Regular meeting of the Tatneft Board of Directors was held

On 25 March in Kazan PJSC TATNEFT’s Board of Directors held its regular meeting presided by Tatarstan President Rustam Minnikhanov, who is the chairman of the Board.

The Board reviewed the results of the TATNEFT budget execution for two months of 2022 and approved the budget for April and the second quarter of the current year.

The participants of the meeting got acquainted with the work of the Exploration and Production business area in 2021. The Company increased crude oil production concordant with the approved business plan in accordance with the parameters of the OPEC+ deal, producing 27.8 million tonnes of crude oil, which was 7 percent higher than in 2020. The crude oil production volume increased due to putting into operation the well stock, which was temporarily not operated due to OPEC+ production restrictions, and the increase in the volume of geological and technical activities in the second half of the last year. The well stock drilled in 2020, but not put into operation, was also commissioned.

The Board of Directors got acquainted with the development concept of the TATNEFT Group in the face of new challenges. The main objective of the Company is to maximize the total shareholder return and the welfare of investors, while respecting the interests of all stakeholders and taking into account the goals of sustainable development.

The Company's project portfolio until 2030 accounts for more than 1.7 trillion roubles and about 40% of this amount is accounted for by businesses other than the Exploration and Production block. Regardless of the external scenario, all projects and businesses within the Group have a margin of safety and will provide for a return on the capital used to be above the cost of raising it. In the key area - Exploration and Production - the Company retains the ability to effectively use its own proven oil reserves, which are estimated at 810 million tonnes as of the beginning of 2021. Under favorable conditions this allows increasing crude oil production to the level exceeding 38 million tonnes per year. The use of modern technologies, including digital algorithms for managing crude oil production facilities, 3D modeling, smart fields, as well as the re-equipment of drilling crews and well maintenance and workover crews, enable the Company to achieve production goals more effectively.

The petrochemical complex is one of the growth key points, within the framework of which projects focused on the domestic market, import substitution and achieving maximum synergy with the TANECO complex are being implemented. The output of chemical products at the enterprises of the TATNEFT Group should exceed 1.6 million tonnes per year by 2030.

The Company sees additional growth potential in business areas that also focus on the domestic market - tyre manufacturing business, composite materials, energy, including the renewable energy sources. The development of innovative solutions within the biotechnological area, which will allow creating unique proposals taking into account the "green agenda" will give a new impetus to traditional businesses. The long-term objectives of the Company, inter alia, include increasing the sustainability of the business with increasing the share of non-fuel business operations up to 20% in operating profit by 2030.

Improvements of the holding management system, introduction of new approaches to labor organization, IT solutions throughout the entire production chain allow TATNEFT to raise new opportunities in the implementation of the projects.

The Company reaffirms the goals to achieve carbon neutrality by 2050. A portfolio of environmental projects has been formed to achieve intermediate targets for reducing greenhouse gas emissions. The main levers for decarbonization will be to improve energy efficiency, increase the utilization of associated petroleum gas, reduce methane emissions, and, in the future after 2025, expand carbon dioxide recovery and disposal.

The priority tasks will also include solving the tasks of maintaining social stability in the regions of the Company's production activities.

The Board of Directors got acquainted with consolidated financial statements of the TATNEFT Group under IFRS for 2021. As a result of operations, the value of the Group's assets increased by 19% and amounted to 1 trillion 502 billion roubles. The share capital of the Group 2021 amounted to 938 billion roubles as of December 31, which was by 13% more than the value in 2020. The EBITDA increased by 63% and amounted to 293 billion roubles in 2021. The shareholder's benefit, formed in accordance with International Financial Reporting Standards, reached the amount of198 billion roubles, which was by 92% more than in 2020. Profitability indicators of the TATNEFT Group demonstrated a high level compared to other companies in the industry. At the same time, the further growth in the Company's profitability in 2021 was hampered by an increased tax burden. The leverage ratio (net debt with respect to EBITDA) was the lowest in the industry.

The results of the TATNEFT's financial statements audit in accordance with IFRS and the positive Opinion of the JSC PricewaterhouseCoopers Audit company were presented to the meeting participants.

The Board of Directors approved a new version of the Corporate Management Code of the TATNEFT, which includes clarifications, including those related to the requirements of the current legislation of the Russian Federation and the Articles of the Company.

The amendments to the Regulations for the preparation and holding of meetings of the Board of Directors were approved during the meeting, and a number of other issues were considered as well.