For the second year in succession, we hosted our annual general meeting electronically via a video teleconference on 9 April, following the publication of our 2020 consolidated financial statements earlier in the week. During the event, the board discussed our fiscal results for the last year, which were later unanimously approved alongside the corresponding director’s report. These documents were prepared in accordance with International Financial Reporting Standards, otherwise known as IFRS, and have been audited as per relevant legislation. All proposed resolutions were passed, including the vote to re-elect each of our current directors and a motion to reappoint our independent auditor. Moreover, it has also been resolved that no alterations to the composition of the audit committee are required at this present time, and in lieu of the ongoing coronavirus pandemic, we will not be paying a dividend for the last year. Those involved expressed their optimism that this would be the final assembly held online, and that the next session in 2022 will be held at a venue. Currently, we have no plans to make arrangements for an extraordinary general meeting this year, but this is subject to change at short notice. At the end of the day, the primary outcome of what unfolded on the day was broad consensus amongst the participants in the plenary that there were numerous reasons to be positive in spite of the clear challenges posed throughout the previous twelve months. Immediately thereafter, our Deputy Chief Executive Officer, Aleksandr Filyurin, gave this statement:   

“I think that first and foremost, I once again need to thank our staff for their incredible efforts over the last year. It has obviously been a very difficult time, and it has obviously taken an extraordinary effort to keep everything going as usual. Now, I cannot predict the future; I don’t know how long this is going to last. When you read about it, you read how the average pandemic in history lasts for three years, and obviously that means that we are probably still at the beginning of this thing, and we probably still have a long way to go before everything returns to how it was back in 2019. Now, I think I can speak for most people when I say that is far from an ideal situation, but if that is going to be how it is for the next few years, it is what it is. However, I would say that we have adapted well so far, and that is obvious when you look at the results we have just announced. When you think back to this time last year, when we were thinking that we would be making massive losses, and that we might have to shut down production. Well, evidently that hasn’t happened, and I think that is a great reflection of the strength of our company. Considering this is probably the worst crisis we have faced in our corporate history, I would say that we have dealt with it incredibly well. To be honest, if this is the worst it will ever get for us, it makes me incredibly confident about our future.”  

Overall, despite the fact that our trading business was significantly influenced by factors outside our control over the last twelve months, we managed to register an enviable economic performance. Revenue and profits for the year were stronger than expected, and although both such figures are lower than in 2019, strong cash flows have enabled our organization to be able to sustain our existing levels of expenditure in infrastructure accordingly. Contrarily, the outlook for 2021 continues to be poor, with restrictions continuing in key markets through the first quarter of the year. Management forecasts that electricity demand shall not recover until late 2021 at the earliest, and the price of oil futures will continue to be hard to accurately and reliably forecast. Notwithstanding the notion that Rusneftegaz maintains healthy balances of liquid cash, the board of directors has opted to curtail our investment program for this year and will make decisions regarding future periods in due course. While our leadership believes it is in a fortunate position to withstand a long-term pandemic, there are still sufficient reasons to be concerned with prolonged political tensions within the oil industry that could destabilize operations both in the short and long term. However, our corporation holds a universal and adamantly held belief that we will emerge from this global crisis resolutely and will remain steadfast, determined and capable of conquering all challenges ahead. Any queries pertaining to our annual general meeting may be submitted to us via the usual channels of telephone and email for a prompt reply. We politely request cooperation and understanding with this matter. 

Last year, the management board resolved to examine the possibility of revising the agreed 2020-2024 investment program for potential savings, largely in order to mitigate the economic costs of the ongoing coronavirus pandemic. Ultimately, the board of directors convened last week and concluded after extensive deliberation that this stratagem should be significantly revised as a result. Ultimately, our previous cash flow forecasts for 2020 are notably different to the monetary reality, and to preserve the long-term financial integrity of our organization, it is integral to replenish cash balances. Following this resolution, our Deputy Chief Executive Officer Aleksandr Filyurin, gave this response: 

“The decisions that we have come to are obviously extremely disappointing. I wish that there was an alternative solution to this. The board and I played a major role in creating these plans, so it is extremely sad for me personally that these ideas may never come to fruition. I would also like to apologize to all the members of our team who researched and helped us create these plans too, without them these plans ideas would have never been thought of in the first place. That said, I am still optimistic that we will be able revive some of this in the future when all this is over, I cannot reliably predict when it will end, but it will at some point. Sometimes doing this job is hard, especially when you worked so hard to do something, but we must act in the best interests of the company. To be direct with you, I refuse to apologize for that, especially when our staff are dependent on us for their livelihoods and to support their families.” 

As such, it has been decided that the termination clauses of various contracts that Rusneftegaz and its subsidiaries are party to shall now be activated, and all non-urgent redevelopment proposals that are at pre-development or preliminary stages will go no further. However, the board of directors still intends to either expand the current international office, or open a second global trading hub, by the end of 2022. Management will communicate the results of this revised investment strategy with the corresponding parties over the coming weeks, and will not announce publicly which projects are expected to be terminated at this time. We necessitate your cooperation and understanding in regards to these decisions, and request that any questions affiliated with these changes should be directed via email or telephone.

Pertaining to the results of a concluded consultation, both the board of directors and key stakeholders have mutually agreed that the 2021 annual general meeting should be hosted via an online teleconference with absentee voting, as per the previous assembly in 2020. The event shall be held on the previously scheduled date of 9 April, with no changes to any items on the agendum, including motions to alter the executive remuneration policy and the appointment of an external auditor for the financial year. In lieu of this announcement, our Deputy Chief Executive Officer Aleksandr Filyurin, issued this statement in response: 

“It has been obvious to us for some time that this change needed to be made, and I am very thankful to my colleagues and our other stakeholders for making it happen. It is disappointing that yet again we will be unable to host our AGM (annual general meeting) fully for another year, but we understand why and to be direct with you, I fully support this move. We will continue to keep everyone who would have otherwise attended the AGM updated with all the latest news from Rusneftegaz as we have done for the past year. I, along with the rest of the board, hope that we will be able to host it in-person soon and look forward to that time.” 

It is also still intended that we publish our 2020 consolidated financial statements prior to the event, which will then be analyzed during the conference with an approval vote being held accordingly. It is preferred that all ballots for each resolution shall be sent electronically, and all interested parties are to be contacted shortly with instructions as to how to submit this in due course, although a postal option is expected to be available upon request. All competed ballots must be transmitted to the relevant officer by the close of business on 8 April. Any questions in regards to these changes should be directed via email or telephone. We necessitate your cooperation and understanding with this particular matter.

As a consequence of the ongoing coronavirus pandemic, the board of directors has resolved that additional measures should be undertaken to guarantee all our existing capital commitments, and thus also the long-term financial standing of our company. After a prolonged and highly detailed review, our leadership has determined that it is far too challenging to project a formal end of this crisis, and we do not have the epidemiological expertise to do so with sufficient accuracy. Therefore, it is deemed paramount that we do our utmost to preserve the immediate and future interests of our organization and the members of our workforce. Whilst we are satisfied by the progress made over the past few months in terms of vaccine development, there remains a number of pressing concerns for our current operations. These principally pertain to several new variants that have recently emerged that appear to be both more transmissible and cause disease with enhanced severity, and could have the potential to yield further restrictions accordingly. From this perspective, we are basing all our assumptions on the basis that historical epidemics of this nature endure for approximately three years, and that we should be adequately prepared to function under these conditions for the duration of such a timeframe. Ultimately, the economic effects of this disaster have affected our corporation considerably, and will result in both revenues and profits being significantly below projections at the start of the year. Moreover, we have no desire to be wholly dependent upon government support in any of the jurisdictions we operate in to pay salaries or meet other costs, and intended to take remedial action to resolve this issue. In his announcement of these new policies, our Deputy Chief Executive Officer Aleksandr Filyurin remarked:  

“I am very pleased that we have managed to organize a deal with our owners to secure the long-term future of Rusneftegaz and our upcoming projects. Personally, I felt that it would have been a real shame if we had to make any of our staff redundant after all they have done for us since the beginning of the pandemic. It is the same as if we had needed to cancel any of the projects we have been planning, a lot of which have been in the works for quite a few years now. I do not think it is unreasonable to say that it has been an unexpectedly tough few months, and being realistic, we have no real idea how long all of this will continue. That is why, as a board, we took the decision to approach the ownership about an arrangement where we can provide guarantees to all our staff and contractors at what is a very unstable time. We do not want anyone who works for this great organization having to worry about their job, especially when there is so much to worry about already at this time. I hope now that we have eased some of the worries, and we can be ready to rebound when all this is over.”  

Thus, we can thus disclose that following lengthy and protracted negotiations, our shareholders have agreed in principle to disburse additional investment and loans if necessary to meet all our contractual arrangements that commenced prior to this health emergency. Hence, this new pact will ensure that all employee wages and other remuneration will be paid over the next twenty-four months, regardless of our business performance. Although we still intend to offer all our administrative personnel the opportunity to reduce their working hours next year, no changes will be imposed on staff that do not wish to participate in the scheme, nor will there be any compulsory redundancies in the imminent future. Likewise, it also denotes that when this endemic concludes, we shall have an ample sum of money to not only restart our investment program, but to do so at an expedited rate. While we anticipate announcing amendments to this plan after an internal analysis soon, the designated increase in cash is expected to largely mitigate the delays enforced upon us. Under the terms of the accord, the proceeds are only to be utilized if there are insufficient funds to otherwise meet the aforementioned costs, potentially leading to liquidity issues arising. However, the board of directors does not expect to use these reserves in the near-term, and are to remain solely as a contingency. In the instance that this capital is required, it must be noted that the stipulations of the deal dictate that the borrowings are to bear no interest and mature in ten years. Any questions regarding this settlement should be directed to the appropriate managers, or via the conventional channels. We necessitate your cooperation and understanding with this matter.