Rosneft's board of directors approves strategy up to 2030
MOSCOW. Dec 21 (Interfax) - The board of directors of Rosneft has approved the corporate strategy titled Rosneft-2030: Reliable Energy and Global Energy Transition, according to a press release posted on the Russian oil company's website.
"Rosneft has achieved most of the targets set in the Rosneft-2022 strategy ahead of schedule by the end of 2021. The new strategy is built upon the achievements of the previous strategic cycle and is also adjusted to current trends related to the low-carbon agenda, the global energy transition, and the need for reliable supplies of affordable and clean energy," according to the press release.
The Rosneft-2030 strategy envisages reducing the company's carbon footprint while further improving operational and financial efficiency.
According to the press release, Rosneft sets a net zero 2050 target, with the company attaining the ambitious target through a number of actions aimed at reducing emissions, including utilizing low-carbon power generation, zero routine flaring, energy-saving technologies, carbon capture and storage technologies, as well as utilizing natural forest offsets.
"Achieving net carbon neutrality by 2050 will be possible by implementing a number of strategic emission-reduction initiatives by 2030. In particular, this implies a 25% reduction in emissions from Scope 1 and 2 compared to 2020, as well as implementation of additional measures for natural sequestration, and sequestration and storage of carbon. As an interim target, it is projected to reduce emissions from Coverage 1 and 2 by 5% by 2025. It is also planned to achieve zero routine flaring of associated petroleum gas five years sooner than anticipated under the 2035 Carbon Management Plan and in line with the World Bank's Zero Routine Flaring by 2030 initiative," Rosneft said.
"The company will strive to reduce the intensity of methane emissions to less than 0.2%, gradually convert its own vehicles to low-carbon fuels, expand the CNG network and increase quantity of EV charging points at Rosneft's retail sites, and produce aviation fuel with a reduced carbon footprint," according to the press release.
"The Rosneft-2030 strategy sets the strategic goals and priorities for both upstream and downstream. This will enable the businesses to improve efficiency further and to support shareholder value growth," the company said.
"Rosneft aims to maintain its leadership in production costs. High efficiency in the portfolio of production assets allows the company to keep its lifting costs at a level significantly lower than the industry average for many years," according to the press release.
"In terms of upstream, the Rosneft-2030 strategy target is 330 million tonnes of oil equivalent in hydrocarbon production. The key drivers of production growth relative to the current level will be the flagship Vostok Oil project; ongoing large new projects, including the Russkoye, Yurubcheno-Tokhomskoye, Severo-Danilovskoye, and Severo-Komsomolskoye fields, respectively; as well as the Rospan and Kharampur gas projects and others. The share of gas in total hydrocarbon output will grow to 25% by 2025. In terms of refining, the aim is at growth of light product yields in Russia to 69%," Rosneft said.
"Shareholder payouts growth and enhancing yield and efficiency of the assets remain among the key company strategic targets. Rosneft aims to secure stable free cash flow in the medium term and to increase it in the longer term. Achievement of a set of strategic targets is expected to contribute to more than doubling of the company's FCF by 2030," according to the press release.
When commenting on the approval of the Rosneft-2030 strategy, Rosneft CEO Igor Sechin said that, "The board of directors has approved the new strategy and laid the foundation for the company's development for decades to come. The new strategy supports free cash flow growth, which is expected to more than double by 2030, and facilitates sustainable growth in the company's shareholder and investor value. Carbon-reduction objectives confirm the company's status as a responsible energy supplier and one of the leaders in energy transition in Russia."