The new Strategy basis will be the development of a business that meets the highest ecological, environmental and industrial safety standards.
Technological potential development is one of the key items of the Rosneft-2022 Strategy. The company pays special attention to innovation and breakthroughs, recognising the technological leadership as an essential element for competitive performance on the oil market.
In order to achieve the set of goals the Company needs to implement a number of strategic initiatives as follows:
- 1. To keep the leadership by unit costs in production with a decrease in unit operating costs by 2-3 % per year under comparable conditions.
- 2. To create a stable technological advantage and intensify the production. The company intends to replace at least 100 % of the produced liquid hydrocarbons. In the coming years it is planned to actively develop a number of new promising projects and to increase the output to 250 Mmt by 2022 through natural growth. It is planned to achieve a 5 % increase in the average flow rate of new wells, to reduce the cost of well construction by 10 % and significantly increase the share of horizontal wells due to the optimization of the capital costs and development process of the RF onshore fields.
- 3. To develop gas business. The implementation of the key gas production projects on time and within the budget to increase the positive free cash flow in 2018-2022 and will allow Rosneft to occupy 20 % on Russian gas market with production growth to over 100 bcm. An important condition for the gas business development is an increase of producibility and creation of a favorable regulatory environment, in particular to get access to gas export. This will effectively monetize the company's gas resources through the export of pipeline gas to new European consumers.
- 4. To strengthen the technological effectiveness of the service business. The Company will continue to improve the production performance of the service business including reduction of nonproductive time and well drilling time by 5 %, increase of well workover teams' efficiency by 20 % and drilling rigs use efficiency by 20-30 %.
- 5. To develop petrochemical business by allocating an existing portfolio of assets into a separate business with separate financial records. Strategic tasks are a change in the basket of products, long-term contracts, optimization of capacity utilization and improvement of the level of integration with the company's refineries. The availability of raw materials in close proximity to existing and prospective assets will boost the profitability of this business to the level of leading rivals. New projects will be implemented with the involvement of partners and project financing.
- 6. To improve the quality of investment and project management. The priority in project management is completion of development projects at the company’s refineries in Russia, which will drive up their profitability. Rosneft is also planning to implement highly effective projects on de-bottlenecking. Among other tasks is fulfilment of the program of operational efficiency increase based on the benchmarking using the Solomon data (refineries efficiency index), reduction of operating costs, fuel consumption and losses, as well as increasing mean time before failure at refineries with the help of massive digitalization among other measures.
- 7. To provide technological development and digitalization. The programs Digital Oilfield, Digital Plant, Digital Supply Chain and Digital Filling Station, which are being implemented, will allow the company to progress to a new quality level of modern information business, to boost reliability and economic feasibility of production and to reduce losses.
- 8. To adopt the holding management structure, to implement a pilot project in retail. In order to step up the efficiency of retail marketing and increase return on capital, the company plans to boost the share of non-fuel retail by expanding the variety of goods and services offered, to develop the retail network in the regions, to improve customer service package at filling stations, to develop small wholesale operations, to optimize costs and reduce losses.