1.5.Business Model

The Company’s strategic objective is to satisfy oil producing and refining companies’ demand for oil and petroleum products pipeline transportation both within the domestic market and along export routes through efficient operation, development and upgrade of the Russian trunk pipeline transportation system.

Value creation

Change from 2018

Direct economic value

1,087.668 +83.512
RUB bn

Includes income from financial investments and income from the sale of assets

485 +5.2
Oil, million tonnes
37.8 -1.4
Petroleum products,
million tonnes
1247.6 +30.2
Oil, billion tkm
49.8 -2.9
Petroleum products,
billion tkm
703.4 +51.5
Oil, billion tkm
68.3 -3.9
Petroleum products,
billion tkm
Delivery of oil and petroleum products
Turnover
Proceeds from transportation
The strategy provides for:
  • ensuring systematic development of the trunk pipeline system
  • ensuring reception and transportation of petroleum products from newly connected refineries
  • reducing accident rate at trunk pipelines
  • keeping the sulfur contents in the crude oil pumped via the Transneft system within the limits set in the rational routing scheme
  • reducing expenses related to pipeline construction and operation; maintaining the optimum expenditure level
  • excluding discharge of insufficiently treated wastewater
  • decreasing the purchase volumes of imported products
Critical Risks in 2020
  1. State regulation of oil and petroleum products transportation tariffs
  2. Fiscal risks
  3. Shutdown of external power supply to Transneft’s facilities
  4. The risk of new technical standards or changes to the existing ones, which may affect the technological processes related to design, construction and operation of the trunk pipeline system (including environmental and industrial safety requirements).
  5. Non-compliance of oil (petroleum products) quality indicators with established standards
  6. International sanctions
  7. Credit risks concerning partner banks

The 2019 list of critical risks was approved by the Board of Directors of TransneftApproved by the resolution of the Board of Directors of Transneft dated 11 December 2018 (Minutes No. 19) and supplemented by decision of the Board of Directors of TransneftApproved by the resolution of the Board of Directors of Transneft dated 28 June 2019 (Minutes No. 12).. In 2019, the register of risks was updated for further prioritisation and adoption of the list of critical risks for 2020.

The risks were prioritised by the resolution of the Risk Management Council of TransneftApproved by the resolution of the Risk Management Council of Transneft dated 24 December 2019 (Minutes No. 8).. The list of critical risks for 2020 was approved by the resolution of the Board of Directors of TransneftApproved by the resolution of the Board of Directors of Transneft dated 30 December 2019 (Minutes No. 24)..

OPERATIONAL RESOURCES

Length of trunk pipelines, thousand km

Number of pumping stations

Volume of tanks,million m3

NATURAL RESOURCES

Electricity consumption, million kWh

Fuel consumption for own needs, tonne of oil equivalent

Water intake and receipt, thousand m3

INTELLECTUAL RESOURCES

Number of patents and certificates

HUMAN RESOURCES

Average headcount, thousand employees

Across Transneft Group, excluding NCSP and its subsidiaries

FINANCIAL RESOURCES

Equity capital, RUB bn

Loan capital, RUB bn

The development and upgrade of the trunk pipeline system is based on using state-of-the-art technologies ensuring a high level of reliability, industrial and environmental safety, as well as the optimum level of expenditures both for the Company and for its consumers.