COVID-19 response across Gazprom Neft filling stations

A range of pandemic management measures have been deployed across Gazprom Neft filling stations since March 2020 to ensure the safety of both visitors and staff. Filling stations are fitted with ultraviolet antibacterial lighting, with plexiglass sneeze guards installed at checkouts. Employees wear masks and gloves and regularly disinfect and clean the premises.

The development of sales infrastructure, digital customer services and improved customer journey formats set the stage for post-pandemic growth.

Volunteer support programme

As part of the Gazprom Neft for Volunteers campaign, the company supported the regional centres of the national #WeTogether movement and other non-governmental and social organisations. To help them cope with the increased workload, Gazprom Neft issued over 1,600 free fuel cards with a nominal value of more than 200,000 litres to volunteers who delivered food and essential goods to the most at-risk people and who drove district doctors and other healthcare professionals to patients.

In addition, during the harshest period of lockdown in the spring of 2020, the company supported ordinary motorists as part of its “On Our Way!” loyalty programme. The Gazprom Neft filling station network maintained the statuses of loyalty programme members, despite the decrease in traffic in Russia. Members who did not purchase the required amounts of fuel to keep their bonus percentage when tanking up and purchasing goods at filling stations had their statuses automatically extended for three months.

Sales network

In 2020, Gazprom Neft consolidated its network in 45 Russian regions. New filling stations were opened in Moscow and the Moscow, Voronezh, Irkutsk, Kaluga, Kostroma, Leningrad, Lipetsk, Nizhny Novgorod, Ryazan, Samara, Sverdlovsk, Smolensk, Tomsk and Tyumen Oblasts, as well as in the Altaisky, Krasnodar and Krasnoyarsk Krais, and the Republics of Adygea, Altai and Mordovia.

Outside Russia, the Gazprom Neft retail network comprises 622 filling stations, including 202 filling stations in CIS countries (Belarus, Kazakhstan, Kyrgyzstan and Tajikistan) and 420 in South-East Europe (Bosnia and Herzegovina, Bulgaria, Romania and Serbia).

During the year, the company continued to develop its network of OPTI partner filling stations. The OPTI network currently covers 33 regions, including eight new regions, where filling stations were opened in 2020. OPTI’s business model comprises an IT platform, support for business processes from Gazprom Neft and marketing support, all of which enhance the performance of filling stations. The cutting-edge IT platform enables partners to monitor sales of fuel and related products, and track key metrics online. Upon signup, independent market players receive a package of services: their stations are rebranded and they receive access to an automated filling station management system and an online account, as well as fuel quality monitoring and support for daily business processes. Digital tools to manage customer traffic are also available to partners.

Retail network, number of filling stationsOperating stations only.
Product 2016 2017 2018 2019 2020
RussiaIncluding franchised filling stations. 1,244 1,255 1,260 1,458 1,509
CIS 200 188 201 205 202
EuropeIncluding franchised filling stations. 422 423 417 414 420
TOTAL FILLING STATIONS 1,866 1,866 1,878 2,077 2,131
Source: company data
Focus on improving motor fuel sales

In 2020, a digital system was introduced to manage the company’s own fuel truck fleet that delivers fuel to Gazprom Neft filling stations in Moscow, St Petersburg and a string of other Russian cities. The system automatically plans routes based on the availability of petroleum products at filling stations and tank farms, ensuring an uninterrupted supply of fuel.

Each fuel truck carries over 30 sensors, which transmit up to 2 million readings through the internet on the vehicle’s location, the trip progress and the condition of the equipment. The sensors detect the level of petroleum products in the different sections of the fuel truck. All sensors are integrated with a digital platform, which operates as a response centre.

In 2020, the company started a comprehensive programme to embed advanced energy-efficient technology across the network of Gazprom Neft filling stations. Over 600 filling stations were upgraded. Infrastructure upgrades included:

  • replacing lighting with energy-efficient LEDs;
  • using ambient light sensors to automatically switch lighting at stations on and off depending on the time of day; and
  • introducing heat-recovery ventilation across filling stations.

Heat-recovery ventilation alone recovers and returns 60%–95% of heat to the system. This solution now comes as part-and-parcel of the standard design of new Gazprom Neft filling stations.

As part of its lean operations and environmental stewardship policy, the company launched its first ever solar-powered filling station, located in the Yaroslavl Oblast. A 5 kW solar power plant serves as the main source of electricity under sunlight and is able to supply up to 5% of the filling station’s annual power consumption.

Sales of motor fuel and NGV fuel

Due to the COVID-19 pandemic and lockdowns, the motor fuel markets shrank across the regions and countries in which Gazprom Neft filling stations operate. In this context, total retail and small-scale wholesale sales of motor fuels at the company fell by 5.9% year-on-year to 18.4 mt.

Despite the decline, the Gazprom Neft strengthened its position on the Russian retail petroleum-products market. The company was able to grow its regional retail market share by 0.4 percentage points year-on-year to 22.6% by actively developing digital customer services, opening up new consumer engagement formats, promoting customer health and safety, running effective marketing campaigns and taking measures to boost business performance and maintain resilience.

In 2020, the share of premium fuels, branded G-Drive and G-Diesel, continued to grow in total retail sales of motor fuels. Sales of branded gasoline and diesel fuel in Russia and other CIS countries in 2020 totalled 716,000 tonnes, enabling the company to ramp up the share of G-Drive branded gasoline sales from 7.9% to 8.3% in total sales. Sales of premium branded fuels were also supported by the fact that the number of filling stations selling this fuel grew to 1,249.

The increase in LPG consumption as a vehicle fuel in Russia, as well as the company’s competitive edge in this market translated to a 17.6% year-on-year growth in LPG sales to 127,000 tonnes.

Retail sales and small-scale wholesale of motor fuels and LPG
Metric 2016 2017 2018 2019 2020
Retail sales and small-scale wholesale of motor fuels, mt 19.26 20.01 20.40 19.51 18.35
including in Russia 15.17 15.92 16.16 15.39 14.62
Retail sales of motor fuels, mt 10.45 11.04 11.34 10.49 9.77
including in Russia 8.25 8.84 9.12 8.30 7.85
Sales of liquefied petroleum gas, thousand tonnes 115 97 120 108 127
including in Russia 69 56 75 64 83
Source: company data
Engagement with customers

Amid the COVID-19 pandemic, digitising company products and services has become pivotal to our engagements with customers. In 2020, digital multifunctional services allowing customers to interact with the company online exploded in popularity. The company currently offers a wider range of targeted digital solutions to owners of private cars, trucks and light commercial vehicles, as well as taxi companies, independent filling stations and distributors of OPTI 24 service cards. The company’s digital services platform encompasses:

  • a line-up of virtual bank, service and loyalty cards;
  • the Gazprom Neft retail network and AZS.GO mobile apps;
  • online accounts and online services for corporate customers;
  • the Webneft online trading platform.
Digital products and services

In 2020, our full line-up of cards became available to customers virtually, from the AutoDrive Start co-branded bank card, through the Android and iOS “On Our Way!” loyalty cards for Gazprom Neft’s filling station network, to the OPTI 24 virtual service card for professional motorists. In total, about 1.9 million virtual cards have been issued to customers. By late 2020, 42% of new customers were issued an “On Our Way!” loyalty card through the mobile app.

The company’s mobile apps – the Gazprom Neft retail network mobile app and AZS.GO app – offer users a range of new payment options to make their fuel purchases: bank card, “On Our Way!” points, Apple Pay and Google Pay, while the AZS.GO app also offers a group payment option. The company has added new features to AZS.GO, and launched a unique service for professional motorists – an online fuel payment option for OPTI 24 service card holders. This service is offered automatically, with ID verified by the user’s phone number. Mobile fuel payment is available at 95% of Gazprom Neft filling stations in Russia.

All stages of the customer journey are now available online to corporate OPTI 24 card holders: from signing agreements to topping up fuel accounts, something that takes just a few seconds with a number of payment options available. The OPTI 24 online account contains a suite of basic tools for business: analytics, a balance checker, the ability to set limits, bulk driver provisioning and electronic document management. 94% of the company’s corporate customers have an online account.

Petroleum products sales to corporate customers

The company’s product business units maintain their focus on growing sales volumes, but with a new priority on quality metrics, including the depth of business development and the product range.

All business units at the Downstream Division are improving their products, developing new sales channels and enhancing service quality.
Supplies of aviation fuel

The suspension of international air travel from April 2020 and lower number of domestic flights due to the COVID-19 restrictions led to a 33.5% year-on-year decline in premium aviation fuel sales in 2020. However, despite these unprecedented headwinds, Gazpromneft-Aero, the company’s aviation fuel operator, maintained uninterrupted supplies to all government and corporate customers, including our core consumer base at the key airports of the Moscow air hub and at Trans-Siberian destinations.

The company leveraged the strong partnership between Gazpromneft-Aero and airlines to retain its leadership in the highly competitive Russian market amid a substantial drop in demand and fuel glut, with the company’s market share in 2020 estimated at 25.7%.

At 2020-end, Gazpromneft-Aero’s network totalled 294 airports across 69 countries, including Russia. In 2020, the network grew by 11 airports, including one airport in Russia (Baikal airport in Ulan-Ude) and 10 airports abroad (two in both China and India, and one in France, Italy, Mongolia, the Netherlands, Spain and Tanzania). At 2020-end, Gazpromneft-Aero’s sales network comprised 62 refuelling complexes in Russia (including 48 owned and the rest leased) and one refuelling complex in Kyrgyzstan. In addition, Gazpromneft-Aero supplies jet fuel to its customers through third-party refuelling complexes at 10 Russian airports and at 221 airports abroad.

Gazpromneft-Aero seeks to expand its footprint, including by digitising its operations and building a digital ecosystem. Prime examples include refueling planes using blockchain technology.

Gazprom Neft is the first Russian operator to deploy a blockchain-based payment solution for aircraft refuelling

Gazpromneft-Aero, the operator of Gazprom Neft’s aviation fuel business, successfully tested its own digital aircraft refuelling system, the blockchain-based Smart Fuel. With this new solution, aircraft crews are now able to remotely monitor all parameters of aviation fuel supply, instantly pay for fuel directly when refuelling their aircraft (sidestepping the need for advance payment) and promptly receive accounting documents in a digital form.

As part of real environment testing, over 100 scheduled flights were successfully refuelled and instantly paid for with Smart Fuel. Refuelling requests are filed, payments are made and accounting documents are exchanged online through apps installed on pilots’ and refueller operators’ tablets. The new technology increases financial transaction speeds by an order of magnitude and reduces labour costs for airlines and fuel suppliers.

Aircraft refuelling (mt)
Metric 2016 2017 2018 2019 2020
Premium sales 2.62 2.83 3.12 3.22 2.14
Airports serviced 239 254 266 283 294
Owned refuelling complexes 45 46 46 47 48
Russian market share, % 26.8 25.9 26.7 26.3 25.7
Source: company data

The product mix of aviation fuels and sales footprint also continued to grow. During the year, the Gazprom Neft Omsk Refinery started to produce DEF STAN 91-091 compliant Jet A-1 aviation fuel, which is widely used internationally in aviation. Technical audits of Jet A-1 production and logistics to the international requirements of the Joint Inspection Group (JIG) are conducted by Gazpromneft-Aero in partnership with Italy’s oil and gas company Eni.

The launch of wholesale supplies of TS-1 aviation fuel to Global Air Fuel Systems CY Ltd in Uzbekistan, with subsequent reselling to Gazpromneft-Aero’s Russian and international partner airlines, has expanded the sales of company aviation fuel to the Central Asian market.

Increased refuelling for cargo airlines

By promptly responding to changes in the structure of domestic and international demand for cargo transportation, Gazpromneft-Aero was able to ramp up its refuelling operations for international cargo flights by 2.85 times year-on-year in 2020 (to over 93,000 tonnes) and boost its additional aviation fuel sales to international cargo airlines at the Siberian cluster (Koltsovo, Krasnoyarsk and Tolmachevo) to over 88,000 tonnes.

Over 10 new cargo airlines started to order from the company in 2020, including four new foreign airlines: ASL Airlines, CargoLogic Germany, Eznis Airways LLC and Silk Way West Airlines LLC.

Bunkering

The company provides bunkering services across all key Russian ports (including 19 sea and 12 river ports), as well as at the ports of Constanța (Romania), Riga (Latvia), Sillamäe and Tallinn (Estonia). The company’s customers include major Russian and international shipping companies. The company’s own fleet comprises:

  • 12 bunkering vessels, including one Arctic-class vessel for refuelling ships in the White and Barents seas;
  • four Arctic-class shuttle tankers and two icebreakers to ensure uninterrupted oil shipments from the Novoportovskoye field.

In 2020, 0.5% sulphur TSU-180 M grade marine fuel was the best-selling product in the sales basket of Gazprom Neft Marine Bunker, the company’s bunkering business operator. Sales of this fuel totalled 1 mt, or 56.5% of marine fuel supplies to shipping companies. The total share of environmentally-friendly 0.5% sulphur marine fuels increased from 35% of total sales in 2019 to 94% in 2020, due to MARPOL 2020, an international convention capping the maximum sulphur content in emissions from ships operating in global waters, effective since 1 January 2020.

The COVID-19 pandemic had a negative impact on shipping globally, leading to lower demand for marine fuel in 2020, with the company’s fuel sales to shipping companies down to 1.8 mt. At the same time, the company adapted its product mix to the new market requirements, implementing a strategic programme to leverage third-party resources in 2020 and strengthen its position in the Russian bunkering market. As a result, the company’s market share increased by 3.4 percentage points to 19.1%.

As part of the company’s strategy for the LNG bunkering market,LPG bunkering. the Dmitry Mendeleev LNG-bunkering vessel was launched in December 2020, the first vessel of its class in Russia. The vessel is scheduled to commence commercial operations in Q3 2021, making Gazpromneft Marine Bunker the first Russian company to enter the LNG bunkering market.

Our strategic goal is to continue building a fleet of LNG-bunkering vessels until 2030.

Bunkering, mt
Metric 2016 2017 2018 2019 2020
Premium sales (bunkering) 2.77 2.71 2.92 2.99 1.77
Airports serviced in Russia and abroad 36 37 34 35 35
Russian market share, % 19.1 16.6 15.8 15.7 19.1
Source: company data
Production and sales of oils and lubricants

The company boasts advanced production facilities to manufacture oils and lubricants, and an extensive sales network in the B2C and B2B segments. Oils and lubricants are sold through the Gazprom Neft filling station network, other retail networks, online stores and service stations, and are supplied directly to enterprises, including to car assembly lines as first fill oil.

Due to lower industrial production, restrictions imposed on retail in March—May 2020 and closures of a number of international markets amid the COVID-19 pandemic, total lubricant sales fell by 6.4% year-on-year from 0.47 mt in 2019 to 0.44 mt in 2020. In 2020, premium sales totalled 0.31 mt, almost flat year-on-year. Maintaining the volumes of premium sales has enabled the company to increase its share of the Russian packaged lubricants market by 0.1 percentage point to 23.5%.

Gazprom Neft has also expanded its product sales footprint. In 2020, the company shipped its oils to 96 countries (80 countries in 2019).

Oils and lubricants sales, mt
Sales 2016 2017 2018 2019 2020
Total oils and lubricants sales 0.45 0.41 0.49 0.47 0.44
Premium sales 0.27 0.29 0.31 0.32 0.31
Number of G-Energy Service stations 70 120 170 210 205
Share of the Russian packaged oils and lubricants market, % 20.0 21.3 22.0 23.4 23.5
Source: company data
Production and sales of lubricants in the Balkans and Eastern Europe

In 2020, the company set up Gazpromneft Lubricants Balkans doo, a subsidiary in the Republic of Serbia that uses NIS oil business assets to ensure regular supplies of oils and lubricants to the Balkan and Eastern European markets.

Since August 2020, a new facility in Novi Sad has been offering a broad portfolio of oils and lubricants, counting 140 products marketed under the Gazprom Neft brand, including 28 products tailored exclusively to the Balkans. The sales footprint of Gazpromneft Lubricants Balkans doo extends beyond Serbia, covering also Albania, Bulgaria, Croatia, Greece, Hungary and Macedonia. Also in the near future, lubricants produced by Gazpromneft Lubricants Balkans doo will be launched in the markets of Bosnia, Kosovo, Montenegro, Slovakia and Slovenia.

Last year, the company actively expanded its international sales of Gazpromneft Ocean marine oils by launching supplies to Argentina, Brazil, Bulgaria, China (including Hong Kong), Croatia, Greece, Malta, Panama, Romania and the UAE. Furthermore, Gazpromneft Ocean oils have been officially approved by Wärtsilä. The products have been tested and included in the list of lubricating oils approved for use in Wärtsilä and Sulzer engines. Finally, the company’s exports of aviation oils increased by 25%.

Our continuously growing product line currently includes over 1,000 oils, grease lubricants and service fluids. A total of 17 new products were put into production in 2020, including G-Energy Synthetic Far East 5W-20 low-viscosity oil using G-Base base oils for modern vehicles, KAMAZ G-Profi Service Line NEO 10W-40 next-generation diesel engine oil, Terrion Gear UTTO universal tractor oil, fully synthetic Gazpromneft Turbine Oil F Synth EP-68 and zinc-free all-season Gazpromneft Hydraulic HVZF-22 oil. The company also launched the production of a new line of lubricants and coolants. A new brand, Syntolux, is offered to consumers in the affordable price segment.

Performance highlights of deploying the Etalon operations management system (OMS) at the Omsk Lubricants Plant

The Omsk Lubricants Plant took the top spot among 30 Russian and CIS enterprises in the Production Environment Development category at a competition held by the industry movement “Lean Forum. Lean Production Professionals”. This is the Russian equivalent of the international Shingo Prize for operational excellence, which is considered by the professional community to be the “Nobel Prize" for manufacturing.

In 2020, the competition took the form of an offsite certification by leading experts from the Russian Ministry of Economic Development and the Agency for Strategic Initiatives. At the Omsk Lubricants Plant, the experts noted the successful implementation of the Time for Innovation improvement programme and the consistent operation of all programme tools within the Etalon operations management system, including 5C, routine management practices and inspection rounds.

The Omsk Lubricants Plant scored a total of 78 out of 100 points. The award ceremony was held and the top prize, the Gastev Cup, was presented in early 2021.

Production and sales of bitumen materials

Gazprom Neft is one of the largest manufacturers and suppliers of bitumen products and derivatives in Russia. Back in Russia, apart from its own production facilities in Moscow, Omsk, Ryazan, Salsk, Vyazma and Yaroslavl, the company has strong binder production partnerships in the Krasnodar Krai, Mordovia, Moscow Oblast, Perm and St Petersburg. Abroad, bituminous materials are produced in Serbia and Kazakhstan. In total, bitumen and bitumenmaterials under the company’s brands are manufactured at 20 production sites.

Even during lockdown, national projects continued to drive the development of the country’s road infrastructure and an increase in the consumption of binders in the base and premium bitumen segment. Supported by positive market performance, the company’s total sales and premium sales of bituminous materials grew 9.6% and 16.7%, respectively.

A digital solution to sell bitumen materials

In 2020, Gazpromneft BM continued developing its ecosystem of digital products. A key module of the CRM system under development at the company has been put into trial operation and continues be updated with new features.

Over 1 mt of base and premium bitumen were sold to end customersvia Gazpromneft BM’s digital platform in 2020 – a year-on-year doubling in sales. Counterparties can use the digital platform to purchase bitumen at the company’s 14 sites across Russia, including the Gazprom Neft Moscow Refinery and Gazprom Neft Omsk Refinery.

Orders for liquid products with delivery within Russia can currently be placed via the CRM (Customer Relationship Management) system; but in 2021, its functionality will be expanded to ordering packaged products within Russia and for export, and later for rail delivery.

Gazprom Neft has become the first Russian vertically-integrated oil company to transport petroleum products by road using a digital delivery note, as part of an experiment run by the Russian Ministry of Transport. The results of this experiment have been used to amend the federal transport regulations, with digital delivery notes to be scaled up from 2022.

Gazpromneft BM, the operator of the company’s bitumen business, was the first among vertically-integrated oil companies to launch its own network of terminals, so as to develop its sales platform out in the Russian regions. In 2020, Gazprom Neft partnered with bitumen terminals in Voronezh and Yekaterinburg. The market is also showing strong demand for Gazpromneft BM to provide logistics services to deliver its bituminous binders. In 2020, sales of road-delivered bulk bitumen increased by 34% year-on-year, with sales of packaged bitumen and polymer-modified bitumen up 54%.

Gazpromneft BM’s production assets plan to produce high-potential waterproofing materials (latex-modified bitumen emulsions for bridges and tunnels, as well as polyurethane sealants for inter-panel joints in buildings and structures) for the Russian construction industry.

In 2020, company products were launched on the retail market for construction materials. Waterproofing materials were offered at Leroy Merlin hypermarkets, one of the largest DIY retailers. Brit-branded mastics and primers used in low-rise suburban construction were the most popular products in the company’s retail product mix.

The company expanded its line-up of high-tech bituminous materials with new polymer-modified bitumen mastics and sealants for the construction and maintenance of transport and industrial infrastructure.
Sales of bitumen materials, mt
Sales 2016 2017 2018 2019 2020
Total sales of bitumen materials 2.17 2.65 2.97 2.92 3.20
Premium sales 0.23 0.29 0.35 0.42 0.49
Source: company data
Production and sales of petrochemicals

The development of petrochemical production is a strategically important growth area for the company. Basic petrochemicals are produced at all Gazprom Neft refineries (Moscow, Omsk and Yaroslavl). Downstream petrochemical products (polypropylene) are produced at joint ventures with SIBUR Holding (50% interest): NPP Neftekhimiya (Moscow) and Poliom (Omsk).

In 2020, NPP Neftekhimiya increased its output of polypropylene, reaching an all-time high of 151.9 ktpa.Poliom increased its hourly production rate to 26.5 tonnes per hour, ramping up its capacity to 224.5 ktpa. Along with higher production rates, both joint projects achieved strong environmental performance: Poliom has cut its environmental footprint by 25%, while NPP Neftekhimiya slashed its by-products by 30% year-on-year.

Sales of basic petrochemical products, mt
Sales 2016 2017 2018 2019 2020
Total petrochemicals sales 1.35 1.25 1.35 1.55 1.47
Source: company data