Rusneftegaz can announce that we are to continue with our research and development program for a further five years, with the latest version commencing immediately and due to expire in 2029. The new plan replaces its previous iteration, which concluded at the end of last year, albeit with many projects incomplete as a direct consequence of the coronavirus pandemic and its aftermath. However, our executive leadership has resolved that the scope of such undertakings is to remain unchanged, with our priorities remaining focused upon ventures that could be lucrative for our organization in the long term. Chief amongst these are our schemes to reduce emissions and fuel consumption in our power generation unit in conjunction with our work in the realm of hydrogen production. Both such endeavors are viewed as critical to the future of our corporation, with our management seeking to maximize our options should an energy transition take place, conceivably within the next few decades. Whilst there are no executives in our enterprise who view this as a probable scenario, the collective view of our board is that it is essential to hedge the success of our existing operations against any developments that may undermine our achievements. In response to the publication of this new strategy, our Deputy Chief Executive Officer, Aleksandr Filyurin, issued the following remarks:
“Firstly, it is necessary for the board and I to put on record our thanks to all the research and development staff that have done some great work over the last five years. They have at times been working under extremely challenging conditions, much like all our other staff were during the pandemic and the difficult times that followed afterward. Ultimately, what we have faced during the past five years has not only helped us build resilience but strengthened this company and made it better because of it. As we continue business as usual, it is important to refocus and double our efforts. Obviously, the fact that our strategic review is still ongoing has somewhat inhibited the decisions that we could make in this cycle. When we have decided the exact direction that Rusneftegaz is going to take over the next few years, we don’t want to be committed to projects that are going to potentially be of no use to us down the line. It is no secret that our trading division is now the largest and most financially important part of our business, and to be honest again, we don’t need an enormous R&D budget to remain competitive. Things have changed a lot here since 2020, not just around the world but internally too, and we have adjusted to that. However, there is every reason to be optimistic about the future of this great company, and I am proud to say that I work here.”
The cornerstone of our research and development program continues to be the education and training of our workforce, who remain vital to the success of all our operations. Not only does this include providing ample opportunities for personal progression, but it also entails ensuring that all our personnel can work with state-of-the-art equipment and technologies. Our organization is continually investigating the current best practices to appraise if these advancements should be incorporated into our own ways of operating, regardless of whether the functions are technical or purely administrative. In recent times, this has involved analyzing the suitability of artificial intelligence for each of the production units, in addition to examining the most effective ways of mitigating viral contagion in enclosed spaces. Such work is not only crucial to our progress as an enterprise, but it is also paramount for easing the workload of our employees and contractors, allowing for greater productivity as a result. Studying the latest improvements and upgrades for the apparatus we deploy in the field similarly remains essential in facilitating increases in efficiency, with Rusneftegaz having invested hundreds of millions of dollars over the past decade to modernize each sector of our company. This has been most evident in our power engineering division, with electricity now generated more cleanly, effectively and safely than ever before in our corporate history.
In congruence with these plans, Rusneftegaz also intends to continue collaborating on research programs with a plethora of institutions and universities, as we have done so for the past two decades. Throughout this time we have contributed to various studies, particularly geological and seismological surveys, as a consequence of which we have built several beneficial partnerships with local and international entities. While such endeavors have undoubtedly been fruitful, our board has ultimately decided that it is in the best interest of the corporation to limit the volume of non-academic proposals pursued in this revision. Despite the fact that there are a range of reasons for this decision, the foremost justification for such action is that the ongoing strategic review of our current operations means that our business may be radically redefined. Our executive leadership is wholly convinced that a broad, overarching strategy is currently inappropriate, and this plan must instead be adapted if necessary once the outcomes of this comprehensive audit are disclosed. Consequently, no new projects are to be funded in this R&D cycle, and in certain cases financing will be restricted for existing works. For instance, it has been mutually agreed between our researchers and managers that our intention to build modular power plants across the globe is implausible before 2030 at the earliest, and thus the scheme can go on hiatus for the foreseeable future.
Likewise, plans to construct our own equipment and apparatus have been cancelled entirely, although no corresponding investments were made for this during the last five-year period due to the coronavirus pandemic. Conversely, the first blueprints for a major research hub were drawn and staff tasked with locating a suitable site, but progress on this has been sluggish, and the notion has now been abandoned. All such programs are to remain within the jurisdiction of their respective production units, with only administrative functions remaining under centralized control and otherwise retaining broad oversight of all these affairs. Whilst there are to be no structural or financial changes to our ongoing work regarding catalytic reformation and electrolysis, which our management believes is imperative for the long-term growth of this enterprise, a proposal to establish prizes for advancements in the energy sector has been discarded and will not return. As previously discussed, this development strategy may be revised upon the completion of the strategic review that is due to be completed imminently and published at our Annual General Meeting in April. However, our board of directors is erstwhile in its belief that all the expenditure on training and education will be more than sufficient to meet the needs of our organization for the next five years, while simultaneously ensuring Rusneftegaz remains a modern, dynamic and innovative company. Any updates or revisions to this will be notified in due course, and any relevant inquiries must be directed via the conventional channels. We necessitate your cooperation and understanding with this pertinent matter.
