Rusneftegaz has published a provisional calendar for the forthcoming fiscal year, with the presentation of our consolidated financial statements on 4 April 2017 serving as the main highlight of what is set to be an eventful twelve months for us. The disclosure of this material is to be immediately followed by our annual general meeting, which is also scheduled to take place later in the same week, and should ultimately yield productive discussions with our key stakeholders regarding our short and long-term strategies. Presently, this conference is intended to be held on 7 April 2017, although this date may be subject to change if any subsequent announcements are made. In adherence with our established protocols, we have devised a strategy to continue to provide full quarterly production reports four weeks after the conclusion of each reporting period. However, it is crucial to note that there may be potential variances between the time this information is uploaded to our website and when this material is made available to our affiliated parties. 

​In more the more immediate future, it is worth noting that our capacity to respond to nonessential matters, including communications received via email and telephone, will be limited due to the staff vacations occurring through the Christmas and New Year holiday. This forthcoming disruption, spanning from 26 December 2016 and 9 January 2017, will only have an impact our administrative functions, and therefore will not have any bearing on our other operational activities. Therefore, it is imperative that all correspondences be submitted promptly to ensure a timely reply. Nevertheless, all messages received during this timeframe will be closely monitored, and ultimately attended to if deemed essential. Likewise, at the end of this period, we will do our utmost to address all these messages within one working day. The full preliminary calendar is available to view on our official website, and whilst all the aforementioned dates are liable to be altered by the board, any such adjustments are unlikely at this time. Any queries pertaining to this announcement, should be directed through the customary channels as soon as practical to do so, principally to ensure a response before our ability to do so is constrained. We appreciate your cooperation and understanding in relation to this pertinent matter.

Rusneftegaz marked the end of the current year by hosting our annual awards ceremony in Moscow last Friday, where a large contingent of our personnel joined with our executives and directors to celebrate our achievements over the past twelve months. Overall, it has been an outstanding period for our organization, in which we have demonstrated strong and sustainable growth in key areas of our enterprise. Whilst we may not have recorded vast increases in revenues as a result of broadly stagnant commodity prices, we are expected to expand our profit margins following major reductions in our operating expenses. Part of this is directly attributable to the restructuring process we undertook in the summer, where we reorganized our administrative departments into a single entity under the control of our leadership. In the long term, this should ensure that we are a more efficient business, in which all strategic aims are aligned amongst our subsidiaries, affiliates and partners. During the evening, Aleksandr Filyurin, our Deputy Chief Executive Officer, gave this statement: 

“I am very pleased by what has been a very good year for Rusneftegaz. We have made excellent progress this year and are on course to meet all the targets that we set. This places us in a great position going into next year, where we will be able to continue with our plans to expand our operations further. To be direct, this is a great time to be working for this company, the plans we have are big and ambitious, and we will be reliant on our staff to help us do it. In a few years, Rusneftegaz will have been transformed into a far stronger company than it is today if our plans do come to fruition, which, to be fair, I expect them to. I also think it is a fitting time to place on record my congratulations to all the members of our team who have received prizes tonight, all of them are worthy winners. We need all our staff to be willing to go above and beyond the ordinary call of duty if we are going to do this, and to be direct, I think we do.” 

On the night itself, the headline prize was awarded to Maksimilian Smirnov, who was named as our employee of the year. Over the past six years, he has established himself as one of our finest engineers, with a notably remarkable capacity to repair any machinery in a rapid and steadfast manner. This was particularly vital earlier this year, when a backup diesel generator failed and required complete dismantling to find the fault. Within a matter of hours, the aforementioned individual managed to diagnose the issue and improvise a replacement part, restoring power to a remote production site. On a similar note, our colleague Filipp Igantiev was chosen as our young employee of the year after he authored a number of papers and essays for his studies that were ultimately reviewed to critical acclaim. Not only did he finish first in his class, but he likewise initiated an extensive volume of additional research without assistance from any of his peers. Although these endeavors are both exceptional and noteworthy in their own right, we are extremely thankful to each and every member of our workforce for their efforts in helping us construct a corporation with an exciting and prosperous future. We vow to continue to do our utmost to reward these deeds, and hope that it is necessary to do so for many decades to come.

Rusneftegaz can announce that following an internal review of our internal management structure, numerous changes are set to be made in due course to the constitution of our senior personnel. Whilst the current board of directors, most of whom were appointed early last year, are generally satisfied with the work being undertaken by our staff, there is collective agreement that certain areas of our administrative departments are not operating at maximum efficiency. Therefore, it has been perceived that it is now necessary to take remedial action to prevent further long-term deterioration in our company work ethic and broader corporate standards. Thus, Rusneftegaz can disclose that the position of the Director of Personnel has been terminated with immediate effect, and will not be reappointed. Similarly, the post of Director of Accounting will be abolished upon the retirement of the current officeholder, Dmitry Golubev, at the end of 2016. In response to this disclosure, the Deputy Chief Executive Officer, Aleksandr Filyurin commented: 

“It is always disappointing when any member of our staff has to leave. However, in this case, it has been necessary to act in the long-term interests of Rusneftegaz. We have been working her for over one year now, and this gave adequate time to see what is working and what is not. To be direct about this, the administrative department of Rusneftegaz is “bloated”, and we found a lot of staff did not accomplish as much as they could on a day-to-day basis. It is important to point out that we do not need to make these cuts; our projections for this year and next year are already looking good. It just comes down to instigating a strong corporate culture, a strong work ethic. If we do not instill these virtues now, how long will it be until standards begin to decline? It is not a risk we wanted to take. As I said before, it is disappointing to lose any member of our team, but fundamentally we are doing what is right.” 

The developments published in this release form part of a wider plan by the board of directors to reduce the number of managers within our organization, and consolidate the existing staff hierarchy accordingly. Not only will this provide greater efficiency, accountability and transparency, but it shall also yield a major reduction in remuneration costs. Although the majority of this will derive from a fall in managerial wages and associated expenses, these savings will also be partially attributable to a nominal number of redundancies in other administrative roles. Rusneftegaz intends to consult on this in the near future at an appropriate time, and it is expected that almost all departures will be voluntary. Under the terms of the revised arrangement, all the work conducted by our accountants and internal auditors will now be supervised by our Chief Financial Officer, Mikhail Avdeyev, and is anticipated to continue as normal. Likewise, most of the functions performed by the personnel department will be transferred to the direct control of the executive office, where it shall be overseen by the Deputy Chief Executive Officer, Aleksandr Filyurin. In certain circumstances, the resolution of any serious employee issues that arise will be delegated to a third party outside the control of Rusneftegaz, primarily to guarantee that any concerns regarding conflict-of-interest are avoided and thus good corporate governance is maintained. Moreover, whilst almost all these activities will continue to be arranged in Moscow, certain functions will now be assigned to regional offices and managers, depending on their capability to manage such affairs. These particular changes ultimately form part of a key tenet in Rusneftegaz’s corporate philosophy to promote localization of business in developing regions of the Russian Federation. Further information regarding this announcement will be communicated internally to our staff, and we will not be accepting any external questions pertaining to this restructuring. We necessitate your cooperation and understanding with this important matter.