register of members of NPP ACR. Auditor’s location: Russian Federation 125047, Moscow, Butyrsky Val str., bldg.10, business center “Belaya Loshad”. The Company’s Shareholder Register is maintained by Closed Joint Stock Company “Specialized Registrar – Holder of the Gas Industry Shareholder Register” (CJSC SPDRAGa). Register Maintenance License No.10-000-1-00291 of 26.12.2003 was issued by the Federal Securities Commission of Russia for an indefinite validity period. Register’s location: Russian Federation 117420, Moscow, Novocheremushinskaya Str., 71/32. Tel.: (495) 719-40-44, fax: (495) 719-45-85.
20
SEVERNEFTEGAZPROM
2.4.
Authorized capital, distribution and issue of shares The Company’s authorized capital amounts to 666,662.49 RUB and is divided into: − − − −
533,324 common registered shares at a par value of 1 RUB each; 2 Type A preferred registered shares at a par value of 41,027 RUB each; 3 Type B preferred shares at a par value of 11,111.54 RUB each; 1 Type C preferred share at a par value of 17,949.87 RUB.
In the 4th quarter of 2009, after an additional issue the Company’s authorized capital was increased from 615,374 RUB to 666,662.49 RUB. Under the resolution passed by OJSC Severneftegazprom’s General Meeting on August 18, 2009, alterations to OJSC Severneftegazprom’s Articles of Association concerning the Company’s increased authorized capital were registered on October 21, 2009 in connection with placement of the following shares through private offering:
Par value, RUB
No. of securities per issue, pcs
Share placement price, RUB
1-01-31375-D-004D
1
4
47,888
Type B preferred shares
2-03-31375-D
11,111.54
3
355,195,000
Type C preferred share
2-04-31375-D
17,949.87
1
573,724,000
Type of share
State registration No.
Common shares
The amount of funds obtained through the issue was 1,639,500,552 RUB and a revenue of 1,639,449,264 RUB was derived. The Company has no own shares on the balance sheet. The Company’s shares have no market quotations since they have not been authorized by trade organizers for circulation on the securities market.
Company’s issuing history Class and category (type) of securities
Par value of each issued security, RUB
No. of placed issued shares, pcs
Issue state registration No.
State registration/ issue date
Common registered uncertified shares
1.00
200,000
1-01-31375-D
12.07.2001
Common registered uncertified shares
1.00
0*
1-02-31375-D
04.09.2001
Common registered uncertified shares
1.00
66,665
1-01-31375-D-002D
09.10.2007
Preferred registered uncertified shares
41,027.00
1*
2-01-31375-D
09.10.2007
Common registered uncertified shares
1.00
266,655
1-01-31375-D-003D
18.12.2008
Preferred registered uncertified shares
41,027.00
1*
2-01-31375-D-001D
18.12. 2008
Common shares (CS)
1.00
4
1-01-31375-D-004D
03.09.2009
Type A preferred shares (PS)
41,027.00
2
2-02-31375-D
03.09.2009
Type B preferred shares
11,111.54
3
2-03-31375-D
03.09.2009
Type C preferred shares
17,949.87
1
2-04-31375-D
03.09.2009
*Under Order by the UFD Regional Office of the Federal Commission for the Securities Market of Russia No. 923-3 of 24.04.2002, issue of the Company’s common shares No.1-02-31375-D registered on 04.09.2001 was found invalid and its state registration was cancelled.
21
SEVERNEFTEGAZPROM
* Type A preferred registered uncertified shares (issue state registration No.2-01-31375-D of 09.10.2007) have been cancelled (paid off) due to their conversion.
All the Company’s securities issues have been registered with the UFD Regional Office of the Federal Financial Markets Service of Russia.
Company’s authorized capital structure as of December 31, 2009
2.5.
Shareholder’s name
Share, %
No. of shares held, pcs
Voting share, %
OJSC Gazprom
40.0004506028
266,668 CS
50.0011250
Wintershall Holding AG
34.9999997750
133,328 CS 2 Type A PS 1 Type С PS
24.9994375
E.ON Ruhrgas E & P GmbH
24.9995496222
133,328 CS 3 Type В PS
24.9994375
Total:
100
533,330
100
Dividends The dividend payment procedure in OJSC Severneftegazprom is determined by the provisions of the Federal Law on Joint Stock Companies and the Company’s Articles of Association: −
The Company is entitled, at the end of the 1st quarter, half year and nine months of the financial year and/or at the end of the financial year, to resolve to pay (declare) dividends on the shares placed, unless otherwise provided by the Federal Law on Joint Stock Companies. A resolution to pay (declare) dividends at the end of the 1st quarter, half year and nine months of the financial year may be adopted within three months of the end of a respective period.
−
Dividends shall be paid from the Company’s net profit.
−
A resolution on distribution of dividends, the amount and method of payment of dividends on common and preferred shares is passed by the Company’s General Meeting. The dividend amount may not exceed the one recommended by the Company’s Board of Directors.
−
The Company may resolve to pay (declare) dividends on shares and may pay dividends taking account of the restrictions as set forth in Article 43 of the Federal Law on Joint Stock Companies.
−
The shareholders owning Type A preferred shares are entitled to receive a fixed annual dividend of 12.308% of the Company’s accrued net profit for the financial year. The net profit allocated for payment of dividends on Type A preferred shares is distributed among the shareholders owning Type A preferred shares in proportion to the number of held Type A preferred shares of the total amount of Type A preferred shares placed by the Company;
−
The shareholders owning Type B preferred shares are entitled to receive a fixed annual dividend of 5% of the Company’s accrued net profit for the financial year. The net profit allocated for payment of dividends on Type B preferred shares is distributed among the shareholders owning Type B preferred shares in proportion to the number of held Type B preferred shares of the total number of Type B preferred shares placed by the Company. The dividends on Type B preferred shares are paid after those on Type A preferred shares have been paid in full.
−
The shareholders owning Type C preferred shares are entitled to receive a fixed annual dividend of 2.692% of the Company’s accrued net profit for the financial year. The net profit allocated for payment of dividends on Type C preferred shares is distributed among the shareholders owning Type B preferred shares in proportion to the number of held Type C preferred shares of the total number of Type C preferred
22
SEVERNEFTEGAZPROM shares placed by the Company. The dividends on Type C preferred shares are paid after those on Type A and Type B preferred shares have been paid in full. Because of the Company’s negative financial performance (3,327.06 million RUB) in the 2008 year, the Company distributed no profit and dividends at the end of 2008. The Company has currently no dividends in arrears.
23
SEVERNEFTEGAZPROM
SECTION 3 PRODUCTION PERFORMANCE
24
SEVERNEFTEGAZPROM
3.1.
Raw materials base & geological survey works The Company’s raw materials base comprises the following recoverable hydrocarbon reserves: Description of hydrocarbon material (as of 31.12.2009)
ABC1
C2
Gas, billion cub. m
841.819
185.811
Condensate, mln ton
0.261
2.255
Oil, mln ton
5.707
16.072
In 2009, exploration and prospecting in the Yuzhno-Russkoje license area were carried out under the license agreement on the terms of use of Yuzhno-Russkoje subsoil area. Exploration and prospecting in 2009 were carried out in four primary areas: − − − −
construction of prospecting and appraisal wells; seismic investigations; thematic and research works; environmental protection measures and elimination of adverse construction conditions.
Basic exploration & prospecting performance indicators
3.2.
Type of work/Indicator
Plan
Actual
Constructed expendable wells, including: - object testing
4
4
38
34
Total rock drivage, m, including: - exploratory drilling - prospect drilling
6,080
6,358
3,050 3,030
3,082 3,276
Exploratory drilling efficiency (tons of equivalent fuel: TEF per m of drivage)
1,530
2,333
Hydrocarbon reserves increment, million TEF
9.30
14.836
Costs of increment of 1 TEF (RUB)
102.96
58.52
Production drilling Key indicators Exploratory drilling indicators
U of M
Commencing of well into production, including:
2009 plan
actual
well
44
42
producing
well
36
36
observation
well
8
6
Drivage
m
31,230
29,795
Total drilling cost (excluding capitalized interest on credit funds)
mln RUB 1,865.9
1,769.1
Cost per m of drilling (excluding capitalized interest on credit funds)
RUB
59,375
59,747
25
SEVERNEFTEGAZPROM
3.3.
Natural gas production In 2009, the Company produced 22.584 billion cub. m of gas. The plan gas production target (22.504 billion cub. m) was achieved and comprised 100.4%. Indicators
2009
2008
2007
Gross gas production, billion cub m
22.584
15.066
1.256
Marketable gas, billion cub m
22.551
15.017
1.217
The plan gas production targets were achieved through commissioning new production capacities in Yuzhno-Russkoje Field. In particular, 36 producing wells were put on production within 11 gas well clusters (GWC). Thus in 2009 the development well stock reached the design level of 142 units located in 41 GWC. In September 2009, during scheduled preventive maintenance on the central gas processing facility (CGPF) the Company carried out works to connect the BCS-1 booster compressor station (1 stage) to the existing UKPG networks. Installation and testing of BCS-1 process equipment and intersection communications were completed. Gas compressor units (GPU) were tested under load in OJSC Gazprom Unified Gas Supply System. Thus BCS-1 was prepared for operation by the reporting period end; however, because CGPF outlet pressure is insufficient for gas transport the commissioning of BCS-1 was postponed to 2010.
Comparative production indicators per years Gross gas production, mln cub. m. 25 000
22 583.5
20 000
50% 15 066.5
15 000
1100%
10 000
5 000
0
1 255.6
2007
2008
2009
26
SEVERNEFTEGAZPROM
Producing well stock Producing well stock as of the reporting year end, wells
142
160 140
34% 106
120 100
146%
80 60
43
40 20 0
2007
2008
2009
The Company does not transport natural gas to the end user. Natural gas, produced by the Company, is supplied to OJSC Gazprom Unified Gas Supply System. The marketable gas connecting pipeline of Yuzhno-Russkoje Field is operated by LLC Gazprom Transgaz Surgut under a service contract. The Company is operating the Yuzhno-Russkoje Field intrafield piping system for natural gas collection. To ensure systemic reliability of the Yuzhno-Russkoje Field gas-collecting system, the Company implemented the following measures in the reporting period: −
pig inspection of the marketable gas connecting pipeline (97.2 km) and intrafield pipelines of the Field gas-collecting system (overall length 105.469 km);
−
electrometric diagnostics to measure protection potentials at test points of the marketable gas connecting pipeline, methanol pipelines and intrafield gas lines of the Field gas-collecting system.
The Company installed UK-1 test stations to monitor the corrosion status of the YuzhnoRusskoje Field gas-collecting pipelines and commissioned cathodic protection stations (CPS) at 10 gas well clusters. Thus, as of the reporting period end, the total number of cathodic protection stations is equal to the design number – 20 CPS.
3.4.
Sales of natural gas The Company is a wholesale supplier of combustible natural gas. Natural gas produced by OJSC Severneftegazprom in 2009 was delivered to wholesale buyers under the long-term gas sales contracts entered into between OJSC Severneftegazprom, OJSC Gazprom (Buyer), CJSC Gazprom YRGM Trading (Buyer) and CJSC Gazprom YRGM Development (Buyer).
27
SEVERNEFTEGAZPROM
SECTION 4 ACCOUNTING STATEMENTS AND AUDIT COMMITTEE’S OPINION 28
SEVERNEFTEGAZPROM
4.1.
Accounting balance sheet Accounting balance sheet of OJSC "Severneftegazprom" as of 31.12.2009. Codes Form â„–1 as per OKUD
Company:
Severneftegazprom
0710001
Date (year, month, date)
2009 12 31
As per OKPO
48 731 500
Identification Taxpayer number
INN
8912 001 990
Type of activity Natural Gas and Gas Condensate Production
As per OKVED
11.10.20
Form of incorporation / form of property Open Joint-Stock Company/joint private
As per OKOPF/OKFS
Unit of measurement: thous. RUB
As per OKEI
47/34 384
Location (address) RF, 629380, Tyumen region, Yamalo Nenetsky autohomous district, settlement Krasnoselkup, Lenina street, 22
ASSETS
Indicator code
As of reporting year beginning
As of reporting period end
1
2
3
4
I. Non-current assets Intangible assets
110
49,768
39,948
111
-
-
organizational expenses
112
-
-
goodwill
113
-
-
Fixed assets
120
14,581,085
27,004,275
land plots and land use facilities
121
-
-
buildings, structures, machinery and equipment
122
14,427,119
26,835,097
Construction in progress
130
39,014,235
35,545,807
Income-bearing placements in inventory items
135
-
-
Long-term financial investments
140
-
-
including: Patents, licenses, trademarks (service trademarks) or other rights and assets similar thereto
including:
including: investments in subsidiaries
141
-
-
investments in affiliated companies
142
-
-
investments in other entities
143
-
-
loans extended to entities for a period exceeding 12 months
144
-
-
Deferred tax assets
145
2,624,997
2,274,797
Other non-current assets
150
1,158,542
1,118,681
VAT on purchased values
151
-
-
Total for Section I
190
57,428,627
65,983,508
including:
II. Current assets
29
SEVERNEFTEGAZPROM
Inventory stocks
210
2,062,662
1,269,837
feedstock, materials and other similar values
211
1,439,117
1,144,759
rearers and fatteners
212
-
-
including:
construction in progress costs
213
-
-
finished products and goods for resale
214
5,957
4,729
dispatched goods
215
-
-
deferred expenses
216
617,588
120,349
other stocks and costs
217
-
-
VAT on purchased values
220
65,889
33,243
Accounts receivable (payments expected in more than 12 months after the reporting date)
230
-
-
including: buyers and customers
231
-
-
bills receivable
232
-
-
prepayments made
234
-
-
other accounts receivable
235
-
-
240
11,853,177
5,374,368
buyers and customers
241
6,649,558
2,124,464
bills receivable
242
-
-
244
-
-
245
5,132,789
1,225,744
Accounts receivable (payments months after the reporting date)
expected within 12
including:
founders’ outstanding contributions to the authorized capital prepayments made other accounts receivable
246
70,830
2,024,160
Short-term financial investment
250
17,731,311
13,571,828
loans extended to entities for a period of less than 12 months
251
-
-
Cash assets
260
2,660,814
14,303
cash in hand
261
-
-
current accounts
262
776,529
13,497
foreign currency accounts
263
1,884,265
743
including:
other cash assets
264
20
63
Other current assets
270
1,641
1,630
290
34,375,494
20,265,209
300
91,804,121
86,248,717
Total for Section II BALANCE
LIABILITIES 1
Indicator As of reporting year code beginning 2
3
As of reporting period end 4
III. Capital and reserves Authorized capital
410
615
667
Own shares bought from shareholders
411
-
-
Additional capital
420
23,546,071
25,185,521
Reserve capital
430
-
including: reserves set up under applicable laws
431
-
-
30
SEVERNEFTEGAZPROM
reserves set up under foundation documents
432
-
-
Retained profits (uncovered loss)
470
( 3,493,278)
( 2,069,525)
State-backed social fund
480
-
-
Total for Section III
490
20,053,408
23,116,663
Loans and credits
510
17,532,773
-
bank credits to be repaid in more than 12 months after the reporting date
511
-
-
loans to be repaid in more than 12 months after the reporting date
512
17,532,773
-
Deferred tax liabilities
515
1,831,328
1,940,440
Other long-term liabilities
520
-
-
bills payable
522
-
-
outstanding investment contribution
523
-
-
Total for Section IV
590
19,364,101
1,940,440
Loans and credits
610
50,909,352
59,590,301
bank credits to be repaid within 12 months of the reporting date
611
50,909,352
41,233,713
loans to be repaid within 12 months of the reporting date
612
-
-
613
-
18,356,588
620
1,477,260
1,601,313
buyers and customers
621
856,506
469,140
outstanding payroll payments
622
8,613
28,265
outstanding payments to public extrabudgetary funds
623
-
732
outstanding Đž taxes and dues
624
483,340
1,039,843
other payables, including:
625
128,801
63,333
IV. Long-term liabilities
including:
V. Short-term liabilities
current portion of long-term loans and credits Accounts payable including:
bills payable
626
-
-
prepayments received
627
79
-
other payables
628
128,722
63,333
Income payable to members (founders)
630
-
-
Deferred revenue
640
-
-
Expenses and provisions
650
-
-
Other short-term liabilities
660
-
-
690
52,386,612
61,191,614
700
91,804,121
86,248,717
Total for Section V BALANCE
31
SEVERNEFTEGAZPROM
INFORMATION NOTE ON VALUABLES BOOKED ON OFF-BALANCE ACCOUNT
Indicator name
Indicator code
As of reporting year beginning
As of reporting period end
1
2
3
4
Leased fixed assets
910
140,451
85,202
including leasing
911
-
-
Abandoned wells at license areas
915
-
-
Goods and materials accepted for custody
920
124,583
17
Materials accepted for processing
921
-
-
Goods accepted for commission
930
-
-
Equipment accepted for installation
931
-
-
Indebtedness of insolvent debtors written off to losses
940
402
517
Expenses under construction contracts as of commencement of the contract performance
946
-
-
Securities received for obligations and payments
950
-
-
Securities given for obligations and payments
960
1,455
-
Housing stock depreciation
970
-
-
Land improvement and other similar facilities depreciation
980
-
-
Non-material assets granted for use
990
-
-
Pledged sale proceeds cost under export contracts
999
-
-
32
SEVERNEFTEGAZPROM
4.2.
Profit and loss statement for 2009 Profit and loss statement of OJSC Severneftegazprom for 2009 Codes Form â„–2 as per OKUD
Company:
Severneftegazprom
0710002
Date (year, month, date)
2009 12 31
As per OKPO
48 731 500
Identification Taxpayer number
INN
8912 001 990
Type of activity Natural Gas and Gas Condensate Production
As per OKVED
11.10.20
Form of incorporation / form of property Open Joint-Stock Company/joint private
As per OKOPF/OKFS
Unit of measurement: thous. RUB
As per OKEI
Indicator
384
Description
Code
For reporting period
1 Profit and loss in ordinary activities
2
3
Proceeds (net) from sales of goods, products, works, services (less VAT), excises and similar compulsory payments
47/34
For corresponding period of previous 4
010
16,890,504
14,626,801
011
16,890,504
14,626,801
012
-
-
013
-
-
014
-
-
015
-
-
016
-
-
017
-
-
other
018
-
-
Cost of sold goods, products, works and services
020
(9,432,404)
(5,392,108)
gas
021
(9,432,404)
(5,392,108)
gas condensate
022
-
-
023
-
-
024
-
-
025
-
-
026
-
-
027
-
-
other
028
-
-
Gross profit
029
7,458,100
9,234,693
Business expenses
030
-
-
including proceeds from sales of: gas
including sold:
33
SEVERNEFTEGAZPROM
Administrative expenses
040
(717,142)
(498,790)
Sales profit (loss)
050
6,740,958
8,735,903
Interest receivable
060
1,026,230
25,835
Interest payable
070
( 2,381,592)
( 1,763,195)
Participation capital
080
-
-
Reorganization expenses
085
-
-
Other income
105
42,412,503
4,418,541
Other expenses
110
( 45,912,266)
( 15,709,832)
Profit (loss) before tax
140
1,885,833
( 4,292,748)
Deferred tax assets
141
(334,827)
1,569,569
Deferred tax liabilities
142
(109,112)
( 603,680)
Current profit tax
150
-
-
Previous profit tax
153
-
-
Other profit cost
156
(18,141)
( 205)
Net profit (loss) of the reporting period
190
1,423,753
( 3,327,064)
Constant tax liabilities (assets)
200
66,772
64,371
Basic earnings (loss) per share
201
3
( 12)
Diluted profit (loss) per share
202
-
-
Other income and expenditure
FOR REFERENCE ONLY
34
SEVERNEFTEGAZPROM
4.3.
Audit opinion
35
SEVERNEFTEGAZPROM
36
SEVERNEFTEGAZPROM
37
SEVERNEFTEGAZPROM
38
SEVERNEFTEGAZPROM
4.4.
Audit Committee’s report CONCLUSION of the Audit Commission (Revision Commission) summarizing the results of the audit of financing and operating activities of OJSC “Severneftegazprom” for 2009 21.04.1010
Moscow
The Audit Commission elected by annual General Meeting of OJSC “Severneftegazprom” Shareholders (minutes dated 02.11.2009 No. 8/2009) carried out audit and analysis of financing and operating activities of OJSC Severneftegazprom (Company) for the year 2009. Upon audit it considered annual report for 2009, balance sheet and its annexes, profit and loss report, Audit Report of CJSC “PricewaterhouseCoopers Audit”, constitutional documents, orders of the Company. Financial statement for 2009 was drawn on the basis of the requirements of the Federal Law dated 21.11.1996 No. 129-FZ “On Accounting”, Provision on accounting records maintenance and financial statement in the Russian Federation approved by the order of Minister of Finance of the Russian Federation dated 29.07.1998 No. 34n, the order of Ministry of Finance of the Russian Federation dated 22.07.2003 No. 67n “On the formats of financial statement of organizations” as well as other standard acts that are a part of the regulatory system of accounting and financial statement in the Russian Federation. Accounting records in the Company are maintained on the basis of the order of OJSC “Severneftegazprom” dated 30.12.2008 No. 273. These financial statements are the responsibility of the Company's management. Analysis of assets and liabilities structure shows that financial standing of the Company in the accounting period was steady. The system of inner control over the accurate accounting and conducting of all standards and rules is operating in the Company. The auditor’s conclusion on the financial statements prepared in compliance with Russian accounting standards was performed on 15.03.2010 by CJSC “PricewaterhouseCoopers Audit”. In the auditors’ opinion the financial statement of the Company reflects in all material respects a fair presentation of the Company’s financial position of 31.12.2009 and the results of the financing and operating activities over the period from January 01 till December 31, 2009, in compliance with the requirements of the legislation of the Russian Federation in part of financial (accounting) statement preparation. Following the results of the audit of the financial and economic activities of the Company the Audit Commission considers that: −
annual financial statement of the Company is drawn up in accordance with the legislation of the Russian Federation and reliably reflects in all material matters the financial position of the Company of 31.12.2009;
−
financial information contained in the annual report of the Company is reliable in all material matters and corresponds to the data in the financial (accounting) statement.
Chairman of Audit Commission
I.L.Mikhaylov
Members
J.Buss
E.Esterlein
39
SEVERNEFTEGAZPROM
SECTION 5 FINANCIAL AND ECONOMIC PERFORMANCE DATA OF THE COMPANY 40
SEVERNEFTEGAZPROM
5.1.
Key performance indicators The Company effectively borrows capital with a view of financing its investment activity that has now a priority. Thus, the opportunity of raising capital by the Company on more favorable terms is possible only in case of growth of operating data of the Company, improvement of its assets and liabilities.
Key performance variables of financial activity of the Company in 2009 in comparison with 2008 (by accounting reporting data), thous. RUB Name of variable
2009
2008
Deviation +/-
Income and expenditure on ordinary activities Net sales of goods, production, works, services (minus VAT, excise taxes and analogue mandatory payments)
16,890,504
14,626,801
2,263,703
Prime-cost of sold goods, production, works, services
(9,432,404)
(5,392,108)
4,040,296
Gross margin
7,458,100
9,234,693
-1,776,593
Selling costs
-
-
-
Administrative expenses
(717,142)
(498,790)
218,352
Profit (loss) on sales
6,740,958
8,735,903
-1,994,945
1,026,230
25,835
1,000,395
(2,381,592)
(1,763,195)
618,397
-
-
-
42,412,503
4,418,541
37,993,962
(45,912,266)
(15,709,832)
30,202,434
Income (loss) before tax
1,885,833
(4,292,748)
6,178,581
Deferred tax assets
(334,827)
1,569,569
-1,904,396
Deferred tax liabilities
(109,112)
(603,680)
-494,568
-
-
-
(18,141)
(205)
17,936
1,423,753
(3,327,064)
4,750,817
66,772
64,371
2,401
Other income and loss Interest receivable Due interest Participation capital Other income Other loss
Current income tax Tax sanction Net income (loss) FOR REFERENCE ONLY Constant tax liabilities (assets)
Performance of Annual Work Program and Budget of the Company Budget of the Company for 2009 (financial plan) was approved by the Board Resolution on the 16 of December 2008 with the following indicators: Volume of commercial gas – 24,878,360 thous. cub.m; Disposal price of gas – 749 RUB excluding VAT per 1,000 cub.m of gas; Income – 18,633.89 mln RUB excluding VAT; Expenditures – 16,180.39 mln RUB excluding VAT; Income from current activity– 2,453.51 mln RUB; Expenses not deductible for tax purposes on profit tax – 323.5 mln RUB;
41
SEVERNEFTEGAZPROM Information on Company Budget implementation, thous. RUB Name of variable
Planned 2009
Actual 2009
Deviation +/-
Income
18,633,891.64
16,890,503.70
-1,743,387.94
Gas sales revenue, total
18,633,891.64
16,890,503.70
-1,743,387.94
Expenditures
16,180,386.47
14,131,524.60
-2,048,861.87
380,552.41
122,114.72
-258,437.69
4,425.26
546.59
-3,878.67
Expenses on salaries, social benefits and pay-outs
985,735.88
953,780.77
-31,955.12
Unified Social Tax (UST)
104,615.60
101,427.51
-3,188.09
Depreciation
3,391,342.82
3,546,087.71
154,744.90
Capital lease
53,780.60
52,704.74
-1,075.87
5,201,046.33
4,119,467.80
-1,081,578.53
Geological exploration (under subcontract)
162,886.98
136,755.54
-26,131.45
Costs on insurance contracts
129,612.37
196,444.60
-66,832.23
26,266.95
18,390.21
-7,876.74
Other expenses
5,740,121.27
4,883,804.42
-856,316.85
Income (loss)
2,453,505.18
2,758,979.10
305,473.92
323,502.7
236,824.1
-86,678.6
559,227.68
559,227.68
1,227.82
1,227.82
2,751,113.16
2,751,113.16
-2,826,979.97
-2,826,979.97
1,885,832.70
1,885,832.70
-334,827.09
-334,827.09
109,112.24
109,112.24
18,140.57
18,140.57
1,423,752.82
1,423,752.82
Materials Gas for own needs Purchased power
Leasing Taxes and other mandatory payments
Capital repairs (under contract without materials and equipment)
Expenses not deductible for tax purposes Correction on expenses of future periods Change in balance of finished goods Other income Exchange rate difference (balance) Income (loss) before tax Deferred tax liabilities Deferred tax assets Other expenses from income Net income (loss)
5.2.
Analysis of economic and financial results Analysis of income and expenditures According to the results of 2009 actual income of the Company on main activity was 16,890.50 mln RUB with the planned value being 18,633.85 mln RUB Deviation from the planned variable was caused by the fact that due to reasons beyond the Company control, because of restriction on gas intake into OJSC Gazprom Unified gas supply system, the Company delivered to Customers 2,327,621 thous.cub.m of gas less compared to the planned contract value during accounting period.
42
SEVERNEFTEGAZPROM Thus, the non-fulfillment of the approved Budget of the Company in respect of revenue side is related to updating of the plan on gas development and is 9%. According to the results of 2009, the actual expenses of the Company, without taking into account the exchange rate difference and expenses not deductible for tax purposes on profits tax, are 14,131.52 mln RUB (plan – 16,180.39 mln RUB). Thus, according to the results of financial year the saving on current activity is 2,048.86 mln RUB (13%). As a result of the control over expenditures and implementation by the Company of measures on cost optimization during financial year the saving in the sum of 600.93 mln RUB is achieved or 26.65 RUB per 1,000 cub.m of commercial gas that makes up 4% of total costs on Budget.
Expenditure pattern of the Company for 2009 and 2008 2009 %
2008 %
Materials
0.7
0.8
Expenses on salaries, social benefits and pay-outs, Unified Social Tax
6.1
4.6
Depreciation
20.6
8.5
Capital lease
0.3
0.2
24.0
13.8
Geological exploration (under subcontract)
0.8
1.0
Costs on insurance contracts
1.1
0.1
Interest on credits and loans, payment for project financing management
21.8
11.0
Exchange rate difference
16.4
56.3
8.1
3.7
100%
100%
Expenditure item
Taxes and other mandatory payments
Other expenses (including expenses not deductible for tax purposes on profits tax) Total
The analysis of the pattern of total expenditures of the Company in 2009 shows, that the share of constant expenses and relatively constant expenses (depreciation, property tax and other taxes, rent cost, firm expenses on payroll and social transfers, interest on credits and loans, administrative cost, etc.) has made 56% from the sum of the total expenditures. The share of uncontrollable expenses (exchange rate differences, oil and gas extraction tax) has made 36%. The share of variable expenses and relatively variable expenses has made 8% correspondingly.
43
SEVERNEFTEGAZPROM
Expenditures pattern in 2008
Expenditures pattern in 2009
Exchange rate difference of liabilities assessment of the Company in foreign currency Because the primary obligations on credits and loans of the Company are represented in foreign currency, the rise of the exchange rate of USD and EUR during the financial year has led to a negative exchange rate difference in the amount of 2,826.98 mln RUB. Exchange rate, RUB
31.12.2008
31.12.2009
USD
29.38
30.24
EUR
41.44
43.38
Cost analysis Gas production cost (including management expenses) has made 10,149.55 mln RUB, with the planned value being – 12,836.54 mln RUB. Thus, the saving from the main activity is 2,686.99 million RUB, what corresponds to cost reduction at 21%. Estimated prime-cost per 1,000 cub.m of gas was 515.97 RUB, actual cost – 450.02 RUB. Thus, the saving of 13% from the main activity per 1,000 cub.m of gas is achieved.
44
SEVERNEFTEGAZPROM The profit from gas sales was planned in the amount of 5,797.35 mln RUB. Actual profit from gas sales has made 6,740.96 mln RUB, and that is 943.61 mln RUB more than estimated profit or 16% higher.
Other income and expenditures Other income and expenditure, basically, have developed as a result of credits and loans service of the Company in foreign currency (US dollars and euro). The rise of exchange rate has significantly influenced on financial variables of Company in 2009. The result of other income and expenditure of the Company during the financial year has made negative value of 3,499.76 mln RUB. The main cause of losses under other income and expenditure is related to obtaining of the negative exchange rate difference being 2,826.98 mln RUB. In total other incomes are 42,412.53 mln RUB, other expenses – 45,912.266 mln RUB, including: income on exchange rate difference – 17,199.23 mln RUB, expenses on exchange rate difference – 20,026.21 mln RUB. Besides, accrued interest for payment on credits and loans amounts 2,381.59 mln RUB. It is necessary to note, that the Company used reasonable best efforts to minimize of risks of obtaining negative financial result. So in 2009 the non-planned income was obtained n the form of interest from investment of funds on deposit accounts in the amount of 1,026.23 mln RUB. Besides, other income includes payment of penalty for the not off-taken gas in the amount of 1,477.45 mln RUB without taking into account VAT, foreseen by the terms of gas delivery agreements.
Net income According to the results of financial year the net income of the Company has made 1,423.75 mln RUB at the planned income being -174.6 mln RUB, that is 1,598.35 mln RUB more than the planned variable. Growth of net income, basically, is related to achieving of the non-planned income in the form of interest from investment of funds on deposit accounts in the sum of 1,026.23 mln RUB and because of the expenses optimization as a result of expenses cut procedure implementation.
Assets Profile of the Company Non-current assets, thous. RUB. 31.12.2008
31.12.2009
Fixed assets
14,581,085
27,004,275
Incomplete construction
39,014,235
35,545,807
Other non-current assets
3,833,307
3,433,426
57,428,627
65,983,508
Total:
During the financial year the Company has transferred into fixed capital assets the objects for a total sum of 14,432,869 thousand RUB. The above-mentioned objects include the following: a highway, operating wells, gas-gathering systems connected to well clusters. Thus, the increase of property cost during the financial period has made 8,555 mln RUB.
Current assets, thousand RUB 31.12.2008
31.12.2009
2,062,662
1,269,837
Receivables
11,853,177
5,374,368
Short-term financial investments
17,731,311
13,571,828
Stocks
45
SEVERNEFTEGAZPROM
Other current assets Total:
2,728,344
49,176
34,375,494
20,265,209
The main share of current assets as of 31.12.2009 is made with short-term financial investments (70%). On this line, the monetary resources placed on deposit accounts at Commercial Bank Société Générale Vostok (CJSC) and Gazprombank (OJSC) are reflected. The share of receivables at the end of 2009 has made 26.5%. Cost of stocks and expenses on incomplete construction during the financial period has decreased by 1.62 times. The significant share of inventory is made of construction materials which are used for construction and erection works. During the financial period the decrease of the share of inventory is observed resulting from completion of construction stage of significant volume of fixed capital. There are no bills on the balance of the Company.
Analysis of accounts receivable and accounts payable The share of cash settlements of the Company has made 100 %. The principal source of income is realization of produced gas, and proceeds from credits and loans. In 2009 the funds in the amount of 24,455.53 mln RUB were obtained for realization of commercial gas.
Accounts receivable, thousand RUB 31.12.2008
31.12.2009
Customers and Clients
6,649,558
2,124,464
Advance payments made
5,132,789
1,225,744
Taxes and duties, social security contribution
12,416
8,103
Other debtors
58,414
2,016,057
11,853,177
5,374,368
Total:
Accounts receivable of customers and clients during the financial period are current. Periodicity of payment (time of accounts turnover of the issued invoices) during all the period was 35 days average after the end of the month of gas delivery. Reduction of the accounts receivable in 2009 occurred under the influence of two circumstances: 1.
Reduction of debts of customers and clients.
2.
Reduction of the sum of advance payments in 2009 by 76%. The sum of advance payments for the end of 2009 has made 1,225.74 mln RUB.
Accounts payable, thousand RUB 31.12.2008
31.12.2009
856,506
469,140
8,613
28,265
Taxes and duties, social security contribution
483,340
1,040,575
Other creditors
128,801
63,333
1,477,260
1,601,313
Suppliers and Contractors Debt to staff
Total:
46
SEVERNEFTEGAZPROM
Credit policy and loans According to the Long-term Plan of development and budget, the development of YuzhnoRusskoje field is carried out with use of two basic funding methods of the Company: shareholders’ loan and debt (credit) financing. Within the frames of work organization on attraction of long-term project financing, in July, 2009 the Company has entered into agreement with Société Générale Bank (credit facility agent) on granting of the short-term multi-currency credit guaranteed by OJSC "Gazprom" and BASF SE for the sum of 193,183 thousand EUR and 1,084,142 thousand USD, with the loan maturity date in 2010. A share of the OJSC "Gazprom" guarantee is 65%, the share of BASF SE being 35%. The multi-currency credit was granted for repayment of financial debts on the multicurrency credit involved by the Company in 2008. The interest rate on the debts guaranteed by JSC "Gazprom", nominated in euro, has made EURIBOR + 4.50 % margin; EURIBOR + 1.25 % margin – regarding the part, guaranteed by BASF SE. The interest rate on the debts guaranteed by OJSC "Gazprom", nominated in dollars, has made LIBOR + 4.5 % margin; LIBOR + 1.25 % margin regarding the part, guaranteed by BASF SE. All sum received under the Loan Agreement with Société Générale Bank, has been directed on debts repayment on the multi-currency credit received in 2008. For the end of 2009 the Company has the following debts on the involved loans and credits:
Credits and loans portfolio as of 31.12.2009 Kind of loan (credit)
Creditor
Sum of debt liability
Maturity date
Multi-currency credit (guaranteed by Gazprom)
Group of commercial banks
125,568,788.35€
18.06.2010
Group of commercial banks
704,692,040.11$
18.06.2010
Multi-currency credit (guaranteed by BASF SE)
Group of commercial banks
67,613,963.00€
18.06.2010
Group of commercial banks
379,449,560.04$
18.06.2010
Bank
OJSC "Gazprom" (cession in favor of LLC «Aragon»)
40,000,000.00 €
15.11.2010
Bank
OJSC "Gazprom" (cession in favor of LLC «Aragon»)
129,230,769.23€
30.12.2010
Shareholder’s
Wintershall Holding AG
113,076,923.08€
30.12.2010
Shareholder’s
Wintershall Holding AG
35,000,000.00€
15.11.2010
Shareholder’s
E.ON RUHRGAS E&P GmbH
25,000,000.00€
15.11.2010
Shareholder’s
E.ON RUHRGAS E&P GmbH
80,769,230.77€
30.12.2010
Total
616,259,674.43 € 1,084,141,600.15 $
The Company has no past-due debts on credits and loans as of 31.12.2009.
47
SEVERNEFTEGAZPROM
SECTION 6 INVESTMENT ACTIVITY
48
SEVERNEFTEGAZPROM
6.1.
Investment measures
The main direction of investment activity of the Company is capital construction (arrangement of Yuzhno-Russkoje field and geological exploration). Volume of the assimilated capital investments in financial year has made 12,150.9 mln RUB, the planned value being – 10,600.0 mln RUB. Increase of the actual indicator compared to the planned is mainly related to correction of construction terms of booster compressor station BCS-1 (stage 1). During the financial year, the objects of the fixed assets were put into operation for the total cost of 19,124.0 mln RUB, including: −
multiple well platforms – 11 pieces;
−
operating wells – 42 pieces (including, producing wells – 36 pieces, monitoring wells – 6 pieces);
−
gas-gathering systems with total length: Diameter Diameter Diameter Diameter Diameter Diameter Diameter
57 mm 89 mm 273 mm 325 mm 426 mm 530 mm 720 mm
-
18,810 running meters, 31,420 running meters, 2,907 running meters, 16,024 running meters, 21,377 running meters, 4,383 running meters, 8,154 running meters,
−
access roads (category IV-v) – 36 687 running meters;
−
highway Urengoy – Krasnoselkup. Site of Yuzhno-Russkoje oil and gas field Beregovoye gas condensate field (category IV) – 68,717 running meters,
−
high voltage line 10 kV – 26,999 running meters;
49
SEVERNEFTEGAZPROM
−
administration and on-site facilities (consists of 2 buildings with section of garages) in Urengoy village – 5,622.3 sq.m (administrative area), 580.9 sq.m (section of garages).
In this regard the planned sum in terms of volume of facilities commissioning for 2009 has made 23,889.3 mln RUB. The deviation of actual volume of facilities commissioning from planned volume has made 4,765.3 mln RUB, including: Object Booster compressor station
million RUB -3,304.6
Technical security equipment, communication, information management system
-380.3
Gas wells clusters (seasonal works), including CGS sites – landscaping, slope protection; access highways – road pavement, roadsides and slope protection; gas-gathering systems, highways, high voltage lines, sites, borrow pits – recultivation of land allotment for return of lands.
-872.3
Other objects of «Field» and «Gas pipeline of commercial gas»
-138.3
Equipment not included in the construction estimate, ready-to-operate -69.7 Total
-4,765.3
The total sum of incomplete construction for the end of financial year has made 8,352.6 mln RUB. During the financial period the volumes of incomplete construction has been decreased by 43.9%. During the financial year the works on reconstruction and modernizations of objects of fixed assets for the total sum 19.2 mln RUB have been performed. The works on design development for modernization of communication center equipment of "Field" and "Commercial gas pipeline" and reconstruction of TEG combustion regeneration blocks were performed.
6.2.
Investment plans The plan of capital investments and commissioning of facilities in 2010 is formed according to the Long-term plan of development and budget of the Company. According to the mentioned plan the primary tasks of the investment program for 2010 are: −
geological exploration on Yuzhno-Russkoje licensed field regarding construction of exploration wells and prospecting and appraisal wells;
−
completing of construction and commissioning of site structures and facilities of Yuzhno-Russkoje field, including BCS (booster compressor station)-1 (1 stage); purchasing or construction of object "Office building in Novy Urengoy";
−
construction of health complex (block of rehabilitation on the territory of rotational camp) (planned commissioning – in 2011);
−
preparatory work on objects: "Gas-gathering collector, third line DN 700, L=16.6 km" and "BCS-1 (2 stage) GPU-16BCS-09 "Urals" 3 units" (planned term of commissioning - 2015);
−
planned works on reconstruction and modernizations of objects, equipment and gas field systems of Yuzhno-Russkoje field.
50
SEVERNEFTEGAZPROM
SECTION 7 ENVIRONMENTAL PROTECTION AND POWER SAVING 51
SEVERNEFTEGAZPROM
7.1.
Environmental protection
The Company has necessary permissions (licenses) on realization of activity on gathering, use, decontamination, transportation, accommodation of dangerous wastes (ОТ-59000262 (89)); on production of fresh ground waters for domestic and industrial water supply of multiple well sites during construction of production wells on Yuzhno-Russkoje field (SLKh № 01383 VE); on use of nameless lakes in the Taz river basin for the water intake for carrying out of drilling works (№ SLKh 00293 BOIIO), and also a number of other licenses. Industrial activity of the Company is objectively related to emissions of toxic substances into the atmosphere. In 2009 there was a tendency of decreasing the emissions of toxic substances discharges into atmospheric air from stationary sources, what is related to decreasing of volumes of drilling works in comparison with 2008. The main share of emissions is related to the purging of equipment and emptying of gas gathering collectors. During the financial period the quality of sewage treatment at the waste-water treatment facilities of Yuzhno-Russkoje gas field has considerably improved. Treatment parameters are within admissible limits. By results of inspection, held by the Federal accredited laboratory (FGU «TsLATI for Urals FD») in 2009 no excess of specifications of maximum permissible emissions of dangerous wastes into the atmosphere, emergency discharges of polluting substances into the environment has been detected.
Specific weight of pollution emissions into atmosphere in 2009 has made: Name
Specific weight (kg/mln cub.m, kg/thous.t.equiv. fuel)
Specific permissible weight (kg/mln cub.m, kg/thous.t. equiv. fuel)
76/66
271/235
Methane - CH4
116.4/101.2
274/238
Nitrogen oxide - NO x
13/11
276/240
Sulfur dioxide - SO2
0.22/0.19
1.04/0.9
Carbon oxide
- CO
52
SEVERNEFTEGAZPROM
Other
7.38 / 6.61
148.96 / 130.1
Total
213/185
971/844
The main purpose of the Company activity in ecological sphere is the maximum possible environmental pollution prevention, decrease of negative effect of production and administrative activities on natural environment. Achievement of this purpose is provided, first of all, by maintenance of technical condition of machinery of the Company on a high level, and also by realization of environmental measures.
Expenses on environmental measures performed in 2009: Expenses, thous. RUB
Name Capital costs, including:
191,652
Land recultivation
165,311
Construction of sewage treatment facilities
26,341
Current expenses, including:
107,299
Protection of atmospheric air
4,252
Water resources conservancy
3,707
Environmental protection from production and consumption
4,566
wastes Recultivation of old stock of exploration, prospecting and appraisal wells
94,774
TOTAL:
298,951
Main indicators of ecological activity: Indicator name
2007
2008
2009
Gross emissions of dangerous wastes into the atmosphere, thous. 1.013 tones
5.237
4.820
Including above-limit, thous. tones
0
0
0
Intake from water resources, mln cub. m
0.101
0.137
0.116
Water discharge, thous. cub. m
30
65
37.5
Wastes per year, thous. tones
25.43
28.02
27.518
Land recultivated area, ha
0
77.778
62.22
Emergency environmental damage (gas),
0
0
0
Current expenses on environmental protection measures, thous. RUB
18,590
15,233
107,299
Legal actions for recovery of damage compensation, caused by breaking of environmental regulations, including resulting from accidents
0
0
0
Investments into Fixed capital, directed to environmental protection, thous. RUB
414.52
103.59
191,652
53
SEVERNEFTEGAZPROM
7.2.
Industrial safety and labor safety
Economic efficiency of industrial activity of the Company depends on reliable, secure operation of the equipment and on qualified actions of personnel, that is why special attention is paid to the matters of labor, industrial and fire safety. Operation of dangerous industrial objects of the Company is performed on the basis and according to the requirements of norms and regulations acting in the sphere of industrial safety. As of the end of financial year, 63 dangerous industrial objects of the Company are identified, they are registered in the State register of dangerous industrial objects and secured from the responsibility for causing harm of life, health or property of other persons and environment in case of emergency or accident. In accordance with established order in the Company, the control of working conditions at workplaces is carried out on a regular basis, over correctness of application of equipment for the personal and collective protection of employees; over observance of safety requirements at operation of high-risk facilities, and also administrative-industrial inspection and supervision of carrying out of requirements, norms and regulations of HSE is performed. Works on maintenance of reliability and operation safety of industrial facilities are fulfilled. For the mentioned measures on a labor safety 9.7 million RUB total were spent during the financial period. Industrial inspection is carried out in accordance with Regulations on industrial inspection of observance of industrial safety requirements at dangerous industrial facilities of OJSC "Severneftegazprom". 6 inspections were carried out by permanent commission of OJSC "Severneftegazprom" within the limits of realization of administrative-industrial inspection (I, II, III and IV levels) over the conditions of labor, fire, industrial and ecological safety, and also with participation of representatives of the state supervision bodies.
54
SEVERNEFTEGAZPROM In accordance with the results of inspections certificates were made, the corrective actions on elimination of violations were developed, responsible persons, execution period of measures and works were determined. In conditions of strict observance of requirements, norms and regulations of labor, industrial and fire safety during the financial period, no accidents, alarms and incidents have been registered over the objects of the Company.
7.3.
Power saving Within the limits of realization of the priority purposes and objectives of environment protection, labor and industrial safety the following power saving and resources saving measures have been developed in the Company, which are planned for realization in 20102011: 1.
Replacement of illumination devices by power saving light-emitting diode projectors and light fixtures providing electric power saving. The purpose is: reduction of consumption of fuel gas by gas-turbine power units (auxiliary power supply complex) and, as a result, decrease of the amount of toxic wastes emissions (CO), contained in off-gases;
2.
Development of non-flare system of gas production. The purpose is: return of losses of low pressure gases of Central Processing Facility into the process cycle of production providing the decrease of losses of extracted gas and, as consequence, decrease of the amount of emissions of dangerous wastes into the atmosphere.
55
SEVERNEFTEGAZPROM
SECTION 8 SOCIAL POLICY
56
SEVERNEFTEGAZPROM
8.1.
Personnel
One of the main priorities of the Company is formation of the highly professional, efficient and team-oriented team. The Company acts as the responsible employer, providing for the employees competitive wages and decent social security. As of December the 31st, 2009 listed number of employees of the Company has made 933 persons.
Staff composition of the Company %: − − − −
managers – 22.6 specialists – 28 common employment – 0.8 workers- 48.4
Educational level of staff % − − − −
postgraduate study – 0.4 higher vocational – 48 intermediate vocational - 16.6 secondary - 35.1
Key directions of personnel department work of the Company is training and development of the personnel, and also work with young professionals. In financial year 67 workers have passed vocational training, 86 managers, specialists and employees have raised their qualification. Within the limits of obligatory certification 376 person were trained, including 159 persons on program “Industrial safety and labor safety", 27 persons - "Ecological safety", 188 persons - "Other technical programs (gas, oil and water inflow, welding, fire-fighting, etc.)”. With the purpose of professional adaptation of young professionals within the frames of modern staff policy of JSC "Gazprom" 7 young specialists of the Company were trained on
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SEVERNEFTEGAZPROM the double-modular program "Training school of young professionals of JSC "Gazprom" in 2009. The total sum of expenses of the Company on training and development of the personnel in 2009 has made 11,164.84 thous. RUB (taking into account business trip expenses). During the financial year the Company fulfilled all the accepted obligations to the personnel regarding social benefits, benefits provided by the Collective agreement of OJSC "Severneftegazprom" for 2007-2009. In 2009 the administrative personnel of OJSC "Severneftegazprom" is transferred to new office buildings of the administrative and amenity building constructed in settlement Urengoy. Delivery of personnel from a Novy Urengoy to a place of work and back is carried out daily by transport means of the Company.
8.2.
Social assistance of native population
The settlements nearest to Yuzhno-Russkoje oil-and-gas field are village Krasnoselkup (regional center, being the location of the Company), located 90 km to the East from the field, and settlement Urengoy located 90 km to the West from the field, which are places of residence of native minorities of the North. At a stage of development and approval of the Project of arrangement of Yuzhno-Russkoje the public consultations of materials of the Environmental impact assessment of activity on field development have been successfully held which also included issues on protection of interests of the native minorities of the North. During the period of industrial activity of the Company, there were no protests against any kinds of activity of OJSC "Severneftegazprom" from the side of the native minorities of the North. With a view of creation of conditions on development of traditional branches of farming and a way of life of low-numbered peoples of the North, rational use of the lands and complex development of field, and also with a view of fulfillment of conditions of the License agreement on conditions of using Yuzhno-Russkoje site of subsurface resources, the Company concluded General agreements with Administrations of municipal formations of
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SEVERNEFTEGAZPROM Krasnoselkup and Purovskiy regions of Yamalo-Nenetsky Autonomous District about mutual cooperation in 2006. Within the limits of the concluded agreements, as the contribution to the arrangement of national settlements and as indemnification of damage to natural resources the Company using own expenses finances the following: − − − − − −
House construction for persons from among native minorities of the North; Capital repair of child welfare and general educational institutions; Bonus payments for teachers of general educational institutions; Carrying out of festive events, Study of students from among native minorities of the North; Other actions directed to habitat preservation of native minorities of regions and social development of areas.
The amount of finance directed by OJSC "Severneftegazprom" to support native minorities of the North, is defined by annually agreements additional to the General agreements. Totally in 2009 the total sum of expenses for financing of the mentioned activities has made 40.7 mln RUB. In September, 2009 within the limits of realization of strategy of observance of balance between economic purposes and ecological and social responsibility of the Company the Plan of measures on public consultations and disclosing of information was developed and put into operation which realization will allow various public groups to express their own point of view about the results of activity of the Company, based on the objective information. Realization of the program incorporated in this document, is called to contribute to the maintenance of meaningful dialogue between the Company and all interested parties that will allow to avoid the risks related to possible untimely reaction to public responses during all life cycle of the project of development of Yuzhno-Russkoje field. Also OJSC "Severneftegazprom" on a regular base informs the population living in the regions of presence about significant events of the Company through municipal mass media. The Company actively participates in social assistance for native minorities of the North and makes all possible efforts for preservation of history, culture, customs and traditions of native minorities of the North.
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SECTION 9 DEVELOPMENT PROSPECTS OF THE COMPANY
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9.1.
Production activity In 2010 the Company plans to undertake: − − − − −
9.2.
Maintaining the design level of gas production in volume of 25 billion m3 per year; commissioning of boostering compressor station (BCS-1, the first section); realization of design decisions and measures on the control over development of Yuzhno-Russkoje field; performance of the plan of geological exploration and increase of reserves; additional site exploration of Turonian (Т1, Т2) gas deposits of Yuzhno-Russkoje field.
License obligations One of priority direction of activity of the Company is to carry out the license agreement in respect of conditions of using the Yuzhno-Russkoje subsurface site. The Company intends to observe strictly the requirements of the license agreement, and also all other provided licenses.
9.3.
Scientific research work According to the Project of pilot development of Turonian gas deposits of Yuzhno-Russkoje field in 2010 the Company plans to start the construction of experimental multibranch well with carrying out of a complex of research works. Also the Company plans to carry out some scientific researches and developments directed to effective operation of field. In total for these purposes in 2010 the Budget of the Company provides financing in the amount of 75.59 mln RUB.
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9.4.
Project financing In 2010 the Company plans to attract the long-term project financing provided by the consortium of foreign banks, for the period up to 7 years with the opportunity of advanced repayment. The prime purpose of involvement of project financing is refinancing of existing debts on the short-term multi-currency loans received by the Company under the guarantees of the shareholders, for the sum 1.084 billion US dollars and 193 million euro. Involvement of project financing will allow the shareholders not to represent themselves as guarantors on credit obligations of the Company. By the end of 2010 the Company plans using its own expenses to repay the loans of shareholders nominated in euro, for the sum of 423 million.
9.5.
Ecological and social management Development of Yuzhno-Russkoje field is carried out in accordance with the requirements of the Laws of Russian Federation, including, regarding observance of social and ecological norms and standards. The Company endeavors to carry out requirements of Equator Principles, and also the International Standards in the field of ecological and social management, established by the International Financial Corporation. In 2010 it is planned to pass the certification of International Securities Market Association on conformity to requirements of international standards ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007.
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APPENDIX 1 REPORT ON COMPLIANCE WITH THE CODE OF CORPORATE CONDUCT 63
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Report on compliance with the code of corporate conduct The Company complies with the following provisions of the Code of Corporate Conduct recommended for application by joint-stock companies according to the Order issued by the Federal Commission for the Securities Market of Russia under No. 421/r on April 4, 2002. The shareholders must have access to the list of persons entitled to take part in the general meeting of shareholders beginning from the date when information about holding the general meeting of shareholders was published and until the closure of the general meeting of shareholders held in person, and in case of an absentee general meeting of shareholders – prior to the deadline fixed for accepting voting bulletins. The shareholder must have an opportunity to bring in items for the agenda of a general meeting of shareholders or require the convention of a general meeting of shareholders without presenting an extract from the register of shareholders if the shareholder’s right to shares is registered with the system of maintenance of the register of shareholders. The Articles of Association must provide for authorities of the Board of Directors related to annual approval of the Company’s financial and economic plan. Absence of people found guilty of committing crimes in the field of economic activities or crimes against state authorities, interests of state service and local governments or people, on which administrative punishments were imposed for civil injuries in the field of entrepreneurial activities, finances, taxes, charges or securities market, among members of the Company’s Board of Directors. Persons being a general director, a member of the management board or an employee of a legal person competing with the Company must not occupy positions in the Company’s Board of Directors. The Company’s Articles of Association must provide for the requirement to elect the Board of Directors by cumulative voting. Sessions of the Company’s Board of Directors must be held for the year of preparing the annual report with the frequency of not less than once every sox weeks. Presence of the Company’s internal documents approved by the Board of Directors providing for the procedure of forming and operation of standing committees of the Board of Directors. The procedure of approving of operations exceeding the limits of the Company’s financial and economic plan must be provided in the Company’s inner documents. A special official (the Company’s secretary) in charge of compliance with the procedural requirements guaranteeing the implementation of rights and legal interests of the Company’s shareholders by the Company’s bodies and officials must be employed by the Company. The Company’s Articles of Association or internal documents must provide for the requirement about approval of a large-scale transaction prior to its conduction. The Company’s Articles of Association must not exempt the transferee from the obligation to offer the shareholders to sell the ordinary shares held by them in the Company upon redemption. Presence of a special department in the Company providing for compliance with the inner control procedures (audit service). Absence of people found guilty of committing crimes in the field of economic activities or crimes against state authorities, interests of state service and local governments or people, on which administrative punishments were imposed for civil injuries in the field of
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SEVERNEFTEGAZPROM entrepreneurial activities, finances, taxes, charges or securities market, among members of the audit service. Persons being members of the Company’s executive authorities as well as people being a general director, member of the management bodies or employee of a legal person competing with the Company must not occupy positions in the audit service.
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APPENDIX 2 INFORMATION ON INTERESTED PARTY TRANSACTIONS AND MAJOR TRANSACTIONS MADE IN 2009 66
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Information on interested party transactions and major transactions made in 2009 List of the Company’s transactions in the reporting year, considered as interested party transactions in conformance with Federal law «On joint stock companies».
Essential conditions
Persons, interested in settlement of a transaction
Management body, that made a decision on transaction approval
1.
Agreement of Sale and Purchase of Wells dated 30.04.2009 between the Company (Buyer) and OJSC "Zapsibgazprom" (Seller). The Seller shall transfer into ownership of the Buyer wells under construction at Yuzhno-Russkoje oil and gas field, owned by the Seller and free of third party rights. The Agreement amount is 391,583,122 RUB, including VAT.
Stockholder of the Company – OJSC "Gazprom"
Board of Directors, minutes № 12/2009 dated 10.04.2009
2.
General Agreement № 34/SNGP-2009 dated 11.03.2009 with «Gazprombank» (OJSC) on the order of deposit operations execution. The Agreement determines the order and conditions of conclusion and execution of deposit account contracts between the bank and the Company.
Stockholder of the Company – OJSC "Gazprom"
Board of Directors, minutes № 12/2009 dated 10.04.2009
3.
Second Compensation Agreement with BASF SE dated July 2009. Subject of the Agreement - OJSC «Severneftegazprom» shall pay BASF SE a commission fee for granting guarantee related to Multicurrency Credit Agreement, concluded by the Company and the group of financial institutions headed by Société Générale bank. The Agreement amount does not exceed the amount equivalent to 25,000,000 EUR.
Stockholder of the Company – Wintershall Holding AG.
Board of Directors, minutes dated 15.06.2009 № 15/2009
4.
Agreement № В21-S73509 dated 27.10.2009 with LLC «Gazprom transgaz Surgut», according to which LLC OJSC «Gazprom transgaz Surgut» shall render services of sales gas pipeline «Yuzhno-Russkoje oil and gas field – Compressor station «Purtazovskaya» maintenance. Period of services rendering: from 01.01.2010 till 31.12.2010. The Agreement amount is 46,279,813.58 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
5.
Agreement № С1-10/001 dated 21.10.2009 with OJSC «Gazprom gazbezopasnost», according to which OJSC «Gazprom gazbezopasnost» shall render services of facilities preventive maintenance with the purpose of gas, water and oil showings as well as accidental release and blowouts prevention. Period of services rendering: from 01.10.2010 till 31.12.2010. The Agreement amount is 5,626,830 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
6.
Agreement № 115/SNGP-2009 dated 31.07.2009 with OJSC «Electrogaz» OJSC «Gazprom», according to which OJSC «Electrogaz» OJSC «Gazprom» shall perform start-up and commissioning works «under load» at well pads: from 01.08.2009 till 31.10.2009, expiration date – December 2009. The Agreement amount is 130,115.82 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
7.
Agreement № 127/SNGP-2009 dated 17.08.2009 with OJSC «Electrogaz» OJSC «Gazprom» branch «Novourengoyelectrogaz», shall perform works of preventive electrical modification of the gas treatment unit. Works performance time: beginning - July 2009, termination – December 2009. The Agreement amount is 2,999,823 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
8.
Agreement № 09-145 dated 05.10.2010 with LLC «Gazprom bureniye» in accordance with which LLC «Gazprom bureniye» leases out special equipment to the Company. Lease period: from 01.12.2009 till 31.12.2010. The Agreement amount 52,414 RUB per month including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
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9.
Supplementary Agreement № 10 dated 07.07.2009 to Agreement № 05125 dated 08.12.2005 with OJSC «YUZHNIIGIPROGAZ», according to which OJSC «YUZHNIIGIPROGAZ» shall develop a detailed design of peat borrow. Works performance time: beginning - September 2009, termination – October 2009. The Agreement amount is 177,584.4 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
10. Supplementary Agreement № 6 dated 22.09.2009 to Agreement № 05125АН dated 21.03.2006 with OJSC «YUZHNIIGIPROGAZ», according to which OJSC «YUZHNIIGIPROGAZ» shall render field supervision services. Period of services rendering: till fulfillment of obligations. The Agreement amount 1,180,000 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009 № 4/2009
11. Agreement № С1-10/001 dated 21.10.2009 with LLC «Gazprom gazobezopasnost», in accordance with which LLC «Gazprom gazobezopasnost» shall render services of providing blowout safety when constructing and testing wells. Works performance time: beginning - January 2010, termination – December 2010. The Agreement amount is 5,724,180 RUB including VAT.
Stockholder of the Company – OJSC "Gazprom"
Annual general meeting of shareholders, minutes dated 01.07.2009г. № 4/2009
12. Agreement № 134/SNGP-2009 dated 09.09.2009 of sale and purchase the Company’s additional common stock, distributed by closed subscription, between OJSC «Severneftegazprom» and Gazprom Gerosgaz Holdings B.V. The Agreement amount is 191,552 RUB.
Stockholder of the Company – OJSC "Gazprom"
Board of Directors, minutes dated 21.08.2009 № 17/2009
13. Agreement № 135/SNGP-2009 dated 09.09.2009 of sale and purchase of Stockholder of preference stock of «В» type, distributed by closed subscription, with Gazprom the Company – Gerosgaz Holdings B.V. The Agreement amount – 1,065,585,000 RUB. OJSC "Gazprom"
Board of Directors, minutes dated 21.08.2009 № 17/2009
14. Agreement № 136/SNGP-2009 dated 09.09.2009 of sale and purchase of Stockholder of preference stock of «C» type, distributed by closed subscription, with Wintershall the Company – Holding Aktiengesellschaft. The Agreement amount – 573,724,000 RUB. Wintershall Holding AG, members of the Board of Directors of the Company Reinier Zwitserloot and Ties Tiessen
Board of Directors, minutes dated 21.08.2009 № 17/2009
15. Supplementary Agreement № 4 dated 08.09.2009 to Gas Supply Agreement №25 Stockholder of Pk-2007 dated 13.12.2007, concluded with OJSC «Gazprom». Technical the Company changes. OJSC "Gazprom", member of the Board of Directors of the Company Medvedev А.I., Podyuk V.G., Golubev V.А., Pavlova О.P.
Board of Directors, minutes dated 21.08.2009 № 17/2009
16. Supplementary Agreement № 4 dated 25.09.2009 to Gas Supply Agreement №28 Stockholder of Pk-2007 dated 13.12.2007, concluded with CJSC «Gazprom URGM Trading». the Company – Technical changes. OJSC "Gazprom"
Board of Directors, minutes dated 21.08.2009 № 17/2009
17. Gas Supply Agreement № 144/SNGP-2009 dated 29.10.2009 with CJSC «Gazprom URGM Development» (Buyer). The Supplier shall supply to the Buyer flammable natural gas, and the Buyer shall receive gas and pay for it. The date of beginning of supply is 01.11.2009. The price of the gas supplied during the period from 10 a.m. of 01.11.2009 till 10 a.m. of 01.01.2010 is 749 RUB excluding VAT for 1,000 cubic meters.
Stockholder of the Company – OJSC "Gazprom"
Extraordinary general meeting, minutes dated 29.10.2009 № 4/2009
18. Supplementary Agreement № 5 dated 29.10.2009 to Gas Supply Agreement №25 Stockholder of Pk-2007 dated 13.12.2007 with OJSC «Gazprom». Subject – change in gas the Company -
Extraordinary general meeting,
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supply volume for 2009. The price of the gas supplied within the period from 10 a.m. of 01.11.2007 till 10 a.m. of 01.01.2008 (year of supply - 2007) amounts to 720 RUB per 1000 cubic meters of gas. The price of the gas supplied within the period from 10 a.m. of 01.01.2008 till 10 a.m. of 01.01.2009. (year of supply 2008), amounts to 974.0 RUB per 1,000 cubic meter of gas. The price of the gas supplied within the period from 10 a.m. of 01.01.2009 till 10 a.m. of 01.01.2010. (year of supply - 2009), amounts to 749.0 RUB per 1,000 cubic meters of gas.
OJSC "Gazprom", members of the Board of Directors Medvedev А.I., Podyuk V.G., Golubev V.А., Pavlova О.P.
minutes dated 29.10.2009 № 4/2009
19. Supplementary Agreement № 229/SNGP-2009 dated 26.12.2009 between LLC «Aragon» (Lender 1), Wintershall Holding AG (Lender 2), E.ON Ruhrgas E&P GmbH (Lender 3) and the Company (Borrower). Subject – maintenance of balance of original amounts of existing loans, according to Loan agreements, at the level of 40 (according to Loan agreement № 19/06-В dated 02.03.2006):35 (according to Loan agreement № 19/06-В/WH-4 dated 12 .11.2007):25 (according to Loan agreement № 158/SNGP-2009 dated 27.10.2009), concluded between the Borrower and each Lender.
Stockholder of the Company – E.ON Ruhrgas E&P GmbH and Wintershall Holding AG, members of the Board of Directors Ties Tiessen, Reiner Seele and Frank Sivertsen
Board of Directors, minutes dated 25.12.2009 № 23/2009
20. Supplementary Agreement № 230/SNGP-2009 dated 26.12.2009 between LLC «Aragon» (Lender 1), Wintershall Holding AG (Lender 2), E.ON Ruhrgas E&P GmbH (Lender 3) and the Company (Borrower). Subject – maintenance of balance of original amounts of existing loans, according to Loan agreements, at the level of 40 (according to Loan agreement № 19/06-В dated 02.03.2006):35 (according to Loan agreement № 19/06-В/WH-4 dated 12 .11.2007):25 (according to Loan agreement № 158/SNGP-2009 dated 27.10.2009), concluded between the Borrower and each Lender.
Stockholder of the Company – E.ON Ruhrgas E&P GmbH and Wintershall Holding AG, members of the Board of Directors Ties Tiessen, Reiner Seele and Frank Sivertsen
Board of Directors, minutes dated 25.12.2009 № 23/2009
The list of the Company’s transactions in the reporting year, considered as major transactions in conformance with Federal law «On joint stock companies». Essential conditions
Management body, that made a decision on transaction approval
1.
Agreement dated 10.07.2009 with the group of banks headed by Société Générale bank on extension of multicurrency credit, guaranteed by OJSC «Gazprom», in the amount equivalent to 650 million EUR.
Board of Directors, minutes dated 15.06.2009 № 15/2009
2.
Agreement dated 10.07.2009 with the group of banks headed by Société Générale Bank on extension of multicurrency credit, guaranteed by «BASF SE», in the amount equivalent to 350 million EUR.
Board of Directors, minutes dated 15.06.2009 № 15/2009
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APPENDIX 3 CONTACTS AND REFERENCE INFORMATION
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Contact and reference information Location address The Company is registered at the address: the Russian Federation, 629380, Yamal-Nenets Autonomous District, Krasnoselkup region, the village of Krasnoselkup, Lenina str., 22.
Postal address of the Company The Russian Federation, 629300, Yamal-Nenets Autonomous District, the city of Novy Urengoy, P.O.B. 1130.
Telephone/fax tel.: +7 (3494) 248-106 fax: +7 (3494) 248-116 tel.: +7 (495) 510-29-30 fax: +7 (495) 510-29-31
E-mail address sngp@msk.sngp.org
Web page address http://www.draga.ru/issuers_information/issuers_list/831/
The Company’s code according to ОKPO (Russian National Classifier of Businesses and Organizations) 48731500
The Company’s Tax Registration Reason Code (KPP) 891450001
Taxpayer Identification Number (INN) 8912001990 The Company is registered with Interregional Inspection of the Ministry of Taxation of the Russian Federation №3 for Yamal-Nenets Autonomous District
Primary State Registration Number (OGRN) 1028900699035
Bank information Beneficiary bank: «Gazprombank» (OJSC) in Moscow, settlement acount 40702810600000002179, BIK 044525823, correspondent account 30101810200000000823.
Contact information Structural subdivision in charge of stockholders relations — Corporate Department of OJSC «Severneftegazprom» Head of the Department: Lobanova Yuliya Anatolyevna tel./fax: e-mail:
+7 (495) 510-29-33 LobanovaUA@msk.sngp.org
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