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.
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.
|RussiaIncluding franchised filling stations.||1,244||1,255||1,260||1,458||1,509|
|EuropeIncluding franchised filling stations.||422||423||417||414||420|
|TOTAL FILLING STATIONS||1,866||1,866||1,878||2,077||2,131|
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, 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|
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.
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.
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.
|Owned refuelling complexes||45||46||46||47||48|
|Russian market share, %||26.8||25.9||26.7||26.3||25.7|
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.
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.
|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|
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
Gazprom Neft has also expanded its product sales footprint. In 2020, the company shipped its oils to 96 countries (80 countries in 2019).
|Total oils and lubricants sales||0.45||0.41||0.49||0.47||0.44|
|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|
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.
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.
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.
|Total sales of bitumen materials||2.17||2.65||2.97||2.92||3.20|
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.
|Total petrochemicals sales||1.35||1.25||1.35||1.55||1.47|