Last year, the management board resolved to examine the possibility of revising the agreed 2020-2024 Investment Strategy 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.
