Rusneftegaz can today confirm that Vitaliy Kalyuzhniy has departed his role as Chief Operations Officer by mutual agreement, with his understudy Ivan Skorokhodov assuming the role on an interim basis whilst a permanent replacement is found. He will also surrender his position on our board of directors with immediate effect, with the seat remaining vacant until our next annual general meeting next year. In response to these major developments, our Deputy Chief Executive Officer issued the following statement:  

 “I am delighted to welcome Ivan to the management board; I have been continually impressed with the work that he has done since he joined Rusneftegaz just over three years ago. The rest of the board and I wish him the best of luck in his new role. There is no doubt in my mind that he will continue to deliver to the same high standards that he has achieved so far in his career with us, and I hope this continues long into the future.”  

 We would also like to place on record our thanks to Kalyuzhniy for his work since his appointment in 2015 and wish him well for the future. Our executive leadership will commence the process of diligently searching for his successor immediately, and is optimistic about recruiting a candidate before the end of this calendar year. We will be making no further statements on this matter and will not be accepting any queries pertaining to these events at this time, although we will issue prompt updates in due course. We necessitate your cooperation and understanding at this time.

Rusneftegaz can announce that it has made comprehensive upgrades to our technological security following a series of attempts to attack our computer systems, including our website and online employee portals, in recent weeks. Whilst none of these incidents resulted in either a data breach or our site being inaccessible, management has elected to respond quickly to the situation, foremost by requesting assistance from external parties to fortify our protections against such aggression. For instance, our website has been routinely subjected to denial-of-service cyber-attacks, ultimately with the intent to disrupt the service on our network-based resources by inundating it with superfluous requests, often by using bots. Such hostile acts are conducted to attempt to overload the computer systems, preventing regular users and from accessing them temporarily, or in the most extreme instances, permanently. 

However, the decision to expedite these improvements was made after one notable effort that saw the criminals endeavor to access the personal data of our staff, which fortunately was unsuccessful. Although Rusneftegaz retained strong and robust safeguards against such incursions prior to this episode, the malignant nature of this particular attack was perceived by management to be so appalling that remedial action was necessary immediately. Under the terms of our policies regarding data protection, Rusneftegaz will never compromise on the security of the personal information of our personnel or our partners, and these recent occurrences highlighted to our management that if similar or greater transgressions were perpetuated in the future, our defenses may not be so vigilant. 

Simultaneously, the board of directors has also opted to temporarily remove certain contact details from our website following a considerable volume of abuse being directed towards our employees through these channels in recent times. Anyone wishing to communicate with us in the immediate future should do so by email via inquiries@rusneftegaz.com, or the form on our website. Please be aware that all electronic messages and telephone calls will now be subjected to enhanced screening, and may not be delivered to the intended recipient. Similarly, all those who work for Rusneftegaz will additionally be receiving a briefing in the next week with regard to new and amended policies in relation to these adjustments. For example, our entire workforce is to be instructed to examine whether there are adequate physical records of key information that would otherwise be considered necessary for the day-to-day functioning of our operations. Whilst this is expected to take some time, the board of directors believes it is a vital step to guarantee that our business can operate regardless of circumstances. Due to the necessity for the details of these changes to remain confidential for security reasons, Rusneftegaz will not be accepting questions pertaining to these developments.

Rusneftegaz held our 2022 annual general meeting on 8 April at a venue in Moscow, with delegates attending in person for the first time since 2019. While the notion of hosting a teleconference option was deliberated with key stakeholders in private talks, the suggestion was unanimously rejected. The assembly was convened following the publication of our 2021 consolidated financial statements in the preceding days, which, in conjunction with conversations regarding broader business strategy, were the primary focus of the discussions held throughout the main session. Such results were prepared in accordance with International Financial Reporting Standards, otherwise known as IFRS, and were audited accordingly. It was also resolved to approve our director’s report, providing a comprehensive discussion and analysis of the undertakings of last year, in addition to the other aforementioned documents. All tabled motions also passed without any issues arising, including a proposition to re-elect all members of the board of directors. Nevertheless, it was agreed that the audit committee, whose composition remains unaltered from last year, be bestowed with the power to nominate an alternative independent auditor if necessary. This is despite the fact that a proposal to reappoint the current firm was approved, although we are yet to receive a commitment that this particular entity will be able to complete this process in 2023. If this were to occur, our shareholders will be called to an extraordinary general meeting to vote on an amendment to this policy at the appropriate time. During the yearly congress, attendees chose to forego any type of dividend payment for a further twelve months, with management citing the need to reinvest earned funds into expanding many areas of our operations. Consequently, there was broad consensus amongst participants at this gathering that the prospects of our company were excellent and that all of those affiliated with our organization have a valid reason to be optimistic about the future. At the culmination of the showpiece event, our Deputy Chief Executive Officer, Aleksandr Filyurin, delivered these remarks:  

“I think first and foremost the board and I would like to place on record our thanks to everyone associated with this great company in what has been an exceptionally challenging period for us. To be honest, we would be in a far worse situation today if it weren’t for the extraordinary efforts that they have made to get us over line in the end. Now, I think that I can speak for almost everyone when I say that I am incredibly happy that the pandemic appears to be over, and we can move on from it and forget that it ever happened. But that said, generally speaking, it didn’t affect us too badly. You only need to look at the financial reports we just published to see that Rusneftegaz had record-high revenues for last year, which considering the circumstances, I think is actually an amazing achievement. Obviously since then circumstances have changed again, and to be very honest, I don’t really want to comment on that at the moment. But I think that it is important to say that we are ready for whatever happens next. Listen, we proved that we could deal with anything during the pandemic, and that hasn’t changed. Okay, so maybe we are going to have to adapt, but that is what we have always done here. We just need to believe in ourselves and stay determined to take on anyone that opposes us, whether that is here or anywhere else.”   

Whilst the majority of the totals disclosed in our fiscal statements may be considered favorable at this time, the forecasts for our results next year are undoubtedly far more pessimistic. The deterioration in geopolitical relations that has arisen in the months prior to the release of this financial report is anticipated to not only affect us in the immediate future but also in the years ahead. Since the beginning of 2021 there has been a material deflation in the value of the ruble, and while it has still recovered from its nadir in early March, the de facto purchasing power of the currency continues to be substantially reduced. Although in recent times our organization has undertaken actions to mitigate the effects of such volatility on our enterprise, including through increasing international trading to create receipts deriving from other currencies, these efforts may have been in vain. Despite the fact that our leadership maintains comprehensive contingency plans should controls on products of Russian origin take effect on the global markets, this will be at the cost of heightened expenses for transactions and lowered potential revenues from sales. This period may be an opportunity for Rusneftegaz to commence business in different corners of the globe, but it is likely to occur to the detriment of relationships with long-standing partners and customers.  

The major caveat to this is that since the advent of the New Year, commodity prices have also remained unquestionably higher than their existing values for most of the past two decades, which will offset any negative factors weighing on our enterprise. Moreover, it is unlikely that such figures for oil and gas will recede for some time; those jurisdictions that implement embargoes on Russian petroleum and refined products will almost certainly be unable to replace these goods with ease. In fact, it is reasonable to predict that arbitrary prohibition will have a wider economic impact on any such nation, to such an extent that all such measures may be withdrawn sooner than otherwise anticipated. Consequently, next year our firm will continue to execute our international expansion plans with renewed haste and vigor, and will find means to guarantee our business succeeds in new countries and territories. The unceasing fulfillment of both our immediate and long-term strategic goals is paramount to the steadfast development of not only our entity but also our personnel. Ultimately, we intend to be vigilant towards any potential changes that may afflict our organization in the times ahead, but our management is adamant that we retain the financial and intellectual resources to not only face the aforementioned difficulties but surmount them in a dignified manner. All queries in relation to our annual general meeting may be submitted via the conventional channels of email and telephone in due course. We require your cooperation and understanding at this critical time. 

The board of directors can announce that it has approved the latest revisions to the current investment program, originally due to be instigated between 2020 and 2024, which should result in Rusneftegaz increasing investments to exceed pre-pandemic margins of expenditure. The initial plan was suspended during the first six months of the crisis, and was ultimately altered significantly twelve months ago to accommodate reduced cash flows. When such changes were instigated, management believed it was necessary to mitigate the costs of the health emergency via reductions in spending, with such decisions being made at a time when there was no foreseeable end to the pandemic. Another major factor considered by the board was the delay of various works, due to both postponements and cancellations in 2020, in addition to the announced reduction in spending, indicated that the fulfillment of the five-year strategy was highly improbable. However, a further review has now been completed, accounting for significant changes in circumstances since the previous assessment, with management electing to postpone a formal announcement of any approved changes until the preferred resolution could be confirmed. It was believed that an announcement would be made late last year, but the board elected to defer decisions until all aggravating and mitigating circumstances could be analyzed accordingly. This included the cessation of severe medical restrictions afflicting our operations, and also the accumulation of significant cash reserves as a consequence of the prudent preservation of capital during the prior two years. In response to this statement, our Deputy Chief Executive Officer, Aleksandr Filyurin, delivered the following remarks: 

“I am very pleased that we are able to announce that our investment program is to resume. After we announced that remote working was to end a few weeks ago, it is sensible to do all we can to return to the normality of the pre-pandemic world. We have a lot of big plans for the future, and the delays of the last few years have done a lot to try and sabotage them. To be direct with you, it is vital for the long-term prospects of Rusneftegaz that we complete all these plans to be best of our ability. From a personal perspective, I would like to thank my fellow board members for giving their support to the revised version of this plan, and also to our shareholders who are prepared to increase the funds invested in this company to help us complete the time to its original schedule. I believe that together, we will all be able to make this work, and we will all prosper because of it.” 

Under the latest version of the investment program, we will now expend a similar amount of funds to the values projected in the original version of the plan, albeit in an expedited manner. For example, certain projects that previously would have been organized concurrently will now be arranged simultaneously where possible, although the realization of specific constituents of the strategy will be delayed until after the next formal investment proposal is finalized in 2024, and not all schemes will be completed by the end of the current cycle. Under the latest version, key tenets of the original plan are retained, including the expansion of our international trading office to commence global commodities trading, and a budget allotted to further pursue the international expansion of our energy division with the acquisition of additional power generating capacity. The majority of funds will nonetheless, continue to be directed to the renewal of existing production assets, although management has resolved to prioritize the purchase of equipment and services deriving from the Russian Federation. Any questions regarding this announcement should be directed via email or telephone. We necessitate your cooperation and understanding with this matter.