Following an extensive review of our current operations by the board of directors since taking office in January, our management has concluded that it is in the best and long-term interest of Rusneftegaz to diverge from our existing commercial strategy. Whilst our organization has previously undertaken business in multiple areas and invested in numerous industries, it has been perceived that existing operations focus too narrowly on oil production. It has also been resolved that our company maintains the intellectual and financial resources necessary to expand further within the broader scope of the wider petroleum and energy markets. Therefore, the development plan that is to be enacted in the years ahead should enable Rusneftegaz and our partners to not merely fulfill our potential, but also to enhance our revenues and profit accordingly. Following the publication of the new approach, Deputy Chief Executive Officer, Aleksandr Filyurin, commented: 

“Since we joined Rusneftegaz earlier this year, the other directors and I immediately began to think of how we can improve this business. I think it is fair to say that the company has been expanding rapidly over the course of the past decade. But as we began to examine everything more closely and learned how things worked, it became apparent that there is a lot of potential to grow the business from its current foundations. When you look at what we do now, our upstream business is in excellent health, but we are missing out on extra profit by not developing our midstream or downstream operations. The same can be said for our power plants, they are old and aging. If we were to invest in all this properly, it will not only grow our revenues, but it will also grow our profits substantially. With this new strategy, we will be able to grow Rusneftegaz sustainably, not only for the long-term benefit of the company, but also for the long-term benefit of our staff too.” 

The new strategy has two primary areas of focus, oil and electricity, and will be implemented in phases over the next five years, in unison with our current investment program. Whilst our intentions to overhaul our existing generation assets has been previously publicly documented and will be conducted in the immediate future in due course, in the longer-term the revised scheme will also entail acquiring coal power plants across the world to expand our production portfolio by 2020. In this instance, Rusneftegaz will aim to purchase stations at a nominal price that have either retired or are approaching the end of their useful lives. Our company will then utilize our capital and skills to overhaul the sites and restore them to function at maximum capacity, while also renewing their environmental and economic credentials. These affairs, which form the later parts of the wider strategy, will be simultaneously undertaken with a major expansion of our petroleum trading business into new markets. We plan to increase international petroleum sales via a new global hub, dealing in not only our own crude and refined products, but also cargoes that do not necessarily originate in the Russian Federation. This particular project should grow our turnover significantly, allowing Rusneftegaz to commence commercial activities in new and expanding markets, such as Asia, with a view to further undertakings in these regions in the near future. Although this scheme will not be implemented until the end of the decade, primarily due to the volume of prior research required, the board of directors believes the scope to grow our existing oil operation within Russia is now limited. Whilst this is due to a number of both domestic and foreign factors, namely the restrictions on accessing the equipment needed to upgrade the efficiency and productivity of our petroleum business, this proposal should enable Rusneftegaz to form new, international partnerships with other companies and institutions to enable our future success. Further details regarding these changes will be circulated to all affected personnel at a suitable time. Any questions should be directed via the usual channels, and we necessitate your cooperation and understanding with these matters. 

Rusneftegaz can announce that we have devised a new, five-year investment program for the period between 2015 and 2019, which is currently in the process of being implemented by our management. This current plan has been significantly expanded from the previous version, which ultimately resulted in substantial sums being expended on both new assets and infrastructure for our petroleum activities. However, whilst the latest scheme shall continue to develop our domestic fuel production business, it also accounts for major structural revisions to our broader commercial strategy, which will be disclosed at a later date. These changes should yield considerable growth for all our existing undertakings, in conjunction with a wider expansion into new areas of operation. Thus, Rusneftegaz can divulge that for the first time in our corporate history we have apportioned a budget to fund speculative proposals until the end of the decade. Initially, a small amount of the allocated capital will be utilized to conduct further research on hypothetical projects, with the majority of the monies being preserved until a suitable course of action becomes available. In response to this statement, the Deputy Chief Executive Officer, Aleksandr Filyurin, stated: 

“I am very pleased that we can publish this comprehensive plan, which will enable us to fulfill our growth plans long into the future. I have only worked here for a few months now, but I have been very impressed by what I have seen so far. However, in this business, we cannot stand still. In fact, staying the same in this industry is the same as regressing. That is why it is crucial for us to expand on what we are already doing. Now, I understand that Rusneftegaz has tried to expand before, and there may be some trepidation because of it, but this time it will be different. We will focus our efforts in areas where we already have expertise. We will not repeat the same mistakes as our predecessors. Obviously, before we arrived, there were already plans to invest in new oil equipment, but we wanted to build on this as a basis, rather than thinking that was the final set of plans. That is why in a few weeks time we will be setting out our proposals to transform Rusneftegaz. I hope that the period of our leadership will be marked by continual success and growth, and I hope that all of those that work for Rusneftegaz will join us in making these efforts.” 

The investments that are planned over the next five-year period exceed, in terms of value, our entire expenditure on assets since the year 2000, including when inflation is accounted for. This is partially due to the retention of all the proposals made by the previous administration to develop our petroleum business, which will enable Rusneftegaz to maintain continuity in this division of our organization and continue its growth in a financially sustainable and organic manner. The new scheme also accounts for the potential and ongoing challenges of acquiring infrastructure and equipment from certain countries, namely those in Europe and North America. Whilst our management does not believe there will be any deterioration in the geopolitical situation in the near or distant future, the board of directors has elected to prioritize the purchase of goods and services of Russian origin. Although our company shall always endeavor to procure the best and most suitable products available, it is necessary to consider the practical implications of sourcing beyond our borders. For instance, any further restrictions placed on importing or exporting to or from the Russian Federation could impact our capacity to have our equipment and assets serviced and maintained by companies located in foreign nations. By making this commitment, Rusneftegaz is also supporting Russian businesses and industry at this challenging time, befitting our status as a large and prosperous enterprise. Despite the fact that our organization has no intention of distributing this document beyond a small pool of executives, stakeholders and affiliates, the matters that have been set forth in this article should yield a significant expansion in revenues and profits by the end of the decade. As a result, we will not be accepting queries regarding these updates, and will disclose further information at the relevant time. 

Rusneftegaz held our first annual general meeting since the changes to our board were instigated in February, marking the commencement of what is a new era for our organization. At the event held in Moscow on 10 April, the delegates actively debated the prospects of our firm in the years and decades ahead. Such talks are pivotal at this time, with key decisions pertaining to our future underway and set to be announced imminently. This included matters such as revising our current corporate strategy, creating a new investment plan and considering the expansion of our operations internationally. At the same time, all involved also reviewed our full consolidated financial statements for the previous twelve months, which were prepared in accordance with International Financial Reporting Standards and have been audited by a third party. This was ratified by a vote of all our stakeholders, who also opted to approve the corresponding director’s report and reappoint our auditor for this year. As to be expected, all the individuals who were nominated for directorships eight weeks ago were elected accordingly, and a ballot was similarly held to appoint a new audit committee for our fiscal reports for the next year. Conversely, a motion to authorize a dividend payment did not pass, with those against citing a desire for our enterprise to reinvest our earnings into new infrastructure in the fullness of time. This shall allow us to continue to grow and prosper and should yield even greater results at a later date. Following the yearly congress, our new Deputy Chief Executive Officer, Aleksandr Filyurin, gave these remarks:

“The board and I would like to place on record our thanks to everybody who helped us hold our annual general meeting without issue, and to be honest, I would say that it has been a great success. Since we joined, we have been mostly impressed with what we have seen so far. I have been particularly impressed with the quality of the staff here; everyone has been incredibly welcoming, and I can sense there is a desire for us to help sort everything out. Obviously, a lot of work is going to be needed to fix the problems here, but we definitely have a reasonable platform to build on. I will give you one example: although the wells that we own are small, they all have the potential to be very productive, which is exactly the position that we want to be in. Now to be fair, it is still very early days here, and it is going to be a big project, but I think that we are going to be able to turn it around. We are going to need to look at and analyze everything over the coming months and formulate a plan to see how we can improve things. It really is a mammoth task. It has obviously been a tough time for this company, but I hope that we are going to be able to draw a line under it and move forward. I am incredibly optimistic that in 2020 this company will have been completely transformed, and I am looking forward to the challenge.”

While it has evidently been a challenging period for our enterprise, our board perceives that all indicators demonstrate that our business is in robust fiscal health, with revenue being earned through a plethora of different customers. Ultimately, our corporation also managed to remain profitable, undeterred by the external economic factors of which we have no control. The long-term outlook for our oil revenues, however, will be less certain until there is a stabilization in commodity prices. By such time, our executives will have reviewed all available options for the sector and formulated a comprehensive plan accordingly. Likewise, the forecast for our petroleum operations in 2015 is not optimistic, but we have the capability and intrinsic resilience to ensure that we prosper regardless. As such, the incoming administration intends to pivot the direction of our organization away from our dependency on oil, and will instead focus more of our resources on the expansion of our power generation division to bring greater variety to our sources of income. Our management is projecting that the majority of our future growth will derive from such investments in electricity, and will commit further funds once the viability of the plan is proven. In the immediate term, this will involve an overhaul and modernization of all our existing infrastructure, before an eventual expansion of capacity and the purchase of additional plants. Sequentially, the ambition of our ownership is to expand Rusneftegaz to be one of the largest companies in both the Russian Federation and the world, and we intend to do so as soon as possible. Any queries pertaining to this subject should be submitted via the conventional channels of telephone or email, and we will send a prompt reply in due course. We necessitate your cooperation and understanding with this matter.

Rusneftegaz can announce that we have updated our research and development strategy for the next five years. Whilst long-term projects have been assigned to facilitate the progress of our organization, for the majority of their time, our pool of engineers and scientists will be responding to the ongoing needs and challenges that are faced by our personnel working in the field. This regularly entails improvising tools, repairing or repurposing machinery according to the circumstances, in addition to prolonging the lifespan of assets that are vital to our operations. However, work shall also be conducted on the fulfillment of our strategic objectives, to be defined at a later date by the incoming management. Primarily, and regardless of the intricacies of these aims, this will entail the development and adoption of new technologies that will ultimately improve the efficiency and effectiveness of our organization, including making reductions in pollution and carbon emissions. Following the publication of the revisions to this aforementioned program, the incoming Deputy Chief Executive Officer, Aleksandr Filyurin, commented: 

“Since I joined Rusneftegaz a few weeks ago, I have been very impressed by all those I have met in the research and development department so far, they are highly skilled and knowledgeable in their areas of expertise. We are very fortunate to have them on our side. The work that they appear to do covers almost all areas of our business, obviously there is the work done in the laboratory, but also in terms of consulting on the acquisition of new equipment and developing new working practices out on our oil wells. Research is a fundamental pillar of our plan to grow and expand this company, and we believe that it is crucial that we place every available resource necessary to continue this important work. I view this investment as speculation, like trading stocks and shares. If we can find or do something that is vastly superior to what our competitors are doing, Rusneftegaz could become one of the leading companies in the global oil industry.” 

The outlined scheme builds upon those that preceded it, and ultimately recognizes both the achievement and the progress that has been registered over the past half-decade. At a fundamental level, this involves continuing to support the accumulation of knowledge by our personnel, and utilizing it appropriately within the relevant areas within our company. Thus, with this extensive understanding of our industry, our engineers are capable of changing the best working practices in accordance with the latest recommendations from across the globe. Similarly, continual learning gives our staff the skills necessary to analyze the suitability of specialist equipment that could be deployed on our production sites. Rusneftegaz will also continue to collaborate with our strategic partners, not only in academia, but private institutions and other enterprises. This shall be not merely be for our own immediate economic progress, but for the longer-term interest of all the involved entities. Throughout our corporate history, Rusneftegaz has routinely supported projects conducted by geologists and scientists alike with the data accrued on our license areas over the past twenty years, and this will continue for the foreseeable future. Such efforts could potentially yield meaningful benefits for the wider world, if the work is sufficiently bold and ambitious. For example, our company possesses both substantial monetary resources and research capacity to advance and improve the next generation of sustainable technologies. Therefore, a generous budget has been allocated to study catalytic reformation techniques that can be used to generate hydrogen, in conjunction with another project examining how electrolysis can potentially be utilized in the production of the fuel on an industrial scale. However, on a short-term basis, this comprehensive research and development program will enable our company to implement technical measures that will reduce costs and improve operations respectively. Hence, Rusneftegaz intends to consume considerable capital engineering alternative steam generators for our power stations over the next five years. Our management believes this represents a significant innovation upon contemporary production standards, and once this initial design phase culminates, it is projected that our organization will be able to modify our existing power infrastructure in accordance with these concepts. If this is successful, Rusneftegaz will have consequentially reduced the amount of coal required to facilitate electricity generation, and will undertake the necessary legal processes to protect the begotten intellectual property accordingly. With such a broad set of schemes being disclosed in this announcement, Rusneftegaz will endeavor to provide updates at the appropriate time, and will make further briefings regarding these plans accordingly.