Effectiveness of Major Investment Programs

Oil Production in the Republic of Tatarstan

The Company successfully implements investment projects for geological and technical measures in the licensed areas of PJSC TATNEFT. The Company performs monitoring of actual investments, crude oil production, hours worked, and the efficiency for each well intervention.

The project for the development of fields with application of in-fill wells grid is being effectively implemented, and new sites are being selected to increase the recovery factor through the construction of inexpensive small-diameter in-fill wells.

About half of the investment oil is produced through the application of tertiary technologies and enhanced oil recovery methods application (sidetracking and horizontal laterals drilling, EOR, hydraulic fracturing), while the share of invested funds accounts for 1/5 of the total.

The project for the introduction of dual production and injection facilities is strategically important and is actively developing. There is the work underway with various modifications of equipment and combinations of installations.

The Company invests in pilot development projects of prospecting and exploring oil deposits in the Domanik sediments, elaborates technological solutions for extracting the identified hydrocarbon reserves to the surface, to study and develop the Domanik sediments and bituminous reservoirs at the Domanik and Bitumen test sites.

Working under the current restrictions on crude oil production as agreed with OPEC, the Company regulates the volume of investments in the implementation of geological and technical measures and ensures the efficiency increase of the investment portfolio in terms of the yield index.

HVO Fields Development

The Company is advancing a project to involve in production development deposits of high-viscosity oil. The Company has been producing high-viscosity oil since 2006 at the Ashalchinskoye field, and starting 2017 there 9 uplifts were put into operation in stages. The average daily total production rate is more than 5 thousand tonnes / day. There were 3.4 million tonnes of oil produced over 12 years of exploitation of HVO fields. Currently, construction of facilities is underway at 6 HVO uplifts with their commissioning date scheduled for 2019. Definition drilling of appraisal wells is carried out at 6 more uplifts and the total maximum production after their commissioning is expected to reach 3.3 million tonnes / year. Prospecting and exploring operations are being carried out on promising HVO uplifts.

Projects outside the Republic of Tatarstan in the Russian Federation

The Company continues investing in the strategic area of expanding the resource base and crude oil production outside the Republic of Tatarstan. The actualization, risk assessment and consideration of the economic efficiency indicators of 29 implemented projects are made by the investment committee on the annual basis. Based on the update results measures are being developed aimed at improving the operations efficiency in this area; for some risk projects, the options for selling the asset or the license relinquishment are being considered

Development of the TANECO Complex

PJSC TATNEFT continues the implementation of the project for the construction of the Refinery and Petrochemical Plants Complex in Nizhnekamsk. The 2018 plans provide for conducting comprehensive testing of the isomerization unit, hydrotreating units for diesel fuel and kerosene, the first stage of the aromatic hydrocarbons production complex (catalytic reforming unit) and off-site facilities. This will allow producing EURO-5 diesel fuel, aviation kerosene, Regular-92 and Premium-95 motor gasoline brands of Euro-5 ecological class. According to the results of the contest “Best Goods and Services of the Republic of Tatarstan” TANECO products were awarded in 2017, receiving five awards in the nomination “Industrial and Technical Products” for yielding high performance and environmentally friendly competitive products.

The winners were:

  • isoparaffin base oil VHVI-4;
  • arctic "EURO - 5 diesel fuel ".

The first-degree Diplomas were conferred for:

  • jet fuel of RT and JET A-1 brands;
  • isoparaffin base oil TATNEFT HVI-2.

Tyre Manufacturing Business

Investments in the development of tyre manufacturing business allowed to increasing the volume of tyre production to 14.8 million tyres in a year. The Company is purposefully pursuing a strategy of increasing the profitability of the tyre manufacturing business and meeting the market demand for modern high-quality passenger and light truck tyres. At this stage, the investments are directed to the development of new tyre sizes and the modernization of existing production, which will allow the Company to increase tyre production to 16 million tyres per year by 2025.

Power generating assets

The implementation of the "Electric Power and Heat Generation" business area development program, which includes the enterprises of OOO Nizhnekamsk CHP, TN Energosbyt, JSC Almetyevsk Heat Networks, allows improving the reliability of the electricity and heat supply to TATNEFT Group enterprises, third-party consumers and to ensure the growth of the Company’s own electricity generation capacity up to 2.4 billion kWh per year and heat energy up to 6 million Gcal per year by 2025.

Retail Chain Development

The Company continues the strategy of developing a network of filling stations for the sale of high-quality fuel, goods and services. More than 670 filling stations provide for oil and gas products sales in the Russian Federation, Republic of Belarus and Ukraine. Investment decisions are made on projects that provide the highest return. Projects that do not ensure the effectiveness of certain business area have to go through reinvestment procedures.